LIBERTY TAX CREDIT PLUS LP - 10-K Annual Report

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

FORM 10-K

(Mark One)

X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- - --- ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended March 15, 1996
OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- - --- EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

Commission File Number 33-15479

LIBERTY TAX CREDIT PLUS L.P.
(Exact name of registrant as specified in its charter)

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

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

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

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

None

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

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

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

DOCUMENTS INCORPORATED BY REFERENCE

None

Page 1 of 132

PART I

Item 1. Business.

General
- - -------

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

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

The Partnership was formed to invest, as a limited partner, in other
limited partnerships (referred to herein as "Local Partnerships", "subsidiaries"
or "subsidiary partnerships") which own leveraged low and moderate-income
multifamily residential complexes ("Apartment Complexes" or "Properties") that
are eligible for the low-income housing tax credit ("Housing Tax Credit")
enacted in the Tax Reform Act of 1986, and to a lesser extent in Local
Partnerships owning Properties that are eligible for the historic rehabilitation
tax credit ("Rehabilitation Projects"). The Partnership's investment in each
Local Partnership represents 20% to 98% interest in each of the Local
Partnerships. As of March 15, 1996, the Partnership had acquired interests in 31
Local Partnerships and does not anticipate making any additional investments.
See Item 2, Properties, below.

Liberty Associates is the Special Limited Partner in all 31 Local
Partnerships, as well as a General Partner of the Partnership. Liberty
Associates has certain rights and obligations in its role as Special Limited
Partner, which permit this affiliate of the Partnership to execute control over
the management and policies of the subsidiaries.

The investment objectives of the Partnership are to:

1. Entitle qualified BACs holders to substantial low-income housing Tax
Credits (and potentially rehabilitation tax credits) over the period of the
Partnership's entitlement to claim Tax Credits (for each Property, ten years
from the date of investment or, if later, the date the Property is placed in
service.)

2. Participate in any capital appreciation in the value of the
Properties and provide distributions of Sale or Refinancing Proceeds upon the
disposition of the Properties.

3. Preserve and protect the Partnership's capital.

4. Provide cash distributions when available from the operations of
Apartment Complexes and Rehabilitation Projects.

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

-2-

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

As of March 15, 1996, the Partnership has not met its investment
objective of providing cash distributions from the operations of the Properties.
Cash distributions received from the Local Partnership have been relatively
immaterial. The Partnership does not anticipate providing cash distributions to
BACs holders in circumstances other than refinancings or sales. Accordingly, at
this time there can be no assurance that the Partnership will achieve each of
its investment objectives.

Competition
- - -----------

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

Employees
- - ---------

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

-3-

Item 2. Properties.

The Partnership has acquired an interest as a general partner in 31
Local Partnerships. Set forth below is a schedule of these Local Partnerships
including certain information concerning the properties (the "Local Partnership
Schedule"). Further information concerning those Local Partnerships and their
properties may be found in Item 14, Schedule III.

Except for the seven limited partnerships listed below, the following
is the allocation of ownership percentage for each of the lower-tier
partnerships.

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

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

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

* Affiliate of the Partnership with same management

Local Partnership Schedule

% of Units Occupied at May 1,
-----------------------------
Name and Location (Number of Units) Date Acquired 1996 1995 1994 1993 1992
- - ----------------------------------- ------------- ---- ---- ---- ---- ----

B & C Housing Associates, L.P. December 1987 89 87 95 95 99
Tulsa, OK (220)

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

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

Shiloh-Grove L.P. (Mt. Vernon) February 1988 97 97 98 97 96
Columbus, OH (394)

Silver Blue Lake Apartments, LTD. February 1988 98 100 99 98 99
Miami, FL (123)

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

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

-4-

Local Partnership Schedule (Continued)

% of Units Occupied at May 1,
-----------------------------
Name and Location (Number of Units) Date Acquired 1996 1995 1994 1993 1992
- - ----------------------------------- ------------- ---- ---- ---- ---- ----

Autumn Park Associates, L.P. June 1988 97 93 93 96 94
Wilsonville, OR (144)

Regent Street Associates, L.P. June 1988 98 99 96 98 100
Philadelphia, PA (80)

Magnolia Arms Associates, LTD. July 1988 97 84 86 90 91
Jacksonville, FL (232)

Greenleaf Associates, L.P. July 1988 97 98 98 96 95
Kansas City, Mo (195)

Alameda Towers Associates, L.P. July 1988 100 98 98 92 100
San Juan, PR (150)

Dixie Apartment Associates, LTD. July 1988 93 100 100 100 100
Miami, FL (29)

Ludlam Gardens Apartments, LTD. July 1988 99 99 99 100 100
Miami, FL (90)

Grove Parc Associates, L.P. (Woodlawn) July 1988 99 98 100 99 97
Chicago, IL (504)

2108 Bolton Drive Associates, L.P. July 1988 95 100 82 33 34
Atlanta, GA (358)

Apple Creek Housing Associates, LTD. June 1988 96 99 99 97 97
Arvado, CO (195)

Redwood Villa Associates September 1988 100 96 99 99 99
San Diego, CA (92)

Charles Drew Court Associates, L.P. September 1988 89 100 97 100 100
Atlantic City, NJ (38)

Walnut Park Plaza Associates, L.P. September 1988 89 92 93 96 98
Philadelphia, PA (227)

Bayridge Associates, L.P. December 1988 97 97 97 95 98
Beaverton, OR (246)

United-Pennsylvanian, L.P. December 1988 98 100 100 100 100
Erie, PA (112)

2051 Grand Concourse Associates, L.P. November 1988 97 98 95 96 97
Bronx, NY (63)

Concourse Artists Housing Associates, L.P. November 1988 96 100 98 100 100
Bronx, NY (23)

-5-

Local Partnership Schedule (Continued)

% of Units Occupied at May 1,
-----------------------------
Name and Location (Number of Units) Date Acquired 1996 1995 1994 1993 1992
- - ----------------------------------- ------------- ---- ---- ---- ---- ----

Willoughby/Wycoff Housing Associates, L.P. November 1988 97 88 90 85 88
Bronx, NY (68)

Robin Housing November 1988 97 92 96 96 98
Bronx, NY (100)

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

Tanglewood Apartments, L.P. October 1988 100 100 90 98 100
Joplin, MO (176)

Quality Hill Historic District-Phase II-A, L.P. March 1989 94 85 91 95 100
Kansas City, MO (49)

Penn Alto Associates, L.P. June 1989 87 81 94 100 94
Altoona, PA (150)

Sartain School Venture, L.P. August 1990 89 100 100 100 100
Philadelphia, PA (35)

The general partners of the Local Partnerships in which the Partnership
invests ("Local General Partners") are generally required, pursuant to a
Development Deficit Guaranty Agreement, to fund deficits incurred during the
development stage of the Local Partnerships and/or to undertake to repurchase
the Partnership's interest in the Local Partnership if construction is not
completed substantially on time and on budget. A development deficit is incurred
when costs to rehabilitate, finance and pay all other operating expenses of a
Local Partnership exceed the proceeds of the mortgage note, capital contribution
and rental receipts prior to completion of the development of the Local
Partnership. Development deficit payments are made without right of repayment.

The General Partners generally require that the Local General Partners
undertake an obligation, pursuant to an Operating Deficit Guaranty Agreement, to
fund operating deficits (up to a stated maximum amount) of the Local Partnership
during a limited period of time (generally three years) following the
Partnership's investment. In each case the operating deficits will be funded by
Operating Loans which will not bear interest and which will be repaid only out
of 50% of available cash flow or out of available net sale or refinancing
proceeds.

Additionally, the Local General Partners are generally required to
enter into a Rent-Up Guaranty Agreement, whereby the Local General Partner
agrees to pay liquidated damages if predetermined occupancy rates are not
achieved. These payments are made without right of repayment. In most instances,
if rental achievement is not met by a specified date, the Local General Partner
must also pay to the Local Partnership, a return of capital, and interest
thereon, as stated in the local partnership agreement. Security for these
agreements are generally provided in the form of letters of credit and/or escrow
deposits provided by the Local General Partner.

All development deficit and rent-up guarantees with respect to the
properties have expired. All operating deficit guarantees expire within the next
three years.

Housing Tax Credits with respect to a given Property are available for
a ten-year Tax Credit Period that commences when the property is leased to
qualified tenants. However, the annual Housing Tax Credits available in the year
in which the Apartment Complex is placed in service must be prorated based upon
the months remaining in the year. The amount of the annual Housing Tax Credits
not available in the first year will be available

-6-

in the eleventh year. In certain cases, the Partnership acquired its interest in
a Local Partnership after the Local Partnership had placed its Apartment Complex
in service. In these cases, the Partnership may be allocated Housing Tax Credits
only beginning in the month following the month in which it acquired its
interest and Housing Tax Credits allocated in any prior period would not be
available to the Partnership.

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

Commercial tenants (to which average rental per square foot applies)
comprise less than 5% of the rental revenues of the Partnership. Rents for the
residential units are determined annually by HUD and reflect increases in
consumer price indices in various geographic areas.

Management continuously reviews the physical state of the Properties
and budgets improvements when required, which are generally funded from cash
flow from operations or release of replacement reserve escrows. No improvements
are expected to require additional financing.

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

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

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

Item 3. Legal Proceedings.

None.

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

None.

-7-

PART II

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

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

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

The Partnership has 5,525 registered holders of an aggregate of
15,987.5 BACs, as of June 1, 1996.

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

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

There are no material legal restrictions in the Partnership's Amended
and Restated Agreement of Limited Partnership (the "Partnership Agreement") on
the ability to make distributions.

The Partnership has made no distributions to the BAC holders as of
March 15, 1996. The Partnership does not anticipate providing cash distributions
to its Limited Partners in circumstances other than refinancing or sales
proceeds.

-8-

Item 6. Selected Financial Data.

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

For the Year Ended March 15
---------------------------------------------------------------------------------
OPERATIONS 1996 1995 1994 1993 1992
- - ---------- ------------- ------------- ------------- ------------- -------------

Revenues $ 35,455,255 $ 34,345,754 $ 31,952,673 $ 31,272,203 $ 31,242,508
Operating expenses 42,396,512 43,557,847 41,632,706 41,018,149 41,132,283
------------- ------------- ------------- ------------- -------------
Loss before minority
interest and extraordinary
item (6,941,257) (9,212,093) (9,680,033) (9,745,946) (9,889,775)

Minority interest in loss
of subsidiaries 483,863 367,308 621,840 568,542 560,954
------------- ------------- ------------- ------------- -------------

Loss before
extraordinary item (6,457,394) (8,844,785) (9,058,193) (9,177,404) (9,328,821)

Extraordinary item - forgive-
ness of indebtedness 0 8,789,439 196,889 0 0
------------- ------------- ------------- ------------- -------------

Net loss $ (6,457,394) $ (55,346) $ (8,861,304) $ (9,177,404) $ (9,328,821)
============= ============= ============= ============= =============

Loss before extra-
ordinary item per BAC $ (399.86) $ (547.70) $ (560.91) $ (568.30) $ (577.67)

Extraordinary item per BAC 0 544.27 12.19 0 0
------------- ------------- ------------- ------------- -------------

Net loss per weighted
average BAC $ (399.86) $ (3.43) $ (548.72) $ (568.30) $ (577.67)
============= ============= ============= ============= =============

March 15
---------------------------------------------------------------------------------
FINANCIAL POSITION 1996 1995 1994 1993 1992
- - ------------------ ------------- ------------- ------------- ------------- -------------

Total assets $ 208,338,218 $ 216,196,946 $ 226,002,670 $ 233,324,354 $ 242,794,438
============= ============= ============= ============= =============

Total liabilities $(182,639,668) $(183,414,534) $(192,502,613) $(190,529,135) $(190,044,740)
============= ============= ============= ============= =============

Minority interest $ (7,133,812) $ (7,760,280) $ (8,422,579) $ (8,856,437) $ (9,633,512)
============= ============= ============= ============= =============

Total partners' capital $ 18,564,738 $ 25,022,132 $ 25,077,478 $ 33,938,782 $ 43,116,186
============= ============= ============= ============= =============

During the years ended March 15, 1992 through 1996, total assets
decreased primarily due to depreciation, partially offset by net additions to
property and equipment.

-9-

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

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

The Partnership's primary sources of funds are the cash distributions
from operations of the Local Partnerships in which the Partnership has invested.
However, the cash distributions received from the Local Partnerships to date
have not been sufficient to meet all such obligations of the Partnership. During
the years ended March 15, 1996, 1995 and 1994 such distributions amounted to
approximately $140,000, $218,000 and $252,000 respectively. Accordingly, the
Related General Partner advanced funds totaling approximately $59,000, 25,000
and $21,000 at March 15, 1996, 1995 and 1994, respectively, to meet the
Partnership's third party obligations. In addition, certain fees and expense
reimbursements owed to the General Partners amounting to approximately
$1,022,000, $549,000 and $266,000 were accrued and unpaid as of March 15, 1996,
1995 and 1994, respectively. Without the General Partner's advances and
continued accrual without payment of certain fees and expense reimbursements,
the Partnership will not be in a position to meet its obligations, The General
Partners have continued advancing and allowing the accrual without payment of
these amounts but are under no obligation to do so.

Pursuant to a public offering which began on November 20, 1987 and
terminated on April 4, 1988, the Partnership received $79,937,500 in gross
proceeds from the sale of BACs. The net proceeds available for investment, after
volume discounts, establishment of a working capital reserve, payment of sales
commission, acquisition fees, acquisition expenses and organization and offering
expenses, were approximately $63,750,000. The entire amount of the net proceeds
has been fully invested in 31 Local Partnerships.

Cash and cash equivalents decreased $148,553 during the year ended
March 15, 1996 as a result of cash used in financing activities of $1,955,719
(which includes net repayment of mortgage notes of $2,908,134 offset by an
increase in due to Local General Partner and affiliates of $1,095,430) and cash
used in investing activities of $2,086,068, which includes property improvements
of $1,268,987 and an increase in cash held in escrow of $817,081, exceeding cash
provided by operating activities of $3,893,234. Included in the adjustments to
reconcile the net loss to cash flow from operations is depreciation and
amortization in the amount of $9,060,347.

A working capital reserve of approximately $2,400,000 was initially
established to pay operating expenses of the Partnership, including partnership
management fees payable to the General Partners, of which approximately $19,000
and $53,000 remained unused at March 15, 1996 and 1995, respectively.

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

The Partnership has negotiated Operating Deficit Guaranty Agreements
with all Local Partnerships, in which the Local General Partners have agreed to
fund operating deficits, up to a stated maximum amount, for a specified period
of time (generally, three years commencing at break-even). The terms of the
Operating Deficit Guaranty Agreements vary for each Local Partnership. The gross
amount of the Operating Deficit Guarantees aggregate approximately $16,880,000,
of which $16,430,000, $15,388,000 and $13,864,000 had expired as of March 15,
1996, 1995 and 1994, respectively. As of March 15, 1996, 1995 and 1994,
$621,887, $513,055 and $723,025, respectively, has been funded by the Local
General Partners to meet such obligations. Of the amount funded through March
15, 1996 approximately $108,000 has been recorded as a capital contribution and
the remaining balance of approximately $513,000 is recorded as noninterest
bearing operating advances to be repaid from operating cash flow. All operating
deficit guarantees expire within the next three years. Management does not
expect a material impact on liquidity, based on prior years' fundings.

HUD recently released the American Community Partnerships Act (the
"ACPA"). The ACPA is HUD's proposed blueprint for providing for the nation's
housing needs in an era of static or decreasing budget authority. Two key
proposals in the ACPA could affect the Local Partnerships: discontinuation of
project based Section 8 subsidy payments and an attendant reduction in debt on
properties that were supported by the Section 8 payments.

-10-

The ACPA calls for a transition during which the project based Section
8 would be converted to a tenant based voucher system. Any FHA insured debt
would then be "marked-to-market", that is revalued in light of the reduced
income stream, if any.

Several industry sources have already commented to HUD and Congress
that in the event the ACPA were fully enacted in its present form, the reduction
in mortgage indebtedness would be considered taxable income to limited partners
in the Partnership. Legislative relief has been proposed to exempt
"marked-to-market" debt from cancellation of indebtedness income treatment.
Though HUD initially backed away from the "marked-to-market" proposal, it has
now been re-introduced as "Portfolio Restructuring".

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

Management is not aware of any trends or events, commitments or
uncertainties which have not otherwise been disclosed that will or are likely to
impact liquidity in a material way. Management believes the only impact would be
from laws that have not yet been adopted. The portfolio is diversified by the
location of the properties around the United States so that if one area of the
country is experiencing downturns in the economy, the remaining properties in
the portfolio may be experiencing upswings. However, the geographic
diversification of the portfolio may not protect against a general downturn in
the national economy. The Partnership has fully invested the proceeds of its
offerings in 31 Local Partnerships, all of which fully have their tax credits in
place. The tax credits are attached to the property for a period of ten years
and are transferable with the property during the remainder of the ten year
period. If trends in the real estate market warrant the sale of a property, the
remaining tax credits would transfer to the new owner, thereby adding
significant value to the property on the market, which is not included in the
financial statement carrying amount.

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

Property and equipment are carried at the lower of depreciated cost or
estimated amounts recoverable through future operations and ultimate disposition
of the property. Cost includes the purchase price, acquisition fees and
expenses, and any other costs incurred in acquiring the properties. A provision
for loss on impairment of assets is recorded when estimated amounts recoverable
through future operations and sale of the property on an undiscounted basis are
below depreciated cost. However, depreciated cost, adjusted for such reductions
in value, if any, may be greater than the fair value. Property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows) when the property is considered to be impaired and the depreciated cost
exceeds estimated fair value. Through March 15, 1996, the Partnership has not
recorded any provisions for loss on impairment of assets or reduction to
estimated fair value.

In March 1995, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
("SFAS 121"). Under SFAS 121, the Partnership is required to review long-lived
assets and certain identifiable intangibles for impairment whenever events or
changes in circumstances indicate that the book value of an asset may not be
recoverable. An impairment loss should be recognized whenever the review
demonstrates that the book value of a long-lived asset is not recoverable.

Effective March 16, 1996, the Partnership intends to adopt SFAS 121,
consistent with the required adoption period. The Partnership does not expect
the implementation to have a material impact on its financial condition or its
future results of operations.

The following is a summary of the results of operations of the
Partnership for the years ended March 15, 1996, 1995 and 1994 (the 1995, 1994
and 1993 Fiscal Years, respectively).

-11-

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

The net loss for the 1995, 1994 and 1993 Fiscal Years totaled
$6,457,394, $55,346 and $8,861,304, respectively. The 1994 Fiscal Year net loss
is net of extraordinary income of $8,789,439.

The Partnership continues to meet the investment objective of
generating Housing Tax Credits to qualified BACs holders. To date all of the
Local Partnerships have remained in compliance with the Tax Credit requirements,
and therefore none has suffered an event of recapture of Tax Credits. The
Partnership generated $11,327,236 $11,327,236 and $11,327,258 in Tax Credits
during the 1995, 1994, and 1993 Fiscal Years, respectively.

1995 vs. 1994
- - -------------

Rental income increased approximately $850,000 for the 1995 Fiscal Year
as compared to the corresponding period in 1994 primarily due to annual rental
rate increases which are generally subject to HUD limitations and a retroactive
rent increase at B & C Housing Associates.

Other income increased approximately $260,000 for the 1995 Fiscal Year
as compared to the corresponding period in 1994 primarily due to B & C Housing
Associates receiving federal funds for physical repair and improvements.

Total expenses remained fairly consistent for the 1995 Fiscal Year as
compared to the corresponding period in 1994.

1994 vs. 1993
- - -------------

Rental income increased approximately $1,900,000 or 6% for the 1994
Fiscal Year as compared to the 1993 Fiscal Year. Approximately 1.5% of the
increase is attributable to a retro-active increase for 1990 and 1991 at Fox
Glenn Apartments, 3% is due to an increase in occupancy at three Local
Partnerships, and 1% is due to annual rent increases which are generally subject
to HUD limitation.

