SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

ý		Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
		For the fiscal year ended March 31, 2003 or
o		TRANSITION REPORT PERSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from             to            

 

Commission file number 0-19443

 

BOSTON CAPITAL TAX CREDIT FUND II LIMITED PARTNERSHIP

(Exact name of registrant as specified in its charter)

 

 

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

 

 

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

 

Beneficial Assignee Certificates

(Title of Class)

 

Indicate by check mark whether the Partnership (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 twelve months (or for such shorter period that the Partnership was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 

 

YES

ý

NO

o

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) 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.                                     ý

 

 

DOCUMENTS INCORPORATED BY REFERENCE

 

The following documents of the Partnership are incorporated by reference:

 

Form 10-K Parts		Document
Parts I, III		October 25, 1989 Prospectus, as supplemented
Parts II, IV

 

 

BOSTON CAPITAL TAX CREDIT FUND II LIMITED PARTNERSHIP

Form 10-K ANNUAL REPORT FOR THE YEAR ENDED MARCH 31, 2003

 

TABLE OF CONTENTS

 

PART I
Item 1.	Business
Item 2.	Properties
Item 3.	Legal Proceedings
Item 4.	Submission of Matters to a Vote of Security-Holders
PART II
Item 5.	Market for the Registrant’s Limited Partnership Interests and Related Partnership Matters
Item 6.	Selected Financial Data
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 8.	Financial Statements and Supplementary Data
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
PART III
Item 10.	Directors and Executive Officers of the Partnership
Item 11.	Executive Compensation
Item 12.	Security Ownership of Certain Beneficial Owners and Management
Item 13.	Certain Relationships and Related Transactions
Item 14.	Controls and Procedures
PART IV
Item 15.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K
	Signatures

 

 

PART I

 

Item 1.                                Business

 

Organization

 

Boston Capital Tax Credit Fund II Limited Partnership (the “Partnership”) is a limited partnership formed under the Delaware Revised Uniform Limited Partnership Act as of June 28, 1989. Effective as of June 1, 2001 there was a restructuring, and as a result, the Fund’s general partner was reorganized as follows.  The General Partner of the Fund continues to be Boston Capital Associates II Limited Partnership, a Delaware limited partnership.  The general partner of the General Partner is BCA Associates Limited Partnership, a Massachusetts limited partnership, whose sole general partner is C&M Management, Inc., a Massachusetts corporation.  John P. Manning is the principal of Boston Capital Partners, Inc. and C&M Management Inc. The limited partner of the General Partner is Capital Investment Holdings, a general partnership whose partners are certain officers and employees of Boston Capital Partners, Inc., and its affiliates. The Assignor Limited Partner is BCTC II Assignor Corp., a Delaware corporation which is now wholly-owned by John P. Manning.

 

The Assignor Limited Partner was formed for the purpose of serving in that capacity for the Partnership and will not engage in any other business.  Units of beneficial interest in the Limited Partnership Interest of the Assignor Limited Partner have been assigned by the Assignor Limited Partner by means of beneficial assignee certificates (“BACs”) to investors and investors are entitled to all the rights and economic benefits of a Limited Partner of the Partnership including rights to a percentage of the income, gains, losses, deductions, credits and distributions of the Partnership.

 

A Registration Statement on Form S-11 and the related prospectus, as supplemented (the “Prospectus”) was filed with the Securities and Exchange Commission and became effective October 25, 1989 in connection with a public offering (“Offering”) in series 7, 9 through 12, and 14.  The Partnership raised $186,337,517 representing a total of 18,679,738 BACs. The Partnership completed sales of BACs in all Series on January 27, 1992.

 

Description of Business

 

The Partnership’s principal business is to invest as a limited partner in other limited partnerships (the “Operating Partnerships”), each of which owns or leases and operates an Apartment Complex exclusively or partially for low- and moderate-income tenants.  Each Operating Partnership in which the Partnership invested owns Apartment Complexes which are completed, newly-constructed, under construction or rehabilitation, or to-be constructed or rehabilitated, and which are expected to receive Government Assistance.

 

Each Apartment Complex has qualified for the low-income housing tax credit under Section 42 of the Code (the “Federal Housing Tax Credit”), thereby providing tax benefits over a period of twelve years in the form of tax credits which investors may use to offset income, subject to certain strict limitations, from other sources.  Certain of the Apartment Complexes also qualified for the historic

 

1

 

rehabilitation tax credit under Section 48 of the Code (the “Rehabilitation Tax Credit”).  The Federal Housing Tax Credit and the Government Assistance programs are described on pages 67 to 92 of the Prospectus, as supplemented, under the caption “Government Assistance Programs,” which is incorporated herein by reference.  Section 236 (f) (ii) of the National Housing Act, as amended, in Section 101 of the Housing and Urban Development Act of 1965, as amended, each provide for the making by HUD of rent supplement payments to low income tenants in properties which receive other forms of federal assistance such as Tax Credits.  The payments for each tenant, which are made directly to the owner of their property, generally are in such amounts as to enable the tenant to pay rent equal to 30% of the adjusted family income.  Some of the Apartment Complexes in which the Partnership has invested are receiving such rent supplements from HUD.  HUD has been in the process of converting rent supplement assistance to assistance paid not to the owner of the Apartment Complex, but directly to the individuals.  At this time, the Partnership is unable to predict whether Congress will continue rent supplement programs payable directly to owners of the Apartment Complex.

 

As of March 31, 2003, the Partnership had invested in a total of 304 Operating Partnerships; 14 Operating Partnerships on behalf of Series 7, 53 Operating Partnerships on behalf of Series 9, 44 Operating Partnerships on behalf of Series 10, 40 Operating Partnerships on behalf of Series 11, 53 Operating Partnerships on behalf of Series 12, and 100 Operating Partnerships on behalf of Series 14. A description of these Operating Partnerships is set forth in Item 2 herein.

 

The business objectives of the Partnership are to:

 

(1);	preserve and protect the Partnership’s capital
(2)	provide current tax benefits to Investors in the form of (a) Federal Housing Tax Credits and Rehabilitation Tax Credits, which an Investor may apply, subject to certain strict limitations, against his federal income tax liability from active, portfolio and passive income, and (b) passive losses which an Investor may apply to offset his passive income (if any);
(3);	provide capital appreciation (except with respect to the Partnership’s investment in certain Non-Profit Operating Partnerships) through increases in value of the Partnership’s investments and, to the extent applicable, equity buildup through periodic payments on the mortgage indebtedness with respect to the Apartment Complexes
(4)	provide cash distributions (except with respect to the Partnership’s investment in certain Non-Profit Operating Partnerships) from a Capital Transaction as to the Partnership.  The Operating Partnerships intend to hold the Apartment Complexes for appreciation in value.  The Operating Partnerships may sell the Apartment Complexes after a period of time if financial conditions in the future make such sales desirable and if such sales are permitted by government restrictions; and
(5)	provide, on a current basis and to the extent available, cash distributions from the operations of the Apartment Complexes (no significant amount of which is anticipated).

 

2

 

The business objectives and investment policies of the Partnership are described more fully on pages 44 to 52 of the Prospectus, as supplemented, under the caption “Business Objectives and Investment Policies, “ which is incorporated herein by reference.

 

Item 2.                                Properties

 

The Partnership has acquired a Limited Partnership Interest in each of the 307 Operating Partnerships in 6 series identified in the table set forth below.  In each instance the Apartment Complex owned by each of the Operating Partnerships is eligible for the Federal Housing Tax Credit. Initial occupancy of a unit in each Apartment Complex which complied with the Minimum Set-Aside Test (i.e., initial occupancy by tenants with incomes equal to no more than a certain percentage of area median income) and the Rent Restriction Test (i.e., gross rent charged tenants does not exceed 30% of the applicable income standards) is referred to hereinafter as “Qualified Occupancy.”  Each of the Operating Partnerships and each of the respective Apartment Complexes are described more fully in the Prospectus or applicable Report on Form 8-K filed during the past fiscal year.  The General Partner believes that there is adequate casualty insurance on the properties.

 

Please refer to Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a more detailed discussion of operational difficulties experienced by certain of the Operating Partnerships.

 

3

 

Boston Capital Tax Credit Fund II Limited Partnership - Series 7

 

PROPERTY PROFILES AS OF March 31, 2003

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
The Bowditch School Lodging House		Jamaica Plain, MA		50		$	1,583,824		12/89		12/89		100	%	$	606,390
Briarwood Apartments		Cameron, MO		24		615,365			12/89		12/89		100	%	157,254
Buckner Properties		Buckner, MO		24		611,779			12/89		3/89		100	%	146,287
Creekside Apartments		Vandergrift, PA		30		1,076,045			6/89		9/89		100	%	247,790
Deer Hill II Apartments		Huntersville, NC		40		1,460,912			2/90		5/89		100	%	333,370
Hillandale Commons		Lithonia, GA		132		4,609,196			12/89		1/90		100	%	1,138,907
Leo A. Meyer Senior Citizen Housing		King City, CA		44		1,658,088			6/90		11/89		100	%	893,708
Lebanon Properties II		Lebanon, MO		24		566,528			12/89		7/89		100	%	136,440
Oak Grove Estates		Oak Grove, MO		20		478,062			12/89		9/89		100	%	113,188
Oakview Apartments		Delta, OH		38		1,111,917			12/89		10/89		100	%	258,264
Metropole Apartments		Miami Beach, FL		42		2,025,471			12/89		12/89		100	%	694,581

 

4

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Rosenberg Apartments		Santa Rosa, CA		77		$	1,742,683		2/90		1/92		100	%	$	1,943,360
Westwood Square Apartments		Moore Head City, NC		36		1,393,721			7/90		7/90		100	%	117,286
Winfield Properties II		Winfield, MO		24		602,504			12/89		5/89		100	%	142,525

 

5

 

Boston Capital Tax Credit Fund II Limited Partnership - Series 9

 

PROPERTY PROFILES AS OF March 31, 2003

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Azalea Village Apartments		Crawford, GA		24		$	632,816		5/90		5/90		100	%	$	143,206
Beaver Brook Commons		Pelham, NH		24		1,168,640			4/90		5/90		91	%	290,403
Bent Creek Apartments II		Crest View, FL		24		700,250			6/90		5/90		100	%	164,534
Big Lake Seniors		Big Lake, TX		20		550,159			4/94		6/95		100	%	145,660
Blanco Senior Apts.		Blanco, TX		20		511,941			12/93		9/94		100	%	98,561
Breezewood Village Phase I		Kissimmee, FL		86		2,752,218			4/90		4/90		100	%	831,650
Breezewood Village II		Kissimmee, FL		42		1,412,498			5/90		5/90		100	%	416,268
Cambridge Manor		Madison, FL		36		1,118,945			4/90		1/90		100	%	268,523
Corinth Senior Housing		Corinth, NY		40		1,470,441			4/90		2/90		100	%	384,000
Cotton Mill Apartments		Stuart, VA		40		1,453,613			10/92		7/93		100	%	271,351
Country Hill Apts.		Cedar Rapids, IA		166		4,310,552			4/90		6/90		100	%	3,471,607
Country Lane Apts.		Blakely, GA		32		1,015,996			5/90		5/90		100	%	211,916

 

6

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Fawn River Apartments		Sturgis, MI		100		$	3,655,650		10/90		10/90		100	%	$	971,446
Garden Lake Apartments		Immokalee, FL		65		2,168,213			5/90		5/90		100	%	577,529
Glenwood Hotel		Porterville, CA		36		684,046			6/90		6/90		100	%	383,100
Grand Princess Manor		St. Croix, USVI		24		1,475,236			6/90		8/90		100	%	374,766
Grand Princess Villa		St. Croix, USVI		24		1,474,251			6/90		8/90		100	%	276,203
Greenwich Senior Housing		Greenwich, NY		36		1,463,696			4/90		2/90		100	%	340,000
Grifton Manor Apts.		Grifton, NC		40		1,228,644			9/93		2/94		100	%	261,645
Hacienda Villa Apartments		Firebaugh, CA		120		3,671,164			4/90		1/90		100	%	1,343,294
Haines City Apartments		Haines City, FL		46		1,419,716			4/90		2/90		100	%	339,465
Hamlet Square		Newfane, NY		24		936,499			10/92		9/92		96	%	193,830
Hill St. Commons		South Paris, ME		25		1,468,846			11/92		10/92		100	%	301,064
Kristin Park Apartments		Las Vegas, NV		44		1,374,053			3/90		6/90		100	%	313,200

 

7

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Le Grand Apts.		Le Grand, CA		34		$	1,712,804		11/92		10/93		100	%	$	419,011
Longmeadow Apartments		Skowhegan, ME		28		1,463,395			8/90		8/90		100	%	284,000
Magnolia Lane Apartments		Bloomingdale, GA		48		1,460,380			5/90		3/90		100	%	321,908
Maywood Apartments		Corning, CA		40		1,483,380			3/90		7/90		100	%	365,280
Meadowcrest Southfield, Apartments		Southfield, MI		83		2,836,657			9/90		10/90		100	%	1,116,284
Mill Pond Apartments		Brooklyn, MI		36		1,095,184			5/90		5/90		100	%	250,175
Pinewoods Apartments		Springfield, IL		168		4,109,156			6/90		6/91		100	%	1,258,700
Pine Ridge Place		Polkton, NC		16		630,567			1/94		12/93		100	%	114,730
Pleasanton Seniors Apts.		Pleasanton, TX		24		611,398			12/93		7/93		100	%	144,839
Port Crossing		Portage, IN		160		3,576,610			3/90		4/90		100	%	2,733,580
Putney Meadows Apts		Putney, VT		28		1,408,780			12/92		5/93		100	%	374,495
Quail Hollow Apartments		Homerville, GA		54		1,450,768			5/90		1/90		100	%	363,353

 

8

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Quail Hollow II		Raleigh, NC		36		$	1,387,645		7/90		9/90		100	%	$	313,521
Rainbow Gardens Apartments		Dunnellon, FL		36		1,198,055			12/92		6/93		100	%	236,763
Raitt Street Apts.		Santa Ana, CA		6		828,972			5/93		8/93		100	%	416,200
School St. Apts. II		Marshall, WI		24		646,658			6/93		6/93		100	%	652,967
Scottsville Hollow		Scottsville, NY		36		1,410,539			5/90		5/90		100	%	304,060
St. Paul’s Apartments		St. Paul, NC		32		1,250,472			5/90		9/90		100	%	263,165
Surry Village II		Surry, VA		24		770,014			5/90		1/90		100	%	157,002
Tappahannock Greens Apts.		Tappahannock, VA		40		1,485,540			3/94		5/94		100	%	293,486
Telluride Apartments		Telluride, CO		30		1,455,060			9/90		11/90		100	%	300,033
The Warren St. Lodging House		Boston, MA		19		721,934			3/90		5/90		100	%	460,900
Twin Oaks Apartments		Raeford, NC		28		1,126,917			5/90		5/90		100	%	275,894

 

9

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Ventura Village		Hernando, FL		53		$	1,468,278		6/90		7/90		100	%	$	473,300
Village Oaks Apartments II		Live Oak, FL		24		723,374			6/90		2/90		100	%	164,291
Warrensburg Estates		Warrensburg, MO		32		782,576			4/90		4/90		100	%	181,849
Westside Apartments		Providence, RI		40		2,311,029			6/90		12/90		100	%	1,777,738
Westwood Square Apartments		Moorehead City, NC		36		1,393,721			7/90		7/90		100	%	195,391
Wilmington Housing		Wilmington, NY		24		1,033,585			8/90		8/90		100	%	237,279

