LIBERTY TAX CREDIT PLUS LP - 10-K Annual Report

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

FORM 10-K
(Mark One)

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

For the fiscal year ended March 15, 2004

OR

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

Commission File Number 0-17015

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

Delaware 13-3446500
- ---------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
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:

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

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

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

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes No X
----- -----

The approximate aggregate book value of the voting and non-voting common
equity held by non-affiliates of the Registrant as of September 15, 2003, was
($30,650,000), based on Limited Partner equity (deficit) as of such date.

DOCUMENTS INCORPORATED BY REFERENCE
None

PART I

Item 1. Business.

General
- -------

Liberty Tax Credit Plus L.P. (the "Partnership") is a limited partnership which
was formed under the laws of the State of Delaware on June 26, 1987. The general
partners of the Partnership are Related Credit Properties L.P., a Delaware
limited partnership (the "Related General Partner") and Liberty Associates III
L.P., a Delaware limited partnership ("Liberty Associates", and together with
the Related General Partner, the "General Partners"). The Related General
Partner is also the special limited partner of the Partnership. The general
partner of the Related General Partner is Credit Properties GP LLC ("Credit
Properties"), a Delaware corporation. The general partner of Liberty Associates
is the Related General Partner. On November 17, 2003, CharterMac acquired
Related Capital Company, which is the indirect parent of RCC Manager L.L.C., the
managing member of Credit Properties. Pursuant to the acquisition, CharterMac
acquired controlling interests in the General Partners. This acquisition did not
affect the Partnership or its day-to-day operations, as the majority of the
General Partners' management team remained unchanged.

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

The Partnership was formed to invest, as a limited partner, in other limited
partnerships (referred to herein as "Local Partnerships," "subsidiaries" or
"subsidiary partnerships") which own leveraged low and moderate-income
multifamily residential complexes ("Apartment Complexes") 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 ("Rehabilitation Projects"), and together with the Apartment
Complexes, the "Properties" that are eligible for the historic rehabilitation
tax credit (the "Historic Rehabilitation Tax Credit", and together with the
Housing Tax Credit, the "Tax Credits"). The Partnership's investment in each
Local Partnership represents a 20% to 98% interest in each of the Local
Partnerships. The Partnership does not anticipate making any additional
investments. As of March 15, 2004, the Partnership has disposed of four of its
31 original Properties. Subsequently on March 31, 2004, the property and the
related assets and liabilities of Walnut Park Associates, L.P. ("Walnut") were
sold. See Item 2, Properties, below.

Liberty Associates is the special limited partner in all of the Local
Partnerships, as well as a general partner of the Partnership. Liberty
Associates has certain rights and obligations in its role as special limited
partner, which permit it to exercise control over the management and policies of
the Local Partnerships.

The investment objectives of the Partnership are to:

1. Entitle qualified BACs holders to substantial Housing Tax Credits (and
potentially Historic Rehabilitation Tax Credits) over the period of the
Partnership's entitlement to claim Tax Credits (for each Property, ten
years from the date of investment or, if later, the date the Property is
placed in service);

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

3. Preserve and protect the Partnership's capital;

4. Provide cash distributions, when available, from the operations of
Properties; and

2

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

One of the Partnership's objectives is to entitle qualified BACs holders to Tax
Credits over the period of the Partnership's entitlement to claim Tax Credits
(for each Property, generally ten years from the date of investment or, if
later, the date the Property is leased to qualified tenants; referred to herein
as the "Tax Credit Period"). Each of the Local Partnerships in which the
Partnership has acquired an interest has been allocated by respective state
credit agencies the authority to recognize Tax Credits during the Tax Credit
Period provided that the Local Partnership satisfies the rent restriction,
minimum set-aside and other requirements for recognition of the Tax Credits at
all times during the 15-year period (the "Compliance Period") commencing at the
beginning of the Tax Credit Period. Once a Local Partnership has become eligible
to recognize Tax Credits, it may lose such eligibility and suffer an event of
"recapture" if its Property fails to remain in compliance with the Tax Credit
requirements 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 generated $686, $21,629 and $23,744 in Tax Credits during the
2003, 2002 and 2001 Fiscal Years, respectively. As of December 31, 2003 all the
Local Partnerships have completed their tax credit periods and the Partnership
has met its primary objective of generating Tax Credits for qualified BACs
holders. However, each Local Partnership must continue to comply with the Tax
Credit requirements until the end of the Compliance Period in order to avoid
recapture of the Tax Credits. The Compliance Period will end between December
31, 2003 and December 31, 2008 with respect to the Properties depending upon
when the Tax Credit Period commenced.

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 investment and other passive activities, and allocating
passive losses to the corporate BACs holders to offset business income. At this
time, there can be no assurance that the Partnership will continue to meet this
investment objective.

As of March 15, 2004, the Partnership has not met its investment objective of
providing cash distributions from the operations of the Properties. The
Partnership does not anticipate providing cash distributions to BACs holders
other than distributions of sale or refinancing proceeds upon the disposition of
Properties. Furthermore, at this time there can be no assurance that the
Partnership will achieve this investment objective.

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
19% of the Properties are located in any single state.

The Partnership is the beneficiary of certain subsidy agreements pursuant to
which the United States Department of Housing and Urban Development ("HUD")
subsidizes the amount of rent that the Local Partnerships earn. There are
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
owners' equity contribution. The Partnership cannot sell or substantially
liquidate its investments in subsidiary partnerships during the period that the
subsidy agreements are in existence without HUD's approval. Furthermore, there
may not be market demand for apartments at full market rents when the rental
assistance contracts expire.

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 acquired by the Partnership are subject to active competition from
similar properties in their respective vicinities. In addition, various other
limited partnerships may, in the future, be formed by the General Partners
and/or their affiliates to engage in businesses which may be competitive with
the Partnership.

3

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 had acquired an interest as a limited partner in 31 Local
Partnerships. During the fiscal year ended March 15, 2004, the property and
related assets and liabilities of one Local Partnership was sold. Through the
fiscal year ended March 15, 2004, the properties and the related assets and
liabilities of three Local Partnerships and the limited partnership interest in
one Local Partnership were sold (see Note 11 in Item 8). Set forth below is a
schedule of the Local Partnerships including certain information concerning the
Properties (the "Local Partnership Schedule"). Further information concerning
those Local Partnerships and their Properties, including any encumbrances
affecting the Properties, may be found in Item 15, Schedule III.

Except for the seven Local Partnerships listed below, the following is the
allocation of ownership percentage for each of the Local Partnerships:

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

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

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

*Each is an affiliate of the Partnership with the same management.

4

Local Partnership Schedule
--------------------------

Name and Location % of Units Occupied at May 1,
-----------------------------
(Number of Units) Date Acquired 2004 2003 2002 2001 2000
- ----------------- ------------- ---- ---- ---- ---- ----

B & C Housing Associates, L.P. December 1987 94 99 97 93 92
Tulsa, OK (220)

State Street 86 Associates, L.P. February 1988 100 98 99 97 100
Camden, NJ (200)

Fox Glenn Investors, L.P. March 1988 96 98 95 97 93
Seat Pleasant, MD (172)

Shiloh-Grove, L.P. (Mt. Vernon) February 1988 94 100 95 99 94
Columbus, OH (394)

Silver Blue Lake Apartments, LTD. February 1988 (c) 96 93 87 93
Miami, FL (123)

Lancaster Towers Associates, LTD. May 1988 100 99 100 100 100
Lancaster, NY (157)

West Kinney Associates, L.P. June 1988 97 100 97 97 94
Newark, NJ (114)

Autumn Park Associates, L.P. June 1988 96 88 88 95 93
Wilsonville, OR (144)

Regent Street Associates, L.P. June 1988 94 90 100 94 93
Philadelphia, PA (80)

Magnolia Arms Associates, LTD. July 1988 92 98 99 90 91
Jacksonville, FL (232)

Greenleaf Associates, L.P. July 1988 100 97 94 97 97
Kansas City, Mo (195)

Alameda Towers Associates, L.P. July 1988 94 90 97 99 99
San Juan, PR (150)

Dixie Apartment Associates, LTD. July 1988 (a) (a) 100 97 100
Miami, FL (29)

Ludlam Gardens Apartments, LTD. July 1988 (a) (a) 99 99 97
Miami, FL (90)

Grove Parc Associates, L.P.
(Woodlawn) July 1988 96 98 92 94 95
Chicago, IL (504)

2108 Bolton Drive Associates, L.P. July 1988 85 78 92 97 99
Atlanta, GA (358)

5

Local Partnership Schedule
--------------------------
(continued)
Name and Location % of Units Occupied at May 1,
-----------------------------
(Number of Units) Date Acquired 2004 2003 2002 2001 2000
- ----------------- ------------- ---- ---- ---- ---- ----

Apple Creek Housing
Associates, LTD. June 1988 (b) (b) 93 99 98
Arvado, CO (195)

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

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

Walnut Park Plaza
Associates, L.P. September 1988 (d) 80 89 83 89
Philadelphia, PA (227)

Bayridge Associates, L.P. December 1988 90 91 91 97 90
Beaverton, OR (246)

United-Pennsylvanian, L.P. December 1988 95 99 97 99 99
Erie, PA (112)

2051 Grand Concourse
Associates, L.P. November 1988 95 98 91 100 95
Bronx, NY (63)

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

Willoughby/Wycoff Housing
Associates, L.P. November 1988 94 99 100 87 87
Bronx, NY (68)

Robin Housing Associates, L.P. November 1988 99 96 98 93 98
Bronx, NY (100)

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

Tanglewood Apartments, L.P. October 1988 97 94 98 93 96
Joplin, MO (176)

6

Local Partnership Schedule
--------------------------
(continued)
Name and Location % of Units Occupied at May 1,
-----------------------------
(Number of Units) Date Acquired 2004 2003 2002 2001 2000
- ----------------- ------------- ---- ---- ---- ---- ----

Quality Hill Historic District-
Phase II-A, L.P. March 1989 92 94 94 92 98
Kansas City, MO (49)

Penn Alto Associates, L.P. June 1989 83 84 83 82 82
Altoona, PA (150)

Sartain School Venture, L.P. August 1990 94 100 97 97 100
Philadelphia, PA (35)

(a) The properties and the related assets and liabilities were sold during the
fiscal year ended March 15, 2003 (see Note 11 in Item 8. Financial
Statements and Supplementary Data).

