LIBERTY TAX CREDIT PLUS LP - 10-K Annual Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 0-17015

FORM 10-K

(Mark One)

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

For the fiscal year ended March 15, 1997

OR

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

Commission File Number 0-17015

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

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

Index to exhibits may be found on page 117

Page 1 of 127

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, 1997, 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, 1997, the Partnership has not met its investment
objective of providing cash distributions from the operations of the
Properties. Cash distributions received from the Local Partnerships 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.

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.

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

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

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

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

-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, including any encumbrances affecting the
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 1997 1996 1995 1994 1993
- - ----------------------------------- ------------- ---- ---- ---- ---- ----

B & C Housing Associates, L.P. December 1987 86 89 87 95 95
Tulsa, OK (220)

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

Fox Glenn Investors, L.P. March 1988 96 98 97 98 98
Seat Pleasant, MD (172)

Shiloh-Grove L.P. (Mt. Vernon) February 1988 93 97 97 98 97
Columbus, OH (394)

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

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

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

-4-

Local Partnership Schedule (Continued)

% of Units Occupied
at May 1,
----------------------------
Name and Location (Number of Units) Date Acquired 1997 1996 1995 1994 1993
- - ----------------------------------- ------------- ---- ---- ---- ---- ----

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

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

Magnolia Arms Associates, LTD July 1988 96 97 84 86 90
Jacksonville, FL (232)

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

Alameda Towers Associates, L.P. July 1988 99 100 98 98 92
San Juan, PR (150)

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

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

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

2108 Bolton Drive Associates, L.P. July 1988 99 95 100 82 33
Atlanta, GA (358)

Apple Creek Housing Associates, LTD June 1988 98 96 99 99 97
Arvado, CO (195)

Redwood Villa Associates September 1988 98 100 96 99 99
San Diego, CA (92)

Charles Drew Court Associates, L.P. September 1988 95 89 100 97 100
Atlantic City, NJ (38)

Walnut Park Plaza Associates, L.P. September 1988 88 89 92 93 96
Philadelphia, PA (227)

Bayridge Associates, L.P. December 1988 93 97 97 97 95
Beaverton, OR (246)

United-Pennsylvanian, L.P. December 1988 96 98 100 100 100
Erie, PA (112)

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

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

-5-

Local Partnership Schedule (Continued)

% of Units Occupied
at May 1,
----------------------------
Name and Location (Number of Units) Date Acquired 1997 1996 1995 1994 1993
- - ----------------------------------- ------------- ---- ---- ---- ---- ----

Willoughby/Wycoff Housing Associates, L.P. November 1988 93 97 88 90 85
Bronx, NY (68)

Robin Housing Associates, L.P. November 1988 99 97 92 96 96
Bronx, NY (100)

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

Tanglewood Apartments, L.P. October 1988 85 100 100 90 98
Joplin, MO (176)

Quality Hill Historic District-Phase II-A, L.P. March 1989 98 94 85 91 95
Kansas City, MO (49)

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

Sartain School Venture, L.P. August 1990 100 89 100 100 100
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 is 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.

This information is incorporated by reference to the discussions
of Regent Street and Robin Housing in the Results of Operations of Certain
Local Partnerships contained in Item 7. Management's Discussion and Analysis
of Financial Condition and Results of Operations.

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, 1997.

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
Agreement on the ability to make distributions.

The Partnership has made no distributions to the BAC holders as
of March 15, 1997. The Partnership does not anticipate providing cash
distributions to its Limited Partners in circumstances other than refinancing
or sales proceeds.

There has recently been an increasing number of requests for the
list of BAC holders of limited partners such as the Partnership. Often these
requests are made by a person who, only a short time before making the
request, acquired merely a small number of BACs in the partnership and seeks
the list for an improper purpose, a purpose that is not in the best interest
of the partnership or is harmful to the partnership. In order to best serve
and protect the interests of the Partnership and all of its investors, the
General Partners of the Partnership have adopted a policy with respect to
requests for the Partnership's list of BAC holders. This policy is intended to
protect investors from unsolicited and coercive offers to acquire BAC holders'
interests and does not limit any other rights the General Partners may have
under the Partnership Agreement or applicable law.

-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 1997 1996 1995* 1994 1993
- - ------------------ ------------- ------------- ------------- ------------- -------------

Revenues $ 35,324,316 $ 35,455,255 $ 34,345,754 $ 31,952,673 $ 31,272,203
Operating expenses 43,324,501 42,396,512 44,104,158 41,632,706 41,018,149
------------- ------------- ------------- ------------- -------------
Loss before minority
interest and extraordinary
item (8,000,185) (6,941,257) (9,758,404) (9,680,033) (9,745,946)

Minority interest in loss
of subsidiaries 382,054 483,863 367,308 621,840 568,542
------------- ------------- ------------- ------------- -------------

Loss before
extraordinary item (7,618,131) (6,457,394) (9,391,096) (9,058,193) (9,177,404)

Extraordinary item - forgive-
ness of indebtedness 0 0 9,335,750 196,889 0
------------- ------------- ------------- ------------- -------------

Net loss $ (7,618,131) $ (6,457,394) $ (55,346) $ (8,861,304) $ (9,177,404)
============= ============= ============= ============= =============

Loss before extra-
ordinary item per BAC (471.74) $ (399.86) $ (581.53) $ (560.91) $ (568.30)

Extraordinary item per BAC 0.00 00.00 578.10 12.19 00.00
------------- ------------- ------------- ------------- -------------

Net loss per weighted
average BAC $ (471.74) $ (399.86) $ (3.43) $ (548.72) $ (568.30)
============= ============= ============= ============= =============

* Reclassified for comparative purposes.

March 15
---------------------------------------------------------------------------------------------
FINANCIAL POSITION 1997 1996 1995 1994 1993
- - ------------------ ------------- ------------- ------------- ------------- -------------

Total assets $ 200,797,952 $ 208,338,218 $ 216,196,946 $ 226,002,670 $ 233,324,354
============= ============= ============= ============= =============

Total liabilities $(183,727,165) $(182,639,668) $(183,414,534) $(192,502,613) $(190,529,135)
============= ============= ============= ============= =============

Minority interest $ (6,124,180) $ (7,133,812) $ (7,760,280) $ (8,422,579) $ (8,856,437)
============= ============= ============= ============= =============

Total partners' capital $ 10,946,607 $ 18,564,738 $ 25,022,132 $ 25,077,478 $ 33,938,782
============= ============= ============= ============= =============

During the years ended March 15, 1992 through 1997, 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, 1997, 1996
and 1995, such distributions amounted to approximately $208,000, $140,000 and
$218,000, respectively. Accordingly, the Related General Partner and
affiliates have advanced funds totaling approximately $118,000, $59,000 and
$25,000 at March 15, 1997, 1996 and 1995, respectively, to meet the
Partnership's third party obligations. In addition, certain fees and expense
reimbursements owed to the General Partners amounting to approximately
$2,281,000, $1,022,000 and $549,000 were accrued and unpaid as of March 15,
1997, 1996 and 1995, respectively. Without the General Partners' 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 continue 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.

During the year ended March 31, 1997, cash and cash equivalents
of the Partnership and its 31 consolidated Local Partnerships increased by
approximately $138,000. This increase was primarily due to cash provided by
operating activities ($2,408,000), a net increase in due to Local General
Partners and affiliates ($703,000) and a decrease in cash held in escrow for
investing activities of approximately ($78,000) which exceeded acquisitions of
property and equipment of approximately ($1,275,000), an increase in deferred
costs of approximately ($324,000), net repayments of mortgage notes of
approximately ($811,000) and a decrease in capitalization of consolidated
subsidiaries attributable to minority interest of approximately ($628,000).
Included in the adjustments to reconcile the net loss to cash provided by
operating activities is depreciation and amortization of approximately
$8,874,000.

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 $83,000 and $19,000 remained unused at March 15, 1997 and 1996,
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, $16,430,000 and $15,388,000
had expired as of March 15, 1997, 1996 and 1995, respectively. As of March 15,
1997, 1996 and 1995, $695,097, $621,887 and $513,055, respectively, has been
funded by the Local General Partners to meet such obligations. Of the amount
funded through March 15, 1997, approximately $108,000 has been recorded as a
capital contribution and the remaining balance of approximately $587,000 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.

Partnership Management fees owed to the General Partners amounting
to approximately $1,988,000 and $172,000 were accrued and unpaid as of March
15, 1997 and March 15, 1996, respectively. Expense reimbursements and asset
monitoring fees owed to the Related General Partner amounting to approximately
$293,000 and $172,000 were accrued and unpaid as of March 15, 1997 and March 15,
1996, respectively.

HUD recently released the American Community Partnerships Act
(the "ACPA"). The ACPA is HUD's blueprint for providing for the nation's
housing needs in an era of static or decreasing budget authority. Two

-10-

key proposals in the ACPA that could affect the Local Partnerships: a
discontinuation of project based Section 8 subsidy payments and an attendant
reduction in debt on properties that were supported by the Section 8 payments.

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 reintroduced 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. However, the
Partnership's loss of its investment in a Local Partnership will eliminate the
ability to generate future tax credits from such Local Partnership and may
also result in recapture of tax credits if the investment is lost before
expiration of the credit period.

Except as described above, management is not aware of any trends
or events, commitments or uncertainties which have not otherwise been
disclosed that will or are likely to impact liquidity in a material way.
Management believes the only impact would be from laws that have not yet been
adopted. The portfolio is diversified by the location of the properties around
the United States so that if one area of the country is experiencing downturns
in the economy, the remaining properties in the portfolio may be experiencing
upswings. However, the geographic diversification of the portfolio may not
protect against a general downturn in the national economy. The Partnership
has fully invested the proceeds of its offerings in 31 Local Partnerships, all
of which fully have their tax credits in place (See Results of Operations of
Certain Local Partnerships below with respect to Regent Street Associates,
L.P.). 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
- - ---------------------

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 adopted SFAS 121,
consistent with the required adoption period.

