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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2002
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 0-17690
Krupp Insured Mortgage Limited Partnership
Massachusetts 04-3021395
(State or other jurisdiction of (IRS employer
incorporation or organization) identification no.)
One Beacon Street, Boston, Massachusetts 02108
(Address of principal executive offices) (Zip Code)
(617) 523-0066
(Registrant's telephone number, including area code)
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 whether the registrant is an accelerated filer (as
defined by Rule 12b-2 of the Exchange Act).
Yes |_| No |X|
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
This Form 10-Q contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. When used in this Form 10-Q, the words "believes," "anticipates,"
"expects," "plans," "intends," "estimates," "continue," "may" or "will" (or the
negative of such words) and similar expressions are intended to identify
forward-looking statements. Such statements are subject to a number of risks and
uncertainties, including but not limited to the following: federal, state or
local regulations; adverse changes in general economic or local conditions;
prepayments of mortgages; failure of borrowers to pay participation interests
due to poor operating results of properties underlying the mortgages; uninsured
losses and potential conflicts of interest between the Partnership and its
Affiliates, including the General Partners. The Company's filings with the
Securities and Exchange Commission, including its Annual Report on Form 10-K for
the year ended December 31, 2001, contain additional information concerning such
risk factors. Actual results in the future could differ materially from those
described in any forward-looking statements as a result of the risk factors set
forth above, and the risk factors described in the Annual Report.
-2-
KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP
BALANCE SHEETS
------
ASSETS
September 30, December 31,
2002 2001
------------ ------------
Participating Insured Mortgages ("PIMs") (Note 2) $ 23,494,100 $ 23,723,593
Mortgage-Backed Securities ("MBS") (Note 3) 4,016,148 14,308,403
------------ ------------
Total mortgage investments 27,510,248 38,031,996
Cash and cash equivalents 2,478,700 3,603,846
Interest receivable and other assets 191,370 267,672
Prepaid acquisition fees and expenses, net of
accumulated amortization of $596,986 -- 30,656
Prepaid participation servicing fees, net of
accumulated amortization of $195,430 -- 12,106
------------ ------------
Total assets $ 30,180,318 $ 41,946,276
============ ============
LIABILITIES AND PARTNERS' EQUITY
Liabilities $ 15,940 $ 17,875
------------ ------------
Partners' equity (deficit)(Note 4):
Limited Partners
(14,956,796 Limited Partner interests outstanding) 30,322,940 41,833,148
General Partners (383,786) (377,115)
Accumulated comprehensive income 225,224 472,368
------------ ------------
Total Partners' equity 30,164,378 41,928,401
------------ ------------
Total liabilities and Partners' equity $ 30,180,318 $ 41,946,276
============ ============
The accompanying notes are an integral
part of the financial statements.
-3-
KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
------
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
------------------- -------------------------
2002 2001 2002 2001
-------- -------- ----------- ----------
Revenues:
Interest income - PIMs:
Basic interest $458,149 $460,333 $ 1,371,257 $1,609,352
Participation interest -- -- -- 19,231
Interest income - MBS 78,593 279,212 531,821 632,534
Other interest income 42,169 29,126 79,407 105,732
-------- -------- ----------- ----------
Total revenues 578,911 768,671 1,982,485 2,366,849
-------- -------- ----------- ----------
Expenses:
Asset management fee to an affiliate 40,850 53,531 142,000 171,216
Expense reimbursements to affiliates 33,633 31,098 91,498 87,304
Amortization of prepaid fees and expenses 6,110 18,328 42,762 54,983
General and administrative 36,223 82,635 157,560 171,338
-------- -------- ----------- ----------
Total expenses 116,816 185,592 433,820 484,841
-------- -------- ----------- ----------
Net income 462,095 583,079 1,548,665 1,882,008
Other comprehensive income:
Net change in unrealized gain on MBS 15,694 257,665 (247,144) 461,949
-------- -------- ----------- ----------
Total comprehensive income $477,789 $840,744 $ 1,301,521 $2,343,957
======== ======== =========== ==========
Allocation of net income (Note 4):
Limited Partners $448,232 $565,587 $ 1,502,205 $1,825,548
======== ======== =========== ==========
Average net income per Limited
Partner interest (14,956,796
Limited Partner interests outstanding) $ .03 $ .04 $ .10 $ .12
======== ======== =========== ==========
General Partners $ 13,863 $ 17,492 $ 46,460 $ 56,460
======== ======== =========== ==========
The accompanying notes are an integral
part of the financial statements.