(b) The Partnership's limited partnership interest was sold during the fiscal
year ended March 15, 2003 (see Note 11 in Item 8. Financial Statements and
Supplementary Data).

(c) The property and the related assets and liabilities were sold during the
fiscal year ended March 15, 2004 (see Note 11 in Item 8. Financial
Statements and Supplementary Data).

(d) The property and related assets and liabilities were subsequently sold on
March 31, 2004 (see Note 12 in Item 8. Financial Statements and
Supplementary Data).

All development deficit, rent-up and operating deficit guarantees with respect
to the Properties have expired.

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

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

Management annually reviews the physical state of the Properties and budgets
improvements when required, which improvements are generally funded from cash
flow from operations or release of replacement reserve escrows to the extent
available.

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

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

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

Item 3. Legal Proceedings.

None.

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

None.

7

PART II

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

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

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

The Partnership has 5,599 registered holders of an aggregate of 15,987.5 BACs,
as of May 1, 2004.

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

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

There are no material legal restrictions in the Partnership Agreement on the
ability to make distributions.

The Partnership has made no distributions to the BACs holders as of March 15,
2004. The Partnership does not anticipate providing cash distributions to the
BACs holders other than distributions of sale or refinancing proceeds upon the
disposition of Properties.

8

Item 6. Selected Financial Data.

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

For the Year Ended March 15,
------------------------------------------------------------------------------------
OPERATIONS 2004 2003 2002 2001 2000
- ---------------------------- ------------ ------------ ------------ ------------ ------------

Revenues $ 36,719,779 $ 43,490,483 $ 37,918,705 $ 37,421,097 $ 36,518,877

Operating expenses (44,436,322) (44,557,403) (46,267,377) (46,357,904) (45,568,571)
------------ ------------ ------------ ------------ ------------

Loss before minority
interest and extraordinary
item (7,716,543) (1,066,920) (8,348,672) (8,936,807) (9,049,694)

Minority interest in loss of
subsidiaries 479,188 466,991 428,522 475,683 461,338
------------ ------------ ------------ ------------ ------------

Loss before extraordinary
item (7,237,355) (599,929) (7,920,150) (8,461,124) (8,588,356)

Extraordinary item 113,565 0 0 500,000 0
------------ ------------ ------------ ------------ ------------

Net loss $ (7,123,790) $ (599,929) $ (7,920,150) $ (7,961,124) $ (8,588,356)
============ ============ ============ ============ ============

Loss before extraordinary
item per BAC $ (448.16) $ (37.15) $ (490.44) $ (523.94) $ (531.82)

Extraordinary item per
BAC 7.03 0 0 30.96 0
------------ ------------ ------------ ------------ ------------

Net loss per weighted
average BAC $ (441.13) $ (37.15) $ (490.44) $ (492.98) $ (531.82)
============ ============ ============ ============ ============

For the Year Ended March 15,
-------------------------------------------------------------------------------------
FINANCIAL POSITION 2004 2003 2002 2001 2000
- ---------------------------- ------------- ------------- ------------- ------------- -------------

Total assets $ 146,186,305 $ 158,553,482 $ 170,552,302 $ 178,650,012 $ 180,711,472
============= ============= ============= ============= =============

Total liabilities $(181,212,208) $(186,336,777) $(197,397,871) $(197,201,242) $(190,839,539)
============= ============= ============= ============= =============

Minority interest $ (1,654,689) $ (1,743,507) $ (2,111,304) $ (2,485,493) $ (2,947,532)
============= ============= ============= ============= =============

Total partners' deficit $ (36,680,592) $ (29,556,802) $ (28,956,873) $ (21,036,723) $ (13,075,599)
============= ============= ============= ============= =============

During the years ended March 15, 2000 through 2002, total assets decreased
primarily due to depreciation, partially offset by net additions to property and
equipment. During the years ended March 15, 2003 and 2004, total assets and
liabilities decreased primarily due to the sale of Local Partnerships.

9

Selected Quarterly Financial Data (Unaudited)

Quarter Ended
------------------------------------------------------------------
June 15, September 15, December 15, March 15,
OPERATIONS 2003 2003 2003 2004
- ----------------------------------------- ------------ ------------ ------------ ------------

Revenues $ 9,998,230 $ 9,136,561 $ 8,544,627 $ 9,040,361

Operating expenses (10,790,380) (11,061,818) (10,753,221) (11,830,903)
------------ ------------ ------------ ------------

Loss before minority interest and
extraordinary item (792,150) (1,925,257) (2,208,594) (2,790,542)

Minority interest in loss of subsidiaries 230,706 233,316 8,018 7,148
------------ ------------ ------------ ------------

Loss before extraordinary item (561,444) (1,691,941) (2,200,576) (2,783,394)

Extraordinary item - forgiveness of
indebtedness income (Note 7) 0 113,565 0 0

Net loss $ (561,444) $ (1,578,376) $ (2,200,576) $ (2,783,394)
============ ============ ============ ============

Net loss - limited partnership $ (555,830) $ (1,562,592) $ (2,178,570) $ (2,755,560)
============ ============ ============ ============

Net loss per weighted average BAC $ (34.77) $ (97.73) $ (136.27) $ (172.36)
============ ============ ============ ============

Quarter Ended
------------------------------------------------------------------
June 15, September 15, December 15, March 15,
OPERATIONS 2002 2002 2002 2003
- ----------------------------------------- ------------ ------------ ------------ ------------

Revenues $ 9,264,532 $ 15,822,189 $ 8,708,683 $ 9,695,079

Operating expenses (11,314,298) (10,703,674) (10,966,844) (11,572,587)
------------ ------------ ------------ ------------

Loss before minority interest (2,049,766) 5,118,515 (2,258,161) (1,877,508)

Minority interest in loss of subsidiaries 128,929 179,148 113,124 45,790
------------ ------------ ------------ ------------

Net (loss) income $ (1,920,837) $ 5,297,663 $ (2,145,037) $ (1,831,718)
============ ============ ============ ============

Net (loss) income - limited partnership $ (1,901,629) $ 5,244,686 $ 2,123,587 $ 1,813,401
============ ============ ============ ============

Net (loss) income per weighted average
BAC $ (118.94) $ 328.05 $ (132.82) $ (113.44)
============ ============ ============ ============

10

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

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

The Partnership's capital has been invested in 31 Local Partnerships. As of
March 15, 2004, the properties and the related assets and liabilities of three
Local Partnerships and the limited partnership interest in one Local Partnership
were sold (the "Sold Assets"). For a discussion of these sales, see Note 11 in
Item 8.

The Partnership's primary source of funds is cash distributions from operations
of the Local Partnerships in which the Partnership has invested. Such funds are
available to meet the obligations of the Partnership. During the years ended
March 15, 2004, 2003 and 2002, such distributions amounted to approximately
$124,000, $855,000 and $1,028,000, respectively. In addition, certain fees and
expense reimbursements owed to the General Partners amounting to approximately
$8,002,000, $7,212,000 and $6,235,000 were accrued and unpaid as of March 15,
2004, 2003 and 2002, respectively. In particular, partnership management fees
owed to the General Partners amounting to approximately $7,911,000 and
$7,151,000 were accrued and unpaid as of March 15, 2004 and 2003, respectively.
Furthermore, expense reimbursements and asset monitoring fees owed to the
General Partners amounting to approximately $90,000 and $61,000 were accrued and
unpaid as of March 15, 2004 and 2003, respectively. Without the General
Partners' continued accrual without payment of the partnership management fees,
the Partnership will not be in the position to meet its obligations. The General
Partners have allowed for the accrual without payment of the partnership
management fees but are under no obligation to continue to do so.

During the year ended March 15, 2004, cash and cash equivalents of the
Partnership decreased approximately $843,000. This decrease is attributable to
costs paid relating to the sale of properties ($440,000), an increase in
property and equipment ($2,100,000), net proceeds and principal repayments of
mortgage notes ($10,804,000), an increase in cash held in escrow relating to
investing activities ($2,707,000), a decrease in due to selling partners
($11,000) and an increase in deferred costs ($131,000) which exceeded cash
provided by operating activities ($3,074,000), a net increase in due to local
general partners and affiliates ($3,185,000), proceeds from sale of properties
($8,700,000), and a decrease in capitalization of consolidated subsidiaries
attributable to minority interest ($390,000). Included in the adjustments to
reconcile the net loss to cash provided by operating activities is depreciation
and amortization of approximately $9,182,000, gain on sale of properties
($1,798,000) and forgiveness of indebtedness income ($114,000).

A working capital reserve of approximately $2,603,000 remained unused at March
15, 2004.

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

On October 20, 1999, President Clinton signed FY 2000 VA, the HUD Independent
Agencies Appropriations Act. The Act contained revisions to the HUD
Mark-to-Market Program and other HUD programs concerning the preservation of the
HUD housing stock. On December 29, 1999, HUD issued Notice H99-36 addressing
"Project Based Section 8 Contracts Expiring in Fiscal Year 2000" reflecting the
changes in the Act and superceding earlier HUD Notices 98-34, 99-08, 99-15,
99-21 and 99-32. Notice 99-36 clarified many of the earlier uncertainties with
respect to the earlier HUD Section 8 Mark-to-Market Programs and continued the
Mark-up-to-Market Program which allows owners with Section 8 contracts where
contract rents are currently below market to increase the rents to market
levels.

