LIBERTY TAX CREDIT PLUS III LP - 10-K Annual Report

Back to GetFilings.com

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

FORM 10-K
(Mark One)

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

For the fiscal year ended March 31, 2001
OR

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

Commission File Number 0-24656

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

Delaware 13-3491408
- - -------------------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

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

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

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

None

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

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

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

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

DOCUMENTS INCORPORATED BY REFERENCE
None

-

CAUTIONARY STATEMENT FOR PURPOSES OF
THE "SAFE HARBOR" PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

WHEN USED IN THIS ANNUAL REPORT ON FORM 10-K, THE WORDS "BELIEVES,"
"ANTICIPATES," "EXPECTS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. STATEMENTS LOOKING FORWARD IN TIME ARE INCLUDED IN
THIS ANNUAL REPORT ON FORM 10-K PURSUANT TO THE "SAFE HARBOR" PROVISION OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH STATEMENTS ARE SUBJECT TO
CERTAIN RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY, INCLUDING, BUT NOT LIMITED TO, THOSE SET FORTH IN "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS."
READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING
STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF.

PART I

Item 1. Business.

General
- - -------

Liberty Tax Credit Plus III L.P. (the "Partnership") is a limited partnership
which was formed under the laws of the State of Delaware on November 17, 1988.
The General Partners of the Partnership are Related Credit Properties III L.P.,
a Delaware limited partnership (the "Related General Partner"), and Liberty GP
III Inc., a Delaware corporation (the "Liberty General Partner"). The general
partner of the Related General Partner is Related Credit Properties III Inc., a
Delaware corporation. On November 25, 1997, an affiliate of the Related General
Partner, purchased 100% of the stock of the Liberty General Partner (the
"Transfer"). In addition to the Transfer, by acquiring the stock of the Liberty
General Partner, an affiliate of the Related General Partner also acquired the
Liberty General Partner's general partnership interest in Liberty Associates IV
L.P., the special limited partner of the Partnership. Pursuant to the
Partnership's Amended and Restated Partnership Agreement, the consent of the
limited partners was not required to approve the Transfer. In connection with
the Transfer, the Partnership paid to the Liberty General Partner the accrued
asset management fees owed to the Liberty General Partner in the aggregate
amount of $737,750.

On May 2, 1989, the Partnership commenced a public offering (the "Offering") of
Beneficial Assignment Certificates ("BACs") representing assignments of limited
partnership interests in the Partnership ("Limited Partnership Interests").

As of March 30, 1990, (the date on which the Partnership held the final closing
of the sale of BACs and on which the Offering was terminated), the Partnership
had received $139,101,500 of gross proceeds of the Offering from 9,082
investors.

The Partnership was formed to invest, as a limited partner, in other limited
partnerships (referred to herein as "Local Partnerships" or "Subsidiary
Partnerships") each of which owns one or more leveraged low-income multifamily
residential complexes ("Apartment Complexes") that are eligible for the
low-income housing tax credit ("Housing Tax Credit") enacted in the Tax Reform
Act of 1986, some of which are eligible for the historic rehabilitation tax
credit ("Historic Rehabilitation Tax Credit") ("Rehabilitation Projects"; and
together with the Apartment Complexes, the"Properties"). Some of the Apartment
Complexes benefit from one or more other forms of federal or state housing
assistance. The Partnership's investment in each Local Partnership represents
from 27% to 98% of the Partnership's interests in the Local Partnership. As of
March 31, 2001, approximately $109,000,000 (not including acquisition fees) of
net proceeds have been invested in 62 Local Partnerships. The Partnership does
not anticipate making any additional investments. See Item 2, Properties, below.

Liberty Associates IV, L.P. ("Liberty Associates") is the special limited
partner in all 62 Local Partnerships. Liberty Associates has certain rights and
obligations in its role as special limited partner which permit this affiliate
of the registrant to exercise control over the management and policies of the
Local Partnerships.

The Partnership has been formed to invest primarily in low-income Apartment
Complexes that are eligible for the Housing Tax Credit. The investment
objectives of the Partnership are to:

1. Entitle qualified BACs holders to substantial Housing Tax Credits over the
period of the Partnership's entitlement to claim such Tax Credits (for each
Property, generally ten years from the date of investment or, if later, the date
the Property is placed in service; referred to herein as the "Credit Period")
with respect to each Apartment Complex.

2. Preserve and protect the Partnership's capital.

3. Participate in any capital appreciation in the value of the Properties and
provide distributions of sale or refinancing proceeds upon the disposition of
the Properties.

4. Provide cash distributions when available from the operations of the
Properties, current taxes on which are expected to be substantially deferred.

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

One of the Partnership's objectives is to entitle qualified BACs holders to
Housing Tax Credits over the Credit Period. Each of the Local Partnerships in
which the Partnership has acquired an interest has been allocated by the
relevant state credit agency the authority to recognize Housing Tax Credits
during the Credit Period provided that the Local Partnership satisfies the rent
restriction, minimum set-aside and other requirements for recognition of the
Housing Tax Credits at all times during the 15-year period (the "Compliance
Period"). commencing at the beginning of the Credit Period. Once a Local
Partnership has become eligible to recognize Housing Tax Credits, it may lose
such eligibility and suffer an event of "recapture" if (1) the Partnership
ceases to meet qualification requirements , (2) there is a decrease in the
qualified basis of the property, or (3) there is a reduction in the taxpayer's
interest in the property at any time during the Compliance Period. None of the
Local Partnerships in which the Partnership has acquired an interest has
suffered an event of recapture.

The Partnership continues to meet its primary objective of generating Housing
Tax Credits. The Partnership generated Housing Tax Credits of approximately
$15,786,000, $19,534,000 and $19,584,000 during the tax years 2000, 1999 and
1998 respectively.

The Partnership also continues to meet its objective of allocating passive
losses to individual BACs holders to offset passive income that they may realize
from rental real estate investments and other passive activities, and allocating
passive losses to corporate BACs holders to offset business income.

Cash distributions received from the Local Partnerships have been relatively
immaterial. Management does not expect that the distributions received from the
Local Partnerships will be sufficient to permit cash distributions to BACs
holders. The Partnership does not anticipate providing cash distributions to
BACs holders in circumstances other than refinancings or sales.

There can be no assurance that the Partnership will continue to achieve its
investment objectives in the future.

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

In order for certain Subsidiary Partnerships to qualify for the Section 421A
Program and the Inclusionary Zoning Program, they must comply with certain
requirements by local authorities as to the level of rent that may be charged to
tenants, the tenants' incomes, the obligation to operate the property in
accordance with rent stabilization guidelines, and restrictions on the rate at
which housing units may be released from such guidelines.

Also, certain Subsidiary Partnerships obtain grants from local authorities to
fund construction costs of the properties and in order to qualify must maintain
the low-income nature of the property, among other provisions.

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

Segments
- - --------
The Partnership operates in one segment, which is the investment in multi-family
residential properties.

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

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

Item 2. Properties.

The Partnership holds a 98% limited partnership interest in 61 Local
Partnerships and a 26.46% limited partnership interest in 1 Local Partnership
(the other 71.54% limited partnership interest is held by an affiliate of the
Partnership with the same management); together these 62 Local Partnerships own
66 apartment complexes. Set forth below is a schedule of these Local
Partnerships including certain information concerning their respective Apartment
Complexes (the "Local Partnership Schedule"). Further information concerning
these Local Partnerships and their Properties, including any encumbrances
affecting the properties, may be found in Item 14. Schedule III.

Local Partnership Schedule

Name and Location % of Units Occupied at May 1,
-----------------------------------
(Number of Units) Date Acquired 2001 2000 1999 1998 1997
- - ----------------- ------------- ---- ---- ---- ---- ----

C.V. Bronx Associates, L.P./
Gerald Gardens
Bronx, NY (121) June 1989 95 98 98 97 97
Michigan Rural Housing
Limited Partnership
Michigan (192)(*) September 1989 96 90 94 98 97
Jefferson Limited Partnership
Schreveport, LA (69) December 1989 92 96 93 100 94
Inter-Tribal Indian Village Housing
Development Associates, L.P.
Providence, RI (36) October 1989 100 100 100 97 94
RBM Associates/Spring Garden
Philadelphia, PA (8) December 1989 89 89 100 100 100
Glenbrook Associates
Atglen, PA (35) November 1989 100 100 97 100 100
Affordable Flatbush Associates
Brooklyn, NY (30) December 1989 93 100 93 100 97
Barclay Village II, LTD.
Chambersburg, PA (87) November 1989 99 97 98 95 100
1850 Second Avenue Associates, L.P.
New York, NY (48) October 1989 100 100 100 100 100
R.P.P. Limited Dividend Housing/
River Place
Detroit, MI (301) November 1989 97 98 98 98 95
Williamsburg Residential II, L.P.
Wichita, KS (50) November 1989 93 64 90 76 74
West 104th Street Associates L.P.
New York, NY (56) December 1989 100 100 100 100 98
Meredith Apartments, LTD.
Salt Lake City, UT (22) August 1989 100 91 100 100 100
Ritz Apartments, LTD.
Salt Lake City, UT (30) August 1989 83 90 100 100 93
Ashby Apartments, LTD.
Salt Lake City, UT (27) August 1989 89 85 96 93 96
South Toledo Associates, LTD.
Toledo, OH (18) January 1990 100 100 94 94 94
Dunlap School Venture
Philadelphia, PA (35) January 1990 100 100 97 97 100
Philipsburg Elderly Housing
Associates
Philipsburg, PA (103) February 1990 95 96 97 97 98
Franklin Elderly Housing
Associates
Franklin, PA (89) February 1990 100 100 100 99 99
Wade D. Mertz Elderly Housing
Associates
Sharpsville, PA (103) February 1990 99 98 100 98 98
Lancashire Towers Associates
Limited Partnership
Cleveland, OH (240) February 1990 92 92 96 100 98
Northwood Associates Limited
Partnership
Toledo, OH (176) February 1990 85 97 94 95 96
Brewery Renaissance Associates
Middletown, NY (53) February 1990 100 96 98 94 98
Brandywine Court Associates, L.P.
Jacksonville, FL (52) November 1989 87 90 92 94 98
Art Apartments Associates
Philadelphia, PA (30) March 1990 100 90 100 100 97
The Village at Carriage Hills, LTD.
Clinton, TN (48) March 1990 100 100 96 100 100
Mountainview Apartments, LTD.
Newport, TN (34) March 1990 100 100 97 100 100
The Park Village, Limited
Jackson, MS (24) March 1990 100 100 100 100 100
River Oaks Apartments, LTD.
Oneonta, AL (35) March 1990 100 97 97 94 100
Forrest Ridge Apartments, LTD.
Forrest City, AR (25) March 1990 100 100 100 100 100
The Hearthside Limited Dividend
Housing Association Limited
Partnership
Portage, MI (101) March 1990 97 91 100 97 99
Redemptorist Limited Partnership
New Orleans, LA (126) March 1990 94 91 94 95 95
Manhattan A Associates
New York, NY (99) April 1990 97 98 98 99 97
Broadhurst Willows, L.P.
New York, NY (129) April 1990 98 95 97 97 92
Weidler Associates Limited
Partnership
Portland, OR (52) May 1990 94 98 100 100 100
Gentle Pines-West Columbia
Associates, L.P.
Columbia, SC (150) June 1990 99 89 98 97 100
Lake Forest Estates II, LTD.
Livingston, AL (32) June 1990 100 100 100 97 100
Las Camelias Limited Partnership
Rio Piedras, PR (166) June 1990 99 92 97 97 100
WPL Associates XXIII
Portland, OR (48) July 1990 98 90 97 96 92
Broadway Townhouses L.P.
Camden, NJ (175) July 1990 99 100 100 100 100
Puerto Rico Historic Zone Limited
Dividend Partnership
San Juan, PR (67) August 1990 99 97 100 96 100
Citrus Meadows Apartments, LTD.
Brandenton, FL (200) July 1990 96 92 88 94 96
Sartain School Venture
Philadelphia, PA (35) August 1990 97 100 91 100 98
Driftwood Terrace Associates, LTD.
Ft. Lauderdale, FL (176) September 1990 99 99 100 100 100
Holly Hill, LTD.
Greenville, TN (46) October 1990 98 100 98 100 100
Mayfair Apartments LTD.
Morristown, TN (48) October 1990 100 100 96 100 100
Foxcroft Apartments LTD.
Troy, AL (48) October 1990 94 100 98 100 98
Canterbury Apartments, LTD.
Indianola, MS (48) October 1990 94 100 98 90 90
Cutler Canal III Associates, LTD.
Miami, FL (262) October 1990 99 99 98 96 94
Jefferson Place L.P.
Olathe, KS (352) October 1990 96 98 97 95 96
Callaway Village, LTD.
Clinton, TN (46) November 1990 96 100 93 100 100
Commerce Square Apartments
Associates L.P.
Smyrna, DE (80) December 1990 98 96 96 95 100
West 132nd Development
Partnership
New York, NY (40) December 1990 100 97 100 100 95
Site H Development Co.
Brooklyn, NY (11) December 1990 93 100 93 100 100
L.I.H. Chestnut Associates, L.P.
Philadelphia, PA (78) December 1990 86 94 97 96 94
Diamond Phase II Venture
Philadelphia, PA (32) December 1990 96 91 100 100 97
Bookbindery Associates
Philadelphia, PA (41) December 1990 98 95 100 93 98
The Hamlet, LTD.
Boynton Beach, FL (240) December 1990 96 95 89 97 93
Stop 22 Limited Partnership
Santurce, PR (153) December 1990 98 99 99 99 100
Knob Hill Apartments, LTD.
Greenville, TN (48) December 1990 100 100 100 100 100
Conifer James Street Associates
Syracuse, NY (73) December 1990 92 97 79 91 92
Longfellow Heights Apartments, L.P.
Kansas City, MO (104) March 1991 96 99 94 95 98

(*) Consists of five apartment complexes located throughout Michigan.

Generally, the General Partners required, in connection with the Partnership's
investments in Local Partnerships, that the general partners of the Local
Partnerships ("Local General Partners") undertake an obligation to fund
operating deficits (up to a stated maximum amount) of the Local Partnership
during a limited period of time following rent stabilization ("Guarantee
Period"). In each case, the operating deficits have been funded by Operating
Loans which will not bear interest and will be repaid only out of 50% of
available cash flow or out of available net sale or refinancing proceeds. The
gross amount of the Operating Deficit Guarantees aggregate approximately
$18,700,000, of which approximately $17,300,000 had expired as of March 31,
2001. In cases where the General Partners deem it appropriate, the obligations
of a Local General Partner under the Operating Deficit and/or Rent-Up Guarantees
are secured by letters of credit and/or cash escrow deposits.

The Housing Tax Credits are available for a ten-year period which commences when
the property is occupied by qualified tenants. However, the annual Housing Tax
Credit available in the year in which the Apartment Complex was first occupied
by qualified tenants must be prorated based upon the months remaining in the
year after the Apartment Complex was placed in service. The amount of the annual
Housing Tax Credit not available in the first year will be available in the
eleventh year. In certain cases, the Partnership acquired its interest in a
Local Partnership after the Local Partnership had placed its Apartment Complex
in service. In these cases, the Partnership was allocated Housing Tax Credits
only beginning in the month following the month in which the Partnership
acquired its interest. In addition, Housing Tax Credits allocated in any prior
period may not be claimed by the Partnership. The Partnership has also acquired
Local Partnership Interests in which some of the Local Partnerships owning
historic complexes qualify for the Historic Rehabilitation Tax Credit. The
amount of the Historic Rehabilitation Tax Credit is generally 20% of qualified
rehabilitation expenditures and is available in its entirety in the year the
rehabilitated building is placed in service or, under certain circumstances, in
the year in which the rehabilitation expenditure is made.

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

Rent from commercial tenants (to which average rental per square foot applies)
comprise less than 5% of the rental revenues of the Partnership. Maximum rents
for the residential units are determined annually by HUD and reflect
increases/decreases in consumer price indexes in various geographic areas.
Market conditions, however, determine the amount of rent actually charged.

Management annually reviews the physical state of the properties and suggests to
the respective Local General Partner budget improvements, which improvements are
generally funded from cash flow from operations or release of replacement
reserve escrows to the extent available.

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

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

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

Item 3. Legal Proceedings.

None.

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

None.

PART II

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

The Partnership has issued 27,820.3 Limited Partnership Interests, each
representing a $5,000 capital contribution to the Partnership, for aggregate
Gross Proceeds of $139,101,500. All of the issued and outstanding Limited
Partnership Interests have been issued to Liberty Credit Assignor III Inc. (the
"Assignor Limited Partner"), which has in turn issued 139,101.5 BACs to the
purchasers thereof for an aggregate purchase price of $139,101,500. Each BAC
represents all of the economic and virtually all of the ownership rights
attributable to one-fifth of a Limited Partnership Interest held by the Assignor
Limited Partner. BACs may be converted into Limited Partnership Interests at no
cost to the holder (other than the payment of transfer costs not to exceed
$100), but Limited Partnership Interests so acquired are not thereafter
convertible into BACs.

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

As of May 15, 2001, the Partnership has approximately 9,055 registered holders
of an aggregate of 139,101.5 BACs.

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

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

Pursuant to the terms of the Partnership Agreement there are no material
restrictions that restrict the ability of the Partnership to make distributions.

However, the Partnership has made no distributions to BACs holders as of March
31, 2001. The Partnership does not anticipate providing cash distributions to
BACs holders other than from net refinancing or sales proceeds.

Item 6. Selected Financial Data.

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

Year Ended March 31,
OPERATIONS
- - ---------- ------ -------- -------- ------- --------
2001 2000 1999 1998 1997
---------- ---------- ---------- ---------- --------

Revenues $37,266,093 $35,444,349 $36,122,840 $33,735,906 $33,542,935
Operating expenses (51,522,177) (51,605,028) (51,078,523) (50,778,124) (48,902,130)
Loss on impairment
of assets 0 0 0 0 (20,083,101)
----------- --------- -------- --------- ------------
Loss before minority (14,256,084)(16,160,679) (14,955,683) (17,042,218) (35,442,296)
interest and
extraordinary gain
Minority interest in 208,775 214,105 259,094 154,367 156,523
loss of subsidiary
partnerships
Extraordinary
item-forgiveness 0 0 0 1,045,627 0
--------- ---------- ---------- --------- ----------
on indebtedness
income
Net loss $(14,047,309 $(15,946,574) $(14,696,589) $(15,842,224 $(35,285,773)
=========== =========== =========== =========== ==============
Net loss - limited $(13,906,836 $(15,787,108) $(14,549,623) $(15,683,802 $(34,932,915)
=========== =========== =========== =========== ============
partners
Net loss per BAC
$ (99.98) $ (113.49) $ (104.60) $ (112.75) $ (251.13)
====== ======== ======= ======= =======

Year Ended March 31,
FINANCIAL POSITION
- - ------------------ ------ -------- -------- ---------- -------
2001 2000 1999 1998 1997
---------- ---------- ---------- ---------- ------

Total assets $224,963,913 $235,131,327 $245,335,047 $256,800,296 $268,870,640
=========== =========== =========== =========== ===========

Total liabilities $277,376,359 $272,523,628 $266,334,183 $262,594,185 $258,746,588
=========== =========== =========== =========== ===========

Minority interest $ 253,252 $1,226,088 $ 1,672,679 $2,181,337 $ 2,257,054
======= ========= ========= ========= =========

Total partners' $(52,665,698 $(38,618,389) $(22,671,815) $(7,975,226) $ 7,866,998
=========== =========== =========== ============ ==========
(deficit) capital

During the years ended March 31, 1997 through 2001, total assets decreased
primarily due to depreciation and loss on impairment of assets (for the year
ended March 31, 1997), partially offset by net addition to property and
equipment. During the years ended March 31, 1997 through 2001, total liabilities
increased primarily due to the accrual of principal and interest payments at one
of the Local Partnerships along with the increase in obligations at the
remaining Local Partnerships.

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

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

Through March 31, 2001, the Partnership has invested approximately $109,000,000
(not including acquisition fees) of net proceeds in 62 Local Partnerships, of
which approximately $306,000 remains to be paid including approximately $282,000
held in escrow.

During the year ended March 31, 2001, the Partnership's primary source of funds
included (i) working capital reserves and (ii) cash distributions from the
operations of the Local Partnerships, neither of which are substantial in
amount.

For the year ended March 31, 2001, cash and cash equivalents of the Partnership
and its 62 consolidated subsidiary partnerships decreased by approximately
$219,000. This decrease was attributable to an increase in cash held in escrow
for investing ($568,000), acquisition of property and equipment ($973,000), net
repayments on mortgage notes ($2,669,000), a net decrease in due to local
general partners and affiliates ($129,000), an increase in deferred costs
($496,000) and a decrease in capitalization of consolidated subsidiaries
attributable to minority interest ($764,000) which exceeded cash provided by
operating activities ($4,206,000) and advances from debt guarantor
($1,174,000)). Included in the adjustments to reconcile the net loss to cash
provided by operating activities is depreciation and amortization in the amount
of $10,972,000 and an increase in due to debt guarantor in the amount of
$2,944,000.

The Partnership has an unconsolidated working capital reserve of approximately
$309,000 at March 31, 2001.

The Partnership is not expected to have access to additional sources of
financing, and in particular will not have the ability to assess BACs holders
for additional capital contributions to provide capital if needed by the
Partnership. Accordingly, if circumstances arise that cause a Local Partnership
to require capital in addition to that contributed by the Partnership and any
equity of the Local General Partner, the only sources from which such capital
needs will be able to be satisfied (other than the limited reserves available at
the Partnership level) will be additional third party debt financing (which may
not be available if, as expected, the property owned by the Local Partnership is
already substantially leveraged or, as in the case of the New York program
properties, the incurrence of third party debt is not permitted) or additional
equity contributions of the Local General Partner or other equity sources (which
could adversely affect the Partnership's interest in operating cash flow and/or
proceeds of sale or refinancing of the property and result in adverse tax
consequences to the BACs holders). There can be no assurance that any of such
sources would be readily available in sufficient proportions to fund the capital
requirements of the Local Partnerships in question, particularly if the residual
value of a property is uncertain. If sources are not available, such Local
Partnership would risk foreclosure on its property if it was unable to
renegotiate the terms of its first mortgage and any other debt with the lenders
thereof. The risks associated with the need of such Local Partnership to
refinance its underlying first mortgage debt are exacerbated by the probability
that the term of certain favorable assistance programs from which a Local
Partnership may benefit will expire prior to the end of the compliance period
with respect to such Local Partnership's property.

Cash distributions received from the Local Partnerships remain relatively
immaterial. These distributions, as well as the working capital reserves
referred to above, will be used towards the future operating expenses of the
Partnership. During the years ended March 31, 2001, 2000 and 1999, the amounts
received from operations of the Local Partnerships were approximately $239,000,
$151,000 and $161,000, respectively.

Partnership management fees owed to the General Partners amounted to
approximately $5,601,000 and $4,192,000 were accrued and unpaid at March 31,
2001 and 2000. Without the General Partners' continued accrual and without
payment of certain fees and expense reimbursements, the Partnership will not be
in a position to meet its obligations. The General Partners have allowed for the
accrual without payment of these amounts but are under no obligation to continue
to do so.

For a discussion of contingencies affecting certain Local Partnerships, see
Results of Operations of Certain Local Partnerships below. Since the maximum
loss the Partnership would be liable for is its net investment in the respective
Local Partnerships, the resolution of the existing contingencies is not
anticipated to impact future results of operations, liquidity or financial
condition in a material way. However, the Partnership's loss of its investment
in a Local Partnership will eliminate the ability to generate future Tax Credits
from such Local Partnership and may also result in recapture of Tax Credits if
the investment is lost before the expiration of the Credit Period.

Except as described above, management is not aware of any trends or events,
commitments or uncertainties, which have not otherwise been disclosed, that will
or are likely to impact liquidity in a material way. Management believes the
only impact would be from laws that have not yet been adopted. The portfolio is
diversified by the location of the properties around the United States so that
if one area of the country is experiencing downturns in the economy, the
remaining properties in the portfolio may be experiencing upswings. However, the
geographic diversifications of the portfolio may not protect against a general
downturn in the national economy. The Partnership has fully invested the
proceeds of its offering in 62 Local Partnerships, all of which fully have their
Tax Credits in place. The Tax Credits are attached to the project for a period
of ten years and are transferable with the property during the remainder of the
ten-year period. If trends in the real estate market warranted the sale of a
property, the remaining Tax Credits would transfer to the new owner; thereby
adding significant value to the property on the market which is not included in
the financial statement carrying amount.

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

Property and equipment to be held and used are carried at cost, which includes
the purchase price, acquisition fees and expenses, construction period interest
and any other costs incurred in acquiring the properties. The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods. Expenditures for repairs and maintenance are charged
to expense as incurred; major renewals and betterments are capitalized. At the
time property and equipment are retired or otherwise disposed of, the cost and
accumulated depreciation are eliminated from the assets and accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings. A loss on impairment of assets is recorded when management estimates
amounts recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. Property investments themselves
are reduced to estimated fair value (generally using discounted cash flows) when
the property is considered to be impaired and the depreciated cost exceeds
estimated fair value. Through March 31, 2001, the Partnership has recorded
approximately $20,083,000 as a loss on impairment of assets.