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. 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, 1997, the Partnership has not
recorded any provisions for loss on impairment of assets or reduction to
estimated fair value.

-11-

The following is a summary of the results of operations of the
Partnership for the years ended March 15, 1997, 1996 and 1995 (the 1996, 1995
and 1994 Fiscal Years, respectively).

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

The net loss for the 1996, 1995 and 1994 Fiscal Years totaled
$7,657,731, $6,457,394 and $55,346, respectively. The 1994 Fiscal Year net
loss is net of extraordinary income of $9,335,750. (See Note 10 to the
financial statements in Item 8. below.)

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 $11,001,671, $11,327,236 and $11,327,236 in
Tax Credits during the 1996, 1995, and 1994 Fiscal Years, respectively.

1996 vs. 1995
- - -------------

Rental income decreased less than 1% for the 1996 Fiscal Year as
compared to the corresponding period in 1995 primarily due to a retroactive
rent increase during the third quarter of 1995 at B & C Housing Associates and
a decrease in rental assistance payments at Shiloh-Grove. Excluding these two
Local Partnerships, rental income increased approximately 1% for the 1996
Fiscal Year as compared to the corresponding period in 1995 primarily due to
annual rental rate increases.

Total expenses excluding general and administrative-related
parties remained fairly consistent for the 1996 Fiscal Year as compared to the
corresponding period in 1995 with an increase of less than 1%.

General and administrative-related parties increased
approximately $903,000 for the 1996 Fiscal Year as compared to the
corresponding period in 1995 primarily due to an increase in partnership
management fees.

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 excluding general and administrative-related
parties remained fairly consistent for the 1995 Fiscal Year as compared to the
corresponding period in 1994 with a decrease of approximately 2%.

General and administrative-related parties decreased approximately
$743,000 primarily due to the proceeds from the savings of interest expense
resulting from refinancings at two Local Partnerships which became payable to
local general partners of such Local Partnerships in the 1994 Fiscal year. (See
Note 8 to the financial statements in Item 8 below.)

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

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

Three note holders, which provided additional permanent
financing for Silver Blue Lake Apartments Ltd. ("Silver Blue Lake"), had
commenced legal action against Silver Blue Lake claiming that it was in
default of the provisions of the notes regarding the payments of principal and
interest to be made from net cash flow, as

-12-

defined. Accordingly, they had declared the notes to be in default and had
demanded the entire outstanding indebtedness of principal and interest. At
December 31, 1996, total indebtedness, under these notes, amounted to
$267,840. In December 1995, a settlement agreement was reached by Silver Blue
Lake and the note holders. Silver Blue Lake 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 at March 15, 1997 and 1996 was
reduced to zero by prior years' losses and the minority interest balance was
zero at each date. Silver Blue Lake's net income (loss) after minority
interest amounted to approximately $21,000, ($21,000) and ($146,000) for the
1996, 1995 and 1994 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 Regent Street has allocated the below-market
federal financing to its properties, which challenge, if successful, would
result in Regent Street 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 have filed a
petition in the United States Tax Court for readjustment challenging each of
the positions taken by the Internal Revenue Service. The Partnership's
investment in Regent Street at March 15, 1997 and 1996 was approximately
$919,000 and $1,153,000, respectively, and the minority interest balance was
zero at each date. Regent Street's net loss after minority interest amounted
to approximately $234,000, $336,000 and $322,000 for the 1996, 1995 and 1994
Fiscal Years, respectively.

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

Redwood Villa Associates ("Redwood") has sustained operating
losses since its inception. For the 1996 Fiscal Year, Redwood experienced a loss
of $204,847, including $218,595 of depreciation and $4,533 of amortization and
at December 31, 1996, had a working capital deficiency of $448,810 and a deficit
in partners' equity of $241,085. These conditions raise substantial doubt about
Redwood's ability to continue as a going concern. Redwood's continuation as a
going concern is dependent upon its ability to achieve profitable operations or
contributions from partners. Management, whenever possible plans to reduce
operating costs to achieve profitable operations. The financial statements for
the 1996, 1995 and 1994 Fiscal Years for Redwood have been prepared assuming
that Redwood will continue as a going concern. The Partnership's investment in
Redwood at March 15, 1997 and 1996 was reduced to zero by prior years' losses
and the minority interest balance was approximately $410,000 and $412,000,
respectively. Redwood's net loss after minority interest amounted to
approximately $203,000, $238,000 and $393,000 for the 1996, 1995 and 1994 Fiscal
Years, respectively.

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

Magnolia Arms Associates, Ltd. ("Magnolia") was in default of
its mortgage and effective September 1, 1995, Magnolia entered into a
forbearance agreement with their 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. 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, 1997 and 1996 was reduced to zero by prior years' losses
and the minority interest balance was zero at each date. Magnolia's net (loss)
income after minority interest amounted to approximately ($112,000), $33,000
and ($648,000) for the 1996, 1995 and 1994 Fiscal Years, respectively.

-13-

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 noninterest 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. In both
1996 and 1995, $68,571 is recorded as cancellation of indebtedness income and
is included in other income.

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

Walnut Park Plaza Associates ("Walnut Park") has sustained
recurring losses from operations. At December 31, 1996, 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 Moos which expired October 15, 1996. Moos and
Walnut Park continued to operate under the interim agreement while negotiating a
Settlement Agreement and Release ("the Agreement"). 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. On April 29, 1997, the Agreement
was signed which provides for, among other things, the transfer of the general
partner interest to RCC Partners '96 LLC ("RCC"), an affiliate of the
Partnership. Through the rights of the Partnership and/or a General Partner,
which General Partner has a contractual obligation to act on behalf of the
Partnership, to approve certain major operating and financial decisions, the
Partnership continues to have a controlling financial interest in Walnut Park.
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, Walnut Park
may be unable to continue as a going concern in its present form. The
Partnership's investment in Walnut Park at March 15, 1997 and 1996 was reduced
to zero by prior years' losses and the minority interest balance amounted to
approximately $437,000 and $442,000, respectively. Walnut Park's net loss after
minority interest amounted to approximately $541,000, $257,000 and $193,000 for
the 1996, 1995 and 1994 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 $711,000. The Partnership's
investment in Robin Housing was approximately $711,000 and $830,000 at March
15, 1997 and 1996, and the minority interest balance was approximately
$174,000 and $292,000, respectively. Robin Housing's net loss after minority
interest amounted to approximately $115,000, $140,000 and $121,000 for the
1996, 1995, and 1994 Fiscal Years, respectively.

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

On March 20, 1996, 2108 Bolton Drive Associates L.P. ("2108")
refinanced its mortgage payable which had a balance 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. The mortgage bears interest at the rate of 8.64% per annum
and is payable in monthly installments of $36,103 which includes principal and
interest through March 2006, when the remaining principal balance of
approximately $3,785,000 will be due. The Partnership's investment in 2108 at
March 15, 1997 and 1996, was approximately $1,570,000 and $2,204,000,
respectively, and the minority interest balance was approximately $1,689,000
and $1,695,000, respectively. 2108's net (loss) income after minority interest
amounted to approximately ($633,000), ($843,000) and $7,616,000 for the 1996,
1995 and 1994 Fiscal Years, respectively.

-14-

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

The local general partnership interest in B & C Housing I
Associates, L.P. ("Sun Garden/Worthington Apts.") was sold to Michaels Corp.,
coincident with a proposed loan modification. Effective February 1, 1996, the
property refinanced its mortgage and reduced its interest from 10.25% to
7.15%, which will result in annual interest cost savings of approximately
$170,000, enabling the owner to complete an approved repair and replacement
plan over the next four years. The mortgage is payable in monthly installments
of $37,901 which includes principal and interest through the maturity date of
July 2028. The Partnership's investment in B & C at March 15, 1997 and 1996
was approximately $547,000 and $795,000, respectively, and the minority
interest balance was approximately $146,000 and $163,000, respectively. B &
C's net (loss) income after minority interest amounted to approximately
($247,000), $161,000 and ($338,000) for the 1996, 1995 and 1994 Fiscal Years,
respectively.

Willoughby-Wyckoff Housing Associates
- - -------------------------------------

The financial statements for Willoughby-Wyckoff Housing
Associates ("Willoughby") have been prepared on the basis that it will
continue as a going concern, which contemplates continuity of operations,
realization of assets and liquidation of liabilities in the ordinary course of
business. There are certain conditions that raise substantial doubt about the
Willoughby's ability to continue as a going concern. Willoughby has had
operating losses, operating cash flow deficiencies, and equity deficiencies.
Management plans to continue to minimize costs within their
control and seek additional funding sources to supplement project operations.
Continuance of Willoughby as a going concern is dependent upon
the Willoughby's ability to obtain additional funding to supplement project
operations and enable Willoughby to meet its obligations as they become due.
The financial statements do not include any adjustments that might result from
the outcome of these uncertainties.
The Partnership's investment in Willoughby at March 15, 1997 and
1996 was reduced to zero by prior years losses and the minority interest
balance was approximately $277,000 and $280,000, respectively. Willoughby's
net loss after minority interest amounted to approximately $276,000, $309,000
and $316,000 for the 1996, 1995 and 1994 Fiscal Years.