 

10

 

Boston Capital Tax Credit Fund II Limited Partnership - Series 10

 

PROPERTY PROFILES AS OF March 31, 2003

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Athens Park Apartments		Athens, AL		48		$	1,321,852		8/90		6/90		100	%	$	354,144
Autumn Lane Apartments		Washington, GA		24		725,661			8/89		11/90		100	%	168,234
Baytree Apartments		Richlands, NC		24		946,822			11/88		7/90		100	%	210,999
Benchmark Apartments		China Grove, NC		24		1,100,326			11/88		7/90		100	%	223,328
Berkshire Apartments II		Wichita, KS		66		1,686,911			7/90		7/90		100	%	1,183,452
Brentwood Apartments		Eunice, LA		32		943,901			11/90		10/90		100	%	205,470
Briarwood Apartments		Middleburg, FL		52		1,464,776			8/90		8/90		100	%	509,251
Butler Manor Apartments		Morgantown, KY		16		496,806			12/90		2/91		100	%	119,952
Campbell Creek Apartments		Dallas, GA		80		1,303,327			12/91		10/90		100	%	735,000
Candlewick Place		Monroeville, AL		40		1,239,932			12/92		10/92		100	%	241,600
Cedarstone Apts.		Poplarville, MS		24		763,341			5/93		5/93		100	%	180,800
Charlton Court Apartments		Folkston, GA		40		1,185,259			12/92		1/93		100	%	263,520

 

11

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Chuckatuck Square		Suffolk VA		42		$	1,441,053		11/90		2/90		100	%	$	320,900
Cloverleaf Apartments		Bishopville, SC		24		844,658			11/90		4/90		100	%	153,900
Cloverleaf Apts., Phase II		Bishopville, SC		24		863,638			11/90		4/90		100	%	160,761
Connellsville Heritage Apts.		Connellsville, PA		36		1,350,784			11/90		3/90		100	%	325,460
Freedom Apartments		Ford City, PA		28		1,038,050			11/90		9/90		100	%	262,791
Hartway Apts.		Munfordville, KY		32		902,613			7/90		6/90		100	%	239,041
Hilltop Terrace		Kingsland, GA		54		1,470,795			8/90		7/90		100	%	455,851
Ironton Estates		Ironton, MO		24		613,797			5/93		1/93		100	%	157,976
Lambert Square Apts.		Lambert, MS		32		980,400			11/92		12/92		100	%	192,347
Longview Apartments		Maysville, NC		24		862,214			11/88		8/90		100	%	195,837
Maidu Village		Roseville, CA		81		1,878,192			3/91		12/91		100	%	470,000

 

12

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Mann Estates		Indianapolis, IN		132		$	3,192,845		7/90		10/90		100	%	$	1,980,000
Meadowbrook Lane Apartments		Americus, GA		50		1,459,204			9/90		3/90		100	%	336,264
Melrose Lane Apartments		Great Falls, SC		24		873,877			11/90		10/90		100	%	203,645
Mercer Manor		Mercer, PA		26		898,157			11/90		8/90		96	%	220,450
Pecan Village Apartments		Ellaville, GA		30		777,013			7/90		2/90		100	%	221,856
Piedmont Hills		Forsyth, GA		50		1,441,159			7/90		9/90		100	%	439,958
Pine View Apartments		Perry, FL		29		949,701			9/90		12/90		100	%	277,405
Pines by the Creek Apts.		Newnan, GA		96		1,533,306			12/90		10/90		100	%	890,000
Pine Grove Apts.		Ackerman, MS		24		550,578			9/93		6/94		100	%	169,926
Pinetree Manor Apts.		Centreville, MS		32		968,363			11/92		1/93		100	%	191,500
Rosewood Village Apartments		Willacoochee, GA		24		665,019			7/90		7/90		100	%	147,480

 

13

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Springwood Park Apartments		Durham, NC		100		$	2,814,963		3/91		5/91		100	%	$	1,000,000
Stockton Estates		Stockton, MO		20		508,558			2/93		1/93		100	%	120,352
Stratford Square Apartments		Brundidge, AL		24		742,961			10/92		2/93		100	%	145,036
Summer Glen Apartments		Immokalee, FL		45		1,464,658			11/92		3/93		100	%	246,230
Summerwood Apartments		West Des Moines, IA		86		2,187,025			7/90		7/90		100	%	2,015,183
Sunmark Apartments		Morgantown, KY		24		760,220			8/90		12/90		100	%	176,669
Village Commons		Lawton, MI		58		1,549,883			11/90		6/90		100	%	323,665
Washington Heights Apartments, IV		Bismarck, ND		24		471,312			11/90		7/90		100	%	381,010
Woods Hollow Apartments		Centreville, MI		24		676,132			11/90		2/90		100	%	132,700
Woodside Apartments		Lisbon, ME		28		1,464,665			12/90		11/90		100	%	397,630

 

14

 

Boston Capital Tax Credit Fund II Limited Partnership - Series 11

 

PROPERTY PROFILES AS OF March 31, 2003

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Academy Hill Apartments		Ahoskie, NC		40		$	1,360,924		2/91		2/91		100	%	$	319,224
Aspen Square Apartments		Tazewell, VA		60		1,813,949			11/90		11/90		100	%	356,495
Bridgeview Apartments		Emlenton, PA		36		1,346,713			12/90		12/89		100	%	327,257
Buckeye Senior Apartments		Buckeye, AZ		41		1,324,550			12/90		8/90		100	%	311,480
Campbell Creek Apartments		Dallas, GA		80		1,303,327			12/90		10/90		100	%	142,000
Cambridge Manor Apartments		Macon, MS		47		1,600,131			5/93		4/93		100	%	356,356
Church Hill Apartments		Church Point, LA		32		944,334			12/90		1/91		100	%	205,750
Copper Creek Apartments		Lebanon, VA		36		1,161,540			11/90		9/90		100	%	237,647
Coronado Hotel		Tuscon, AZ		42		227,126			3/91		3/91		100	%	614,050
Crestwood Apartments		St. Cloud, FL		216		3,905,014			1/91		6/91		100	%	5,636,484
El Dorado Springs Est.		El Dorado Springs, MO		24		574,006			11/90		9/90		100	%	133,790
Eldon Est. II		Eldon, MO		24		574,495			12/90		11/90		100	%	131,340

 

15

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Eldon Manor		Eldon, MO		24		$	553,108		12/90		11/90		100	%	$	241,980
Elmwood Manor Apartments		Eutaw, AL		47		1,603,699			5/93		12/93		100	%	333,440
Fairridge Lane Apartments		Denmark, SC		24		761,283			11/90		6/90		100	%	209,326
Fairridge Village Apartments		Denmark, SC		24		808,553			11/90		6/90		100	%	186,381
Farmerville Square Apts.		Farmerville, LA		32		957,428			1/91		4/91		100	%	212,280
Forest Glade Apartments		Wauchula, FL		50		1,466,148			12/90		12/90		100	%	420,565
Franklin School		Great Falls, MT		40		1,209,042			10/90		12/91		100	%	1,453,270
Hilltop Apts.		Los Lunas, NM		40		1,402,487			1/93		11/92		100	%	258,455
Holland Meadows		Holland, NY		24		889,429			11/90		6/90		100	%	213,880
Holley Grove		Holley, NY		24		907,033			11/90		10/90		100	%	207,360
Ivan Woods Senior Apts.		Delta Township, MI		90		2,561,538			2/91		4/91		100	%	1,184,275
Kaplan Manor Apartments		Kaplan, LA		32		915,650			12/90		12/90		100	%	198,460

 

16

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Lakewood Village Apartments		Lake Providence, LA		32		$	943,562		1/91		5/91		100	%	$	223,827
Licking Apartments		Licking, MO		16		401,613			11/91		3/92		100	%	90,436
London Arms		Miami Beach, FL		58		2,670,528			12/90		12/90		100	%	937,961
Maidu Village		Roseville, CA		81		1,878,192			3/91		12/91		100	%	530,000
Nevada Manor		Nevada, MO		24		640,051			11/90		10/90		100	%	143,270
Oatka Meadows		Warsaw, NY		24		908,285			11/90		6/90		100	%	206,670
Osage Place		Arkansas City, KS		38		1,218,016			12/90		12/90		100	%	522,999
Pines by the Creek Apartments		Newnan, GA		96		1,533,306			12/90		10/90		100	%	245,000
Sandy Pines Manor		Punta Gorda, FL		44		1,464,701			12/90		7/90		100	%	399,977
Sierra Springs Apartments		Tazewell, VA		36		1,162,435			11/90		11/90		100	%	299,634
South Fork Heights		South Fork, CO		48		1,459,502			2/91		2/91		100	%	343,358
Twin Oaks Apartments		Allendale, SC		24		773,183			12/90		9/90		100	%	206,888

 

17

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Walnut Village Apartments		Manning, SC		24		$	829,580		11/90		11/90		100	%	$	183,244
Washington Manor Apartments		Washington, LA		32		946,517			1/91		3/91		100	%	216,990
Wildridge Apartments		Jesup, GA		48		1,374,771			1/91		4/91		100	%	329,130
Windsor Apts.		Metter, GA		53		1,448,708			12/92		5/93		100	%	248,207

 

18

 

Boston Capital Tax Credit Fund II Limited Partnership - Series 12

 

PROPERTY PROFILES AS OF March 31, 2003

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Bowman Village Apartments		Bowman, GA		24		$	657,944		6/91		10/91		100	%	$	139,879
Brandywood Apartments		Oak Creek, WI		54		1,676,187			12/91		9/91		100	%	1,532,506
Brentwood Manor Apartments		Clarkson, KY		24		736,194			6/91		7/91		100	%	173,969
Briarwick Apartments		Nicholasville, KY		40		1,215,441			4/91		4/91		100	%	323,941
Bridgerun Townhomes		Cannon Falls, MN		18		544,533			6/91		7/91		100	%	458,800
Bucksport Park Apartments		Bucksport, ME		24		1,355,539			6/91		8/91		100	%	334,600
Campbell Creek Apartments		Dallas, GA		80		1,303,327			3/91		10/90		100	%	593,000
Cananche Creek Apartments		Norton, VA		36		1,221,142			5/91		6/91		100	%	276,695
Carson Village Apartments		Wrightsville, GA		24		644,529			10/91		6/92		100	%	161,452
Clymer House Apartments		Clymer, PA		26		1,103,272			6/91		10/91		100	%	254,097
Corcoran Garden Apartments		Corcoran, CA		38		1,602,373			2/91		11/90		100	%	432,438
Cornish Park		Cornish, ME		25		1,438,668			6/91		6/91		100	%	333,000

 

19

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Crescent City Senior Apartments		Crescent City, CA		38		$	1,843,010		3/91		3/91		100	%	$	474,536
Earlimart Senior Apartments		Earlimart, CA		35		1,330,325			6/91		6/91		100	%	364,515
Evanwood Apartments		Hardinsburg, KY		24		745,306			6/91		5/91		100	%	167,221
Fox Run Apartments		Jesup, GA		24		591,551			12/91		7/92		100	%	150,033
Franklin House Apts.		Liberty, MO		21		279,734			5/93		1/88		100	%	137,836
Hamilton Village Apartments		Preston, GA		20		562,542			10/91		3/92		100	%	140,948
Hunters Park Apartments		Tarboro, NC		40		1,394,091			5/91		4/91		100	%	320,175
Ivan Woods Senior Apartments		Delta Township, MI		90		2,561,538			2/91		4/91		100	%	778,688
Keenland Apartments		Burkesville, KY		24		726,270			6/91		9/91		100	%	164,246
Lakeridge Apartments		Eufala, AL		30		906,060			3/91		4/91		100	%	186,780
Laurel Village Apartments		Wadley, GA		24		653,825			10/91		5/92		100	%	149,058

 

20

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Los Caballos II Apts.		Hatch, NM		24		$	733,059		7/91		8/91		100	%	$	164,740
Marlboro Place Apartments		Bennettsville, SC		24		826,216			3/91		2/91		100	%	192,779
Melville Plaza Apartments		Melville, LA		32		881,706			7/91		10/91		100	%	178,564
Nanty Glo House Apartments		Nanty Glo, PA		36		1,458,948			6/91		7/91		100	%	353,000
Newport Village		Franklin, VA		48		1,468,739			4/91		11/90		100	%	355,000
Oakleigh Apartments		Abbeville, LA		32		902,679			8/91		3/92		100	%	178,716
Oak Street Apartments		Scott City, MO		24		592,644			6/91		11/91		100	%	138,149
Oakwood Apartments		Mamou, LA		32		895,659			8/91		1/92		100	%	180,819
Pines by the Creek Apartments		Newnan,  GA		96		1,533,306			3/91		10/90		100	%	645,000
Pinewoods Apartments		Springfield, IL		168		4,109,156			7/91		6/91		100	%	2,880,000
Portales Estates		Portales, NM		44		1,423,323			7/91		7/91		100	%	365,100

 

21

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Prairie West Apts. III		West Fargo, ND		24		$	485,452		3/91		3/91		100	%	$	360,698
Ridgeway Court III Apartments		Bemidji, MN		24		893,390			4/91		1/91		100	%	180,186
River Reach Apts.		Crystal River, FL		41		1,350,419			5/91		5/91		100	%	351,421
Rockmoor Apartments		Banner Elk, NC		12		556,201			5/91		3/91		100	%	95,818
Shawnee Ridge Apartments		Norton, VA		20		659,728			5/91		5/91		100	%	145,606
Springwood Park Apartments		Durham, NC		100		2,814,963			3/91		5/91		100	%	374,349
Spring Mountain Apartments		Pahrump, NV		33		1,348,712			5/91		4/91		100	%	290,406
Stonegate Manor		Perry, FL		36		998,582			5/91		12/90		100	%	274,321
Summit Ridge Apartments		Palmdale, CA		304		8,516,143			10/92		12/93		100	%	3,674,306
Turner Lane Apartments		Ashburn, GA		24		713,221			5/91		7/91		100	%	147,090
Union Baptist Plaza Apartments		Springfield, IL		24		367,714			5/91		4/91		100	%	432,648

 

22

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Uptown Apartments		Salyersville, KY		16		$	515,299		5/91		3/91		100	%	$	121,700
Villas of Lakeridge		Eufala, AL		18		525,875			3/91		3/91		100	%	96,868
Waynesboro Village Apartments		Waynesboro, TN		48		1,355,893			4/91		1/91		100	%	310,510
Windsor Court II		Windsor, VA		24		727,162			4/91		11/90		100	%	169,347
Woodcrest Manor Apartments		Woodville, MS		24		701,689			6/91		11/91		100	%	138,579
Woodlawn Village Apartments		Abbeville, GA		36		1,001,222			10/91		4/92		100	%	229,601
Woodside Apartments		Grove City, PA		32		1,141,510			4/91		3/91		100	%	229,291
Yorkshire Townhome Apts.		Fort Smith, AR		50		817,247			9/93		8/94		98	%	874,069

 

23

 

Boston Capital Tax Credit Fund II Limited Partnership - Series 14

 