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 may result in recapture of Tax Credits if the investment
is lost before expiration of the Compliance 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

11

remaining properties in the portfolio may be experiencing upswings. However, the
geographic diversification of the portfolio may not protect against a general
downturn in the national economy.

Sale of Underlying Properties/Local Partnership Interests
- ---------------------------------------------------------
For a discussion of the sale of properties in which the Partnership owns direct
and indirect interests, see Note 11 of the Financial Statements.

Tabular Disclosure of Contractual Obligations
- ---------------------------------------------
The following table summarized the Partnership's commitments as of March 31,
2004 to make future payments under its debt agreements and other contractual
obligations.

Less than 1 - 3 3 - 5 More than
Total 1 Year Years Years 5 Years
------------ ------------ ------------ ------------ ------------

Mortgage notes payable (a) $136,800,161 $ 8,041,365 $ 12,483,035 $ 23,179,874 $ 93,095,887
Land lease obligations (b) 1,481,550 60,000 120,000 120,000 1,181,550
Notes payable to local
general partners (c) 8,968,086 3,928,086 0 0 5,040,000
------------ ------------ ------------ ------------ ------------

Total $147,249,797 $ 12,029,451 $ 12,603,035 $ 23,299,874 $ 99,317,437
============ ============ ============ ============ ============

(a) The mortgage notes are payable in aggregate monthly installments of
approximately $800,000 including principal and interest at rates varying
from 1% to 10.25% per annum, through 2036. Each subsidiary partnership's
mortgage note payable is collateralized by the land and buildings of the
respective subsidiary partnership and the assignment of certain subsidiary
partnership's rents and leases is without further recourse.

(b) Redwood Villa Associates has entered into a land lease agreement for forty
years commencing September 9, 1988. Annual lease payments are $60,000.

(c) See Note 8(g) in Item 8. Financial Statements and Supplementary Data.

Off Balance Sheet Arrangements
- ------------------------------
The Partnership has no off-balance sheet arrangements.

Critical Accounting Policies
- ----------------------------

In preparing the consolidated financial statements, management has made
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates. Set forth below is a summary of the accounting policies
that management believes are critical to the preparation of the consolidated
financial statements. The summary should be read in conjunction with the more
complete discussion of the Partnership's accounting policies included in Note 2
to the consolidated financial statements in this annual report on Form 10-K.

Property and Equipment
- ----------------------

Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, and any other costs incurred
in acquiring the properties. The cost of property and equipment is depreciated
over their estimated useful lives using accelerated and straight-line methods.
Expenditures for repairs and maintenance are charged to expense as incurred;
major renewals and betterments are capitalized. At the time property and
equipment are retired or otherwise disposed of, the cost and accumulated
depreciation are eliminated from the assets and accumulated depreciation
accounts and the profit or loss on such disposition is reflected in earnings.
The Partnership complies with Statement of Financial Accounting Standards (SFAS)
No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets". 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. At that time property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows).

12

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. These
assets are classified as property and equipment-held for sale and are not
depreciated.

Through March 15, 2004, the Partnership has not recorded any loss on impairment
of assets or reduction to estimated fair value.

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.

New Accounting Pronouncements
- -----------------------------

In January 2003, the Financial Accounting Standards Board issued FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
FIN 46 is applicable immediately for variable interest entities created after
January 31, 2003. For variable interest entities created before February 1,
2003, the provisions of FIN 46 are applicable no later than July 1, 2003. The
Partnership has not created any variable interest entities after January 31,
2003. In December 2003 the FASB redeliberated certain proposed modifications and
revised FIN 46 ("FIN 46 (R)"). The revised provisions are applicable no later
than the first reporting period ending after March 15, 2004. The adoption of FIN
46 and FIN 46 (R) is not anticipated to have a material impact on the
Partnership's financial reporting and disclosures.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
changes the accounting for certain financial instruments that, under previous
guidance, could be classified as equity or "mezzanine" equity, by now requiring
those instruments to be classified as liabilities (or assets in some
circumstances) in the Consolidated Balance Sheets. Further, SFAS No. 150
requires disclosure regarding the terms of those instruments and settlement
alternatives. The guidance in SFAS No. 150 generally was effective for all
financial instruments entered into or modified after May 31, 2003, and was
otherwise effective at the beginning of the first interim period beginning after
June 15, 2003. The Partnership has evaluated SFAS No. 150 and determined that it
does not have an impact on the Partnership's financial reporting and
disclosures.

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

The following is a summary of the results of operations of the Partnership for
the years ended March 15, 2004, 2003 and 2002 (the 2003, 2002 and 2001 Fiscal
Years, respectively).

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

The Partnership had originally invested in 31 Local Partnerships. As of March
15, 2004, Silver Blue Lake Apartments Ltd., Bryden Road (one of the properties
owned by Shiloh-Grove L.P.), Ludlam Garden Apartments Ltd. and Dixie Apartment
Associates sold their properties and related assets and liabilities and Apple
Creek Housing Associates, Ltd. sold its Local Partnership interests
(collectively the "Sold Assets").

The net loss for the 2003, 2002 and 2001 Fiscal Years totaled $7,123,790,
$599,929 and $7,920,150, respectively. The 2003 fiscal year is net of an
extraordinary gain of $113,565.

The Partnership generated $686, $21,629 and $23,744 in Tax Credits during the
2003, 2002 and 2001 Fiscal Years, respectively. As of December 31, 2003 all the
Local Partnerships have completed their tax credit periods and the Partnership

13

has met its primary objective of generating Tax Credits for qualified BACs
holders, although each Local Partnership must continue to comply with the Tax
Credit requirements until the end of the Compliance Period for an additional
five years from the date of expiration in order to avoid recapture of the Tax
Credits.

2003 vs. 2002
- -------------

During the years ended March 15, 2004 and 2003, Silver Blue Lake Apartments
Ltd., Bryden Road (one of the properties owned by Shiloh-Grove L.P.), Ludlam
Garden Apartments Ltd. and Dixie Apartment Associates sold their properties and
related assets and liabilities (collectively the "2003 Sold Assets").

Rental income decreased approximately 5% for the 2003 Fiscal Year as compared to
the 2002 Fiscal Year. Excluding the 2003 Sold Assets, rental income increased
approximately 1%, primarily due to rental rate increases.

Total expenses, excluding the 2003 Sold Assets, general and administrative,
repairs and maintenance and depreciation and amortization, remained fairly
consistent with a decrease of approximately 3% for the 2003 Fiscal Year as
compared to the 2002 Fiscal Year.

General and administrative increased approximately $265,000 for the 2003 Fiscal
Year as compared to the 2002 Fiscal Year. Excluding the 2003 Sold Assets,
general and administrative increased approximately $777,000, primarily due to an
increase in salaries and benefits at three Local Partnerships.

Repairs and maintenance increased approximately $512,000 for the 2003 Fiscal
Year as compared to the 2002 Fiscal Year. Excluding the 2003 Sold Assets,
repairs and maintenance increased approximately $937,000, primarily due to an
increase in electrical and plumbing repairs, landscaping expense, security
contracts, maintenance salaries and general repairs due to high tenant turnover
at one Local Partnership, an increase in heating and air conditioning repairs,
repair contracts and maintenance salaries at a second Local Partnership and
increases in maintenance salaries and security contracts at a third Local
Partnership.

Depreciation and amortization increased approximately $956,000 for the 2003
Fiscal Year as compared to the 2002 Fiscal Year. Excluding the 2003 Sold Assets,
depreciation and amortization increased approximately $1,142,000, primarily due
to the resumption of depreciation expense at one Local Partnership that was
classified as an asset held for sale in 2002, and therefore not depreciated in
2002.

Taxes and interest expense decreased approximately $199,000 and $1,530,000,
respectively, for the 2003 Fiscal Year as compared to the 2002 Fiscal Year,
primarily due to decreases related to the 2003 Sold Assets.

Gain on sale of properties and forgiveness of indebtedness income will continue
to fluctuate as a result of the disposition of properties.

2002 vs. 2001
- -------------

During the years ended March 15, 2003 and 2002, Ludlam Garden Apartments Ltd.
and Dixie Apartment Associates sold their properties and related assets and
liabilities and Apple Creek Housing Associates, Ltd. sold its Local Partnership
interests (collectively the "2002 Sold Assets").

Rental income decreased approximately 2% for the 2002 Fiscal Year as compared to
the 2001 Fiscal Year. Excluding the 2002 Sold Assets, rental income decreased
less than 1%, primarily due to a decrease in occupancy at one local partnership.

Other income decreased approximately $360,000 for the 2002 Fiscal Year as
compared to the 2001 Fiscal Year. Excluding the 2002 Sold Assets, other income
decreased approximately $328,000 primarily due to lower interest rates on cash
and cash equivalent balances at the Local Partnerships and Partnership level and
a decrease in grant income at one Local Partnership.

A gain on sale of properties was recorded in the 2002 Fiscal Year (see Note 11).

14

Total expenses, excluding the 2002 Sold Assets and taxes and insurance, remained
fairly consistent with a decrease of approximately 1% for the 2002 Fiscal Year
as compared to the 2001 Fiscal Year.

Taxes increased approximately $163,000 for the 2002 Fiscal Year as compared to
the 2001 Fiscal Year. Excluding the 2002 Sold Assets, taxes increased
approximately $202,000, primarily due to an increase in real estate taxes at one
Local Partnership due to a tax reassessment as well as small increases at
several other Local Partnerships.

Insurance increased approximately $432,000 for the 2002 Fiscal Year as compared
to the 2001 Fiscal Year. Excluding the 2002 Sold Assets, insurance increased
approximately $446,000, primarily due to an increase in insurance premiums at
the Local Partnerships.

Depreciation and amortization expense decreased approximately $952,000 for the
2002 Fiscal Year as compared to the 2001 Fiscal Year, primarily due to decreases
related to the 2002 Sold Assets.