-4-
KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
------
For the Nine Months
Ended September 30,
---------------------------
2002 2001
------------ -----------
Operating activities:
Net income $ 1,548,665 $ 1,882,008
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of prepaid fees and expenses 42,762 54,983
Changes in assets and liabilities:
Decrease in interest receivable and other assets 76,302 28,185
Increase (decrease) in liabilities (1,935) 126,548
------------ -----------
Net cash provided by operating activities 1,665,794 2,091,724
------------ -----------
Investing activities:
Principal collections on PIMs 229,493 256,670
Principal collections on MBS 10,045,111 1,089,120
------------ -----------
Net cash provided by investing activities 10,274,604 1,345,790
------------ -----------
Financing activities:
Quarterly distributions (2,745,355) (2,753,040)
Special distributions (10,320,189) --
------------ -----------
Net cash used for financing activities (13,065,544) (2,753,040)
------------ -----------
Net increase (decrease) in cash and cash equivalents (1,125,146) 684,474
Cash and cash equivalents, beginning of period 3,603,846 2,737,740
------------ -----------
Cash and cash equivalents, end of period $ 2,478,700 $ 3,422,214
============ ===========
Supplemental disclosure of non-cash investing activities:
Reclassification of investment in a PIM to a MBS $ -- $ 8,950,340
============ ===========
Non cash activities:
Increase (decrease) in Fair Value of MBS $ (247,144) $ 461,949
============ ===========
The accompanying notes are an integral
part of the financial statements.
-5-
KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
------
1. Accounting Policies
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or
omitted in this report on Form 10-Q pursuant to the Rules and Regulations
of the Securities and Exchange Commission. However, in the opinion of the
General Partners, Krupp Plus Corporation and Mortgage Services Partners
Limited Partnership, (collectively the "General Partners"), of Krupp
Insured Mortgage Limited Partnership (the "Partnership"), the disclosures
contained in this report are adequate to make the information presented
not misleading. See Notes to Financial Statements included in the
Partnership's Form 10-K for the year ended December 31, 2001 for
additional information relevant to significant accounting policies
followed by the Partnership.
In the opinion of the General Partners of the Partnership, the
accompanying unaudited financial statements reflect all adjustments
(consisting of only normal recurring accruals) necessary to present fairly
the Partnership's financial position as of September 30, 2002, its results
of operations for the three and nine months ended September 30, 2002 and
2001 and its cash flows for the nine months ended September 30, 2002 and
2001.
The results of operations for the three and nine months ended September
30, 2002 are not necessarily indicative of the results which may be
expected for the full year. See Management's Discussion and Analysis of
Financial Condition and Results of Operations included in this report.
2. PIMs
At September 30, 2002, the Partnership has estimated that the GNMA MBS
portion of the Wildflower PIM and the FHA insured mortgage portion of the
Creekside PIM have a fair market value of $25,146,955 and gross unrealized
gains of $1,652,855. Fair value assumes that the insured first mortgage
and the GNMA MBS backed by an insured first mortgage could be sold at
prices equal to amounts realized by MBS with similar interest rates. The
Partnership's PIMs have maturities ranging from 2025 to 2031.
3. MBS
The Partnership received a payoff of the Richmond Park Apartments MBS on
June 17, 2002 for $8,796,086. On August 28, 2002, the Partnership paid a
special distribution of $.59 per Limited Partner interest from the
principal proceeds received.
At September 30, 2002, the Partnership's MBS portfolio had an amortized
cost of $3,790,924 and gross unrealized gains of $225,224. The MBS
portfolio has maturity dates ranging from 2016 to 2024.