Other
- - -----

There has recently been an increasing number of requests for the
list of BAC holders of limited partners such as the Partnership. Often these
requests are made by a person who, only a short time before making the
request, acquired merely a small number of BACs in the partnership and seeks
the list for an improper purpose, a purpose that is not in the best interest
of the partnership or is harmful to the partnership. In order to best serve
and protect the interests of the Partnership and all of its investors, the
General Partners of the Partnership have adopted a policy with respect to
requests for the Partnership's list of BAC holders. This policy is intended to
protect investors from unsolicited and coercive offers to acquire BAC holders'
interests and does not limit any other rights the General Partners may have
under the Partnership Agreement or applicable law.

-15-

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

Independent Auditors' Report 17

Consolidated Balance Sheets at March 15, 1997 and 1996 95

Consolidated Statements of Operations for the
Years Ended March 15, 1997, 1996 and 1995 96

Consolidated Statements of Changes in
Partners' Capital for the Years Ended
March 15, 1997, 1996 and 1995 97

Consolidated Statements of Cash Flows for the
Years Ended March 15, 1997, 1996 and 1995 98

Notes to Consolidated Financial Statements 100

-16-

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, 1997 and 1996, and the related consolidated statements of operations,
changes in partners' capital, and cash flows for the years ended March 15, 1997,
1996 and 1995, (the 1996, 1995 and 1994 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 1996, 1995,
and 1994) subsidiary partnerships whose losses aggregated $5,837,225 (Fiscal
1996), $5,342,970 (Fiscal 1995), and $7,491,819 (Fiscal 1994) and whose assets
constituted 93% and 95% of the Partnership's assets at March 15, 1997 and 1996,
respectively, 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, 1997 and 1996 and the results of their operations and
cash flows for the years ended March 15, 1997, 1996 and 1995, in conformity with
generally accepted accounting principles.

As discussed in Note 11(a), the consolidated financial statements
include the financial statements of three subsidiary partnerships with
significant contingencies and uncertainties regarding their continuing
operations. During the 1996 Fiscal Year, these subsidiary partnerships incurred
significant operating losses and one is in default on its mortgage obligation.
These conditions raise substantial doubt about the subsidiary partnership's
abilities to continue as going concerns. The financial statements of these three
subsidiary partnerships were prepared assuming that each will continue as a
going concern. The three subsidiary partnerships' losses aggregated $1,027,546
(Fiscal 1996), $812,198 (Fiscal 1995), and $911,453 (Fiscal 1994) and their
assets aggregated $17,647,112 and $18,794,249 at March 15, 1997 and 1996,
respectively. Management's plans regarding these matters are also discussed in
Note 11(a). The accompanying consolidated financial statements do not include
any adjustments that might result from the outcome of these uncertainties.

TRIEN, ROSENBERG, ROSENBERG,
WEINBERG, CIULLO & FAZZARI, LLP

New York, New York
June 26, 1997

-17-

[JOHN D. SCHULER LETTERHEAD]

Independent Auditor's Report

To the Partners
B & C Housing Associates
Marlton, New Jersey

We have audited the accompanying balance sheets of B & C Housing
Associates, A Limited Partnership, HUD Project No. 118-94004, as of December
31, 1996, and 1995, and the related statements of income and expense, changes
in partners' equity and cash flows for the year ended December 31, 1996. 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, 1996, and 1995, and the results of its
operations and the changes in partners' equity and cash flows for the year
ended December 31, 1996, 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 18,
1997, on our consideration of B & C Housing Associates' internal control
structure and reports dated January 18, 1997, 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 24 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 18, 1997

[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

[Fishbein & Company, P.C Letterhead]

INDEPENDENT AUDITOR'S REPORT

January 22, 1997

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, 1996
and 1995, 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, 1996 and 1995, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

/s/ Fishbein & Company, P.C.
- - ---------------------------------

Elkins Park, Pennsylvania
January 22, 1997

[FISHBEIN & COMPANY, P.C. - ELKINS PARK, PENNSYLVANIA 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 24, 1997

Partners
Foxglenn Investors

We have audited the accompanying balance sheets of FOXGLENN INVESTORS (A
Limited Partnership) as of December 31, 1996 and 1995, 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, 1996 and 1995, 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
- - -----------------------------
Elkins Park, Pennsylvania
January 22, 1997

[FISHBEIN & COMPANY, P.C. - ELKINS PARK, PENNSYLVANIA 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.

[Larry C. Stemen, CPA and Associates Letterhead]

Independent Auditor's Report

January 29, 1997

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, 1996 and 1995, 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 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, 1996 and 1995, 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 12-15) 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
January 29, 1997

[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

[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, 1996 and
1995 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, 1996 and 1995 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 24, 1997

[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

[Bick-Fredman & Co. Letterhead]

Independent Auditor's Report

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

We have audited the accompanying balance sheets of Lancaster Towers
Associates, L.P. (a Delaware Limited Partnership), as of December 31, 1996 and
1995, and the related statements of income, partners' capital and cash flows for
the years then ended. These financial statements are the responsibility of the
Project's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Lancaster Towers Associates,
L.P. as of December 31, 1996 and 1995, 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 24, 1997 on our consideration of Lancaster Towers
Associates, L.P.'s internal control structure and a report dated January 24,
1997 on its compliance with laws and regulations.

/s/ Bick-Fredman & Co.
-----------------------------

Cleveland, Ohio
January 24, 1997

[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

[Asher & Company, Ltd. Letterhead]

Independent Auditors' Report

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

We have audited the accompanying balance sheet of West Kinney Associates,
L.P. T/A Willie T. Wright Plaza (A Limited Partnership), as of December 31,
1996, and the related statements of operations, Partners deficit, and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit. The financial statements of West
Kinney Associates, L.P. T/A Willie T. Wright Plaza (A Limited Partnership), as
of December 31, 1995 were audited by other auditors whose report dated January
18, 1996 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 West Kinney Associates, L.P.
T/A Willie T. Wright Plaza (A Limited Partnership), as of December 31, 1996, and
the results of its operations, changes in its Partners' deficit and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards and the Consolidated
Audit Guide for Audits of HUD Programs, issued by the U.S. Department of Housing
and Urban Development, we have issued a report dated January 28, 1997 on our
consideration of West Kinney Associates', L.P. T/A Willie T. Wright Plaza (A
Limited Partnership), internal control structure and reports dated January 28,
1997 on its compliance with specific requirements applicable to major HUD
programs and specific requirements applicable to affirmative fair housing.

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

Philadelphia, Pennsylvania
January 28, 1997

[SHORE, AVRACH & COMPANY, P.C. - PHILADELPHIA, PENNSYLVANIA 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

[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, 1996 and 1995, 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, 1996 and 1995, 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.
West Linn, Oregon
February 18, 1997

[MERINA McCOY GERRITZ, P.C. - WEST LINN, OREGON 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

[J. H. WILLIAMS & 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, 1996 and 1995 and the related statements
of (loss), changes in partners' equity and cash flows for the years then ended.
These financial statements are the reasonability 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, 1996 and 1995, 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. Williams & Co., LLP
- - ------------------------------
Kingston, Pennsylvania
February 9, 1997

[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

[Asher & Company, Ltd. Letterhead]

Independent Auditors' Report

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

We have audited the accompanying balance sheet of Magnolia Arms
Associates, Ltd. T/A Palm Terrace Apartments (A Limited Partnership) as of
December 31, 1996 and the related statements of income (loss), 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. The financial
statements of Magnolia Arms Associates, Ltd. T/A Palm Terrace Apartments (A
Limited Partnership) as of December 31, 1995 were audited by other auditors,
whose report dated January 23, 1996 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 Magnolia Arms Associates,
Ltd. T/A Palm Terrace Apartments (A Limited Partnership) as of December 31, 1996
and the results of its operations, changes in its 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 1996
financial statements taken as a whole. The accompanying supplementary
information is presented for purposes of additional analysis and is not a
required part of the basic 1996 financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic 1996
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic 1996 financial statements taken as a whole.
The supplementary information for 1995 was subjected to the auditing procedures
applied in the audit of the basic 1995 financial statements by the other
auditors. Their report as of January 23, 1996, stated that, in their opinion,
such information was fairly stated in all material respects in relation to the
basic 1995 financial statements taken as a whole.

/s/ Asher & Company, Ltd.
-------------------------
ASHER & COMPANY, Ltd.

Philadelphia, Pennsylvania
January 24, 1997

[SHORE, AVRACH & COMPANY, P.C. - PHILADELPHIA, PENNSYLVANIA 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

[Asher & Company, Ltd. Letterhead]

Independent Auditors' Report

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

We have audited the accompanying balance sheet of Greenleaf Associates,
L.P. (A Limited Partnership), HUD Project No. 084-94009, as of December 31, 1996
and the related statements of profit and loss, 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. The financial statements of
Greenleaf Associates, L.P. (A Limited Partnership), HUD Project No. 084-94009,
as of December 31, 1995 were audited by other auditors, whose report dated
January 24, 1996, except for Note C, as to which the date was February 21, 1996,
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 Greenleaf Associates, L.P.
(A Limited Partnership), HUD Project No. 084-94009, as of December 31, 1996 and
the results of its operations, changes in its Partners' deficit and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards and the Consolidated
Audit Guide for Audits of HUD Programs, issued by the U.S. Department of Housing
and Urban Development, we have also issued a report dated January 21, 1997 on
our consideration of Greenleaf Associates, L.P.'s (A Limited Partnership), HUD
Project No. 084-94009, internal control structure and reports dated January 21,
1997 on its compliance with specific requirements applicable to major HUD
programs and specific requirements applicable to affirmative fair housing.

Our audit was made for the purpose of forming an opinion on the basic 1996
financial statements taken as a whole. The accompanying supplementary
information is presented for purposes of additional analysis and is not a
required part of the basic 1996 financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic 1996
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic 1996 financial statements taken as a whole.