PROPERTY PROFILES AS OF March 31, 2003

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Ada Village Apts.		Ada, OK		44		$	1,015,697		1/93		11/93		100	%	$	158,976
Amherst Village		Amherst, VA		48		1,574,630			1/92		1/92		100	%	322,796
Belmont Village Court		Belmont, NY		24		918,187			1/92		12/91		100	%	201,300
Bethel Park Apartments		Bethel, ME		24		1,471,378			12/91		3/92		100	%	324,100
Blanchard Senior Apts. II		Blanchard, LA		24		590,224			10/91		9/91		100	%	143,628
Blanchard Village Apts.		Blanchard, OK		8		213,137			1/93		7/93		100	%	32,954
Brantwood Lane Apartments		Centreville, AL		36		1,130,195			7/91		9/91		100	%	237,873
Breckenridge Apartments		McColl, SC		24		857,472			1/92		3/92		100	%	186,065
Briarwood Apartments Ph II		Middleburg,  FL		50		1,473,475			2/92		4/92		100	%	293,694
The Bridge Building		New York, NY		15		0			1/92		12/91		100	%	1,037,770
Buchanan Court		Warren, PA		18		716,827			7/91		11/90		100	%	160,600
Burnt Ordinary Village		Toano, VA		22		701,276			7/91		7/91		100	%	159,400

 

24

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Carleton Court Apartments		Providence RI		46		$	2,883,206		12/91		12/91		100	%	$	1,496,922
Carriage Run Apartments		Emporia, VA		40		1,297,110			10/91		4/92		100	%	259,980
Cedar View Apartments		Brinkley, AR		32		1,251,805			5/92		10/92		100	%	254,016
Cedarwood Apartments		Pembroke, NC		36		1,398,841			10/91		1/92		100	%	326,310
Chapparral Apartments		Kingman, AZ		20		687,710			8/91		7/91		100	%	198,275
College Green		Chili, NY		110		3,712,242			3/95		8/95		100	%	755,771
Colorado City Seniors Apartments		Colorado City, TX		24		536,216			10/91		10/91		100	%	98,721
Cottonwood Apts. II		Cottonport LA		24		708,841			10/91		7/91		100	%	152,664
Country Meadows Apartments		Sioux Falls, SD		44		940,776			11/91		10/91		100	%	922,350
Countryside Fulton, Manor		MS		24		658,088			10/91		8/91		100	%	151,868
Davis Village Apts.		Davis, OK		44		1,143,819			1/93		9/93		100	%	180,452
Devenwood Apartments		Ridgeland, SC		24		861,072			7/92		1/93		100	%	186,000

 

25

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Duncan Village Apts.		Duncan, OK		48		$	1,105,152		1/93		11/93		100	%	$	172,005
Edison Village Apartments		Edison, GA		42		1,181,173			7/91		2/92		100	%	274,144
Ethel Bowman Proper House		Tionesta, PA		36		1,411,310			2/92		1/92		100	%	334,160
Excelsior Springs Properties		Excelsior Springs, MO		24		616,068			2/92		4/91		100	%	150,651
Fairground Place Apts.		Bedford, KY		19		685,976			3/95		8/95		100	%	176,963
Four Oaks Village Apartments		Four Oaks, NC		24		882,234			3/92		6/92		100	%	179,900
Franklin Vista III Apts.		Anthony, NM		28		917,301			1/92		4/92		100	%	179,685
Friendship Village		Bel Air, MD		32		1,423,265			1/92		6/91		100	%	226,000
Glenhaven Park		Merced, CA		12		381,956			1/94		6/90		100	%	125,000
Glenhaven Park II		Merced, CA		15		472,610			1/94		6/89		100	%	365,925
Glenhaven Park III		Merced, CA		15		475,035			1/94		12/89		100	%	225,500

 

26

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Glenhaven Estates		Merced, CA		13		$	267,940		1/94		6/89		100	%	$	134,000
Green Village Apts. II		Standardsville, VA		16		578,686			4/92		11/91		100	%	99,100
Greenleaf Apartments		Bowdoinham, ME		21		1,114,870			11/91		8/92		100	%	295,085
Hughes Springs Seniors Apartments		Hughes Springs, TX		32		778,867			10/91		8/91		100	%	183,674
Harrison City Apts.		Penn Township, PA		38		1,462,483			7/92		9/92		100	%	311,775
Hessmer Village Apartments		Hessmer, LA		32		898,391			12/91		4/92		100	%	186,503
Hillmont Village Apartments		Micro, NC		24		873,423			9/91		1/92		100	%	184,900
Hunters Run Apartments		Douglas, GA		50		1,428,173			12/91		2/92		100	%	322,368
Independence Apartments		Mt. Pleasant, PA		28		1,069,309			8/91		6/91		100	%	223,100
Indian Creek Apartments		Kilmarnock, VA		20		788,733			7/91		4/91		100	%	174,400
Jarratt Village Apartments		Jarratt, VA		24		821,050			10/91		12/91		100	%	159,140
Kingfisher Village Apts.		Kingfisher, OK		8		160,475			1/93		12/93		100	%	24,365

 

27

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
La Gema del Barrio Apts.		Santa Ana, CA		6		$	664,214		6/92		8/92		100	%	$	458,000
Lafayettee Gardens Apartments		Scott, LA		56		1,058,863			10/91		11/91		100	%	437,688
Lake Isabella Senior Apartments		Lake Isabella, CA		46		1,971,838			9/91		1/92		100	%	442,457
Lakeside Manor Apartments		Schroon Lake, NY		24		1,043,631			11/91		1/92		96	%	249,349
Lakeview Meadows		Battle Creek, MI		53		1,518,541			1/92		6/92		100	%	1,018,808
Lakewood Terrace Apts.		Lakeland, FL		132		3,496,058			11/93		8/89		100	%	725,312
Lana Lu Apartments		Lonaconing, MD		30		1,467,102			12/91		9/92		100	%	303,261
Lexington Village Apts.		Lexington, OK		8		205,080			1/93		11/93		100	%	32,178
Maidu Village		Roseville, CA		81		1,878,192			1/92		12/91		100	%	1,096,199
Marion Apartments		Manor Marion,LA		32		991,352			2/92		6/92		100	%	199,708
Maysville Village Apts.		Maysville, OK		8		213,007			1/93		10/93		100	%	33,726
Montague Place Apartments		Caro, MI		28		1,126,342			12/91		12/91		100	%	432,320

 

28

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Navapai Apartments		Prescott Valley, AZ		26		872,588			6/91		4/91		100	%	207,330
Nevada City Senior Apartments		Grass Valley, CA		60		$	3,507,094		1/92		10/92		100	%	$	839,300
Newellton Place Apartments		Newellton, LA		32		925,289			2/92		4/92		100	%	190,600
New River Overlook Apartments		Radford, VA		40		1,466,397			8/91		2/92		100	%	285,371
Northridge Apartments		Arlington, TX		126		2,006,662			1/92		2/92		98	%	741,300
Oak Ridge Apartments		Crystal Springs, MS		40		1,289,358			1/92		1/92		100	%	308,578
Oakland Village Apts.		Littleton, NC		24		841,894			5/92		8/92		100	%	161,939
Okemah Village Apts.		Okemah, OK		30		676,419			1/93		5/93		100	%	119,832
Pineridge Apartments		McComb, MS		32		994,243			10/91		10/91		100	%	238,995
Pineridge Elderly		Walnut Cove, NC		24		968,387			10/91		3/92		100	%	199,311
Pittsfield Park Apartments		Pittsfield, ME		18		1,033,959			12/91		6/92		100	%	237,300
Plantation Apartments		Richmond Hill, GA		49		1,402,245			12/91		11/91		100	%	320,858

 

29

 

Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Portville Square Apartments		Portville, NY		24		895,581			3/92		3/92		100	%	198,100
Prague Village Apts.		Prague, OK		8		$	105,751		1/93		3/93		100	%	$	21,373
Rainbow Commons Apartments		Marshfield WI		48		693,841			9/91		6/91		100	%	1,126,901
Rainier Manor Apartments		Mt. Rainier, MD		104		3,537,442			3/92		1/93		100	%	1,190,350
Rosenberg Hotel		Santa Rosa, CA		77		1,742,683			12/91		1/92		100	%	1,850,000
Rosewood Manor Apartments		Ellenton, FL		43		1,422,986			12/91		11/91		100	%	302,250
San Jacinto Senior Apartments		San Jacinto, CA		46		2,345,531			1/92		10/91		100	%	588,965
Smithville Properties		Smithville, MO		48		1,230,587			2/92		5/91		100	%	285,384
Snow Hill Ridge Apartments		Raleigh, NC		32		1,174,589			10/91		12/91		100	%	307,524
Spring Creek Village		Derby, KS		72		1,614,809			6/91		9/91		100	%	1,634,760

 

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Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Spring Valley Apartments		Lexington Park, MD		128		$	4,756,745		11/91		12/92		100	%	$	2,877,811
Springwood Park Apartments		Durham, NC		100		2,814,963			10/91		5/91		100	%	374,349
Summer Lane Apartments		Santee, SC		24		864,294			7/91		11/91		100	%	176,291
Summit Ridge Apartments		Palmdale, CA		304		8,516,143			10/92		12/93		100	%	1,236,600
Titusville Apartments		Titusville PA		30		1,225,017			12/91		1/92		100	%	280,829
Townview Apartments		St.Mary’s, PA		36		1,364,277			9/91		10/91		100	%	315,700
Tyrone House Apartments		Tyrone, PA		36		1,465,843			12/91		1/92		100	%	349,800
Valley Ridge Senior Apartments		Central Valley, CA		38		1,802,050			1/92		12/91		100	%	456,600
Victoria Place		Victoria, VA		39		1,359,497			1/92		6/92		100	%	287,736
Villa West Apts. IV		Topeka, KS		60		1,406,593			8/91		1/91		100	%	1,392,873
Village Green		Raleigh, NC		42		675,745			5/92		9/91		100	%	581,446
Washington Court		Abingdon, VA		39		1,151,137			7/91		8/91		100	%	295,250

 

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Property Name		Location		Units		Mortgage Balance As of 12/31/02			Acq Date		Const Comp		Qualified Occupancy 3/31/03		Cap Con Paid Thru 3/31/03
Wesley Village Apartments		Martinsburg, WV		36		$	1,296,566		10/91		6/92		100	%	$	266,253
Westside Apartments		Louisville, MS		33		784,702			3/92		1/92		100	%	191,014
Wildwood Terrace Apartments		Wildwood, FL		40		1,250,136			10/91		10/91		100	%	281,647
Woodside Apartments		Belleview, FL		41		1,199,655			11/91		10/91		100	%	268,500
Wynnewood Village Apts.		Wynnewood, OK		16		387,056			1/93		11/93		100	%	67,443
Yorkshire Corners		Delevan, NY		24		914,204			8/91		9/91		100	%	191,500
Zinmaster Apartments		Minneapolis, MN		36		1,746,117			1/95		1/88		100	%	150,000

 

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Item 3.                                Legal Proceedings

 

None.

 

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

 

None.

 

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PART II

 

Item 5.             Market for the Registrant’s Partnership Interests and Related Partnership Matters

 

(a)                                  Market Information

 

The Partnership is classified as a limited partnership and thus has no common stock.  There is no established public trading market for the BACs and it is not anticipated that any public market will develop.

(b)                                 Approximate number of security holders

 

As of March 31, 2003, the Partnership has 11,333 registered BAC holders for an aggregate of 18,679,738 BACs which were offered at a subscription price of $10 per BAC.

 

The BACs were issued in series.  Series 7 consists of 801 investors holding 1,036,100 BACs, Series 9 consists of 2,164 investors holding 4,178,029 BACs, Series 10 consists of 1,622 investors holding 2,428,925 BACs, Series 11 consists of 1,348 investors holding 2,489,599 BACs, Series 12 consists of 1,884 investors holding 2,972,795 BACs, and Series 14 consists of 3,514 investors holding 5,574,290 BACs at March 31, 2003.

(c)                                  Dividend history and restriction

 

The Partnership has made no distributions of Net Cash Flow to its BAC Holders from its inception, June 28, 1989 through March 31, 2003.

 

The Partnership Agreement provides that Profits, Losses and Credits will be allocated each month to the holder of record of a BAC as of the last day of such month.  Allocation of Profits, Losses and Credits among BAC Holders will be made in proportion to the number of BACs held by each BAC Holder.

 

Any distributions of Net Cash Flow or Liquidation, Sale or Refinancing Proceeds will be made within 180 days of the end of the annual period to which they relate.  Distributions will be made to the holders of record of a BAC as of the last day of each month in the ratio which (i) the BACs held by such Person on the last day of the calendar month bears to (ii) the aggregate number of BACs outstanding on the last day of such month.

 

Partnership allocations and distributions are described on pages 107 to 112 of the Prospectus, as supplemented, which are incorporated herein by reference.

 

During the year ended March 31, 2003, the Fund made distribution to the Series 10 Limited Partners in the amount of $769,321.  The distribution was from the proceeds from the sale of one of the Operating Partnerships.

 

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Item 6.             Selected Financial Data

 

The information set forth below presents selected financial data of the Partnership for each of the five years in the period ended March 31, 2003. Additional detailed financial information is set forth in the audited financial statements listed in Item 15 hereof.

 

		March 31, 2003			March 31, 2002			March 31, 2001			March 31, 2000			March 31, 1999
Operations
Interest & other Inc		$	56,293		$	53,149		$	61,179		$	92,529		$	110,392
Share of Loss Of Operating Partnerships		(5,855,904		)	(5,815,333		)	(5,981,076		)	(5,998,233		)	(7,498,353		)
Operating Exp		(4,034,177		)	(2,639,786		)	(2,834,858		)	(2,701,882		)	(3,177,618		)
Net Loss		$	(9,833,788	)	$	(8,401,970	)	$	(8,754,755	)	$	(8,607,586	)	$	(10,565,579	)
Net Loss per BAC		$	(.52	)	$	(.45	)	$	(.46	)	$	(.46	)	$	(.56	)
Balance Sheet
Total Assets		$	29,506,804		$	38,568,793		$	44,443,818		$	50,584,819		$	56,648,106
Total Liabilities		$	26,412,221		$	24,871,101		$	22,344,156		$	19,730,402		$	17,186,103
Capital		$	3,094,583		$	13,697,692		$	22,099,662		$	30,854,417		$	39,462,003
Other Data
Credit per BAC for the Investors Tax Year, for the twelve months ended December 31, 2002, 2001, 2000, 1999 and 1998*		$	.29		$	.74		$	1.19		$	1.23		$	1.39

 

Credit per BAC is a weighted average of all the Series.  Since each Series has invested as a limited partner in different Operating Partnerships the Credit per BAC will vary slightly from series to series.  For more detailed information refer to Item 7. Results of Operations.

 

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

 

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements such as our intentions, hopes, beliefs, expectations, strategies and predictions of our future activities, or other future events or conditions. Such statements are “forward looking statements” within the meaning of Section 27A of the Securities Act of 1993, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbors created thereby. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including, without limitation, the factors identified in Part I, Item 1 of this Report. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and, therefore, there can be no assurance that the forward-looking statements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved.

 

Liquidity

 

The Partnership’s primary source of funds was the proceeds of its Public Offering.  Other sources of liquidity include (i) interest earned on capital contributions unpaid as of March 31, 2003 and on working capital reserves and (ii) cash distributions from operations of the Operating Partnerships in which the Partnership has invested.  These sources of liquidity, along with the Partnership’s working capital reserve, are available to meet the obligations of the Partnership.  The Partnership does not anticipate significant cash distributions from operations of the Operating Partnerships.