Continued
-6-
KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS, Continued
------
4. Changes in Partners' Equity
A summary of changes in Partners' Equity for the nine months ended
September 30, 2002 is as follows:
Accumulated Total
Limited General Comprehensive Partner's
Partners Partners Income Equity
------------ --------- --------- ------------
Balance at December 31, 2001 $ 41,833,148 $(377,115) $ 472,368 $ 41,928,401
Net income 1,502,205 46,460 -- 1,548,665
Quarterly distributions (2,692,224) (53,131) -- (2,745,355)
Special distributions (10,320,189) -- -- (10,320,189)
Change in unrealized gain on MBS -- -- (247,144) (247,144)
------------ --------- --------- ------------
Balance at September 30, 2002 $ 30,322,940 $(383,786) $ 225,224 $ 30,164,378
============ ========= ========= ============
-7-
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
financial statements and accompanying notes contained in the Partnership's 2001
Annual Report on Form 10-K and in the Form Q-10.
Certain statements in this Management's Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere in this Form 10-Q constitute
"forward-looking statements" within the meaning of the Federal Private
Securities Litigation Reform Act of 1995. These forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the Partnership's actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or
implied by these forward-looking statements. These factors include, among other
things, federal, state or local regulations; adverse changes in general economic
or local conditions; prepayments of mortgages; failure of borrowers to pay
participation interests due to poor operating results at properties underlying
the mortgages; uninsured losses and potential conflicts of interest between the
Partnership and its Affiliates, including the General Partners.
Liquidity and Capital Resources
At September 30, 2002, the Partnership had liquidity consisting of cash and cash
equivalents of approximately $2.5 million as well as the cash flow provided by
its investments in PIMs and MBS. The Partnership anticipates that these sources
will be adequate to provide the Partnership with sufficient liquidity to meet
its obligations as well as to provide distributions to its investors.
The most significant demand on the Partnership's liquidity is the quarterly
distribution paid to investors of approximately $900,000. Funds for the
quarterly distributions come from scheduled monthly principal and interest
payments received on the PIMs and MBS, the principal prepayments of the MBS and
interest earned on the Partnership's cash and cash equivalents and cash
reserves. The portion of distributions attributable to the principal collections
and cash reserves reduces the capital resources of the Partnership. As the
capital resources decrease, the total cash flows to the Partnership will also
decrease and over time will result in periodic adjustments to the distributions
paid to investors. The General Partners periodically review the distribution
rate to determine whether an adjustment is necessary based on projected future
cash flows. In general, the General Partners try to set a distribution rate that
provides for level quarterly distributions. To the extent that quarterly
distributions do not fully utilize the cash available for distributions and cash
balances increase, the General Partners may adjust the distribution rate and
distribute such funds through a special distribution. Based on current
projections, the General Partners have determined that the Partnership will
continue to pay a distribution of $.06 per Limited Partner interest per quarter
for the near future.
The Partnership received a payoff of the Richmond Park Apartments MBS on June
17, 2002 for $8,796,086. On August 28, 2002, the Partnership paid a special
distribution of $.59 per Limited Partner interest from the principal proceeds
received.
On March 1, 2002, the Partnership paid a special distribution of $.10 per
Limited Partner interest from proceeds received from the prepayment of the
single family MBS over the last few years.
In addition to providing insured or guaranteed monthly principal and basic
interest payments from the insured first mortgage or GNMA MBS portion of the
PIM, the Partnership's PIM investments also may provide additional income
through its participation interest in the underlying properties. The Partnership
may receive a share in any operating cash flow that exceeds debt service
obligations and capital needs or a share in any appreciation in value when the
properties are sold or refinanced. However, this participation is neither
guaranteed nor insured, and it is dependent upon whether property operations or
its terminal value meet certain criteria.