Other income consists primarily of interest income earned by both the
Local Partnerships and the Partnership on funds held in escrow, subsidy income
and miscellaneous income. Other income increased approximately $508,000 for the
1994 Fiscal Year as compared to the 1993 Fiscal Year. This increase is primarily
due to a local partnership being awarded a housing drug elimination grant by HUD
for the construction of a fence around the perimeter of the property and due to
the cancellation of indebtedness at "Quality Hill" (see Note 7). The increase
was also due, to a lesser extent, to insurance proceeds received by one local
partnership for a claim for a cooling unit which needed to be repaired.

Repairs and maintenance increased approximately $1,153,000 for the 1994
Fiscal Year as compared to the 1993 Fiscal Year. This increase is due to three
Local Partnerships addressing the physical needs of the properties. HUD rated
one local partnership "Grove Parc" unsatisfactory, and therefore, the Local
Partnership made improvements, including a new security fence around the
perimeter of the property, the installation of water restrictors in shower heads
and commodes as a water conservation method, repainting of hallways, and
installation of new light fixtures. One local partnership was built on a
landfill, therefore additional costs were incurred to fill in parts of the
ground that had washed away. There was an increase in expenses at another Local
Partnership due to the replacement of a cooling unit which had broken during the
winter. Insurance proceeds covered the costs of the cooling unit, and are
included in other income.

-12-

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

2108 Bolton Drive Associates, L.P.
- - ----------------------------------

2108 Bolton Drive Associates, L.P. ("2108"), located in Atlanta,
Georgia, incurred significant operating losses before extraordinary items of
approximately $852,000, $1,640,000, and $1,819,000 in the 1995, 1994 and 1993
Fiscal Years, respectively, and had a partners' capital of approximately
$3,900,000 and $4,750,000 at December 31, 1995 and 1994, respectively. As a
result of negative cash flows, the subsidiary partnership did not have the
ability to meet its debt obligations and was in arrears under the terms of its
mortgage loan as of December 31, 1993.

During the 1993 Fiscal Year, the original general partner of Bolton,
the predecessor to 2108, was replaced by New Texas Associates, Inc. ("New
Texas"); and in connection therewith operating deficit loans previously advanced
by the former general partner in the amount of $196,889 were forgiven and the
operating deficit agreement cancelled. New Texas had attempted to reach a
provisional mortgage workout agreement with HUD. Subsequent to December 31,
1993, HUD concluded that a workout was not in its best interest and ordered that
the property be sold. The sale occurred on April 26, 1994 for a price of
$4,500,000 to a new limited partnership, 2108. The 98.99% limited partner of
2108 is Liberty Tax Credit Plus L.P. The closing occurred on July 13, 1994. On
June 28, 1994, Bolton was merged with 2108. For tax purposes, as well as in the
financial statements the transaction was considered a continuation of Bolton.

The acquisition was financed by a first mortgage dated June 29, 1994 in
the original amount of $4,500,000. The mortgage provides for interest at the
commercial base rate of the mortgagee plus 2% per annum matured June 29, 1995
and was extended to October 31, 1996. In addition, 2108 committed to spend
approximately $400,000 on capital improvements and repairs. In order to acquire
the property, affect repairs and pay closing costs, an affiliate of the general
partner of 2108 advanced $600,000 and the Partnership advanced $1,027,000. The
property was originally encumbered by a $9,631,800 mortgage at an interest rate
of 10.75% and accrued interest at July 13, 1994 was $3,911,510. The effect of
the transaction is a refinancing resulting in a reduction in mortgage
indebtedness (including accrued interest and other liabilities) of $9,335,750.

For financial reporting purposes, the Partnership has recognized income
in the amount of $9,335,750 (forgiveness of indebtedness) from the transaction,
including the mortgage reduction and write-off of certain other payables which
has been shown as an extraordinary gain in the 1994 financial statements.
Development deficit loans previously funded by the former general partner have
been reflected as a reduction of the basis of the property. In March 1996, 2108
refinanced its mortgage note payable of approximately $3,500,000. The new
mortgage note in the amount of $4,480,000 paid off the former mortgage note and
approximately $900,000 of debt due to an affiliate of the Partnership. This
mortgage bears interest at the rate of 8.64% per annum and is payable in monthly
installments of $36,105 which includes principal and interest through March
2006, when the remaining principal balance of approximately $3,700,000 will be
due. The Partnership's investment in 2108 at March 15, 1996 and 1995 was
approximately $2,204,000 and $3,047,000, respectively and the minority interest
balance was approximately $1,695,000 and $1,700,000. 2108's net (loss) income
after minority interest amounted to approximately ($843,000), $7,616,000 and
($1,605,000), for the 1995, 1994 and 1993 Fiscal Years, respectively.

Silver Blue Lake Apartments, Ltd.
- - ---------------------------------

Three note holders, which provided additional permanent financing for
Silver Blue Lake Apartments Ltd., ("Silver Blue Lake") have commenced legal
action against the Local Partnership claiming that it is in default of the
provisions of the notes regarding the payments of principal and interest to be
made from net cash flow, as defined. Accordingly, they have declared the notes
to be in default and have demanded the entire outstanding indebtedness of
principal and interest. At December 31, 1995, total indebtedness, under these
notes, amounted to $258,840. In December 1995, a settlement agreement was
reached by Silver Blue Lake and the note holders. The subsidiary partnership
agreed to pay the noteholders $18,480, record a second mortgage covering the
notes, and pay interest semiannually up to 20% of cash flow or $1,250 whichever
is greater. The Partnership's investment in Silver Blue Lake and the minority
interest balance at March 15, 1996, and 1995 has been reduced to zero by prior
years' losses. Silver Blue Lake's net loss amounted to approximately $21,000,
$146,000 and $61,000 for the 1995, 1994 and 1993 Fiscal Years, respectively.

-13-

Regent Street Associates, L.P.
- - ------------------------------

Regent Street Associates, L.P. ("Regent Street") has received from the
Internal Revenue Service a notice of final partnership administrative
adjustment. Pursuant to the notice the Internal Revenue Service has challenged
the method in which the subsidiary partnership has allocated the below-market
federal financing to its properties, which challenge, if successful, would
result in the subsidiary partnership only being able to claim a 4% Low Income
Housing Tax Credit rather than a 9% Low Income Housing Tax Credit. The Internal
Revenue Service has also challenged the inclusion of a portion of the
developer's fee and legal costs in qualified expenditures for the purpose of
determining Low Income Housing and Historic Rehabilitation Tax Credits and
depreciable basis. The general partners of the Regent Street subsidiary
partnership intend to file a petition for readjustment challenging each of the
positions taken by the Internal Revenue Service. The Partnership's investment in
Regent Street at March 15, 1996 and 1995, was approximately $1,153,000 and
$1,489.000, respectively and the minority interest balance was zero. Regent
Streets net loss amounted to approximately $336,000, $322,000 and $355,000 for
the 1995, 1994 and 1993 Fiscal Years, respectively.

Redwood Villa Associates, L.P.
- - ------------------------------

Redwood Villa Associates ("Redwood") has sustained operating losses
since its inception. For the 1995 Fiscal Year, Redwood experienced a loss of
$240,426 including $227,084 of depreciation and $4,533 of amortization. For the
1994 Fiscal Year, Redwood experienced a loss of $397,877 including $241,990 of
depreciation and $4,533 of amortization. Redwood also had a loss on disposal of
a co-generation unit of $175,528 (net of $106,951 received in grant monies to
construct the co-generation unit). Redwood's continuation as a going concern is
dependent upon its ability to achieve profitable operations or contributions
from partners. The financial statements for the 1995 and 1994 Fiscal Years for
Redwood Villa have been prepared assuming that Redwood Villa will continue as a
going concern. Management, whenever possible plans to reduce operating costs to
achieve profitable operations. The Partnership's investment in Redwood at March
15, 1996 and 1995 was reduced to zero by current and prior years losses and the
minority interest balance was approximately $412,000 and $415,000, respectively.
Redwood Villa's net loss after minority interest amounted to approximately
$238,000, $393,000 and $227,000 for the 1995, 1994 and 1993 Fiscal Years,
respectively.

Magnolia Arms Associates, Ltd.
- - ------------------------------

Magnolia Arms Associates, Ltd. ("Magnolia") was in default of its
mortgage. As a result of the default, the trustee could have demanded full
payment of the mortgage loan balance ($7,105,000 at August 31, 1995), taken
possession of the project, foreclosed the mortgage promissory note or taken
other measures as provided for in the financing documents. Effective September
1, 1995, Magnolia entered into a forbearance agreement with the bondholders and
mortgagee which reduced the interest rate to 5% per annum and subjected the
bonds to mandatory sinking fund redemption at discounted payment rates ranging
from 65% in 1995 to 100% in 2017, contingent upon payments being made. Since the
total future cash payment of all new debt was greater than the carrying amount
of the old debt the amount of the original note was not adjusted and no gain was
recorded. However, the current interest rate was adjusted using the interest
method. The new effective rate is the discount rate that equates the present
value of the future cash payments with the carrying amount of the debt. The
effective interest rate of the debt related to the restructuring is 4.52%. The
bondholders have directed the trustee not to accelerate the maturity of the
bonds or to pursue any remedies provided for in the financing documents as long
as the parties to the agreement are meeting their obligations. The Partnership's
investment in Magnolia at March 15, 1996 and 1995 was reduced to zero by prior
years' losses. Magnolia's net income (loss) amounted to approximately $33,000,
($648,000) and ($603,000) for the 1995, 1994 and 1993 Fiscal Years,
respectively.

-14-

Quality Hill Historic District - Phase II - A, L.P.
- - ---------------------------------------------------

One of the loans providing permanent financing for Quality Hill
Historic District - Phase II A, L.P. ("Quality Hill") is being provided by the
Land Clearance for Redevelopment Authority of Kansas City ("LCRA") in the amount
of $960,000. This non-interest bearing note is secured by a fourth deed of trust
on the rental property and is due in full on June 26, 2021. One-fourteenth of
the unpaid principal balance shall be forgiven annually on the anniversary date
of the note so long as the property is used only as rental property for
qualified low-income families and individuals. $68,571 and $205,714 were
recorded as cancellation of indebtedness income at December 31, 1995 and 1994,
respectively, (see Note 7). The Partnership's investment in Quality Hill at
March 15, 1996 and 1995 was approximately $2,270,000 and $2,460,000,
respectively and the minority interest balance was zero. Quality Hill's net loss
amounted to approximately $191,000 $44,000 and $243,000 for the 1995, 1994 and
1993 Fiscal Years, respectively.

Greenleaf Associates, L.P.
- - --------------------------

Greenleaf Associates, L.P. ("Greenleaf"), has not made its monthly
mortgage payments when due. Pursuant to the terms of the mortgage note,
Greenleaf's failure to make the required payments when due, constituted an event
of default. As a result of the default, the mortgagee could demand full payment
of the mortgage loan balance ($4,453,250 at December 31, 1995) and exercise the
other remedies of a secured party under the Uniform Commercial Code including
taking possession of the collateral (the project) and selling or otherwise
disposing of the project. The mortgagee has not yet determined to accelerate the
mortgage and Greenleaf is negotiating with the mortgagee to restructure the
terms of the mortgage loan.

The auditors for Greenleaf have prepared the 1995 Fiscal Year financial
statements assuming Greenleaf will continue as a going concern. The
Partnerships' investment in Greenleaf and the minority interest balance was
reduced to zero by prior years' losses. Greenleaf's net loss amounted to
approximately $203,000, $214,000 and $245,000 for the 1995, 1994 and 1993 Fiscal
Years, respectively.

B & C Housing I Associates, L.P. ("Sun Garden/Worthington Apts")
- - ----------------------------------------------------------------

B & C Housing I Associates, L.P. ("Sun Garden/Worthington Apts") local
general partnership interest was sold to Michaels Corp., coincident with a
proposed loan modification. Effective February 1, 1996 the property benefited
from a reduction in mortgage interest from 10.25% to 7.15%, which will result in
approximately $170,000 less in annual interest costs, enabling the owner to
complete an approved repair and replacement plan over the next four years. The
Partnership's investment in B & C Housing at March 15, 1996 and 1995 was
approximately $795,000 and $633,000. In the case of B&C Housing the minority
interest balance at March 13, 1996 and 1995 was approximately $163,000 and
$147,000, respectively. B & C's net income (loss) after minority interest
amounted to approximately $161,000, ($338,000) and ($343,000) for the 1995, 1994
and 1993 Fiscal Years, respectively.

Walnut Park Plaza Associates
- - ----------------------------

Walnut Park Plaza Associates, ("Walnut Park") has sustained recurring
losses from operations. At December 31, 1995, Walnut Park had not made certain
payments required under the terms of the Bond Indenture and, as a result, is in
default. In August, 1995, the Project's bonds payable were sold by the
bondholder to E. A. Moos ("Moos"). On April 9, 1996, Walnut Park entered into an
interim agreement with Moo's. The expiration date for the interim agreement is
October 15, 1996 and is subject to certain defined extension and termination
provisions. The interim agreement primarily allows Moos to select an interim and
permanent replacement property manager, to formulate a proposal to replace the
Local General Partner, and to possibly restructure the indebtedness of the
Project. Walnut Park's continued existence is dependent on the impact of the
interim agreement and ultimately the resolution of the default of certain
obligations under the terms of the Bond Indenture. Contingent upon the outcome
of the interim agreement and of the status of the Bond Indenture default, the
subsidiary partnership may be unable to continue as a going concern in it's
present form. The Partnership's investment in Walnut Park at March 15, 1996 was
written down to zero as a result of current year losses and at March 15, 1995
the Partnerships investment was approximately $167,000. In the case of Walnut
Park minority interest balance at March 15, 1996 and 1995 amounted to
approximately $442,000 and $445,000, respectively. Walnut Park's net loss after
minority interest amounted to approximately $257,000, $193,000 and $332,000 for
the 1995, 1994 and 1993 Fiscal Years, respectively.

-15-

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

Independent Auditors' Report 17

Consolidated Balance Sheets at March 15, 1996 and 1995 92

Consolidated Statements of Operations for the Years
Ended March 15, 1996, 1995 and 1994 93

Consolidated Statements of Changes in Partners' Capital
for the Years Ended March 15, 1996, 1995 and 1994 94

Consolidated Statements of Cash Flows for the Years
Ended March 15, 1996, 1995 and 1994 95

Notes to Consolidated Financial Statements 97

-16-

[Letterhead of Trien, Rosenberg, Felix,
Rosenberg, Barr & Weinberg, LLP]

INDEPENDENT AUDITORS' REPORT

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

We have audited the consolidated balance sheets of Liberty Tax Credit
Plus L.P. (a Delaware Limited Partnership) and Subsidiaries as of March 15, 1996
and 1995, and the related consolidated statements of operations, changes in
partners' capital, and cash flows for the years ended March 15, 1996, 1995 and
1994, (the 1995, 1994 and 1993 Fiscal Years, respectively). These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We did not audit the financial statements for 30 (Fiscal 1995, 1994,
and 1993) subsidiary partnerships whose losses aggregated $5,342,970 (Fiscal
1995), $7,491,819 (Fiscal 1994), and $7,262,762 (Fiscal 1993) and whose assets
constituted 95% of the Partnership's assets at March 15, 1996 and 1995
presented in the accompanying consolidated financial statements. The financial
statements for these subsidiary partnerships were audited by other auditors
whose reports thereon have been furnished to us and our opinion expressed
herein, insofar as it relates to the amounts included for these subsidiary
partnerships, is based solely upon the reports of the other auditors.

We conducted our audits in accordance with 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, based upon our audits, and the reports of the other
auditors referred to above, the accompanying consolidated financial statements
referred to in the first paragraph present fairly, in all material respects, the
financial position of Liberty Tax Credit Plus L.P. and Subsidiaries at March 15,
1996 and 1995 and the results of their operations and their cash flows for the
years ended March 15, 1996, 1995 and 1994, in conformity with generally
accepted accounting principles.

As discussed in Note 11, the consolidated financial statements include
the financial statements of four limited partnerships with significant
contingencies and uncertainties regarding their continuing operations. During
the 1995 Fiscal Year, these subsidiary partnerships incurred significant
operating losses and two are in default on their mortgage obligations. These
conditions raise substantial doubt about the subsidiary partnership's abilities
to continue as going concerns. The financial statements of these four subsidiary
partnerships were prepared assuming that each will continue as a going concern.
The four subsidiary partnerships' losses before extraordinary items aggregated
$1,554,801 (Fiscal 1995), $2,446,846 (Fiscal 1994), and $2,717,107 (Fiscal 1993)
and their assets aggregated $28,187,671 and $29,787,047 at December 31, 1995 and
1994, respectively. The accompanying consolidated financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.

/s/ TRIEN, ROSENBERG, FELIX,
ROSENBERG, BARR & WEINBERG, LLP

TRIEN, ROSENBERG, FELIX,
ROSENBERG, BARR & WEINBERG, LLP

New York, New York
June 4, 1996

[JOHN D. SCHULER LETTERHEAD]

Independent Auditor's Report

To the Partners
B & C Housing Associates
Tulsa, Oklahoma

We have audited the accompanying balance sheets of B & C Housing
Associates, A Limited Partnership, HUD Project No. 118-94004, as of December 31,
1995, and 1994, and the related statements of income and expense, changes in
partners' equity and cash flows for the year ended December 31, 1995. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our 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 B & C Housing Associates, as
of December 31, 1995, and 1994, and the results of its operations and the
changes in partners' equity and cash flows for the year ended December 31, 1995,
in conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards and the Consolidated
Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing
and Urban Development, we have also issued a report dated January 20, 1996, on
our consideration of B & C Housing Associates' internal control structure and
reports dated January 20, 1996, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to
Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD
program transactions.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 15 to 23 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.

/s/ JOHN D. SCHULER

Tulsa, Oklahoma
January 20, 1996

[JOHN D. SCHULER LETTERHEAD]

Independent Auditor's Report

To the Partners
B & C Housing Associates
Tulsa, Oklahoma

We have audited the accompanying balance sheets of B & C Housing
Associates, A Limited Partnership, HUD Project No. 118-94004, as of December 31,
1994, and 1993, and the related statements of Income and Expense, Changes in
Partners' Equity and Cash Flows for the year ended December 31, 1994. 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 B & C Housing Associates, as
of December 31, 1994, and 1993, and the results of its operations and the
changes in partners' equity and cash flows for the year ended December 31, 1994,
in conformity with generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report (shown
on pages 14 to 22) are presented for the purposes of additional analysis and are
not a required part of the financial statements of B & C Housing Associates.
Such information has been subjected to the auditing procedures applied in the
audit of the financial statements and, in our opinion, is fairly presented in
all material respects in relation to the financial statements taken as a whole.

/s/ JOHN D. SCHULER

Tulsa, Oklahoma
January 21, 1995

[FISHBEIN & COMPANY, P.C. LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

January 23, 1996

Partners
State Street 86 Associates Limited Partnership

We have audited the accompanying balance sheets of STATE STREET 86
ASSOCIATES LIMITED PARTNERSHIP (A Limited Partnership) as of December 31, 1995
and 1994, and the related statements of operations, partners' equity
(deficiency) and cash flows for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of State Street 86 Associates
Limited Partnership as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ FISHBEIN & COMPANY, P.C.

[FISHBEIN & COMPANY, P.C. LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

January 26, 1995

Partners
State Street 86 Associates Limited Partnership

We have audited the accompanying balance sheets of STATE STREET 86
ASSOCIATES LIMITED PARTNERSHIP (A Limited Partnership) as of December 31, 1994
and 1993, and the related statements of operations, partners' equity
(deficiency) and cash flows for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of State Street 86 Associates
Limited Partnership as of December 31, 1994 and 1993, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ FISHBEIN & COMPANY, P.C.

[FISHBEIN & COMPANY, P.C. LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

January 23, 1996
Partners
Foxglenn Investors

We have audited the accompanying balance sheets of FOXGLENN INVESTORS (A
Limited Partnership) as of December 31, 1995 and 1994, and the related
statements of operations, partners' equity (deficiency) and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Foxglenn Investors as of
December 31, 1995 and 1994, and the results of its operations and its cash flows
for the years then ended, in conformity with generally accepted accounting
principles.