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

Redwood Villa Associates, L.P.
- ------------------------------
Redwood Villa Associates, L.P. ("Redwood") has sustained operating losses since
its inception. For the 2003 Fiscal Year, Redwood experienced a loss of $201,871,
including $212,076 of depreciation and $4,553 of amortization, and at December
31, 2003 had a working capital deficiency of $754,531 and a partners' deficit of
$1,729,970. In addition, Redwood has been able to defer ground lease payments
that are due to a related party in the cumulative amount of $363,147 and
$358,147 as of December 31, 2003 and 2002, respectively. These conditions raise
substantial doubt about Redwood's ability to continue as a going concern.
Redwood's continuation as a going concern is dependent upon its ability to
achieve continued profitable operations or obtain future capital contributions
from the partners. The Local General Partner, whenever possible, plans to reduce
operating costs to achieve profitable operations. The financial statements for
the 2003, 2002 and 2001 Fiscal Years for Redwood have been prepared assuming
that Redwood will continue as a going concern. The Partnership's investment in
Redwood at March 15, 2004 and 2003 was reduced to zero by prior years' losses
and the minority interest balance was approximately $397,000 and $399,000,
respectively. Redwood's net loss after minority interest amounted to
approximately $200,000, $157,000 and $193,000 for the 2003, 2002 and 2001 Fiscal
Years, respectively.

Walnut Park Plaza Associates, L.P.
- ----------------------------------
The financial statements for Walnut Park Plaza Associates ("Walnut Park") have
been prepared on the basis that it will continue as a going concern. Walnut Park
incurred a net loss of $594,376 during the year ended December 31, 2003 and as
of that date the Local Partnership's cash flows from operations were
insufficient to pay current liabilities. In addition, Walnut Park is currently
in default in its bond payments to the Redevelopment Authority of the City of
Philadelphia Multifamily Housing Revenue Refunding Bond due to the inability to
pay its monthly obligation. Those factors create an uncertainty about the Local
Partnership's ability to continue as a going concern. Management of the Local
Partnership is developing a plan to obtain additional financing or restructure
its existing bonds. The Partnership's continued existence is dependent on its
resolution of the default under the mortgage loan. No action has been taken by
the first mortgagee to enforce any of its rights under the loan. The financial
statements do not include any adjustments that might be necessary if the Local
Partnership is unable to continue as a going concern. The Partnership's
investment in Walnut Park at March 15, 2004 and 2003 was reduced to zero by
prior years' losses and the minority interest balance was approximately $993,000
and $1,109,000, respectively. Walnut Park's net loss after minority interest
amounted to approximately $588,000, $501,000 and $389,000 for the 2003, 2002 and
2001 Fiscal Years, respectively. Walnut Park was subsequently sold on March 31,
2004.

Autumn Park Associates, L.P.
- ----------------------------
Autumn Park Associates, L.P. ("Autumn Park") incurred a net loss of $173,140
during the year ended December 31, 2003, and as of that date, Autumn Park's
total liabilities exceeded its total assets by $815,693. These factors, as well
as uncertain conditions that Autumn Park faces regarding the deterioration and
needed repairs of the buildings, tenants' turnover and vacancies, and debt
service requirements, create uncertainty about Autumn Park's ability to continue
in existence. Autumn Park's management has developed and implemented a plan to
improve tenant selection in order to reduce turnovers and vacancies. The
management is developing a plan to refinance the mortgage to reduce its annual

15

debt service obligation. The ability of Autumn Park to continue operations is
dependent on increased cash flow from rent collections and/or reduced debt
service requirements. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts and
classification of liabilities that might be necessary if Autumn Park is unable
to continue operations. The Partnership's investment in Autumn Park at March 15,
2004 and 2003 was reduced to zero by prior years' losses and the minority
interest balance was zero at those dates. Autumn Park's net loss after minority
interest amounted to approximately $173,000, $183,000 and $237,000 for the 2003,
2002 and 2001 Fiscal Years, respectively.

Other
- -----

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. Furthermore, inflation generally does not
impact the fixed long-term financing under which real property investments were
purchased. Inflation also affects the Local Partnerships adversely by increasing
operating costs, such as fuel, utilities, and labor.

For a discussion of Mortgage Notes payable, see Note 7 to the Financial
Statements.

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

The Partnership does not have any market risk sensitive instruments.

16

Item 8. Financial Statements and Supplementary Data.

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

Report of Independent Registered Public Accounting Firm 18

Consolidated Balance Sheets at March 15, 2004 and 2003 85

Consolidated Statements of Operations for the Years
Ended March 15, 2004, 2003 and 2002 86

Consolidated Statements of Changes in Partners' Deficit
for the Years Ended March 15, 2004, 2003 and 2002 87

Consolidated Statements of Cash Flows for the Years
Ended March 15, 2004, 2003 and 2002 88

Notes to Consolidated Financial Statements 91

17

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------

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

We have audited the consolidated balance sheets of Liberty Tax Credit Plus L.P.
(A Delaware Limited Partnership) and Subsidiaries as of March 15, 2004 and 2003,
and the related consolidated statements of operations, changes in partners'
deficit, and cash flows for the years ended March 15, 2004, 2003 and 2002 (the
2003, 2002 and 2001 Fiscal Years, respectively). These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits. We did not
audit the financial statements for 29 (Fiscal Year 2003) and 30 (Fiscal Years
2002 and 2001) subsidiary partnerships whose losses aggregated $4,961,601 (2003
Fiscal Year), $700,428 (2002 Fiscal Year), and $6,641,429 (2001 Fiscal Year) and
whose assets constituted 93% of the Partnership's assets at March 15, 2004 and
2003, presented in the accompanying consolidated financial statements. The
financial statements for these subsidiary partnerships were audited by other
auditors whose reports thereon have been furnished to us and our opinion
expressed herein, insofar as it relates to the amounts included for these
subsidiary partnerships, is based solely upon the reports of the other auditors.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (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, based upon our audits, and the reports of the other auditors
referred to above, the accompanying consolidated financial statements referred
to in the first paragraph present fairly, in all material respects, the
financial position of Liberty Tax Credit Plus L.P. and Subsidiaries at March 15,
2004 and 2003 and the results of their operations and their cash flows for the
years ended March 15, 2004, 2003 and 2002, in conformity with U.S. generally
accepted accounting principles.

As discussed in Note 10(a), the consolidated financial statements include the
financial statements of two subsidiary partnerships with significant
contingencies and uncertainties regarding their continuing operations. During
the 2003 Fiscal Year, these subsidiary partnerships incurred significant
operating losses and have significant equity deficiencies. These conditions
raise substantial doubt about the subsidiary partnerships' abilities to continue
as going concerns. The financial statements of these two subsidiary partnerships
were prepared assuming that each will continue as a going concern. The two
subsidiary partnerships' losses aggregated $796,247 (2003 Fiscal Year), $663,949
(2002 Fiscal Year) and $240,856 (2001 Fiscal Year) and their assets aggregated
$10,260,761 and $10,746,963 at March 15, 2004 and 2003, respectively.
Management's plans regarding these matters are also discussed 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 7, 2004

18

[ASHER & COMPANY LETTERHEAD]

Independent Auditor's Report

The Partners
B & C Housing Associates
T/A St. Thomas Square/Worthington Apartments
Marlton, New Jersey

We have audited the accompanying balance sheets of B & C Housing Associates T/A
St. Thomas Square/Worthington Apartments (A Limited Partnership), HUD Project
No. 118-94008, as of December 31, 2003 and 2002 and the related statements of
loss, Partners' capital and cash flows for the year ended December 31, 2003.
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 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 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 B & C Housing Associates T/A
St. Thomas Square/Worthington Apartments (A Limited Partnership), HUD Project
No. 118-94008, as of December 31, 2003 and 2002, and the results of its
operations, changes in its Partners' capital and its cash flows for the year
ended December 31, 2003 in conformity with accounting principles generally
accepted in the United States of America.

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 we have also issued reports
dated January 15, 2004 on our consideration of B & C Housing Associates' T/A St.
Thomas Square/Worthington Apartments (A Limited Partnership), HUD Project No.
118-94008, internal control 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 read in conjunction with this report in considering the
results of our audit.

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 15, 2004

19

[ASHER & COMPANY LETTERHEAD]

Independent Auditor's Report

The Partners
B & C Housing Associates
T/A St. Thomas Square/Worthington Apartments
Marlton, New Jersey

We have audited the accompanying balance sheets of B & C Housing Associates T/A
St. Thomas Square/Worthington Apartments (A Limited Partnership), HUD Project
No. 118-94008, as of December 31, 2002 and 2001, and the related statements of
loss, Partners' capital and cash flows for the year ended December 31, 2002.
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 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 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 B & C Housing Associates T/A
St. Thomas Square/Worthington Apartments (A Limited Partnership), HUD Project
No. 118-94008, as of December 31, 2002 and 2001, and the results of its
operations, changes in its Partners' capital and its cash flows for the year
ended December 31, 2002 in conformity with accounting principles generally
accepted in the United States of America.

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 we have also issued reports
dated February 8, 2003 on our consideration of B & C Housing Associates' T/A St.
Thomas Square/Worthington Apartments (A Limited Partnership), HUD Project No.
118-94004, internal control 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 read in conjunction with this report in considering the
results of our audit.

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
February 8, 2003

20

[FISHBEIN & COMPANY, P.C. Letterhead]

INDEPENDENT AUDITOR'S REPORT

Partners
State Street 86 Associates Limited Partnership

We have audited the accompanying balance sheets of STATE STREET 86 ASSOCIATES
LIMITED PARTNERSHIP (A Limited Partnership) as of December 31, 2003 and 2002,
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 State Street 86 Associates
Limited Partnership as of December 31, 2003 and 2002, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles generally accepted in the United States
of America.