The Partnership agreed in December of 2000 to provide debt service relief for
the Wildflower PIM due to the property's poor operating performance in the
competitive Las Vegas market. Occupancy had fallen as low as 80%, and the
property had been unable to generate sufficient revenues to adequately maintain
the property. Consequently, a loan modification agreement, between the
Partnership, the borrower entity under the PIM, the principals of the borrower
entity and the affiliated property management agent, provides operating funds
for property repairs. As of September 30, 2002 the repairs are nearly complete,
and the property's occupancy was 93%. The repairs are expected to be finished
prior to the end of the modification agreement in December 2002. Under the
modification, the principals of the borrower entity converted $105,000 of cash
advances to a long-term non-interest-bearing loan. In addition, an escrow
account to be used exclusively for property repairs was established and is under
the control of the Partnership. The management agent made an initial deposit
into the escrow equal to 30% of the management fees it received during 2000 and
will continue to
-8-
deposit a similar amount until December 2002. The Partnership made an initial
deposit into the escrow account to match the $105,000 principals' loan and the
management agent's initial deposit and will continue to match additional
deposits until December 2002. The Partnership's contributions to the escrow
account will be considered an interest rebate. The principals' loan and the
escrow deposits made by the management agent and the Partnership can be repaid
exclusively out of any Surplus Cash, as defined by HUD, that the property may
generate in future years. Any repayments will be made on a pro rata basis among
the parties. The effective interest rate after the interest rebate was to a
level that was at the then prevailing rate for similar instruments.
The Partnership's other remaining PIM investment is backed by the underlying
first mortgage loan on Creekside. Located in Clackamas County near Portland,
Oregon, property operations have been affected by an extensive road improvement
project. The County is building a new road interchange, and construction has
impeded access to the property resulting in some loss of occupancy as residents
have been inconvenienced and leasing has been hampered. The borrower has learned
that a significant portion of the property will be taken by eminent domain,
possibly including some of the apartment buildings. The borrower is contesting
the condemnation action because the County's monetary payment for the land taken
will not fully compensate ownership for the adverse effects that construction
project will have on the remaining portion of the property. It is expected that
the legal proceedings will be complicated and lengthy, particularly because the
property is security for an FHA-insured mortgage. During the second quarter
2002, the borrower gave notice to the Partnership that it would pay off the
first mortgage loan by utilizing the ownership entity's short-term credit lines.
However, subsequently, the borrower decided to forgo this option due to the
ongoing uncertainty of the effect the condemnation will have on the value of the
property.
The Partnership has the option to call these PIMs by accelerating their maturity
if they are not prepaid by the tenth year after permanent funding. If the call
feature is exercised then the insurance feature of the loan would be cancelled.
Therefore, the Partnership will determine the merits of exercising the call
option for each PIM as economic conditions warrant. Such factors as the
condition of the asset, local market conditions, the interest rate environment
and availability of financing will affect those decisions.
Critical Accounting Policy
The Partnership's critical accounting policy relates primarily to revenue
recognition related to the participation feature of the Partnership's PIM
investments. The Partnership's policy is as follows:
Basic interest on PIMs is recognized based on the stated rate of the FHA
mortgage loan (less the servicer's fee) or the stated coupon rate of the GNMA
MBS. The Partnership recognizes interest related to the participation features
when the amount becomes fixed and the transaction that gives rise to such amount
is consummated. Consummation of a transaction could be the sale or refinancing
of the underlying real estate, which results in a cash payment to the
Partnership, or a cash payment made to the Partnership from Surplus Cash.
Results of Operations
Net income decreased in the three months ended September 30, 2002 as compared to
September 30, 2001 primarily due to lower MBS interest income net of a decrease
in general and administrative expenses. MBS interest income decreased primarily
due to the payoff of the Richmond Park Apartments MBS in June 2002 and
single-family MBS principal collections. The decrease in general and
administrative expenses was due to a delay in billing the third quarter 2001
processing costs. Due to the delay, an estimate of these costs was recorded.
This estimate was approximately $24,000 too high and was adjusted in the fourth
quarter of 2001.
Net income decreased in the nine months ended September 30, 2002 as compared to
September 30, 2001 primarily due to lower basic interest on PIMs and lower MBS
interest income. Basic interest on PIMs decreased primarily due to the
reclassification of the Richmond Park PIM to a MBS in May 2001. In 2001, the
Partnership received a payment from the borrower of the Richmond Park PIM as a
settlement to release the loan's participation feature. The Partnership
continued to receive the scheduled payments on the insured first mortgage, but
due to the elimination of the participation feature the classification of
interest income was changed from PIM interest income to MBS interest income. MBS
interest income decreased primarily due to on-going single-family MBS principal
collections.