/s/ FISHBEIN & COMPANY, P.C.

[FISHBEIN & COMPANY, P.C. LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

January 24, 1995

Partners
Foxglenn Investors

We have audited the accompanying balance sheets of FOXGLENN INVESTORS (A
Limited Partnership) as of December 31, 1994 and 1993, and the related
statements of operations, partners' equity (deficiency) and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Foxglenn Investors as of
December 31, 1994 and 1993, and the results of its operations and its cash flows
for the years then ended, in conformity with generally accepted accounting
principles.

/s/ FISHBEIN & COMPANY, P.C.

[LARRY C. STEMEN, CPA AND ASSOCIATES LETTERHEAD]

Independent Auditor's Report

February 28, 1996

To the General and Limited Partners of
Shiloh Grove Limited Partnership
Columbus, Ohio

We have audited the accompanying balance sheets of Shiloh Grove Limited
Partnership as of December 31, 1995 and 1994, 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 Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audits in accordance with generally accepted auditing
standards. 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 above mentioned financial statements present fairly, in all
material respects, the financial position of Shiloh Grove Limited Partnership at
December 31, 1995 and 1994, 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 financial
statements taken as a whole. The supplemental data included in this report
(shown on pages 11-14) are presented for the purposes of additional analysis and
are not a required part of the financial statements. Such information has been
subjected to the same auditing procedures applied in the audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.

/s/ LARRY C. STEMEN, CPA AND ASSOCIATES
Larry C. Stemen, CPA and Associates
Certified Public Accountants
Columbus, Ohio

[LARRY C. STEMEN, CPA AND ASSOCIATES LETTERHEAD]

Independent Auditor's Report

March 2, 1995

To the General and Limited Partners of
Shiloh Grove Limited Partnership
Columbus, Ohio

We have audited the accompanying balance sheets of Shiloh Grove Limited
Partnership as of December 31, 1994 and 1993, 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 Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audits in accordance with generally accepted auditing
standards. 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 above mentioned financial statements present fairly, in all
material respects, the financial position of Shiloh Grove Limited Partnership at
December 31, 1994 and 1993, 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 financial
statements taken as a whole. The supplemental data included in this report
(shown on pages 11-13) are presented for the purposes of additional analysis and
are not a required part of the financial statements. Such information has been
subjected to the same auditing procedures applied in the audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.

/s/ LARRY C. STEMEN, CPA AND ASSOCIATES
Larry C. Stemen, CPA and Associates
Certified Public Accountants
Columbus, Ohio

[L. H. FRISHKOFF & COMPANY LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

To the Partners of
Silver Blue Lake Apartments, Ltd.
(A Limited Partnership)
Miami, Florida

FHA PROJECT NO. FL29-K005-009-124

We have audited the accompanying statements of financial condition of Silver
Blue Lake Apartments, Ltd. (A Limited Partnership) as of December 31, 1995 and
1994 and the related statements of operations, changes in partners' deficit and
cash flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our 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 condition of Silver Blue Lake Apartments,
Ltd. (A Limited Partnership) as of December 31, 1995 and 1994 and the results of
its operations, changes in partners' deficit and its cash flows for the years
then ended in conformity with generally accepted accounting principles.

/s/ L. H. FRISHKOFF & COMPANY
L. H. FRISHKOFF & COMPANY
New York, New York
January 19, 1996

[L. H. FRISHKOFF & COMPANY LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

To the Partners of
Silver Blue Lake Apartments, Ltd.
(A Limited Partnership)
Miami, Florida

FHA PROJECT NO. FL29-K005-009-124

We have audited the accompanying statements of financial condition of Silver
Blue Lake Apartments, Ltd. (A Limited Partnership) as of December 31, 1994 and
1993 and the related statements of operations, changes in partners' deficit and
cash flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our 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 condition of Silver Blue Lake Apartments,
Ltd. (A Limited Partnership) as of December 31, 1994 and 1993 and the results of
its operations, changes in partners' deficit and its cash flows for the years
then ended in conformity with generally accepted accounting principles.

/s/ L. H. FRISHKOFF & COMPANY
L. H. FRISHKOFF & COMPANY
New York, New York
January 20, 1995

[BICK FREDMAN & CO LETTERHEAD]

Independent Auditor's Report

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

We have audited the accompanying balance sheet of Lancaster Towers
Associates, L.P. (a Delaware Limited Partnership), as of December 31, 1995, and
the related statements of income, partners' capital and cash flows for the year
then ended. These financial statements are the responsibility of the Project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit. The financial statements of Lancaster Towers
Associates, L.P. as of December 31, 1994 were audited by other auditors whose
report, dated January 20, 1995, expressed an unqualified opinion on those
statements.

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 misstatements. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our 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 Lancaster Towers Associates,
L.P. as of December 31, 1995, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards, we have also issued a
report dated January 19, 1996 on our consideration of Lancaster Towers
Associates, L.P.'s internal control structure and report dated January 19, 1996
on its compliance with laws and regulations.

/s/ BICK FREDMAN & CO

Cleveland, Ohio
January l9, 1996

[CIUNI & PANICHI INC. LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

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

We have audited the accompanying balance sheet of Lancaster Towers
Associates, L.P. (A Delaware Limited Partnership), as of December 31, 1994 and
the related statements of operations, partners' capital and cash flows for the
year then ended. These financial statements are the responsibility of the
Project's management. Our responsibility is to express an opinion on these
financial statements based on our audit. The financial statements of Lancaster
Towers Associates, L.P. of December 31, 1993 were audited by other auditors
whose report, dated January 19, 1994, expressed an unqualified opinion on those
statements.

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 Lancaster Towers Associates,
L.P. as of December 31, 1994, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.

/s/ CIUNI & PANICHI INC.

Cleveland, Ohio
January 20, 1995

[HAUSSER & TAYLOR LETTERHEAD]

Independent Auditors' Report

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

We have audited the accompanying balance sheet of Lancaster Towers
Associates, L.P. (A Delaware Limited Partnership) as of December 31, 1993, and
the related statements of operations, partners' capital and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit. The financial statements of Lancaster
Towers Associates, L.P. as of December 31, 1992 were audited by other auditors
whose report, dated February 1, 1993, expressed an unqualified opinion on those
statements.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Lancaster Towers Associates,
L.P. as of December 31, 1993, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.

/s/ HAUSSER & TAYLOR
Cleveland, Ohio
January 19, 1994

[SHORE, AVRACH & COMPANY, P.C. LETTERHEAD]

Independent Auditor's Report on Basic
Financial Statements

To the Partners
West Kinney Associates, L.P.
Marlton, New Jersey

We have audited the accompanying balance sheets of West Kinney Associates,
L.P. T/A Willie T. Wright Plaza (A New Jersey Limited Partnership) as of
December 31, 1995 and 1994, and the related statements of operations, partners'
(deficit), and cash flows for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of West Kinney Associates, L.P.
as of December 31, 1995 and 1994, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards, we have also issued the
following reports dated January 18, 1996 concerning West Kinney Associates, L.P.
T/A Willie T. Wright Plaza (1) on the internal control structure, (2) on
compliance with specific requirements applicable to major HUD programs, (3) on
compliance with specific requirements applicable to affirmative fair housing,
and (4) on compliance with applicable laws and regulations.

/s/ SHORE, AVRACH & COMPANY, P.C.
Certified Public Accountants

January 18, 1996

[SHORE, AVRACH & COMPANY, P.C. LETTERHEAD]

Financial Statements

To the Partners
West Kinney Associates, L.P.
Marlton, New Jersey

We have audited the accompanying balance sheets of West Kinney Associates, L.P.
T/A Willie T. Wright Plaza (A New Jersey Limited Partnership) as of December 31,
1994 and 1993, and the related statements of operations, partners' capital, and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of West Kinney Associates, L.P. as
of December 31, 1994 and 1993, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

/s/ SHORE, AVRACH & COMPANY, P.C.
Certified Public Accountants

February 3, 1995

[MERINA McCOY GERRITZ, P.C. LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners
of Autumn Park Associates Limited Partnership

We have audited the accompanying balance sheets of Autumn Park Associates
Limited Partnership as of December 31, 1995 and 1994, and the related statements
of operations, changes in partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Autumn Park Associates Limited
Partnership as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles.

/s/ MERINA McCOY GERRITZ
Merina McCoy Gerritz, CPA's, P.C.
February 23, 1996

[MERINA McCOY GERRITZ, P.C. LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners
of Autumn Park Associates Limited Partnership

We have audited the accompanying balance sheets of Autumn Park Associates
Limited Partnership as of December 31, 1994 and 1993, and the related statements
of operations, changes in partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Autumn Park Associates Limited
Partnership as of December 31, 1994 and 1993, and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles.

/s/ MERINA McCOY GERRITZ
Merina McCoy Gerritz, CPA's, P.C.
February 7, 1995

[J. H. WlLLIAMS & CO., LLP LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Regent Street Associates (a Limited Partnership)
Philadelphia, Pennsylvania

We have audited the accompanying balance sheets of Regent Street Associates (a
Limited Partnership) as of December 31, 1995 and 1994 and the related statements
of income, changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the 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 audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partners and contracted management agent, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Regent Street Associates (a
Limited Partnership) at December 31, 1995 and 1994, 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/ J. H. WlLLIAMS & CO., LLP

Kingston, Pennsylvania
February 13, 1996

[J. H. WlLLIAMS & CO. LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Regent Street Associates (a Limited Partnership)
Philadelphia, Pennsylvania

We have audited the accompanying balance sheets of Regent Street Associates (a
Limited Partnership) as of December 31, 1994 and 1993 and the related statements
of income, changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the 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 audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partners and contracted management agent, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Regent Street Associates (a
Limited Partnership) at December 31, 1994 and 1993, 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/ J. H. WlLLIAMS & CO.

Kingston, Pennsylvania
February 2, 1995

[SHORE, AVRACH & COMPANY, P.C. LETTERHEAD]

Independent Auditor's Report on
Basic Financial Statements

To the Partners
Magnolia Arms Associates, Ltd.
Marlton, New Jersey

We have audited the accompanying balance sheets of Magnolia Arms
Associates, Ltd. T/A Palm Terrace Apartments (A Florida Limited Partnership), as
of December 31, 1995 and 1994, and the related statements of operations,
partners' (deficit) and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Magnolia Arms Associates,
Ltd. as of December 31, 1995 and 1994, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.

/s/ SHORE, AVRACH & COMPANY, P.C.
Certified Public Accountants

January 23, 1996

[SHORE, AVRACH & COMPANY, P.C. LETTERHEAD]

Independent Auditor's Report on
Basic Financial Statements

To the Partners
Magnolia Arms Associates, Ltd.
Marlton, New Jersey

We have audited the accompanying balance sheets of Magnolia Arms
Associates, Ltd. T/A Palm Terrace Apartments (A Florida Limited Partnership), as
of December 31, 1994 and 1993, and the related statements of (loss), partners'
(deficit) and cash flows for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Magnolia Arms Associates,
Ltd. as of December 31, 1994 and 1993, 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 3 to the
financial statements, the trustee has drawn on a letter of credit to fund the
Partnership's mortgage payments beginning November 1993, which raises
substantial doubt about its ability to continue as a going concern once the
letter of credit is exhausted. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

/s/ SHORE, AVRACH & COMPANY, P.C.
Certified Public Accountants

February 6, 1995

[SHORE, AVRACH & COMPANY, P.C. LETTERHEAD]

Independent Auditor's Report on Basic
Financial Statements and Supplemental Data

To the Partners
Greenleaf Associates, L.P.
Marlton, New Jersey

We have audited the accompanying balance sheets of Greenleaf Associates,
L.P. (A Missouri Limited Partnership), HUD Project #084-94009, as of December
31, 1995 and 1994, and the related statements of profit and loss, partners'
(deficit) and cash flows for the year ended December 31, 1995. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion the financial statements referred to above present fairly,
in all material respects, the financial position of Greenleaf Associates, L.P.
as of December 31, 1995 and 1994, and the results of its operations and its cash
flows for the year ended December 31, 1995, in conformity with generally
accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data included in the
report (shown on pages 15 through 20) are presented for the purposes of
additional analysis and are not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, is
fairly presented in all material respects in relation to the basic financial
statements taken as a whole.

The accompanying financial statements have been prepared assuming that
Greenleaf Associates, L.P. will continue as a going concern. As discussed in
Note 3 to the financial statements, Greenleaf Associates, L.P. has defaulted on
its mortgage loan payable which raises substantial doubt about its ability to
continue as a going concern. Management's plans in regard to this matter are
also described in Note 3. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

In accordance with Government Auditing Standards, we have also issued the
following reports dated January 24, 1996 concerning Greenleaf Associates, L.P.
(1) on the internal control structure, (2) on compliance with specific
requirements applicable to major HUD programs, (3) on compliance with specific
requirements applicable to affirmative fair housing, and (4) on compliance with
applicable laws and regulations.

/s/ SHORE, AVRACH & COMPANY, P.C.
Certified Public Accountants

January 24, 1996 except for Note 3 as to
which the date is February 21, 1996

[SHORE, AVRACH & COMPANY, P.C. LETTERHEAD]

Independent Auditor's Report on Basic
Financial Statements and Supplemental Data

To the Partners
Greenleaf Associates, L.P.
Marlton, New Jersey

We have audited the accompanying balance sheets of Greenleaf Associates,
L.P. (A Missouri Limited Partnership), HUD Project 084-94009, as of December 31,
1994 and 1993, and the related statements of profit and loss, partners'
(deficit) - capital and cash flows for the year ended December 31, 1994. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Greenleaf Associates as of
December 31, 1994 and 1993, and the results of its operations and its cash flows
for the year ended December 31, 1994, in conformity with generally accepted
accounting principles.

Our audits were made for the purpose of forming an opinion on the
financial statements taken as a whole. The supplemental data included in the
report (shown on pages 14 through 19) are presented for the purposes of
additional analysis and are not a required part of the financial statements of
Greenleaf Associates, L.P. Such information has been subjected to the auditing
procedures applied in the audits of the financial statements and, in our
opinion, is fairly presented in all material respects in relation to the
financial statements taken as a whole.

/s/ SHORE, AVRACH & COMPANY, P.C.
Certified Public Accountants

January 22, 1995

[JOSE E. ROSARIO & CO. LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Alameda Towers Associates, L.P.
Rio Piedras, Puerto Rico

I have audited the accompanying balance sheets of Alameda Towers Associates,
L.P. as of December 31, 1995 and 1994 and the related Statements of Losses and
Changes in Partner's Capital and Cash Flows for the years then ended. These
financial statements are the responsibility of the partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audits.

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

In my opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Alameda Towers Associates, L.P. as
of December 31, 1995 and 1994 the results of its operations and changes in
partner's capital and cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ JOSE E. ROSARIO
Jose E. Rosario & Co.
License No. 961
Expires December 1, 1998
January 22, 1996

Stamp No. 1336626 of the Puerto
Rico College of CPAs was
affixed to the original.

[JOSE E. ROSARIO & CO. LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Alameda Towers Associates, L.P.
Rio Piedras, Puerto Rico

I have audited the accompanying balance sheets of Alameda Towers Associates,
L.P. as of December 31, 1994 and 1993 and the related Statements of Losses and
Changes in Partner's Capital and Cash Flows for the years then ended. These
financial statements are the responsibility of the partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audits.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Alameda Towers Associates, L.P. as
of December 31, 1994 and 1993 the results of its operations and changes in
partner's capital and cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ JOSE E. ROSARIO & CO.
Jose E. Rosario & Co.
License No. 961
Expires December 1, 1995

February 14, 1995

1274982
(stamp of the
Puerto Rico College
of CPAs)

[L. H. FRISHKOFF & COMPANY LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

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

FHA PROJECT NO. FL29-K005-013-131

We have audited the accompanying statements of financial condition of Dixie
Apartment Associates, Ltd. (A Limited Partnership) as of December 31, 1995 and
1994, and the related statements of operations, changes in partners' capital and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dixie Apartment Associates,
Ltd. (A Limited Partnership) as of December 31, 1995 and 1994, and the results
of its operations, changes in partners' capital and its cash flows for the years
then ended, in conformity with generally accepted accounting principles.

/s/ L. H. FRISHKOFF & COMPANY
L. H. FRISHKOFF & COMPANY

New York, New York
January 19, 1996

[L. H. FRISHKOFF & COMPANY LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

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

FHA PROJECT NO. FL29-K005-013-131

We have audited the accompanying statements of financial condition of Dixie
Apartment Associates, Ltd. (A Limited Partnership) as of December 31, 1994 and
1993, and the related statements of operations, changes in partners' capital and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dixie Apartment Associates,
Ltd. (A Limited Partnership) as of December 31, 1994 and 1993, and the results
of its operations, changes in partners' capital and its cash flows for the years
then ended, in conformity with generally accepted accounting principles.

/s/ L. H. FRISHKOFF & COMPANY
L. H. FRISHKOFF & COMPANY

New York, New York
January 20, 1995

[L. H. FRISHKOFF & COMPANY LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

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

FHA Project No. FL29-K005-009-123

We have audited the accompanying statements of financial condition of Ludlam
Gardens Apartments, Ltd. (A Limited Partnership) as of December 31, 1995 and
1994 and the related statements of operations, changes in partners' capital and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ludlam Gardens Apartments, Ltd.
(A Limited Partnership) as of December 31, 1995 and 1994 and the results of its
operations, changes in partners' capital and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

/s/ L. H. FRISHKOFF & COMPANY
L. H. FRISHKOFF & COMPANY
New York, New York
January 19, 1996

[L. H. FRISHKOFF & COMPANY LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

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

FHA Project No. FL29-K005-009-123

We have audited the accompanying statements of financial condition of Ludlam
Gardens Apartments, Ltd. (A Limited Partnership) as of December 31, 1994 and
1993 and the related statements of operations, changes in partners' capital and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ludlam Gardens Apartments, Ltd.
(A Limited Partnership) as of December 31, 1994 and 1993 and the results of its
operations, changes in partners' capital and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

/s/ L. H. FRISHKOFF & COMPANY
L. H. FRISHKOFF & COMPANY

New York, New York
January 20, 1995

[PHILIP ROOTBERG & COMPANY, LLP LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Grove Parc Associates Limited Partnership

We have audited the accompanying balance sheet of Grove Parc Associates Limited
Partnership, F.H.A. Project No. 071-36654 as of December 31, 1995 and 1994, 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
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Grove Parc Associates Limited
Partnership, F.H.A. Project No. 071-36654 as of December 31, 1995 and 1994, and
the results of its operations, changes in its partners' capital (deficit) and
its cash flows for the years then ended in conformity with generally accepted
accounting principles.

In accordance with Government Auditing Standards, we have also issued a report
dated January 24, 1996, on our consideration of the Partnership's internal
control structure and a report dated January 24, 1996, on its compliance with
laws and regulations.

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

/s/ PHILIP ROOTBERG & COMPANY, LLP

January 24, 1996

[PHILIP ROOTBERG & COMPANY, LLP LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Grove Parc Associates Limited Partnership

We have audited the accompanying balance sheet of Grove Parc Associates Limited
Partnership, F.H.A. Project No. 071-36654 as of December 31, 1994 and 1993, and
the related statements of operations, partners' capital and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Grove Parc Associates Limited
Partnership, F.H.A. Project No. 071-36654 as of December 31, 1994 and 1993, and
the results of its operations, changes in partners' capital and cash flows for
the years then ended in conformity with generally accepted accounting
principles.