/s/Asher & Comany, Ltd.
------------------------
ASHER & COMPANY, Ltd.

Philadelphia, Pennsylvania
January 21, 1997

[SHORE, AVRACH & COMPANY, P.C. - PHILADELPHIA, PENNSYLVANIA 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

[JOSE E. ROSARIO & CO. - SAN JUAN, PUERTO RICO 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, 1996 and 1995 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, 1996 and 1995 and 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, 1998

January 27, 1997

Stamp No. 1401425 of the Puerto
Rico College of CPAs was
affixed to the original.

[JOSE E. ROSARIO & CO. - SAN JUAN, PUERTO RICO 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.

[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-O13-131

We have audited the accompanying statements of financial condition of Dixie
Apartment Associates, Ltd. (A Limited Partnership) as of December 31, 1996 and
1995, 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, 1996 and 1995, 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 22, 1997

[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
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, 1996 and
1995 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, 1996 and 1995 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 23, 1997

[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

[PHILIP ROOTBERG & COMPANY, LLP LETTERHEAD]

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, 1996 and 1995, 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, 1996 and 1995, 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 23, 1997, on our consideration of the Partnership's internal
control structure and a report dated January 23, 1997, 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

Chicago, Illinois
January 23, 1997

[PHILIP ROOTBERG & COMPANY, LLP - CHICAGO, ILLINOIS 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

[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, 1996, 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, 1996, 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 has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.

In accordance with Government Auditing Standards and the "Consolidated
Audit Guide for Audits of HUD Programs," we have also issued reports dated
January 23, 1997 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
January 23, 1997 Identification Number:
52-1088612

Audit Principal: Philip A. Weitzel

[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

[BRUNO, MACK & BARCLAY LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

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

We have audited the balance sheet of Redwood Villa Associates (A Limited
Partnership) as of December 31, 1996, and the related statements of operations,
changes in partner's equity/(deficit), and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit. The financial statements of Redwood Villa
Associates as of December 31, 1995 were audited by other auditors whose report
dated February 22, 1996 on those statements included an explanatory paragraph
that described the uncertainty about the Partnership's ability to continue as a
going concern discussed in note 2 to the 1996 financial 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, 1996 the financial statements referred to above present fairly,
in all material respects, the financial position of Redwood Villa Associates (A
Limited Partnership) as of December 31, 1996, 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 2 to the
financial statements, the Partnership has sustained operating losses since
inception. For the year ended December 31, 1996, the Partnership experienced a
loss of $204,847 (including $218,595 of depreciation and $4,553 of amortization
expense) and as of that date, had a working capital deficiency of $448,810 and
deficit in partners' equity of $241,085. These conditions raise substantial
doubt about the Partnership's ability to continue as a going concern.
Management's plans regarding these matters are described in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

In accordance with Government Auditing Standards, we have also issued a report
dated January 22, 1997 on our consideration of Redwood Villa Associates' (A
Limited Partnership) internal control structure and a report dated January 22,
1997, on its compliance with laws and regulations.

/s/Bruno, Mack & Barclay

San Diego, California
January 22, 1997

[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

[Asher & Company, Ltd. Letterhead]

Independent Auditors' Report

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

We have audited the accompanying balance sheet of Charles Drew Court
Associates, L.P. (A Limited Partnership) as of December 31, 1996 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 Charles Drew Court
Associates, L.P. (A Limited Partnership) as of December 31, 1995 were audited by
other auditors, whose report dated January 17, 1996 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 Charles Drew Court
Associates, L.P. (A Limited Partnership) as of December 31, 1996 and the results
of its operations, changes in its Partners' capital 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 1996
financial statements taken as a whole. The accompanying supplementary
information is presented for purposes of additional analysis and is not a
required part of the basic 1996 financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic 1996
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic 1996 financial statements taken as a whole.
The supplementary information for 1995 was subjected to the auditing procedures
applied in the audit of the basic 1995 financial statements by the other
auditors. Their report as of January 17, 1996, stated that, in their opinion,
such information was fairly stated in all material respects in relation to the
basic 1995 financial statements taken as a whole.

/s/ Asher & Company, Ltd.
------------------------------
ASHER & COMPANY, Ltd.

Philadelphia, Pennsylvania
January 17, 1997

[SHORE, AVRACH & COMPANY, P.C. - PHILADELPHIA, PENNSYLVANIA 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

[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, 1996 and 1995
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, 1996 and 1995 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, 1996. 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.

Philadelphia, Pennsylvania
February 3, 1997, except for Note M,
as to which the date is April 29, 1997.

[ASHER & COMPANY, Ltd. - PHILADELPHIA, PENNSYLVANIA 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

[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, 1996 and 1995,
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, 1996 and 1995, 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 L.L.P.

Denver, Colorado,
February 12, 1997.

[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.

[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, 1996 and 1995, 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, 1996 and 1995, 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, 1997 on our consideration of UNITED-PENNSYLVANIAN LIMITED
PARTNERSHIP's internal control structure and a report dated January 31, 1997 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, 1997

[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

[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, 1996 and 1995, 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, 1996 and 1995, 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.G.

/s/ Marden, Harrison & Kreuter

Port Chester, New York
January 31, 1997

[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
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, 1996 and 1995, 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, 1996 and 1995, 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, 1997

[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
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, 1996 and 1995, 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 as of December 31, 1996 and 1995, 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
company will continue as a going concern. As discussed in Note 1B to the
financial statements, the Partnership has had operating losses, operating cash
flow deficiencies, and equity deficiencies. These conditions raise substantial
doubt about its ability to continue as a going concern. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

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

/s/ Marden, Harrison & Kreuter

Port Chester, New York
January 31, 1997

[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
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, 1996 and 1995, 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 as of
December 31, 1996 and 1995, 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, 1997

[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

[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, 1996, and the
related statements of partners' equity (deficit), operations and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, the financial statements referred to above, (not presented
herein) present fairly, in all material respects, the financial position of Lund
Hill Associates as of December 31, 1996, and the results of its operations and
its cash flows for the year then ended, in conformity with generally accepted
accounting principles.

/s/ Smith & Radigan

Atlanta, Georgia
February 7, 1997

[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. Tanneberger 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, 1996 and 1995, 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, 1996 and 1995, 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. Tanneberger
------------------------------
Rick J. Tanneberger, CPA, P.A.

Fayetteville, Arkansas
February 3, 1997

[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

[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, 1996 and 1995 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, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/Rubin, Brown, Gornstein & Co. LLP
-------------------------------------

St. Louis, Missouri
January 23, 1997

[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

[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, 1996 and 1995 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, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplementary information on pages
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, P.C.

February 26, 1997 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, 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

[J. H. WILLIAMS & Co., LLP 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, 1996 and 1995 and the related statements
of (loss), 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'a 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, 1996 and 1995, 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. Williams & Co., LLP
- - ------------------------------
Kingston, Pennsylvania
February 8, 1997

[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

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

March 15
------------------------------
1997 1996
------------ ------------
ASSETS

Property and equipment, at cost, less accumulated
depreciation (Notes 2, 4, 7 and 11) $182,767,711 $190,117,455
Cash and cash equivalents (Notes 2, 3 and 11) 2,918,344 2,780,280
Cash held in escrow (Notes 3 and 5) 9,258,938 9,493,952
Accounts receivable - tenants 612,022 527,513
Deferred costs, less accumulated amortization (Notes 2 and 6) 3,836,817 3,811,548
Other assets 1,404,120 1,607,470
------------ ------------
Total assets $200,797,952 $208,338,218
============ ============

LIABILITIES AND PARTNERS' CAPITAL

Liabilities
Mortgage notes payable (Notes 3, 7 and 10) $157,643,066 $158,390,811
Accounts payable and other liabilities 7,954,170 7,413,973
Due to local general partners and affiliates (Note 8) 14,161,748 13,458,747
Due to general partners and affiliates (Note 8) 2,987,268 2,381,554
Due to selling partners 980,913 994,583
------------ ------------
183,727,165 182,639,668
------------ ------------

Minority interests (Note 2) 6,124,180 7,133,812
------------ ------------
Commitments and contingencies (Notes 7, 8, 10 and 11)

Partners' capital
Limited partners (15,987.5 BACs issued and outstanding) (Note 1) 11,566,985 19,108,935
General partners (620,378) (544,197)
------------ ------------
Total partners' capital 10,946,607 18,564,738
------------ ------------
Total liabilities and partners' capital $200,797,952 $208,338,218
============ ============

See accompanying notes to consolidated financial statements.

-18-

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

Year Ended March 15
-------------------------------------------------
1997 1996 1995*
----------- ----------- -----------

Revenues
Rental income $33,414,089 $33,437,870 $32,587,993
Other (Notes 7 and 11) 1,910,227 2,017,385 1,757,761
----------- ----------- -----------

35,324,316 35,455,255 34,345,754
----------- ----------- -----------

Expenses
General and administrative 4,882,668 4,749,747 4,299,837
General and administrative - related parties (Note 8) 2,677,535 1,774,751 2,518,209
Repairs and maintenance 6,674,072 6,330,209 6,292,907
Operating and other 4,001,390 3,745,599 3,931,661
Real estate taxes 1,618,529 1,568,091 1,629,251
Insurance 1,477,670 1,556,561 1,518,382
Interest 13,118,835 13,611,207 14,399,598
Depreciation and amortization 8,873,802 9,060,347 9,514,313
----------- ----------- -----------

43,324,501 42,396,512 44,104,158
----------- ----------- -----------

Minority interests in loss of subsidiaries 382,054 483,863 367,308
----------- ----------- -----------

Loss before extraordinary item (7,618,131) (6,457,394) (9,391,096)

Extraordinary item (Note 10) 0 0 9,335,750
----------- ----------- -----------

Net loss $(7,618,131) $(6,457,394) $ (55,346)
=========== =========== ===========
Number of BACs outstanding 15,987.5 15,987.5 15,987.5
=========== =========== ===========

Loss before extraordinary item - limited partners $(7,541,950) $(6,392,820) $(9,297,185)

Extraordinary item - limited partners 0 0 9,242,392
----------- ----------- -----------

Net loss - limited partners $(7,541,950) $(6,392,820) $ (54,793)
=========== =========== ===========
Loss before extraordinary item per BAC (471.74) $ (399.86) $ (581.53)

Extraordinary item per BAC 0.00 0.00 578.10
----------- ----------- -----------

Net loss per BAC $ (471.74) $ (399.86) $ (3.43)
=========== =========== ===========

* Reclassified for comparative purposes.