At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. Such
assets would be classified as property and equipment-held for sale and are not
depreciated. There are no assets classified as property and equipment-held for
sale through March 31, 2001.

The following is a summary of the results of operations of the Partnership for
the years ended March 31, 2001, 2000 and 1999 ("Fiscal 2000", "Fiscal 1999" and
"Fiscal 1998", respectively).

The majority of the Local Partnerships' income continues to be in the form of
rental income, with the corresponding expenses (excluding loss on impairment of
assets) being divided among operations, depreciation, and mortgage interest.

The net loss for the 2000, 1999 and 1998 Fiscal Years totaled $14,047,309,
$15,946,574 and $14,696,589, respectively.

2000 vs. 1999
- - -------------

Rental income increased approximately 3% for the year ended March 31, 2001 as
compared to the corresponding period ended March 31, 2000, primarily due to
rental rate increases.

Other income increased approximately $687,000 for the year ended March 31, 2001
as compared to the corresponding period ended March 31, 2000, primarily due to a
mortgage refinancing at one Local Partnership, a tax refund at a second Local
Partnership, write off of old receivables at a third Local Partnership and water
and sewer reimbursements from the tenants at a fourth and fifth Local
Partnership.

Total expenses, excluding general and administrative-related parties and
depreciation and amortization, remained fairly consistent with an increase of
approximately 2% for the year ended March 31, 2001 as compared to the
corresponding period ended March 31, 2000.

General and administrative-related parties increased approximately $300,000 for
the year ended March 31, 2001 as compared to the corresponding period ended
March 31, 2000, primarily due to an increase in property management fees
incurred to affiliates of the Local General Partners.

Depreciation and amortization decreased approximately $1,236,000 for the year
ended March 31, 2001 as compared to the corresponding period ended March 31,
2000, primarily due to auditors adjustment at one Local Partnership.

1999 vs. 1998
- - -------------

Rental income increased approximately 2% for the year ended March 31, 2000 as
compared to the corresponding period ended March 31, 1999, primarily due to
rental rate increases.

Other income decreased approximately $1,176,000 for the year ended March 31,
2000 as compared to the corresponding period ended March 31, 1999, primarily due
to a decrease at one Local Partnership due to a real estate settlement in the
prior year which reduced the accrued interest owed on prior year delinquent
taxes and a decrease at a second Local Partnership due to the reversal, in the
prior year, of the excess reserve established to cover the maximum exposure of
the disputed property tax assessments.

Total expenses remained fairly consistent with an increase of approximately 1%
for the year ended March 31, 2000 as compared to the corresponding period ended
March 31, 1999.

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

R.P.P. Limited Dividend Housing Association Limited Partnership ("River Place")
- - -------------------------------------------------------------------------------
River Place has been unable to generate sufficient cash flow to make the
required principal and interest payments under its loan agreements. River
Place's debt guarantor, General Retirement System of the City of Detroit
("GRS"), entered into an agreement with the Michigan State Housing Authority
(the "Authority") to purchase these loans upon occurrence of certain events. GRS
has declared River Place in default under its obligation to make the required
payments. During 1996, GRS agreed to waive its right of foreclosure under the
mortgages, unless certain events occur, through February 1, 2006. GRS has made
advances for debt service and has incurred certain fees relating to these loans
totaling $38,934,738 including accrued interest on such advances at a rate of
15%. Such amount is included in the amount due to debt guarantor on the balance
sheet.

Management anticipates that River Place will be unable to make all of the
required debt service payments during 2001. However, there is no guarantee that
GRS, or any other persons, will continue to make these payments on behalf of
River Place. These items raise substantial doubt about River Place's ability to
continue as a going concern.

The financial statements of River Place have been prepared assuming that River
Place will continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty. The
Partnership's investment in River Place has been written down to zero by prior
years' losses and the minority interest balance was approximately $883,000 at
both March 31, 2001 and 2000. The net loss after minority interest for River
Place amounted to approximately $3,795,000, $3,822,000 and $3,185,000 for the
years ended March 31, 2001, 2000 and 1999, respectively.

Jefferson Limited Partnership ("Jefferson")
- - -------------------------------------------
At December 31, 2000 and 1999, Jefferson's current liabilities exceeded its
current assets by over $7,000 and $27,000, respectively. Although this condition
could raise substantial doubt about Jefferson's ability to continue as a going
concern, such doubt is alleviated by the fact that $17,918 and $14,040 of
current liabilities at December 31, 2000 and 1999, respectively, are to related
parties which do not intend to pursue payment beyond Jefferson's ability to pay.

Accordingly, management believes that Jefferson has the ability to continue as a
going concern for at least one year from December 31, 2000. The Partnership's
investment in Jefferson was approximately $413,000 and $518,000 at March 31,
2001 and 2000, respectively, and the minority interest balance was $0 at each
date. The net loss after minority interest for Jefferson amounted to
approximately $105,000, $149,000, and $132,000 for the years ended March 31,
2001, 2000 and 1999, respectively.

Affordable Flatbush Associates ("Affordable Flatbush")
- - ------------------------------------------------------
In order for Affordable Flatbush to qualify for the Housing Tax Credits, it must
meet certain rental income restrictions. The rental and income restrictions must
be adhered to for a 15-year compliance period. During 1996, the Department of
Housing Preservation and Development ("HPD") audited Affordable Flatbush's
compliance with the rental and income restrictions of Section 42 of the Internal
Revenue Code. HPD concluded in its audit report that Affordable Flatbush was not
in compliance within the guidelines as set forth in the Internal Revenue Code
for certain units of the project and, consequently, the basis of the property
for purposes of computing the Housing Tax Credits should be reduced by an amount
which approximates 88% of such basis. Affordable Flatbush management is
contesting the findings by HPD and, consequently, has computed the low-income
tax credits for 1999 as if there was no reduction in the basis of the property.

Other Subsidiary Partnerships
- - -----------------------------

Four of the SubsidiaryPartnerships are leasing the land on which the properties
are located for terms ranging from 28 to 99 years. At December 31, 2000, the
Subsidiary Partnerships were committed to minimum annual rentals on the
noncancelable leases aggregating $155,130 for each of the next five years, and
$3,788,993 in total, thereafter.

Other
- - -----

The Partnership's investment in the Local Partnerships is subject to the risks
incident to management and ownership of improved real estate. The Partnership's
investments also could be adversely affected by poor economic conditions, which
could increase vacancy levels, rental payment defaults, and operating expenses,
any or all of which could threaten the financial viability of one or more of the
Local Partnerships.

There also are substantial risks associated with the operation of Apartment
Complexes receiving government assistance. These risks stem from governmental
regulations concerning tenant eligibility, which may make it more difficult to
rent apartments in the complexes, difficulties in obtaining government approval
for rent increases, limitations on the percentage of income which low and
moderate-income tenants may pay as rent, the possibility that Congress may not
appropriate funds to enable HUD to make the rental assistance payments it has
contracted to make, and the possibility that when the rental assistance
contracts expire there may not be market demand for apartments at full market
rents in a Local Partnership's Apartment Complex.

The Local Partnerships are impacted by inflation in several ways. Inflation
allows for increases in rental rates generally to reflect the impact of higher
operating and replacement costs. Inflation also affects the Local Partnerships
adversely by increasing operating costs, for example, for such items as fuel,
utilities and labor. However, continued inflation should allow for appreciated
values of the Local Partnerships' Apartment Complexes over a period of time as
rental revenues and replacement costs continue to increase.

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

Not applicable.

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

Independent Auditors' Report 19

Consolidated Balance Sheets at March 31, 2001 and 2000 179

Consolidated Statements of Operations for the Years Ended
March 31, 2001, 2000 and 1999 180

Consolidated Statements of Changes in Partners'
Deficit for the Years Ended March 31, 2001, 2000 and 1999 181

Consolidated Statements of Cash Flows for the Years
Ended March 31, 2001, 2000 and 1999 182

Notes to Consolidated Financial Statements 184

INDEPENDENT AUDITORS' REPORT
----------------------------

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

We have audited the consolidated balance sheets of Liberty Tax Credit Plus III
L.P. and Subsidiaries (A Delaware Limited Partnership) (the "Partnership") as of
March 31, 2001 and 2000, and the related consolidated statements of operations,
changes in partners' deficit, and cash flows for the years ended March 31, 2001,
2000 and 1999 (the 2000, 1999 and 1998 Fiscal Years, respectively). These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We did not audit the financial statements of 61 (Fiscal 2000, 1999
and 1998) subsidiary partnerships whose losses aggregated $12,004,389,
$12,717,054 and $11,808,044 of the Partnership's net loss for the 2000, 1999 and
1998 Fiscal Years, respectively, and whose assets constituted 96% of the
Partnership's assets at March 31, 2001 and 2000, respectively, presented in the
accompanying consolidated financial statements. The financial statements of
these 61 subsidiary partnerships were audited by other auditors whose reports
thereon have been furnished to us and our opinion expressed herein, insofar as
it relates to the amounts included for these subsidiary partnerships, is based
solely upon the reports of the other auditors.

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

In our opinion, based upon our audits, and the reports of the other auditors
referred to above, the consolidated financial statements referred to in the
first paragraph present fairly, in all material respects, the financial position
of Liberty Tax Credit Plus III L.P. and Subsidiaries at March 31, 2001 and 2000,
and the results of their operations and their cash flows for the years ended
March 31, 2001, 2000 and 1999, in conformity with U.S. generally accepted
accounting principles.

As discussed in Note 10(a), the consolidated financial statements include the
financial statements of one subsidiary partnership with significant
contingencies and uncertainties. The financial statements of this subsidiary
partnership were prepared assuming that it will continue as a going concern.
This subsidiary partnership has been unable to generate sufficient cash flow to
pay its mortgage obligations. The subsidiary partnership's net loss aggregated
$3,795,415 (Fiscal 2000), $3,821,713 (Fiscal 1999) and $3,185,181 (Fiscal 1998),
and its assets aggregated $13,242,087 and $13,951,782 at March 31, 2001 and
2000, respectively. Management's plans in regard to these matters are also
described in Note 10(a). The accompanying consolidated financial statements do
not include any adjustments that might result from the outcome of these
uncertainties.

TRIEN ROSENBERG ROSENBERG
WEINBERG CIULLO & FAZZARI LLP

New York, New York
June 11, 2001

[Letterhead of GROSSMAN, TUCHMAN & SHAH, LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners of
C.V. Bronx Associates, L.P.
New York, New York

We have audited the accompanying balance sheets of C.V. Bronx Associates, L.P.
(a Delaware limited partnership) as of December 31, 2000 and 1999, and the
related statements of income (loss), changes in partners' capital (deficit), and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of C.V. Bronx Associates, L.P. as
of December 31, 2000 and 1999 and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

Respectfully submitted,

/s/ Grossman, Tuchman & Shah, LLP
New York, N.Y.
February 2, 2001

[Letterhead of GROSSMAN, TUCHMAN & SHAH, LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners of
C.V. Bronx Associates, L.P.
New York, New York

We have audited the accompanying balance sheets of C.V. Bronx Associates, L.P.
(a Delaware limited partnership) as of December 31, 1999 and 1998, and the
related statements of income (loss), changes in partners' capital (deficit), and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of C.V. Bronx Associates, L.P. as
of December 31, 1999 and 1998 and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

Respectfully submitted,

/s/ Grossman, Tuchman & Shah, LLP
New York, N.Y.
February 1, 2000

[Letterhead of THEO CARSON & ASSOCIATES]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Michigan Rural Housing Limited Partnership

I have audited the accompanying balance sheets of Michigan Rural Housing Limited
Partnership (a Michigan partnership) as of December 31, 2000 and 1999, and the
related statements of operations, changes in partners' deficit, and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. My responsibility is to express an opinion on
these financial statements based on my audits.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Michigan Rural Housing Limited
Partnership as of December 31, 2000 and 1999, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.

/s/ Theo C. Carson & Associates
Kalamazoo, Michigan
February 3, 2001

[Letterhead of THEO CARSON & ASSOCIATES]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Michigan Rural Housing Limited Partnership

I have audited the accompanying balance sheets of Michigan Rural Housing Limited
Partnership (a Michigan partnership) as of December 31, 1999 and 1998, and the
related statements of operations, changes in partners' deficit, and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. My responsibility is to express an opinion on
these financial statements based on my audits.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Michigan Rural Housing Limited
Partnership as of December 31, 1999 and 1998, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.

/s/ Theo C. Carson & Associates
Kalamazoo, Michigan
February 14, 2000

[Letterhead of COLE, EVANS & PETERSON]

INDEPENDENT AUDITORS' REPORT

To the Partners
Jefferson Limited Partnership
Shreveport, Louisiana

We have audited the accompanying balance sheets of Jefferson Limited Partnership
at December 31, 2000 and December 31, 1999, and the related statements of
income, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to in the first paragraph
above present fairly, in all material respects, the financial position of
Jefferson Limited Partnership at December 31, 2000 and December 31, 1999, and
the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

Our audits were made primarily for the purpose of forming an opinion on the
basic financial statements for the years ended December 31, 2000 and December
31, 1999 taken as a whole. The supplementary Schedule 1 is presented for
purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the audit
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.

/s/ Cole, Evans & Peterson
Shreveport, Louisiana
February 6, 2001

[Letterhead of COLE, EVANS & PETERSON]

INDEPENDENT AUDITORS' REPORT

To the Partners
Jefferson Limited Partnership
Shreveport, Louisiana

We have audited the accompanying balance sheets of Jefferson Limited Partnership
at December 31, 1999 and December 31, 1998, and the related statements of
income, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to in the first paragraph
above present fairly, in all material respects, the financial position of
Jefferson Limited Partnership at December 31, 1999 and December 31, 1998, and
the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

Our audits were made primarily for the purpose of forming an opinion on the
basic financial statements for the years ended December 31, 1999 and December
31, 1998 taken as a whole. The supplementary Schedule 1 is presented for
purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the audit
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.

/s/ Cole, Evans & Peterson
Shreveport, Louisiana
February 8, 2000

[Letterhead of PAUL DAMIANO]

INDEPENDENT AUDITORS' REPORT

To the Partners
Inter-Tribal Indian Village Housing Development Associates, L.P.
(A Limited Partnership)
Providence, RI

We have audited the accompanying balance sheet of Project No. HIP010 of
Inter-Tribal Indian Village Housing Development Associates, L.P. (a limited
partnership) as of December 31, 2000, and the related statements of loss and
changes in partners' equity (capital deficiency) and cash flows for the year
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Project No. HIP010 as of December
31, 2000 and the results of its operations and the changes in partners' equity
(capital deficiency) and cash flows for the year then ended in conformity with
generally accepted accounting principles.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, , we have also issued a report dated January 18, 2001 on our
consideration of Inter-Tribal Indian Village Housing Development Associates,
L.P.'s internal control and reports dated January 18, 2001 on its compliance
with specific requirements applicable to non-major HUD programs. These reports
are an integral part of an audit performed in accordance with Government
Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken an a whole. The supporting information included in
the report shown on pages 12-18 are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Project No. HIP010. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.

/s/ Paul Damiano CPA PC
Lincoln, Rhode Island
January 18, 2001

[Letterhead of PAUL DAMIANO]

INDEPENDENT AUDITORS' REPORT

To the Partners
Inter-Tribal Indian Village Housing Development Associates, L.P.
(A Limited Partnership)
Providence, RI

We have audited the accompanying balance sheet of Project No. HIP010 of
Inter-Tribal Indian Village Housing Development Associates, L.P. (a limited
partnership) as of December 31, 1999, and the related statements of loss and
changes in partners' equity (capital deficiency) and cash flows for the year
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Project No. HIP010 as of December
31, 1999 and the results of its operations and the changes in partners' equity
(capital deficiency) and cash flows for the year then ended in conformity with
generally accepted accounting principles.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, , we have also issued a report dated January 18, 2000 on our
consideration of Inter-Tribal Indian Village Housing Development Associates,
L.P.'s internal control and reports dated January 18, 2000 on its compliance
with specific requirements applicable to major RIHMFC programs, specific
requirements applicable to Fair Housing and Non-Discrimination, and specific
requirements applicable to nonmajor RIHMFC program transactions.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken an a whole. The supporting information included in
the report shown on pages 13-17 are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Project No. HIP010. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.

/s/ Paul Damiano CPA PC
Lincoln, Rhode Island
January 18, 2000

[Letterhead of PAUL DAMIANO]

INDEPENDENT AUDITORS' REPORT

To the Partners
Inter-Tribal Indian Village Housing Development Associates, L.P.
(A Limited Partnership)
Providence, RI

We have audited the accompanying balance sheet of Project No. HIP010 of
Inter-Tribal Indian Village Housing Development Associates, L.P. (a limited
partnership) as of December 31, 1998, and the related statements of loss and
changes in partners' equity (capital deficiency) and cash flows for the year
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Project No. HIP010 as of December
31, 1998 and the results of its operations and the changes in partners' equity
(capital deficiency) and cash flows for the year then ended in conformity with
generally accepted accounting principles.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, , we have also issued a report dated January 25, 1999 on our
consideration of Inter-Tribal Indian Village Housing Development Associates,
L.P.'s internal control and reports dated January 25, 1999 on its compliance
with specific requirements applicable to major RIHMFC programs, specific
requirements applicable to Fair Housing and Non-Discrimination, and specific
requirements applicable to nonmajor RIHMFC program transactions.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken an a whole. The supporting information included in
the report shown on pages 13-17 are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
Project No. HIP010. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.

/s/ Paul Damiano CPA PC
Lincoln, Rhode Island
January 25, 1999

[ZINER, KENNEDY & LEHAN LLP. LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners of
RBM Associates

We have audited the accompanying balance sheets of RBM Associates (a
Pennsylvania limited partnership) as of December 31, 2000 and 1999, and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

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

/s/ Ziner, Kennedy & Lehan LLP
Quincy, Massachusetts
January 25, 2001

[ZINER, KENNEDY & LEHAN LLP. LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners of
RBM Associates

We have audited the accompanying balance sheets of RBM Associates (a
Pennsylvania limited partnership) as of December 31, 1999 and 1998, and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of RBM Associates as of December
31, 1999 and 1998, and the results of its operations, changes in partners'
equity and its cash flows for the years then ended in conformity with generally
accepted accounting principles.

/s/ Ziner, Kennedy & Lehan LLP
Quincy, Massachusetts
January 15, 2000

[Letterhead of McKONLY & ASBURY LLP]

INDEPENDENT AUDITOR'S REPORT

The Partners of
Glenbrook Associates
Lancaster, Pennsylvania

Rural Housing Service
Allentown, Pennsylvania

We have audited the accompanying balance sheets of Glenbrook Associates (a
limited partnership) as of December 31, 2000 and 1999, and the related
statements of income, partners' equity, and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Glenbrook Associates at
December 31, 2000 and 1999, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards, we have also issued a report
dated January 16, 2001 on our consideration of Glenbrook Associates' internal
control over financial reporting and our tests of its compliance with certain
provisions of laws, regulations, contracts, and grants. This report is an
integral part of an audit performed in accordance with Government Auditing
Standards and should be read in conjunction with this report in considering the
results of our audits.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information on pages 16
and 17 is presented for the purpose of additional analysis and is not a required
part of the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.

/s/ McKonly & Asbury, LLP
Harrisburg, Pennsylvania
January 16, 2001

[Letterhead of McKONLY & ASBURY LLP]

INDEPENDENT AUDITOR'S REPORT

The Partners of
Glenbrook Associates
Lancaster, Pennsylvania

Rural Housing Service
Allentown, Pennsylvania

We have audited the accompanying balance sheets of Glenbrook Associates (a
limited partnership) as of December 31, 1999 and 1998, and the related
statements of income, partners' equity, and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Glenbrook Associates at
December 31, 1999 and 1998, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards, we have also issued a report
dated January 19, 2000 on our consideration of Glenbrook Associates' internal
control over financial reporting and our tests of its compliance with certain
provisions of laws, regulations, contracts, and grants.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information on pages 17
and 20 is presented for the purpose of additional analysis and is not a required
part of the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.

/s/ McKonly & Asbury, LLP
Harrisburg, Pennsylvania
January 19, 2000

[Letterhead of J.R. LUPO, P.A. CPA]

INDEPENDENT AUDITOR'S REPORT

To the Partners of
Affordable Flatbush Associates
(A New York Limited Partnership)

We have audited the accompanying balance sheets of Affordable Flatbush
Associates (A New York Limited Partnership) as of December 31, 2000 and December
31, 1999, and the related statements of operations, changes in partners'
capital, and cash flows for the years then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Affordable Flatbush Associates
(A New York Limited Partnership) at December 31, 2000 and December 31, 1999, and
the results of its operations and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.

/s/ J.R. Lupo
Verona, New Jersey
March 1, 2001

[Letterhead of J.R. LUPO, P.A. CPA]

INDEPENDENT AUDITOR'S REPORT

To the Partners of
Affordable Flatbush Associates
(A New York Limited Partnership)

We have audited the accompanying balance sheet of Affordable Flatbush Associates
(A New York Limited Partnership) as of December 31, 1999 and December 31, 1998,
and the related statements of operations, changes in partners' capital, and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Affordable Flatbush Associates
(A New York Limited Partnership) as of December 31, 1999 and December 31, 1998,
and the results of its operations and its cash flows for the year then ended,
in conformity with generally accepted accounting principles.

/s/ J.R. Lupo
Verona, New Jersey
February 27, 2000

[Letterhead of WESSEL & COMPANY]

INDEPENDENT AUDITOR'S REPORT

To the Partners of
Barclay Village II, Ltd.

We have audited the accompanying balance sheets of Barclay Village II, Ltd. (a
limited partnership) PHFA No. R-0039-8F as of December 31, 2000 and 1999, and
the related statements of operations, changes in partners' capital, and cash
flows for the years then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Barclay Village II, Ltd., PHFA
No. R-0039-8F, as of December 31, 2000 and 1999, and the results of its
operations, changes in partners' capital, and cash flows for the years then
ended in conformity with accounting principles generally accepted in the United
States of America.

In accordance with Government Auditing Standards the Consolidated Audit Guide
for Auditing of HUD Programs issued by the U.S. Department of Housing and Urban
Development and the Pennsylvania Housing Finance Agency regulations, we have
also issued a report dated February 27, 2001, on our consideration of Barclay
Village II, Ltd.'s internal control, and reports dated February 27, 2001, on its
compliance with specific requirements applicable to major HUD Programs,
Pennsylvania Housing Finance Agency regulations, and Specific Requirements
applicable to Fair Housing and Nondiscrimination.

/s/ Wessel & Company
Certified Public Accountants
Johnstown, Pennsylvania

February 27, 2001

[Letterhead of WESSEL & COMPANY]

INDEPENDENT AUDITOR'S REPORT

January 20, 2000

To the Partners of
Barclay Village II, Ltd.

We have audited the accompanying balance sheets of Barclay Village II, Ltd. (a
limited partnership) PHFA No. R-0039-8F as of December 31, 1999 and 1998, and
the related statements of operations, changes in partners' capital, and cash
flows for the years then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Barclay Village II, Ltd., PHFA
No. R-0039-8F, as of December 31, 1999 and 1998, and the results of its
operations, changes in partners' capital, and cash flows for the years then
ended in conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards the Consolidated Audit Guide
for Auditing of HUD Programs issued by the U.S. Department of Housing and Urban
Development and the Pennsylvania Housing Finance Agency regulations, we have
also issued a report dated January 20, 2000, on our consideration of Barclay
Village II, Ltd.'s internal control, and reports dated January 20, 2000, on its
compliance with specific requirements applicable to major HUD Programs,
Pennsylvania Housing Finance Agency regulations, and Specific Requirements
applicable to Fair Housing and Nondiscrimination.

/s/ Wessel & Company
Certified Public Accountants
Johnstown, Pennsylvania

[Letterhead of GROSSMAN, TUCHMAN & SHAH, LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners of
1850 Second Avenue
Associates, L.P.
New York, New York

We have audited the accompanying balance sheets of 1850 Second Avenue
Associates, L.P. (a Delaware limited partnership) as of December 31, 2000 and
1999, and the related statements of income (loss), changes in partners' capital
(deficit), and cash flows for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 1850 Second Avenue Associates,
L.P. as of December 31, 2000 and 1999 and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.

Respectfully submitted,

/s/ Grossman, Tuchman & Shah, LLP
New York, N.Y.
January 25, 2001

[Letterhead of GROSSMAN, TUCHMAN & SHAH, LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners of
1850 Second Avenue
Associates, L.P.
New York, New York

We have audited the accompanying balance sheets of 1850 Second Avenue
Associates, L.P. (a Delaware limited partnership) as of December 31, 1999 and
1998, and the related statements of income (loss), changes in partners' capital
(deficit), and cash flows for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 1850 Second Avenue Associates,
L.P. as of December 31, 1999 and 1998 and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.

Respectfully submitted,

/s/ Grossman, Tuchman & Shah, LLP
New York, N.Y.
February 8, 2000

[Ernst & Young Letterhead]

Report of INDEPENDENT Certified Public Accountants

Partners
R.P.P. Limited Dividend Housing
Association Limited Partnership

We have audited the accompanying balance sheets of R.P.P. Limited Dividend
Housing Association Limited Partnership (the Partnership) as of December 31,
2000 and 1999, and the related statements of operations, partners' deficit and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of R.P.P. Limited Dividend Housing
Association Limited Partnership at December 31, 2000 and 1999, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 7, the
Partnership has been unable to generate sufficient cash flow to meet its debt
service requirements and is in default under those obligations. These conditions
raise substantial doubt about the Partnership's ability to continue as a going
concern. The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability of assets or the amounts of
liabilities that may result from the outcome of this uncertainty.