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

/s/ PHILIP ROOTBERG & COMPANY, LLP

January 19, 1995

[TRIEN, ROSENBERG, FELIX, ROSENBERG, BARR & WEINBERG, LLP LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners of
2108 Bolton Drive Associates, L.P.
(A Limited Partnership)

We have audited the accompanying balance sheet of 2108 Bolton Drive Associates,
L.P. (A Limited Partnership) (the "Partnership") as of December 31, 1995, and
the related statements of operations, partners' capital, and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 2108 Bolton Drive Associates,
L.P. (A Limited Partnership) as of December 31, 1995, and the results of its
operations, partners' capital, and cash flows for the year 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 3 to the
financial statements, the Partnership has experienced recurring operating losses
and has a working capital deficiency of $58,608 at December 31, 1995. These
items raise substantial doubt about the Partnership's ability to continue as a
going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

/s/ TRIEN, ROSENBERG, FELIX,
ROSENBERG, BARR & WEINBERG, LLP

TRIEN, ROSENBERG, FELIX,
ROSENBERG, BARR & WEINBERG, LLP

February 21, 1996,
except for Note 10 as to which
the date is March 18, 1996

[TRIEN, ROSENBERG, FELIX, ROSENBERG, BARR & WEINBERG, LLP LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners of
2108 Bolton Drive Associates, L.P.
(A Limited Partnership)

We have audited the accompanying balance sheet of 2108 Bolton Drive Associates,
L.P. (A Limited Partnership) (the "Partnership") as of December 31, 1994, and
the related statements of income, partners' (deficiency) capital, and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 2108 Bolton Drive Associates,
L.P. (A Limited Partnership) as of December 31, 1994, and the results of its
operations, partners' capital, and cash flows for the year 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 3 to the
financial statements, the Partnership has experienced recurring operating losses
and has a working capital deficiency of $3,604,160 at December 31, 1994, and its
mortgage note payable is due in June 1995. These items raise substantial doubt
about the Partnership's ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

/s/ TRIEN, ROSENBERG, FELIX,
ROSENBERG, BARR & WEINBERG, LLP

TRIEN, ROSENBERG, FELIX,
ROSENBERG, BARR & WEINBERG, LLP

April 5, 1995

[TRIEN, ROSENBERG, FELIX, ROSENBERG, BARR & WEINBERG, LLP LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Bolton Place Associates, L.P.
(A Limited Partnership)

HUD Project No. 061-36633-PM

We have audited the accompanying balance sheet of Bolton Place Associates, L.P.
(A Limited Partnership) (the "Partnership") HUD Project No. 061-36633-PM as of
December 31, 1993, and the related statements of operations, partners'
deficiency and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards issued by the Comptroller General of the United
States and the Consolidated Audit Guide for Audits of HUD Programs issued by the
U.S. Department of Housing and Urban Development ("HUD") Office of Inspector
General. 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 Bolton Place Associates, L.P.
(A Limited Partnership) as of December 31, 1993, and the results of its
operations, partners' deficiency and cash flows for the year 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 3 to the
financial statements, the Partnership has a working capital deficiency of
$3,636,616 at December 31, 1993, and has incurred significant recurring losses
from operations. In addition, the Partnership is in violation of its mortgage
agreement which was assigned to HUD and has not made mortgage payments for 40
months. These items raise substantial doubt about the Partnership's ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

/s/ TRIEN, ROSENBERG, FELIX,
ROSENBERG, BARR & WEINBERG, LLP

TRIEN, ROSENBERG, FELIX,
ROSENBERG, BARR & WEINBERG, LLP

March 9, 1994

[REZNICK FEDDER & SILVERMAN LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners
Apple Creek Housing Associates, Ltd.

We have audited the accompanying balance sheet of Apple Creek Housing
Associates, Ltd. as of December 31, 1995, and the related statements of profit
and loss (on HUD Form No. 92410), 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 Apple Creek Housing
Associates, Ltd. as of December 31, 1995, and the results of its operations, the
changes in partners' deficit and its cash flows for the year then ended, in
conformity with generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 20
through 26 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information, except for
that portion marked "Unaudited" on which we express no opinion, has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.

In accordance with Government Auditing Standards, we have also issued
reports dated February 7, 1996 on our consideration of Apple Creek Housing
Associates, Ltd.'s internal control structure and on its compliance with
specific requirements applicable to major HUD programs, affirmative fair
housing, and laws and regulations applicable to the financial statements.

/s/ REZNICK FEDDER & SILVERMAN

Boston, Massachusetts Federal Employer
February 7, 1996 Identification Number:
52-1088612

Audit Principal: Philip A. Weitzel

[COOPERS & LYBRAND LETTERHEAD]

REPORT OF INDEPENDENT ACCOUNTANTS

To the Partners of
Apple Creek Housing Associates, Ltd.
(a Limited Partnership):

We have audited the accompanying balance sheet of Apple Creek Housing
Associates, Ltd. (a Limited Partnership), HUD Project No. 101-36611, as of
December 31, 1994, and the related statements of profit and loss, partners'
equity (deficiency), and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards
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 Apple Creek Housing Associates,
Ltd. (a Limited Partnership), HUD Project No. 101-36611, as of December 31,
1994, and the results of its operations and its cash flows for the year then
ended, in conformity with generally accepted accounting principles.

/s/ COOPERS & LYBRAND L.L.P
/s/ COOPERS & LYBRAND L.L.P

Boston, Massachusetts
February 1, 1995

REPORT OF INDEPENDENT ACCOUNTANTS

To the Partners of
Apple Creek Housing Associates, Ltd.
(a Limited Partnership):

We have audited the accompanying balance sheet of Apple Creek Housing
Associates, Ltd. (a Limited Partnership), HUD Project No. 101-36611, as of
December 31, 1993, and the related statements of profit and loss, partners'
equity (deficiency), and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing
standards 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 Apple Creek Housing
Associates, Ltd. (a Limited Partnership), HUD Project No. 101-36611, as of
December 31, 1993, and the results of its operations and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.

/s/ COOPERS & LYBRAND
Boston, Massachusetts
February 1, 1994

[LEAF AND COLE LETTERHEAD]

Independent Auditor's Report

To the Partners
Redwood Villa Associates
(A Limited Partnership)

Dear Partners:

We have audited the accompanying balance sheet of Redwood Villa Associates
(A Limited Partnership) as of December 31, 1995, and the related statements of
income (loss), changes in partners' equity (deficit) and cash flows for the year
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards 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 Redwood Villa Associates (A
Limited Partnership) at December 31, 1995, and the results of its operations and
its cash flows for the year then ended in conformity with generally accepted
accounting principles.

To the Partners
Redwood Villa Associates
(A Limited Partnership)

The accompanying financial statements have been prepared assuming that the
partnership will continue as a going concern. As discussed in Note 8 to the
financial statements, the partnership has sustained operating losses since
inception. For the year ended December 31, 1995 the partnership experienced a
loss of $244,725 including $227,084 of depreciation and $4,553 of amortization
and as of that date, had a working capital deficiency of $395,250 and partners'
deficit of $25,537. These conditions raise substantial doubt about its ability
to continue as a going concern. Management's plans regarding these matters are
described in Note 8. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

In accordance with Government Auditing Standards, we have also issued a
report dated February 22, 1996 on our consideration of Redwood Villa Associates'
internal control structure and a report dated February 22, 1996 on its
compliance with laws and regulations.

/s/ LEAF AND COLE

San Diego, California
February 22, 1996

[LEAF AND COLE LETTERHEAD]

Independent Auditor's Report

The Partners
Redwood Villa Associates
(A Limited Partnership)

Dear Partners:

We have audited the accompanying balance sheet of Redwood Villa Associates
(A Limited Partnership) as of December 31, 1994, and the related statements of
income (loss), changes in partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards 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 Redwood Villa Associates (A
Limited Partnership) at December 31, 1994, and the results of its operations and
its cash flows for the year 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 9 to the
financial statements, the partnership has sustained operating losses since
inception. For the year ended December 31, 1994 the partnership experienced a
loss of $397,877 including $241,990 of depreciation and $4,553 of amortization.
The Partnership also had a loss on disposal of the co-generation unit of
$175,528 (net of $106,951 received in grant monies to construct co-generation
unit). The Partnership also increased the fourth trust deed note payable on the
building during the year in the amount of $81,820. These conditions raise
substantial doubt about its ability to continue as a going concern. Management's
plans regarding these matters are described in Note 9. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

/s/ LEAF AND COLE

San Diego, California
January 24, 1995

[LEAF AND COLE LETTERHEAD]

Independent Auditor's Report

The Partners
Redwood Villa Associates
(A Limited Partnership)

Dear Partners:

We have audited the accompanying balance sheet of Redwood Villa Associates
(A Limited Partnership) as of December 31, 1993, and the related statements of
income (loss), changes in partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards 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 Redwood Villa Associates (A
Limited Partnership) at December 31, 1993, and the results of its operations and
its cash flows for the year 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 10 to the
financial statements, the partnership has sustained operating losses since
inception. For the year ended December 31, 1993 the partnership experienced a
loss of $229,476 including $233,727 of depreciation and $17,063 of amortization.
The partnership also obtained a fourth trust deed note payable on the building
during the year in the amount of $128,467. These conditions raise substantial
doubt about its ability to continue as a going concern. Management's plans
regarding these matters are described in Note 10. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.

/s/ LEAF AND COLE

San Diego, California
February 16, 1994

[SHORE, AVRACH & COMPANY, P.C. LETTERHEAD]

Independent Auditor's Report on
Basic Financial Statements

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

We have audited the accompanying balance sheets of Charles Drew Court
Associates, L.P. (A New Jersey Limited Partnership), as of December 31, 1995 and
1994, and the related statements of operations, partners' capital, and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Charles Drew Court
Associates, L.P. as of December 31, l995 and 1994, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ SHORE, AVRACH & COMPANY, P.C.
Certified Public Accountants

January 17, 1996

[SHORE, AVRACH & COMPANY, P.C. LETTERHEAD]

Independent Auditor's Report on
Basic Financial Statements

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

We have audited the accompanying balance sheets of Charles Drew Court
Associates, L.P. (A New Jersey Limited Partnership), as of December 31, 1994 and
1993, and the related statements of operations, partners' capital, and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Charles Drew Court
Associates, L.P. as of December 31, 1994 and 1993, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ SHORE, AVRACH & COMPANY, P.C.
Certified Public Accountants

January 16, 1995

[ASHER & COMPANY, Ltd. LETTERHEAD]

Independent Auditors' Report

The Partners
Walnut Park Plaza Associates
Philadelphia, Pennsylvania

We have audited the accompanying balance sheets of Walnut Park Plaza
Associates (a Pennsylvania Limited Partnership) as of December 31, 1995 and 1994
and the related statements of operations, changes in Partners' capital, and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Walnut Park Plaza Associates
as of December 31, 1995 and 1994 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 is in default of certain obligations under the terms of the bond
indenture. These conditions raise substantial doubt about the Partnership's
ability to continue as a going concern at December 31,1995. The General
Partner's plans regarding 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.

/s/ ASHER & COMPANY, LTD.
ASHER & COMPANY, Ltd.

February 13, 1996 except for Note L, as to which
the date is April 9, 1996

[ASHER & COMPANY, Ltd. LETTERHEAD]

Independent Auditors' Report

The Partners
Walnut Park Plaza Associates
Philadelphia, Pennsylvania

We have audited the accompanying balance sheets of Walnut Park Plaza
Associates (a Pennsylvania Limited Partnership) as of December 31, 1994 and 1993
and the related statements of operations, changes in Partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Walnut Park Plaza Associates
as of December 31, 1994 and 1993 and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

/s/ ASHER & COMPANY, Ltd.
ASHER & COMPANY, Ltd.
ASHER & COMPANY, Ltd.

January 24, 1995

[ARTHUR ANDERSEN LLP LETTERHEAD]

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Partners of
Bayridge Associates Limited Partnership:

We have audited the accompanying balance sheets of BAYRIDGE ASSOCIATES LIMITED
PARTNERSHIP (an Oregon limited partnership) as of December 31,1995 and 1994, 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 Bayridge Associates Limited
Partnership as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.

/s/ ARTHUR ANDERSEN LLP

Denver, Colorado,
February 1, 1996.

[ARTHUR ANDERSEN LLP LETTERHEAD]

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Partners of
Bayridge Associates Limited Partnership:

We have audited the accompanying balance sheets of BAYRIDGE ASSOCIATES LIMITED
PARTNERSHIP (an Oregon limited partnership) as of December 31, 1994 and 1993,
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 Bayridge Associates Limited
Partnership as of December 31, 1994 and 1993, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.

/s/ ARTHUR ANDERSEN LLP

Denver, Colorado,
January 30, 1995.

[HABIF, AROGETI & WYNNE, P.C. LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners of
United-Pennsylvanian Limited Partnership

We have audited the accompanying balance sheets of UNITED-PENNSYLVANIAN LIMITED
PARTNERSHIP, PHFA Project No. R-251-8E, as of December 31, 1995 and 1994, and
the related statements of profit and loss, changes in partners' equity
[deficit], and cash flows for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on the financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of UNITED-PENNSYLVANIAN LIMITED
PARTNERSHIP as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued a report
dated January 31, 1996 on our consideration of UNITED-PENNSYLVANIAN LIMITED
PARTNERSHIP's internal control structure and report dated January 31, 1996 on
its compliance with laws and regulations.

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

/s/ HABIF, AROGETI & WYNNE, P.C.
Atlanta, Georgia

January 31, 1996

[HABIF, AROGETI & WYNNE, P.C. LETTERHEAD]

INDEPENDENT AUDITORS' REPORTS

To the Partners of
United-Pennsylvanian Limited Partnership

We have audited the accompanying balance sheets of UNITED-PENNSYLVANIAN LIMITED
PARTNERSHIP, PHFA Project No. R-251-8E, as of December 31, 1994 and 1993, and
the related statements of profit and loss, changes in partners' equity
[deficit], and cash flows for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of UNITED-PENNSYLVANIAN LIMITED
PARTNERSHIP as of December 31, 1994 and 1993, 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 supporting information included in
the report [shown on pages 15 to 23] is presented for the purpose of additional
analysis and is not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audits
of the financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.

/s/ HABIF, AROGETI & WYNNE, P.C.

Atlanta, Georgia

January 31, 1995

[MARDEN, HARRISON & KREUTER LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheets of 2051 Grand Concourse Housing
Associates (a limited partnership) as of December 31, 1995 and 1994, and the
related statements of operations, partners' capital (deficiency), and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with 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 2051 Grand Concourse Housing
Associates as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.

MARDEN, HARRISON & KREUTER
Certified Public Accountants, P.C.

/s/ MARDEN, HARRISON & KREUTER

Port Chester, New York
January 29, 1996

[MARDEN, HARRISON & KREUTER LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheets of 2051 Grand Concourse Housing
Associates (a limited partnership) as of December 31, 1994 and 1993, and the
related statements of operations, partners' capital (deficiency), and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with 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 2051 Grand Concourse Housing
Associates (a limited partnership) as of December 31, 1994 and 1993, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

MARDEN, HARRISON & KREUTER
Certified Public Accountants, P.C.
/s/ MARDEN, HARRISON & KREUTER

Port Chester, New York
January 31, 1995

[MARDEN, HARRISON & KREUTER LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheets of Concourse Artists Housing
Associates (a limited partnership) as of December 31, 1995 and 1994, and the
related statements of operations, partners' capital (deficiency), and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with 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 Concourse Artists Housing
Associates as of December 31, l995 and 1994, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.

MARDEN, HARRISON & KREUTER
Certified Public Accountants, P.C.

/s/ MARDEN, HARRISON & KREUTER

Port Chester, New York
January 29, 1996

[MARDEN, HARRISON & KREUTER LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheets of Concourse Artists Housing
Associates (a limited partnership) as of December 31, 1994 and 1993, and the
related statements of operations, partners' capital (deficiency), and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with 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 Concourse Artists Housing
Associates (a limited partnership) as of December 31, 1994 and 1993, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

MARDEN, HARRISON & KREUTER
Certified Public Accountants, P.C.

/s/ MARDEN, HARRISON & KREUTER

Port Chester, New York
January 31, 1995

[MARDEN, HARRISON & KREUTER LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheets of Willoughby-Wyckoff Housing
Associates (a limited partnership) as of December 31, 1995 and 1994, and the
related statements of operations, partners' capital (deficiency), and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with 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 Willoughby-Wyckoff Housing
Associates (a limited partnership) as of December 31, 1995 and 1994, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

MARDEN, HARRISON & KREUTER
Certified Public Accountants, P.C.

/s/ MARDEN, HARRISON & KREUTER

Port Chester, New York
January 29, 1996

[MARDEN, HARRISON & KREUTER LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheets of Willoughby-Wyckoff Housing
Associates (a limited partnership) as of December 31, 1994 and 1993, and the
related statements of operations, partners' capital (deficiency), and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with 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 Willoughby-Wyckoff Housing
Associates (a limited partnership) as of December 31, 1994 and 1993, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

MARDEN, HARRISON & KREUTER
Certified Public Accountants, P.C.

/s/ MARDEN, HARRISON & KREUTER

Port Chester, New York
January 31, 1995

[MARDEN, HARRISON & KREUTER LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheets of Robin Housing Associates (a
limited partnership) as of December 31, 1995 and 1994, and the related
statements of operations, partners' capital (deficiency) and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with 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 Robin Housing Associates (a
limited partnership) as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

MARDEN, HARRISON & KREUTER
Certified Public Accountants. P.C.

/s/ MARDEN, HARRISON & KREUTER

Port Chester, New York
January 29, 1996

[MARDEN, HARRISON & KREUTER LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheets of Robin Housing Associates (a
limited partnership) as of December 31, 1994 and 1993, and the related
statements of operations, partners' capital (deficiency), and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with 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 Robin Housing Associates (a
limited partnership) as of December 31, 1994 and 1993, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

MARDEN, HARRISON & KREUTER
Certified Public Accountants, P.C.

/s/ MARDEN, HARRISON & KREUTER

Port Chester, New York
January 31, 1995

[SMITH & RADIGAN LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners
Lund Hill Associates

We have audited the accompanying balance sheet of Lund Hill Associates, (a
limited partnership), WHEDA Project No. 021, as of December 31, 1995, and the
related statements of partners' equity (deficit), operations and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lund Hill Associates as of
December 31, 1995, and the results of its operations and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedules and supporting data on
pages 13-23 are presented for purposes of additional analysis and are not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in our audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 9, 1996 on our consideration of the Partnership's internal
control structure and a report dated February 9, 1996 on its compliance with
specific requirements applicable to State/HUD programs.

/s/ SMITH & RADIGAN

Atlanta, Georgia
February 9, 1996

[PHILIP ROOTBERG & COMPANY, LLP LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Lund-Hill Associates, Limited Partnership
1601 5th Avenue, Suite 1900
Seattle, Washington 98101

We have audited the accompanying balance sheet of Lund-Hill Associates, Limited
Partnership as of December 31, 1994 and 1993, and the related statements of
changes in partners' capital, operations 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 Lund-Hill Associates, Limited
Partnership at December 31, 1994 and 1993, and the results of its operations,
changes in its partners' capital and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.

/s/ PHILIP ROOTBERG & COMPANY LLP

January 30, 1995

[RICK J. TANNENBERGER LETTERHEAD]

Independent Auditor's Report

The Partners
Tanglewood Apartments, A Limited Partnership

We have audited the accompanying balance sheets of Tanglewood Apartments, A
Limited Partnership, as of December 31, 1995 and 1994, and the related
statements of income, partners' capital and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tanglewood Apartments, A
Limited Partnership as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information presented
on page 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.