-9-
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Assessment of Credit Risk
The Partnership's investments in MBS and the MBS and insured mortgage portion of
a PIM are guaranteed and/or insured by the Government National Mortgage
Association ("GNMA"), Fannie Mae, the Federal Home Loan Mortgage Corporation
("FHLMC") or the United States Department of Housing and Urban Development
("HUD"), and therefore, the certainty of their cash flows and the risk of
material loss of the amounts invested depends on the creditworthiness of these
entities.
Fannie Mae is a federally chartered private corporation that guarantees
obligations originated under its programs. FHLMC is a federally chartered
corporation that guarantees obligations originated under its programs. These
obligations are not guaranteed by the U.S. Government or the Federal Home Loan
Bank Board. However, Fannie Mae and FHLMC are two of the largest corporations in
the United States with significant experience in mortgage securitizations. In
addition, their MBS instruments carry the highest credit rating given to
financial instruments. GNMA guarantees the full and timely payment of principal
and basic interest on the securities it issues, which represent interests in
pooled mortgages insured by HUD. Obligations insured by HUD, an agency of the
U.S. Government, are backed by the full faith and credit of the U.S. Government.
The Partnership included in cash and cash equivalents approximately $2.1 million
of commercial paper, which is issued by entities with a credit rating equal to
one of the top two rating categories of a nationally recognized statistical
rating organization.
Interest Rate Risk
The Partnership's primary market risk exposure is to interest rate risk, which
can be defined as the exposure of the Partnership's net income, comprehensive
income or financial condition to adverse movements in interest rates. At
September 30, 2002, the Partnerships PIMs and MBS comprised the majority of the
Partnership's assets. Decreases in interest rates may accelerate the prepayment
of the Partnership's investments. The Partnership does not utilize any
derivatives or other instruments to manage this risk as the Partnership plans to
hold all of its PIM investments to expected maturity while it is expected that
substantially all of the MBS will prepay over the same time period thereby
mitigating any potential interest rate risk to the disposition value of any
remaining MBS.
The Partnership monitors prepayments and considers prepayment trends, as well as
distribution requirements of the Partnership, when setting regular distribution
policy. For MBS, the Partnership forecasts prepayments based on trends in
similar securities as reported by statistical reporting entities such as
Bloomberg. For PIMs, the Partnership incorporates prepayment assumptions into
planning as individual properties notify the Partnership of the intent to prepay
or as they are scheduled to mature.
Item 4. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
Within the 90 days prior to the date of this Quarterly Report on Form 10-Q, the
Principal Executive Officer and Chief Accounting Officer of Krupp Plus
Corporation, a general partner of the Partnership, carried out an evaluation of
the effectiveness of the design and operation of the Partnership's disclosure
controls and procedures. Based upon that evaluation, the Principal Executive
Officer and the Chief Accounting Officer concluded that the Partnership's
disclosure controls and procedures were effective as of the date of their
evaluation in timely alerting them to material information relating to the
Partnership required to be included in this Quarterly Report on Form 10-Q.
(b) Changes in Internal Controls
There were no significant changes in the Partnership's internal controls or in
other factors that could significantly affect such internal controls subsequent
to the date of the evaluation described in paragraph (a) above.
-10-
KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP
PART II - OTHER INFORMATION
------
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(99.1) Principal Executive Officer Certification pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
(99.2) Chief Accounting Officer Certification pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K
None
-11-
SIGNATURE
Pursuant to the requirements 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.
Krupp Insured Mortgage Limited Partnership
(Registrant)
BY: /s/ Robert A. Barrows
-----------------------------------------
Robert A. Barrows
Treasurer and Chief Accounting Officer of
Krupp Plus Corporation, a General Partner
DATE: November 11, 2002
-12-
Certifications
I, Douglas Krupp, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Krupp Insured
Mortgage Limited Partnership;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: November 11, 2002
/s/ Douglas Krupp
--------------------------------
Douglas Krupp
Principal Executive Officer
-13-
Certifications
I, Robert A. Barrows, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Krupp Insured
Mortgage Limited Partnership;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b. any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: November 11, 2002
/s/ Robert A. Barrows
------------------------------
Robert A. Barrows
Chief Accounting Officer