/s/ Ernst & Young LLP
West Palm Beach, Florida
January 31, 2001

[Ernst & Young Letterhead]

Report of INDEPENDENT Certified Public Accountants

Partners
R.P.P. Limited Dividend Housing
Association Limited Partnership

We have audited the accompanying balance sheets of R.P.P. Limited Dividend
Housing Association Limited Partnership (the Partnership) as of December 31,
1999 and 1998, and the related statements of operations, partners' deficit and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of R.P.P. Limited Dividend Housing
Association Limited Partnership at December 31, 1999 and 1998, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 7, the
Partnership has been unable to generate sufficient cash flow to meet its debt
service requirements and is in default under those obligations. These conditions
raise substantial doubt about the Partnership's ability to continue as a going
concern. The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability of assets or the amounts of
liabilities that may result from the outcome of this uncertainty.

/s/ Ernst & Young LLP
West Palm Beach, Florida
March 6, 2000

[Letterhead of CHESSER & COMPANY]

INDEPENDENT AUDITOR'S REPORT

Partners
Williamsburg Residential II, L.P.
New York, New York

We have audited the accompanying balance sheet of Williamsburg Residential II,
L.P. as of December 31, 2000 and 1999, and the related statements of operations,
changes in partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Williamsburg Residential II,
L.P. as of December 31, 2000 and 1999, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.

/s/ Chesser & Company, P.A.
Wichita, Kansas
March 16, 2001

[Letterhead of CHESSER & COMPANY]

INDEPENDENT AUDITOR'S REPORT

Partners
Williamsburg Residential II, L.P.
New York, New York

We have audited the accompanying balance sheet of Williamsburg Residential II,
L.P. as of December 31, 1999 and 1998, and the related statements of operations,
changes in partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Williamsburg Residential II,
L.P. as of December 31, 1999 and 1998, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.

/s/ Chesser & Company, P.A.
Wichita, Kansas
February 17, 2000

[Letterhead of J.R. LUPO, P.A. CPA]

INDEPENDENT AUDITOR'S REPORT

To the Partners of
West 104th Street Associates, L.P.
(a Delaware Limited Partnership)

We have audited the accompanying balance sheets of West 104th Street Associates,
L.P. (a Delaware Limited Partnership) as of December 31, 2000 and December 1999,
and the related statements of operations, changes in partners' capital, and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of West 104th Street Associates,
L.P. at December 31, 2000 and December 31, 1999, and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.

/s/ J.R. Lupo
Verona, New Jersey
March 1, 2001

[Letterhead of J.R. LUPO, P.A. CPA]

INDEPENDENT AUDITOR'S REPORT

To the Partners of
West 104th Street Associates, L.P.
(a Delaware Limited Partnership)

We have audited the accompanying balance sheet of West 104th Street Associates,
L.P. (a Delaware Limited Partnership) as of December 31, 1999 and December 1998,
and the related statements of operations, changes in partners' capital, and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of West 104th Street Associates,
L.P. at December 31, 1999 and December 31, 1998, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.

/s/ J.R. Lupo
Verona, New Jersey
February 27, 2000

INDEPENDENT ACCOUNTANTS' REPORT

To the Partners of
Meredith Apartments, Ltd.

We have audited the accompanying balance sheet of Meredith Apartments, Ltd. (a
Limited Partnership) as of December 31, 2000 and 1999 and the related statements
of operations, changes in partners' capital and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Meredith Apartments, Ltd. at
December 31, 2000 and 1999, and the results of its operations and cash flows for
the years then ended, in conformity with generally accepted accounting
principles.

/s/ Lake, Hill & Myers
Salt Lake City, Utah
January 24, 2001

INDEPENDENT ACCOUNTANTS' REPORT

To the Partners of
Meredith Apartments, Ltd.

We have audited the accompanying balance sheet of Meredith Apartments, Ltd. (a
Limited Partnership) as of December 31, 1999 and 1998 and the related statements
of operations, changes in partners' capital and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Meredith Apartments, Ltd. at
December 31, 1999 and 1998, and the results of its operations and cash flows for
the years then ended, in conformity with generally accepted accounting
principles.

/s/ Lake, Hill & Myers
Salt Lake City, Utah
January 13, 2000

INDEPENDENT ACCOUNTANTS' REPORT

To the Partners of
Ritz Apartments, Ltd.

We have audited the accompanying balance sheet of Ritz Apartments, Ltd. (a
Limited Partnership) as of December 31, 2000 and 1999 and the related statements
of operations, changes in partners' capital and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ritz Apartments, Ltd. at
December 31, 2000 and 1999, and the results of its operations and cash flows for
the years then ended, in conformity with generally accepted accounting
principles.

/s/ Lake, Hill & Myers
Salt Lake City, Utah
January 19, 2001

INDEPENDENT ACCOUNTANTS' REPORT

To the Partners of
Ritz Apartments, Ltd.

We have audited the accompanying balance sheet of Ritz Apartments, Ltd. (a
Limited Partnership) as of December 31, 1999 and 1998 and the related statements
of operations, changes in partners' capital and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ritz Apartments, Ltd. at
December 31, 1999 and 1998, and the results of its operations and cash flows for
the years then ended, in conformity with generally accepted accounting
principles.

/s/ Lake, Hill & Myers
Salt Lake City, Utah
January 11, 2000

INDEPENDENT ACCOUNTANTS' REPORT

To the Partners of
Ashby Apartments, Ltd.

We have audited the accompanying balance sheet of Ashby Apartments, Ltd. (a
Limited Partnership) as of December 31, 2000 and 1999 and the related statements
of operations, changes in partners' capital and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ashby Apartments, Ltd. at
December 31, 2000 and 1999, and the results of its operations and cash flows for
the years then ended, in conformity with generally accepted accounting
principles.

/s/ Lake, Hill & Myers
Salt Lake City, Utah
January 19, 2001

INDEPENDENT ACCOUNTANTS' REPORT

To the Partners of
Ashby Apartments, Ltd.

We have audited the accompanying balance sheet of Ashby Apartments, Ltd. (a
Limited Partnership) as of December 31, 1999 and 1998 and the related statements
of operations, changes in partners' capital and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ashby Apartments, Ltd. at
December 31, 1999 and 1998, and the results of its operations and cash flows for
the years then ended, in conformity with generally accepted accounting
principles.

/s/ Lake, Hill & Myers
Salt Lake City, Utah
January 11, 2000

[Letterhead of DAUBY O'CONNOR & ZALESKI]

Independent Auditors' Report

To the Partners of
South Toledo Associates, Ltd.
Toledo, Ohio

We have audited the accompanying balance sheet of South Toledo Associates, Ltd.
(an Ohio Limited Partnership) as of December 31, 2000, and the related
statements of profit and loss (HUD Form 92410), changes in partners' equity and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of South Toledo Associates, Ltd.
(an Ohio Limited Partnership) as of December 31, 2000, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued a report
dated January 5, 2001, on our consideration of the Partnership's internal
controls and a report dated January 5, 2001, on its compliance with laws and
regulations.

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

/s/ Dauby O'Connor & Zaleski, LLC
Certified Public Accountants
Carmel, Indiana
January 5, 2001

[Letterhead of DAUBY O'CONNOR & ZALESKI]

Independent Auditors' Report

To the Partners of
South Toledo Associates, Ltd.
Toledo, Ohio

We have audited the accompanying balance sheet of South Toledo Associates, Ltd.
(an Ohio Limited Partnership) as of December 31, 1999, and the related
statements of profit and loss (HUD Form 92410), changes in partners' equity and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of South Toledo Associates, Ltd.
(an Ohio Limited Partnership) as of December 31, 1999, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued a report
dated January 7, 2000, on our consideration of the Partnership's internal
controls and a report dated January 7, 2000, on its compliance with laws and
regulations.

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

/s/ Dauby O'Connor & Zaleski, LLC
Certified Public Accountants
Carmel, Indiana
January 7, 2000

[Letterhead of DAUBY O'CONNOR & ZALESKI]

Independent Auditors' Report

To the Partners of
South Toledo Associates, Ltd.
Toledo, Ohio

We have audited the accompanying balance sheet of South Toledo Associates, Ltd.
(an Ohio Limited Partnership) as of December 31, 1998, and the related
statements of profit and loss (HUD Form 92410), changes in partners' equity and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of South Toledo Associates, Ltd.
(an Ohio Limited Partnership) as of December 31, 1998, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued a report
dated January 7, 1999, on our consideration of the Partnership's internal
controls and a report dated January 7, 1999, on its compliance with laws and
regulations.

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

/s/ Dauby O'Connor & Zaleski, LLC
Certified Public Accountants
Carmel, Indiana
January 7, 1999

[ZINER, KENNEDY & LEHAN LLP LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Dunlap School Venture

We have audited the accompanying balance sheets of Dunlap School Venture (a
Pennsylvania Limited Partnership) as of December 31, 2000 and 1999, and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dunlap School Venture at
December 31, 2000 and 1999, and the results of its operations, changes in
partners' equity and cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ Ziner, Kennedy & Lehan LLP
Quincy, Massachusetts
January 13, 2001

[ZINER, KENNEDY & LEHAN LLP LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Dunlap School Venture

We have audited the accompanying balance sheets of Dunlap School Venture (a
Pennsylvania Limited Partnership) as of December 31, 1999 and 1998, and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dunlap School Venture at
December 31, 1999 and 1998, and the results of its operations, changes in
partners' equity and cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ Ziner, Kennedy & Lehan LLP
Quincy, Massachusetts
January 16, 2000

[Letterhead of BAKER NEWMAN & NOYES]

INDEPENDENT AUDITORS' REPORT

To The Partners of Philipsburg Elderly Housing Associates
(A Maine Limited Partnership)

We have audited the accompanying balance sheets of Philipsburg Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0210-8E, as of
December 31, 2000 and 1999, and the related statements of profit and loss,
changes in partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Philipsburg Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0210-8E, as of
December 31, 2000 and 1999, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards, we have also issued our
reports dated January 18, 2001 on our consideration of internal controls over
financial reporting of Philipsburg Elderly Housing Associates (A Maine Limited
Partnership) and on our tests of its compliance with certain provisions of laws,
regulations contracts and grants. Those reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be used in
conjunction with this report in considering the results of our audits.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included on
pages 16 - 24 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of the Partnership, but is
supplementary information required by the Pennsylvania Housing Finance Agency
(PHFA). Such information has been subjected to the auditing procedures applied
in our audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.

/s/ Baker Newman & Noyes
Limited Liability Company
Portland, Maine
January 18, 2001

[Letterhead of BAKER NEWMAN & NOYES]

INDEPENDENT AUDITORS' REPORT

To The Partners of Philipsburg Elderly Housing Associates
(A Maine Limited Partnership)

We have audited the accompanying balance sheets of Philipsburg Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0210-8E, as of
December 31, 1999 adn 1998, and the related statements of profit and loss,
changes in partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Philipsburg Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0210-8E, as of
December 31, 1999 an d 1998, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards, we have also issued our
reports dated January 20, 2000 on our consideration of internal controls over
financial reporting of Philipsburg Elderly Housing Associates (A Maine Limited
Partnership) and on our tests of its compliance with certain provisions of laws
and regulations.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included on
pages 16 - 23 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of the Partnership, but is
supplementary information required by the Pennsylvania Housing Finance Agency
(PHFA). Such information has been subjected to the auditing procedures applied
in our audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.

/s/ Baker Newman & Noyes
Limited Liability Company
Portland, Maine
January 20, 2000

[Letterhead of BAKER NEWMAN & NOYES]

INDEPENDENT AUDITORS' REPORT

To The Partners of Franklin Elderly Housing Associates
(A Maine Limited Partnership)

We have audited the accompanying balance sheets of Franklin Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0383-8E, as of
December 31, 2000 and 1999, and the related statements of profit and loss,
changes in partners' capital (deficit) and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Franklin Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0383-8E, as of
December 31, 2000 and 1999, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards, we have also issued our
reports dated January 25, 2001 on our consideration of internal controls over
financial reporting of Franklin Elderly Housing Associates (A Maine Limited
Partnership) and on our tests of its compliance with certain provisions of laws,
regulations, contracts and grants. Those reports are an integral part of an
audit performed in accordance with Government Auditing Standards and should be
used in conjunction with this report in considering the results of our audits.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included on
pages 16 - 23 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of the Partnership, but is
supplementary information required by the Pennsylvania Housing Finance Agency
(PHFA). Such information has been subjected to the auditing procedures applied
in our audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.

/s/ Baker Newman & Noyes
Limited Liability Company
Portland, Maine
January 25, 2001

[Letterhead of BAKER NEWMAN & NOYES]

INDEPENDENT AUDITORS' REPORT

To The Partners of Franklin Elderly Housing Associates
(A Maine Limited Partnership)

We have audited the accompanying balance sheets of Franklin Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0383-8E, as of
December 31, 1999 and 1998, and the related statements of profit and loss,
changes in partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Franklin Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0383-8E, as of
December 31, 1999 and 1998, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards, we have also issued our
reports dated January 27, 2000 on our consideration of internal controls over
financial reporting of Franklin Elderly Housing Associates (A Maine Limited
Partnership) and on our tests of its compliance with certain provisions of laws
and regulations.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included on
pages 16 - 23 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of the Partnership, but is
supplementary information required by the Pennsylvania Housing Finance Agency
(PHFA). Such information has been subjected to the auditing procedures applied
in our audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.

/s/ Baker Newman & Noyes
Limited Liability Company
Portland, Maine
January 27, 2000

[Letterhead of BAKER NEWMAN & NOYES]

INDEPENDENT AUDITORS' REPORT

To The Partners of Wade D. Mertz Elderly Housing Associates
(A Maine Limited Partnership)

We have audited the accompanying balance sheets of Wade D. Mertz Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0488-8E, as of
December 31, 2000 and 1999, and the related statements of profit and loss,
changes in partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Wade D. Mertz Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0488-8E, as of
December 31, 2000 and 1999, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards, we have also issued our
reports dated January 26, 2001 on our consideration of internal controls over
financial reporting of Wade D. Mertz Elderly Housing Associates (A Maine Limited
Partnership) and on our tests of its compliance with certain provisions of laws,
regulations, contracts and grants. Those reports are an integral part of an
audit performed in accordance with Government Auditing Standards and should be
used in conjunction with this report in considering the results of our audits.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included on
pages 16 - 23 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of the Partnership, but is
supplementary information required by the Pennsylvania Housing Finance Agency
(PHFA). Such information has been subjected to the auditing procedures applied
in our audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.

/s/ Baker Newman & Noyes
Limited Liability Company
Portland, Maine
January 26, 2001

[Letterhead of BAKER NEWMAN & NOYES]

INDEPENDENT AUDITORS' REPORT

To The Partners of Wade D. Mertz Elderly Housing Associates
(A Maine Limited Partnership)

We have audited the accompanying balance sheet of Wade D. Mertz Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0488-8E, as of
December 31, 1999 and 1998, and the related statements of profit and loss,
changes in partners' capital and cash flows for the year sthen ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Wade D. Mertz Elderly Housing
Associates (A Maine Limited Partnership), PHFA Project Number R-0488-8E, as of
December 31, 1999 and 1998, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards, we have also issued our
reports dated January 22, 2000 on our consideration of internal controls over
financial reporting of Wade D. Mertz Elderly Housing Associates (A Maine Limited
Partnership) and on our tests of its compliance with certain provisions of laws
and regulations.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included on
pages 16 - 23 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of the Partnership, but is
supplementary information required by the Pennsylvania Housing Finance Agency
(PHFA). Such information has been subjected to the auditing procedures applied
in our audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.

/s/ Baker Newman & Noyes
Limited Liability Company
Portland, Maine
January 22, 2000

[Letterhead of BICK FREDMAN & CO]

Independent Auditors' Report

The General and Limited Partners
Lancashire Towers Associates Limited Partnership
Cleveland, Ohio

We have audited the accompanying balance sheets of Lancashire Towers Associates
Limited Partnership (An Ohio Limited Partnership) as of December 31, 2000 and
1999, and the related statement of operations, partners' capital (deficit) and
cash flows for the years then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

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

In accordance with Government Auditing Standards, we have also issued a report
dated January 13, 2001 on our consideration of Lancashire Towers Associates
Limited Partnership's internal control and reports dated January 13, 2001 on its
compliance with laws and regulations. Those reports are an integral part of an
audit performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of our audit.

/s/ Bick Fredman & Co
Cleveland, Ohio
January 13, 2001

[Letterhead of BICK FREDMAN & CO]

Independent Auditors' Report

The General and Limited Partners
Lancashire Towers Associates Limited Partnership
Cleveland, Ohio

We have audited the accompanying balance sheets of Lancashire Towers Associates
Limited Partnership (An Ohio Limited Partnership) as of December 31, 1999 and
1998, and the related statement of operations, partners' capital (deficit) and
cash flows for the years then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lancashire Towers Associates
Limited Partnership's as of December 31, 1999 and 1998, and the results of its
operations and cash flows for the years then ended, in conformity with generally
accepted accounting principles.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 3, 2000 on our
consideration of Lancashire Towers Associates Limited Partnership's internal
control and reports dated February 3, 2000 on its compliance with specific
requirements applicable to major HUD programs and specific requirements
applicable to Fair Housing and Non-Discrimination, and specific requirements
applicable to nonmajor HUD program transactions.

/s/ Bick Fredman & Co
Cleveland, Ohio
February 3, 2000

[INSERO, KASPERSKI, CIACCIA & CO. LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Northwood Associates Limited Partnership
Toledo, Ohio

We have audited the accompanying balance sheets - regulatory basis of Northwood
Associates Limited Partnership, HUD Project #042-44050-LDP, as of December 31,
2000 and 1999 and the related statements of changes in partners' equity -
regultory basis, operations - regulatory basis, and cash flows - regulatory
basis for the years then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

As described in Note 1, the Project's policy is to prepare its financial
statements on the basis of accounting practices prescribed or permitted by U.S.
Department of Housing and Urban Development. These practices differ in some
respects from generally accepted accounting principles. Accordingly, the
accompanying financial statements are not intended to present financial position
and results of operations in conformity with generally accepted accounting
principles. This report is intended solely for filing with regulatory agencies
and is not intended for any other purpose.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Northwood Associates Limited
Partnership as of December 31, 2000 and 1999, and the results of its operations,
changes in partners' equity, and cash flows for the years then ended on the
basis of accounting described in Note 1.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 7, 2001, on our
consideration of Northwood Associates Limited Partnership's internal control,
and reports dated February 7, 2001, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to Fair
Housing and Non-Discrimination. Those reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.

Respectfully Submitted,

/s/ Insero, Kasperski, Ciaccia & Co., P.C.
Certified Public Accountants
Rochester, New York
February 7, 2001

[INSERO, KASPERSKI, CIACCIA & CO. LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Northwood Associates Limited Partnership
Toledo, Ohio

We have audited the accompanying balance sheets - regulatory basis of Northwood
Associates Limited Partnership, HUD Project #042-44050-LDP, as of
December 31, 1999 and 1998 and the related statements of changes in partners'
equity - regultory basis, operations - regulatory basis, and cash flows -
regulatory basis for the years then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

As described in Note 1, the Project's policy is to prepare its financial
statements on the basis of accounting practices prescribed or permitted by U.S.
Department of Housing and Urban Development. These practices differ in some
respects from generally accepted accounting principles. Accordingly, the
accompanying financial statements are not intended to present financial position
and results of operations in conformity with generally accepted accounting
principles. This report is intended solely for filing with regulatory agencies
and is not intended for any other purpose.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Northwood Associates Limited
Partnership as of December 31, 1999 and 1998, and the results of its operations,
changes in partners' equity, and cash flows for the years then ended on the
basis of accounting described in Note 1.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 31, 2000, on our
consideration of Northwood Associates Limited Partnership's internal control,
and reports dated January 31, 2000, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to Fair
Housing and Non-Discrimination.

Respectfully Submitted,

/s/ Insero, Kasperski, Ciaccia & Co., P.C.
Certified Public Accountants
Rochester, New York
January 31, 2000

[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Brewery Renaissance Associates, L.P.

We have audited the accompanying balance sheets of Brewery Renaissance
Associates, L.P. as of December 31, 2000, and the related statements of
operations, partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brewery Renaissance Associates,
L.P. as of December 31, 2000, and the results of its operations, the changes in
partners' equity and cash flows for the years then ended, in conformity with
generally accepted accounting principles.

/s/ Reznick Fedder & Silverman
Bethesda, Maryland
February 22, 2001

[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Brewery Renaissance Associates, L.P.

We have audited the accompanying balance sheets of Brewery Renaissance
Associates, L.P. as of December 31, 1999 and 1998, and the related statements of
operations, partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brewery Renaissance Associates,
L.P. as of December 31, 1999 and 1998, and the results of its operations, the
changes in partners' equity and cash flows for the years then ended, in
conformity with generally accepted accounting principles.

/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 14, 2000

[Letterhead of ASHER & COMPANY, LTD.]

Independent Auditors' Report

The Partners
Brandywine Court Associates, L.P.
Marlton, New Jersey

We have audited the accompanying balance sheets of Brandywine Court Associates,
L.P. (A Limited Partnership), HUD Project No. 063-94015, as of December 31, 2000
and 1999 and the related statements of loss, Partners' capital and cash flows
for the year ended December 31, 2000. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brandywine Court Associates,
L.P. (A Limited Partnership), HUD Project No. 063-94015, as of December 31, 2000
and 1999, and the results of its operations, changes in its Partners' capital,
and its cash flows for the year ended December 31, 2000, in conformity with
generally accepted accounting principles.

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

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 17, 2001 on our
consideration of Brandywine Court Associates, L.P.'s (A Limited Partnership),
HUD Project No. 063-94015, internal control and reports dated January 17, 2001
on its compliance with specific requirements applicable to major HUD program,
specific requirements applicable to nonmajor HUD program transactions and
specific requirements applicable to fair housing and non-discrimination. These
reports are an integral part of an auditing performed in accordance with
Government Auditing Standards and should be read in conjunction with this report
in considering the results of our audit.

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 17, 2001

[Letterhead of ASHER & COMPANY, LTD.]

Independent Auditors' Report

The Partners
Brandywine Court Associates, L.P.
Marlton, New Jersey

We have audited the accompanying balance sheets of Brandywine Court Associates,
L.P. (A Limited Partnership), HUD Project No. 063-94015, as of December 31, 1999
and 1998 and the related statements of profit and loss, Partners' capital and
cash flows for the year ended December 31, 1999. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brandywine Court Associates,
L.P. (A Limited Partnership), HUD Project No. 063-94015, as of December 31, 1999
and 1998, and the results of its operations, changes in its Partners' capital,
and its cash flows for the year ended December 31, 1999, in conformity with
generally accepted accounting principles.

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

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 19, 2000 on our
consideration of Brandywine Court Associates, L.P.'s (A Limited Partnership),
HUD Project No. 063-94015, internal control and reports dated January 19, 2000
on its compliance with specific requirements applicable to major HUD program,
specific requirements applicable to nonmajor HUD program transactions and
specific requirements applicable to fair housing and non-discrimination.

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 19, 2000

[Letterhead of J.H. WILLIAMS & CO., LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Art Apartments Associates (a Limited Partnership)
Philadelphia, Pennsylvania

We have audited the accompanying balance sheets of Art Apartments Associates (a
Limited Partnership) as of December 31, 2000 and 1999 and the related statements
of (loss), changes in partners' equity (deficit) and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's general partner and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Art Apartments Associates (a
Limited Partnership) at December 31, 2000 and 1999, and the results of its
operations, changes in partners' equity and its cash flows for the years then
ended in conformity with accounting principles generally accepted accounting
principles in the United States of America.