/s/ RICK J. TANNENBERGER
Rick J. Tanneberger
Certified Public Accountant

February 16, 1996

[RICK J. TANNEBERGER LETTERHEAD

Independent Auditor's Report

Tanglewood of Joplin Management Co., Inc.
Fayetteville, Arkansas

We have audited the accompanying balance sheets of Tanglewood Apartments, A
Limited Partnership, as of December 31, 1994 and 1993, and the related
statements of income, partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tanglewood Apartments, A
Limited Partnership as of December 31, 1994 and 1993, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ RICK J. TANNENBERGER
Certified Public Accountant

February 28, 1995

[RBG & CO. LETTERHEAD]

Independent Auditors' Report

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

We have audited the accompanying balance sheet of Quality Hill Historic
District - Phase II-A, L.P., a limited partnership, as of December 31, 1995 and
1994 and the related statements of income, partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Quality Hill Historic
District - Phase II-A L.P. as of December 31, 1995 and 1994, and the results of
its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ RUBIN, BROWN, GORNSTEIN & CO. LLP

January 26, 1996

[RUBIN, BROWN, GORNSTEIN & CO. LLP LETTERHEAD]

Independent Auditors' Report

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

We have audited the accompanying balance sheet of Quality Hill Historic
District - Phase II-A, L.P., a limited partnership, as of December 31, 1994 and
1993 and the related statements of income, partners' equity and cash flows for
the years then ended. These financia1 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 determining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Quality Hill Historic
District - Phase II-A, L P. as of December 31, 1994 and 1993, and the results of
its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ RUBIN, BROWN, GORNSTEIN & CO. LLP

January 23, 1995

[HAMILTON & MUSSER, P.C. LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

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

We have audited the accompanying balance sheets of Penn Alto Associates,
Limited Partnership as of December 31, 1995 and 1994 and the related statements
of income, changes in partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Penn Alto Associates,
Limited Partnership, as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for the years then ended in conforming with
generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 10 and 11 is presented for the purpose of additional
analysis and is not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

Mechanicsburg, Pennsylvania /s/ HAMILTON & MUSSER

February 26, 1996 Certified Public Accountants

[HAMILTON & MUSSER, P.C. LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

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

We have audited the accompanying balance sheets of Penn Alto Associates,
Limited Partnership as of December 31, 1994 and 1993 and the related statements
of income, changes in partner's capital and cash flows for the years then ended.
These financial statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Penn Alto Associates,
Limited Partnership, as of December 31, 1994 and 1993 and the results of its
operations and its cash flows for the years then ended in conforming with
generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 10 and 11 is presented for the purpose of additional
analysis and is not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

Mechanicsburg, Pennsylvania /s/ HAMILTON & MUSSER

February 22, 1995 Certified Public Accountants

[J. H. WlLLIAMS & CO. LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Sartain School Venture (a Limited Partnership)
Philadelphia, Pennsylvania

We have audited the accompanying balance sheets of Sartain School Venture (a
Limited Partnership) as of December 31, 1995 and 1994 and the related statements
of income, changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's general
partners and contracted management agent. Our responsibility is to express an
opinion on the 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 the
Partnership's general partners and contracted management agent, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Sartain School Venture (a
Limited Partnership) at December 31, 1995 and 1994, and the results of its
operations, changes in partners' equity and cash flows for the years then ended
in conformity with generally accepted accounting principles.

/s/ J. H. WlLLIAMS & CO., LLP

Kingston, Pennsylvania
February 7, 1996

[J. H. WlLLIAMS & CO. LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Sartain School Venture (a Limited Partnership)
Philadelphia, Pennsylvania

We have audited the accompanying balance sheets of Sartain School Venture (a
Limited Partnership) as of December 31, 1994 and 1993 and the related statements
of income, changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the 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 audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partners and contracted management agent, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Sartain School Venture (a
Limited Partnership) at December 31, 1994 and 1993, and the results of its
operations, changes in partners' equity and cash flows for the years then ended
in conformity with generally accepted accounting principles.

/s/ J. H. WlLLIAMS & CO.

Kingston, Pennsylvania
February 7, l995

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

March 15
------------------------------
1996 1995
------------ ------------
ASSETS

Property and equipment, at cost, less accumulated
depreciation (Notes 2, 4, 7 and 11) $190,117,455 $197,504,961
Cash and cash equivalents (Notes 2 and 11) 2,780,280 2,928,833
Cash held in escrow (Note 5) 9,493,952 9,825,726
Accounts receivable - tenants 527,513 477,697
Deferred costs, less accumulated amortization (Notes 2 and 6) 3,811,548 4,056,790
Other assets 1,607,470 1,402,939
------------ ------------
Total assets $208,338,218 $216,196,946
============ ============

LIABILITIES AND PARTNERS' CAPITAL

Liabilities
Mortgage notes payable (Notes 7 and 10) $158,390,811 $161,241,458
Accounts payable and other liabilities 7,413,973 7,440,889
Due to local general partners and affiliates (Note 8) 13,458,747 12,363,317
Due to general partners and affiliates (Note 8) 2,381,554 1,403,936
Due to selling partners 994,583 964,934
------------ ------------
182,639,668 183,414,534
------------ ------------
Minority interests (Note 2) 7,133,812 7,760,280
------------ ------------
Commitments and contingencies (Notes 7, 8, 10 and 11)
Partners' capital
Limited partners (15,987.5 BACs issued and outstanding)
(Note 1) 19,108,935 25,501,755
General partners (544,197) (479,623)
------------ ------------
Total partners' capital 18,564,738 25,022,132
------------ ------------
Total liabilities and partners' capital $208,338,218 $216,196,946
============ ============

See accompanying notes to consolidated financial statements.

-18-

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

Year Ended March 15
-----------------------------------------
1996 1995 1994
----------- ----------- -----------

Revenues
Rental income $33,437,870 $32,587,993 $30,689,732
Other (Notes 7 and 11) 2,017,385 1,757,761 1,262,941
----------- ----------- -----------

35,455,255 34,345,754 31,952,673
----------- ----------- -----------

Expenses
General and administrative 4,749,747 4,299,837 4,192,692
General and administrative - related parties (Note 8) 1,774,751 1,971,898 1,676,606
Repairs and maintenance 6,330,209 6,292,907 5,139,840
Operating and other 3,745,599 3,931,661 3,744,591
Real estate taxes 1,568,091 1,629,251 1,675,617
Insurance 1,556,561 1,518,382 1,418,248
Interest 13,611,207 14,399,598 14,558,416
Depreciation and amortization 9,060,347 9,514,313 9,226,696
----------- ----------- -----------

42,396,512 43,557,847 41,632,706
----------- ----------- -----------

Minority interests in loss of subsidiaries 483,863 367,308 621,840
----------- ----------- -----------

Loss before extraordinary items (6,457,394) (8,844,785) (9,058,193)

Extraordinary items (Note 10) 0 8,789,439 196,889
----------- ----------- -----------

Net loss $(6,457,394) $ (55,346) $(8,861,304)
=========== =========== ===========

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

Loss before extraordinary items - limited partners $(6,392,820) $(8,756,337) $(8,967,611)

Extraordinary items - limited partners 0 8,701,544 194,920
----------- ----------- -----------

Net loss - limited partners $(6,392,820) $ (54,793) $(8,772,691)
=========== =========== ===========

Loss before extraordinary items per BAC $ (399.86) $ (547.70) $ (560.91)

Extraordinary items per BAC 0.00 544.27 12.19
----------- ----------- -----------

Net loss per BAC $ (399.86) $ (3.43) $ (548.72)
=========== =========== ===========

See accompanying notes to consolidated financial statements.

-19-

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

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

Partners' capital - March 16, 1993 $ 33,938,782 $ 34,329,239 $ (390,457)

Net loss, year ended March 15, 1994 (8,861,304) (8,772,691) (88,613)
------------ ------------ ----------
Partners' capital - March 15, 1994 25,077,478 25,556,548 (479,070)

Net loss, year ended March 15, 1995 (55,346) (54,793) (553)
------------ ------------ ----------

Partners' capital - March 15, 1995 25,022,132 25,501,755 (479,623)

Net loss, year ended March 15, 1996 (6,457,394) (6,392,820) (64,574)
------------ ------------ ----------

Partners' capital - March 15, 1996 $ 18,564,738 $ 19,108,935 $ (544,197)
============ ============ ==========

See accompanying notes to consolidated financial statements.

-20-

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

Year Ended March 15
-------------------------------------------
1996 1995 1994
----------- ------------ -----------

Cash flows from operating activities:
Net loss $(6,457,394) $ (55,346) $(8,861,304)
----------- ------------ -----------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Extraordinary items (Note 10) 0 (8,789,439) (196,889)
Present value of legal settlement (Note 11) 0 210,636 0
Cancellation of indebtedness income (Note 7) (68,571) (205,714) 0
Accrued interest added to principal
of mortgage note payable 126,058 67,241 0
Depreciation and amortization 9,060,347 9,514,313 9,226,696
(Increase) decrease in assets
Cash held in escrow 1,148,855 793,551 (501,395)
Accounts receivable - tenants (49,816) (54,032) 15,988
Other assets (204,531) 494,039 (152,070)
Increase (decrease) in liabilities
Accounts payable and other liabilities (155,469) 211,185 1,798,361
Due to General Partners and affiliates 977,618 922,788 319,676
Minority interest in loss of subsidiaries (483,863) (367,308) (621,840)
----------- ------------ -----------

Total adjustments 10,350,628 2,797,260 9,888,527
----------- ------------ -----------

Net cash provided by operating activities 3,893,234 2,741,914 1,027,223
----------- ------------ -----------

Cash flows from investing activities:
Increase in cash held in escrow (817,081) (1,423,752) (253,186)
Acquisition of property and equipment, net (1,268,987) (575,452) (871,418)
----------- ------------ -----------

Net cash used in investing activities (2,086,068) (1,999,204) (1,124,604)
----------- ------------ -----------

Net cash from operating and investing activities,
carried forward 1,807,166 742,710 (97,381)

See accompanying notes to consolidated financial statements.

-21-

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

Year Ended March 15
------------------------------------------
1996 1995 1994
----------- ----------- -----------

Net cash from operating and investing activities,
brought forward 1,807,166 742,710 (97,381)
----------- ----------- -----------

Cash flows from financing activities:
Increase in deferred costs (30,059) (435,045) (16,105)
Increase in due to Local General
Partners and affiliates 1,496,048 924,954 1,568,895
Decrease in due to Local General
Partners and affiliates (400,618) (727,871) (219,078)
Increase (decrease) in due to selling partners 29,649 34,533 (361,777)
Proceeds from mortgage notes 0 3,800,000 0
Repayment of mortgage notes (2,908,134) (5,622,961) (935,710)
(Decrease) increase in capitalization of consolidated
subsidiaries attributable to minority interest (142,605) (294,991) 187,982
----------- ----------- -----------

Net cash (used in) provided by financing activities (1,955,719) (2,321,381) 224,207
----------- ----------- -----------

Net (decrease) increase in cash and cash equivalents (148,553) (1,578,671) 126,826

Cash and cash equivalents, beginning of year 2,928,833 4,507,504 4,380,678
----------- ----------- -----------

Cash and cash equivalents, end of year $ 2,780,280 $ 2,928,833 $ 4,507,504
=========== =========== ===========

Supplemental disclosure of cash flows information:

Cash paid during the year for interest $11,607,623 $11,308,455 $11,790,552

Supplemental disclosures of noncash activities:

Increase in mortgage notes payable
from present value of legal settlement $ 0 $ 210,636 $ 0
Decrease in mortgage notes payable due to refinancing 0 (5,131,800) 0
Decrease in accounts payable and other liabilities
due to refinancing 0 4,203,950 0
Increase (decrease) in due to Local General
Partners and affiliates 0 546,311 (196,889)
Increase in accounts payable and other liabilities for
property and equipment additions 128,553 86,569 0

See accompanying notes to consolidated financial statements.

-22-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1996

NOTE 1 - General

Liberty Tax Credit Plus L.P., a Delaware limited partnership (the
"Partnership") was organized on June 26, 1987, but had no activity until October
1, 1987 (which date is considered to be inception for financial accounting
purposes). The Partnership had no operations until commencement of the public
offering on November 22, 1987.

The Partnership's business is to invest as a limited partner in other
limited partnerships ("Local Partnerships" or "subsidiaries" or "subsidiary
partnerships"), owning leveraged apartment complexes that are eligible for the
low-income housing tax credit ("Tax Credit") enacted in the Tax Reform Act of
1986, and to a lesser extent in Local Partnerships owning properties that are
eligible for the historic rehabilitation tax credit. As of March 15, 1996, the
Partnership has invested in 31 Local Partnerships and does not anticipate making
any additional investments.

The General Partners of the Partnership are Related Credit Properties,
L.P., a Delaware Limited Partnership (the "Related General Partner"), Liberty
Associates III L.P., a Delaware Limited Partnership ("Liberty Associates"), and
Liberty GP Inc. (formerly Shearson/Liberty G.P. Inc.), a Delaware corporation
(the "Liberty General Partner" and together with the Related General Partner and
Liberty Associates, the "General Partners"). The general partner of the Related
General Partner is Related Credit Properties, Inc., a Delaware corporation. The
general partners of Liberty Associates are the Related General Partner and
Liberty General Partner.

The Partnership is authorized to issue a total of 16,000 Beneficial
Assignment Certificates ("BACs"), which were registered with the Securities and
Exchange Commission for sale to the public. Each BAC represents all of the
economic and virtually all of the ownership rights attributable to a limited
partnership interest. Pursuant to a public offering the Partnership received
$79,937,500 of gross proceeds from the issuance of 15,987.5 BACs. The offering
was completed on April 4, 1988.

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

NOTE 2 - Summary of Significant Accounting Policies

a) Basis of Consolidation

The consolidated financial statements include the accounts of the
Partnership and 31 subsidiary partnerships in which the Partnership is a limited
partner. All intercompany accounts and transactions with the subsidiary
partnerships have been eliminated in consolidation.

The Partnership's fiscal year ends on March 15. All subsidiaries
have calendar year ends. Accounts of the subsidiaries have been adjusted for
intercompany transactions from January 1 through March 15. The books and records
of the Partnership are maintained on the accrual basis of accounting, in
accordance with generally accepted accounting principles ("GAAP").

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

-23-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1996

NOTE 2 - Summary of Significant Accounting Policies (Continued)

a) Basis of Consolidation (Continued)

Losses attributable to minority interests which exceed the minority
interests' investment in a subsidiary partnerships have been charged to the
Partnership. Such losses aggregated $174,915, $79,369 and $147,692 for the years
ended March 15, 1996, 1995 and 1994, respectively. The Partnership's investment
in each subsidiary partnership is equal to the respective subsidiary's partners'
equity less minority interest capital, if any. However, in cases where
subsidiary partnership losses have reduced the Partnership's investment to zero,
no further reduction in the Partnership's investment is recorded. In
consolidation, all subsidiary partnership losses are included in the
Partnership's capital account except for losses allocated to minority interest
capital.

b) Cash and Cash Equivalents

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

c) Property and Equipment

Property and equipment are carried at the lower of depreciated cost
or estimated amounts recoverable through future operations and ultimate
disposition of the property. Cost includes the purchase price, acquisition fees
and expenses, and any other costs incurred in acquiring the properties. The cost
of property and equipment is depreciated over their estimated useful lives using
accelerated and straight-line methods. Expenditures for repairs and maintenance
are charged to expense as incurred; major renewals and betterments are
capitalized. At the time property and equipment are retired or otherwise
disposed of, the cost and accumulated depreciation are eliminated from the
assets and accumulated depreciation accounts and the profit of loss on such
disposition is reflected in earnings. A provision for loss on impairment of
assets is recorded when estimated amounts recoverable through future operations
and sale of the property on an undiscounted basis are below depreciated cost.
However, depreciated cost, adjusted for such reductions in value, if any, may be
greater than the fair value. Property investments themselves are reduced to
estimated fair value (generally using discounted cash flows) when the property
is considered to be impaired and the depreciated cost exceeds estimated fair
value. Through March 15, 1996, the Partnership has not recorded any provisions
for loss on impairment of assets or reduction to estimated fair value.

d) Organization and Offering Costs

Costs incurred to organize the Partnership including but not limited
to legal, accounting, and registration fees are considered deferred organization
expenses. These costs have been capitalized and are being amortized over a
60-month period. Costs incurred to sell BACs including brokerage and the
nonaccountable expense allowance are considered selling and offering expenses.
These costs are charged directly to limited partners' capital (Note 8).

e) Income Taxes

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

-24-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1996

NOTE 2 - Summary of Significant Accounting Policies (Continued)

f) Loss Contingencies

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

g) Use of Estimates

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

h) Accounting Pronouncements Not Yet Implemented

In March 1995, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of". Under SFAS No. 121, the Partnership is required to review long-lived assets
and certain identifiable intangibles for impairment whenever events or changes
in circumstances indicate that the book value of an asset may not be
recoverable. An impairment loss should be recognized whenever the review
demonstrates that the book value of a long-lived asset is not recoverable.

Effective March 16, 1996, the Partnership intends to adopt SFAS No.
121, consistent with the required adoption period. The Partnership does not
expect the implementation to have a material impact on its financial condition
or its future results of operations.

NOTE 3 - Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair
value of each class of financial instruments for which it is practicable to
estimate that value:

Cash and Cash Equivalents, Certificates of Deposit, Mortgage Escrow
Deposits and Cash-Restricted for Tenants' Security Deposits

The carrying amount approximates fair value because of the short
maturity of those instruments.

Mortgage Notes Payable

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

-25-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1996

NOTE 3 - Fair Value of Financial Instruments (Continued)

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

March 15, 1996
------------------------
Carrying
Mortgage Notes Payable for which it is: Amount Fair Value
----------- -----------

Practicable to estimate fair value $71,288,746 $70,885,462

Not Practicable $87,102,065 (a)

(a) Management believes it is not practical to estimate the fair value
of the mortgage notes payable because mortgage programs with similar
characteristics are not currently available to the partnerships.

The carrying amount of other assets and liabilities reported on
the statement of financial position that require such disclosure approximates
fair value.

NOTE 4 - Property and Equipment

The components of property and equipment are as follows:

March 15
-------------------------------- Estimated Useful
1996 1995 Lives (Years)
------------ -------------- -------------

Land $ 11,804,469 $ 11,804,469 -
Buildings and improvements 237,764,534 236,732,884 20 to 40
Other 4,033,439 3,674,335 5 to 15
------------ ------------
253,602,442 252,211,688
Less: Accumulated depreciation 63,484,987 54,706,727
------------ ------------

$190,117,455 $197,504,961
============ ============

Included in property and equipment are $6,859,371 of acquisition fees
paid to the general partners and $952,737 of acquisition expenses. In addition,
as of March 15, 1996, buildings and improvements include $2,870,719 of
capitalized interest.

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

Depreciation expense for the years ended March 15, 1996, 1995 and 1994
amounted to $8,785,046, $8,793,783 and $8,775,531, respectively.

During the year ended March 15, 1996, accumulated depreciation on
dispositions amounting to $6,786 was written off.

-26-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1996

NOTE 5 - Cash Held in Escrow

Cash held in escrow consists of the following:
March 15
---------------------------
1996 1995
------------ ------------
Real estate taxes, insurance, and other $ 2,664,682 $ 3,786,262
Reserve for replacements 6,033,062 5,215,981
Other 796,208 823,483
------------ ------------
$ 9,493,952 $ 9,825,726
============ ============

NOTE 6 - Deferred Costs

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

March 15
-----------------------
1996 1995 Period (Months)
----------- ---------- ---------------

Operating guarantee fee $ 510,443 $ 510,443 60
Financing expenses 4,525,450 4,495,391 *
Organization expenses 1,452,489 1,596,088 60
Supervisory salaries 795,609 795,609 60
Other 48,518 48,518 Various
---------- ----------
7,332,509 7,446,049

Less: Accumulated amortization 3,520,961 3,389,259
---------- ----------
$3,811,548 $4,056,790
========== ==========

*Over the life of the respective mortgages.

Amortization of deferred costs for the years ended March 15, 1996, 1995
and 1994 amounted to $275,301, $720,530, $451,165, respectively.

During the year ended March 15, 1996, deferred costs and accumulated
amortization of $143,599 were written off.

NOTE 7 - Mortgage Notes Payable

The mortgage notes are payable in aggregate monthly installments of
approximately $1,100,000 including principal and interest at rates varying from
1% to 12% per annum, through 2030. Each subsidiary partnership's mortgage note
payable is collateralized by the land and buildings of the respective subsidiary
partnership, the assignment of certain subsidiary partnership's rents and leases
and is without further recourse.