/s/ Fishbein & Company, P.C.
Elkins Park, Pennsylvania
January 21, 2004

21

[FISHBEIN & COMPANY, P.C. Letterhead]

INDEPENDENT AUDITOR'S REPORT

Partners
State Street 86 Associates Limited Partnership

We have audited the accompanying balance sheets of STATE STREET 86 ASSOCIATES
LIMITED PARTNERSHIP (A Limited Partnership) as of December 31, 2002 and 2001,
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 State Street 86 Associates
Limited Partnership as of December 31, 2002 and 2001, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles generally accepted in the United States
of America.

/s/ Fishbein & Company, P.C.
Elkins Park, Pennsylvania
January 21, 2003

22

[Fishbein & Company, P.C. Letterhead]

INDEPENDENT AUDITOR'S REPORT

Partners
Foxglenn Investors

We have audited the accompanying balance sheets of FOXGLENN INVESTORS (A Limited
Partnership) as of December 31, 2003 and 2002, and the related statements of
operations, partners' equity deficiency and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with 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 Foxglenn Investors as of
December 31, 2003 and 2002, 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/ Fishbein & Company, P.C.
Elkins Park, Pennsylvania
January 15, 2004

23

[Fishbein & Company, P.C. Letterhead]

INDEPENDENT AUDITOR'S REPORT

Partners
Foxglenn Investors

We have audited the accompanying balance sheets of FOXGLENN INVESTORS (A Limited
Partnership) as of December 31, 2002 and 2001, and the related statements of
operations, partners' equity deficiency and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with 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 Foxglenn Investors as of
December 31, 2002 and 2001, 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/ Fishbein & Company, P.C.
Elkins Park, Pennsylvania
January 16, 2003

24

[Bordman & Winnick CPAs Letterhead]

Independent Auditor's Report

To the Partners
Shiloh Grove Limited Partnership
Beachwood, Ohio

We have audited the accompanying balance sheet of SHILOH GROVE LIMITED
PARTNERSHIP, FHA PROJECT #043-35442 as of December 31, 2003, and the related
Statements of income, changes in partners' equity and cash flows for the year
then ended. These financial statements are the responsibility of SHILOH GROVE
LIMITED PARTNERSHIP'S management. Our responsibility is to express an opinion on
these financial statements based on our audit. The financial statements of
SHILOH GROVE LIMITED PARTNERSHIP as of December 31, 2002, were audited by other
auditors whose report, dated February 21, 2003 expressed an unqualified opinion
on those statements.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America 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 SHILOH GROVE LIMITED
PARTNERSHIP as of December 31, 2003, and the results of its operations, changes
in partners' equity, and its cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued a report
dated March 5, 2004 on our consideration of SHILOH GROVE LIMITED PARTNERSHIP's
internal control and 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 read in conjunction with this report in considering the results of our audit.

Our audit were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
included in the report (shown on pages 12 to 16) and the Financial Data Template
is presented for purposes of additional analysis and is not a required part of
the basic financial statements of SHILOH GROVE LIMITED PARTNERSHIP. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated, in all
material respects, in relation to the basic financial statements taken as a
whole.

/s/ Bordman & Winnick
Certified Public Accountants
West Bloomfield, MI
March 5, 2004

25

[Bordman & Winnick CPAs Letterhead]

Independent Auditor's Report

To the Partners
Shiloh Grove Limited Partnership
Beachwood, Ohio

We have audited the accompanying balance sheet of SHILOH GROVE LIMITED
PARTNERSHIP, FHA PROJECT #043-35445 as of December 31, 2003, and the related
Statements of income, changes in partners' equity and cash flows for the year
then ended. These financial statements are the responsibility of SHILOH GROVE
LIMITED PARTNERSHIP'S management. Our responsibility is to express an opinion on
these financial statements based on our audit. The financial statements of
SHILOH GROVE LIMITED PARTNERSHIP as of December 31, 2002, were audited by other
auditors whose report, dated February 21, 2003 expressed an unqualified opinion
on those statements.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America 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 SHILOH GROVE LIMITED
PARTNERSHIP as of December 31, 2003, and the results of its operations, changes
in partners' equity, and its cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued a report
dated March 5, 2004 on our consideration of SHILOH GROVE LIMITED PARTNERSHIP's
internal control and 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 read in conjunction with this report in considering the results of our audit.

Our audit were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
included in the report (shown on pages 12 to 17) and the Financial Data Template
is presented for purposes of additional analysis and is not a required part of
the basic financial statements of SHILOH GROVE LIMITED PARTNERSHIP. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated, in all
material respects, in relation to the basic financial statements taken as a
whole.

/s/ Bordman & Winnick
Certified Public Accountants
West Bloomfield, MI
March 5, 2004

26

[Baumgarten & Company LLP Letterhead]

Independent Auditor's Report

To the Partners
Shiloh Grove Limited Partnership
Beachwood, Ohio

We have audited the accompanying balance sheets of Shiloh Grove Limited
Partnership, (an Ohio Limited Partnership) as of December 31, 2002 and 2001, 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
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 standards generally accepted in the
United States of America 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 Shiloh Grove Limited
Partnership as of December 31, 2002 and 2001, and the results of its operations,
changes in partners' equity and cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.

Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information included in these financial statements is presented for the purposes
of additional analysis and is not a required part of the basic financial
statements of Shiloh Grove Limited Partnership. 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/ Baumgarten & Company LLP
Certified Public Accountants
Cleveland, Ohio
February 21, 2003

27

[FRIEDMAN ALPREN & GREEN LLP Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Silver Blue Lake Apartments, Ltd.

We have audited the accompanying statements of income, changes in partners'
capital and cash flows of SILVER BLUE LAKE APARTMENTS, LTD. (a limited
partnership), FHA Project No. FL29-K005-009-124, for the period January 1, 2003
to June 18, 2003 (date of dissolution). 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 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 audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations and cash flows of SILVER BLUE
LAKE APARTMENTS, LTD. for the period January 1, 2003 to June 18, 2003 (date of
dissolution), in conformity with accounting principles generally accepted in the
United States of America.

/s/ Friedman Alpren & Green LLP
New York, New York
September 18, 2003

28

[FRIEDMAN ALPREN & GREEN LLP Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Silver Blue Lake Apartments, Ltd.

We have audited the accompanying balance sheet of SILVER BLUE LAKE APARTMENTS,
LTD. (a limited partnership), FHA Project No. FL29-K005-009-124, as of December
31, 2002, and the related statements of operations, changes in partners' capital
deficiency and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with 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 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 SILVER BLUE LAKE APARTMENTS,
LTD. as of December 31, 2002, and the results of its operations and its cash
flows for the year then ended in conformity with accounting principles generally
accepted in the United States of America.

/s/ Friedman Alpren & Green LLP
New York, New York
February 4, 2003

29

[FRIEDMAN ALPREN & GREEN LLP Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Silver Blue Lake Apartments, Ltd.

We have audited the accompanying balance sheet of SILVER BLUE LAKE APARTMENTS,
LTD. (a limited partnership), FHA Project No. FL29-K005-009-124, as of December
31, 2001, and the related statements of operations, comprehensive loss, changes
in partners' capital deficiency and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with 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 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 SILVER BLUE LAKE APARTMENTS,
LTD. as of December 31, 2001, and the results of its operations and its cash
flows for the year then ended in conformity with accounting principles generally
accepted in the United States of America.

/s/ Friedman Alpren & Green LLP
New York, New York
February 8, 2002

30

[Saltz, Shamis & Goldfarb, Inc. Letterhead]

Independent Auditor's Report

To the General and Limited Partners
Lancaster Towers Associates, L.P.

We have audited the accompanying balance sheet of Lancaster Towers Associates,
L.P. (A Delaware Limited Partnership), FHA Project No. 014-44031-LDC-R as of
December 31, 2003, and the related statements of income, partners' capital and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit. The financial
statements as of December 31, 2002 were audited by Bick Fredman & Company whose
Audit Department merged with Saltz, Shamis & Goldfarb, Inc. as of October 1,
2003 and whose report dated January 10, 2003 expressed an unqualified opinion on
those statements.

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. 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 Lancaster Towers Associates,
L.P. as of December 31, 2003, and the results of its operations and cash flows
for the year then ended, in conformity with accounting principles generally
accepted in the United States of America.

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 9, 2004 on our
consideration of Lancaster Towers Associates, L.P.'s internal control and
reports dated January 9, 2004 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. 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/ Saltz, Shamis & Goldfarb, Inc.
Cleveland, Ohio
January 9, 2004

31

[Bick-Fredman & Co Letterhead]

Independent Auditor's Report

To the General and Limited Partners
Lancaster Towers Associates, L.P.

We have audited the accompanying balance sheets of Lancaster Towers Associates,
L.P. (A Delaware Limited Partnership), FHA Project No. 014-44031-LDC-R as of
December 31, 2002 and 2001, 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 auditing standards generally accepted
in the United States of America 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 Lancaster Towers Associates,
L.P. as of December 31, 2002 and 2001, and the results of its operations 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 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 10, 2003 on our
consideration of Lancaster Towers Associates, L.P.'s internal control and
reports dated January 10, 2003 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. 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 10, 2003

32

[Asher & Company, Ltd. Letterhead]

Independent Auditors' Report

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

We have audited the accompanying balance sheets of West Kinney Associates, L.P.
T/A Willie T. Wright Plaza (A Limited Partnership) Project No. NJHMFA 607, as of
December 31, 2003 and 2002, 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 auditing standards generally accepted
in the United States of America 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 audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of West Kinney Associates, L.P.
T/A Willie T. Wright Plaza (A Limited Partnership) Project No. NJHMFA 607, as of
December 31, 2003 and 2002, and the results of its operations, changes in its
Partners' capital and its 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, we have issued reports dated
January 19, 2004 on our consideration of West Kinney Associates, L.P.'s T/A
Willie T. Wright Plaza (A Limited Partnership) Project No. NJHMFA 607, internal
control 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
read in conjunction with this report in considering the results of our audit.