/s/ J. H. Williams & Co., LLP
Kingston, Pennsylvania
January 31, 2001

[Letterhead of J.H. WILLIAMS & CO., LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Art Apartments Associates (a Limited Partnership)
Philadelphia, Pennsylvania

We have audited the accompanying balance sheets of Art Apartments Associates (a
Limited Partnership) as of December 31, 1999 and 1998 and the related statements
of (loss), changes in partners' equity (deficit) and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's general partner and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Art Apartments Associates (a
Limited Partnership) at December 31, 1999 and 1998, and the results of its
operations, changes in partners' equity and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

/s/ J. H. Williams & Co., LLP
Kingston, Pennsylvania
February 3, 2000

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
The Village at Carriage Hills, Ltd.
Clinton, Tennessee

We have audited the accompanying balance sheets of The Village at Carriage Hills
Ltd., a limited partnership, RHS Project No.: 48-001-630980039 as of December
31, 2000 and 1999, and the related statements of operations, partners' deficit
and cash flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Village at Carriage Hills,
Ltd., RHS Project No.: 48-001-630980039 as of December 31, 2000 and 1999, and
the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2000 and 1999, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 26, 2001 on our consideration of The Village at Carriage Hills,
Ltd.'s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 26, 2001

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
The Village at Carriage Hills, Ltd.
Clinton, Tennessee

We have audited the accompanying balance sheets of The Village at Carriage Hills
Ltd., a limited partnership, RHS Project No.: 48-001-630980039 as of December
31, 1999 and 1998, and the related statements of operations, partners' deficit
and cash flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Village at Carriage Hills,
Ltd., RHS Project No.: 48-001-630980039 as of December 31, 1999 and 1998, and
the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 1999 and 1998, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 26, 2000 on our consideration of The Village at Carriage Hills,
Ltd.'s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 26, 2000

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Mountainview Apartments, Ltd.
Clinton, Tennessee

We have audited the accompanying balance sheets of Mountainview Apartments,
Ltd., a limited partnership, RHS Project No.: 48-015-63097225 as of December 31,
2000 and 1999, and the related statements of operations, partners' deficit and
cash flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mountainview Apartments, Ltd.,
RHS Project No.: 48-015-63097225 as of December 31, 2000 and 1999, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2000 and 1999, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 6, 2001 on our consideration of Mountainview Apartments, Ltd.'s,
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 6, 2001

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Mountainview Apartments, Ltd.
Clinton, Tennessee

We have audited the accompanying balance sheets of Mountainview Apartments,
Ltd., a limited partnership, RHS Project No.: 48-015-63097225 as of December 31,
1999 and 1998, and the related statements of operations, partners' deficit and
cash flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mountainview Apartments, Ltd.,
RHS Project No.: 48-015-63097225 as of December 31, 1999 and 1998, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 1999 and 1998, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 26, 2000 on our consideration of Mountainview Apartments, Ltd.'s,
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 26, 2000

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
The Park Village, Limited
Jackson, Mississippi

We have audited the accompanying balance sheets of The Park Village, Limited, a
limited partnership, as of December 31, 2000 and 1999, and the related
statements of operations, partners' capital and cash flows for the years then
ended. These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

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

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

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 25, 2001

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
The Park Village, Limited
Jackson, Mississippi

We have audited the accompanying balance sheets of The Park Village, Limited, a
limited partnership, as of December 31, 1999 and 1998, and the related
statements of operations, partners' capital and cash flows for the years then
ended. These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Park Village, Limited, as
of December 31, 1999 and 1998, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on page 10
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the audit
procedures applied in the audit of the basic financial statements and, in our
opinion is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 23, 1998

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
River Oaks Apartments, Ltd.
Oneonta, Alabama

We have audited the accompanying balance sheets of River Oaks Apartments, Ltd.,
a limited partnership, RHS Project No.: 01-005-630988076 as of December 31, 2000
and 1999, and the related statements of operations, partners' deficit and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of River Oaks Apartments, Ltd.,
RHS Project No.: 01-005-630988076 as of December 31, 2000 and 1999, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2000 and 1999, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 26, 2001 on our consideration of River Oaks Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 26, 2001

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
River Oaks Apartments, Ltd.
Oneonta, Alabama

We have audited the accompanying balance sheets of River Oaks Apartments, Ltd.,
a limited partnership, RHS Project No.: 01-005-630988076 as of December 31, 1999
and 1998, and the related statements of operations, partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of River Oaks Apartments, Ltd.,
RHS Project No.: 01-005-630988076 as of December 31, 1999 and 1998, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 1999 and 1998, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 16, 2000 on our consideration of River Oaks Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 16, 2000

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Forrest Ridge, Ltd.
Forrest City, Arkansas

We have audited the accompanying balance sheets of Forrest Ridge Apartments,
Ltd., a limited partnership, RHS Project No.: 03-062-630899211 as of December
31, 2000 and 1999, and the related statements of operations, partners' capital
and cash flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Forrest Ridge Apartments, Ltd.,
RHS Project No.: 03-062-630899211 as of December 31, 2000 and 1999, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2000 and 1999, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 26, 2001 on our consideration of Forrest Ridge Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 26, 2001

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Forrest Ridge, Ltd.
Forrest City, Arkansas

We have audited the accompanying balance sheets of Forrest Ridge Apartments,
Ltd., a limited partnership, RHS Project No.: 03-062-630899211 as of December
31, 1999 and 1998, and the related statements of operations, partners' capital
and cash flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Forrest Ridge Apartments, Ltd.,
RHS Project No.: 03-062-630899211 as of December 31, 1999 and 1998, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 1999 and 1998, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 12, 2000 on our consideration of Forrest Ridge Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 12, 2000

[Letterhead of SCHOONOVER BOYER GETTMAN AND ASSOCIATES]

INDEPENDENT AUDITORS' REPORT

The Partners
The Hearthside Limited Dividend
Housing Association Limited Partnership
(a Michigan limited partnership)

We have audited the accompanying balance sheets of The Hearthside Limited
Dividend Housing Association Limited Partnership, (a Michigan limited
partnership) as of December 31, 2000 and 1999, and the related statements of
income (loss), partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on the financial statements based on our
audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Hearthside Limited Dividend
Housing Association Limited Partnership as of December 31, 2000 and 1999, and
the results of its operations and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.

/s/ Schoonover Boyer Gettman & Associates
Columbus, Ohio
January 26, 2001

[Letterhead of SCHOONOVER BOYER GETTMAN AND ASSOCIATES]

INDEPENDENT AUDITORS' REPORT

The Partners
The Hearthside Limited Dividend
Housing Association Limited Partnership
(a Michigan limited partnership)

We have audited the accompanying balance sheets of The Hearthside Limited
Dividend Housing Association Limited Partnership, (a Michigan limited
partnership) as of December 31, 1999 and 1998, and the related statements of
income (loss), partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on the financial statements based on our
audits.

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

In our opinion, the financial statements mentioned above present fairly, in all
material respects, the financial position of The Hearthside Limited Dividend
Housing Association Limited Partnership as of December 31, 1999 and 1998, and
the results of its operations and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.

/s/ Schoonover Boyer Gettman & Associates
Columbus, Ohio
January 28, 2000

[Letterhead of PAILET, MEUNIER AND LeBLANC, L.L.P.]

INDEPENDENT AUDITORS' REPORT

To the Partners
of Redemptorist Limited Partnership
New Orleans, Louisiana

We have audited the accompanying balance sheets of Redemptorist Limited
Partnership, HUD Project No. 064-35271, as of December 31, 2000 and 1999, and
the related statements of income, changes in partners' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Redemptorist Limited
Partnership, HUD Project No. 064-35271, as of December 31, 2000 and 1999, and
the results of its operations, changes in partners' equity, and cash flows for
the years then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 19, 2001, on our
consideration of Redemptorist Limited Partnership's internal control, and
reports dated February 19, 2001, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to
Affirmative Fair Housing.

/s/ Pailet, Meunier and LeBlanc, L.L.P.
Metairie, Louisiana
February 19, 2001

[Letterhead of PAILET, MEUNIER AND LeBLANC, L.L.P.]

INDEPENDENT AUDITORS' REPORT

To the Partners
of Redemptorist Limited Partnership
New Orleans, Louisiana

We have audited the accompanying balance sheets of Redemptorist Limited
Partnership, HUD Project No. 064-35271, as of December 31, 1999 and 1998, and
the related statements of income, changes in partners' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Redemptorist Limited
Partnership, HUD Project No. 064-35271, as of December 31, 1999 and 1998, and
the results of its operations, changes in partners' equity, and cash flows for
the years then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 2, 2000, on our
consideration of Redemptorist Limited Partnership's internal control, and
reports dated February 2, 2000, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to
Affirmative Fair Housing.

/s/ Pailet, Meunier and LeBlanc, L.L.P.
Metairie, Louisiana
February 2, 2000

[Letterhead of SATTY, LEVINE & CIACCO, CPAs, P.C.]

To the Partners MANHATTAN A ASSOCIATES (A LIMITED PARTNERSHIP) New York, New
York

We have audited the accompanying balance sheet of Manhattan A Associates (A
Limited Partnership) as of December 31, 2000 and the related statements of
operations, changes in partners' capital and cash flows for the years then
ended. These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion of these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MANHATTAN A ASSOCIATES as of
December 31, 2000 and the results of its operations and its cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.

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

/s/ Satty, Levine & Ciacco, CPAs, P.C.
Jericho, New York
February 19, 2001

[Letterhead of LEVINE GREENBERG & COMPANY]

To the Partners MANHATTAN A ASSOCIATES (A LIMITED PARTNERSHIP) 105 West 128
Street New York, New York 10029

Gentlemen:

We have audited the accompanying balance sheet of Manhattan A Associates (A
Limited Partnership) as of December 31, 1998 and the related statements of
operations, changes in partners' capital and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion of these financial
statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MANHATTAN A ASSOCIATES (a
Limited Partnership) as of December 31, 1998 and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.

/s/ Levine, Greenberg & Company
Certified Public Accountant
Hewlett, New York
February 24, 1999

[Letterhead of GREGG ASSOCIATES]

INDEPENDENT AUDITORS' REPORT

To the Partners
of Weidler Associates Limited Partnership
Portland, Oregon

We have audited the accompanying balance sheets of Weidler Associates Limited
Partnership as of December 31, 2000 and 1999, and the related statements of
operations, changes in partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

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

GREGG ASSOCIATES, PC

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

[Letterhead of GERALD V. GERRITZ, JR. P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
of Weidler Associates Limited Partnership

I have audited the accompanying balance sheets of Weidler Associates Limited
Partnership as of December 31, 1998 and 1997, and the related statements of
operations, changes in partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. My responsibility is to express an opinion on these financial
statements based on my audits.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Weidler Associates Limited
Partnership as of December 31, 1998 and 1997, and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles.

/s/ Gerald V. Gerritz, Jr., CPA, P.C.
Portland, Oregon
February 12, 1999

[Letterhead of ASHER & COMPANY, LTD.]

Independent Auditors' Report

The Partners
Gentle Pines - West Columbia Associates, L.P.
Marlton, New Jersey

We have audited the accompanying balance sheets of Gentle Pines - West Columbia
Associates, L.P. (A Limited Partnership), HUD Project No. 054-36627, as of
December 31, 2000 and 1999, and the related statements of loss, Partners'
capital and cash flows for the year ended December 31, 2000. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Gentle Pines - West Columbia
Associates, L.P. (A Limited Partnership), HUD Project No. 054-36627, as of
December 31, 2000 and 1999, and the results of its operations, changes in its
Partners' capital, and its cash flows for the year ended December 31, 2000 in
conformity with generally accepted accounting principles.

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

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 24, 2001 on our
consideration of Gentle Pines - West Columbia Associates, L.P.'s (A Limited
Partnership), HUD Project No. 054-36627, internal control and reports dated
January 24, 2001 on its compliance with specific requirements applicable to
major HUD programs
and specific requirements applicable to fair housing and non-discrimination.
Those reports are an integral part of an audit performed in accordance with
Government Auditing Standards and should be read in conjunction with this report
in considering the results of our audit.

/s/ Asher & Company, Ltd
Philadelphia, Pennsylvania
January 24, 2001

[Letterhead of ASHER & COMPANY, LTD.]

Independent Auditors' Report

The Partners
Gentle Pines - West Columbia Associates, L.P.
Marlton, New Jersey

We have audited the accompanying balance sheets of Gentle Pines - West Columbia
Associates, L.P. (A Limited Partnership), HUD Project No. 054-36627, as of
December 31, 1999 and 1998, and the related statements of profit and loss,
Partners' capital and cash flows for the year ended December 31, 1999. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Gentle Pines - West Columbia
Associates, L.P. (A Limited Partnership), HUD Project No. 054-36627, as of
December 31, 1999 and 1998, and the results of its operations, changes in its
Partners' capital, and its cash flows for the year ended December 31, 1999 in
conformity with generally accepted accounting principles.

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

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 17, 2000 on our
consideration of Gentle Pines - West Columbia Associates, L.P.'s (A Limited
Partnership), HUD Project No. 054-36627, internal control and reports dated
January 17, 2000 on its compliance with specific requirements applicable to
major HUD programs and specific requirements applicable to fair housing and
non-discrimination.

/s/ Asher & Company, Ltd
Philadelphia, Pennsylvania
January 17, 2000

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Lake Forest Estates II, Ltd.
Livingston, Alabama

We have audited the accompanying balance sheets of Lake Forest Estates II, Ltd.,
a limited partnership, RHS Project No.: 01-060-630996944 as of December 31, 2000
and 1999, and the related statements of operations, partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lake Forest Estates II, Ltd.,
RHS Project No.: 01-060-630996944 as of December 31, 2000 and 1999, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2000 and 1999, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 6, 2001 on our consideration of Lake Forest Estates II, Ltd.,
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 6, 2001

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Lake Forest Estates II, Ltd.
Livingston, Alabama

We have audited the accompanying balance sheets of Lake Forest Estates II, Ltd.,
a limited partnership, RHS Project No.: 01-060-630996944 as of December 31, 1999
and 1998, and the related statements of operations, partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lake Forest Estates II, Ltd.,
RHS Project No.: 01-060-630996944 as of December 31, 1999 and 1998, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 1999 and 1998, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 26, 2000 on our consideration of Lake Forest Estates II, Ltd.,
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 26, 2000

[Letterhead of AMILCAR TORRES RIVERA, CPA]

INDEPENDENT AUDITORS' REPORT

To the Partners
Las Camelias Limited Partnership

I have audited the accompanying balance sheets of Las Camelias Limited
Partnership as of December 31, 2000 and 1999, and the related statements of
loss, changes in Partner's capital/(deficit) and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. My responsibility is to express an opinion on these financial
statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Las Camelias Limited Partnership as
of December 31, 2000 and 1999, and the result of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

/s/ Amilcar Torres Rivera, CPA
San Juan, Puerto Rico
Stamp #1598370 of the Puerto Rico Society of CPA's was affixed to the original.
February 2, 2001

[Letterhead of AMILCAR TORRES RIVERA, CPA]

INDEPENDENT AUDITORS' REPORT

To the Partners
Las Camelias Limited Partnership

I have audited the accompanying balance sheets of Las Camelias Limited
Partnership as of December 31, 1999 and 1998, and the related statements of
loss, changes in Partner's capital and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. My responsibility is to express an opinion on these financial
statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Las Camelias Limited Partnership as
of December 31, 1999 and 1998, and the result of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

Las Camelias Limited Partnership rent income from subsidies is approximately 83%
of total partnership revenues. As disclosed in Note 1-A, one of the three
Housing Assistance Payment (HAP) Contracts expired on February 28, 1999.

/s/ Amilcar Torres Rivera, CPA
San Juan, Puerto Rico
Stamp #1598370 of the Puerto Rico Society of CPA's was affixed to the original.
February 1, 2000

[Letterhead of DAVID W. SCOTT, CPA, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners of
WPL Associates XXIII Limited Partnership 522 NW 23rd, Suite 200 Portland, Oregon
97201

We have audited the accompanying balance sheet of WPL Associates XXIII Limited
Partnership, as of December 31, 2000, and the related statements of operations,
changes in partnerships' capital, and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of WPL Associates XXIII Limited
Partnership at December 31, 2000, and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.

/s/ David W. Scott, CPA, P.C.
Portland, Oregon
March 2, 2001

[Letterhead of DAVID W. SCOTT, CPA, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners of
WPL Associates XXIII Limited Partnership 522 NW 23rd, Suite 200 Portland, Oregon
97201

We have audited the accompanying balance sheet of WPL Associates XXIII Limited
Partnership, as of December 31, 1999, and the related statements of operations,
changes in partnerships' capital, and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of WPL Associates XXIII Limited
Partnership at December 31, 1999, and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.

/s/ David W. Scott, CPA, P.C.
Portland, Oregon
February 15, 2000

[Letterhead of DAVID W. SCOTT, CPA, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners of
WPL Associates XXIII Limited Partnership 522 NW 23rd, Suite 200 Portland, Oregon
97201

We have audited the accompanying balance sheet of WPL Associates XXIII Limited
Partnership, as of December 31, 1998, and the related statements of operations,
changes in partnerships' capital, and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of WPL Associates XXIII Limited
Partnership at December 31, 1998, and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.

/s/ David W. Scott, CPA, P.C.
Portland, Oregon
February 16, 1999

[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Broadway Townhouses L.P.

We have audited the accompanying balance sheet of Broadway Townhouses L.P. as of
December 31, 2000, and the related statements of operations, partners' equity
(deficit) and cash flows for the year then ended. These financial statements are
the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Broadway Townhouses L.P. as of
December 31, 2000, and the results of its operations, the changes in partners'
equity (deficit) and cash flows for the year then ended, in conformity with
generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 24 through 28
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.

In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 24,
2001 on our consideration of Broadway Townhouses L.P.'s internal control and on
its compliance with specific requirements applicable to major HUD programs and
fair housing and non-discrimination. Those reports are an integral part of an
audit performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of our audit.

/s/ Reznick Fedder & Silverman
Lead Auditor: Robert J. Denmark
Bethesda, Maryland
Taxpayer Identification Number: 52-1088612
January 24, 2001

[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Broadway Townhouses L.P.

We have audited the accompanying balance sheet of Broadway Townhouses L.P. as of
December 31, 1999, and the related statements of operations, partners' equity
(deficit) and cash flows for the year then ended. These financial statements are
the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Broadway Townhouses L.P. as of
December 31, 1999, and the results of its operations, the changes in partners'
equity (deficit) and cash flows for the year then ended, in conformity with
generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 24 through 28
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.

In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 19,
2000 on our consideration of Broadway Townhouses L.P.'s internal control and on
its compliance with specific requirements applicable to major HUD programs and
fair housing and non-discrimination.

/s/ Reznick Fedder & Silverman
Lead Auditor: Robert J. Denmark
Bethesda, Maryland
Taxpayer Identification Number: 52-1088612
January 19, 2000

[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Broadway Townhouses L.P.

We have audited the accompanying balance sheet of Broadway Townhouses L.P. as of
December 31, 1998, and the related statements of operations, partners' equity
(deficit) and cash flows for the year then ended. These financial statements are
the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Broadway Townhouses L.P. as of
December 31, 1998, and the results of its operations, the changes in partners'
equity (deficit) and cash flows for the year then ended, in conformity with
generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 24 through 27
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.

In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 22,
1999 on our consideration of Broadway Townhouses L.P.'s internal control and on
its compliance with specific requirements applicable to major HUD programs and
fair housing and non-discrimination.

/s/ Reznick Fedder & Silverman
Lead Auditor: Lester A. Kanis
Bethesda, Maryland
Taxpayer Identification Number: 52-1088612
January 22, 1999

[Letterhead of HECTOR M. LOPEZ CERTIFIED PUBLIC ACCOUNTANT]

INDEPENDENT AUDITORS' REPORT

To the Partners
Puerto Rico Historic Zone Limited Dividend Partnership

I have audited the accompanying balance sheet of Puerto Rico Historic Zone
Limited Dividend Partnership as of December 31, 2000, and the related statements
of operations, partners' equity, and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Puerto Rico Historic Zone Limited
Dividend Partnership as of December 31, 2000, and the results of its operations,
the changes in partners' equity and its cash flows for the year then ended in
conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards and the Consolidated Audits of
HUD Programs, issued by the U.S. Department of Housing and Urban Development, I
have also issued reports dated January 31, 2001, on our consideration of Puerto
Rico Historic Zone Limited Dividend Partnership's internal control and reports
dated January 31, 2001, on its compliance with specific requirements applicable
to major HUD programs, specific requirements applicable to fair housing and
non-discrimination, specific requirements applicable to non-major HUD program
transactions. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of my audit.

My audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 20 through 24
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in my opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.

/s/ Hector M. Lopez
The Stamp No. 1703003 was adhered to the original of this report.
Taxpayer Identification Number: 050-36-4320
San Juan, Puerto Rico
January 31, 2001

[Letterhead of HECTOR M. LOPEZ CERTIFIED PUBLIC ACCOUNTANT]

INDEPENDENT AUDITORS' REPORT

To the Partners
Puerto Rico Historic Zone Limited Dividend Partnership

I have audited the accompanying balance sheet of Puerto Rico Historic Zone
Limited Dividend Partnership as of December 31, 1999, and the related statements
of operations, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Puerto Rico Historic Zone Limited
Dividend Partnership as of December 31, 1999, and the results of its operations,
the changes in partners' equity and its cash flows for the year then ended in
conformity with generally accepted accounting principles.

My audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 20 through 24
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in my opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.

In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," I have also issued reports dated February 18,
2000, on my consideration of Puerto Rico Historic Zone Limited Dividend
Partnership's internal control and on its compliance with specific requirements
applicable to major HUD programs, and fair housing and non-discrimination.

/s/ Hector M. Lopez
The Stamp No. 1623825 was adhered to the original of this report.
Taxpayer Identification Number: 050-36-4320
San Juan, Puerto Rico
February 18, 2000

[Letterhead of SANTIAGO, RILEY & REZNICK]

INDEPENDENT AUDITORS' REPORT

To the Partners
Puerto Rico Historic Zone Limited Dividend Partnership

We have audited the accompanying balance sheet of Puerto Rico Historic Zone
Limited Dividend Partnership as of December 31, 1998, and the related statements
of operations, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Puerto Rico Historic Zone
Limited Dividend Partnership as of December 31, 1998, and the results of its
operations, the changes in partners' equity and its cash flows for the year then
ended, in conformity with generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 20 through 24
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.

In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 29,
1999, on our consideration of Puerto Rico Historic Zone Limited Dividend
Partnership's internal control and on its compliance with specific requirements
applicable to major HUD programs, and fair housing and non-discrimination.

/s/ Santiago, Riley & Reznick
Lead Auditor: William T. Riley, Jr.
San Juan, Puerto Rico
Taxpayer Identification Number: 66-0432841
[1520212]
Seal
January 29, 1999

[Letterhead of CABLISH, GENTILE & GAY]

INDEPENDENT AUDITORS' REPORT

To the Partners
Citrus Meadows Apartments, Ltd.
Bradenton, Florida

We have audited the accompanying balance sheet of Citrus Meadows Apartments,
Ltd., FHA Project No. 067-36654 (a limited partnership) (the Partnership), as of
December 31, 2000, and the related statements of changes in partners equity
(deficit), profit and loss, partners' equity (deficit) and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards, issued by the Comptroller General of the United
States and the Consolidated Audit Guide for Audits of HUD Programs, issued by
the U.S. Department of Housing and Urban Development, Office of Inspector
General, in August 1997. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Citrus Meadows Apartments, Ltd.
at December 31, 2000 and the results of its operations, cash flows and changes
in partners' equity (deficit) for the year then ended in conformity with
generally accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting information included in the
financial statements (shown on pages 12 through 16) are presented for the
purposes of additional analysis and are not a required part of the basic
financial statements of Citrus Meadows Apartment, Ltd. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly presented in all material respects in
relation to the financial statements taken as a whole.

In accordance with Government Auditing Standards, we have also issued reports
dated February 5, 2001 on our consideration of Citrus Meadows Apartments, Ltd.'s
internal controls and on its compliance with laws and regulations applicable to
the basic financial statements. In accordance with the Consolidated Audit Guide,
we have also issued reports dated February 5, 2001, on major HUD programs, and
the nonmajor HUD program.

/s/ Cablish, Gentile & Gay, CPA
BRADENTON, FLORIDA
February 5, 2001

[Letterhead of CABLISH, GENTILE & GAY]

INDEPENDENT AUDITORS' REPORT

To the Partners
Citrus Meadows Apartments, Ltd.
Bradenton, Florida

We have audited the accompanying balance sheet of Citrus Meadows Apartments,
Ltd., FHA Project No. 067-36654 (a limited partnership) (the Partnership), as of
December 31, 1999, and the related statements of changes in partners equity
(deficit), profit and loss, partners' equity (deficit) and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards, issued by the Comptroller General of the United
States and the Consolidated Audit Guide for Audits of HUD Programs, issued by
the U.S. Department of Housing and Urban Development, Office of Inspector
General, in August 1997. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Citrus Meadows Apartments, Ltd.
at December 31, 1999 and the results of its operations, cash flows and changes
in partners' equity (deficit) for the year then ended in conformity with
generally accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting information included in the
financial statements (shown on pages 12 through 17) are presented for the
purposes of additional analysis and are not a required part of the basic
financial statements of Citrus Meadows Apartment, Ltd. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly presented in all material respects in
relation to the financial statements taken as a whole.

In accordance with Government Auditing Standards, we have also issued reports
dated February 7, 2000 on our consideration of Citrus Meadows Apartments, Ltd.'s
internal controls and on its compliance with laws and regulations applicable to
the basic financial statements. In accordance with the Consolidated Audit Guide,
we have also issued reports dated February 7, 2000, on major HUD programs, and
the nonmajor HUD program.

/s/ Cablish, Gentile & Gay, CPA
BRADENTON, FLORIDA
February 7, 2000

[Letterhead of CHRISTOPHER, SMITH, GENTILE, LEONARD & BRISTOW, P.A.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Citrus Meadows Apartments, Ltd.
Bradenton, Florida

We have audited the accompanying balance sheet of Citrus Meadows Apartments,
Ltd., FHA Project No. 067-36654 (a limited partnership) (the Partnership), as of
December 31, 1998, and the related statements of changes in partners equity
(deficit), profit and loss, partners' equity (deficit) and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards, issued by the Comptroller General of the United
States and the Consolidated Audit Guide for Audits of HUD Programs, issued by
the U.S. Department of Housing and Urban Development, Office of Inspector
General, in August 1997. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Citrus Meadows Apartments, Ltd.
at December 31, 1998 and the results of its operations, cash flows and changes
in partners' equity (deficit) for the year then ended in conformity with
generally accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting information included in the
financial statements (shown on pages 12 through 17) are presented for the
purposes of additional analysis and are not a required part of the basic
financial statements of Citrus Meadows Apartment, Ltd. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly presented in all material respects in
relation to the financial statements taken as a whole.