-27-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1996

NOTE 7 - Mortgage Notes Payable (Continued)

Annual principal payment requirements as of March 15, 1996 for each of
the next five fiscal years and thereafter are as follows:

Fiscal Year Amount
----------- ------------
1996 $ 6,693,707
1997 2,448,474
1998 2,661,485
1999 2,900,851
2000 3,158,085
Thereafter 140,528,209
------------
$158,390,811
============

The above principal payment requirements have been adjusted for
principal acceleration which may result from the default of Greenleaf
Associates, Ltd. which has a mortgage note balance aggregating $4,453,250 at
December 31, 1995 (Note 11).

During the 1994 Fiscal Year, Penn Alto restructured its debt and
reduced its monthly payments as a result of the general partner advancing
$1,800,000 to the subsidiary partnership as a voluntary loan. The loan would
receive priority payment and is included in mortgage notes payable. However,
Special Limited Partner approval has not been obtained.

See Notes 10 and 11 for other subsidiary partnerships' financing
activities.

Quality Hill Historic District - Phase II - A, L.P.
---------------------------------------------------

One of the loans providing permanent financing for Quality Hill
Historic District - Phase II A, L.P. ("Quality Hill") is being provided by the
Land Clearance for Redevelopment Authority of Kansas City ("LCRA") in the amount
of $960,000. This non-interest bearing note is secured by a fourth deed of trust
on the rental property and is due in full on June 26, 2021. One-fourteenth of
the unpaid principal balance shall be forgiven annually on the anniversary date
of the note so long as the property is used only as rental property for
qualified low-income families and individuals. $68,571 and $205,714 were
recorded as cancellation of indebtedness income and are included in other income
in the 1995 and 1994 Fiscal Year financial statements, respectively.

Magnolia Arms Associates, Ltd.
------------------------------

Magnolia Arms Associates, Ltd. ("Magnolia") was in default of its
mortgage. As a result of the default, the trustee could have demanded full
payment of the mortgage loan balance ($7,105,000 at August 31, 1995), taken
possession of the Project, foreclosed the mortgage promissory note or taken
other measures as provided for in the financing documents. Effective September
1, 1995, Magnolia entered into a forbearance agreement with the bondholders and
mortgagee which reduced the interest rate to 5% per annum and subjected the
bonds to mandatory sinking fund redemption at discounted payment rates ranging
from 65% in 1995 to 100% in 2017, contingent upon payments being made. Since the
total future cash payment of all new debt was greater than the carrying amount
of the old debt the amount of the original note was not adjusted and no gain was
recorded. However, the current interest rate was adjusted using the interest
method. The new effective rate is the discount rate that equates the present
value of the future cash payments with the carrying amount of the debt. The
effective interest rate of the debt related to the restructuring is 4.52%. The
bondholders have directed the trustee to accelerate the maturity of the bonds or
to pursue any remedies provided for in the financing documents as long as the
parties to the agreement are meeting their obligations.

-28-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1996

NOTE 7 - Mortgage Notes Payable (Continued)

B & C Housing I Associates, L.P. ("Sun Garden/Worthington Apts")
----------------------------------------------------------------

B & C Housing I Associates, L.P. ("Sun Garden/Worthington Apts") local
general partnership interest was sold to Michaels Corp., coincident with a
proposed loan modification. Effective February 1, 1996 the property benefited
from a reduction in mortgage interest from 10.25% to 7.15%, which will result in
approximately $170,000 less in annual interest costs, enabling the owner to
complete an approved repair and replacement plan over the next four years.

NOTE 8 - Related Party Transactions

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

The General Partners and their affiliates (through common ownership)
perform services for the Partnership. The costs incurred for the years ended
March 15, 1996, 1995 and 1994 are as follows:

A) Related Party Fees
Year Ended March 15
-----------------------------------
1996 1995 1994
---------- ---------- ----------
Partnership management fees (a) $ 294,500 $ 291,500 $ 270,000
Expense reimbursement (b) 213,927 145,946 139,274
Property management fees (c) 1,184,824 1,470,702 1,213,332
Local administrative fee (d) 81,500 63,750 54,000
---------- ---------- ----------

$1,774,751 $1,971,898 $1,676,606
========== ========== ==========

(a) The General Partners are entitled to receive a partnership
management fee, after payment of all Partnership expenses, which together with
the local annual administrative fees will not exceed a maximum of 0.5% per annum
of invested assets (as defined in the Partnership Agreement), for administering
the affairs of the Partnership. The partnership management fee, subject to the
foregoing limitation, will be determined by the general partners in their sole
discretion based upon their review of the Partnership's investments. Partnership
management fees owed to the general partners amounting to approximately $850,000
and $555,000 were accrued and unpaid as of March 15, 1996 and March 15, 1995,
respectively.

(b) The Partnership reimburses the General Partners and their
affiliates for actual Partnership operating expenses incurred by the General
Partners and their affiliates on the Partnership's behalf. The amount of
reimbursement from the Partnership is limited by the provisions of the
Partnership Agreement. Another affiliate of the General Partners performs asset
monitoring for the Partnership. These services include site visits and
evaluations of the subsidiary partnerships' performance. Expense reimbursements
and asset monitoring fees owed to the Related General Partner amounting to
approximately $172,000 and $0 were accrued and unpaid as of March 15, 1996 and
March 15, 1995, respectively.

The General Partners have continued advancing and allowing the
accrual without payment of these amounts but are under no obligation to do so.

-29-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1996

NOTE 8 - Related Party Transactions (Continued)

(c) Property management fees incurred by subsidiary partnerships
amounted to $1,828,409, $1,801,111 and $1,726,644 for the years ended March 15,
1996, 1995 and 1994, respectively. Of these fees $1,108,548, $1,407,893 and
$1,179,154 were incurred to affiliates of the subsidiary partnerships' general
partners. In addition $76,276, $62,809 and $34,178 were incurred to affiliates
of the Partnership.

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

The General Partners of the Partnership were allocated approximately
$45,000, $10,000 and $84,000 of passive losses for the years ended March 15,
1996, 1995 and 1994, respectively.

Liberty Associates III L.P. received cash distributions of
approximately $800, $3,500 and $800 during the years ended March 15, 1996, 1995
and 1994, respectively.

Liberty Associates III L.P. was allocated Low-Income Housing Tax
Credits of approximately $2,200, for each of the taxable years ended March 15,
1996, 1995 and 1994, respectively.

Due to local general partners and affiliates at December 31, 1995
and 1994 consists of the following:

December 31,
--------------------------
1995 1994
----------- -----------
Operating deficit advances $ 513,055 $ 513,055
Operating advances 1,045,530 822,021
Development fee payable 255,000 278,600
Residual loan payable 52,500 52,500
Interest (Note 11) 3,766,055 3,106,522
Long term notes payable (f) 5,586,311 5,586,311
Management and other fees 2,240,296 2,004,308
----------- -----------
$13,458,747 $12,363,317
=========== ===========

(f) Long term notes payable consist of the following:

Grove Parc Assoc. L.P. $ 5,040,000 $ 5,040,000
This note bears interest at 7.39%
compounded annually on May 1 of
each year. The note is secured
by a mortgage subordinate in rights
to mortgages securing the building
loan. Both principal and interest
on the loan are due and payable in
full out of residual receipts on
April 29, 2010, or are immediately
due and payable upon refinancing
or sale of the project.
Dixie Apartment Assoc. LTD 105,187 105,187
This promissory note bears interest
at 11% with a maturity date of
June 1, 2002. (Note 10)
Ludlam Gardens Apartments LTD 441,124 441,124
----------- -----------
This promissory note bears interest
at 11% with a maturity date of
June 1, 2000. (Note 10)
5,586,311 5,586,311
=========== ===========

-30-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1996

NOTE 8 - Related Party Transactions (Continued)

B) Guarantees

The Partnership has negotiated Operating Deficit Guaranty Agreements
with all of the Local Partnerships, in which the Local General Partners have
agreed to fund operating deficits, up to a stated maximum amount, for a
specified period of time (generally, three years commencing at break-even). The
terms of the Operating Deficit Guaranty Agreements vary for each Local
Partnership. The gross amount of the Operating Deficit Guarantees aggregate
approximately $16,880,000, of which approximately, $16,430,000, $15,388,000 and
$13,864,000 expired as of March 15, 1996, 1995 and 1994, respectively. As of
March 15, 1996, 1995 and 1994, $621,887, $513,055 and $723,035, respectively,
has been funded by the Local General Partners to meet such obligations. Of the
amount funded through March 31, 1996, approximately $108,000 has been recorded
as a capital contribution and the remaining balance of approximately $513,000 is
recorded as due to local general partners and affiliates as noninterest bearing
operating advances to be repaid from operating cash flows. All operating deficit
guarantees expire within the next three years. Management does not expect impact
on liquidity based on prior years' fundings.

The general partners of Bayridge Associates Limited Partnership
("Bayridge"), a subsidiary partnership, agreed to provide guarantees of up to
$1,000,000 to fund debt service deficiencies in the event certain debt coverage
and debt service ratios were not met for specified periods of time. As of March
15, 1996 no guarantees have been funded. The Debt Coverage Guaranty Agreement
provides for the security to be reduced to a $100,000 letter of credit provided
by the Bayridge general partners.

NOTE 9 - Income Taxes

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

Year Ended December 31
----------------------------------------
1995 1994 1993
----------- ---------- -----------

Financial statement
Net loss $(6,457,394) $ (55,346) $(8,861,304)
Difference between depreciation and amortization
expense recorded for financial reporting purposes
and the accelerated cost recovery system utilized
for income tax purposes 84,208 (79,957) (27,118)
Difference resulting from parent company having a
different fiscal year for income tax and financial
reporting purposes (62,638) (160,802) 43,859
Cancellation of indebtedness income 0 742,260 0
Tax basis forgiveness of debt 2,096,523 0 0
Differences resulting principally from rental income
recognized for income tax purposes and deferred for
financial reporting purposes and interest and other
operating expenses deducted for financial reporting
purposes not deducted for income tax purposes 310,469 (1,148,420) 716,117
----------- ---------- -----------

Net loss as shown on the income tax return for the
calendar year ended $(4,028,832) $ (702,265) $(8,128,446)
=========== ========== ===========

-31-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1996

NOTE 10 - Extraordinary Items

Extraordinary items consist of the following:

Year Ended March 15
----------------------------------------
1996 1995 1994
----------- ---------- -----------

2108 Bolton Drive Associates, L.P. -
forgiveness of indebtedness income $ 0 $9,335,750 $ 196,889
Ludlam Gardens Apartments, Ltd. -
interest expense incurred on refinancing 0 (441,124) 0
Dixie Apartment Associates, Ltd. -
interest expense incurred on refinancing 0 (105,187) 0
----------- ---------- -----------
$ 0 $8,789,439 $ 196,889
=========== ========== ===========

2108 Bolton Drive Associates, L.P.
----------------------------------

During the 1993 Fiscal Year, the original general partner of Bolton,
the predecessor to 2108 Bolton Drive Associates, L.P., was replaced by New Texas
Associates, Inc. ("New Texas"); accordingly operating deficit loans previously
advanced by the former general partner in the amount of $196,889 were forgiven
and the operating deficit agreement cancelled. New Texas had attempted to reach
a provisional mortgage workout agreement with HUD. Subsequent to December 31,
1993, HUD concluded that a workout was not in its best interest and ordered that
the property be sold. The sale occurred on April 26, 1994 for a price of
$4,500,000 to a new limited partnership, 2108 Bolton Drive Associates, L.P.
("2108"). The 98.99% limited partner of 2108 is the Partnership. The closing
occurred on July 13, 1994. On June 28, 1994, Bolton was merged with 2108. For
tax purposes, as well as in the financial statements the transaction was
considered a continuation of Bolton.

The acquisition was financed by a first mortgage dated June 29, 1994 in
the original amount of $4,500,000. The mortgage provides for interest at the
commercial base rate of the mortgagee plus 2% per annum and matures June 29,
1995, which provides for a possible additional four month extension. In addition
2108 committed to spend approximately $400,000 on capital improvements and
repairs. In order to acquire the property, affect repairs and pay closing costs,
an affiliate of the general partner of 2108 advanced $600,000 and the
Partnership advanced $1,027,000. 2108 is in the process of applying for
long-term fixed rate financing. The property was originally encumbered by a
$9,631,800 mortgage at an interest rate of 10.75% and accrued interest at July
13, 1994 was $3,911,510. The effect of the transaction is a refinancing
resulting in a reduction in mortgage indebtedness (including accrued interest)
of $9,335,750.

In March 1996, 2108 refinanced its mortgage note payable of
approximately $3,500,000. The new mortgage note in the amount of $4,480,000 paid
off the former mortgage note and approximately $900,000 of debt due to an
affiliate of the Partnership. This mortgage bears interest at the rate of 8.64%
per annum and is payable in monthly installments of $36,105 which includes
principal and interest through March 2006, when the remaining principal balance
of approximately $3,700,000 will be due. For financial reporting purposes, the
Partnership has recognized income in the amount of $9,335,750 (forgiveness of
indebtedness) from the transaction, including the mortgage reduction and
write-off of certain other payables which has been shown as an extraordinary
gain in the 1994 financial statements. Development deficit loans previously
funded by the former general partner have been reflected as a reduction of the
basis of the property. The Partnership's investment in 2108 at March 15, 1996
and 1995 was approximately $2,204,000 and $3,047,000, respectively and the
minority interest balance was approximately $1,695,000 and $1,700,000. 2108's
net (loss) income after minority interest amounted to approximately ($843,000),
$7,616,000 and ($1,605,000), for the 1995, 1994 and 1993 Fiscal Years,
respectively.

-32-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1996

NOTE 10 - Extraordinary Items (continued)

Ludlam Gardens Apartments, Ltd.
-------------------------------

On May 26, 1994, Ludlam Gardens Apartments, Ltd. ("Ludlam") closed on a
$2,800,000 loan with Northern Trust Bank of Florida N.A. and paid off the
indebtedness with Barnett Bank of South Florida in the amount of $2,718,435.
From the loan closing, $35,975 of excess proceeds, net of expenses, remained
which were placed in the operating account available to Ludlam. Of this amount,
$14,500 was used for reimbursement of a portion of the commitment fee.

The Northern Trust loan is for $2,800,000 and matures January 26, 2002
(120 days prior to expiration of the HAP Contract), amortized over twenty-five
(25) years and carries a fixed rate of 9% (10.08% constant). A sliding
prepayment penalty exists until January 26, 2000. An annual 1.15 Debt Service
coverage ratio is required. If not obtained, the lender may request loan
reduction or additional collateral.

The Barnett Bank loan in the original amount of $3,300,000 which was to
mature on August 28, 1997 was satisfied in full. This loan was amortized
assuming an 11.44% payrate, with the interest rate reset on an annual basis at a
rate which was 2.75% over the average weekly yield on U.S. Treasury Bills
adjusted to a one year constant. The interest in effect at the time of
refinancing was 6.12%. To the extent that any monthly payment exceeded the
applicate interest rate, such excess payment (positive amortization) was treated
as a voluntary prepayment of the outstanding principal balance. In accordance
with the Partnership Agreement, upon the refinancing, proceeds from the savings
of interest expense due to positive amortization became payable to the general
partner. This amount totaled $441,124, and is shown as a extraordinary loss for
the 1994 Fiscal Year.

Dixie Apartments Associates, Ltd.
---------------------------------

On May 26, 1994 Dixie Apartments Associates, Ltd. ("Dixie") closed on a
$1,000,000 loan with Northern Trust Bank of Florida N.A. and paid off the
indebtedness with Barnett Bank of South Florida in the amount of $947,999. From
the loan closing, $21,132 of excess proceeds, net of expenses, remained which
were placed in the operating account available to Dixie. Of this amount, $5,000
was used for reimbursement of a portion of the commitment fee.

The Northern Trust loan is for $1,000,000 and matures September 5, 2002
(120 days prior to expiration of HAP Contract), amortizes over twenty-five (25)
years and carries a fixed rate of 9% (10.08% constant). A sliding prepayment
penalty exists until September 5, 2000. An annual 1.15 Debt Service coverage
ratio is required. If not obtained, the lender may request loan reduction or
additional collateral.

The Barnett Bank loan in the original amount of $1,100,000 which was to
mature on August 28, 1997 was satisfied in full. This loan was amortized
assuming an 11.44% payrate, with the interest rate reset on an annual basis at a
rate which was 2.75% over the average weekly yield on U.S. Treasury Bills
adjusted to a one-year constant. The interest in effect at the time of
refinancing was 6.12%. To the extent, under the original loan, that any monthly
payment exceeded the applicable interest rate, such excess payment (positive
amortization) was treated as a voluntary prepayment of the outstanding principal
balance. In accordance with the Partnership Agreement, upon the refinancing,
proceeds from the savings of interest expense due to positive amortization
became payable to the general partner. This amount totaled $105,187 and is shown
as an extraordinary loss for the 1994 Fiscal Year.

-33-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1996

NOTE 11 - Commitments and Contingencies

a) Subsidiary Partnership - Going Concern

Four subsidiary partnerships, Redwood Villa Associates, 2108 Bolton
Drive Associates, L.P., Greenleaf Associates L.P. and Walnut Park Plaza
Associates have significant contingencies and uncertainties regarding their
continuing operations which raise substantial doubt about their abilities to
continue as going concerns. The financial statements of these four subsidiary
partnerships were prepared assuming that each will continue as a going concern.

Redwood Villa Associates
------------------------

Redwood Villa Associates ("Redwood") has sustained operating losses
since its inception. For the 1995 Fiscal Year, Redwood experienced a loss of
$240,426 including $227,084 of depreciation and $4,533 of amortization. For the
1994 Fiscal Year, Redwood experienced a loss of $397,877 including $241,990 of
depreciation and $4,533 of amortization. Redwood also had a loss on disposal of
a co-generation unit of $175,528 (net of $106,951 received in grant monies to
construct the co-generation unit). Redwood's continuation as a going concern is
dependent upon its ability to achieve profitable operations or contributions
from partners. The financial statements for the 1995, 1994 and 1993 Fiscal Years
for Redwood Villa have been prepared assuming that Redwood Villa will continue
as a going concern. Management, whenever possible, plans to reduce operating
costs to achieve profitable operations. The Partnership's investment in Redwood
at March 15, 1996 and 1995 was reduced to zero by current and prior years losses
and the minority interest balance amounted to approximately $412,000 and
$415,000. Redwood's net loss after minority interest amounted to approximately
$238,000, $393,000 and $227,000 for the 1995, 1994 and 1993 Fiscal Years,
respectively.

2108 Bolton Drive Associates, L.P.
----------------------------------

2108 Bolton Drive Associates, L.P. ("2108"), has experienced
recurring operating losses and has a working capital deficit at December 31,
1995.

The auditors for this subsidiary partnership modified their report
on the 1995 and 1994 Fiscal Year financial statements due to the uncertainty of
the subsidiary partnership's ability to continue as a going concern. The
Partnership's investment in 2108 at March 15, 1996 and 1995 was approximately
$2,204,000 and $3,047,000, respectively and the minority interest balance was
approximately $1,695,000 and $1,700,000. 2108's net loss (income) after minority
interest amounted to approximately $843,000, ($7,616,000) and $1,605,000 for the
1995, 1994 and 1993 Fiscal Years, respectively.

Greenleaf Associates, L.P.
--------------------------

Greenleaf Associates, L.P. ("Greenleaf"), a subsidiary partnership
has not made its monthly mortgage payments when due. Pursuant to the terms of
the mortgage note, the partnerships failure to make the required payments when
due, constituted an event of default. As a result of the default, the mortgagee
could demand full payment of the mortgage loan balance ($4,453,250 at December
31, 1995) and exercise the other remedies of a secured party under the Uniform
Commercial Code including taking possession of the collateral (the project) and
selling or otherwise disposing of the project. The partnership is negotiating
with the mortgagee to restructure the terms of the mortgage loan.

-34-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1996

NOTE 11 - Commitments and Contingencies (Continued)

a) Subsidiary Partnership - Going Concern (Continued)

The auditors for Greenleaf have prepared 1995 Fiscal Year financial
statements for this subsidiary partnership assuming Greenleaf will continue as a
going concern. The Partnerships investment in Greenleaf and the minority
interest balance was reduced to zero by prior and current year's losses.
Greenleaf's net loss amounted to approximately $203,000, $214,000 and $245,000
for the 1995, 1994 and 1993 Fiscal Years, respectively.