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 19, 2004

33

[Asher & Company, Ltd. Letterhead]

Independent Auditors' Report

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

We have audited the accompanying balance sheets of West Kinney Associates, L.P.
T/A Willie T. Wright Plaza (A Limited Partnership) Project No. NJHMFA 607, as of
December 31, 2002 and 2001, 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 auditing standards generally accepted
in the United States of America 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 audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of West Kinney Associates, L.P.
T/A Willie T. Wright Plaza (A Limited Partnership) Project No. NJHMFA 607, as of
December 31, 2002 and 2001, and the results of its operations, changes in its
Partners' capital and its 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, we have issued reports dated
January 23, 2003 on our consideration of West Kinney Associates, L.P.'s T/A
Willie T. Wright Plaza (A Limited Partnership) Project No. NJHMFA 607, internal
control 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
read in conjunction with this report in considering the results of our audit.

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 23, 2003

34

[MERINA & COMPANY, LLP Letterhead]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Autumn Park Associates Limited Partnership

We have audited the accompanying balance sheets of Autumn Park Associates
Limited Partnership as of December 31, 2003 and 2002, and the related statements
of profit and loss, changes of partner' 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 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 partnership as of December
31, 2003 and 2002, 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/ Merina & Company, LLP
West Linn, Oregon
February 26, 2004

35

[GREGG ASSOCIATES Letterhead]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Autumn Park Associates Limited Partnership

We have audited the accompanying balance sheet of Autumn Park Associates Limited
Partnership as of December 31, 2002 and the related statements operation,
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. The financial statements of Autumn Park Associates Limited
Partnership as of December 31, 2001 were audited by other auditors whose report
dated February 20, 2002, expressed an unqualified opinion on those statements.

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 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 the Partnership as of December
31, 2002 and the results of its operations and its cash flows for the year then
ended, in conformity with accounting principles generally accepted in the United
States of America.

/s/ Merina & Company, LLP
West Linn, Oregon
February 21, 2003

36

[GREGG ASSOCIATES Letterhead]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Autumn Park Associates Limited Partnership
Portland, Oregon

We have audited the accompanying balance sheets of Autumn Park Associates
Limited Partnership, as of December 31, 2001 and 2000, 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 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 Autumn Park Associates Limited
Partnership, as of December 31, 2001 and 2000, and the results of its
operations, changes in partners' capital, and cash flows for the year then ended
in conformity with accounting principles generally accepted in the United States
of America.

/s/ GREGG ASSOCIATES, PC
David R. Gregg
Certified Public Accountant
Portland, Oregon
February 20, 2002

37

[REZNICK FEDDER & SILVERMAN Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Regent Street Associates

We have audited the accompanying balance sheets of Regent Street Associates as
of December 31, 2003 and 2002, and the 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 audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America 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 audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Regent Street Associates as of
December 31, 2003 and 2002, and the results of its operations, the changes in
partners' equity (deficit) and its 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 and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports for the year
ended December 31, 2003, dated February 13, 2004, on our consideration of Regent
Street Associates' internal control and 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.

Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
on pages 27 through 40 is presented for purposes of additional analysis and is
not a required part of the basic financial statements of the Partnership. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

/s/ Reznick Fedder & Silverman
Taxpayer Identification Number;
52-1088612
Baltimore, Maryland
February 13, 2004

Lead Auditor: Michael A. Cumming

38

[REZNICK FEDDER & SILVERMAN Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Regent Street Associates

We have audited the accompanying balance sheets of Regent Street Associates as
of December 31, 2002 and 2001, and the 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 audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America 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 audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Regent Street Associates as of
December 31, 2002 and 2001, and the results of its operations, the changes in
partners' equity (deficit) and its 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 and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports for the year
ended December 31, 2002, dated January 31, 2003, on our consideration of Regent
Street Associates' internal control and 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.

Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
on pages 28 through 32 is presented for purposes of additional analysis and is
not a required part of the basic financial statements of the Partnership. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

/s/ Reznick Fedder & Silverman
Taxpayer Identification Number;
52-1088612
Baltimore, Maryland
January 31, 2003

Lead Auditor: Michael A. Cumming

39

[Asher & Company, Ltd. Letterhead]

Independent Auditors' Report

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

We have audited the accompanying balance sheets of Magnolia Arms Associates,
Ltd. T/A Palm Terrace Apartments (A Limited Partnership) as of December 31, 2003
and 2002 and the related statements of 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
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 Magnolia Arms Associates, Ltd.
T/A Palm Terrace Apartments (A Limited Partnership) as of December 31, 2003 and
2002, and the results of its operations, changes in its Partners' capital and
its cash flows for the years then ended in conformity with 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 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 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/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 31, 2004

40

[Asher & Company, Ltd. Letterhead]

Independent Auditors' Report

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

We have audited the accompanying balance sheets of Magnolia Arms Associates,
Ltd. T/A Palm Terrace Apartments (A Limited Partnership) as of December 31, 2002
and 2001, 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 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 Magnolia Arms Associates, Ltd.
T/A Palm Terrace Apartments (A Limited Partnership) as of December 31, 2002 and
2001, and the results of its operations, changes in its Partners' capital and
its cash flows for the years then ended in conformity with 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 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 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/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 15, 2003

41

[Asher & Company, Ltd. Letterhead]

Independent Auditors' Report

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

We have audited the accompanying balance sheets of Greenleaf Associates, L.P. (A
Limited Partnership), HUD Project No. 084-94009, as of December 31, 2003 and
2002, and the related statements of loss, Partners' capital and cash flows for
the year ended December 31, 2003. 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 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 audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Greenleaf Associates, L.P. (A
Limited Partnership), HUD Project No. 084-94009, as of December 31, 2003 and
2002, and the results of its operations, changes in its Partners' capital and
its cash flows for the year ended December 31, 2003 in conformity with
accounting principles generally accepted in the United States of America.

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, we have also issued reports
dated January 23, 2004 on our consideration of Greenleaf Associates, L.P.'s (A
Limited Partnership), HUD Project No. 084-94009, internal control 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 read in conjunction
with this report in considering the results of our audit.

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 23, 2004

42

[Asher & Company, Ltd. Letterhead]

Independent Auditors' Report

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

We have audited the accompanying balance sheets of Greenleaf Associates, L.P. (A
Limited Partnership), HUD Project No. 084-94009, as of December 31, 2002 and
2001, and the related statements of loss, Partners' capital and cash flows for
the year ended December 31, 2002. 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 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 audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Greenleaf Associates, L.P. (A
Limited Partnership), HUD Project No. 084-94009, as of December 31, 2002 and
2001, and the results of its operations, changes in its Partners' capital and
its cash flows for the year ended December 31, 2002 in conformity with
accounting principles generally accepted in the United States of America.

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, we have also issued reports
dated January 17, 2003 on our consideration of Greenleaf Associates, L.P.'s (A
Limited Partnership), HUD Project No. 084-94009, internal control 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 read in conjunction
with this report in considering the results of our audit.

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 17, 2003

43

[JOSE E. ROSARIO & CO. Letterhead]

INDEPENDENT AUDITOR'S REPORT

To the Partners of Puerto Rico Housing Finance Corporation
Alameda Towers Associates, L.P. San Juan, Puerto Rico
Rio Piedras, PR

I have audited the accompanying balance sheets of Alameda Towers Associates,
L.P. HUD Project No. RQ-46-K-006-003, as of December 31, 2003 and 2002, 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. My responsibility is to express an opinion on these
financial statements based on my audits.

I conducted my audits in accordance with auditing standards generally accepted
in the United States of America and Puerto Rico 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 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 Alameda Towers Associates, L.P. as
of December 31, 2003 and 2002 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 and
Puerto Rico.

In accordance with GOVERNMENT AUDITING STANDARDS, I have also issued a report
dated January 28, 2004 on my consideration of Alameda Towers Associates, L.P.'s
internal control and on my 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 read in conjunction with this report in considering the results of my audits.

My audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 13 to 19 is presented for purposes of additional analysis
and is not a required part of the basic financial statements of Alameda Towers
Associates, LP. Such information has been subjected to the auditing procedures
applied in the audits 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/ Jose E. Rosario & Co.
License No. 961 Expires December 1, 2004
Stamp No. 1931870 of the Puerto Rico College of CPA was affixed to the original.
January 28, 2004
San Juan, Puerto Rico

44

[JOSE E. ROSARIO & CO. Letterhead]

INDEPENDENT AUDITOR'S REPORT

To the Partners of Puerto Rico Housing Finance Corporation
Alameda Towers Associates, L.P. San Juan, Puerto Rico
Rio Piedras, PR

I have audited the accompanying balance sheets of Alameda Towers Associates,
L.P. HUD Project No. RQ-46-K-006-003, as of December 31, 2002 and 2001, 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. My responsibility is to express an opinion on these
financial statements based on my audits.

I conducted my audits in accordance with auditing standards generally accepted
in the United States of America and Puerto Rico 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 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 Alameda Towers Associates, L.P. as
of December 31, 2002 and 2001 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 and
Puerto Rico.

In accordance with GOVERNMENT AUDITING STANDARDS, I have also issued a report
dated January 30, 2003 on my consideration of Alameda Towers Associates, L.P.'s
internal control and on my 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 read in conjunction with this report in considering the results of my audits.

My audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 13 to 19 is presented for purposes of additional analysis
and is not a required part of the basic financial statements of Alameda Towers
Associates, LP. Such information has been subjected to the auditing procedures
applied in the audits 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/ Jose E. Rosario & Co.
License No. 961 Expires December 1, 2004
Stamp No. 1865278 of the Puerto Rico College of CPA was affixed to the original.
January 30, 2002
San Juan, Puerto Rico

45

[Friedman, Alpren & Green, LLP Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Dixie Apartment Associates, Ltd.