 

The Partnership is currently accruing the annual partnership management fee to enable each series to meet current and future third party obligations. During the fiscal year ended March 31, 2003 the Partnership accrued, net of payments made, $1,527,952 in annual partnership management fees.  The amount is lower than in recent years due to payments made by Series 9 and Series 14, from proceeds of reporting fees received and payments made by Series 10 from proceeds from the sale of one of the Operating Partnerships.  As of March 31, 2003 the accrued partnership management fees totaled $25,665,254.  Pursuant to the Partnership Agreement, such liabilities will be deferred until the Partnership receives sale or refinancing proceeds from Operating Partnerships, and at that time proceeds from such sales or refinancing will be used to satisfy such liabilities.  The Partnership anticipates that there will be sufficient cash to meet future third party obligations.  The Partnership does not anticipate significant cash distributions in the long or short term from operations of the Operating Partnerships.

 

An affiliate of the general partner has advanced $401,715 to the Partnership to pay certain third party operating expenses and to fund advances to operating partnerships. Of this amount, no additional funds were advanced during the fiscal year ended March 31, 2003.  The allocation of the total

36

 

advanced through March 31, 2003, to four of the six series is as follows:  $161,547 to Series 7, $4,960 to Series 9, $62,550 to Series 12 and $172,658 to Series 14.  These, and any additional advances, will be paid, without interest, from available cash flow, reporting fees, or the proceeds of the sale or refinancing of the Partnership’s interest in Operating Partnerships.  The Partnership anticipates that as the Operating Partnerships continue to mature, more cash flow and reporting fees will be generated.  Cash flow and reporting fees will be added to the Partnership’s working capital and will be available to meet future third party obligations of the Partnership.  The Partnership is currently pursuing, and will continue to pursue, available cash flow and reporting fees and anticipates that the amount collected will be sufficient to cover third party operating expenses.

 

Capital Resources

 

The Partnership offered BACs in a public offering declared effective by the Securities and Exchange Commission on October 25, 1989.  The Partnership received and accepted subscriptions for $186,337,517 representing 18,679,738 BACs from investors admitted as BAC Holders in Series 7, 9 through 12 and 14 of the Partnership.

 

Offers and sales of BACs in Series 7, 9 through 12, and 14 of the Partnership were completed and the last of the BACs in Series 14 were issued by the Partnership on January 27, 1992.

 

(Series 7).  The Partnership commenced offering BACs in Series 7 on November 14, 1989.  The Partnership had received and accepted subscriptions for $10,361,000, representing 1,036,100 BACs from investors admitted as BAC Holders in Series 7.  Offers and sales of BACs in Series 7 were completed and the last of the BACs in Series 7 were issued by the Partnership on December 29, 1989.

 

As of March 31, 2003 the net proceeds from the offer and sale of BACs in Series 7 had been used to invest in a total of 14 Operating Partnerships in an aggregate amount of $7,774,651, and the Partnership had completed payment of all installments of its capital contributions to the Operating Partnerships.  Series 7 net offering proceeds in the amount of $9,823 remain in working capital.

 

(Series 9).  The Partnership commenced offering BACs in Series 9 on February 1, 1990.  The Partnership had received and accepted subscriptions for $41,574,518, representing 4,178,029 BACs from investors admitted as BAC Holders in Series 9.  Offers and sales of BACs in Series 9 were completed and the last of the BACs in Series 9 were issued by the Partnership on April 30, 1990.

 

As of March 31, 2003 the net proceeds from the offer and sale of BACs in Series 9 had been used to invest in a total of 53 Operating Partnerships in an aggregate amount of $31,605,286, and the Partnership had completed payment of installments of its capital contributions to the Operating Partnerships.  Series 9 net offering proceeds in the amount of $291,217 remain in working capital.  As of March 31, 2003, Series 9 also held proceeds from the sale of one of the Operating Partnerships in the amount of $1,739,655.

 

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(Series 10).  The Partnership commenced offering BACs in Series 10 on May 7, 1990.  The Partnership had received and accepted subscriptions for $24,288,997 representing 2,428,925 BACs from investors admitted as BAC Holders in Series 10.  Offers and sales of BACs in Series 10 were completed and the last of the BACs in Series 10 were issued by the Partnership on August 24, 1990.

 

As of March 31, 2003 the net proceeds from the offer and sale of BACs in Series 10 had been used to invest in a total of 44 Operating Partnerships in an aggregate amount of $18,555,455, and the Partnership had completed payment of all installments of its capital contributions to the Operating Partnerships.  Series 10 net offering proceeds in the amount of $121,830 remain in working capital.

 

(Series 11).  The Partnership commenced offering BACs in Series 11 on September 17, 1990.  The Partnership had received and accepted subscriptions for $24,735,002, representing 2,489,599 BACs in Series 11.  Offers and sales of BACs in Series 11 were completed and the last of the BACs in Series 11 were issued by the Partnership on December 31, 1990.

 

During the fiscal year ended March 31, 2003, the Partnership did not use any of Series 11’s net offering proceeds to pay installments of its capital contributions to the Operating Partnerships.  As of March 31, 2003 the net proceeds from the offer and sale of BACs in Series 11 had been used to invest in a total of 40 Operating Partnerships in an aggregate amount of $18,894,372.  The Partnership has completed payment of all installments of its capital contributions to 39 of the 40 Operating Partnerships.  Series 11 net offering proceeds in the amount of $369,202 remain to be used by the Partnership to pay outstanding installments of capital contributions to one Operating Partnership and to fund working capital expenses.

 

(Series 12).  The Partnership commenced offering BACs in Series 12 on February 1, 1991.  The Partnership had received and accepted subscriptions for $29,649,003, representing 2,972,795 BACs in Series 12.  Offers and sales of BACs in Series 12 were completed and the last of the BACs in Series 12 were issued by the Partnership on April 30, 1991.

 

During the fiscal year ended March 31, 2003, the Partnership did not use any of Series 12’s net offering proceeds to pay installments of its capital contributions to the Operating Partnerships.  As of March 31, 2003 the net proceeds from the offer and sale of BACs in Series 12 had been used to invest in a total of 53 Operating Partnerships in an aggregate amount of $22,356,179.  The Partnership has completed payment of all installments of its capital contributions to 51 of the 53 Operating Partnerships.  Series 12 net offering proceeds in the amount of $39,674 remain to be used by the Partnership to pay outstanding installments of capital contributions to two Operating Partnerships and to fund working capital expenses.

 

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(Series 14).  The Partnership commenced offering BACs in Series 14 on May 20, 1991.  The Partnership had received and accepted subscriptions for $55,728,997, representing 5,574,290 BACs in Series 14.  Offers and sales of BACs in Series 14 were completed and the last of the BACs in Series 14 were issued by the Partnership on January 27, 1992.

 

During the fiscal year ended March 31, 2003, the Partnership did not use any of Series 14’s net offering proceeds to pay installments of its capital contributions to the Operating Partnership.  As of March 31, 2003 the net proceeds from the offer and sale of BACs in Series 14 had been used to invest in a total of 100 Operating Partnerships in an aggregate amount of $42,034,328.  The Partnership has completed payment of all installments of its capital contributions to 88 of the 100 Operating Partnerships.  Series 14 net offering proceeds in the amount of $596,549 remain to be used by the Partnership to pay outstanding installments of capital contributions to Operating Partnerships and to fund working capital expenses. As of March 31, 2003, Series 14 also held proceeds from the sale of one of the Operating Partneships in the amount of $465,982.

 

Results of Operations

 

The Partnership incurs an annual partnership management fee payable to the General Partner and/or its affiliates in an amount equal to 0.5% of the aggregate cost of the Apartment Complexes owned by the Operating Partnerships, less the amount of certain partnership management and reporting fees paid by the Operating Partnerships.  The annual partnership management fee, net of reporting fees received, charged to operations for the fiscal years ended March 31, 2003 and 2002 was $1,831,759 and $2,258,377, respectively. The significant decrease in the current fiscal year is mainly the result of the payment outstanding reporting fees for the years 1992 through 2002 by one of the Operating Partnerships in Series 9 and Series 14 totaling approximately $368,000.  The Partnership’s investment objectives do not include receipt of significant cash distributions from the Operating Partnerships in which it has invested.  The Partnership’s investments in Operating Partnerships have been made principally with a view towards realization of Federal Housing Tax Credits for allocation to its partners and BAC holders.

 

All series in Boston Capital Tax Credit Fund II Limited Partnership experienced a decrease in the tax credits generated per BAC from calendar year 2001 to 2002.  The Operating Partnerships were allocated tax credits for 10 years.  Based on each Operating Partnership’s lease-up, the total credits could be spread over as many as 13 years.  In cases where the actual number of years is more than 10, the credits delivered in the early and later years will be less than the maximum allowable per year.  The decrease in credits from calendar year 2001 to 2002 results from the fact that a large number of the Operating Partnerships are in their final years of credit.  The decrease in tax credits generated per BAC is expected to continue until all credits have been realized and tax credits generated per BAC will be reduced to zero.

 

(Series 7).  As of March 31, 2003 and 2002, the average Qualified Occupancy for the series was 100%.  The Series had a total of 14 properties at March 31, 2003, all of which were at 100% qualified occupancy.

39

 

For the tax years ended December 31, 2002 and 2001, the series, in total, generated $664,635 and $733,886, respectively, in passive income tax losses that were passed through to the investors, and also provided $.04 and $.30, respectively, in tax credits per BAC to the investors.

 

As of March 31, 2003 and 2002, Investments in Operating Partnerships for Series 7 was $133,996 and $263,837, respectively.  Investments in Operating Partnerships was affected by the way the Partnership accounts for such investments, the equity method.  By using the equity method the Partnership adjusts its investment cost for its share of each Operating Partnership’s results of operations and for any distributions received or accrued.

 

For the years ended December 31, 2002 and 2001 Series 7 reflects a net income from Operating Partnerships of $168,853 and $103,758, respectively, adjusted for depreciation which is a non-cash item.

 

The city of Miami Beach issued a safety and health violations notice to Metropole Apartments Associates LP (Metropole Apartments) in the fourth quarter of 2000.  The Operating General Partner evaluated the issue, conducted a needs assessment on the property, provided funding for corrective actions, and has addressed as many of the issues as possible.  At this time the management company reports that the issues have been satisfactorily addressed. The Investment General partner visited the site in third quarter 2002 and confirmed all issues regarding city violations were resolved. There were several capital improvements including carpet replacement in all the common areas and new interior lighting in the hallways. The Residential section of the property has now achieved an occupancy rate of 97% through the first quarter of 2003 and rent collections are strong.  On May 8, 2003, the Investment General Partner received notice from the lender that property taxes have not been paid for the tax years 2001 and 2002.  The total amount currently delinquent is $102,749.  The lender has given a 60-day cure period in which to bring taxes current.  Failure to comply within 60 days will constitute an event of default under the mortgage.  The outstanding taxes were paid in early July.

 

(Series 9).  As of March 31, 2003 and 2002, the average Qualified Occupancy for the series was 99.8%, respectively. The series had a total of 53 properties as of March 31, 2003, of which 51 were at 100% qualified occupancy.

 

For the tax years ended December 31, 2002 and 2001, the series, in total, generated $3,679,995 and $2,940,626, respectively, in passive income tax losses that were passed through to the investors, and also provided $.23 and $.27, respectively, in tax credits per BAC to the investors.

 

As of March 31, 2003 and 2002, the Investments in Operating Partnerships for Series 9 was $2,197,296 and $4,855,583, respectively. Investments in Operating Partnerships was affected by the way the Partnership accounts for such investments, the equity method.  By using the equity method the Partnership adjusts its investment cost for its share of each Operating Partnership’s results of operations and for any distributions received or accrued.

40

 

For the years ended December 31, 2002 and 2001 Series 9 reflects a net income from Operating Partnerships of $2,549,086 and $251,551, respectively, adjusted for depreciation which is a non-cash item.  The increase in adjusted net income is mainly the result of income reported by one of the Operating Partnerships, California Investors V, that was sold in the current fiscal year.

 

California Investors V (Somerset Apartments) is a 156-unit property located in Antioch, CA in which Series 9 and Series 14 invested $3,920,000 and $1,050,000, respectively.  The property was sold in the fourth quarter of 2002 for proceeds to Series 9 and Series 14 of $1,982,683 and $531,078, respectively.  This amounted to approximately 50.58% of the original equity investment made by each Series in the Operating Partnership. The Operating General Partner is currently holding $250,000 of the total sale proceeds until the Operating Partnership entity has been dissolved.  Of the proceeds received and to be received it is estimated that approximately $1,952,113 and $522,877, respectively will be returned to the investors in Series 9 and Series 14.  The remaining total of $110,000 will be paid to Boston Capital Asset Management Limited Partnership (BCAMLP) for fees and expenses related to the sale.  The total returned to the investors will be distributed based on the number of BACs held by each investor at the time of the sale. The breakdown of the amount paid to BCAMLP is as follows:  $10,000 represents reimbursement of expenses incurred related to sale, which includes but is not limited to due diligence, legal and mailing costs; $100,000 represents a fee for overseeing and managing the disposition of the property.  Prior to the sale of the Operating Partnership it reimbursed the Investment Partnerships approximately $368,000 in reporting fees that it owed.  The Investment Partnerships in turn used the money to pay a portion of the accrued Asset Management Fees owed to BCAMLP.  Consequently, the Investment Partnerships are not withholding a portion of the sale proceeds to make a payment toward the outstanding Asset Management Fee accruals. Since the Investment in Operating Partnership balances of California Investors V for Series 9 and Series 14 were not equal to the sale proceeds received by each series, they have recorded a gain/(loss) on the sale of the Operating Partnership of $275,743 and $(420,816), respectively.

 

Series 9 has invested in 3 Operating Partnerships (the “Calhoun Partnerships”) in which the Operating General Partner is Riemer Calhoun, Jr. or an entity, which is affiliated with and controlled by Riemer Calhoun (the “Riemer Calhoun Group”).  The Operating Partnerships are Big Lake Seniors Apts., Blanco Seniors Apts. Ltd. and Pleasanton, Ltd.  The affordable housing properties owned by the Calhoun Partnerships are located in Texas and consist of approximately 64 apartment units in total.  The low income housing tax credit available annually to Series 9 from the Calhoun Partnerships is approximately $75,331, which is approximately 9% of the total annual tax credit available to investors in Series 9.

 

In the summer of 2002, the US Attorney for the Western District of Louisiana notified the Investment General Partner that the Riemer Calhoun Group was under investigation by several federal agencies for the alleged manipulation of property cost certifications.  In early 2003, the Investment General Partner learned that the US Attorney intended to bring criminal charges against certain members of the Riemer Calhoun Group for falsifying the certified cost basis upon which the Louisiana Housing Finance Agency

 

41

 

determined the tax credit calculation with respect to approximately 40 Operating Partnerships in which Series 9 is not an investor.  The Investment Limited Partner used these certifications in determining the tax credits investors would receive through their investment in the Calhoun Partnerships.  In effect, it appears that the contractor that built the apartment properties (an affiliate of Mr. Calhoun’s) overbilled the respective Operating Partnerships, thereby improperly inflating the cost certification and the amount of tax credit generated.

 

In late March 2003, Riemer Calhoun pleaded guilty to charges of wire fraud and conspiracy to commit equity skimming.   Sentencing is scheduled for late July 2003 and is likely to involve fines and incarceration.  (Certain other business associates of Riemer Calhoun earlier pleaded guilty to various related charges.)