Walnut Park Plaza Associates
----------------------------

Walnut Park Plaza Associates, ("Walnut Park") has sustained
recurring losses from operations. At December 31, 1995, the Partnership had not
made certain payments required under the terms of the Bond Indenture and, as a
result, is in default. In August, 1995, the Project's bonds payable were sold by
the bondholder to E. A. Moos ("Moos"). On April 9, 1996, Walnut Park entered
into an interim agreement with Moos. The expiration date for the interim
agreement is October 15, 1996 subject to certain defined extension and
termination provisions. The interim agreement primarily allows Moos to select an
interim and permanent replacement property manager, to formulate a proposal to
replace the General Partner, and to possibly restructure the indebtedness of the
Project. Walnut Park's continued existence is dependent on the impact of the
interim agreement and ultimately the resolution of the default of certain
obligations under the terms of the Bond Indenture. Contingent upon the outcome
of the interim agreement and of the status of the Bond Indenture default, the
subsidiary partnership may be unable to continue as a going concern in it's
present form. The Partnership's investment in Walnut Park at March 15, 1996 was
written down to zero as a result of current years losses and at March 15, 1995
the Partnerships investment was approximately $167,000. In the case of Walnut
Park minority interest balance at March 15, 1996 and 1995 amounted to
approximately $442,000 and $445,000, respectively. Walnut Park's net loss after
minority interest amounted to approximately $257,000, $193,000 and $332,000 for
the 1995, 1994 and 1993 Fiscal Years, respectively.

b) Subsidiary Partnerships - Other

Silver Blue Lake Apartments, Ltd
--------------------------------

Three note holders, which provided additional permanent financing for
Silver Blue Lake Apartments Ltd., ("Silver Blue Lake") have commenced legal
action against the Local Partnership claiming that it is in default of the
provisions of the notes regarding the payments of principal and interest to be
made from net cash flow, as defined. Accordingly, they have declared the notes
to be in default and have demanded the entire outstanding indebtedness of
principal and interest. At December 31, 1995, total indebtedness, under these
notes, amounted to $258,840. In December 1995, a settlement agreement was
reached by Silver Blue Lake and the note holders. The subsidiary partnership
agreed to pay the noteholders $18,480, record a second mortgage covering the
notes, and pay interest semiannually up to 20% of cash flow or $1,250 whichever
is greater. The Partnership's investment in Silver Blue Lake and the minority
interest balance at March 15, 1996, and 1995 has been reduced to zero by prior
years' losses. Silver Blue Lake's net loss amounted to approximately $21,000,
$146,000 and $61,000 for the 1995, 1994 and 1993 Fiscal Years, respectively.

Regent Street Associates, L.P.
------------------------------

Regent Street Associates, L.P. ("Regent Street") has received from
the Internal Revenue Service a notice of final partnership administrative
adjustment. Pursuant to the notice the Internal Revenue Service has challenged
the method in which the subsidiary partnership has allocated the below-market
federal financing to its properties, which challenge, if successful, would
result in the subsidiary partnership only being able to claim a 4%

-35-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1996

NOTE 11 - Commitments and Contingencies (Continued)

b) Subsidiary Partnerships - Other (Continued)

Low Income Housing Tax Credit rather than a 9% Low Income Housing Tax Credit.
The Internal Revenue Service has also challenged the inclusion of a portion of
the developer's fee and legal costs in qualified expenditures for the purpose of
determining Low Income Housing and Historic Rehabilitation Tax Credits and
depreciable basis. The general partners of the Regent Street subsidiary
partnership intend to file a petition for readjustment challenging each of the
positions taken by the Internal Revenue Service. The Partnership's investment in
Regent Street at March 15, 1996 and 1995, was approximately $1,153,000 and
$1,489.000, respectively and the minority interest balance was zero. Regent
Streets net loss amounted to approximately $336,000, $322,000 and $355,000 for
the 1995, 1994 and 1993 Fiscal Years, respectively.

B & C Housing I Associates, L.P. ("Sun Garden/Worthington Apts")
----------------------------------------------------------------

B & C Housing I Associates, L.P. ("Sun Garden/Worthington Apts")
local general partnership interest was sold to Michaels Corp., coincident with a
proposed loan modification. Effective February 1, 1996 the property benefited
from a reduction in mortgage interest from 10.25% to 7.15%, which will result in
approximately $170,000 less in annual interest costs, enabling the owner to
complete an approved repair and replacement plan over the next four years. The
Partnership's investment in B & C Housing at March 15, 1996 and 1995 was
approximately $795,000 and $633,000. In the case of B&C Housing the minority
interest balance at March 13, 1996 and 1995 was approximately $163,000 and
$147,000, respectively. B & C's net income (loss) after minority interest
amounted to approximately $161,000, ($338,000) and ($343,000) for the 1995, 1994
and 1993 Fiscal Years, respectively.

Robin Housing Associates
------------------------

Robin Housing Associates ("Robin Housing") is a defendant in a
personal injury lawsuit. Robin Housing's insurance carrier intends to defend the
subsidiary partnership vigorously. Management believes that the insurance
coverage is adequate to cover any liability arising from this action. Since it
is too premature to make an evaluation of the amount or range of Robin Housing's
potential loss, it is management's opinion that no accrual for potential losses
is currently warranted in the financial statements. The maximum loss which the
Partnership would be liable for is its net investment in Robin Housing amounting
to approximately $830,000. The Partnership's investment in Robin Housing was
approximately $830,000 and $991,000 at March 15, 1996 and 1995, respectively.
Robin Housing's net loss after minority interest amounted to approximately
$140,000, $121,000 and $173,000 for the 1995, 1994, and 1993, Fiscal Years,
respectively.

Magnolia Arms Associates, Ltd.
------------------------------

Magnolia Arms Associates, Ltd. ("Magnolia") was in default of its
mortgage. As a result of the default, the trustee could have demanded full
payment of the mortgage loan balance ($7,105,000 at August 31, 1995), taken
possession of the project, foreclosed the mortgage promissory note or taken
other measures as provided for in the financing documents. Effective September
1, 1995, Magnolia entered into a forbearance agreement with the bondholders and
mortgagee which reduced the interest rate to 5% per annum and subjected the
bonds to mandatory sinking fund redemption at discounted payment rates ranging
from 65% in 1995 to 100% in 2017, contingent upon payments being made. Since the
total future cash payment of all new debt was greater than the carrying amount
of the old debt the amount of the original note was not adjusted and no gain was
recorded. However, the current interest rate was adjusted using the interest
method. The new effective rate is the discount rate that equates the present
value of the future cash payments with the carrying amount of the debt. The
effective

-36-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1996

NOTE 11 - Commitments and Contingencies (Continued)

b) Subsidiary Partnerships - Other (Continued)

interest rate of the debt related to the restructuring is 4.52%. The
bondholders have directed the trustee not to accelerate the maturity of the
bonds or to pursue any remedies provided for in the financing documents as long
as the parties to the agreement are meeting their obligations. The Partnership's
investment in Magnolia and the minority interest balance at March 15, 1996 and
1995 was reduced to zero by prior year's losses. Magnolia's net income (loss)
amounted to approximately $33,000, ($648,000) and ($603,000) for the 1995, 1994
and 1993 Fiscal Years, respectively.

c) Lease Commitment

One of the subsidiary partnerships entered into a forty-year ground
lease for the land on which the building is built. As stipulated in the lease,
the subsidiary partnership agrees to pay all real estate taxes, license and
permit fees, among other charges that may be assessed upon the land or
improvements. At December 31, 1995, the subsidiary partnership was committed to
minimum future rentals on the noncancellable lease in the amount of $60,000 a
year through 2028. The lease payments are payable from available cash and at
December 31, 1995 the subsidiary partnership has accrued lease payments of
$223,647.

d) Uninsured Cash and Cash Equivalents

The Partnership maintains its cash and cash equivalents in various
banks. Accounts at each bank are guaranteed by the Federal Deposit Insurance
Corporation (FDIC) up to $100,000. As of March 15, 1996, uninsured cash and cash
equivalents approximated $489,000.

e) Letter of Credit

The subsidiary partnerships were contingently liable at December 31,
1995 on the following open letter of credits:
Debt service $700,000
Development contingency 23,310
Other 64,000
--------
$787,310
========
f) Other

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

-37-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1996

NOTE 11 - Commitments and Contingencies (Continued)

g) Tax Credits

The Partnership and BAC holders began recognizing Housing Tax
Credits with respect to the Properties when the Credit Period for such Property
commenced. Because of the time required for the acquisition, completion and
rent-up of Properties, the amount of Tax Credits per BAC gradually increase over
the first three years of the Partnership. Housing Tax Credits not recognized in
the first three years will be recognized in the 11th through 13th years. For the
1995, 1994 and 1993 tax years, Housing Tax Credits of $11,327,236, $11,327,236
and $11,327,258 were generated.

A portion of the low-income housing tax credits are subject to
recapture in future years if (i) the Partnership ceases to meet qualification
requirements, (ii) there is a decrease in the qualified basis of the Projects,
or (iii) there is a reduction in the taxpayer's interest in the Project at any
time during the 15-year Compliance Period that began with the first tax year of
the credit period.

-38-

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

None

PART III

Item 10. Directors and Executive Officers of the Registrant.

The Partnership has no directors or officers. The Partnership's affairs
are managed and controlled by the General Partners. Certain information
concerning the directors and executive officers of the General Partners who may
be deemed directors or executive officers of the Partnership is set forth below.

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

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

Stephen M. Ross Director

J. Michael Fried President and Director

Alan P. Hirmes Senior Vice President

Stuart J. Boesky Vice President

Lawrence J. Lipton Treasurer and Assistant Vice President

Robert Bordonaro Assistant Vice President

Lynn A. McMahon Secretary

STEPHEN M. ROSS, 56, is a Director of the General Partner of the
Related General Partner. Mr. Ross is also President, Director and shareholder of
The Related Realty Group, Inc., the General Partner of The Related Companies,
L.P. He graduated from the University of Michigan School of Business
Administration with a Bachelor of Science degree and from Wayne State University
School of Law with a Juris Doctor degree. Mr. Ross then received a Master of
Laws degree in taxation from New York University School of Law. He joined the
accounting firm of Coopers & Lybrand in Detroit as a tax specialist and later
moved to New York, where he worked for two large Wall Street investment banking
firms in their real estate and corporate finance departments. Mr. Ross formed
the predecessor of The Related Companies, L.P. in 1972 to develop, manage,
finance and acquire subsidized and conventional apartment developments.

J. MICHAEL FRIED, 52, is President and a Director of the General
Partner of the Related General Partner. Mr. Fried is the sole shareholder of one
of the general partners of Related Capital Company ("Capital"), a real estate
finance and acquisition affiliate of Related. In that capacity, he is
responsible for all of Capital's syndication, finance, acquisition and investor
reporting activities. Mr. Fried practiced corporate law in New York City with
the law firm of Proskauer Rose Goetz & Mendelsohn from 1974 until he joined
Capital in 1979. Mr. Fried graduated from Brooklyn Law School with a Juris
Doctor degree, magna cum laude; from Long Island University Graduate School with
a Master of Science degree in Psychology; and from Michigan State University
with a Bachelor of Arts degree in History.

ALAN P. HIRMES, 41, is a Senior Vice President of the General Partner
of the Related General Partner. Mr. Hirmes has been a Certified Public
Accountant in New York since 1978. Prior to joining Capital in October 1983, Mr.
Hirmes was employed by Weiner & Co., Certified Public Accountants. Mr. Hirmes is
also a Vice President of Capital. Mr. Hirmes graduated from Hofstra University
with a Bachelor of Arts degree.

-40-

STUART J. BOESKY, 40, is Vice President of the General Partner of the
Related General Partner. Mr. Boesky practiced real estate and tax law in New
York City with the law firm of Shipley & Rothstein from 1984 until February 1986
when he joined Capital. From 1983 to 1984 Mr. Boesky practiced law with the
Boston law firm of Kaye, Fialkow, Richard & Rothstein and from 1978 to 1980 was
a consultant specializing in real estate at the accounting firm of Laventhol &
Horwath. Mr. Boesky graduated from Michigan State University with a Bachelor of
Arts degree and from Wayne State School of Law with a Juris Doctor degree. He
then received a Master of Laws degree in Taxation from Boston University School
of Law.

LAWRENCE J. LIPTON, 40, is Treasurer and Assistant Vice President of
the General Partner of the Related General Partner. Mr. Lipton has been a
Certified Public Accountant in New York since 1989. Prior to joining Related,
Mr. Lipton was employed by Deloitte & Touche from 1987-1991. Mr. Lipton
graduated from Rutgers College with a Bachelor of Arts degree and from Baruch
College with a Masters of Business Administration degree.

ROBERT BORDONARO, 42, is Assistant Vice President of the General
Partner of the Related General Partner. Mr. Bordonaro is also a controller of
The Related Companies, L.P. Mr. Bordonaro has been a Certified Public Accountant
in New York since 1977. Prior to joining Related, Mr. Bordonaro was employed by
the accounting firms of Weiner & Co. from 1982-1985 and Arthur Young from
1975-1981. Mr. Bordonaro graduated from New York University with a Bachelor of
Science degree in 1974 and with a Masters of Business Administration degree in
1975.

LYNN A. McMAHON, 40, is Secretary of the General Partner of the Related
General Partner. Since 1983, she has served as Assistant to the President of
Capital. From 1978 to 1983 she was employed at Sony Corporation of America in
the Government Relations Department.

Liberty GP, Inc.
- - ----------------

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

Paul L. Abbot Chairman of the Board, President,
Chief Executive Officer and Chief
Financial Officer

Donald E. Petrow Vice President

PAUL L. ABBOTT, 50, is a Managing Director of Lehman Brothers and
President of the Liberty General Partner. Mr. Abbott joined Lehman Brothers in
August 1988, and is responsible for the investment management of residential,
commercial and retail real estate. Prior to joining Lehman Brothers, Mr. Abbott
was a real estate consultant and senior officer of a privately held company
specializing in the syndication of private real estate limited partnerships.
From 1974 through 1983, Mr. Abbott was an officer of two life insurance
companies and a director of an insurance agency subsidiary. Mr. Abbott received
his formal education in the undergraduate and graduate schools of Washington
University of St. Louis.

DONALD E. PETROW, 39, is a First Vice President of Lehman Brothers and
Vice President of the Liberty General Partner. From March 1989, he has been
responsible for the investment management of various investment portfolios,
including but not limited to, federal insured mortgages, residential real
estate, broadcasting and energy. From November 1981 to February 1989, Mr.
Petrow, as a Vice President of Lehman Brothers, was involved in investment
banking activities relating to partnership finance and acquisition. Prior to
joining Lehman Brothers, Mr. Petrow was employed in accounting and equipment
leasing firms. Mr. Petrow holds a B.S. Degree in accounting from Saint Peters
College and an M.B.A. in Finance from Pace University.

-41-

Item 11. Executive Compensation.

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

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

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

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

General Partnership Related Credit Properties L.P. $500 capital contribution 49%
Interest in the Partnership 625 Madison Avenue - directly owned
New York, NY 10022

Liberty GP, Inc. $500 capital contribution 49%
c/o Lehman Brothers - directly owned
3 World Financial Center
New York, NY 10285

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

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

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

Item 13. Certain Relationships and Related Transactions.

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

-42-

PART IV

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

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

Independent Auditors' Report 17

Consolidated Balance Sheets at March 15, 1996 and 1995 92

Consolidated Statements of Operations for the Years
Ended March 15, 1996, 1995 and 1994 93

Consolidated Statements of Changes in Partners' Capital
for the Years Ended March 15, 1996, 1995 and 1994 94

Consolidated Statements of Cash Flows for the Years
Ended March 15, 1996, 1995 and 1994 95

Notes to Consolidated Financial Statements 97

(a) 2. Financial Statement Schedules

Independent Auditors' Report 120

Schedule I - Condensed Financial Information of Registrant 121

Schedule III - Real Estate and Accumulated Depreciation 124

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

(a) 3. Exhibits

(21) Subsidiaries of the Registrant - the local partnerships
set forth in item 2 may be considered subsidiaries of
the Registrant 117

(27) Financial Data Schedule (filed herewith) 132

(b) Reports on Form 8-K

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

-43-

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

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

Jurisdiction
of Organization
---------------

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

-44-

SIGNATURES
----------

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

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

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

By: RELATED CREDIT PROPERTIES INC.
its General Partner

Date: June 12, 1996

By: /s/ J. Michael Fried
------------------------
J. Michael Fried
President and Director
(Principal Executive Officer)

By: LIBERTY GP INC.
a General Partner

Date: June 12, 1996

By: /s/ Paul L. Abbott
------------------------
Paul L. Abbott
Chairman of the Board, President
and Chief Executive Officer

-47-

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d), this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated:

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

President, Chief Executive Officer (principal
/s/ J. Michael Fried executive officer) and Director of Related Credit
- - -------------------- Properties Inc., general partner of Related Credit
J. Michael Fried Properties, L.P. (a General Partner of Registrant) June 12, 1996

/s/ Lawrence J. Lipton
- - ---------------------- Treasurer (principal financial and accounting
Lawrence J. Lipton officer) of Related Credit Properties Inc. June 12, 1996

/s/ Stephen M. Ross Director of Related Credit Properties Inc.,
- - ------------------- a general partner of Related Credit
Stephen M. Ross Properties, L.P. (a General Partner of Registrant) June 12, 1996

Chairman of the Board, President, Chief
Executive Officer (principal executive officer),
/s/ Paul L. Abbott Chief Financial Officer and Director of
- - ------------------ Liberty GP, Inc. (a General Partner June 12, 1996
Paul L. Abbott of Registrant)

/s/ Donald E. Petrow
- - --------------------
Donald E. Petrow Vice President of Liberty GP, Inc. June 12, 1996

-48-

[Letterhead of Trien, Rosenberg, Felix,
Rosenberg, Barr & Weinberg, LLP]

INDEPENDENT AUDITORS' REPORT

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

In connection with our audits of the consolidated financial statements
of Liberty Tax Credit Plus L.P. and Subsidiaries included in the Form 10-K as
presented in our opinion dated June 4, 1996 on pages 17 and 18 and based on the
reports of other auditors, we have also audited supporting Schedules I and III
for the 1995, 1994 and 1993 Fiscal Years. In our opinion, and based on the
reports of the other auditors (certain of which were modified due to the
uncertainty of these subsidiary partnerships' abilities to continue in
existence), these consolidated schedules present fairly, when read in
conjunction with the related consolidated financial statements, the financial
data required to be set forth therein.

As discussed in Note 11, the consolidated financial statements include
the financial statements of four limited partnerships with significant
contingencies and uncertainties regarding their continuing operations. During
the 1995 Fiscal Year, these subsidiary partnerships incurred significant
operating losses and two are in default on their mortgage obligations. These
conditions raise substantial doubt about the subsidiary partnerships' abilities
to continue as going concerns. The financial statements of these four subsidiary
partnerships were prepared assuming that each will continue as a going concern.
The four subsidiary partnerships' losses before extraordinary items aggregated
$1,554,801 (Fiscal 1995), $2,446,846 (Fiscal 1994), and $2,717,107 (Fiscal 1993)
and their assets aggregated $28,187,671 and $29,787,047 at December 31, 1995 and
1994, respectively. The accompanying consolidated financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.