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, 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)

Net loss, year ended March 15, 1997 (7,618,131) (7,541,950) (76,181)
----------- ----------- -----------

Partners' capital - March 15, 1997 $10,946,607 $11,566,985 $ (620,378)
=========== =========== ===========

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
------------------------------------------------
1997 1996 1995*
----------- ----------- ----------

Cash flows from operating activities:
Net loss $(7,618,131) $(6,457,394) $ (55,346)
----------- ----------- -----------
Adjustments to reconcile net loss to net cash provided
by operating activities:
Extraordinary item (Note 10) 0 0 (9,335,750)
Present value of legal settlement (Note 11) 0 0 210,636
Cancellation of indebtedness income (Note 7) (68,571) (68,571) (205,714)
Accrued interest added to principal
of mortgage note payable 131,713 126,058 67,241
Depreciation and amortization 8,873,802 9,060,347 9,514,313
Loss on sale of property and equipment 49,189 0 445,827
(Increase) decrease in assets
Cash held in escrow 157,260 1,148,855 793,551
Accounts receivable - tenants (84,509) (49,816) (54,032)
Other assets 203,350 (204,531) 494,039
Increase (decrease) in liabilities
Accounts payable and other liabilities 540,196 (155,469) 211,185
Due to General Partners and affiliates 605,714 977,618 922,788
Minority interest in loss of subsidiaries (382,054) (483,863) (367,308)
----------- ----------- -----------

Total adjustments 10,026,090 10,350,628 2,696,776
----------- ----------- -----------

Net cash provided by operating activities 2,407,959 3,893,234 2,641,430
----------- ----------- -----------

Cash flows from investing activities:
Decrease (increase) in cash held in escrow 77,754 (817,081) (1,423,752)
Acquisition of property and equipment (1,274,858) (1,268,987) (1,021,279)
----------- ----------- -----------

Net cash used in investing activities (1,197,104) (2,086,068) (2,445,031)
----------- ----------- -----------

Net cash from operating and investing activities,
carried forward 1,210,855 1,807,166 196,399

* Reclassified for comparative purposes.

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
------------------------------------------------
1997 1996 1995
----------- ----------- ----------

Net cash from operating and investing activities,
brought forward 1,210,855 1,807,166 196,399
----------- ----------- -----------

Cash flows from financing activities:
Increase in deferred costs (323,658) (30,059) (435,045)
Increase in due to Local Genera
Partners and affiliates 971,417 1,496,048 1,471,265
Decrease in due to Local General
Partners and affiliates (268,416) (400,618) (727,871)
(Decrease) increase in due to selling partners (13,670) 29,649 34,533
Proceeds from mortgage notes 4,480,000 0 3,800,000
Repayment of mortgage notes (5,290,887) (2,908,134) (5,622,961)
Decrease in capitalization of consolidated
subsidiaries attributable to minority interest (627,577) (142,605) (294,991)
----------- ----------- -----------

Net cash used in financing activities (1,072,791) (1,955,719) (1,775,070)
----------- ----------- -----------

Net increase (decrease) in cash and cash equivalents 138,064 (148,553) (1,578,671)

Cash and cash equivalents, beginning of year 2,780,280 2,928,833 4,507,504
----------- ----------- -----------

Cash and cash equivalents, end of year $ 2,918,344 $ 2,780,280 $ 2,928,833
=========== =========== ===========
Supplemental disclosure of cash flows information:

Cash paid during the year for interest $10,384,244 $11,607,623 $11,308,455

Supplemental disclosures of noncash activities:

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

See accompanying notes to consolidated financial statements.

-22-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1997

NOTE 1 - General

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

The Partnership's business is to invest as a limited partner in
other limited partnerships ("Local Partnerships" 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, 1997, the Partnership has invested in 31 subsidiary 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 the 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 Partnership's Amended and Restated Agreement of
Limited Partnership (the "Partnership Agreement") provide, among other things,
that net profits or losses and distributions of cash flow are, in general,
allocated 99% to the limited partners and BACs holders and 1% to the General
Partners.

NOTE 2 - Summary of Significant Accounting Policies

a) Basis of Consolidation

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

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, 1997

NOTE 2 - Summary of Significant Accounting Policies (Continued)

a) Basis of Consolidation

Losses attributable to minority interests which exceed the
minority interests' investment in a subsidiary partnership have been charged
to the Partnership. Such losses aggregated approximately $157,000, $175,000
and $79,000 for the years ended March 15, 1997, 1996 and 1995, respectively.
The Partnership's investment in each subsidiary partnership is equal to the
respective subsidiary's partners' equity less minority interest capital, if
any. 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

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
nonrecoverable. Effective March 16, 1996, the Partnership adopted SFAS No.
121, consistent with the required adoption period.

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.
As required by SFAS 121, 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. 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, 1997, 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).

-24-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1997

NOTE 2 - Summary of Significant Accounting Policies (Continued)

e) Income Taxes

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

f) Loss Contingencies

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

g) Use of Estimates

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

NOTE 3 - Fair Value of Financial Instruments

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

Cash and Cash Equivalents and Cash Held in Escrow
-------------------------------------------------

The carrying amount approximates fair value.

Mortgage Notes Payable
----------------------

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

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

-25-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1997

NOTE 3 - Fair Value of Financial Instruments (Continued)

March 15, 1997 March 15, 1996
--------------------------- -------------------------
Carrying Carrying*
Mortgage Notes Payable for Amount Fair Value Amount Fair Value
which it is: ----------- ----------- ----------- ----------

Practicable to estimate fair value $63,531,870 $63,407,383 $63,491,831 $63,088,547
Not Practicable $94,111,193 * $87,102,065 (a)

* Reclassified for comparative purposes.

(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
1997 1996 Lives (Years)
------------ ------------ ----------------

Land $ 11,804,469 $ 11,804,469 -
Buildings and improvements 238,560,792 237,764,534 15 to 40
Other 4,448,700 4,033,439 3 to 20
------------ ------------
254,813,961 253,602,442
Less: Accumulated depreciation 72,046,250 63,484,987
------------ ------------

$182,767,711 $190,117,455
============ ============

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, 1997, 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, 1997, 1996
and 1995 amounted to $8,575,413, $8,785,046 and $8,793,783, respectively.

During the year ended March 15, 1997, accumulated depreciation
on dispositions amounting to $14,150 was written off.

-26-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1997

NOTE 5 - Cash Held in Escrow

Cash held in escrow consists of the following:

March 15
----------------------------
1997 1996
---------- ----------
Real estate taxes, insurance, and other $2,506,597 $2,664,682
Reserve for replacements 5,955,308 6,033,062
Other 797,033 796,208
---------- ----------
$9,258,938 $9,493,952
========== ==========

NOTE 6 - Deferred Costs

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

March 15
-----------------------
1997 1996 Period (Months)
---------- ---------- ---------------
Operating guarantee fee $ 510,443 $ 510,443 60
Financing expenses 4,724,538 4,525,450 *
Organization expenses 1,452,489 1,452,489 60
Supervisory salaries 795,609 795,609 60
Other 48,518 48,518 Various
---------- ----------
7,531,597 7,332,509

Less: Accumulated amortization (3,694,780) (3,520,961)
---------- ----------
$3,836,817 $3,811,548
========== ==========

*Over the life of the respective mortgages.

Amortization of deferred costs for the years ended March 15,
1997, 1996 and 1995 amounted to $298,389, $275,301 and $720,530, respectively.

During the year ended March 15, 1997, deferred costs and
accumulated amortization of $124,570 were written off.

NOTE 7 - Mortgage Notes Payable

The mortgage notes are payable in aggregate monthly installments
of approximately $1,081,000 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 and 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, 1997

NOTE 7 - Mortgage Notes Payable (Continued)

Annual principal payment requirements as of March 15, 1997 for
each of the next five fiscal years and thereafter are as follows:

Fiscal Year Amount
----------- ------------
1997 $ 2,491,420
1998 2,708,286
1999 2,950,025
2000 3,210,646
2001 9,289,670
Thereafter 136,993,019
------------
$157,643,066
============

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. In both
1996 and 1995, $68,571 is recorded as cancellation of indebtedness income and
is included in other income.

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

On March 20, 1996, 2108 Bolton Drive Associates L.P. ("2108")
refinanced its mortgage payable which had a balance 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. The mortgage bears interest at the rate of 8.64% per annum
and is payable in monthly installments of $36,103 which includes principal and
interest through March 2006, when the remaining principal balance of
approximately $3,785,000 will be due.