In accordance with Government Auditing Standards, we have also issued reports
dated January 29, 1999 on our consideration of Citrus Meadows Apartments, Ltd.'s
internal controls and on its compliance with laws and regulations applicable to
the basic financial statements. In accordance with the Consolidated Audit Guide,
we have also issued reports dated January 29, 1999, on major HUD programs, and
the nonmajor HUD program.

/s/ Christopher, Smith, Gentile, Leonard & Bristow, P.A.
BRADENTON, FLORIDA
January 29, 1999

[ZINER, KENNEDY & LEHAN LLP LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Sartain School Venture

We have audited the accompanying balance sheets of Sartain School Venture (a
Pennsylvania limited partnership) as of December 31, 2000 and 1999 and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

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

/s/ Ziner, Kennedy & Lehan LLP
Quincy, Massachusetts
January 13, 2001

[ZINER, KENNEDY & LEHAN. LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Sartain School Venture

We have audited the accompanying balance sheets of Sartain School Venture (a
Pennsylvania limited partnership) as of December 31, 1999 and 1998 and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Sartain School Venture as of
December 31, 1999 and 1998, and the results of its operations, changes in
partners' equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ Ziner, Kennedy & Lehan, LLP
Quincy, Massachusetts
January 14, 2000

[ASHER & COMPANY, LTD. LETTERHEAD]

Independent Auditors' Report

The Partners
Driftwood Terrace Associates, Ltd.
Marlton, New Jersey

We have audited the accompanying balance sheets of Driftwood Terrace Associates,
Ltd. (A Limited Partnership), HUD Project No. 066-36678, as of December 31, 2000
and 1999 and the related statements of loss, Partners' capital and cash flows
for the year ended December 31, 2000. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Driftwood Terrace Associates,
Ltd. (A Limited Partnership), HUD Project No. 066-36678, as of December 31, 2000
and 1999 and the results of its operations, changes in its Partners' capital,
and its cash flows for the year ended December 31, 2000, in conformity with
generally accepted accounting principles.

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

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 16, 2001on our
consideration of Driftwood Terrace Associates, Ltd.'s (A Limited Partnership),
HUD Project No. 066-36678, internal control and reports dated January 16, 2001on
its compliance with specific requirements applicable to major HUD programs and
specific requirements applicable to fair housing and non-discrimination. Those
reports are an integral part of an audit performed in accordance with Government
Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 16, 2001

[ASHER & COMPANY, LTD. LETTERHEAD]

Independent Auditors' Report

The Partners
Driftwood Terrace Associates, Ltd.
Marlton, New Jersey

We have audited the accompanying balance sheets of Driftwood Terrace Associates,
Ltd. (A Limited Partnership), HUD Project No. 066-36678, as of December 31, 1999
and 1998 and the related statements of profit and loss, Partners' capital and
cash flows for the year ended December 31, 1999. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Driftwood Terrace Associates,
Ltd. (A Limited Partnership), HUD Project No. 066-36678, as of December 31, 1999
and 1998 and the results of its operations, changes in its Partners' capital,
and its cash flows for the year ended December 31, 1999, in conformity with
generally accepted accounting principles.

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

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 14, 2000 on our
consideration of Driftwood Terrace Associates, Ltd.'s (A Limited Partnership),
HUD Project No. 066-36678, internal control and reports dated January 14, 2000
on its compliance with specific requirements applicable to major HUD programs
and specific requirements applicable to fair housing and non-discrimination.

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 14, 2000

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Holly Hill, Ltd.
Greenville, Tennessee

We have audited the accompanying balance sheets of Holly Hill, Ltd., a limited
partnership, RHS Project No.: 48-030-621264791 as of December 31, 2000 and 1999,
and the related statements of operations, partners' deficit and cash flows for
the years then ended. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Holly Hill, Ltd., RHS Project
No.: 48-030-621264791 as of December 31, 2000 and 1999, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2000 and 1999, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 16, 2001on our consideration of Holly Hill, Ltd.,'s internal
control over financial reporting and on our tests of its compliance with certain
provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 16, 2001

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Holly Hill, Ltd.
Greenville, Tennessee

We have audited the accompanying balance sheets of Holly Hill, Ltd., a limited
partnership, RHS Project No.: 48-030-621264791 as of December 31, 1999 and 1998,
and the related statements of operations, partners' deficit and cash flows for
the years then ended. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Holly Hill, Ltd., RHS Project
No.: 48-030-621264791 as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 12 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 1999 and 1998, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 14, 2000 on our consideration of Holly Hill, Ltd.,'s internal
control over financial reporting and on our tests of its compliance with certain
provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 14, 2000

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Mayfair Apartments, Ltd.
Morristown, Tennessee

We have audited the accompanying balance sheets of Mayfair Apartments, Ltd., a
limited partnership, RHS Project No.: 48-032-630957575 as of December 31, 2000
and 1999, and the related statements of operations, partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mayfair Apartments, Ltd., RHS
Project No.: 48-032-630957575 as of December 31, 2000 and 1999, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2000 and 1999, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 20, 2001on our consideration of Mayfair Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 20, 2001

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Mayfair Apartments, Ltd.
Morristown, Tennessee

We have audited the accompanying balance sheets of Mayfair Apartments, Ltd., a
limited partnership, RHS Project No.: 48-032-630957575 as of December 31, 1999
and 1998, and the related statements of operations, partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mayfair Apartments, Ltd., RHS
Project No.: 48-032-630957575 as of December 31, 1999 and 1998, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 1999 and 1998, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 20, 2000 on our consideration of Mayfair Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 20, 2000

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Foxcroft Apartments, Ltd.
Troy, Alabama

We have audited the accompanying balance sheets of Foxcroft Apartments, Ltd., a
limited partnership, RHS Project No.: 01-055-630971151 as of December 31, 2000
and 1999, and the related statements of operations, partners' deficit and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Foxcroft Apartments, Ltd., RHS
Project No.: 01-055-630971151 as of December 31, 2000 and 1999, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2000 and 1999, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 26, 2001on our consideration of Foxcroft Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 26, 2001

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Foxcroft Apartments, Ltd.
Troy, Alabama

We have audited the accompanying balance sheets of Foxcroft Apartments, Ltd., a
limited partnership, RHS Project No.: 01-055-630971151 as of December 31, 1999
and 1998, and the related statements of operations, partners' deficit and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Foxcroft Apartments, Ltd., RHS
Project No.: 01-055-630971151 as of December 31, 1999 and 1998, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 1999 and 1998, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 15, 2000 on our consideration of Foxcroft Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 15, 2000

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Indianola, Mississippi

We have audited the accompanying balance sheets of Canterbury Apartments, Ltd.,
a limited partnership, RHS Project No.: 28-067-630979083 as of December 31, 2000
and 1999, and the related statements of operations, partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Canterbury Apartments, Ltd.,
RHS Project No.: 28-067-630979083 as of December 31, 2000 and 1999, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2000 and 1999, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 22, 2001 on our consideration of Canterbury Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 22, 2001

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Indianola, Mississippi

We have audited the accompanying balance sheets of Canterbury Apartments, Ltd.,
a limited partnership, RHS Project No.: 28-067-630979083 as of December 31, 1999
and 1998, and the related statements of operations, partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Canterbury Apartments, Ltd.,
RHS Project No.: 28-067-630979083 as of December 31, 1999 and 1998, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 1999 and 1998, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 24, 2000 on our consideration of Canterbury Apartments, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 24, 2000

[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Cutler Canal III Associates, Ltd.

We have audited the accompanying balance sheets of Cutler Canal III Associates,
Ltd., as of December 31, 2000 and 1999, and the related statements of
operations, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cutler Canal III Associates,
Ltd., as of December 31, 2000 and 1999, and the results of its operations, and
its cash flows for the years then ended, in conformity with generally accepted
accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 17
and 18 is presented for purposes of additional analysis and is not a required
part of the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audits of the basic financial statements
and, in our opinion, if fairly stated in all material respects in relation to
the basic financial statements taken as a whole.

/s/ Reznick Fedder & Silverman
Atlanta, Georgia
January 28, 2001

[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Cutler Canal III Associates, Ltd.

We have audited the accompanying balance sheets of Cutler Canal III Associates,
Ltd., as of December 31, 1999 and 1998, and the related statements of
operations, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cutler Canal III Associates,
Ltd., as of December 31, 1999 and 1998, and the results of its operations, and
its cash flows for the years then ended, in conformity with generally accepted
accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 17
and 18 is presented for purposes of additional analysis and is not a required
part of the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audits of the basic financial statements
and, in our opinion, if fairly stated in all material respects in relation to
the basic financial statements taken as a whole.

/s/ Reznick Fedder & Silverman
Atlanta, Georgia
January 25, 2000

[Letterhead of MUELLER, PROST, PURK & WILLBRAND, P.C.]

To the Partners
Jefferson Place, L.P.
Omaha, Nebraska

INDEPENDENT AUDITORS' REPORT

We have audited the accompanying balance sheets of Jefferson Place, L.P., (a
Missouri Limited Partnership) (the "Partnership"), as of December 31, 2000, 1999
nd 1998, and the related statements of income, changes in partners' deficit and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Jefferson Place, L.P., as of
December 31, 2000, 1999 and 1998, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

/s/ Mueller, Prost, Purk & Willbrand, P.C.
Certified Public Accountants
St. Louis, MO
January 26, 2001

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Callaway Village, Ltd.
Clinton, Tn.

We have audited the accompanying balance sheets of Callaway Village, Ltd., a
limited partnership, RHS Project No.: 48-001-581172107 as of December 31, 2000
and 1999, and the related statements of operations, partners' deficit and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Callaway Village, Ltd., RHS
Project No.: 48-001-581172107 as of December 31, 2000 and 1999, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 12 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2000 and 1999, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 21, 2001 on our consideration of Callaway Village, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 21, 2001

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Callaway Village, Ltd.
Clinton, Tn.

We have audited the accompanying balance sheets of Callaway Village, Ltd., a
limited partnership, RHS Project No.: 48-001-581172107 as of December 31, 1999
and 1998, and the related statements of operations, partners' (deficit) capital
and cash flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Callaway Village, Ltd., RHS
Project No.: 48-001-581172107 as of December 31, 1999 and 1998, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 1999 and 1998, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 10, 2000 on our consideration of Callaway Village, Ltd.'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 10, 2000

[Letterhead of HALBERT, KATZ & CO. P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Commerce Square Apartments Associates, L.P.
Wilmington, Delaware

We have audited the accompanying balance sheets of Commerce Square Apartments
Associates, L.P., as of December 31, 2000 and December 31, 1999, and the related
statements of loss, partners' capital (capital deficiency) and cash flows
for the years then ended. These financial statements are the responsibility of
the project's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Commerce Square Apartments
Associates, L.P., as of December 31, 2000 and December 31, 1999, and the results
of its operations, changes in partners' capital (capital deficiency) and cash
flows for the years then ended, in conformity with generally accepted accounting
principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on page 13 to 23) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements of
Commerce Square Apartments Associates, L.P. Such information has been subjected
to the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.

In accordance with Government Auditing Standards, we have also issued a report
dated January 31, 2001, on our consideration of Commerce Square Apartments
Associates, L.P.'s internal control and reports dated January 31, 2001, on its
compliance with specific requirements applicable to major HUD programs and
specific requirements applicable to Fair Housing and Non-Discrimination.

/s/ Halbert, Katz & Co. P.C.
Philadelphia, Pennsylvania
January 31, 2001

[Letterhead of HALBERT, KATZ & CO. P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Commerce Square Apartments Associates, L.P.
Wilmington, Delaware

We have audited the accompanying balance sheets of Commerce Square Apartments
Associates, L.P., as of December 31, 1999 and December 31, 1998, and the related
statements of loss, partners' capital (capital deficiency) and cash flows
for the years then ended. These financial statements are the responsibility of
the project's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Commerce Square Apartments
Associates, L.P., as of December 31, 1999 and December 31, 1998, and the results
of its operations, changes in partners' capital (capital deficiency) and cash
flows for the years then ended, in conformity with generally accepted accounting
principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on page 16 to 23) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements of
Commerce Square Apartments Associates, L.P. Such information has been subjected
to the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.

In accordance with Government Auditing Standards, we have also issued a report
dated January 31, 2000, on our consideration of Commerce Square Apartments
Associates, L.P.'s internal control and reports dated January 31, 2000, on its
compliance with specific requirements applicable to major HUD programs and
specific requirements applicable to Fair Housing and Non-Discrimination.

/s/ Halbert, Katz & Co. P.C.
Philadelphia, Pennsylvania
January 31, 2000

[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
West 132nd Development Partnership

We have audited the accompanying balance sheets of West 132nd Development
Partnership as of December 31, 2000 and 1999, and the related statements of
operations, partners' equity (deficit) and cash flows for the years then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of West 132nd Development
Partnership, as of December 31, 2000 and 1999, and the results of its
operations, changes in partners' equity (deficit) and cash flows for the years
then ended, in conformity with generally accepted accounting principles.

/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 17, 2001

[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
West 132nd Development Partnership

We have audited the accompanying balance sheets of West 132nd Development
Partnership as of December 31, 1999 and 1998, and the related statements of
operations, partners' equity (deficit) and cash flows for the years then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of West 132nd Development
Partnership, as of December 31, 1999 and 1998, and the results of its
operations, changes in partners' equity (deficit) and cash flows for the year
then ended, in conformity with generally accepted accounting principles.

/s/ Reznick Fedder & Silverman
Bethesda, Maryland
February 3, 2000

[Letterhead of MUNNS AND DOBBINS]

To the Partners
Site H Development Company
(A Limited Partnership)

Independent Auditors' Report

We have audited the accompanying statement of assets, liabilities and partners'
capital of Site H Development Company (a Limited Partnership) for the years
ended December 31, 2000 and 1999 and the related statements of income and
expenses, changes in partners' capital and cash flows for the years then ended.
These financial statements are the responsibility of Site H Development Company
(a Limited Partnership) management. Our responsibility is to express an opinion
on these financial statements based on our audits.

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

In our opinion, the aforementioned financial statements represent fairly, in all
material respects, the assets, liabilities and partners' capital of Site H
Development Company (a Limited Partnership) as of December 31, 2000 and 1999 and
its income and expenses, changes in its partners' capital accounts and cash
flows for the years then ended in conformity with the accounting principles
generally accepted in the United States of America.

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

/s/ Munns and Dobbins
CERTIFIED PUBLIC ACCOUNTANTS
Scarsdale, NY
February 28, 2001

[Letterhead of MUNNS AND DOBBINS]

To the Partners
Site H Development Company
(A Limited Partnership)

Independent Auditors' Report

We have audited the accompanying statement of assets, liabilities and partners'
capital of Site H Development Company (a Limited Partnership) for the year ended
December 31, 1999 and 1998 and the related statements of income and expenses,
changes in partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of Site H Development Company (a
Limited Partnership) management. Our responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion, the aforementioned financial statements represent fairly, in all
material respects, the assets, liabilities and partners' capital of Site H
Development Company (a Limited Partnership) as of December 31, 1999 and 1998 and
its income and expenses, changes in its partners' capital and cash flows for the
years then ended.

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

/s/ Munns and Dobbins
CERTIFIED PUBLIC ACCOUNTANTS
Scarsdale, NY
February 23, 2000

[Letterhead of Koch Geringer & Co., LLP]
Independent Auditors' Report

The Partners
L.I.H. Chestnut Associates, L.P.

We have audited the accompanying statement of financial position of L.I.H.
Chestnut Associates, L.P. (A Pennsylvania limited partnership), PHFA Project No.
O-0083, as of December 31, 2000, and the related statements of operations,
changes in Partners' equity, and cash flows for the year then ended. These
financial statements are the responsibility of L.I.H Chestnut Associates, L.P.'s
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of L.I.H. Chestnut Associates,
L.P. (A Pennsylvania limited partnership), PHFA Project No. O-0083, as of
December 31, 2000, and the changes in its net assets and its cash flows for the
year then ended in conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued our report
dated March 16, 2001, on our consideration of L.I.H. Chestnut Associates, L.P.'s
(A Pennsylvania limited partnership), PHFA Project No. O-0083, and internal
control over financial reporting and on our tests of its compliance with certain
provision of laws, regulators, contracts and grants.

/s/ Koch Geringer & Co., LLP
New York, New York
March 16, 2001

[Letterhead of KPMG]

Independent Auditors' Report

The Partners
L.I.H. Chestnut Associates, L.P.:

We have audited the accompanying balance sheet of L.I.H. Chestnut Associates,
L.P. (A Pennsylvania limited partnership), PHFA Project No. O-0083, as of
December 31, 1999, and the related statements of loss, changes in Partners'
capital, and cash flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of L.I.H. Chestnut Associates,
L.P. (A Pennsylvania limited partnership), PHFA Project No. O-0083, as of
December 31, 1999, and the results of its operations, changes in its Partners'
capital, and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in note 3 to the
financial statements, the Partnership has suffered recurring losses from
operations and is in default of certain obligations under the terms of the
mortgage loan. These conditions raise substantial doubt about the Partnership's
ability to continue as a going concern at December 31, 1999. The General
Partner's plans regarding these matters are described in note 3. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

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

In accordance with Government Auditing Standards, we have also issued our report
dated March 15, 2000, on our consideration of L.I.H. Chestnut Associates, L.P.'s
(A Pennsylvania limited partnership), PHFA Project No. O-0083, internal control
over financial reporting.

/s/ KPMG LLP
Philadelphia, Pennsylvania
March 15, 2000

[Letterhead of ASHER & COMPANY, LTD.]

Independent Auditors' Report

The Partners
L.I.H. Chestnut Associates, L.P.
Philadelphia, Pennsylvania

We have audited the accompanying balance sheets of L.I.H. Chestnut Associates,
L.P. (A Pennsylvania Limited Partnership), PHFA Project No. O-0083, as of
December 31, 1998 and 1997 and the related statements of loss, changes in
Partners' capital, and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of L.I.H. Chestnut Associates,
L.P. (A Pennsylvania Limited Partnership), PHFA Project No. O-0083, as of
December 31, 1998 and 1997 and the results of its operations, changes in its
Partners' capital, and its cash flows for the years then ended in conformity
with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note C to the
financial statements, the Partnership has suffered recurring losses from
operations and is in default of certain obligations under the terms of the
mortgage loan. These conditions raise substantial doubt about the Partnership's
ability to continue as a going concern at December 31, 1998. The General
Partner's plans regarding these matters are described in Note C. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

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

In accordance with Government Auditing Standards, we have also issued our report
dated February 26, 1999 on our consideration of L.I.H. Chestnut Associates,
L.P.'s (A Pennsylvania Limited Partnership), PHFA Project No. O-0083, internal
control over financial reporting and our tests of its compliance with certain
provisions of laws, regulations, contracts and grants.

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
February 26, 1999

[Letterhead of ZINER, KENNEDY & LEHAN LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Diamond Phase II Venture

We have audited the accompanying balance sheets of Diamond Phase II Venture (a
Pennsylvania limited partnership) as of December 31, 2000 and 1999, and the
related statements of operations, changes in partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Diamond Phase II Venture at
December 31, 2000 and 1999, and the results of its operations, changes in
partners' equity and its cash flows for the year then ended in conformity with
generally accepted accounting principles.

/s/ Ziner, Kennedy & Lehan LLP
Boston, Massachusetts
January 27, 2001

[Letterhead of ZINER, KENNEDY & LEHAN LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Diamond Phase II Venture

We have audited the accompanying balance sheets of Diamond Phase II Venture (a
Pennsylvania limited partnership) as of December 31, 1999 and 1998, and the
related statements of operations, changes in partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Diamond Phase II Venture at
December 31, 1999 and 1998, and the results of its operations, changes in
partners' equity and its cash flows for the year then ended in conformity with
generally accepted accounting principles.

/s/ Ziner, Kennedy & Lehan LLP
Quincy, Massachusetts
January 22, 2000

[Letterhead of ZINER, KENNEDY & LEHAN LLP

INDEPENDENT AUDITORS' REPORT

To the Partners of
Bookbindery Associates

We have audited the accompanying balance sheets of Bookbindery Associates (a
Pennsylvania limited partnership) as of December 31, 2000 and 1999 and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

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

/s/ Ziner, Kennedy & Lehan
Boston, Massachusetts
January 11, 2001

[Letterhead of ZINER, KENNEDY & LEHAN LLP

INDEPENDENT AUDITORS' REPORT

To the Partners of
Bookbindery Associates

We have audited the accompanying balance sheets of Bookbindery Associates (a
Pennsylvania limited partnership) as of December 31, 1999 and 1998 and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bookbindery Associates as of
December 31, 1999 and 1998, and the results of its operations, changes in
partners' equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ Ziner, Kennedy & Lehan
Quincy, Massachusetts
January 16, 2000

[Letterhead of BUCHBINDER TUNICK & COMPANY LLP]

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Partners of The Hamlet, Ltd.

We have audited the accompanying balance sheets of The Hamlet, Ltd. (a Florida
limited partnership) (the "Partnership") as of December 31, 2000 and 1999 and
the related statements of operations, partners' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Hamlet, Ltd. as of December
31, 2000 and 1999 and the results of its operations and its cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.

/s/ Buchbinder Tunick & Company LLP
Boca Raton, Florida
January 26, 2001

[Letterhead of BUCHBINDER TUNICK & COMPANY LLP]

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Partners of The Hamlet, Ltd.

We have audited the accompanying balance sheets of The Hamlet, Ltd. (a Florida
limited partnership) (the "Partnership") as of December 31, 1999 and 1998 and
the related statements of operations, partners' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Hamlet, Ltd. as of December
31, 1999 and 1998 and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.

/s/ Buchbinder Tunick & Company LLP
Boca Raton, Florida
February 1, 2000

[Letterhead Of ISRAEL ROLON]

INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION

TO THE PARTNERS OF
STOP 22 LIMITED PARTNERSHIP

I have audited the accompanying balance sheet of Stop 22 Limited Partnership,
H.U.D. Project No.: R2-46-E-006-014 and R2-46-E-00l-013, as of December 31,
2000, and the related statements of loss, changes in partners' deficit and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. My responsibility is to express an opinion on
these financial statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Stop 22 Limited Partnership, as of
December 31, 2000, and the results of its operations, changes in partners'
deficit, and cash flows for the year then ended in conformity with U.S.
generally accepted accounting principles.

In accordance with Government Auditing Standards, and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, I have also issued reports dated February 14, 2001 on my
consideration of Stop 22 Limited Partnership's internal control and reports
dated February 14, 2001 on its compliance with specific requirements applicable
to major HUD programs, specific requirements applicable to Fair Housing and
Non-discrimination, and laws and regulations applicable to the financial
statements.

My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information (shown on pages to 22 to 30) is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements, and, in my opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.

/s/ ISRAEL ROLON, C.P.A.
SAN JUAN, PUERTO RICO
FEDERAL EMPLOYER IDENTIFICATION NUMBER: 66-0392808
STAMP NUMBER 1698748 WAS AFFIXED TO THE ORIGINAL OF THIS REPORT.
February 14, 2001

[Letterhead Of ISRAEL ROLON]

INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION

TO THE PARTNERS OF
STOP 22 LIMITED PARTNERSHIP

I have audited the accompanying balance sheet of Stop 22 Limited Partnership,
H.U.D. Project No.: R2-46-E-006-014 and R2-46-E-00l-013, as of December 31,
1999, and the related statements of loss, changes in partners' equity and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. My responsibility is to express an opinion on
these financial statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Stop 22 Limited Partnership, as of
December 31, 1999, and the results of its operations, changes in partners'
equity, and cash flows for the year then ended in conformity with generally
accepted accounting principles.

In accordance with Government Auditing Standards, and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, I have also issued reports dated February 17, 2000 on my
consideration of Stop 22 Limited Partnership's internal control and on its
compliance with specific requirements applicable to major HUD programs, specific
requirements applicable to Fair Housing and Non-discrimination, and laws and
regulations applicable to the financial statements.

My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information (shown on pages to 22 to 30) is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements, and, in my opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.

/s/ ISRAEL ROLON, C.P.A.
SAN JUAN, PUERTO RICO
FEDERAL EMPLOYER IDENTIFICATION NUMBER: 66-0392808
STAMP NUMBER 1621959 WAS AFFIXED TO THE ORIGINAL OF THIS REPORT.
February 17, 2000

[Letterhead Of ISRAEL ROLON]

INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION

TO THE PARTNERS OF
STOP 22 LIMITED PARTNERSHIP

I have audited the accompanying balance sheet of Stop 22 Limited Partnership,
H.U.D. Project No.: R2-46-E-006-014 and R2-46-E-00l-013, as of December 31,
1998, and the related statements of loss, changes in partners' equity and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. My responsibility is to express an opinion on
these financial statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Stop 22 Limited Partnership, as of
December 31, 1998, and the results of its operations, changes in partners'
equity, and cash flows for the year then ended in conformity with generally
accepted accounting principles.

In accordance with Government Auditing Standards, and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, I have also issued reports dated February 19, 1999 on my
consideration of Stop 22 Limited Partnership's internal control and on its
compliance with specific requirements applicable to major HUD programs, specific
requirements applicable to Fair Housing and Non-discrimination, and laws and
regulations applicable to the financial statements.