 

The Investment General Partner has cooperated fully with the US Attorney in the investigation, and there has been no suggestion of any wrongdoing on the part of it or any of its affiliates.

 

The Internal Revenue Service has commenced an audit of the Calhoun Partnerships, which will finally determine the amount of overstated tax credits.  At the Investment General Partner and its affiliates insistence, Riemer Calhoun has personally funded an escrow in the amount of $1,282,202 which will be available to compensate investors for any tax credits which are ultimately disallowed by the IRS.  It is hoped, but not certain, that the escrow fund will be sufficient to fully protect investors. (We are also pursuing a resolution with the IRS whereby escrow funds would be used to make a settlement payment directly to the IRS instead of requiring affected Partnerships and investors to restate tax returns to reflect less credit and then pay additional taxes.)

 

With respect to each of the Calhoun Partnerships where Riemer Calhoun has been the Operating General Partner or in control of an entity which has been the Operating General Partner, the Investment General Partner and its affiliates are in the process of replacing them with another entity which is controlled by Murray Calhoun, the son of Riemer Calhoun.  Murray Calhoun is the principal of Calhoun Property Management, L.L.C., which has provided property level management services for the apartment properties owned by the Calhoun Partnerships.  Murray Calhoun also cooperated fully with the criminal investigation of his father, and the Investment General Partner and its affiliates have confirmed directly with the US Attorney that no evidence was found of any wrongdoing on the part of Murray Calhoun.

 

The Investment General Partner and its affiliates have undertaken discussions with the Rural Housing Service of the U.S. Department of Agriculture, in its capacity as first mortgage lender for each of the Calhoun Partnerships, to make sure that all of the mortgage loans are and will continue to be in good standing notwithstanding the overstated credit and the criminal prosecution resulting therefrom.  RHS has also indicated that it will consent to the replacement of general partners noted above.

 

Finally, the Investment General Partner and its affiliates are reviewing their business dealings with the Calhoun Partnerships in general to attempt to determine if any other irregularities have occurred.

 

42

 

In April of 2000, Marshall School Street II, LLC became the Operating General Partner and the property manager for School Street II Limited Partnership (School Street Apts. II). Since taking control, the management company has completed the capital improvements program and improved the tenant selection criteria. As a result, occupancy has increased and stabilized. During 2001 and 2002, the averaged occupancy was 98% and 94%, respectively.  Average occupancy for the first quarter of 2003 is 92%.  The improved occupancy and tenant selection criteria increased cash flow significantly in 2002, but operations remained below breakeven due to high operating expenses.  Management has replaced faulty water valves which were responsible for the property’s high utility expenses.  As a result the 2002 operating expenses declined by 13% versus 2001. The General Partner projects the property to cash flow in the second half of 2003 as they further control operating expenses and increase rents. The Operating General Partner continues to fund any operating cash deficits. The mortgage, taxes, insurance and accounts payables are current.

 

The Operating Partnership Glennwood Hotel Investors (Glennwood Hotel) operated with an average occupancy of 62% for the first quarter of 2003.  As a result of the high vacancy rate the property will not achieve breakeven operations in 2003. The area has an oversupply of affordable rental housing, including new Section 8 projects, which has negatively impacted the property.

 

Without significant structural improvements that are at this time physically and financially unfeasible, the property will not be able to compete effectively in the market. The management agent continues to market the available units to the housing authority as well as performing various outreach efforts to attract qualified residents. The Operating General Partner continues to financially support the partnership. The mortgage, taxes, insurance and payables are current. The Investment General Partner continues to monitor this situation to ensure the property reaches the end of the tax credit compliance period.

 

Surry Village II Limited Partnership, (Surry Village II) a 24-unit development located in Spring Grove, Virginia, operated below breakeven during the first quarter of 2003.  The average occupancy was 79% for the quarter.  In December of 2002, the General Partner submitted a workout plan to the first mortgage holder, Farmers Home Administration-Rural Development (FmHA-RD), which is currently under review.  Through the workout plan, the General Partner is requesting a rent increase, marketing incentives and rental assistance to eliminate operating deficits.  The Operating General Partner, in an effort to bring the property into compliance with the loan documents, fully funded the reserves and paid all outstanding real estate taxes.

 

Warrensburg Estates Limited Partnership (Warrensburg Estates), located in Warrensburg, Missouri, operated below breakeven during the first quarter of 2003 and in 2002.  The operating deficits result from the high vacancy rate at this property.  The average occupancy for the first quarter of 2003 was only 69% and averaged 76% overall in 2002.  The occupancy issues stem from the poor image of the neighborhood in which Warrensburg Estates is located and from several problem tenants at the property.  In addition, occupancy has been impacted by the lack of rental assistance and increased competition.  Current management, which took over at the beginning of 2001, has been working with local civic organizations in an effort to change the image of

 

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the property and has been working to evict the problem tenants.  The management company has also been advertising in local newspapers and contacting churches and local senior organizations in an effort to increase occupancy.  The property’s mortgage, taxes and insurance were all current as of March 31, 2003.

 

The Operating General Partner of the Partnership Corinth Housing Redevelopment Company (Adams Lawrence Apts.) has negotiated a sale of its General Partner interest.  In addition to the transfer of the Operating General Partner interest, an exit strategy has been put in place that will allow for the sale of the Investment Limited Partner interest to the new Operating General Partner at the end of the 15-year tax credit compliance period. It is anticipated that this transaction will be finalized within the third quarter of 2003 pending receipt of all required agency approvals.

 

The Operating General Partner of the Partnership Greenwich Housing Redevelopment Company (Cynthia Meadows) has negotiated a sale of its General Partner interest.  In addition to the transfer of Operating General Partner interest, an exit strategy has been put in place that will allow for the sale of the Investment Limited Partner interest to the new Operating General Partner at the end of the 15-year tax credit compliance period. It is anticipated that this transaction will be finalized within the third quarter of 2003 pending receipt of all required agency approvals.  The current estimated proceeds to the Investment Partnership are $21,477.

 

The Operating General Partner of the Partnership Wilmington Housing Redevelopment Company (Bonnieview Terrace) has negotiated a sale of its General Partner interest.  In addition to the transfer of Operating General Partner interest, an exit strategy has been put in place that will allow for the sale of the Investment Limited Partner interest to the new Operating General Partner at the end of the 15-year tax credit compliance period. It is anticipated that this transaction will be finalized within the third quarter of 2003 pending receipt of all required agency approvals.  The current estimated proceeds to the Investment Partnership are $14,318.

 

(Series 10).  As of March 31, 2003 and 2002, the average Qualified Occupancy for the series was 99.9%. The series had a total of 44 properties at March 31, 2003, of which 43 were at 100% qualified occupancy.

 

For the tax years ended December 31, 2002 and 2001 the series, in total, generated $1,644,944 and $1,575,629, respectively, in passive income tax losses that were passed through to the investors, and also provided $.21 and $.40, respectively, in tax credits per BAC to the investors.

 

As of March 31, 2003 and 2002, the Investments in Operating Partnerships for Series 10 was $3,083,824 and $5,996,854, respectively.  Investments in Operating Partnerships was affected by the way the Partnership accounts for such investments, the equity method.  By using the equity method the Partnership adjusts its investment cost for its share of each Operating Partnership’s results of operations and for any distributions received or accrued.

 

For the years ended December 31, 2002 and 2001 Series 10 reflects net income from Operating Partnerships of $873,124 and $1,220,310, respectively, adjusted for depreciation which is a non cash item. Operations for South Farm

 

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LP were not included in the current fiscal year, since the property was sold during 2002.  The decrease in adjusted net income is mainly the result of the exclusion of adjusted operations for South Farm LP in the current fiscal year.

 

South Farm Limited Partnership (Indian Run Village) is 114-unit property located in South Kingston, RI.  The property was sold for total proceeds of $1,000,000 to Series 10 in the third quarter of 2002.  This amounted to approximately 110% of the original equity investment made by Series 10 in the operating partnership. Of the proceeds received $769,321 was returned to the investors, and $230,697 was paid to Boston Capital Asset Management Limited Partnership (BCAMLP) for fees and expenses related to the sale and partial reimbursement of amounts payable to affiliates.  The total returned to the investors was distributed based on the number of BACs held by each investor at the time of the sale.  The distribution amounted to $.31673 per BAC, or $316.73 per $10,000 invested. The breakdown of the amount paid to BCAMLP is as follows:  $36,783 represented reimbursement of expenses incurred related to sale, which included but is not limited to due diligence, legal and mailing costs; $60,000 represented a fee for overseeing and managing the disposition of the property; and $133,896 represented a partial payment of outstanding Asset Management Fees due to BCAMLP.  Since South Farm LP’s Investment in Operating Partnership balance was not equal to the sale proceeds received by Series 10, the series has recorded a gain on the sale of the Operating Partnership in the amount of $1,396,476.

 

Chuckatuck Square (Chuckatuck Square), a 42-unit complex located in Suffolk, Virginia, operated below breakeven during the first quarter of 2003 even though the average occupancy was 95% for the quarter.  In 2002, the property operated below breakeven as well, having expended cash even though occupancy averaged 95% for the year.  Due to the operating deficit the auditor issued a “going concern” opinion in the 2002 audit.  In December of 2002, the Operating General Partner submitted a workout plan to the first mortgage holder, FmHA-RD, which is currently under review.  Through the workout plan, the General Partner is requesting a rent increase to address the ongoing deficits incurred by the property.   In addition, the General Partner has entered into discussions with FmHA-RD concerning the restructuring of the mortgage.  The General Partner, in an effort to bring the property into compliance with the loan documents, fully funded the reserves and paid all outstanding real estate taxes.

 

Lawton Apartments Company Limited Partnership (Village Commons) is a 58-unit, family property located in Lawton, MI. This property has historical low occupancy, which has resulted in negative cash flow and delinquent taxes for the years 1998, 2000, 2001, and 2002. In May of 2002, Rural Development vouchered mortgage funds to pay real estate taxes for 1998, 2000, and 2001.  The vouchered funds will be repaid over the remaining years of the mortgage.

 

As of December 31, 2002, the physical occupancy was 69%.  Occupancy trended positively in the first quarter of 2003, averaging 74% and ending at 81% on March 31, 2003.  Low occupancy is attributed to deferred maintenance and lack of employment in Lawton, combined with the high level of affordable housing in the surrounding area. The mortgage and insurance are current. To fund operating deficits, the partnership received mortgage proceeds of $103,078 from an additional Rural Development mortgage note.

 

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Because of the declining financial conditions of this property, the operating reserve, replacement reserve, and tax and insurance escrow have not been properly funded.

 

Centreville Apartments Company Limited (Wood Hollow Apartments) is a 24-unit, family property located in Centreville, MI. This property has historically suffered from low occupancy.  Occupancy averaged 86% in 2002, which decreased from the prior year average of 90%. In the first quarter of 2003, the average physical occupancy improved to 90%. As of March 2003, the property was operating with 92% physical occupancy.

 

Because this is a small property, resident turnover significantly impacts occupancy.  In May of 2002, Rural Development vouchered mortgage funds to pay real estate taxes for 1998-2001.  The vouchered funds will be repaid over remaining years of the mortgage. In February 2002, the partnership received mortgage proceeds of $52,707 from an additional RD mortgage note. The funds were used to reduce the high payables balance that accrued in 2002.  The mortgage, insurance and payables are current.

 

Stockton Estates Limited Partnership (Stockton Estates), located in Stockton, Missouri, operated below breakeven during the first quarter of 2003.  In 2002, the property operated below breakeven as well. The operating deficits result from the high vacancy rate at this property, which averaged 67% during 2002 and 65% for the first quarter of 2003.  The occupancy issue stemmed from tenants opting to relocate to nearby nursing homes and increased competition in the community.  However, the property was severely damaged in a tornado during May 2003 and is presently uninhabitable.  Discussions are ongoing about the future of the property.  There were no injuries during the tornado, and all of the tenants who wished to be relocated were moved to another tax credit property in the area.  The property’s mortgage, taxes and insurance were all current as of March 31, 2003.

 

Dallas Apartments II, LP (Campbell Creek Apartments) is an 80-unit property located in Dallas, Georgia operated below breakeven in 2002. The primary cause of the negative cash flow was due to low occupancy, which averaged 88.65% in 2002 and high debt service. The first quarter of 2003 occupancy averaged 73.33%. Because of the negative cash flow, working capital is insufficient to cover trade accounts payable. The Investment Limited Partner will work with the General Partner to develop a plan to reduce debt service, increase occupancy, and stabilize the property. The mortgage and property taxes, property insurance are current. The General Partner continues to fund operating deficits.

 

Newnan Apartments II, LP (Pines by the Creek Apartments II) is a 96-unit property located in Newnan, Georgia, that operated below breakeven in 2002. The primary cause of the negative cash flow was due to low occupancy, which averaged 83.59% in 2002 and high debt service. The first quarter of 2003 occupancy averaged 77%. The Investment Limited Partner will work with the General Partner to develop a plan to reduce debt service, increase occupancy, and stabilize the property. The mortgage and property taxes, property insurance are current. The General Partner continues to fund operating deficits.

 

(Series 11).  As of March 31, 2003 and 2002, the average Qualified Occupancy

 

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for the series was 100%. The series had a total of 40 properties at March 31, 2003, all of which were at 100% qualified occupancy.

 

For the tax years ended December 31, 2002 and 2001, the series, in total, generated $1,679,758 and $1,815,481, respectively, in passive income tax losses that were passed through to the investors, and also provided $.10 and $.63, respectively, in tax credits per BAC to the investors

 

As of March 31, 2003 and 2002, Investments in Operating Partnerships for Series 11 was $5,877,650 and $6,453,652, respectively.  Investments in Operating Partnerships was affected by the way the Partnership accounts for such investments, the equity method.  By using the equity method the Partnership adjusts its investment cost for its share of each Operating Partnership’s results of operations and for any distributions received or accrued.

 

For the years ended December 31, 2002 and 2001 Series 11 reflects net income from Operating Partnerships of $502,169 and $765,008, respectively, adjusted for depreciation which is a non-cash item.  The decrease in adjusted net income was mainly the result of a prepayment penalty incurred by one of the Operating Partnerships to refinance its mortgage.

 

In June of 2001, the Investment General Partner became aware that unauthorized distributions in excess of Rural Development’s (mortgage) allowable limits were made to the Operating General Partner of Aspen Square Limited Partnership (Aspen Square Apartments), Copper Creek Limited Partnership (Copper Creek Apartments) and Sierra Springs Limited Partnership (Sierra Springs Apartments). These unauthorized distributions have been classified as receivables from the Operating General Partner on the Operating Partnerships audited financial statements as of December 31, 2001 and 2000. The Investment General Partner is actively seeking the immediate return of these funds through the Estate of the Operating General Partner. Claims in the name of the individual Partnerships have been filed against the Estate.  On May 30, 2003, the Investment Limited Partner filed a complaint for the damages suffered by the misappropriations of funds against the Operating General Partner, the certified public accountant who performed audits of the properties, a related corporation of the Operating General Partner who received some of the misappropriated funds, and the former, and current management companies.  In addition, the Investment General Partner is continuing to weigh all available options to expedite the return of the unauthorized distributions and continues to monitor the Partnerships, including the sale of the properties.