We have audited the accompanying statements of income, changes in partners'
capital and cash flows of DIXIE APARTMENT ASSOCIATES, LTD. (a limited
partnership), for the period January 1, 2003 to June 18, 2003 (date of
dissolution). 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 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 audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations, changes in partners' capital
and cash flows of DIXIE APARTMENT ASSOCIATES, LTD. for the period January 1,
2003 to June 18, 2003 (date of dissolution), in conformity with accounting
principles generally accepted in the United States of America.

/s/ Friedman, Alpren & Green LLP
New York, New York
June 18, 2003

46

[Friedman, Alpren & Green, LLP Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Dixie Apartment Associates, Ltd.

We have audited the accompanying balance sheet of Dixie Apartment Associates,
Ltd. (a limited partnership), as of December 31, 2002, and the related
statements of operations, changes in partners' capital deficiency and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with 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 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 Dixie Apartment Associates,
Ltd. as of December 31, 2002, and the results of its operations and its cash
flows for the year then ended in conformity with accounting principles generally
accepted in the United States of America.

/s/ Friedman, Alpren & Green LLP
New York, New York
February 6, 2003

47

[Ernst & Young Letterhead]

REPORT OF INDEPENDENT AUDITORS

To the Partners
Dixie Apartment Associates, Ltd.

We have audited the accompanying balance sheet of Dixie Apartment Associates,
Ltd., a limited partnership, as of December 31, 2001, and the related statements
of operations, partners' capital 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 auditing standards generally accepted
in 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 Dixie Apartment Associates,
Ltd. at December 31, 2001, and the results of its operations and its cash flows
for the year then ended in conformity with accounting principles generally
accepted in the United States of America.

/s/ Ernst & Young LLP
Indianapolis, Indiana
February 22, 2002

48

[Friedman, Alpren & Green LLP Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Ludlam Gardens Apartments, Ltd.

We have audited the accompanying statements of income, changes in partners'
capital and cash flows of LUDLAM GARDENS APARTMENTS, LTD. (a limited
partnership) for the period January 1, 2003 to June 18, 2003 (date of
dissolution). 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 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 audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations, changes in partners' capital
and cash flows of LUDLAM GARDENS APARTMENTS, LTD. for the period January 1, 2003
to June 18, 2003 (date of dissolution), in conformity with accounting principles
generally accepted in the United States of America.

/s/ Friedman, Alpren & Green LLP
New York, New York
June 18, 2003

49

[Friedman, Alpren & Green LLP Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Ludlam Gardens Apartments, Ltd.

We have audited the accompanying balance sheet of Ludlam Gardens Apartments,
Ltd., (a limited partnership) as of December 31, 2002, and the related
statements of operations, changes in partners' capital deficiency and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with 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 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 Ludlam Gardens Apartments, Ltd.
as of December 31, 2002, and the results of its operations and its cash flows
for the year then ended in conformity with accounting principles generally
accepted in the United States of America.

/s/ Friedman, Alpren & Green LLP
New York, New York
February 4, 2003

50

[Ernst & Young Letterhead]

REPORT OF INDEPENDENT AUDITORS

To the Partners
Ludlam Gardens Apartments, Ltd.

We have audited the accompanying balance sheet of Ludlam Gardens Apartments,
Ltd., a limited partnership, as of December 31, 2001, and the related statements
of operations, partners' capital and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with auditing standards generally accepted
in 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 Ludlam Gardens Apartments, Ltd.
at December 31, 2001, and the results of its operations and its cash flows for
the year then ended in conformity with accounting principles generally accepted
in the United States.

/s/ Ernst & Young, LLP
Indianapolis, Indiana
February 22, 2002

51

[FRIDUSS, LUKEE, SCHIFF & CO., P.C. Letterhead]

INDEPENDENT AUDITOR'S REPORT

To the Partners
GROVE PARC ASSOCIATES LIMITED PARTNERSHIP

We have audited the accompanying balance sheet of GROVE PARC ASSOCIATES LIMITED
PARTNERSHIP, FHA Project No. 071-11091 (An Illinois Limited Partnership) as of
December 31, 2003, and the related statement of operations, partners' deficit,
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit. The financial
statements of GROVE PARC ASSOCIATES LIMITED PARTNERSHIP as of December 31, 2002
were audited by other auditors, whose report dated, January 30, 2003, expressed
an unqualified opinion on those statements.

We conducted our audit in accordance with U.S. 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 Grove Parc Associates Limited
Partnership as of December 31, 2003, and the results of its operations, changes
in its partners' deficit and its cash flows for the year then ended, in
conformity with U.S. generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued reports,
dated March 18, 2004 on our consideration of GROVE PARC ASSOCIATES LIMITED
PARTNERSHIP'S internal control, 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 read in conjunction with this report in considering the
results of our audits.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information for the year ended December 31,
2003 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/ Friduss, Lukee, Schiff & Co., P.C.
Chicago, Illinois
March 18, 2004

52

[PHILIP ROOTBERG & COMPANY, LLP Letterhead]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Grove Parc Associates Limited Partnership

We have audited the accompanying balance sheet of Grove Parc Associates Limited
Partnership (a limited partnership) as of December 31, 2002 and 2001, 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 U.S. 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 Grove Parc Associates Limited
Partnership as of December 31, 2002 and 2001, and the results of its operations,
changes in its partners' deficit and its cash flows for the years then ended in
conformity with U.S. generally accepted accounting principles.

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

/s/ Philip Rootberg & Company, LLP
Chicago, Illinois
January 30, 2003

53

[Michael Sczekan & Co., P.C. Letterhead]

INDEPENDENT AUDITOR'S REPORT

To the General Partners
Apple Creek Housing Associates, Ltd.
Arvada, Colorado

We have audited the accompanying Balance Sheet of Apple Creek Housing
Associates, Ltd. FHA Project Number 101-35515, as of May 31, 2002, and the
related statements of profit and loss, changes in project equity and cash flows
for the period January 1 through May 31, 2002. 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 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 Apple Creek Housing Associates,
Ltd., as of May 31, 2002, 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 and the CONSOLIDATED AUDIT
GUIDE FOR AUDITS OF HUD PROGRAMS we have also issued a report dated August 12,
2002, on our consideration of Apple Creek Housing Associates, Ltd.'s internal
control structure and reports dated August 12, 2002, on its compliance with laws
and regulations and compliance with specific requirements applicable to major
HUD programs and specific requirements applicable to Fair Housing and
Non-Discrimination.

Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report on pages
13 through 18 is presented for the purposes of additional analysis and are not a
required part of the financial statements of Apple Creek Housing Associates,
Ltd. Such information has been subjected to the same auditing procedures applied
in the examination of the basic financial statements and, in our opinion, are
presented fairly in all material respects in relation to the financial
statements taken as a whole.

Respectfully submitted,

/s/ Michael Sczekan & Co., P.C.
Certified Public Accountants

Englewood, Colorado
August 12, 2002

54

[Michael Sczekan & Co., P.C. Letterhead]

INDEPENDENT AUDITOR'S REPORT

To the General Partners
Apple Creek Housing Associates, Ltd.
Arvada, Colorado

We have audited the accompanying Balance Sheet of Apple Creek Housing
Associates, Ltd. FHA Project Number 101-35515, as of December 31, 2001, and the
related statements of profit and loss, changes in project equity 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 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 Apple Creek Housing Associates,
Ltd., as of December 31, 2001, 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 and the Consolidated Audit
Guide for Audits of HUD Programs we have also issued a report dated February 25,
2002, on our consideration of Apple Creek Housing Associates, Ltd.'s internal
control structure and reports dated February 25, 2002, on its compliance with
laws and regulations and compliance with specific requirements applicable to
major HUD programs and specific requirements applicable to Fair Housing and
Non-Discrimination.

Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report on pages
13 through 18 is presented for the purposes of additional analysis and are not a
required part of the financial statements of Apple Creek Housing Associates,
Ltd. Such information has been subjected to the same auditing procedures applied
in the examination of the basic financial statements and, in our opinion, are
presented fairly in all material respects in relation to the financial
statements taken as a whole.

Respectfully submitted,

/s/Michael Sczekan & Co., P.C.
Certified Public Accountants

Englewood, Colorado
February 25, 2002

55

[BRODSHATZER, WALLACE, SPOON & YIP Letterhead]

INDEPENDENT AUDITORS' REPORT

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

We have audited the balance sheets of Redwood Villa Associates (A Limited
Partnership) ("Partnership") as of December 31, 2003 and 2002, and the related
statements of operations, changes in partners' (deficit), and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America 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 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 Redwood Villa Associates (A
Limited Partnership) as of December 31, 2003 and 2002, 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 2 to the
financial statements, the Partnership has sustained operating losses since
inception. For the year ended December 31, 2003, the Partnership experienced a
loss of $201,871 (including $212,076 of depreciation and $4,553 of amortization
expense) and as of that date, had a working capital deficiency of $754,531 and a
partners' (deficit) of $1,729,970.

These conditions raise substantial doubt about the Partnership's ability to
continue as a going concern. Management's plans regarding these matters are
described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued our report
dated January 27, 2004 on our consideration of Redwood Villa Associates' (A
Limited Partnership) internal control over financial reporting and our tests of
its compliance with certain provisions of laws, regulations, contracts and
grants.

/s/ Brodshatzer, Wallace, Spoon & Yip
San Diego, California
January 27, 2004

56

[BRODSHATZER, WALLACE, SPOON & YIP Letterhead]

INDEPENDENT AUDITORS' REPORT

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

We have audited the balance sheets of Redwood Villa Associates (A Limited
Partnership) ("Partnership") as of December 31, 2002 and 2001, and the related
statements of operations, changes in partners' deficit, and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America 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 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 Redwood Villa Associates (A
Limited Partnership) as of December 31, 2002 and 2001, 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 2 to the
financial statements, the Partnership has sustained operating losses since
inception. For the year ended December 31, 2002, the Partnership experienced a
loss of $158,212 (including $212,830 of depreciation and $4,553 of amortization
expense) and as of that date, had a working capital deficiency of $708,645 and a
partners' deficit of $1,513,099.