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

/s/ ISRAEL ROLON, C.P.A.
SAN JUAN, PUERTO RICO
FEDERAL EMPLOYER IDENTIFICATION NUMBER: 66-0392808
STAMP NUMBER 1555745 WAS AFFIXED TO THE ORIGINAL OF THIS REPORT.
February 19, 1999

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Knob Hill Apartments, Ltd.
Morristown, Tennessee

We have audited the accompanying balance sheets of Knob Hill Apartments, Ltd. a
limited partnership, RHS Project No.: 48-032-638979224 as of December 31, 2000
and 1999, and the related statements of operations, partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Knob Hill Apartments, Ltd., RHS
Project No 48-032-638979224 as of December 31, 2000 and 1999, and the results of
its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 2000 and 1999, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 20, 2001 on our consideration of Knob Hill Apartments, Ltd.,'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 20, 2001

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Knob Hill Apartments, Ltd.
Morristown, Tennessee

We have audited the accompanying balance sheets of Knob Hill Apartments, Ltd. a
limited partnership, RHS Project No.: 48-032-638979224 as of December 31, 1999
and 1998, and the related statements of operations, partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Knob Hill Apartments, Ltd., RHS
Project No 48-032-638979224 as of December 31, 1999 and 1998, and the results of
its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

The audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 10
through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. The supplemental information
presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA
1930-8) Parts I and II for the year ended December 31, 1999 and 1998, is
presented for purposes of complying with the requirements of the Rural Housing
Services and is also not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 21, 2000 on our consideration of Knob Hill Apartments, Ltd.,'s
internal control over financial reporting and on our tests of its compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 22, 2000

[Letterhead of Insero, Kasperski, Ciaccia & Co., P.C. ]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Conifer James Street Associates
(A Limited Partnership)
Syracuse, New York

We have audited the accompanying balance sheets of Conifer James Street
Associates (A Limited Partnership) as of December 31, 2000 and 1999 and the
related statements of changes in partners' equity, operations and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Conifer James Street Associates
(A Limited Partnership) as of December 31, 2000 and 1999, and the results of its
operations and cash flows for the years then ended in conformity with generally
accepted accounting principles.

Respectfully Submitted,

/s/ Insero, Kasperski, Ciaccia & Co., P.C.
Certified Public Accountants
Rochester, New York
January 23, 2001

[Letterhead of Insero, Kasperski, Ciaccia & Co., P.C. ]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Conifer James Street Associates
(A Limited Partnership)
Syracuse, New York

We have audited the accompanying balance sheets of Conifer James Street
Associates (A Limited Partnership) as of December 31, 1999 and 1998 and the
related statements of changes in partners' equity (deficiency), operations and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

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

Respectfully Submitted,

/s/ Insero, Kasperski, Ciaccia & Co., P.C.
Certified Public Accountants
Rochester, New York
January 25, 2000

[Letterhead of RBG & CO.]

Independent Auditors' Report

Partners
Longfellow Heights Apartments, L.P.
St. Louis, Missouri

We have audited the accompanying balance sheet of Longfellow Heights Apartments,
L.P., a limited partnership, as of December 31, 2000 and 1999, and the related
statements of income (loss), partners' equity (deficit) and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Longfellow Heights Apartments,
L.P. as of December 31, 2000 and 1999, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.

/s/ Rubin, Brown, Gornstern & Co. LLP
St. Louis, Missouri
February 5, 2001

[Letterhead of RBG & CO.]

Independent Auditors' Report

Partners
Longfellow Heights Apartments, L.P.
St. Louis, Missouri

We have audited the accompanying balance sheet of Longfellow Heights Apartments,
a limited partnership, as of December 31, 1999 and 1998 and the related
statements of income, partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Longfellow Heights Apartments,
L.P. as of December 31, 1999 and 1998, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.

/s/ Rubin, Brown, Gornstern & Co. LLP
St. Louis, Missouri
January 21, 2000

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

ASSETS

March 31,
------------------------------
2001 2000
------------ -----------

Property and equipment - at cost, less accumulated
depreciation (Notes 2, 4 and 10) $199,835,729 $209,626,152
Cash and cash equivalents (Notes 2, 3 and 10) 4,905,819 5,124,712
Cash held in escrow (Notes 3 and 5) 14,366,977 14,457,567
Deferred costs - less accumulated amortization
(Notes 2 and 6) 3,544,473 3,257,295
Other assets 2,310,915 2,665,601
------------- -------------

Total assets $224,963,913 $235,131,327
=========== ===========

LIABILITIES AND PARTNERS' DEFICIT

Liabilities:
Mortgage notes payable (Note 7) $192,128,019 $194,516,380
Due to debt guarantor (Note 10(a)) 38,934,738 34,817,045
Accounts payable and other liabilities 23,884,364 22,395,278
Due to local general partners and affiliates (Note 8) 15,559,602 15,489,515
Due to general partners and affiliates (Note 8) 6,869,636 5,305,410
------------- -------------

Total liabilities 277,376,359 272,523,628
----------- -----------

Minority interest (Note 2) 253,252 1,226,088
-------------- -------------

Commitments and contingencies (Notes 7, 8 and 10)

Partners' deficit
Limited partners (139,101.5 BACs
issued and outstanding) (Note 1) (50,903,584) (36,996,748)
General partners (1,762,114) (1,621,641)
------------- -------------

Total partners' deficit (52,665,698) (38,618,389)
------------ ------------

Total liabilities and partners' deficit $224,963,913 $235,131,327
=========== ===========

See accompanying notes to consolidated financial statements.

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

Year Ended March 31,
-----------------------------------------
2001 2000 1999
------------- ------------ -------------

Revenues
Rental income $ 34,915,025 $ 33,780,252 $ 33,282,554
Other 2,351,068 1,664,097 2,840,286
------------- ------------- -------------
37,266,093 35,444,349 36,122,840
------------ ------------ ------------
Expenses
General and administrative 6,385,090 6,124,845 6,143,062
General and administrative-related parties
(Note 8) 3,811,150 3,511,186 3,592,742
Repairs and maintenance 6,447,218 6,188,428 5,848,011
Operating and other 4,327,197 4,196,914 4,072,781
Real estate taxes 2,357,066 2,315,904 2,333,761
Insurance 1,400,613 1,275,232 1,308,342
Interest 15,821,681 15,784,559 16,121,311
Depreciation and amortization 10,972,162 12,207,960 11,658,513
------------ ------------ ------------

Total expenses 51,522,177 51,605,028 51,078,523
------------ ------------ ------------
Loss before minority interest and
extraordinary gain (14,256,084) (16,160,679) (14,955,683)
Minority interest in loss of subsidiary
partnerships 208,775 214,105 259,094
------------- ---------------------------

Net loss $ (14,047,309)$ (15,946,574)$ (14,696,589)
============ ============ ============

Net loss - limited partners $ (13,906,836)$ (15,787,108)$ (14,549,623)
============ ============ ============

Number of BACs outstanding 139,101.5 139,101.5 139,101.5
=========================================

Net loss per BAC $ (99.98 )$ (113.49) $ (104.60)
================ ============== =========

See accompanying notes to consolidated financial statements.

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

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

Partners' deficit - April 1, 1998 $ (7,975,226)$ (6,660,017) $(1,315,209)

Net loss, year ended March 31, 1999 (14,696,589) (14,549,623) (146,966)
----------- ----------- -----------

Partners' deficit - March 31, 1999 (22,671,815) (21,209,640) (1,462,175)

Net loss, year ended March 31, 2000 (15,946,574) (15,787,108) (159,466)
----------- ----------- -----------

Partners' deficit - March 31, 2000 (38,618,389) (36,996,748) (1,621,641)

Net loss, year ended March 31, 2001 (14,047,309) (13,906,836) (140,473)
----------- ----------- -----------

Partners' deficit - March 31, 2001 $(52,665,698) $(50,903,584) $(1,762,114)
=========== =========== ==========

See accompanying notes to consolidated financial statements.

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

Year Ended March 31,
--------------------------------------------
2001 2000 1999
------------ ----------- -------------

Cash flows from operating activities:

Net loss $(14,047,309) $(15,946,574) $(14,696,589)
----------- ----------- -----------

Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 10,972,162 12,207,960 11,658,513
Interest added to mortgage note payable 280,504 0 0
Minority interest in loss of subsidiary
partnerships (208,775) (214,105) (259,094)
(Increase) decrease in assets:
Cash held in escrow 658,693 110,321 730,975
Other assets 354,686 (441,078) 292,110
Increase (decrease) in liabilities:
Due to debt guarantor 2,943,901 2,736,179 2,620,949
Accounts payable and other liabilities 1,489,086 1,595,517 1,397,788
Increase in due to local general partners
and affiliates 638,443 2,099,460 834,215
Decrease in due to local general partners
and affiliates (439,321) (143,309) (725,357)
Due to general partners and affiliates 1,564,226 1,624,240 1,705,257
----------- ----------- -----------

Total adjustments 18,253,605 19,575,185 18,255,356
---------- ---------- ----------

Net cash provided by operating activities 4,206,296 3,628,611 3,558,767
----------- ----------- -----------

Cash flows from investing activities:

Acquisition of property and equipment (973,343) (1,383,823) (1,226,009)
Increase in cash held in escrow (568,103) (54,730) (26,095)
Decrease in cash held in escrow for
real estate investments 0 657,581 2,500
Increase in due to local general partners
and affiliates 77,570 81,857 90,434
Decrease in due to local general partners
and affiliates (203,420) (144,907) (592,148)
------------ ------------ ------------

Net cash used in investing activities (1,667,296) (844,022) (1,751,318)
------------ ----------- -----------

Cash flows from financing activities:
Increase in deferred costs (495,574) (29,461) 0
Repayments on mortgage notes (31,578,865) (2,444,366) (1,562,799)
Borrowings on mortgage notes 28,910,000 920,000 0
Advances from debt guarantor 1,173,792
Increase in due to local general partners
and affiliates 0 0 70,135
Decrease in due to local general partners
and affiliates (3,185) (135,226) (98,476)
(Decrease) increase in capitalization of consolidated
subsidiaries attributable to minority interest(764,061) (232,486) (249,564)
------------ ------------ ----------

Net cash used in financing activities (2,757,893) (1,921,539) (1,840,704)
----------- ----------- -----------

Net increase (decrease) in cash and
cash equivalents (218,893) 863,050 (33,255)

Cash and cash equivalents at beginning of year 5,124,712 4,261,662 4,294,917
---------- ----------- -----------

Cash and cash equivalents at end of year $ 4,905,819 $ 5,124,712 $ 4,261,662
=========== =========== ==========

Supplemental disclosure of cash flows information:
Cash paid during the year for interest $11,074,725 $11,086,905 $11,307,707
========== ========== ==========

Supplemental disclosures of noncash investing and financing activities:
Repayment of mortgage notes advanced by
debt guarantor $ 0 $ 735,000 $ 660,605
Repayment of accounts payable and other
liabilities advanced by debt guarantor 0 490,000 0
Net increase in mortgage notes reclassified from
accounts payable and other liabilities 0 272,176 330,735

See accompanying notes to consolidated financial statements.

LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2001

NOTE 1 - General

Liberty Tax Credit Plus III L.P., a Delaware limited partnership (the
"Partnership"), was organized on November 17, 1988. The Partnership had no
operations until commencement of the public offering on May 2, 1989. The general
partners of the Partnership are Related Credit Properties III L.P., a Delaware
limited partnership (the "Related General Partner"), and Liberty GP III Inc., a
Delaware corporation (the "Liberty General Partner"). The general partner of the
Related General Partner is Related Credit Properties III Inc., a Delaware
corporation.

The Partnership's business is to invest in other limited partnerships ("Local
Partnerships" or "Subsidiaries" or "Subsidiary Partnerships") owning leveraged
apartment complexes ("Apartment Complexes") that are eligible for the low-income
housing tax credit ("Housing Tax Credit") enacted in the Tax Reform Act of 1986,
and to a lesser extent in Local Partnerships owning properties that are eligible
for the historic rehabilitation tax credit ("Historic Rehabilitation Tax
Credit").

The Partnership has acquired interests in 62 Local Partnerships as of March 31,
2001 and no further acquisitions are anticipated.

The Partnership is authorized to issue a total of 150,000 Beneficial Assignment
Certificates ("BACs"), which have been registered with the Securities and
Exchange Commission for sale to the public. Each BAC represents all of the
economic and virtually all of the ownership rights attributable to one-fifth of
a limited partnership interest. As of March 31, 2001, 139,101.5 have been
issued, and no further issuance of BACs is anticipated. The offering was
completed on March 30, 1990.

The terms of the Partnership's Amended and Restated Agreement of Limited
Partnership (the "Partnership Agreement") provide, among other things, that net
profits or losses and distributions of cash flow are, in general, allocated 99%
to the limited partners and BACs holders and 1% to the general partners.

NOTE 2 - Summary of Significant Accounting Policies

a) Basis of Consolidation

The consolidated financial statements include the accounts of the Partnership
and 62 Subsidiary Partnerships in which the Partnership is the principal limited
partner. Through the rights of the Partnership and/or an affiliate of the
General Partners (which has a contractual obligation to act on behalf of the
Partnership) to remove the general partner of the Subsidiary Partnerships and to
approve certain major operating and financial decisions, the Partnership has a
controlling financial interest in the Subsidiary Partnerships.

For financial reporting purposes, the Partnership's fiscal year ends on March
31. All subsidiaries have fiscal years ending December 31. Accounts of the
Subsidiaries have been adjusted for intercompany transactions from January 1
through March 31. The Partnership's fiscal year ends March 31 in order to allow
adequate time for the Subsidiaries financial statements to be prepared and
consolidated. The books and records of the Partnership are maintained on the
accrual basis of accounting, in accordance with U.S. generally accepted
accounting principles "GAAP").

All intercompany accounts and transactions with the Subsidiary Partnerships have
been eliminated in consolidation.

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

Losses attributable to minority interest which exceed the minority interest's
investment in a Subsidiary have been charged to the Partnership. Such losses
aggregated approximately $244,000, $273,000 and $247,000 for the years ended
March 31, 2001, 2000 and 1999, respectively (the 2000, 1999 and 1998 fiscal
years, respectively). The Partnership's investment in each Subsidiary is equal
to the respective Subsidiary partners' equity less minority interest capital, if
any. In consolidation, all Subsidiary Partnerships' losses are included in the
Partnership's capital account except for losses allocated to minority interest
capital.

b) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, cash in banks and investments in
short-term highly liquid instruments purchased with original maturities of three
months or less. Cash held in escrow has various use restrictions and is not
considered a cash equivalent.

c) Property and Equipment

Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, construction period interest
and any other costs incurred in acquiring the properties. The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods. Expenditures for repairs and maintenance are charged
to expense as incurred; major renewals and betterments are capitalized. At the
time property and equipment are retired or otherwise disposed of, the cost and
accumulated depreciation are eliminated from the assets and accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings. A loss on impairment of assets is recorded when management estimates
amounts recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. Property investments themselves
are reduced to estimated fair value (generally using discounted cash flows) when
the property is considered to be impaired and the depreciated cost exceeds
estimated fair value. Through March 31, 2001, the Partnership has recorded
approximately $20,083,000 as a loss on impairment of assets.

At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. Such
assets would be classified as property and equipment-held for sale and are not
depreciated. There are no assets classified as property and equipment-held for
sale through March 31, 2001.

d) Income Taxes

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

e) Offering Costs

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

f) Loss Contingencies

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

g) Use of Estimates

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

NOTE 3 - Fair Value of Financial Instruments

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

Cash and Cash Equivalents and Cash Held in Escrow
- - -------------------------------------------------
The carrying amount approximates fair value.

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

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

March 31, 2001 March 31, 2000
---------------------- -------------------
Carrying Carrying
Amount Fair Value Amount Fair Value
------ ---------- ------ ----------

Mortgage notes payable for which it is:

Practicable to estimate fair value $114,512,044 $115,802,239 $ 84,672,608 $84,713,340
Not practicable $ 77,615,975 (*) $109,843,772 (*)

(*) Management believes it is not practicable to estimate the fair value of the
mortgage notes payable because mortgage programs with similar characteristics
are not currently available to the Local Partnerships.

Due to Local General Partners and Affiliates
- - --------------------------------------------

The estimated fair value of the Partnership's due to local general partners and
affiliates are as follows:

March 31, 2001 March 31, 2000
------------------------- ------------------------
Carrying Carrying
Amount Fair Value Amount Fair Value
------ ---------- ------ ----------

Due to local general partners and affiliates for which it is:

Not practicable to estimate fair value $15,559,602 (*) $15,489,515 (*)

(*) Management believes it is not practicable to estimate the fair value of due
to local general partners and affiliates, because market information on such
unique loans are not currently available to the Local Partnership.

The carrying amount of other financial instruments that require such disclosure
approximates fair value.

NOTE 4 - Property and Equipment

The components of property and equipment are as follows:

Estimated
March 31, Useful Lives
--------------------------------
2001 2000 (Years)
-------------- -------------- ----------

Land $ 12,894,634 $ 12,894,634
Building and improvements 287,647,681 287,014,289 15 to 40 years
Other 7,656,504 7,327,869 5 to 10 years
------------- -------------
308,198,819 307,236,792
Less: Accumulated depreciation (108,363,090) (97,610,640)
------------ ------------

$199,835,729 $209,626,152
=========== ===========

Included in property and equipment are $8,346,089 of acquisition fees paid to
the general partners and $2,908,694 of acquisition expenses as of March 31, 2001
and 2000. In addition, as of March 31, 2001 and 2000, buildings and improvements
include $14,677,111 of capitalized interest.

Depreciation expense for the years ended March 31, 2001, 2000 and 1999 amounted
to $10,763,766, $12,020,100 and $11,466,030, respectively.

In connection with the rehabilitation of the properties, the Subsidiary
Partnerships have incurred developers' fees of $25,440,729 as of both March 31,
2001 and 2000 to the Local General Partner and affiliates. Such fees have been
included in the cost of property and equipment.

During the 2001 and 2000 Fiscal Years, there was a decrease in accumulated
depreciation in the amount of $11,316 and $18,510, respectively, due to
write-offs on dispositions.

NOTE 5 - Cash Held in Escrow

The components of cash held in escrow are as follows:

March 31,
--------------------------
2001 2000
------------- ----------

Purchase price payments* $ 281,727 $ 281,727
Real estate taxes, insurance and other 6,229,428 6,920,167
Reserve for replacements 6,426,797 5,858,694
Tenants' security deposits 1,429,025 1,396,979
----------- -----------

$14,366,977 $14,457,567
========== ==========

*Represents amounts to be paid to seller upon meeting specified rental
achievement criteria.

NOTE 6 - Deferred Costs

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

March 31,
--------------------------------
2001 2000 Period
---------- ------------- ----------

Financing expenses $ 5,482,219 $ 4,999,880 *
Less: Accumulated amortization (1,937,746) (1,742,585)
---------- ---------

$ 3,544,473 $ 3,257,295
========== ==========
*Over the life of the related mortgages.

Amortization of deferred costs for the years ended March 31, 2001, 2000 and 1999
amounted to $208,396, $187,860 and $192,483, respectively. During the years
ended March 31, 2001 and 2000, there was a decrease in accumulated amortization
due to the write-off of fully amortized costs in the amount of $13,235 and
$660,354, respectively.

NOTE 7 - Mortgage Notes Payable

The mortgage and construction notes, which are collateralized by land and
buildings, are payable in aggregate monthly installments of approximately
$974,000, including principal and interest at rates varying from 0% to 11.5% per
annum, through the year 2044. Each subsidiary partnership's mortgage note
payable is without further recourse and is collateralized by the land and
buildings of the respective subsidiary partnership and the assignment of certain
subsidiary partnership's rent and leases.

Annual principal payment requirements as of March 31, 2001 for each of the next
five fiscal years and thereafter are as follows:

Fiscal Year Ending Amount
- - ----------------------------------------------

2001 $ 4,216,311
2002 4,633,886
2003 5,008,269
2004 5,321,660
2005 8,824,797
Thereafter 164,123,096
-----------
$192,128,019
============

No adjustment has been made in the table above for the events of default and
other matters described in Note 10(a).

The mortgage agreements require monthly deposits to replacement reserves of
approximately $122,000 and monthly deposits to escrow accounts for real estate
taxes, hazard and mortgage insurance and other (Note 5).

R.P.P. Limited Dividend Housing Association Limited Partnership ("River Place")
- - -------------------------------------------------------------------------------
On May 18, 2000, River Place refinanced its existing indebtedness with the
issuance of new bonds with a face value of $28,910,000 from the Michigan State
Housing Development Authority (MSHDA) to provide funds to pay off the
outstanding balances on the two prior bond issues ($17,205,000 and $11,705,000).
The proceeds were used to pay the principal balance of $11,705,000 for the 1988
bonds on June 1, 2000. The sinking fund payment of $160,000 and accrued interest
of $326,288 was paid at the same time from funds provided by The General
Retirement System of the City of Detroit ("GRS"), as a loan to River Place. On
June 23, 2000, $17,205,000 was used to pay the outstanding principal balance of
the 1986 bonds. At the same time, $209,519 in accrued interest was paid, also
from a loan from GRS.

The new bonds bear interest at a weekly variable rate determined by the
remarketing agent. Applicable interest rates have ranged from 3.85% to 5.05%.
The bonds mature on June 1, 2018. Sinking fund payments in various increasing
amounts ranging from $500,000 to $1,200,000 are due on December 1 and June 1 of
each year until maturity with the first payment of $500,000 paid on December 1,
2000.

L.I.H Chestnut Associates, L.P. ("Chestnut")
- - --------------------------------------------
Chestnut's Mortgage Agreement contains various covenants pertaining to payment
of monthly loan installments and maintenance of reserve funds. At December 31,
2000, Chestnut was in violation of such covenants. As of March 15, 2001,
Pennsylvania Housing Finance Agency ("PHFA") has not waived the reserve funds
requirements, and accordingly, Chestnut is currently in default. Under the terms
of the Mortgage Agreement, if any event of default, as defined occurs, and is
continuing, other rights may be enforced on behalf of the lenders, inclusive of
possession of the property.
NOTE 8 - Related Party Transactions

Liberty Associates IV L.P. ("Liberty Associates"), an affiliate of the General
Partners, has a 1% and .998% (see Note 10 with respect to River Place) interest
as a special limited partner in 61 and 1 of the Local Partnerships,
respectively.

The General Partners and their affiliates and the Local General Partners and
their affiliates perform services for the Partnership and the Local
Partnerships, respectively. The costs incurred for the years ended March 31,
2001, 2000 and 1999 are as follows:

A) Guarantees

The Partnership negotiated Operating Deficit Guarantee Agreements with all Local
Partnerships in which the General Partners of the Local Partnerships agreed to
fund operating deficits for a specified period of time. The terms of the
Operating Deficit Guarantee Agreements vary for each Local Partnership, with the
maximum dollar amounts to be funded for a specified period of time, generally
three years, commencing at stabilization. The gross amount of the Operating
Deficit Guarantees aggregate approximately $18,700,000 of which approximately
$17,100,000 had expired as of March 31, 2001. As of March 31, 2001 and 2000,
approximately $4,464,000 and $3,720,000, respectively, has been funded by the
Local General Partners to meet such obligations. Amounts funded under such
agreements are treated as noninterest bearing loans, which will be repaid only
out of 50% of available cash flow or out of available net sale or refinancing
proceeds.

The Operating Deficit Guarantee Agreements were negotiated to protect the
Partnership's interest in the Local Partnerships and to provide incentive to the
Local General Partners to generate positive cash flow.

B) Related Party Fees

The costs incurred to related parties for the years ended March 31, 2001, 2000
and 1999 were as follows:

Year Ended March 31,
--------------------------------------
2001 2000 1999
----------- --------- -----------

Partnership management fees (i) $1,434,000 $1,434,000 $1,434,000
Expense reimbursement (ii) 279,509 257,121 239,390
Property management fees incurred to
affiliates of the General Partners(iii) 0 0 11,420
Local administrative fee (iv) 195,801 130,699 196,796
---------- ---------- ----------

Total general and administrative
- General Partners 1,909,310 1,821,820 1,881,606
--------- --------- ---------

Property management fees incurred to
affiliates of the subsidiary partnerships'
general partners 1,901,840 1,689,366 1,711,136
--------- --------- ---------

Total general and administrative
- related parties $3,811,150 $3,511,186 $3,592,742
========= ========= =========

(i) The General Partners are entitled to receive a partnership management fee
after payment of all Partnership expenses, which together with the local annual
administrative fees will not exceed a maximum of 0.5% per annum of invested
assets (as defined in the Partnership Agreement), for administering the affairs
of the Partnership. The partnership management fee subject to the foregoing
limitation, will be determined by the General Partners in their sole discretion
based upon their review of the Partnership's investments. Unpaid partnership
management fees for any year will be accrued without interest and will be
payable only to the extent of available funds after the Partnership has made the
distributions to the BACs holders of sale or refinancing proceeds equal to their
original capital contributions plus a 10% priority return thereon (to the extent
not theretofore paid out of cash flow). Partnership management fees owed to the
General Partners amounting to approximately $5,601,000 and $4,192,000 were
accrued and unpaid at March 31, 2001 and 2000. Without the General Partners'
continued accrual without payment of certain fees and expense reimbursements,
the Partnership will not be in a position to meet its obligations. The General
Partners have allowed for the accrual without payment of these amounts but are
under no obligation to continue to do so.