 

The Operating General Partner has become uncooperative in soliciting offers to purchase the Limited Partners interest.  On April 7, 2003, the Operating General Partner was requested to cure all violations of the Amended and Restated Agreement of Limited Partnership within 30 days, as required under the agreements.  The Operating General Partner did not and to date has not cured the violations.  Upon the expiration of the 30-day cure period, the requests for approval to remove the Operating General Partner were filed with the mortgagor as required under the loan documents.  The mortgagor is in the process of reviewing the requested removal.  There can be no assurances that the mortgagor will grant such approval of the change in Operating General Partner.  Upon the approval of the mortgagor, an interim Operating General

 

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Partner, which is an affiliate of the Investment General Partner, will assume the Operating General Partner role until a buyer of the properties can be located.  The Investment General Partners will continue to monitor the situation and actively seek a resolution to the matter.

 

Coronado Housing (Coronado Hotel Apartments) located in Tucson Arizona is a 42 unit SRO development with project based Section 8 rental assistance for all the units.  The partnership operated below break-even for 2002 due to low occupancy.  Average occupancy for 2002 was 76%.  Average occupancy for the first quarter of 2003 is 68%.    The low occupancy at Coronado is due to a complex leasing process and unsatisfactory property management by the management company.  The Operating General Partner is in the process of securing another management company.  During 2002 operating expenses declined by 10% versus 2001.  The mortgage, taxes, insurance and payables are current.  On Feb 1, 2003 a fire at Coronado caused significant damage to one of their units.  The unit was out of service for two months.  Additional damage was localized to 13 vacant units because the firemen had to break down the doors of vacant units, to ensure they were vacant.  The damage caused by the fire was cover by insurance.  The Operating General Partner guarantee is unlimited in time and amount.

 

Dallas Apartments II, LP (Campbell Creek Apartments) is an 80-unit property located in Dallas, Georgia, below breakeven in 2002. The primary cause of the negative cash flow was due to low occupancy, which averaged 88.65% in 2002 and high debt service. The first quarter of 2003 occupancy averaged 73.33%. Because of the negative cash flow, working capital is insufficient to cover trade accounts payable. The Investment Limited Partner will work with the Operating General Partner to develop a plan to reduce debt service, increase occupancy, and stabilize the property. The mortgage and property taxes, property insurance are current. The Operating General Partner continues to fund operating deficits.

 

Franklin School Associates (Franklin School Apartments) operated at a small loss during the first quarter of $4,544. The Partnership has applied for and secured a $300,000 low interest loan from the Montana Department of Commerce Board of Housing for capital improvements to the property. The work will consist primarily of complete window replacement but will also include masonry repairs, replacement fire doors, and replacement entry doors. Physical occupancy for the first quarter 2003 was 88% with an economic occupancy of 90%. The lower than expected occupancy stems from both current conditions at the property and in the local market. The property continues to struggle with high turnover and resident problems including vandalism. With the completion of the renovations by the end of the second quarter, management expects improved occupancy and cash flow at the complex. The mortgage, taxes and insurance are all current.

 

The Operating General Partner of London Arms/Lynn Mar Limited (London Arms Apartments) commissioned a capital needs assessment during the first quarter of 2001.  Several deferred maintenance items were identified and later targeted for completion.  The management company reports that the work has all been completed.  The residential section of the property has achieved an occupancy rate of 98% and the leasing activity remains very strong.

 

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El Dorado Springs Estates Limited Partnership (El Dorado Spings Estates), located in El Dorado, Missouri, operated below breakeven during 2002 and the first quarter of 2003.  The operating deficits result from the high vacancy rate at this property, which is exacerbated by the increased competition in the community.  The average occupancy for the 2002 and the first quarter of 2003 were 66% and 71%, respectively.  Due to tornado damage to a nearby property, occupancy has improved to 100% in May.  During 2002 a new property with more amenities was built in the area, and the new property has attracted some of the tenants.  Rental incentives are in place at the property in order to attract new tenants, and the management company has been advertising in local newspapers in an effort to increase occupancy.  The property’s mortgage, taxes and insurance were all current as of March 31, 2003, and because of the tornado that struck Stockton Estates, the property is now 100% occupied due to transplanted tenants from that property.

 

Newnan Apartments II, LP (Pines by the Creek Apts.) is a 96-unit property located in Newnan, Georgia, that operated below breakeven in 2002. The primary cause of the negative cash flow was due to low occupancy, which averaged 83.59% in 2002 and high debt service. The first quarter of 2003 occupancy averaged 77%.  The Investment Limited Partner will work with the Operating General Partner to develop a plan to reduce debt service, increase occupancy, and stabilize the property. The mortgage and property taxes, property insurance are current. The Operating General Partner continues to fund operating deficits.

 

South Fork Heights, Limited (South Fork Heights Apartments) located in South Fork, Colorado is a 48-unit, Rural Development-financed, family development. The property suffers from low occupancy and high turnover due to its location in a small tourist town in the mountains. South Fork has a population of approximately 700 and is heavily dependent on the nearby ski resorts. The seasonal nature of the town causes a high level of transience. In addition, a drought in 2001, followed by a forest fire and the closing of two major employers in 2002 that provided jobs for middle to low-income individuals, has severely damaged the local economy. This has resulted in high unemployment, as well as a lack of qualified tenants. Average occupancy for the first quarter of 2003 was 63% or 30 units occupied. Despite low occupancy, the property generated cash of $6,800 in 2002 due to an agreement with Rural Development to suspend required replacement reserve deposits during the year. If this agreement had not been in place, the property would have expended cash of ($7,471). The Operating General Partner’s guarantee expired in 1996. Management has increased advertising and is working with the local social service organizations for referrals.

 

Nevada Manor, Limited Partnership (Nevada Manor), located in Nevada, Missouri, operated below breakeven during 2002 and the first quarter of 2003.  The operating deficits result from the high vacancy rate at this property.  The average occupancy for 2002 and the first quarter of 2003 were 78 % and 83%, respectively.  Turnover is high at this family property, creating greater vacancy loss. Management has refined the tenant selection criteria to try to gain residents who will stay for longer periods of time.  There are three pending applications for current vacant units. With the amount of interest the property continues to generate, management estimates average occupancy for 2003 to be around 90%.  The property’s mortgage, taxes and insurance were all current as of March 31, 2003.

 

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RPI Limited Partnership #18 (Osage Place) is a 38 unit, senior property located in Arkansas City, KS.  This partnership suffered from low occupancy during 2002. In the first quarter of 2003 occupancy increased slightly to 75% from the fourth quarter 2002 average of 71%. The property manager is working with the Chamber of Commerce to increase occupancy at the property.  Additionally, the management company is offering a $200 move-in special for prospective tenants. The property is advertised in the newspapers and on the local cable station. The property manager is confident that occupancy will increase during the second quarter 2003 as the weather improves.

 

Ivan Woods LDHA Limited Partnership (Ivan Woods Senior Apartments) is a 90 unit, senior complex located in Delta Township, MI. Average occupancy in the first quarter of 2003 decreased slightly to 87% from the 2002 fourth quarter average of 88%. Ivan Woods was re-financed through GMAC in June, 2002. After refinancing, the monthly debt service payments decreased by approximately $3,000.  The partnership has submitted a second application to Delta Township to participate in a PILOT tax program.  The Partnership’s application was declined in 2002. This property has reduced operating expenses, which has improved the cash flow. The Operating General Partners continue to advance funds to cover deficits.

 

(Series 12).  As of March 31, 2003 and 2002, the average Qualified Occupancy for the series was 99.9% and 100%, respectively.  The series had a total of 53 properties at March 31, 2003, of which 52 were at 100% qualified occupancy.

 

For the tax years ended December 31, 2002 and 2001, the series, in total, generated $2,519,836 and $2,475,567, respectively, in passive income tax losses that were passed through to the investors, and also provided $.36 and $.96, respectively, in tax credits per BAC to the investors.

 

As of March 31, 2003 and 2002, the Investments in Operating Partnerships for Series 12 was $5,532,117 and $6,265,977, respectively. Investments in Operating Partnerships was affected by the way the Partnership accounts for such investments, the equity method.  By using the equity method the Partnership adjusts its investment cost for its share of each Operating Partnership’s results of operations and for any distributions received or accrued.

 

For the years ended December 31, 2002 and 2001 Series 12 reflects net income from Operating Partnerships of $430,199 and $611,187, respectively, adjusted for depreciation which is a non cash item. The decrease in adjusted net income was mainly the result of a prepayment penalty incurred by one of the Operating Partnerships to refinance its mortgage.

 

In June of 2001, the Investment General Partner became aware that unauthorized distributions in excess of Rural Development’s (mortgage) allowable limits were made to the Operating General Partner of Cananche Creek Limited Partnership (Cananche Creek Apartments) and Shawnee Ridge Limited Partnership (Shawnee Ridge Apartments). These unauthorized distributions have been classified as receivables from the Operating General Partner on the Operating Partnerships audited financial statements as of December 31, 2001

 

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and 2000. The Investment General Partner is actively seeking the immediate return of these funds through the Estate of the Operating General Partner. Claims in the name of the individual Partnerships have been filed against the Estate.  On May 30, 2003, the Investment Limited Partner filed a complaint for the damages suffered by the misappropriations of funds against the Operating General Partner, the certified public accountant who performed audits of the properties, a related corporation of the Operating General Partner who received some of the misappropriated funds, and the former, and current management companies.  In addition, the Investment General Partner is continuing to weigh all available options to expedite the return of the unauthorized distributions and continues to monitor the Partnerships, including the sale of the properties.

 

The Operating General Partner has become uncooperative in soliciting offers to purchase the Limited Partners interest.  On April 7, 2003, the Operating General Partner was requested to cure all violations of the Amended and Restated Agreement of Limited Partnership within 30 days, as required under the agreements.  The Operating General Partner did not and to date has not cured the violations.  Upon the expiration of the 30-day cure period, the requests for approval to remove the Operating General Partner were filed with the mortgagor as required under the loan documents.  The mortgagor is in the process of reviewing the requested removal.  There can be no assurances that the mortgagor will grant such approval of the change in Operating General Partner.  Upon the approval of the mortgagor, an interim Operating General Partner, which is an affiliate of the Investment General Partner, will assume the Operating General Partner role until a buyer of the properties can be located.  We will continue to monitor the situation and actively seek a resolution to the matter.

 

Union Baptist Plaza, Limited Partnership (Union Baptist Plaza Apartments), located in Springfield, Illinois, suffers from below breakeven operations due to high operating expenses.  The Partnership suffered recurring operating losses and its total liabilities exceed its total assets.  The property has achieved a history of high occupancy.  However, high operating expenses, particularly taxes and utilities, prevent the property from achieving breakeven operations.  Due to the lack of cash flow, the 2001 property taxes became delinquent and accrued in the amount of approximately $22,810 plus interest.  The lender and Investment Limited Partner are in the process of finalizing the refinance of the first mortgage which should be completed by second quarter 2003.  The Operating General Partner is actively seeking to transfer its General Partner interest in the property.    The goal is to find a strategic partner, preferably a nonprofit organization that is capable of operating the property more efficiently on an ongoing basis.

 

Dallas Apartments II, LP (Campbell Creek Apts.) is an 80-unit property located in Dallas, Georgia that operated below breakeven in 2002. The primary cause of the negative cash flow was due to low occupancy, which averaged 88.65% in 2002 and high debt service. The first quarter of 2003 occupancy averaged 73.33%. Because of the negative cash flow, working capital is insufficient to cover trade accounts payable. The Investment Limited Partner will work with the Operating General Partner to develop a plan to reduce debt service, increase occupancy, and stabilize the property. The mortgage and property taxes, property insurance are current. The Operating General Partner continues to fund operating deficits.

 

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Newnan Apartments II, LP (Pines by the Creek Apts.) is a 96-unit property located in Newnan, Georgia, that operated below breakeven in 2002. The primary cause of the negative cash flow was due to low occupancy, which averaged 83.59% in 2002 and high debt service. The first quarter of 2003 occupancy averaged 77%. The Investment Limited Partner will work with the Operating General Partner to develop a plan to reduce debt service, increase occupancy, and stabilize the property. The mortgage and property taxes, property insurance are current. The Operating General Partner continues to fund operating deficits.

 

Ivan Woods LDHA Limited Partnership (Ivan Woods Senior Apartments) is a 90 unit, senior complex located in Delta Township, MI. Average occupancy in the first quarter of 2003 decreased slightly to 87% from the 2002 fourth quarter average of 88%. Ivan Woods was re-financed through GMAC in June, 2002. After refinancing, the monthly debt service payments decreased by approximately $3,000.  The partnership has submitted a second application to Delta Township to participate in a PILOT tax program.  The partnerships application was declined in 2002. This property has reduced operating expenses, which has improved the cash flow. The Operating General Partners continue to advance funds to cover deficits.

 

Lakeridge Apartments of Eufala, Ltd. (Lakeridge Apts.) is a 30 unit tax credit property located in Eufaula, Alabama. This southeastern section of Alabama is considered rural and has a stagnant local economy. It is financed through Rural Development, with subsidized debt effectively reducing the interest rate to 1% over the 50 year term of the loan of 50 years. The project is comprised of 8 one-bedroom, 16 two-bedroom, and 6 three-bedroom units, and targets small and average sized families. Lakeridge Apartments welcomes Section 8 vouchers but does not receive any other rental assistance from the local housing authority.

 

Although the property maintains attractive curb appeal occupancy has proved to be its biggest set back. According to the management company, Royal American, lack of rental assistance is largely to blame for its poor occupancy average and thus crippling the financial strength of the property. A workout plan was entered with Rural Development in efforts to strengthen financial operations; however, the property necessitated replacement reserve funds to apply toward its real estate tax liabilities in 2001.

 

Royal American has been able to maintain operating expenses within an acceptable level. The 2002 audited operating expenses totaled $2,606/per unit, which is considered reasonable for this area. When applying the low rental income to the 2002 annualized cash flow analysis, it was determined that the property is operating with a DSCR of .53.  Royal American continues to annually apply for rental assistance however; the State of Alabama is experiencing a shortfall of funds available.

 

Windsor II Limited Partnership (Windsor Court II), a 24-unit development located in Windsor, Virginia, operated below breakeven during 2002 and the first quarter of 2003. The average occupancy for 2002 and the first quarter of 2003 were 93% and 82%, respectively.  In December of 2002, the General Partner submitted a workout plan to the first mortgage holder, FmHA-RD, which is currently under review.  Through the workout plan, the General Partner is requesting a rent increase, marketing incentives and rental assistance to eliminate operating deficits.  All taxes and insurance were current at March 31, 2003.

 

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Corcoran Investment Group (Corcoran Garden Apartments) is a 38-unit, family property located in Corcoran, CA.  Despite an average occupancy of 97.37% in 2002 the property to operate below breakeven due to high operating expenses.  The lack of funds caused the escrow accounts to be under funded during the year and payables to increase.  Occupancy averaged 95.62% for the first quarter of 2003.  The property was awarded a rent increase effective January 1, 2003 which allowed the property to generate cash and fund escrow accounts during the first quarter of 2003.  The property continues to have strong occupancy and positive cash flow.  The investment limited partner will monitor this property for the next few months to ensure the operations are stabilized.