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

The local general partnership interest in B & C Housing I
Associates, L.P. ("Sun Garden/Worthington Apts.") was sold to Michaels Corp.,
coincident with a proposed loan modification. Effective February 1, 1996, the
property refinanced its mortgage and reduced its interest rate from 10.25% to
7.15%, which will result in annual interest cost savings of approximately
$170,000, enabling the owner to complete an approved repair and replacement
plan over the next four years. The mortgage is payable in monthly installments
of $37,901 which includes principal and interest through the maturity date of
July 2028.

-28-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1997

NOTE 8 - Related Party Transactions

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

The General Partners and their affiliates (through common
ownership) perform services for the Partnership. The costs incurred for the
years ended March 15, 1997, 1996 and 1995 are as follows:

A) Related Party Fees

Year Ended March 15
-----------------------------------------
1997 1996 1995
----------- ----------- -----------
Partnership management fees (a) $ 1,138,000 $ 294,500 $ 291,500
Expense reimbursement (b) 117,130 213,927 145,946
Property management fees (c) 1,345,905 1,184,824 1,470,702
Local administrative fee (d) 76,500 81,500 63,750
Interest expense (e) 546,311
----------- ----------- -----------

$ 2,677,535 $ 1,774,751 $ 2,518,209
=========== =========== ===========

(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 $1,988,000 and $850,000 were accrued and unpaid as
of March 15, 1997 and March 15, 1996, 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 $293,000 and $172,000 were accrued and unpaid as of
March 15, 1997 and March 15, 1996, respectively.

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

(c) Property management fees incurred by subsidiary
partnerships amounted to $1,851,991, $1,828,409 and $1,801,111 for the years
ended March 15, 1997, 1996 and 1995, respectively. Of these fees $1,265,395,
$1,108,548 and $1,407,893 were incurred to affiliates of the subsidiary
partnerships' general partners. In addition $80,510, $76,276 and $62,809 were
incurred to affiliates of the Partnership.

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

(e) 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.

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 amounting to $441,124 due to positive amortization became
payable to the general partner.

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.

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 amounting to 105,187 due to
positive amortization became payable to the general partner.

The General Partners of the Partnership were allocated
approximately $69,000, $45,000 and $10,000 of passive losses for the years
ended March 15, 1997, 1996 and 1995, respectively.

-29-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1997

NOTE 8 - Related Party Transactions (Continued)

Liberty Associates III L.P. received cash distributions of
approximately $1,900, $800 and $3,500 during the years ended March 15, 1997,
1996 and 1995, 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, 1997, 1996 and 1995, respectively.

(f) Due to local general partners and affiliates at March 15,
1997 and 1996 consists of the following:

March 15,
------------------------------
1997 1996
----------- -----------

Operating deficit advances $ 586,265 $ 513,055
Operating advances 1,111,030 1,045,530
Development fee payable 231,400 255,000
Residual loan payable 52,500 52,500
Interest (g) 4,469,886 3,766,055
Long term notes payable (g) 5,725,981 5,586,311
Management and other fees 1,984,686 2,240,296
----------- -----------
$14,161,748 $13,458,747
=========== ===========

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

Grove Parc Assoc. L.P.
- - ----------------------
This note bears interest at 7.39% compounded annually on
May 1 of each year. The note is secured by a mortgage
subordinate in rights to mortgages securing the building
loan. Both principal and interest on the loan are due
and payable in full out of residual receipts on April
29, 2010, or are immediately due and payable upon
refinancing or sale of the project. $ 5,040,000 $ 5,040,000

Dixie Apartment Assoc. LTD
- - --------------------------
This promissory note bears interest at 11% with a
maturity date of June 1, 2002. (Note 10) 105,187 105,187
Ludlam Gardens Apartments LTD
This promissory note bears interest at 11% with a
maturity date of June 1, 2000. (Note 10) 441,124 441,124

B & C Housing Associates
- - ------------------------
This promissory note bears interest on the unpaid
principal balance with interest at prime plus 2% per
annum payable along with principal as and when permitted
by the partnership agreement and payable only
from surplus cash. 139,670 0
----------- -----------

$5,725,981 $5,586,311
=========== ===========

-30-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1997

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,
$16,430,000 and $15,388,000 expired as of March 15, 1997, 1996 and 1995,
respectively. As of March 15, 1997, 1996 and 1995, $695,097, $621,887 and
$513,055, respectively, remains as funded by the Local General Partners to
meet such obligations. Of the amount funded through March 15, 1997,
approximately $108,000 has been recorded as a capital contribution and the
remaining balance of approximately $587,000 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 a material 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, 1997, 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
------------------------------------------------
1996 1995 1994
------------ ------------ ------------

Financial statement
Net loss $ (7,657,731) $ (6,457,394) $ (55,346)
Difference between depreciation and amortization
expense recorded for financial reporting purposes
and the accelerated cost recovery system utilized
for income tax purposes 60,188 84,208 (79,957)
Difference resulting from parent company having a
different fiscal year for income tax and financial
reporting purposes 900,555 (62,638) (160,802)
Cancellation of indebtedness income 0 0 742,260
Tax basis forgiveness of debt (89,648) 2,096,523 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 (79,417) 310,469 (1,148,420)
------------ ------------ -----------

Net loss as shown on the income tax return for the
calendar year ended $ (6,866,053) $ (4,028,832) $ (702,265)
============ ============ ===========

-31-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1997

NOTE 10 - Extraordinary Item

Extraordinary item consists of the following:

Year Ended March 15
1995
-------------------
2108 Bolton Drive Associates, L.P. -
forgiveness of indebtedness income $9,335,750
----------
$9,335,750
==========
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. 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. 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.

-32-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1997

NOTE 11 - Commitments and Contingencies

a) Subsidiary Partnership - Going Concern

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

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

Redwood Villa Associates ("Redwood") has sustained operating
losses since its inception. For the 1996 Fiscal Year, Redwood experienced a loss
of $204,847, including $218,595 of depreciation and $4,533 of amortization and
at December 31, 1996, had a working capital deficiency of $448,810 and a deficit
in partners' equity of $241,085. These conditions raise substantial doubt about
Redwood's ability to continue as a going concern. Redwood's continuation as a
going concern is dependent upon its ability to achieve profitable operations or
contributions from partners. Management, whenever possible plans to reduce
operating costs to achieve profitable operations. The financial statements for
the 1996, 1995 and 1994 Fiscal Years for Redwood have been prepared assuming
that Redwood will continue as a going concern. The Partnership's investment in
Redwood at March 15, 1997 and 1996 was reduced to zero by prior years' losses
and the minority interest balance was approximately $410,000 and $412,000,
respectively. Redwood's net loss after minority interest amounted to
approximately $203,000, $238,000 and $393,000 for the 1996, 1995 and 1994 Fiscal
Years, respectively.

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

Walnut Park Plaza Associates ("Walnut Park") has sustained
recurring losses from operations. At December 31, 1996, 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 Moos which expired October 15, 1996. Moos and
Walnut Park continued to operate under the interim agreement while negotiating a
Settlement Agreement and Release ("the Agreement"). The

-33-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1997

NOTE 11 - Commitments and Contingencies (Continued)

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. On April
29, 1997, the Agreement was signed which provides for, among other things, the
transfer of the general partner interest to RCC Partners '96 LLC ("RCC"), an
affiliate of the Partnership. Through the rights of the Partnership and/or a
General Partner, which General Partner has a contractual obligation to act on
behalf of the Partnership, to approve certain major operating and financial
decisions, the Partnership continues to have a controlling financial interest in
Walnut Park. 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, Walnut
Park may be unable to continue as a going concern in its present form. The
Partnership's investment in Walnut Park at March 15, 1997 and 1996 was reduced
to zero by prior years' losses and the minority interest balance amounted to
approximately $437,000 and $442,000, respectively. Walnut Park's net loss after
minority interest amounted to approximately $541,000, $257,000 and $193,000 for
the 1996, 1995 and 1994 Fiscal Years, respectively.

Willoughby-Wyckoff Housing Associates
-------------------------------------

The financial statements of Willoughby-Wyckoff Housing
Associates ("Willoughby") have been prepared on the basis that it will
continue as a going concern, which contemplates continuity of operations,
realization of assets and liquidation of liabilities in the ordinary course of
business. There are certain conditions that raise substantial doubt about the
Willoughby's ability to continue as a going concern. Willoughby has had
operating losses, operating cash flow deficiencies, and equity deficiencies.
Management plans to continue to minimize costs within their
control and seek additional funding sources to supplement project operations.
Continuance of Willoughby as a going concern is dependent
upon the Willoughby's ability to obtain additional funding to supplement
project operations and enable Willoughby to meet its obligations as they
become due. The financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
The Partnership's investment in Willoughby at March 15, 1997
and 1996 was reduced to zero by prior years losses and the minority interest
balance was approximately $277,000 and $280,000, respectively. Willoughby's
net loss after minority interest amounted to approximately $276,000, $309,000
and $316,000 for the 1996, 1995, and 1994 Fiscal Years.

b) Subsidiary Partnerships - Other

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

Three noteholders, which provided additional permanent financing
for Silver Blue Lake Apartments Ltd. ("Silver Blue Lake"), had commenced legal
action against Silver Blue Lake claiming that it was 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 had declared the notes
to be in default and had demanded the entire outstanding indebtedness of
principal and interest. At December 31, 1996, total indebtedness, under these
notes, amounted to $267,840. In December 1995, a settlement agreement was
reached by Silver Blue Lake and the noteholders. Silver Blue Lake agreed to
pay the noteholders $18,480, record a second mortgage covering the notes, and
pay interest

-34-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1997

NOTE 11 - Commitments and Contingencies (Continued)

Subsidiary Partnerships - Other (Continued)

semiannually up to 20% of cash flow or $1,250 whichever is greater. The
Partnership's investment in Silver Blue Lake at March 15, 1997 and 1996 was
reduced to zero by prior years' losses and the minority interest balance was
zero at each date. Silver Blue Lake's net income (loss) after minority
interest amounted to approximately $21,000, ($21,000) and ($146,000) for the
1996, 1995 and 1994 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 Regent Street has allocated the
below-market federal financing to its properties, which challenge, if
successful, would result in Regent Street 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 have filed a petition in the United States Tax Court for
readjustment challenging each of the positions taken by the Internal Revenue
Service. The Partnership's investment in Regent Street at March 15, 1997 and
1996 was approximately $919,000 and $1,153,000, respectively, and the minority
interest balance was zero at each date. Regent Street's net loss after
minority interest amounted to approximately $234,000, $336,000 and $322,000
for the 1996, 1995 and 1994 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 $711,000. The Partnership's
investment in Robin Housing was approximately $711,000 and $830,000 at March
15, 1997 and 1996, respectively, and the minority interest balance was
approximately $174,000 and $292,000, respectively. Robin Housing's net loss
after minority interest amounted to approximately $115,000, $140,000 and
$121,000 for the 1996, 1995 and 1994 Fiscal Years, respectively.