(ii) The Partnership reimburses the General Partners and their affiliates for
actual Partnership operating expenses incurred by the General Partners and their
affiliates on the Partnership's behalf. The amount of reimbursement from the
Partnership is limited by the provisions of the Partnership Agreement. Another
affiliate of the General Partners performs asset monitoring for the Partnership.
These services include site visits and evaluations of the Subsidiary
Partnerships' performance.

(iii) The Subsidiary Partnerships incurred property management fees amounting to
$2,365,130, $2,214,259 and $2,230,323 for the years ended March 31, 2001, 2000
and 1999, respectively, of which $1,901,840, $1,689,366 and $1,722,556,
respectively, was incurred to affiliates of the Subsidiary Partnerships' general
partners. Included in amounts incurred to affiliates of the Subsidiary
Partnerships ' general partners was $0, $0 and $11,420 for the years ended March
31, 2001, 2000 and 1999, respectively, which was also incurred to an affiliate
of the Related General Partner.

(iv) Liberty Associates, a special limited partner of the Subsidiary
Partnerships, is entitled to receive a local administrative fee of up to $2,500
per year from each Subsidiary Partnership.

Liberty Associates received cash distributions from the Local Partnerships of
$1,882, $1,284 and $1,106 during the years ended March 31, 2001, 2000 and 1999,
respectively.

Pursuant to the Partnership Agreement and the Local Partnership Agreements, the
General Partners and Liberty Associates received their allocable pro rata share
of profits, losses and tax credits from the Partnership and the Local
Partnerships, respectively.

C) Due to Local General Partners and Affiliates

Due to local general partners and affiliates at March 31, 2001 and 2000 consists
of the following:

March 31,
--------------------------
2001 2000
---------- -----------

Operating deficit advances $ 2,401,362 $ 2,840,683
Development fees 1,000,543 1,139,821
Operating advances 4,227,642 3,626,221
Due to contractor 46,289 110,431
General Partner distributions 402,031 405,216
Developer loans (i) 1,470,449 1,452,879
Land note payable (ii) 1,265,106 1,205,106
Long-term note payable (iii) 3,500,000 3,500,000
Management and other operating fees 1,246,180 1,209,158
----------- ------------

$15,559,602 $15,489,515
========== ==========

(i) Developer loans consist of the following:
March 31,
--------------------------
2001 2000
-------------- ----------

Jefferson Limited Partnership - $ 100,000 $ 100,000
- - -----------------------------
This loan is unsecured, bears interest
at an annually adjusted rate (4.94% at
December 31, 2000 and 5.63% at
December 31, 1999) and has no
predetermined due
date.

This note is unsecured, bears interest
at 9.25% per annum 75,000 75,000 and is
due in the event of sale or refinancing
of the property.

Northwood Associates Limited Partnership - 309,665 292,095
This loan bears
interest at 12% per annum and is
payable only out of available surplus cash.

Citrus Meadows Apartments, Ltd. - 985,784 985,784
- - ------------------------------- ---------- ----------
This loan bears no interest and can only be
repaid with the proceeds from a sale or refinancing.
$1,470,449 $1,452,879
========= =========
Interest expense incurred on developer loans
amounted to $30,139, $30,139 and
$30,357 for the years ended March 31,
2001, 2000 and 1999, respectively.

(ii) Land note payable consists of the following:

Citrus Meadows Apartments, Ltd. - $1,265,106 $1,205,106
- - ------------------------------- ========= =========
The land for this Subsidiary Partnership was purchased from the Local General
Partner for a $600,000 note which accrues interest at 10% per annum. The
principal balance, together with the accrued interest, is payable upon the sale
of the property or in December 2004, whichever event occurs first.

Interest expense incurred on land note payable amounted to $60,000 for each of
the three years ended March 31, 2001, 2000 and 1999.

(iii) Long-term note payable consists of the following

March 31,
-----------------------
2001 2000
---------- ----------

Jefferson Place L.P. $3,500,000 $3,500,000
- - -------------------- ========= =========
On July 30, 1997, the Local General Partner, issued a note payable in the sum of
$3,500,000 to the Subsidiary Partnership. Interest on this note, at the rate of
8.5% annually, is payable monthly solely out of excess cash flow generated by
the Subsidiary Partnership. The principal plus all outstanding interest is due
July 1, 2023. All payments under this $3,500,000 note are subordinate to
payments due under the $12,200,000 tax-exempt mortgage bonds.

For the years ended December 31, 2000, 1999 and 1998, interest on this note
amounted to $348,528, $336,313 and $353,367, respectively. At December 31, 2000,
1999 and 1998, $51,028, $38,813 and $20,390 was interest calculated on past
accrued base interest.

NOTE 9 - Income Taxes

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

Year Ended December 31,
----------------------------------------
2000 1999 1998
----------- ---------- ------------

Financial statement
Net loss $(14,047,309) $(15,946,574) $(14,696,589)

Difference resulting from parent company
having a different fiscal year
for income tax and
financial reporting purposes 32,112 (9,305) 56,193

Difference between depreciation and
amortization expense recorded for
financial statement and
income tax reporting purposes (3,531,003) (1,952,849) (2,622,146)

Tax-exempt interest income (14,661) (12,688) (27,455)

Other 451,076 815,869 672,690
----------- ----------- ------------

Net loss as shown on the Partnership's
income tax return $(17,109,785) $(17,105,547) $(16,617,307)
========= =========== ===========

NOTE 10 - Commitments and Contingencies

a) Subsidiary Partnerships - Going Concerns

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

R.P.P. Limited Dividend Housing Association Limited Partnership ("River Place")
- - -------------------------------------------------------------------------------
River Place has been unable to generate sufficient cash flow to make the
required principal and interest payments under its loan agreements. River
Place's debt guarantor, General Retirement System of the City of Detroit
("GRS"), entered into an agreement with the Michigan State Housing Authority
(the "Authority") to purchase these loans upon occurrence of certain events. GRS
has declared River Place in default under its obligation to make the required
payments. During 1996, GRS agreed to waive its right of foreclosure under the
mortgages, unless certain events occur, through February 1, 2006. GRS has made
advances for debt service and has incurred certain fees relating to these loans
totaling $38,934,738 including accrued interest on such advances at a rate of
15%. Such amount is included in the amount due to debt guarantor on the balance
sheet.

Management anticipates that River Place will be unable to make all of the
required debt service payments during 2001. However, there is no guarantee that
GRS, or any other persons, will continue to make these payments on behalf of
River Place. These items raise substantial doubt about River Place's ability to
continue as a going concern.

The financial statements of River Place have been prepared assuming that River
Place will continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty. The
Partnership's investment in River Place has been written down to zero by prior
years' losses and the minority interest balance was approximately $883,000 at
both March 31, 2001 and 2000. The net loss after minority interest for River
Place amounted to approximately $3,795,000, $3,822,000 and $3,185,000 for the
years ended March 31, 2001, 2000 and 1999, respectively.

b) Subsidiary Partnerships - Other

Jefferson Limited Partnership ("Jefferson")
- - -------------------------------------------
At December 31, 2000 and 1999, Jefferson's current liabilities exceeded its
current assets by over $7,000 and $27,000, respectively. Although this condition
could raise substantial doubt about Jefferson's ability to continue as a going
concern, such doubt is alleviated by the fact that $17,918 and $14,040 of
current liabilities at December 31, 2000 and 1999, respectively, are to related
parties which do not intend to pursue payment beyond Jefferson's ability to pay.

Accordingly, management believes that Jefferson has the ability to continue as a
going concern for at least one year from December 31, 2000. The Partnership's
investment in Jefferson was approximately $413,000 and $518,000 at March 31,
2001 and 2000, respectively, and the minority interest balance was $0 at each
date. The net loss after minority interest for Jefferson amounted to
approximately $105,000, $149,000, and $132,000 for the years ended March 31,
2001, 2000 and 1999, respectively.

Affordable Flatbush Associates ("Affordable Flatbush")
- - ------------------------------------------------------
In order for Affordable Flatbush to qualify for the Housing Tax Credits, it must
meet certain rental income restrictions. The rental and income restrictions must
be adhered to for a 15-year compliance period. During 1996, the Department of
Housing Preservation and Development ("HPD") audited Affordable Flatbush's
compliance with the rental and income restrictions of Section 42 of the Internal
Revenue Code. HPD concluded in its audit report that Affordable Flatbush was not
in compliance within the guidelines as set forth in the Internal Revenue Code
for certain units of the project and, consequently, the basis of the property
for purposes of computing the Housing Tax Credits should be reduced by an amount
which approximates 88% of such basis. Affordable Flatbush management is
contesting the findings by HPD and, consequently, has computed the low-income
tax credits for 1999 as if there was no reduction in the basis of the property.

Leases
- - ------

Four of the subsidiary partnerships are leasing the land on which the properties
are located, for terms ranging from 28 to 99 years. At December 31, 2000, the
Subsidiary Partnerships were committed to minimum future annual rentals on the
noncancelable leases aggregating $155,130 for each of the next five years, and
$3,788,933 in total thereafter.

c) Uninsured Cash and Cash Equivalents

The Partnership maintains its cash and cash equivalents in various banks.
Accounts at each bank are guaranteed by the Federal Deposit Insurance
Corporation ("FDIC") up to $100,000. As of March 31, 2001, uninsured cash and
cash equivalents approximated $1,825,000.

d) Other

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

In order for certain Subsidiaries to qualify for the Section 421A Program and
the Inclusionary Zoning Program, they are subject to certain requirements by
local authorities as to the level of rent that may be charged to tenants, the
tenants' incomes, the obligation to operate the property in accordance with rent
stabilization guidelines, and restrictions on the rate at which housing units
may be released from such guidelines.

Also, certain Subsidiary Partnerships obtain grants from local authorities to
fund construction costs of the properties and in order to qualify must maintain
the low-income nature of the property, among other provisions.

e) Tax Credits

A portion of Housing Tax Credits are subject to recapture in future years if (1)
the Local Partnership ceases to meet qualification requirements, (2) there is a
decrease in the qualified basis of the Projects, or (3) there is a reduction in
the taxpayer's interest in the Project at any time during the 15-year Compliance
Period that began with the first tax year of the credit period. None of the
Local Partnerships in which the Partnership has acquired an interest has
suffered an event of recapture.

During the tax years 2000, 1999 and 1998, the Partnership generated Housing Tax
Credits of approximately $15,786,000, $19,534,000 and $19,584,000, respectively.

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

None

PART III

Item 10. Directors and Executive Officers of the Registrant.

On November 25, 1997, an affiliate of the Related General Partner, purchased
100% of the stock of the Liberty General Partner (the "Transfer"). In addition
to the Transfer, by acquiring the stock of the Liberty General Partner, an
affiliate of the Related General Partner also acquired the Liberty General
Partner's general partnership interest in Liberty Associates IV L.P., the
special limited partner of the Partnership. Pursuant to the Partnership's
Amended and Restated Partnership Agreement, the consent of the limited partners
was not required to approve the Transfer. In connection with the Transfer, the
Partnership paid to the Liberty General Partner the accrued asset management
fees owed to the Liberty General Partner in the aggregate amount of $737,750.

The Partnership has no directors or executive officers. The Partnership's
affairs are managed and controlled by the General Partners. Certain information
concerning the directors and executive officers of the Liberty General Partner
and of Related Credit Properties III Inc., the general partner of the Related
General Partner, are set forth below.

Related Credit Properties III, L.P.
- - -----------------------------------

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

Stephen M. Ross Director

Alan P. Hirmes President and Chief Executive Officer

Stuart J. Boesky Senior Vice President

Marc D. Schnitzer Vice President

Denise L. Kiley Vice President

Glenn F. Hopps Treasurer and Assistant Vice President

Teresa Wicelinski Secretary

STEPHEN M. ROSS, 61, is the President, and a Director and shareholder of The
Related Realty Group, Inc., the General Partner of The Related Companies, L.P.
He graduated from the University of Michigan School of Business Administration
with a Bachelor of Science degree and from Wayne State University School of Law
with a Juris Doctor degree. Mr. Ross then received a Master of Laws degree in
taxation from New York University School of Law. He joined the accounting firm
of Coopers & Lybrand in Detroit as a tax specialist and later moved to New York,
where he worked for two large Wall Street investment banking firms in their real
estate and corporate finance departments. Mr. Ross formed the predecessor of The
Related Companies, L.P. in 1972 to develop, manage, finance and acquire
subsidized and conventional apartment developments. Mr. Ross also serves on the
Board of Trustees of Charter Municipal Mortgage Acceptance Company.

ALAN P. HIRMES, 46, has been a Certified Public Accountant in New York since
1978. Prior to joining Related Capital Company ("Capital") in October 1983, Mr.
Hirmes was employed by Weiner & Co., certified public accountants. Mr. Hirmes is
also a Vice President of Capital. Mr. Hirmes graduated from Hofstra University
with a Bachelor of Arts degree. Mr. Hirmes also serves on the Board of Directors
of Aegis Realty, Inc. and Charter Municipal Mortgage Acceptance Company.

STUART J. BOESKY, 45, practiced real estate and tax law in New York City with
the law firm of Shipley & Rothstein from 1984 until February 1986 when he joined
Capital. From 1983 to 1984, Mr. Boesky practiced law with the Boston law firm of
Kaye, Fialkow, Richard & Rothstein (which subsequently merged with Strook &
Strook & Lavan) and from 1978 to 1980 was a consultant specializing in real
estate at the accounting firm of Laventhol & Horwath. Mr. Boesky graduated from
Michigan State University with a Bachelor of Arts degree and from Wayne State
School of Law with a Juris Doctor degree. He then received a Master of Laws
degree in Taxation from Boston University School of Law. Mr. Boesky also serves
on the Board of Directors of Aegis Realty, Inc., Charter Municipal Mortgage
Acceptance Company and American Mortgage Acceptance Company.

MARC D. SCHNITZER, 40, joined Capital in January 1988 after receiving his Master
of Business Administration degree from The Wharton School of The University of
Pennsylvania in December 1987. From 1983 to 1986, Mr. Schnitzer was a Financial
Analyst with The First Boston Corporation in New York, an international
investment banking firm. Mr. Schnitzer received a Bachelor of Science degree,
summa cum laude, in Business Administration, from the School of Management at
Boston University in May 1983.

DENISE L. KILEY, 41, is responsible for overseeing the due diligence and asset
management of all multifamily residential properties invested in RCC sponsored
corporate, public and private equity and debt funds. Prior to joining Capital in
1990, Ms. Kiley had experience acquiring, financing and asset managing
multifamily residential properties. From 1981 through 1985, she was an auditor
with Price Waterhouse. Ms. Kiley holds a Bachelor of Science in Accounting from
Boston College.

GLENN F. HOPPS, 38, joined Capital in December, 1990, and prior to that date was
employed by Marks Shron & Company and Weissbarth, Altman and Michaelson,
certified public accountants. Mr. Hopps graduated from New York State University
at Albany with a Bachelor of Science Degree in Accounting.

TERESA WICELINSKI, 35, joined Capital in June 1992, and prior to that date was
employed by Friedman, Alpren & Green, certified public accountants. Ms.
Wicelinski graduated from Pace University with a Bachelor of Arts Degree in
Accounting.

Liberty GP III Inc.
- - -------------------

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

Michael Brenner Director

Alan P. Hirmes President and Chief Executive Officer

Stuart J. Boesky Executive Vice President

Marc D. Schnitzer Vice President

Denise L. Kiley Vice President

Glenn F. Hopps Treasurer

Teresa Wicelinski Secretary

MICHAEL BRENNER, 55, is a Director of Aegis Reality, Inc., and is the Executive
Vice President and Chief Financial Officer of TRCLP. Prior to joining TRCLP in
1996, Mr. Brenner was a partner with Coopers & Lybrand, having served as
managing partner of its Industry Programs and Client Satisfaction initiatives
from 1993-1996, managing partner of the Detroit group of offices from 1986-1993
and the Chairman of its National Real Estate Industry Group from 1984-1986. Mr.
Brenner graduated summa cum laude from the University of Detroit with a
Bachelors degree in Business Administration and from the University of Michigan
with a Masters of Business Administration, with distinction. Mr. Brenner also
serves on the Board of Trustees of Charter Municipal Mortgage Acceptance Company
and Aegis Realty, Inc.

Biographical information with respect to Messrs. Hirmes, Boesky, Hopps,
Schnitzer, Ms. Kiley and Ms. Wicelinski is set forth above.

Item 11. Executive Compensation.

The Partnership has no officers or directors. The Partnership does not pay or
accrue any fees, salaries or other forms of compensation to the directors or
officers of the Liberty General Partner or of the general partner of the Related
General Partner for their services. Certain directors and officers of the
Liberty General Partner and of the general partner of the Related General
Partner receive compensation from the General Partners and their affiliates for
services performed for various affiliated entities which may include services
performed for the Partnership.

Under the terms of the Partnership Agreement, the General Partners and their
affiliates are entitled to receive compensation from the Partnership in
consideration of certain services rendered to the partnership by such parties.
In addition, the General Partners are entitled to 1% of all cash distributions
and Tax Credit allocations and a subordinated 15% interest in Net Sales or
Refinancing Proceeds. See Note 8 to the Financial Statements in Item 8 for a
presentation of the types and amounts of compensation paid to the General
Partners and their affiliates, which information is incorporated herein by
reference thereto. Tabular information concerning salaries, bonuses and other
types of compensation payable to executive officers have not been included in
this annual report. As noted above, the Partnership has no executive officers.
The levels of compensation payable to the General Partners and/or their
affiliates is limited by the terms of the Partnership Agreement and may not be
increased therefrom on a discretionary basis.

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

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

General Partnership Related Credit Properties $1,000 capital contribution - 50%
Interest in the III L.P. directly owned
Partnership 625 Madison Avenue
New York, NY 10022

General Partnership Liberty GP III Inc. $1,000 capital contribution - 50%
Interest in the 625 Madison Avenue directly owned
Partnership New York, NY 10022

Liberty Associates IV L.P. holds a 1% and .998% (see Item 7. with respect to
River Place) limited partnership interest in 61 and 1 Local Partnerships,
respectively.

Except as set forth in the table below, no person is known by the Partnership to
be the beneficial owner of more than 5% of the Limited Partnership Interests and
neither the Liberty General Partner nor any director or executive officer of the
Liberty General Partner owns any Limited Partnership Interests or BACs. Neither
the Related General Partner nor any director or executive officer of the general
partner of the Related General Partner owns any Limited Partnership Interests.
The following table sets forth the number of BACs beneficially owned, as of June
1, 2001, by (i) each BACs holder known to the Partnership to be a beneficial
owner of more than 5% of the BACs, (ii) each director and executive officer of
the general partner of the Related General Partner and Liberty General Partner
and (iii) the directors and executive officers of the general partner of the
Related General Partner and Liberty General Partner as a group. Unless otherwise
noted, all BACs are owned directly with sole voting and dispositive powers.

Amount and Nature of
Name of Beneficial Owner (1) Beneficial Ownership Percent of Class
- - ------------------------ -------------------- ------------

Lehigh Tax Credit Partners, Inc. 13,127.66 (2) (3) 9.4%

J. Michael Fried 13,127.66 (2) (3) (4) 9.4%

Alan P. Hirmes 13,127.66 (2) (3) (4) 9.4%

Stuart J. Boesky 13,127.66 (2) (3) (4) 9.4%

Stephen M. Ross - -

Mark D. Schnitzer - -

Denise L. Kiley - -

Glenn F. Hopps - -

Teresa Wicelinski - -

All directors and executive officers 13,127.66 (2) (3) (4) 9.4%
of the general partner of the
Related General Partner as a group
(eight persons)

(1) The address for each of the persons in the table is 625 Madison Avenue, New
York, New York 10022.

(2) As set forth in the Schedule 13D filed by Lehigh Tax Credit Partners L.L.C.
("Lehigh I") and Lehigh Tax Credit Partners, Inc., (the "Managing Member") on
June 10, 1997 with the Securities and Exchange Commission (the "Commission") and
pursuant to a letter agreement dated April 4, 1997 among the Partnership, Lehigh
I and the Related General Partner (the "Standstill Agreement"), Lehigh I agreed
that, prior to April 4, 2007 (the "Standstill Expiration Date"), it will not and
it will cause certain affiliates (including Lehigh II) not to (i) acquire,
attempt to acquire or make a proposal to acquire, directly or indirectly, more
than 45% (including BACs acquired through all other means) of the outstanding
BAC's, (ii) seek to propose to enter into, directly or indirectly, any merger,
consolidation, business combination, sale or acquisition of assets, liquidation,
dissolution or other similar transaction involving the Partnership, (iii) make,
or in any way participate, directly or indirectly, in any "solicitation" of
"proxies" or "consents" (as such terms are used in the proxy rules of the
Commission) to vote any voting securities of the Partnership, (iv) form, join or
otherwise participate in a "group" (within the meaning of Section 13 (d)(3) of
the Securities and Exchange Act of 1934) with respect to any voting securities
of the Partnership, except those affiliates bound by the Standstill Agreement
will not be deemed to have violated it and formed a "group" solely by acting in
accordance with the Standstill Agreement, (v) disclose in writing to any third
party any intention, plan or arrangement inconsistent with the terms of the
Standstill Agreement, or (vi) loan money to, advise, assist or encourage any
person in connection with any action inconsistent with the terms of the
Standstill Agreement. In addition, Lehigh I agreed that, until the Standstill
Expiration Date, it will not sell any BACs acquired by it unless the buyer of
such BACs agrees to be bound by the Standstill Agreement; provided, however,
that Lehigh I may make transfers in the secondary market to any purchaser which
represents that following such sale it will not own three (3%) percent or more
of the BACs outstanding. By the terms of the Standstill Agreement, Lehigh I also
agreed to vote its BACs in the same manner as a majority of all voting BACs
holders; provided, however, that Lehigh I is entitled to vote its BACs as it
determines with regard to any proposal (i) to remove the Related General Partner
as a general partner of the Partnership or (ii) concerning the reduction of any
fees, profits, distributions or allocations for the benefit of the Related
General Partner or its affiliates. The address of each of the Partnership,
Lehigh I and the Related General Partner is 625 Madison Avenue, New York, New
York 10022.

(3) All of such BACs represent BACs owned directly by Lehigh I and Lehigh Tax
Credit Partners II, L.L.C. ("Lehigh II") for which the Managing Member serves as
managing member. As of June 1, 2001, Lehigh I held 6,458.33 BACs and Lehigh II
held 6,520.33 BACs.

(4) Each such party serves as a director and executive officer of the Managing
Member and owns an equity interest therein, except for J. Michael Fried, who
owns only an economic interest.

Item 13. Certain Relationships and Related Transactions.

The Partnership has and will continue to have certain relationships with the
General Partners and its affiliates, as discussed in Item 11 and in Note 8 to
the Financial Statements in Item 8, which is incorporated herein by reference
thereto. However, there have been no direct financial transactions between the
Partnership and the directors and executive officers of the Liberty General
Partner or the directors and executive officers of the general partner of the
Related General Partner.

PART IV

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

(a) 1. Financial Statements

Independent Auditors' Report 19

Consolidated Balance Sheets at March 31, 2001 and 2000 179

Consolidated Statements of Operations for the Years Ended
March 31, 2001, 2000 and 1999 180

Consolidated Statements of Changes in Partners'
Deficit for the Years Ended March 31, 2001, 2000 and 1999 181

Consolidated Statements of Cash Flows for the
Years Ended March 31, 2001, 2000 and 1999 182

Notes to Consolidated Financial Statements 184

(a) 2. Financial Statement Schedules

Independent Auditors' Report 210

Schedule I - Condensed Financial Information of Registrant 211

Schedule III - Real Estate and Accumulated Depreciation 214

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

(a) 3. Exhibits

(3A) Form of Amended and Restated Agreement of Limited Partnership of Liberty
Tax Credit Plus III L.P. (attached to Prospectus as Exhibit A)**

(3B) Certificate of Limited Partnership of Liberty Tax Credit Plus III L.P.,
together with amendments filed on November 17, 1988**

(4) Form of Subscription Agreement (attached to Prospectus as Exhibit B)

(10A) Escrow Agreement between Registrant and Bankers Trust Company**

(10B) Forms of Purchase Agreements for purchase of Local Partnership Interests**

(21) Subsidiaries of the Registrant 206

** Incorporated herein by reference to exhibits filed with
Pre-Effective Amendment No. 1 to Liberty Tax Credit Plus III
L.P.'s Registration Statement on Form S-11 (Registration No.
33-25732)

(b) Reports on Form 8-K

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

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

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

C.V. Bronx Associates, L.P. NY
Michigan Rural Housing Limited Partnership MI
Jefferson Limited Partnership LA
Inter-Tribal Indian Village Housing Development Associates, L.P. RI
RBM Associates PA
Glenbrook Associates PA
Affordable Flatbush Associates NY
Barclay Village II, LTD. PA
1850 Second Avenue Associates, L.P. NY
R.P.P. Limited Dividend Housing MI
Williamsburg Residential II, L.P. KS
West 104th Street Associates L.P. NY
Meredith Apartments, LTD. UT
Ritz Apartments, LTD. UT
Ashby Apartments, LTD. UT
South Toledo Associates, LTD. OH
Dunlap School Venture PA
Philipsburg Elderly Housing Associates PA
Franklin Elderly Housing Associates PA
Wade D. Mertz Elderly Housing Associates PA
Lancashire Towers Associates Limited Partnership OH
Northwood Associates Limited Partnership OH
Brewery Renaissance Associates NY
Brandywine Court Associates, L.P. FL
Art Apartments Associates PA
The Village at Carriage Hills, LTD. TN
Mountainview Apartments, LTD. TN
The Park Village, Limited MS
River Oaks Apartments, LTD. AL
Forrest Ridge Apartments, LTD. AR
The Hearthside Limited Dividend Housing Association
Limited Partnership MI
Redemptorist Limited Partnership LA
Manhattan A Associates NY
Broadhurst Willows, L.P. NY
Weidler Associates Limited Partnership OR
Gentle Pines-West Columbia Associates, L.P. SC
Lake Forest Estates II, LTD. AL
Las Camelias Limited Partnership PR
WPL Associates XXIII OR
Broadway Townhouses L.P. NJ
Puerto Rico Historic Zone Limited Dividend Partnership PR
Citrus Meadows Apartments, LTD. FL
Sartain School Venture PA
Driftwood Terrace Associates, LTD. FL
Holly Hill, LTD. TN
Mayfair Apartments LTD. TN
Foxcroft Apartments LTD. AL
Canterbury Apartments, LTD. MS
Cutler Canal III Associates, LTD. FL
Jefferson Place L.P. KS
Callaway Village, LTD. TN
Commerce Square Apartments Associates L.P. DE
West 132nd Development Partnership NY
Site H Development Co. NY
L.I.H. Chestnut Associates, L.P. PA
Diamond Phase II Venture PA
Bookbindery Associates PA
The Hamlet, LTD. FL
Stop 22 Limited Partnership PR
Knob Hill Apartments, LTD. TN
Conifer James Street Associates NY
Longfellow Heights Apartments, L.P. MO

(d) Not applicable.