 

Oakleigh Partnership (Oakleigh Apartments) experienced more than $100,000 worth of hurricane damages in the fourth quarter of 2002.  Although the damages are covered by insurance, as a result of the deductible, approximately $23,000 of the repairs will be funded through the replacement reserve.  Additionally during 2002 the partnership made $20,000 in one-time ADA upgrades.  Overall the partnership is operating very well. Occupancy remained very strong and averaged 100% during 2002. Factoring out storm activity and ADA upgrades, and allowing for the required annual replacement reserve deposit, the property operated with a Debt Coverage Ratio of 1.68 during 2002.  As repairs at the property are complete and operations remain strong, we will not be reporting on this partnership in the future.

 

(Series 14).  As of March 31, 2003 and 2002, the average Qualified Occupancy for the series was 99.9%, respectively.  The series had a total of 100 properties at March 31, 2003, of which 98 were at 100% qualified occupancy.

 

For the tax years ended December 31, 2002 and 2001, the series, in total, generated $4,832,711 and $4,650,269, respectively, in passive income tax losses that were passed through to the investors, and also provided $.48 and $1.26, respectively, in tax credits per BAC to the investors.

 

As of March 31, 2003 and 2002, the Investments in Operating Partnerships for Series 14 was $7,997,833 and $10,611,855, respectively.  Investments in Operating Partnerships were affected by the way the Partnership accounts for such investments, the equity method.  By using the equity method the Partnership adjusts its investment cost for its share of each Operating Partnership’s results of operations and for any distributions received or accrued.

 

For the years ended December 31, 2002 and 2001 Series 14 reflects a net income from Operating Partnerships of $3,747,390 and $1,326,050, respectively, adjusted for depreciation which is a non-cash item. The increase in adjusted net income is mainly the result of proceeds from the sale of one of the Operating Partnerships, California Investors V.

 

California Investors V (Somerset Apartments) is a 156-unit property located in Antioch, CA in which Series 9 and Series 14 invested $3,920,000 and $1,050,000, respectively.  The property was sold in the fourth quarter of 2002 for proceeds to Series 9 and Series 14 of $1,982,683 and $531,078, respectively.  This amounted to approximately 50.58% of the original equity investment made by each Series in the Operating Partnership. The Operating General Partner is currently holding $250,000 of the total sale proceeds until the Operating Partnership entity has been dissolved.  Of the proceeds received and to be received it is estimated that approximately $1,952,113 and

 

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$522,877, respectively will be returned to the investors in Series 9 and Series 14.  The remaining total of $110,000 will be paid to Boston Capital Asset Management Limited Partnership (BCAMLP) for fees and expenses related to the sale.  The total returned to the investors will be distributed based on the number of BACs held by each investor at the time of the sale. The breakdown of the amount paid to BCAMLP is as follows:  $10,000 represents reimbursement of expenses incurred related to sale, which includes but is not limited to due diligence, legal and mailing costs; $100,000 represents a fee for overseeing and managing the disposition of the property. Prior to the sale of the Operating Partnership it reimbursed the Investment Partnerships approximately $368,000 in reporting fees that it owed.  The Investment Partnerships in turn used the money to pay a portion of the accrued Asset Management Fees owed to BCAMLP.  Consequently, the Investment Partnerships are not withholding a portion of the sale proceeds to make a payment toward the outstanding Asset Management Fee accruals.  Since the Investment in Operating Partnership balances of California Investors V for Series 9 and Series 14 were not equal to the sale proceeds received by each series, they have recorded a gain/(loss) on the sale of the Operating Partnership of $275,743 and $(420,816), respectively.

 

Series 14 has invested in 4 Operating Partnerships (the “Calhoun Partnerships”) in which the Operating General Partner is Riemer Calhoun, Jr. or an entity, which is affiliated with and controlled by Riemer Calhoun (the “Riemer Calhoun Group”).  The Operating Partnerships are Blanchard Senior Apartments, Colorado City Seniors, Cottonwood Apts. II A LP and Hughes Springs Seniors Apts. ALP.   The affordable housing properties owned by the Calhoun Partnerships are located in Louisiana or Texas and consist of approximately 104 apartment units in total.  The low income housing tax credit available annually to Series 14 from the Calhoun Partnerships is approximately $117,109, which is approximately 4% of the total annual tax credit available to investors in Series 14.

 

In the summer of 2002, the US Attorney for the Western District of Louisiana notified the Investment General Partner that the Riemer Calhoun Group was under investigation by several federal agencies for the alleged manipulation of property cost certifications.  In early 2003, the Investment General Partner learned that the US Attorney intended to bring criminal charges against certain members of the Riemer Calhoun Group for falsifying the certified cost basis upon which the Louisiana Housing Finance Agency determined the tax credit calculation with respect to approximately 40 Operating Partnerships in which Series 14 is not an investor.  The Investment Limited Partner used these certifications in determining the tax credits investors would receive through their investment in the Calhoun Partnerships.  In effect, it appears that the contractor that built the apartment properties (an affiliate of Mr. Calhoun’s) overbilled the respective Partnerships, thereby improperly inflating the cost certification and the amount of tax credit generated.

 

In late March 2003, Riemer Calhoun pleaded guilty to charges of wire fraud and conspiracy to commit equity skimming.   Sentencing is scheduled for late July 2003 and is likely to involve fines and incarceration.  (Certain other business associates of Riemer Calhoun earlier pleaded guilty to various related charges.)

 

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The Investment General Partner has cooperated fully with the US Attorney in the investigation, and there has been no suggestion of any wrongdoing on the part of it or any of its affiliates.

 

The Internal Revenue Service has commenced an audit of the Calhoun Partnerships, which will finally determine the amount of overstated tax credits.  At the Investment General Partner and its affiliates insistence, Riemer Calhoun has personally funded an escrow in the amount of $1,282,202 which will be available to compensate investors for any tax credits which are ultimately disallowed by the IRS.  It is hoped, but not certain, that the escrow fund will be sufficient to fully protect investors. (We are also pursuing a resolution with the IRS whereby escrow funds would be used to make a settlement payment directly to the IRS instead of requiring affected Partnerships and investors to restate tax returns to reflect less credit and then pay additional taxes.)

 

With respect to each of the Calhoun Partnerships where Riemer Calhoun has been the Operating General Partner or in control of an entity which has been the Operating General Partner, the Investment General Partner and its affiliates are in the process of replacing them with another entity which is controlled by Murray Calhoun, the son of Riemer Calhoun.  Murray Calhoun is the principal of Calhoun Property Management, L.L.C., which has provided property level management services for the apartment properties owned by the Calhoun Partnerships.  Murray Calhoun also cooperated fully with the criminal investigation of his father, and the Investment General Partner and its affiliates have confirmed directly with the US Attorney that no evidence was found of any wrongdoing on the part of Murray Calhoun.

 

The Investment General Partner and its affiliates have undertaken discussions with the Rural Housing Service of the U.S. Department of Agriculture, in its capacity as first mortgage lender for each of the Calhoun Partnerships, to make sure that all of the mortgage loans are and will continue to be in good standing notwithstanding the overstated credit and the criminal prosecution resulting therefrom.  RHS has also indicated that it will consent to the replacement of general partners noted above.

 

Finally, the Investment General Partner and its affiliates are reviewing their business dealings with the Calhoun Partnerships in general to attempt to determine if any other irregularities have occurred.

 

The property owned by Glenhaven Park Partners, A California L.P. (Glenhaven Estates) has historically suffered from excessive operating expenses compared to operating income.  Effective October 4, 2000, San Mar Properties of Fresno, California assumed the role of management agent. An affiliate of San Mar Properties, Central Valley Affordable Housing LLC, assumed the General Partner interest effective December 31, 2000.  In 2001 the Partnership was no longer able to meet the mortgage obligations, and all attempts to restructure the debt were unsuccessful.  The Partnership filed for Chapter 11 bankruptcy protection on October 2, 2001.  The Operating General Partner advanced the funds to bring five of the notes current.  The Reorganization Plan involved bringing current one of the seven remaining delinquent loans in order to remain compliant with IRS Section 42 minimum requirements, thus avoiding disallowance and full recapture of the tax credits.  This plan has been successful and the bankruptcy was dismissed in February 2002.  The six remaining units were foreclosed upon and removed from the Partnership.

 

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As a result of the foreclosure the Partnership will face partial recapture of tax credits previously taken of approximately $50,000.  The remaining six units are 100% occupied as of December 2002 and continue to be 100% occupied through the first quarter of 2003.  The Partnership filed for a welfare tax exemption for 2001-2002 and 2002-2003.  The exemption has recently been approved and the reduction in taxes has taken place.  The Partnership also received a rebate on a portion of the taxes paid in the prior year.  The tax exemption has had a positive effect on cash flow as the Partnership operated above breakeven in 2002.

 

The property owned by Haven Park Partners II, A California LP (Glenhaven Park II) has historically suffered from excessive operating expenses compared to operating income. New management put in place in the fourth quarter of 2000 has been successful in maintaining strong occupancy.  Haven Park II has maintained 100% occupancy through the first quarter of 2003.  Upon review of the 2002 audited financial statement the property operated above breakeven., generating cash in 2002.   This is primarily a result of strong efforts made by management to control operating expenses.  The Partnership has filed for and received a welfare tax exemption.  The exemption was granted retroactive to 2000 and a rebate was received by the Partnership for those prior years.  The tax exemption has had a positive effect on cash flow.  As operations have continued to demonstrate improvement, the Investment General Partner will no longer report on this Partnership.

 

The properties owned by Haven Park Partners III, A California L.P. (Glenhaven Park III) and Haven Park Partners IV, A California L.P. (Glenhaven Park IV) have historically suffered from excessive operating expenses compared to operating income. New management put in place in the fourth quarter of 2000 has been successful in maintaining strong occupancy.  Haven Park III has maintained 98% occupancy through the first quarter of 2003; while Haven Park IV has maintained an occupancy level of 100% through the first quarter of 2003. Upon review of the 2002 audited financial statements, both properties operated above breakeven in 2002.  This is primarily a result of  strong efforts made by management to control operating expenses   The Partnerships have filed for and received a welfare tax exemption  The exemption was granted retroactive to 2000, and a rebate was received by the Partnership for those prior years.  The tax exemption had a positive effect on cash flow.  As operations have continued to demonstrate improvement, the Investment General Partner will no longer report on these Partnerships.

 

Summer Lane Limited Partnership (Summer Lane Apartments) has historically suffered from low occupancy and consequently negative cash flow. The primary cause of the low occupancy has been a lack of rental assistance.  The Operating General Partner was recently able to secure an additional 5 units of rental assistance for this property from Rural Development. As a result, the property achieved 96% occupancy as of December 31, 2002, and rental income increased $14,543 from the prior year. For the 1^st quarter of 2003, occupancy has remained strong at 97%. Operating expenses are below average levels and the condition of the property appears to be exceptional.  The real estate taxes, though current, are being paid by Rural Development as a result of inadequate cash flow from the property. The property is making repayment to Rural Development with the monthly mortgage payment. The replacement reserve account is not being funded adequately. The General Partner has requested that Rural Development restructure the mortgage to reduce the payments and authorize funds for a rehabilitation loan. Should the occupancy

 

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and replacement reserves remain strong throughout 2003, the property will be able to support its operations.

 

Woodfield Commons Limited Partnership (Rainbow Commons Apartments) received 60-Day letters issued by the IRS stating that the Operating Partnership had not met certain IRC Section 42 requirements for the tax years 1993-1998.  The 60-Day letters were the result of an IRS audit of the Operating Partnership’s tenant files.  As a result of their audit, the IRS has proposed an adjustment that would disallow 100% of past and future tax credits.  The adjustment would also include interest and penalties on the past tax credit being disallowed. The Investment General Partner and its counsel along with the Operating General Partner and its counsel have filed an appeal and continue ongoing discussions with the appellate officer. The Investment General Partner believes that the audit is nearing completion, and while an actual settlement has not yet been reached, there is likelihood that the potential disallowance of 100% of credits could be reduced by 50% or more.  In the absence of a settlement as of the date of this filing, the auditors continue to include a contingency footnote in the annual financial statement (Note H) which is a part of the most recently filed 10-K dated, March 31, 2003.

 

The property operated with an average occupancy of 90% for the year 2002. The first quarter 2003 occupancy decreased to an average of 82%.  The operating expenses continue to stay below the state average.  As a result of the high vacancy rate and the low rental rates in the area, the property did not achieve breakeven operations in the first quarter of 2003.

 

The management agent continues to market the available units by working closely with the housing authority and uses various marketing efforts to attract qualified residents. The General Partner continues to financially support the partnership. The mortgage, taxes, insurance and payables are current.

 

Montague Place, LP (Montague Place Apartments) is a 28 unit, family complex located in Caro, MI. This partnership suffered from low occupancy during 2002. Occupancy for the first quarter of 2003 increased to 86% from the 2002 average of 74%. The property was originally designated as a senior complex and it had a history of low occupancy because there was a shortage of eligible residents in the area. The General Partner requested that the property be converted from a senior property to a family property in order to increase the number of qualified tenants. Rural Development approved the property conversion effective September 1, 2002.  The Regional Manager refocused the marketing efforts towards the new resident profile and offered rental concessions, which significantly increased applicant traffic.

 

Kilmarnock Limited Partnership (Indian Creek Apts.), a 20-unit development located in Kilmarnock, Virginia, operated below breakeven during the first quarter of 2003 and during 2002.  The average occupancy was 90% for the first quarter of 2003 and averaged 87% overall in 2002.  In December of 2002, the General Partner submitted a workout plan to the first mortgage holder, FmHA-RD, which is currently under review.  Through the workout plan, the General Partner is requesting a rent increase and rental assistance to eliminate operating deficits.  All taxes and insurance were current at March 31, 2003.

 

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The Operating General Partner of the Partnership Schroon Lake Housing Redevelopment Company (Lakeside Manor Apts.) has negotiated a sale of its General Partner interest.  In addition to the transfer of General Partner interest, an exit strategy has been put in place that will allow for the sale of the Investment Limited Partner interest to the new Operating General Partner at the end of the 15-year tax credit compliance period. It is anticipated that this transaction will be finalized within the third quarter of 2003 pending receipt of all required agency approvals.

 

Critical Accounting Policies and Estimates

 

The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which requires Partnership to make certain estimates and assumptions.  A summary of significant accounting policies is provided in Note A to the financial statements.  The following section is a summary of certain aspects of those accounting policies that may require subjective or complex judgments and are most important to the portrayal of Partnership’s financial condition and results of operations.  The Partnership believes that there is a low probability that the use of different estimates or assumptions in making these judgments would result in materially different amounts being reported in the financial statements.

 

The Partnership accounts for its investment in local partnerships in accordance with the equity method of accounting since the Partnership does not control the operations of an Operating Partnership.

 

If the book value of Partnership’s investment in a Operating Partnership exceeds the estimated value derived by management, the Partnership reduces its investment in any such Operating Partnership and includes such reduction in equity in loss of investment in operating partnerships.

 

Recent Accounting Pronouncements

 

In August 2001, the Financial Accounting Standards Board issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”.  SFAS No. 144 provides accounting guidance for financial accounting and reporting of impairment or disposal of long-lived assets.  SFAS No.144 supercedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assts and for Long-Lived Assets to be Disposed Of”.  SFAS No. 144 is effective for fiscal years beginning after December 15, 2001. Implementation of SFAS No. 144 has not had a material effect on the financial position or results of the operation of the partnership.