/s/ TRIEN, ROSENBERG, FELIX,
ROSENBERG, BARR & WEINBERG, LLP

TRIEN, ROSENBERG, FELIX,
ROSENBERG, BARR & WEINBERG, LLP

New York, New York
June 4, 1996

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

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

LIBERTY TAX CREDIT PLUS L.P.
CONDENSED BALANCE SHEETS

ASSETS

March 15
----------------------------
1996 1995*
----------- -----------
Cash and cash equivalents $ 19,370 $ 53,087
Investment in subsidiary partnerships 30,262,683 33,658,093
Due from subsidiary partnership 1,109,070 1,118,060
Other assets 277,870 297,660
----------- -----------

Total assets $31,668,993 $35,126,900
=========== ===========

LIABILITIES AND PARTNERS' EQUITY

Due to general partner and affiliates $ 1,081,081 $ 573,344
----------- -----------

Total liabilities 1,081,081 573,344

Partners' equity 30,587,912 34,553,556
----------- -----------

Total liabilities and partners' equity $31,668,993 $35,126,900
=========== ===========

* Restated for comparative purposes to reflect investments in certain subsidiary
partnerships at zero.

-1-

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

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

Year Ended March 15
----------------------------------------
1996 1995* 1994*
----------- ---------- -----------

Revenues $ 785 $ 7,269 $ 20,639
----------- ---------- -----------

Expenses

Administrative and management 202,447 193,644 207,057
Administrative and management-related parties 508,427 437,446 409,274
----------- ---------- -----------

Total expenses 710,874 631,090 616,331
----------- ---------- -----------

Loss from operations (710,089) (623,821) (595,692)

Equity in (loss) income of subsidiary
partnerships (3,255,555) 2,228,609 (5,991,449)
----------- ---------- -----------

Net (loss) income $(3,965,644) $1,604,788 $(6,587,141)
=========== ========== ===========

* Restated for comparative purposes to reflect investments in certain subsidiary
partnerships at zero.

-2-

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

LIBERTY TAX CREDIT PLUS L.P.
CONDENSED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents

Year Ended March 15
----------------------------------------
1996 1995* 1994*
----------- ---------- -----------

Cash flows from operating activities:

Net (loss) income $(3,965,644) $(1,604,788) $(6,587,141)
----------- ---------- -----------

Adjustments to reconcile net loss to net cash
used in operating activities:

Equity in loss (income) of subsidiary
partnerships 3,255,555 (2,228,609) 5,991,449
Decrease in other assets 19,790 146,665 33,358
Due from subsidiary partnership 8,990 (1,036,522) (81,538)

Increase (decrease) in liabilities

Due to general partners and affiliates 507,737 285,988 286,371
Other liabilities 0 (11,249) 2778
----------- ---------- -----------

Total adjustments 3,792,072 (2,843,727) 6,232,418
----------- ---------- -----------

Net cash used in operating activities (173,572) (1,238,939) (354,723)
----------- ---------- -----------

Cash flows provided by investing activities:

Distributions from subsidiaries 139,855 218,702 252,167
----------- ---------- -----------

Net decrease in cash and cash equivalents (33,717) (1,020,237) (102,556)

Cash and cash equivalents, beginning of year 53,087 1,073,324 1,175,880
----------- ---------- -----------

Cash and cash equivalents, end of year $ 19,370 $ 53,087 $ 1,073,324
=========== ========== ===========

* Restated for comparative purposes to reflect investments in certain
subsidiary partnerships at zero.

-3-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 15, 1996

Cost
Capitalized
Initial Cost to Subsequent to Gross Amount at which
Partnership Acquisition: Carried at Close of Period
------------------------- ---------------------------------------
Subsidiary Partnership's Encum- Buildings and Buildings and Accumulated
Residential Property brances Land Improvements Improvements Land Improvements Total Depreciation
- - ---------------------- ------- -------- ------------- ------------ -------- ------------- ----------- ------------

B & C Housing (a) $727,300 $5,420,791 $2,383,104 $729,685 $ 7,801,510 $ 8,531,195 $2,193,814
Associates, L.P.
Tulsa, OK
State Street 86 (a) 861,947 12,460,882 248,189 864,332 12,706,686 13,571,018 4,000,318
Associates, L.P.
Camden, NJ
Fox Glenn (a) 491,209 6,548,849 277,799 493,594 6,824,263 7,317,857 2,013,458
Investors, L.P.
Seat Pleasant,
MD
Shiloh Grove L.P. (a) 764,874 16,618,743 410,280 767,259 17,026,638 17,793,897 4,819,104
(Mt Vernon)
Columbus, OH
Silver Blue Lake (a) 537,204 4,755,176 55,766 539,589 4,808,557 5,348,146 1,376,984
Apartments Ltd.
Miami, FL
Lancaster Towers (a) 147,000 3,673,921 816,625 149,385 4,488,161 4,637,546 1,252,096
Associates, Ltd.
Lancaster, NY
West Kinney (a) 262,466 6,072,924 244,337 264,850 6,314,877 6,579,727 1,728,383
Associates, L.P.
Newark, NJ
Autumn Park (a) 369,932 2,251,887 3,564,042 938,336 5,247,525 6,185,861 1,583,163
Associates, L.P.
Wilsonville, OR
Regent Street (a) 40,000 7,387,283 201,704 42,384 7,586,603 7,628,987 2,149,170
Associates, L.P.
Philadelphia, PA

Life on which
Year of Depreciation in
Con- Latest Income
struction/ Date Statement is
Renovation Acquired Computed (b)
- - ---------- --------- ---------------

1987 Dec. 1987 27.5 years

1987 Feb. 1988 27.5 years

1987 Mar. 1988 27.5 years

1987 Feb. 1988 27.5 years

1987 Feb. 1988 27.5 years

1987 May 1988 27.5 years

1983 June 1988 27.5 years

1988 June 1988 27.5 years

1987 June 1988 27.5 years

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 15, 1996
(Continued)

Cost
Capitalized
Initial Cost to Subsequent to Gross Amount at which
Partnership Acquisition: Carried at Close of Period
------------------------- ---------------------------------------
Subsidiary Partnership's Encum- Buildings and Buildings and Accumulated
Residential Property brances Land Improvements Improvements Land Improvements Total Depreciation
- - ---------------------- ------- -------- ------------- ------------ -------- ------------- ----------- ------------

Magnolia Arms (a) 125,000 8,165,738 302,695 127,384 8,466,049 8,593,433 2,852,780
Associates, Ltd.
Jacksonville, FL
Greenleaf (a) 695,000 5,125,103 186,496 697,384 5,309,215 6,006,599 1,985,099
Associates L.P.
Kansas City, MO
Alameda Towers, (a) 644,000 15,157,047 267,335 646,384 15,421,998 16,068,382 2,715,579
Associates L.P.
San Juan, PR
Dixie Apartment (a) 194,480 1,354,562 53,230 196,864 1,405,408 1,602,272 379,821
Associates, Ltd.
Miami, FL
Ludlam Gardens (a) 755,057 3,943,234 47,692 757,441 3,988,542 4,745,983 1,078,304
Apartments, Ltd.
Miami, FL
Grove Park (a) 600,000 9,386,536 7,193,581 602,384 16,577,733 17,180,117 4,033,100
Associates, L.P.
(Woodlawn)
Chicago, IL
2108 Bolton Drive (a) 835,000 6,599,896 6,005,687 837,384 12,603,199 13,440,583 4,155,824
Associates, L.P.
Atlanta, GA
Apple Creek (a) 618,136 10,973,665 247,350 620,520 11,218,631 11,839,151 2,479,008
Housing
Associates, Ltd.
Arvada, CO
Redwood Villa (a) 0 5,931,183 18,253 2,384 5,947,052 5,949,436 1,552,758
Associates
San Diego, CA

Life on which
Year of Depreciation in
Con- Latest Income
struction/ Date Statement is
Renovation Acquired Computed (b)
- - ---------- --------- ---------------

1987 July 1988 27.5
years

1987 July 1988 27.5
years

1987 July 1988 40 years

1987 July 1988 27.5
years

1987 July 1988 27.5
years

1988 July 1988 27.5 to
31.5
years

1988 July 1988 15 to
27.5
years
1988 June 1988 28 years

1988 Sept. 1988 27.5
years

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 15, 1996
(Continued)

Cost
Capitalized
Initial Cost to Subsequent to Gross Amount at which
Partnership Acquisition: Carried at Close of Period
------------------------- ---------------------------------------
Subsidiary Partnership's Encum- Buildings and Buildings and Accumulated
Residential Property brances Land Improvements Improvements Land Improvements Total Depreciation
- - ---------------------- ------- -------- ------------- ------------ -------- ------------- ----------- ------------

Charles Drew (a) 100 7,893,416 301,852 143,846 8,051,522 8,195,368 2,390,284
Court
Associates, L.P.
Atlantic City, NJ
Walnut Park Plaza (a) 454,707 7,690,675 2,126,417 457,091 9,814,708 10,271,799 2,041,205
Associates, L.P.
Philadelphia, PA
Bayridge (a) 917,682 488,333 10,739,111 920,066 11,225,060 12,145,126 2,620,816
Associates, L.P.
Beaverton, OR
United-Pennsylvanian, (a) 217,000 4,191,327 540,122 219,385 4,729,064 4,948,449 2,180,608
L.P.
Erie, PA
2051 Grand (a) 31,500 5,221,117 47,691 33,885 5,266,423 5,300,308 1,388,909
Concourse
Associates, L.P.
Bronx, NY
Concourse Artists (a) 5,750 16,100 2,278,151 8,135 2,291,866 2,300,001 586,151
Housing
Associates, L.P.
Bronx, NY
Willoughby-Wycoff (a) 17,000 47,600 6,126,180 19,386 6,171,394 6,190,780 1,597,269
Housing
Associates, L.P.
Bronx, NY
Robin Housing (a) 26,750 70,700 8,163,046 29,136 8,231,360 8,260,496 2,140,482
Bronx, NY
Lund Hill (a) 205,000 4,877,828 341,532 207,900 5,216,460 5,424,360 909,237
Associates, L.P.
Superior, WI

Life on which
Year of Depreciation in
Con- Latest Income
struction/ Date Statement is
Renovation Acquired Computed (b)
- - ---------- --------- ---------------

1987 Sept. 1988 27.5
years

1988 Sept. 1988 35 years

1988 Dec. 1988 27.5
years

1988 Dec. 1988 25 years

1986 Nov. 1988 27.5
years

1986 Nov. 1988 27.5
years

1987 Nov. 1988 27.5
years

1986 Nov. 1988 27.5
years

1988 Jan. 1989 20 to
40 years

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 15, 1996
(Continued)

Cost
Capitalized
Initial Cost to Subsequent to Gross Amount at which
Partnership Acquisition: Carried at Close of Period
------------------------- ---------------------------------------
Subsidiary Partnership's Encum- Buildings and Buildings and Accumulated
Residential Property brances Land Improvements Improvements Land Improvements Total Depreciation
- - ---------------------- ------- -------- ------------- ------------ -------- ------------- ----------- ------------

Tanglewood (a) 114,932 5,233,022 68,453 117,832 5,298,575 5,416,407 1,377,963
Apartments,
L.P.
Joplin, MO
Quality Hill (a) 215,181 6,403,141 201,516 267,233 6,552,605 6,819,838 1,069,534
Historic
District-Phase
II-A, L.P.
Kansas City,
MO
Penn Alto (a) 60,000 2,731,082 8,899,416 93,905 11,596,593 11,690,498 2,353,148
Associates,
L.P.
Altoona, PA
Sartain School (a) 3,883 3,486,875 128,064 9,126 3,609,696 3,618,822 480,618
Venture, L.P.
Philadelphia,
PA
--------- ---------- --------- --------- ---------- ---------- ---------
$10,938,090 $180,178,636$62,485,716 $11,804,469 $241,797,973 $253,602,442 $63,484,987
========== =========== ========== ========== =========== =========== ==========

Life on which
Year of Depreciation in
Con- Latest Income
struction/ Date Statement is
Renovation Acquired Computed (b)
- - ---------- --------- ---------------

1988 Oct. 1988 27.5 years

1988 Mar. 1989 40 years

1989 June 1989 27.5 years

1989 Aug. 1990 40 years

(a) Properties are subject to mortgage notes as shown in Schedule III

(b) Since all properties were acquired as line method over the estimated
useful lives determined by the Partnership date of acquisition.

(c) Furniture and fixtures, included in building and improvements, are
depreciated primarily by the straight line method over the estimated
useful lives ranging from 5 to 15 years.

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 15, 1996
(Continued)

Cost of Property and Equipment Accumulated Depreciation
------------------------------ ------------------------

Year Ended March 15,
-------------------------------------------------------------------------------------
1996 1995 1994 1996 1995 1994
------------ ------------ ------------ ----------- ----------- -----------

Balance at beginning of period $252,211,688 $251,711,775 $250,847,049 $54,706,727 $46,075,052 $37,306,213
Additions during period:
Improvements 1,397,540 1,107,848 908,275
Depreciation expense 8,785,046 8,793,783 8,775,531
Reductions during period:
Dispositions 6,786 607,935 43,549 6,786 162,108 6,692
-------------- ------------- ------------ ------------- ------------ -------------
Balance at end of period $253,602,442 $252,211,688 $251,711,775 $63,484,987 $54,706,727 $46,075,052
=========== =========== =========== ========== ========== ==========

At the time the local partnerships were acquired by Liberty Tax Credit Plus
Limited Partnership, the entire purchase price paid by Liberty Tax Credit Plus
Limited Partnership was pushed down to the local partnerships as property and
equipment with an offsetting credit to capital. Since the projects were in the
construction phase at the time of acquisition, the capital accounts were
insignificant at the time of purchase. Therefore, there are no material
differences between the original cost basis for tax and GAAP.

LIBERTY TAX CREDIT PLUS L.P.

AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances - Mortgage Loans on Real Estate
MARCH 15, 1996

Principal
Amount of
Loans Subject
Final Periodic to Delinquent
Interest Maturity Payment Prior Face Amount Carrying Amount Principal or
A. Mortgage Loan(s) Rate(s) Date(s) Terms Liens of Mortgages of Mortgages Interest
- - -------------------- -------- -------- -------- ----- ------------ --------------- -------------

B & C Housing Associates, L.P. 10.25% July 2027 Monthly None $ 5,797,500 $ 5,620,727 None
Tulsa, OK
State Street 86 Associates, L.P. 9.00% February 2013 Monthly None 10,100,500 8,859,426 None
Camden, NJ
Fox Glenn Investors, L.P. 8.50% June 2022 Monthly None 6,500,000 6,122,100 None
Seat Pleasant, MD
Shiloh Grove L.P. (Mt Vernon) 7.50% 2017-2019 Monthly None 12,406,974 10,881,414 None
Columbus, OH 6.00% February 2003 Various None 3,313,026 3,313,026 None
Silver Blue Lake Apartments Ltd. 10.25% February 2002 Monthly None 5,147,500 4,237,500 None
Miami, FL
Lancaster Towers Associates, 7.00%- March 2014 Monthly None 2,847,000 2,462,857 None
Ltd. (1) 9.92% August 2004 Monthly 331,808
Lancaster, NY
West Kinney Associates, L.P. 7.30% 2015 Monthly None 5,359,736 4,232,236 None
Newark, NJ 12.00% December 2015 Monthly None 601,912 601,912 None
Autumn Park Associates, L.P. 10.25% July 2029 Monthly None 4,755,700 3,936,535 None
Wilsonville, OR
Regent Street Associates, L.P. 1.00% July 2028 Annually None 3,460,000 3,731,227 None
Philadelphia, PA 10.375% March 2006 Monthly None 750,000 659,197 None
Magnolia Arms Associates, Ltd. 5% Feb 15, 2017 Semi-Annual None 8,700,000 7,303,282 $7,303,282
Jacksonville, FL 9.5%
Greenleaf Associates, L.P. 10.25% 2028 Demand None 4,533,000 4,453,250 $4,453,250
Kansas City, MO
Alameda Towers Associates L.P. 9.25% October 2003 Monthly None 9,720,000 9,152,323 None
San Juan, PR
Dixie Apartment Associates, Ltd. 9.00% September 2002 Monthly None 1,000,000 984,014 None
Miami, FL

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances - Mortgage Loans on Real Estate
MARCH 15, 1996
(Continued)

Principal
Amount of
Loans Subject
Final Periodic to Delinquent
Interest Maturity Payment Prior Face Amount Carrying Amount Principal or
A. Mortgage Loan(s) Rate(s) Date(s) Terms Liens of Mortgages of Mortgages Interest
- - -------------------- -------- -------- -------- ----- ------------ --------------- -------------

Ludlam Gardens Apartments, Ltd. 9.00% January 2002 Monthly None 2,800,000 2,755,238 None
Miami, FL
Grove Park Associates, L.P. 10.25% October 2009 Monthly None 6,380,700 5,546,059 None
(Woodlawn)
Chigaco, IL
2108 Bolton Drive Associates, L.P. 8.64% March 1, 2006 Monthly None 4,480,000 3,518,089 None
Atlanta, GA
Apple Creek Housing Associates, 7.57%- December 2026 Monthly and None 7,568,744 10,232,818 None
Ltd.(1) 9.50% Semi-annually
Arvada, CO
Redwood Villa Associates 0% July 2018 At Maturity None 2,104,820 2,104,820 None
San Diego, CA 9.50% September 2018 Monthly None 2,077,915 1,305,556 None
3.00% December 2006 At Maturity None 380,000 437,000 None
3.00% June 2008 At Maturity None 128,467 210,287 None
Charles Drew Court Associates, L.P. 9.00% 2004 Monthly None 4,770,000 4,481,036 None
Atlantic City, NJ
Walnut Park Plaza Associates, L.P. 9.375% October 2018 Semi-annually None 6,415,000 6,415,000 6,415,000
Philadelphia, PA 9.375% October 2004 Semi-annually None 1,585,000 1,400,000 1,400,000
Bayridge Associates, L.P. 10.25% March 2001 Monthly None 6,150,000 6,087,853 None
Beaverton, OR
United-Pennsylvanian, L.P. 9.00% March 2018 Monthly None 2,655,000 2,340,467 None
Erie, PA 8.05% December 2003 At Maturity None 1,329,678 1,329,678 None
(or sale)
2051 Grand Concourse Associates, 8.94% August 2018 Monthly None 4,031,134 4,159,556 None
L.P.
Bronx, NY
Concourse Artists Housing 1.00%- July 2018 Monthly None 1,702,997 1,610,469 None
Associates, L.P. 10.25% 2029
Bronx, NY

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances - Mortgage Loans on Real Estate
MARCH 15, 1996
(Continued)

Principal
Amount of
Loans Subject
Final Periodic to Delinquent
Interest Maturity Payment Prior Face Amount Carrying Amount Principal or
A. Mortgage Loan(s) Rate(s) Date(s) Terms Liens of Mortgages of Mortgages Interest
- - -------------------- -------- -------- -------- ----- ------------ --------------- -------------

Robin Housing 1.00%- July 2018 Monthly None 5,758,700 5,514,245 None
Bronx, NY 10.25% 2029
Willoughby-Wycoff Housing 1.00% July 2018 Monthly None 4,490,744 4,235,673 None
Associates, L.P. 10.25% 2029
Bronx, NY
Lund Hill Associates, L.P. 6.75% December 2018 Monthly None 3,389,401 2,874,865 None
Superior, WI 8.25% November 2018 Monthly None 759,759 943,720 None
Tanglewood Apartments, L.P. 8.25% June 2020 Monthly None 3,650,000 3,459,068 None
Joplin, MO
Quality Hill Historic 9.14%- December 2005 At Maturity None 500,000 866,378 None
District-Phase II-A, L.P. 10.00%
Kansas City, MO 6.61% March 2020 Monthly None 578,892 536,033 None
5.00% May-Dec 2005 At Maturity None 735,000 735,000 None
- June 2021 Maturity None 960,000 685,715 None
9.50% January 2006 Monthly None 565,000 546,393 None
Penn Alto Associates, L.P. 9.52% January 2006 Monthly None 5,550,000 5,209,939 None
Altoona, PA
Sartain School Venture, L.P. 7.35% 2015 Monthly None 219,734 204,022 None
Philadelphia, PA - 2015 At Maturity None 363,000 363,000 None
8.09% 2030 At Maturity None 1,400,000 1,400,000 None
---------- ----------
$168,472,533 $158,390,811
============ ============

(1) Reflects more than one mortgage.
(2) Interest is charged at the lender's commercial base rate plus 2%.