SIGNATURES

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

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

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

By: Related Credit Properties III Inc.,
its general partner

Date: June 14, 2001
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
President and Chief Executive Officer
(principal
executive and financial
officer)

By: LIBERTY GP III INC.,
a General Partner

Date: June 14, 2001
By: /s/ Alan P. Hirmes Alan P. Hirmes
------------------
President and Chief Executive Officer
(principal executive and
financial
officer)

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

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

President and Chief Executive Officer
(principal executive and financial officer)
of Related Credit Properties
III Inc., (a general partner
of Related Credit Properties III L.P.)
(a General Partner of Registrant))
/s/ Alan P. Hirmes and Liberty GP III, Inc.
- - ------------------
Alan P. Hirmes (a General Partner of Registrant) June 14, 2001

Treasurer (principal accounting officer)
of Related Credit Properties
III Inc., (a general partner
of Related Credit Properties III L.P.)
(a General Partner of Registrant))
/s/ Glenn F. Hopps and Liberty GP III, Inc.
- - ------------------
Glenn F. Hopps (a General Partner of Registrant) June 14, 2001

Director of Related Credit Properties
III Inc., general partner
/s/ Stephen M. Ross of Related Credit Properties III L.P.
- - -------------------
Stephen M. Ross (a General Partner of Registrant) June 14, 2001

INDEPENDENT AUDITORS' REPORT

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

In connection with our audits of the consolidated financial statements of
Liberty Tax Credit Plus III L.P. and Subsidiaries (A Delaware Limited
Partnership) included in the Form 10-K as presented in our opinion dated June
11, 2001 on page 19, and based on the reports of other auditors, we have also
audited supporting Schedule I for the 2000, 1999 and 1998 Fiscal Years and
Schedule III at March 31, 2001. In our opinion, and based on the reports of the
other auditors, these consolidated schedules present fairly, when read in
conjunction with the related consolidated financial statements, the financial
data required to be set forth therein.

As discussed in Note 10(a), the consolidated financial statements include the
financial statements of one subsidiary partnership with significant
contingencies and uncertainties. The financial statements of this subsidiary
partnership were prepared assuming that it will continue as a going concern.
This subsidiary partnership has been unable to generate sufficient cash flow to
pay its mortgage obligations. The subsidiary partnership's net loss aggregated
$3,795,415 (Fiscal 2000), $3,821,713 (Fiscal 1999) and $3,185,181 (Fiscal 1998),
and its assets aggregated $13,242,087 and $13,951,782 at March 31, 2001 and
2000, respectively. Management's plans in regard to these matters are also
described in Note 10(a). The accompanying consolidated financial statements do
not include any adjustments that might result from the outcome of these
uncertainties.

TRIEN ROSENBERG ROSENBERG
WEINBERG CIULLO & FAZZARI LLP

New York, New York
June 11, 2001

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

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

CONDENSED BALANCE SHEETS

ASSETS

March 31,
-------------------------
2001 2000
------------- ----------

Cash and cash equivalents $ 333,514 $ 553,693
Cash held in escrow 281,727 281,727
Investment and advances in subsidiary partnerships 31,218,124 35,472,910
Other assets 245,466 245,466
------------ ------------

Total assets $32,078,831 $36,553,796
========== ==========

LIABILITIES AND PARTNERS' EQUITY

Due to general partner and affiliates $ 6,331,830 $ 4,774,804
Other liabilities 6,344 6,790
-------------- -------------

Total liabilities 6,338,174 4,781,594

Partners' equity 25,740,657 31,772,202
---------- ----------

Total liabilities and partners' equity $32,078,831 $36,553,796
========== ==========

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

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

CONDENSED STATEMENTS OF OPERATIONS

Year Ended March 31,
--------------------------------------------
2001 2000 1999
------------- -------------- -----------

Revenues

Other income $ 14,286 $ 105,468 $ 14,194
----------- ----------- ------------

Total revenues 14,286 105,468 14,194
----------- ----------- ------------

Expenses

General and administrative 165,227 77,439 215,957
General and administrative-related parties 1,713,509 1,691,121 1,673,390
---------- ---------- ----------

Total expenses 1,878,736 1,768,560 1,889,347
---------- ---------- ----------

Loss from operations (1,864,450) (1,663,092) (1,875,153)

Distribution income of subsidiary partnerships
in excess of investments 22,448 7,024 39,203

Equity in loss of subsidiary partnerships (4,189,543) (5,747,276) (5,572,887)
---------- ----------- -----------

Net loss $(6,031,545) $(7,403,344) $(7,408,837)
========== ========== ==========

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

CONDENSED STATEMENTS OF CASH FLOWS

Year Ended March 31,
-------------------------------------------
2001 2000 1999
------------ ------------ ------------

Cash flows from operating activities:

Net loss $(6,031,545) $(7,403,344) $(7,408,837)
---------- ---------- ----------
Adjustments to reconcile net loss to net cash
used in operating activities:

Increase (decrease) in liabilities:

Due to general partners and affiliates 1,557,026 1,555,325 1,625,068
Other liabilities (446) (17,696) 24,486
------------- ----------- ------------

Total adjustments 1,556,580 1,537,629 1,649,554
---------- ---------- ----------

Net cash used in operating activities (4,474,965) (5,865,715) (5,759,283)
---------- ---------- ----------

Cash flows from investing activities:

Equity in loss of subsidiary partnerships 4,189,453 5,747,276 5,572,887
Distributions from subsidiary partnerships 216,920 144,385 121,383
Investments and advances
in subsidiary partnerships (151,587) (476,565) (154,649)
Decrease in cash held in escrow-
purchase price payments 0 657,581 2,500
------------- ----------- -------------

Net cash provided by investing activities 4,254,786 6,072,677 5,542,121
---------- ---------- ----------

Net increase (decrease) in cash and
cash equivalents (220,179) 206,962 (217,162)

Cash and cash equivalents, beginning of year 553,693 346,731 563,893
---------- ----------- -----------

Cash and cash equivalents, end of year $ 333,514 $ 553,693 $ 346,731
========== =========== ===========

LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 2001

Cost Capitalized
Initial Cost to Partnership Subsequent to
--------------------------
Buildings and Acqusition:
Subsidiary Partnerships' Residential Property Encumbrances Land Improvements Improvements
- - --------------------------------------------- ------------ ---- ------------ ------------

C.V. Bronx Associates, L.P.

Bronx, NY $ 0 $ 1,705,800 $ 0 $ 4,279,915
Michigan Rural Housing Limited Partnership
Michigan 4,639,214 141,930 4,013,207 2,141,557
Jefferson Limited Partnership
Schreveport, LA 1,372,849 65,000 3,289,429 48,125
Inter-Tribal Indian Village Housing
Development Associates, L.P.
Providence, RI 1,625,710 36,643 3,290,524 141,568
RBM Associates
Philadelphia, PA 975,000 0 1,590,733 78,136
Glenbrook Associates
Atglen, PA 1,641,781 137,000 2,833,081 133,767
Affordable Flatbush Associates
Brooklyn, NY 1,508,113 0 2,551,365 208,986
Barclay Village II, LTD.
Chambersburg, PA 2,434,564 204,825 3,249,918 690,532
1850 Second Avenue Associates, L.P.
New York, NY 0 920,472 6,262,968 1,165
R.P.P. Limited Dividend Housing
Detroit, MI 28,410,000 0 29,051,380 (12,314,272)
Williamsburg Residential II, L.P.
Witchita, KS 1,500,277 358,305 2,713,872 (1,211,361)
West 104th Street Associates, L.P.
New York, NY 0 0 0 3,033,202
Meredith Apartments, LTD.
Salt Lake City, UT 595,191 40,000 1,500,117 20,962
Ritz Apartments, LTD.
Salt Lake City, UT 311,662 59,760 592,704 90,563
Ashby Apartments, LTD.
Salt Lake City, UT 311,662 50,850 549,611 186,611
South Toledo Associates, LTD.
Toledo, OH 808,300 47,571 1,411,386 44,416
Dunlap School Venture
Philadelphia, PA 2,455,851 5,352 4,522,721 159,386
Philipsburg Elderly Housing Associates
Philipsburg, PA 2,977,281 45,000 4,092,500 530,970
Franklin Elderly Housing Associates
Franklin, PA 2,145,857 165,000 2,594,447 184,465
Wade D. Mertz Elderly Housing Associates
Sharpsville, PA 3,232,227 65,000 4,234,049 668,151
Lancashire Towers Associates L.P.
Cleveland, OH 2,930,967 265,000 6,871,575 372,566

Northwood Associates Limited Partnership
Toledo, OH 1,806,706 200,000 4,065,856 712,854
Brewery Renaissance Associates
Middletown, NY 3,375,000 77,220 102,780 6,227,311
Brandywine Court Associates, L.P.
Jacksonville, FL 1,405,181 78,000 1,960,262 90,905
Art Apartments Associates
Philadelphia, PA 1,099,493 13,695 2,713,615 81,600
The Village at Carriage Hills, LTD.
Clinton, TN 1,459,349 86,663 1,753,799 73,040
Mountainview Apartments, LTD,
Newport, TN 1,036,063 49,918 1,254,182 90,457
The Park Village, Limited
Jackson, MS 355,430 44,102 749,940 83,183
River Oaks Apartments, LTD.
Oneonta, AL 1,063,011 80,340 1,221,336 67,714
Forrest Ridge Apartments, LTD.
Forrest City, AR 815,584 36,000 1,016,647 66,769
The Hearthside Limited Dividend Housing
Associates Limited Partnership
Portage, MI 2,857,594 242,550 4,667,594 111,479
Redemptorist L.P.
New Orleans, LA 2,684,863 0 6,497,259 56,462
Manhattan A Associates
New York, NY 3,731,274 1,092,959 5,991,888 361,470
Broadhurst Willows, L.P.
New York, NY 0 102,324 5,151,039 93,128
Weidler Associates Limited Partnership
Portland, OR 1,250,667 225,000 0 2,171,109
Gentle Pines/West Columbia Associates, L.P.
Columbia, SC 3,571,432 327,650 4,276,739 187,958
Lake Forest Estates II, LTD.
Livingston, AL 960,761 21,623 1,182,480 62,019
Las Camelias L.P.
Rio Piedras, PR 6,526,813 249,000 6,400 9,691,020
WPL Associates XIIII
Portland, OR 2,154,625 0 3,721,763 173,781
Broadway Townhouses L.P.
Camden, NJ 10,625,945 163,000 5,120,066 14,430,086
Puerto Rico Historic Zone Limited
Dividend Partnership
San Juan, PR 4,025,000 0 0 6,515,965
Citrus Meadows Apartments, LTD.
Brandenton, FL 7,191,027 610,073 0 9,392,721
Sartain School Venture
Philadelphia, PA 1,922,706 3,883 3,486,875 135,012
Driftwood Terrace Associates, LTD.
Ft. Lauderdale, FL 6,836,778 270,000 7,753,765 345,795
Holly Hill, LTD.
Greenville, TN 1,381,241 50,000 1,631,820 136,568
Mayfair Apartments LTD.
Morristown, TN 1,365,758 50,000 1,614,861 115,684
Foxcroft Apartments
LTD. Troy, AL 1,236,513 75,000 1,382,973 137,462
Canterbury Apartments, LTD.
Indianola, MS 1,419,127 33,000 1,738,871 105,152
Cutler Canal III Associates, LTD.
Miami, FL 7,677,590 1,269,265 0 12,171,177
Jefferson Place L.P.
Olathe, KS 11,475,000 531,063 13,477,553 34,416
Callaway Village, LTD.
Clinton, TN 1,392,762 66,000 1,613,920 121,493
Commerce Square Apartments Associates L.P.
Smyrna, DE 2,859,346 303,837 0 4,792,365
West 132nd Development Partnership
New York, NY 1,585,313 0 0 2,641,552
Site H Development Co.
Brooklyn, NY 695,182 0 1,346,000 44,416
L.I.H. Chestnut Associates, L.P.
Philadelphia, PA 5,907,405 752,000 693,995 6,417,790
Diamond Phase II Venture
Philadelphia, PA 1,839,349 0 0 4,015,933
Bookbindery Associates
Philadelphia, PA 1,513,396 0 0 3,846,957
The Hamlet, LTD.
Boynton, FL 8,203,584 1,180,482 0 13,345,845
Stop 22 Limited Partnership
Santurce, PR 9,100,880 0 4,025,481 7,064,701
Knob Hill Apartments, LTD.
Greenville, TN 1,469,119 75,085 0 1,837,332
Conifer James Street Associates
Syracuse, NY 2,364,025 57,034 0 4,522,218
Longfellow Heights Apartments, L.P.
Kansas City, MO 4,010,621 0 7,739,692 231,198
--------------------------------------------------------

$192,128,019 $12,730,274 $183,175,038 $112,293,507
=========== ========== =========== ===========

Life on which
Depreciation in
Gross Amount at which Carried At Close of Period
-------------------------------------------------- Year of Latest Income
Buildings and Accumulated Construction/ Date Statements are
Subsidiary Partnerships' Residential Property Land Improvements Total Depreciation Renovation AcquiredComputed(a)(b)
- - -------------------------------------------- ---- ------------ ----- ------------ ------------ -------- ----------

C.V. Bronx Associates, L.P. $ 1,439,504 $ 4,546,211 $ 5,985,715 $ 1,623,598 1990 June 1989 15-27.5 years
Bronx, NY
Michigan Rural Housing Limited Partnership 148,716 6,147,978 6,296,694 2,478,146 1989 Sept. 1989 27.5 years
Michigan
Jefferson Limited Partnership 71,786 3,330,768 3,402,554 1,236,384 1990 Dec. 1989 27.5 years
Schreveport, LA
Inter-Tribal Indian Village Housing
Development Associates, L.P. 43,429 3,425,306 3,468,735 1,363,336 1989 Oct. 1989 27.5 years
Providence, RI
RBM Associates 6,786 1,662,083 1,668,869 430,481 1989 Dec. 1989 40 years
Philadelphia, PA
Glenbrook Associates 143,786 2,960,062 3,103,848 1,158,879 1989 Nov. 1989 3-27.5 years
Atglen, PA
Affordable Flatbush Associates 6,787 2,753,564 2,760,351 1,165,937 1989 Dec. 1989 27.5 years
Brooklyn, NY
Barclay Village II, LTD. 211,611 3,933,664 4,145,275 1,631,620 1989 Nov. 1989 5-27.5 years
Chambersburg, PA
1850 Second Avenue Associates, L.P. 392,457 6,792,148 7,184,605 2,660,649 1989 Nov. 1989 27.5 years
New York, NY
R.P.P. Limited Dividend Housing 6,786 16,730,322 16,737,108 4,526,804 1989 Nov. 1989 27-31.5 years
Detroit, MI
Williamsburg Residential II, L.P. 362,484 1,498,332 1,860,816 602,570 1989 Nov. 1989 40 years
Witchita, KS
West 104th Street Associates, L.P. 6,787 3,026,415 3,033,202 1,035,345 1990 Dec. 1989 27.5 years
New York, NY
Meredith Apartments, LTD. 46,787 1,514,292 1,561,079 642,584 1989 Aug. 1989 27.5 years
Salt Lake City, UT
Ritz Apartments, LTD. 66,547 676,480 743,027 275,566 1989 Aug. 1989 27.5 years
Salt Lake City, UT
Ashby Apartments, LTD. 57,637 729,435 787,072 263,720 1989 Aug. 1989 27.5 years
Salt Lake City, UT
South Toledo Associates, LTD. 51,677 1,451,696 1,503,373 403,057 1988 Jan. 1990 40 years
Toledo, OH
Dunlap School Venture 9,458 4,678,001 4,687,459 1,254,446 1989 Jan. 1990 40 years
Philadelphia, PA
Philipsburg Elderly Housing Associates 68,101 4,600,369 4,668,470 2,019,742 1990 Feb. 1990 15-27.5 years
Philipsburg, PA
Franklin Elderly Housing Associates 169,106 2,774,806 2,943,912 1,312,164 1989 Feb. 1990 7-24 years
Franklin, PA
Wade D. Mertz Elderly Housing Associates 69,106 4,898,094 4,967,200 2,292,432 1989 Feb. 1990 27.5 years
Sharpsville, PA
Lancashire Towers Associates L.P. 269,106 7,240,035 7,509,141 2,869,014 1989 Feb. 1990 27.5 years
Cleveland, OH

Northwood Associates Limited Partnership 204,106 4,774,604 4,978,710 1,876,460 1989 Feb. 1990 27.5 years
Toledo, OH
Brewery Renaissance Associates 81,326 6,325,985 6,407,311 2,256,053 1990 Feb. 1990 27.5 years
Middletown, NY
Brandywine Court Associates, L.P. 82,106 2,047,061 2,129,167 915,336 1988 Nov. 1989 7-27.5 years
Jacksonville, FL
Art Apartments Associates 17,801 2,791,109 2,808,910 1,099,310 1990 Mar. 1990 27.5 years
Philadelphia, PA
The Village at Carriage Hills, LTD. 90,769 1,822,733 1,913,502 729,138 1990 Mar. 1990 25-40 years
Clinton, TN
Mountainview Apartments, LTD, 54,024 1,340,533 1,394,557 558,928 1990 Mar. 1990 25-40 years
Newport, TN
The Park Village, Limited 48,208 829,017 877,225 343,933 1990 Mar. 1990 25-40 years
Jackson, MS
River Oaks Apartments, LTD. 84,446 1,284,944 1,369,390 397,947 1990 Mar. 1990 25-40 years
Oneonta, AL
Forrest Ridge Apartments, LTD. 40,106 1,079,310 1,119,416 327,042 1990 Mar. 1990 25-40 years
Forrest City, AR
The Hearthside Limited Dividend Housing
Associates Limited Partnership 246,656 4,774,967 5,021,623 2,253,122 1990 Mar. 1990 15-27.5 years
Portage, MI
Redemptorist L.P. 4,106 6,549,615 6,553,721 2,463,562 1990 Mar. 1990 27.5 years
New Orleans, LA
Manhattan A Associates 1,097,065 6,349,252 7,446,317 2,514,434 1990 Apr. 1990 27.5 years
New York, NY
Broadhurst Willows, L.P. 106,430 5,240,061 5,346,491 2,522,957 1990 Apr. 1990 10-25 years
New York, NY
Weidler Associates Limited Partnership 229,106 2,167,003 2,396,109 795,965 1990 May 1990 15-27.5 years
Portland, OR
Gentle Pines/West Columbia Associates, L.P. 331,756 4,460,591 4,792,347 2,068,023 1990 June 1990 27.5 years
Columbia, SC
Lake Forest Estates II, LTD. 25,729 1,240,393 1,266,122 364,232 1990 June 1990 25-40 years
Livingston, AL
Las Camelias L.P. 298,878 9,647,542 9,946,420 3,350,017 1990 June 1990 27.5 years
Rio Piedras, PR
WPL Associates XIIII 4,106 3,891,438 3,895,544 1,594,173 1990 July 1990 27.5 years
Portland, OR
Broadway Townhouses L.P. 167,106 19,546,046 19,713,152 6,592,109 1990 July 1990 27.5 years
Camden, NJ
Puerto Rico Historic Zone Limited
Dividend Partnership 156,842 6,359,123 6,515,965 2,180,252 1990 Aug. 1990 27.5 years
San Juan, PR
Citrus Meadows Apartments, LTD. 812,609 9,190,185 10,002,794 3,540,429 1990 July 1990 27.5 years
Brandenton, FL
Sartain School Venture 7,989 3,617,781 3,625,770 969,711 1990 Aug. 1990 15-40 years
Philadelphia, PA
Driftwood Terrace Associates, LTD. 274,106 8,095,454 8,369,560 4,057,954 1989 Sept. 1990 27.5 years
Ft. Lauderdale, FL
Holly Hill, LTD. 54,106 1,764,282 1,818,388 679,616 1990 Oct. 1990 25-40 years
Greenville, TN
Mayfair Apartments LTD. 54,106 1,726,439 1,780,545 500,857 1990 Oct. 1990 25-40 years
Morristown, TN
Foxcroft Apartments 79,106 1,516,329 1,595,435 454,406 1990 Oct. 1990 25-40 years
LTD. Troy, AL
Canterbury Apartments, LTD. 37,106 1,839,917 1,877,023 547,273 1990 Oct. 1990 25-40 years
Indianola, MS
Cutler Canal III Associates, LTD. 1,273,507 12,166,935 13,440,442 2,770,727 1990 Oct. 1990 40 years
Miami, FL
Jefferson Place L.P. 535,169 13,507,863 14,043,032 9,104,339 1990 Oct. 1990 19 years
Olathe, KS
Callaway Village, LTD. 70,106 1,731,307 1,801,413 509,147 1990 Nov. 1990 25-40 years
Clinton, TN
Commerce Square Apartments Associates L.P. 307,943 4,788,259 5,096,202 1,112,819 1990 Dec. 1990 40 years
Smyrna, DE
West 132nd Development Partnership 13,106 2,628,446 2,641,552 681,686 1990 Dec. 1990 40 years
New York, NY
Site H Development Co. 4,106 1,386,310 1,390,416 553,304 1990 Dec. 1990 27.5 years
Brooklyn, NY
L.I.H. Chestnut Associates, L.P. 759,229 7,104,556 7,863,785 2,029,730 1990 Dec. 1990 35 years
Philadelphia, PA
Diamond Phase II Venture 22,081 3,993,852 4,015,933 941,322 1990 Dec. 1990 40 years
Philadelphia, PA
Bookbindery Associates 29,105 3,817,852 3,846,957 915,298 1990 Dec. 1990 40 years
Philadelphia, PA
The Hamlet, LTD. 1,184,587 13,341,740 14,526,327 4,547,304 1990 Dec. 1990 27.5 years
Boynton, FL
Stop 22 Limited Partnership 216,918 10,873,264 11,090,182 3,749,343 1990 Dec. 1990 27.5-31.5 years
Santurce, PR
Knob Hill Apartments, LTD. 79,190 1,833,227 1,912,417 512,014 1990 Dec. 1990 25-40 years
Greenville, TN
Conifer James Street Associates 61,139 4,518,113 4,579,252 1,657,115 1990 Dec. 1990 15-27.5 years
Syracuse, NY
Longfellow Heights Apartments, L.P. 204 7,970,686 7,970,890 2,079,229 1991 Mar. 1991 15-40 years
Kansas City, MO ----------------------------------------------------------

$12,894,634 $295,304,185 $308,198,819 $108,363,090
========== =========== =========== ===========

(a) Personal property is depreciated primarily by the straight-line method over
the estimated useful life ranging from 5 to 10 years
(b) Since all properties were acquired as operating properties, depreciation is
computed using primarily the straight-line method over the estimated useful
life determined by the Partnership date of acquisition.

LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 2001
(continued)

Cost of Property and Equipment Accumulated Deprecitaion
-------------------------------------- --------------------------------------
Year Ended March 31,
2001 2000 1999 2001 2000 1999
----------------------------------------------------------------------------------------------------------------------------

Balance at beginning of period $307,236,792 $305,871,479 $304,650,887 $97,610,640 $85,609,050 $74,148,437
Additions during period:
Improvements 980,015 1,423,745 1,342,989
Depreciation expense 10,763,766 12,020,100 11,466,030
Deductions during period:
Dispositions (17,988) (58,432) (122,397) (11,316) (18,510) (5,417)
--------------- -------------- ------------- -------------- ------------- --------------
Balance at close of period $308,198,819 $307,236,792 $305,871,479 $108,363,090 $97,610,640 $85,609,050
=========== =========== =========== =========== ========== ==========

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