 

In January 2003, the FASB issued Interpretation No. 46 (FIN 46), “Consolidation of Variable Interest Entities”, an interpretation of ARB No. 51, “Consolidated Financial Statements”, which provides new accounting guidance on when to consolidate a variable interest, as defined in FIN 46, in another entity.  FIN 46 applies to variable interests in variable interest entities acquired after January 31, 2003.  FIN 46 should be implemented no later than December 31, 2004. The general partner is in the process of analyzing FIN 46 to determine the impact, if any, on the Partnership’s

 

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Item 7A.                      Quantitative and Qualitative Disclosure About Market Risk

 

Not Applicable

 

Item 8.                                Financial Statements and Supplementary Data

 

The information required by this item is contained in Part IV, Item 15 of this Annual Report on Form 10-K

 

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

 

None.

 

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PART III

 

Item 10.                          Directors and Executive Officers of the Registrant

 

(a), (b), (c), (d) and (e)

 

The Partnership has no directors or executives officers of its own.  The following biographical information is presented for the partners of the General Partners and affiliates of those partners (including Boston Capital Partners, Inc. (“Boston Capital”)) with principal responsibility for the Partnership’s affairs.

 

John P. Manning, age 55, is co-founder, and since 1974 has been the President and Chief Executive Officer of Boston Capital Corporation, where he is primarily responsible for strategic planning and business development. In addition to his responsibilities at Boston Capital Corporation, Mr. Manning is a proactive leader in the industry.  He served in 1990 as a member of the Mitchell-Danforth Task Force, which reviewed and suggested reforms to the Low Income Housing Tax Credit program.  He was the founding President of the Affordable Housing Tax Credit Coalition, is a former member of the board of the National Leased Housing Association, and currently sits on the Executive Committees of the National Housing Conference and the National Multi Housing Council.  During the 1980s, he served as a member of the Massachusetts Housing Policy Committee as an appointee of the Governor of Massachusetts.  In addition, Mr. Manning has testified before the U.S. House Ways and Means Committee and the U.S. Senate Finance Committee on the critical role of the private sector in the success of the Low Income Housing Tax Credit Program.  In 1996, President Clinton appointed him to the President’s Advisory Committee on the Arts at the John F. Kennedy Center for the Performing Arts.  In 1998, President Clinton appointed Mr. Manning to the President’s Export Council, which is the premiere committee comprised of major corporate CEOs that advise the President on matters of foreign trade and commerce.  Mr. Manning sits on the Board of Directors of the John F. Kennedy Presidential Library in Boston where he serves as Chairman of the Distinguished Visitors Program. He also serves as a member of the Advisory Board of the Woodrow Wilson Institute for International Scholars in Washington D.C.   Mr. Manning is a graduate of Boston College.

 

Mr. Manning is the principal shareholder of C&M Management, Inc., a Massachusetts corporation which is the ultimate general partner of Boston Capital. Mr. Manning is also the principal of Boston Capital Corporation. While Boston Capital is not a direct subsidiary of Boston Capital Corporation, each of the entities is under the common control of Mr. Manning.

 

Richard J. DeAgazio, age 57, has been the Executive Vice President of Boston Capital Corporation, and is President of Boston Capital Services, Inc., Boston Capital’s NASD registered broker/dealer since 1981.  Mr. DeAgazio formerly served on the national Board of Governors of the National Association of Securities Dealers (NASD). He recently served as a member of the National Adjudicatory Council of the NASD. He was the Vice Chairman of the NASD’s District 11 Committee, and served as Chairman of the NASD’s Statutory Disqualification Subcommittee of the National Business Conduct Committee. He also served on the NASD State Liaison Committee and the Direct Participation Program Committee.

 

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He is a founder and past President of the National Real Estate Investment Association, past President of the Real Estate Securities and Syndication Institute (Massachusetts Chapter) and the Real Estate Investment Association. Prior to joining Boston Capital in 1981, Mr. DeAgazio was the Senior Vice President and Director of the Brokerage Division of Dresdner Securities (USA), Inc., an international investment banking firm owned by four major European banks, and was a Vice President of Burgess & Leith/Advest. He has been a member of the Boston Stock Exchange since 1967.  He is on the Board of Directors of FurnitureFind.com and Cognistar Corporation. He is a leader in the community and serves on Board of Trustees for Bunker Hill Community College, the Business Leaders Council of the Boston Symphony, Board of Trustees of Junior Achievement of Northern New England, the Board of Advisors for the Ron Burton Training Village and is on the Board of Corporators of Northeastern University. He graduated from Northeastern University.

 

Jeffrey H. Goldstein, age 41, is Chief Operating Officer and Director of Real Estate of Boston Capital Corporation since 1996. He directs Boston Capital Corporation’s comprehensive real estate services, which include all aspects of origination, underwriting, due diligence and acquisition. As COO, Mr. Goldstein is responsible for the financial and operational areas of Boston Capital Corporation and assists in the design and implementation of business development and strategic planning objectives. Mr. Goldstein previously served as the Director of the Asset Management division as well as the head of the dispositions and troubled assets group. Utilizing his 16 years experience in the real estate syndication and development industry, Mr. Goldstein has been instrumental in the diversification and expansion of Boston Capital Corporation’s businesses. Prior to joining Boston Capital Corporation in 1990, Mr. Goldstein was Manager of Finance for A.J. Lane & Co., where he was responsible for placing debt on all new construction projects and debt structure for existing apartment properties. Prior to that, he served as Manager for Homeowner Financial Services, a financial consulting firm for residential and commercial properties, and worked as an analyst responsible for budgeting and forecasting for the New York City Council Finance Division. He graduated from the University of Colorado and received his MBA from Northeastern University.

 

Kevin P. Costello, age 57, has been the Executive Vice President and Director of Institutional Investing for Boston Capital Corporation since 1994. Kevin Costello directs Boston Capital Corporation’s institutional investment business. He has overseen this segment of Boston Capital Corporation’s investment business which encompasses investment activities for corporate institutional funding, private proprietary funds and state CRA funds, since its inception in 1992. Mr. Costello has over 20 years experience in the real estate syndication and investment services industry, including previous roles at Boston Capital Corporation leading the acquisition team and managing the structuring and distribution of conventional and tax credit private placements. Prior to joining Boston Capital in 1987, he held senior management positions with Reynolds Securities, Bache & Company and First Winthrop where he focused on real estate syndication. Mr. Costello graduated from Stonehill College and received his MBA with honors from Rutgers’ Graduate School of Business Administration.

 

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Marc N. Teal, age 39, was promoted to Chief Financial Officer in 2003. Mr. Teal previously served as Senior Vice President and Director of Accounting of Boston Capital Corporation and has been with Boston Capital Corporation since 1990.  He oversees all of the accounting, financial reporting, SEC reporting, budgeting, audit, tax and compliance for Boston Capital, its affiliated entities and all Boston Capital Corporation sponsored partnerships. Additionally, he is responsible for maintaining all banking and borrowing relationships of Boston Capital Corporation and management of all working capital reserves. Prior to joining Boston Capital in 1990, Mr. Teal was a Senior Accountant for Cabot, Cabot & Forbes, a multifaceted real estate company, and prior to that was a Senior Accountant for Liberty Real Estate Corp. He received a Bachelor of Science Accountancy from Bentley College and a Masters in Finance from Suffolk University.

 

(f)                 Involvement in certain legal proceedings.

None

 

(g)              Promoters and control persons.

None

 

Item 11.                          Executive Compensation

 

(a), (b), (c), (d) and (e)

 

The Partnership has no officers or directors.  However, under the terms of the Amended and Restated Agreement and Certificate of Limited Partnership of the Partnership, the Partnership has paid or accrued obligations to the General Partner and its affiliates for the following fees during the 2003 fiscal year:

 

An annual partnership management fee based on .5 percent of the aggregate cost of all Apartment Complexes acquired by the Operating Partnerships, less the amount of certain partnership management and reporting fees paid or payable by the Operating Partnerships, has been accrued as payable to Boston Capital Asset Management Limited Partnership.  The annual partnership management fee accrued during the year ended March 31, 2003, net of payments made, was $1,527,952.  Accrued fees are payable without interest as sufficient funds become available.

 

The Partnership has reimbursed or accrued to an affiliate of the General Partner a total of $332,980 for amounts charged to operations during the year ended March 31, 2003. The reimbursement includes, but may not be limited to sale prep fees, postage, printing, travel, and overhead allocations.

 

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Item 12.                          Security Ownership of Certain Beneficial Owners and Management

 

(a)               Security ownership of certain beneficial owners.

 

As of March 31, 2003, 18,679,738 BACs had been issued.  No person is known to own beneficially in excess of 5% of the outstanding BACs in any of the Series.

 

(b)              Security ownership of management.

 

The General Partner has a 1% interest in all Profits, Losses, Credits and distributions of the Partnership.  The Partnership’s response to Item 12(a) is incorporated herein by reference.

 

(c)               Changes in control

 

There exists no arrangement known to the Partnership the operation of which may at a subsequent date result in a change in control of the Partnership.  There is a provision in the Limited Partnership Agreement which allows, under certain circumstances, the ability to change control.

 

 

Item 13.                          Certain Relationships and Related Transactions

 

(a)               Transactions with management and others.

 

The Partnership has no officers or directors.  However, under the terms of the public offering, various kinds of compensation and fees are payable to the General Partner and its Affiliates during the organization and operation of the Partnership.  Additionally, the General Partner will receive distributions from the Partnership if there is cash available for distribution or residual proceeds as defined in the Partnership Agreement.  The amounts and kinds of compensation and fees are described on pages 32 to 33 of the Prospectus under the caption “Compensation and Fees”, which is incorporated herein by reference.  See Note B of Notes to Financial Statements in Item 15 of this Annual Report on Form 10-K for amounts accrued or paid to the General Partner and its affiliates during the period from April 1, 1995 through March 31, 2003.

 

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(b)              Certain business relationships.

 

The Partnership response to Item 13(a) is incorporated herein by reference.

 

(c)               Indebtedness of management.

 

None.

 

(d)              Transactions with promoters.

 

Not applicable.

 

Item 14.                          Controls & Procedures

 

(a)               Evaluation of Disclosure Controls and Procedures

 

Within the 90 days prior to the date of this report, the Partnership’s Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the Partnership’s “disclosure controls and procedures” as defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15(d)-14(c). Based on that evaluation, the Partnership’s Chief Executive Officer and Principal Financial Officer have concluded that as of the date of the evaluation, the Partnership’s disclosure controls and procedures were adequate and effective in timely alerting them to material information relating to the Partnership required to be included in the Partnership’s periodic SEC filings.

 

(b)              Changes in Internal Controls

 

There were no significant changes in the Partnership’s internal controls or in other factors that could significantly affect the Partnership’s internal controls subsequent to the date of that evaluation.

 

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PART IV

 

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

 

(a)          1 and 2. Financial Statements and Financial Statement Schedules; Filed herein as Exhibit 13

Independent Auditors’ Report

 

Balance Sheets, March 31, 2003 and 2002

 

Statement of Operations, Years ended March 31, 2003, 2002, and 2001.

 

Statements of Changes in Partners’ Capital, Years ended March 31, 2003, 2002 and 2001.

 

Statements of Cash Flows, Years ended March 31, 2003, 2002 and 2001.

 

Notes to Financial Statements, March 31, 2003, 2002 and 2001.

 

Schedule III - Real Estate and Accumulated Depreciation

 

Notes to Schedule III

 

Schedules not listed are omitted because of the absence of the conditions under which they are required or because the information is included in the financial statements or the notes hereto.

 

(b)         Reports on Form 8-K

No reports on Form 8-K were filed during the year ended March 31, 2003

 

(c)          1.Exhibits (listed according to the number assigned in the table in Item 601 of Regulation S-K)

 

Exhibit No. 3 - Organization Documents.

a.                    Certificate of Limited Partnership of Boston  Capital Tax Credit Fund II Limited Partnership.  (Incorporated by reference from Exhibit 3 to the Partnership’s Registration Statement No. 33-30145 on Form S-11 as filed with the Securities and Exchange Commission on October 25, 1989.)

 

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Exhibit No. 4 - Instruments defining the rights of security holders, including indentures.

a.                    Agreement of Limited Partnership of Boston  Capital Tax Credit Fund II Limited Partnership.  (Incorporated by reference from Exhibit 4 to the Partnership’s Registration Statement No. 33-30145 on Form S-11 as filed with the Securities and Exchange Commission on October 25, 1989.)

 

Exhibit No. 10 - Material contracts.

a.                    Beneficial Assignee Certificate.  (Incorporated by reference from Exhibit 10A to the Partnership’s Registration Statement No. 33-30145 on Form S-11 as filed with the Securities and Exchange Commission on October 25, 1989.)

 

Exhibit No. 13 -

a.                  Audited Financial Statement of Boston Capital Tax Credit Fund II Limited Partnership, filed herein

 

Exhibit No. 99 - Additional exhibits

1.                  Certification pursuant to 18 U.S.C. Section 1350, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herein

2.                  Certification pursuant to 18 U.S.C. Section 1350, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herein

3.                    Independent Auditor’s Reports for Operating Partnerships, filed herein.

 

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SIGNATURES

 

Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Partnership has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	Boston Capital Tax Credit Fund II Limited  Partnership
	By:	Boston Capital Associates II L.P. General Partner
	By:	BCA Associates Limited Partnership, General Partner
	By:	C&M Management Inc., General Partner
Date:  July 14,  2003	By:	/s/ John P. Manning
		John P. Manning

 

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

 

DATE:		SIGNATURE:		TITLE:
July  14,  2003		/s/ John P. Manning		Director, President (Principal Executive Officer) C&M Management Inc.; Director, President (Principal Executive Officer) BCTC II Assignor Corp.
		John P. Manning

 

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I, John P. Manning, certify that:

 

1.               I have reviewed this annual report on Form 10-K of Boston Capital Tax Credit Fund II Limited Partnership (the “Partnership”);

 

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

 

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

 

4.               The Partnership’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and we have:

 

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

 

(b)         evaluated the effectiveness of the Partnership’s disclosure controls and procedures as of a date (the “Evaluation Date”) within 90 days prior to the filing date of this annual report; and

 

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

 

5.               The Partnership’s other certifying officer and I have disclosed, based on our most recent evaluation, to the Partnership’s auditors and the audit committee of the Partnership’s board of directors (or persons performing the equivalent function):

 

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

 

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

 

6.               The Partnership’s other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the Evaluation Date, including any corrective actions with regard to significant deficiencies and material weaknesses.

 

Date:  July 14, 2003	/s/ John P. Manning
	John P. Manning Director, President (Principal Executive Officer), C&M Management Inc.;

 

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I, Marc Teal, certify that:

 

1.               I have reviewed this annual report on Form 10-K of Boston Capital Tax Credit Fund II Limited Partnership (the “Partnership”);

 

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

 

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

 

4.               The Partnership’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and we have:

 

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

 

(e)          evaluated the effectiveness of the Partnership’s disclosure controls and procedures as of a date (the “Evaluation Date”) within 90 days prior to the filing date of this annual report; and

 

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

 

5.               The Partnership’s other certifying officer and I have disclosed, based on our most recent evaluation, to the Partnership’s auditors and the audit committee of the Partnership’s board of directors (or persons performing the equivalent function):

 

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

 

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

 

6.               The Partnership’s other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the Evaluation Date, including any corrective actions with regard to significant deficiencies and material weaknesses.

 

Date:  July 14, 2003	/s/ Marc N. Teal
	Marc N. Teal, Chief Financial Officer

 

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