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

Magnolia Arms Associates, Ltd. ("Magnolia") was in default
of its mortgage and effective September 1, 1995, Magnolia entered into a
forbearance agreement with their 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. 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, 1997 and 1996 was reduced to zero by prior years' losses
and the minority interest balance was zero at each date. Magnolia's net (loss)
income after minority interest amounted to approximately ($112,000), $33,000
and ($648,000) for the 1996, 1995 and 1994 Fiscal Years, respectively.

-35-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 1997

NOTE 11 - Commitments and Contingencies (Continued)

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, 1996, 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, 1996, the subsidiary partnership has accrued lease payments of
$232,647.

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, 1997, uninsured
cash and cash equivalents approximated $484,000.

e) Letter of Credit

The subsidiary partnerships were contingently liable at
December 31, 1996 on the following open letters of credit:

Debt service $700,000
Development contingency 23,310
--------
$723,310
========

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.

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 increases 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 1996, 1995 and 1994 tax years, Housing Tax Credits
of $11,001,671, $11,327,236 and $11,327,236 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.

-36-

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 Liberty
General Partner and of Related Credit Properties, Inc., the General Partner of
the Related General Partner, 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

Richard A. Palermo Treasurer

Lynn A. McMahon Secretary

STEPHEN M. ROSS, 57, 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, 53, 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, 42, 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.

-38-

STUART J. BOESKY, 41, 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.

RICHARD A. PALERMO, 37, is Treasurer of the general partner of the
Related General Partner. Mr. Palermo has been a Certified Public Accountant in
New York since 1985. Prior to joining Related in September 1993, Mr. Palermo was
employed by Sterling Grace Capital Management from October 1990 to September
1993, Integrated Resources, Inc. from October 1988 to October 1990 and E.F.
Hutton & Company, Inc. from June 1986 to October 1988. From October 1982 to June
1986, Mr. Palermo was employed by Marks Shron & Company and Mann Judd Landau,
certified public accountants. Mr. Palermo graduated from Adelphi University with
a Bachelor of Business Administration Degree.

LYNN A. McMAHON, 41, 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. Abbott Chairman of the Board, President, Chief Executive
Officer and Chief Financial Officer

Donald E. Petrow Vice President

PAUL L. ABBOTT, 51, is a Managing Director of Lehman Brothers and
President, Chief Executive Officer and Chief Financial Officer 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, 40, 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.

-39-

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 Partners 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 Percent
Title of Class Beneficial Owner Beneficial Owner 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.

-40-

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, 1997 and 1996 95

Consolidated Statements of Operations for the Years Ended March 15,
1997, 1996 and 1995 96

Consolidated Statements of Changes in Partners' Capital for the Years
Ended March 15, 1997, 1996 and 1995 97

Consolidated Statements of Cash Flows for the Years Ended March 15,
1997, 1996 and 1995 98

Notes to Consolidated Financial Statements 100

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

Independent Auditors' Report 121

Schedule I - Condensed Financial Information of Registrant 122

Schedule III - Real Estate and Accumulated Depreciation 125

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 118
2 may be considered subsidiaries of the Registrant

(27) Financial Data Schedule (filed herewith) 127

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

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

-41-

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

(d) Not applicable

-42-

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 27, 1997

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

By: LIBERTY GP INC.,
a General Partner

Date: June 27, 1997

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

-45-

SIGNATURES

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

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 27, 1997

Senior Vice President, (principal financial
/s/ Alan P. Hirmes officer) of Related Credit Properties Inc.,
- - ---------------------- general partner of Related Credit Properties
Alan P. Hirmes L.P. (a General Partner of Registrant) June 27, 1997

Treasurer (principal accounting officer)
/s/ Richard A. Palermo of Related Credit Properties Inc.,
- - ---------------------- general partner of Related Credit Properties,
Richard A. Palermo L.P. (a General Partner of Registrant) June 27, 1997

/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 27, 1997

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 27, 1997
Paul L. Abbott of Registrant)

/s/ Donald E. Petrow Vice President of Liberty GP Inc.
- - ---------------------- (a General Partner of Registrant) June 27, 1997
Donald E. Petrow

-46-

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 26, 1997 on page 17 and based on the
reports of other auditors, we have also audited supporting Schedule I for the
1996, 1995 and 1994 Fiscal Years and Schedule III at March 15, 1997. In our
opinion, and based on the reports of the other auditors (certain of which were
modified due to the uncertainty of these subsidiary partnerships' abilities to
continue in existence), these consolidated schedules present fairly, when read
in conjunction with the related consolidated financial statements, the financial
data required to be set forth therein.

As discussed in Note 11(a), the consolidated financial statements
include the financial statements of three subsidiary partnerships with
significant contingencies and uncertainties regarding their continuing
operations. During the 1996 Fiscal Year, these subsidiary partnerships incurred
significant operating losses and one is in default on its mortgage obligation.
These conditions raise substantial doubt about the subsidiary partnership's
abilities to continue as going concerns. The financial statements of these three
subsidiary partnerships were prepared assuming that each will continue as a
going concern. The three subsidiary partnerships' losses before extraordinary
items aggregated $1,027,546 (Fiscal 1996), $812,198 (Fiscal 1995), and $911,453
(Fiscal 1994) and their assets aggregated $17,647,112 and $18,794,249 at March
31, 1997 and 1996, respectively. Management's plans regarding these matters are
also discussed in Note 11(a). The accompanying consolidated financial statements
do not include any adjustments that might result from the outcome of these
uncertainties.

TRIEN, ROSENBERG, ROSENBERG,
WEINBERG, CIULLO & FAZZARI, LLP

New York, New York
June 26, 1997

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
------------------------------
1997 1996
----------- -----------
Cash and cash equivalents $ 82,962 $ 19,370
Investment in subsidiary partnerships 27,362,123 30,262,683
Due from subsidiary partnership 1,109,070 1,109,070
Other assets 253,499 277,870
----------- -----------

Total assets $28,807,654 $31,668,993
=========== ===========

LIABILITIES AND PARTNERS' EQUITY

Due to general partner and affiliates $ 2,399,155 $ 1,081,081
----------- -----------
Total liabilities 2,399,155 1,081,081

Partners' equity 26,408,499 30,587,912
----------- -----------

Total liabilities and partners' equity $28,807,654 $31,668,993
=========== ===========

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

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

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

Year Ended March 15
------------------------------------------------
1997 1996 1995*
------------ ------------ -------------

Revenues $ 1,150 $ 785 $ 7,269
------------ ------------ -------------

Expenses

Administrative and management 233,068 202,447 193,644
Administrative and management-related parties 1,255,130 508,427 437,446
------------ ------------ -------------

Total expenses 1,488,198 710,874 631,090
------------ ------------ -------------

Loss from operations (1,487,048) (710,089) (623,821)

Equity in (loss) income of subsidiary partnerships (2,692,365) (3,255,555) 2,228,609
------------ ------------ -------------

Net (loss) income $ (4,179,413) $ (3,965,644) $ 1,604,788
============ ============ =============

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

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
-------------------------------------------------
1997 1996 1995*
----------- ----------- -----------

Cash flows from operating activities:

Net (loss) income $(4,179,413) $(3,965,644) $ 1,604,788
----------- ----------- -----------

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

Equity in loss (income) of subsidiary partnerships 2,692,365 3,255,555 (2,228,609)
Decrease in other assets 24,371 19,790 146,665
Due from subsidiary partnership 0 8,990 (1,036,522)

Increase (decrease) in liabilities

Due to general partners and affiliates 1,318,074 507,737 285,988
Other liabilities 0 0 (11,249)
----------- ----------- -----------

Total adjustments 4,034,810 3,792,072 (2,843,727)
----------- ----------- -----------

Net cash used in operating activities (144,603) (173,572) (1,238,939)
----------- ----------- -----------

Cash flows provided by investing activities:

Distributions from subsidiaries 208,195 139,855 218,702
----------- ----------- -----------

Net increase (decrease) in cash and cash equivalents 63,592 (33,717) (1,020,237)

Cash and cash equivalents, beginning of year 19,370 53,087 1,073,324
----------- ----------- -----------

Cash and cash equivalents, end of year $ 82,962 $ 19,370 $ 53,087
=========== =========== ===========

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

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 15, 1997

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

B & C Housing Associates, L.P.
Tulsa, OK $ 5,691,589 $727,300 $ 5,420,791 $ 2,489,238 $729,685 $ 7,907,644 $ 8,637,329
State Street 86 Associates, L.P.
Camden, NJ 8,632,420 861,947 12,460,882 272,280 864,332 12,730,777 13,595,109
Fox Glenn Investors, L.P.
Seat Pleasant, MD 6,063,047 491,209 6,548,849 293,799 493,594 6,840,263 7,333,857
Shiloh Grove L.P. (Mt Vernon)
Columbus, OH 13,933,333 764,874 16,618,743 430,896 767,259 17,047,254 17,814,513
Silver Blue Lake Apartments Ltd.
Miami, FL 4,072,500 537,204 4,755,176 55,766 539,589 4,808,557 5,348,146
Lancaster Towers Associates, Ltd.
Lancaster, NY 2,717,305 147,000 3,673,921 816,625 149,385 4,488,161 4,637,546
West Kinney Associates, L.P.
Newark, NJ 4,734,300 262,466 6,072,924 315,207 264,850 6,385,747 6,650,597
Autumn Park Associates, L.P.
Wilsonville, OR 3,922,343 369,932 2,251,887 3,564,042 938,336 5,247,525 6,185,861
Regent Street Associates, L.P.
Philadelphia, PA 4,388,925 40,000 7,387,283 225,870 42,384 7,610,769 7,653,153
Magnolia Arms Associates, Ltd.
Jacksonville, FL 7,167,934 125,000 8,165,738 314,765 127,384 8,478,119 8,605,503
Greenleaf Associates L.P.
Kansas City, MO 4,434,834 695,000 5,125,103 211,147 697,384 5,333,866 6,031,250
Alameda Towers, Associates L.P.
San Juan, PR 8,983,041 644,000 15,157,047 373,847 646,384 15,528,510 16,174,894
Dixie Apartment Associates, Ltd.
Miami, FL 971,358 194,480 1,354,562 53,230 196,864 1,405,408 1,602,272
Ludlam Gardens Apartments, Ltd.
Miami, FL 2,719,801 755,057 3,943,234 47,692 757,441 3,988,542 4,745,983
Grove Park Associates, L.P. (Woodlawn)
Chicago, IL 5,354,047 600,000 9,386,536 7,347,084 602,384 16,731,236 17,333,620
2108 Bolton Drive Associates, L.P.
Atlanta, GA 4,448,460 835,000 6,599,896 6,005,687 837,384 12,603,199 13,440,583
Apple Creek Housing Associates, Ltd.
Arvada, CO 10,563,089 618,136 10,973,665 284,877 620,520 11,256,158 11,876,678
Redwood Villa Associates
San Diego, CA 4,034,010 0 5,931,183 77,664 2,384 6,006,463 6,008,847
Charles Drew Court Associates, L.P.
Atlantic City, NJ 4,421,144 100 7,893,416 320,448 143,846 8,070,118 8,213,964
Walnut Park Plaza Associates, L.P.
Philadelphia, PA 7,710,000 454,707 7,690,675 2,269,456 457,091 9,957,747 10,414,838
Bayridge Associates, L.P.
Beaverton, OR 6,048,722 917,682 488,333 10,879,870 920,066 11,365,819 12,285,885
United-Pennsylvanian, L.P.
Erie, PA 3,633,957 217,000 4,191,327 703,053 219,385 4,891,995 5,111,380

[RESTUBBED TABLE]

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

B & C Housing Associates, L.P.
Tulsa, OK $ 2,487,816 1987 Dec. 1987 27.5 years
State Street 86 Associates, L.P.
Camden, NJ 4,511,949 1987 Feb. 1988 27.5 years
Fox Glenn Investors, L.P.
Seat Pleasant, MD 2,272,567 1987 Mar. 1988 27.5 years
Shiloh Grove L.P. (Mt Vernon)
Columbus, OH 5,454,662 1987 Feb. 1988 27.5 years
Silver Blue Lake Apartments Ltd.
Miami, FL 1,551,794 1987 Feb. 1988 27.5 years
Lancaster Towers Associates, Ltd.
Lancaster, NY 1,413,873 1987 May 1988 27.5 years
West Kinney Associates, L.P.
Newark, NJ 1,950,738 1983 June 1988 27.5 years
Autumn Park Associates, L.P.
Wilsonville, OR 1,803,552 1988 June 1988 27.5 years
Regent Street Associates, L.P.
Philadelphia, PA 2,417,176 1987 June 1988 27.5 years
Magnolia Arms Associates, Ltd.
Jacksonville, FL 3,147,766 1987 July 1988 27.5 years
Greenleaf Associates L.P.
Kansas City, MO 2,160,003 1987 July 1988 27.5 years
Alameda Towers, Associates L.P.
San Juan, PR 3,099,807 1987 July 1988 40 years
Dixie Apartment Associates, Ltd.
Miami, FL 430,817 1987 July 1988 27.5 years
Ludlam Gardens Apartments, Ltd.
Miami, FL 1,222,870 1987 July 1988 27.5 years
Grove Park Associates, L.P. (Woodl
Chicago, IL 4,696,074 1988 July 1988 27.5 to 31.5 years
2108 Bolton Drive Associates, L.P.
Atlanta, GA 4,654,943 1988 July 1988 15 to 27.5 years
Apple Creek Housing Associates, Lt
Arvada, CO 2,819,150 1988 June 1988 28 years
Redwood Villa Associates
San Diego, CA 1,772,528 1988 Sept. 1988 27.5 years
Charles Drew Court Associates, L.P
Atlantic City, NJ 2,699,104 1987 Sept. 1988 27.5 years
Walnut Park Plaza Associates, L.P.
Philadelphia, PA 2,332,304 1988 Sept. 1988 35 years
Bayridge Associates, L.P.
Beaverton, OR 3,072,785 1988 Dec. 1988 27.5 years
United-Pennsylvanian, L.P.
Erie, PA 2,418,567 1988 Dec. 1988 25 years

[END OF RESTUBBED TABLE]

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 15, 1997
(Continued)

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

2051 Grand Concourse Associates, L.P.
Bronx, NY 4,100,215 31,500 5,221,117 47,691 33,885 5,266,423 5,300,308
Concourse Artists Housing Associates, L.P.
Bronx, NY 1,596,295 5,750 16,100 2,278,151 8,135 2,291,866 2,300,001
Willoughby-Wycoff Housing Associates, L.P.
Bronx, NY 4,228,573 17,000 47,600 6,126,180 19,386 6,171,394 6,190,780
Robin Housing
Bronx, NY 5,474,935 26,750 70,700 8,163,046 29,136 8,231,360 8,260,496
Lund Hill Associates, L.P.
Superior, WI 3,749,644 205,000 4,877,828 408,632 207,900 5,283,560 5,491,460
Tanglewood Apartments, L.P.
Joplin, MO 3,410,729 114,932 5,233,022 83,909 117,832 5,314,031 5,431,863
Quality Hill Historic District-
Phase II-A, L.P. Kansas City, MO 3,357,636 215,181 6,403,141 201,516 267,233 6,552,605 6,819,838
Penn Alto Associates, L.P.
Altoona, PA 5,116,575 60,000 2,731,082 8,901,916 93,905 11,599,093 11,692,998
Sartain School Venture, L.P.
Philadelphia, PA 1,962,305 3,883 3,486,875 133,651 9,126 3,615,283 3,624,409
------------ ----------- ------------ ----------- ----------- ------------ ------------
$157,643,066 $10,938,090 $180,178,636 $63,697,235 $11,804,469 $243,009,492 $254,813,961
============ =========== ============ =========== =========== ============ ============

[RESTUBBED TABLE]

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

2051 Grand Concourse Associates, L.P.
Bronx, NY 1,577,476 1986 Nov. 1988 27.5 years
Concourse Artists Housing Associates, L.P.
Bronx, NY 668,446 1986 Nov. 1988 27.5 years
Willoughby-Wycoff Housing Associates, L.P.
Bronx, NY 1,818,644 1987 Nov. 1988 27.5 years
Robin Housing
Bronx, NY 2,436,081 1986 Nov. 1988 27.5 years
Lund Hill Associates, L.P.
Superior, WI 1,052,922 1988 Jan. 1989 20 to 40 years
Tanglewood Apartments, L.P.
Joplin, MO 1,585,500 1988 Oct. 1988 27.5 years
Quality Hill Historic District-
Phase II-A, L.P. Kansas City, MO 1,243,085 1988 Mar. 1989 40 years
Penn Alto Associates, L.P.
Altoona, PA 2,695,518 1989 June 1989 27.5 years
Sartain School Venture, L.P.
Philadelphia, PA 577,733 1989 Aug. 1990 40 years
-----------
$72,046,250
===========

{END OF RESTUBBED TABLE]

(a) Since all properties were acquired as operating properties, depreciation
is computed using primarily the straight line method over the estimated
useful lives determined by the Partnership date of acquisition.
(b) Furniture and fixtures, included in buildings and improvements, are
depreciated primarily by the straight line method over their estimated
useful lives ranging from 5 to 15 years.

Cost of Property and Equipment Accumulated Depreciation
------------------------------------------------ ----------------------------------------------
Year Ended March 15,
----------------------------------------------------------------------------------------------------
1997 1996 1995 1997 1996 1995
------------ ------------ ------------ ----------- ----------- -----------

Balance at beginning of period $253,602,442 $252,211,688 $251,711,775 $63,484,987 $54,706,727 $46,075,052
Additions during period:
Improvements 1,274,858 1,397,540 1,107,848
Depreciation expense 8,575,413 8,785,046 8,793,783
Reductions during period:
Dispositions 63,339 6,786 607,935 14,150 6,786 162,108
------------ ------------ ------------ ----------- ----------- -----------
Balance at end of period $254,813,961 $253,602,442 $252,211,688 $72,046,250 $63,484,987 $54,706,727
============ ============ ============ =========== =========== ===========

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.