These conditions raise substantial doubt about the Partnership's ability to
continue as a going concern. Management's plans regarding these matters are
described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued our report
dated January 29, 2003 on our consideration of Redwood Villa Associates' (A
Limited Partnership) internal control over financial reporting and our tests of
its compliance with certain provisions of laws, regulations, contracts and
grants.

/s/ Brodshatzer, Wallace, Spoon & Yip
San Diego, California
January 29, 2003

57

[Asher & Company, Ltd. Letterhead]

Independent Auditors' Report

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

We have audited the accompanying balance sheets of Charles Drew Court
Associates, L.P. (A Limited Partnership) as of December 31, 2003 and 2002 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 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 Charles Drew Court Associates,
L.P. (A Limited Partnership) as of December 31, 2003 and 2002 and the results of
its operations, changes in its Partners' capital and its cash flows for the
years then ended in conformity with 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 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 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/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
February 6, 2004

58

[Asher & Company, Ltd. Letterhead]

Independent Auditors' Report

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

We have audited the accompanying balance sheets of Charles Drew Court
Associates, L.P. (A Limited Partnership) as of December 31, 2002 and 2001, 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 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 Charles Drew Court Associates,
L.P. (A Limited Partnership) as of December 31, 2002 and 2001, and the results
of its operations, changes in its Partners' capital and its cash flows for the
years then ended in conformity with 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 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 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/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 10, 2003

59

[Koch Group & Company, LLP Letterhead]

INDEPENDENT AUDITORS' REPORT

To The Partners
Walnut Park Plaza Associates, L.P.

We have audited the accompanying statement of financial position of Walnut Park
Plaza Associates, L.P. (A Pennsylvania Limited Partnership) as of December 31,
2003, and the related statements of operations, changes in partner's equity
(deficiency), cash flows for the year then ended. These financial statements are
the responsibility of the Walnut Park Plaza 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 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 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 Walnut Park Plaza Associates,
L.P. (A Pennsylvania Limited Partnership), as of December 31, 2003, and the
results of its operations, changes in its partner's equity (deficiency), and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.

The accompanying financial statements have been prepared assuming 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 obligation 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, 2003. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

/s/ Koch Group & Company, LLP
New York, New York
March 31, 2004, except for notes 8 and 11,
as to which the date is June 2, 2004

60

[Matthews, Carter and Boyce, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

To The Partners
Walnut Park Plaza Associates
Philadelphia, Pennsylvania

We have audited the accompanying balance sheets of Walnut Park Plaza Associates
(a Pennsylvania Limited Partnership) as of December 31, 2002 and 2001, and the
related statements of operations, 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 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 amount and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Walnut Park Plaza Associates as
of December 31, 2002 and 2001, 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.

In accordance with Government Auditing Standards, we have also issued a report
dated January 31, 2003, on our consideration of Walnut Park Plaza Associates
internal control and a report dated January 31, 2003 on its compliance with
laws, regulations, contracts and grants applicable to Walnut Park Plaza
Associates.

The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 10 to the
financial statements, the Partnership has suffered recurring losses from
operations and does not have sufficient cash flow from operations to pay current
liabilities, which raise substantial doubt about its ability to continue as a
going concern. Management's plans regarding those matters are also described in
Note 10. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

/s/ Matthews, Carter and Boyce, P.C.
Fairfax, Virginia
January 31, 2003

61

[Richey May & Co. Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Bayridge Associates Limited Partnership
Denver, Colorado

We have audited the accompanying balance sheet of Bayridge Associates Limited
Partnership as of December 31, 2003 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. The financial statements of Bayridge Associates Limited Partnership
as of December 31, 2002 were audited by other auditors whose report dated
January 31, 2003 expressed an unqualified opinion on those statements.

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 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 Bayridge Associates Limited
Partnership, as of December 31, 2003 and the results of its operations and its
cash flows for the year then ended, in conformity with accounting principles
generally accepted in the United States of America.

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 11 and 12 is
presented for the 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 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/ Richey may & Co.
Englewood, Colorado
January 16, 2004

62

[Reznick Fedder & Silverman Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Bayridge Associates Limited Partnership

We have audited the accompanying balance sheets of Bayridge Associates Limited
Partnership as of December 31, 2002 and 2001, 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 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 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 Bayridge Associates Limited
Partnership, as of December 31, 2002 and 2001, 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/ Reznick Fedder & Silverman
Atlanta, Georgia
January 31, 2003

63

[Habif, Arogeti & Wynne, LLP. Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners of
United-Pennsylvanian Limited Partnership

We have audited the accompanying balance sheets of UNITED-PENNSYLVANIAN LIMITED
PARTNERSHIP [FHA Project No. R-251-8E] as of December 31, 2003 and 2002, and the
related statements of profit and loss, 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 auditing standards generally accepted
in the United States of America 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 UNITED-PENNSYLVANIAN LIMITED
PARTNERSHIP as of December 31, 2003 and 2002, and the results of its operations,
its changes in partners' deficit, and its 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, 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 the Inspector General, we have also issued our reports dated January 28,
2004, on our consideration of UNITED-PENNSYLVANIAN LIMITED PARTNERSHIP's
internal control 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 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 supporting information included in
the report [shown on pages 14 through 21] is presented for the purpose 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 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/ Habif, Arogeti & Wynne, LLP
Atlanta, Georgia
January 28, 2004

64

[Habif, Arogeti & Wynne, LLP. Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners of
United-Pennsylvanian Limited Partnership

We have audited the accompanying balance sheets of UNITED-PENNSYLVANIAN LIMITED
PARTNERSHIP, PHFA Project No. R-251-8E, as of December 31, 2002 and 2001, and
the related statements of profit and loss, changes in partners' equity
[deficit], and cash flows for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America 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 UNITED-PENNSYLVANIAN LIMITED
PARTNERSHIP as of December 31, 2002 and 2001, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles generally.

In accordance with 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 the Inspector General, we have also issued our reports dated February 23,
2003, on our consideration of UNITED-PENNSYLVANIAN LIMITED PARTNERSHIP's
internal control 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 read in conjunction with this report in considering the result of our audit.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supporting information
on pages13 to 21 is presented for the purpose 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 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/ Habif, Arogeti & Wynne, LLP
Atlanta, Georgia
February 23, 2003

65

[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheets of 2051 Grand Concourse Housing
Associates (a limited partnership) as of December 31, 2003 and 2002, and the
related statements of operations, partners' capital (deficiency), and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with 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 2051 Grand Concourse Housing
Associates as of December 31, 2003 and 2002, 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 audits were made for the purpose of forming an opinion on the basic
financial statements take as a whole. The accompanying 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 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/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C
White Plains, New York
January 23, 2004

66

[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheets of 2051 Grand Concourse Housing
Associates (a limited partnership) as of December 31, 2002 and 2001, and the
related statements of operations, partners' capital (deficiency), and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with 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 2051 Grand Concourse Housing
Associates as of December 31, 2002 and 2001, 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/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C
White Plains, New York
January 31, 2003

67

[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheets of Concourse Artists Housing
Associates (a limited partnership) as of December 31, 2003 and 2002, and the
related statements of operations, partners' capital (deficiency), and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with 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 Concourse Artists Housing
Associates as of December 31, 2003 and 2002, 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 audits were made for the purpose of forming an opinion on the basic
financial statements take as a whole. The accompanying 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 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/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C.
White Plains, New York
January 23, 2004

68

[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheets of Concourse Artists Housing
Associates (a limited partnership) as of December 31, 2002 and 2001, and the
related statements of operations, partners' capital (deficiency), and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with 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 Concourse Artists Housing
Associates as of December 31, 2002 and 2001, 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/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C.
White Plains, New York
January 31, 2003

69

[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheets of Willoughby-Wyckoff Housing
Associates (a limited partnership) as of December 31, 2003 and 2002, and the
related statements of operations, partners' capital (deficiency), and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with 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 Willoughby-Wyckoff Housing
Associates as of December 31, 2003 and 2002, 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 audits were made for the purpose of forming an opinion on the basic
financial statements take as a whole. The accompanying 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 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/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C.
White Plains, New York
January 23, 2004

70

[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheets of Willoughby-Wyckoff Housing
Associates (a limited partnership) as of December 31, 2002 and 2001, and the
related statements of operations, partners' capital (deficiency), and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with 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 Willoughby-Wyckoff Housing
Associates as of December 31, 2002 and 2001, 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/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C.
White Plains, New York
January 31, 2003

71

[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheets of Robin Housing Associates (a
limited partnership) as of December 31, 2003 and 2002, and the related
statements of operations, partners' capital (deficiency), and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with 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 Robin Housing Associates as of
December 31, 2003 and 2002, 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 audits were made for the purpose of forming an opinion on the basic
financial statements take as a whole. The accompanying 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 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/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C.
White Plains, New York
January 23, 2004

72

[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheets of Robin Housing Associates (a
limited partnership) as of December 31, 2002 and 2001, and the related
statements of operations, partners' capital (deficiency), and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with 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 Robin Housing Associates as of
December 31, 2002 and 2001, 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/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C.
White Plains, New York
January 31, 2003

73

[CARTER & COMPANY, CERTIFIED PUBLIC ACCOUNTANTS, LLC Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Lund Hill Associates

We have audited the accompanying balance sheet of Lund Hill Associates, (a
limited partnership), WHEDA Project No. 021, as of December 31, 2003, and the
related statements of operations, changes in 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 auditing standards generally accepted
in the United States of America 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 my audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lund Hill Associates as of
December 31, 2003, and the results of its operations and its cash flows for the
year then ended in conformity with accounting principles generally accepted in
the United States of America.

In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued our
reports dated January 16, 2004 on our consideration of Lund Hill Associates
internal control 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 read in conjunction with this report in considering the results of our audit.

The accompanying supplemental information (shown on pages 14-23) is presented
for purposes of additional analysis and is not a required part of the basic
financial statements of Lund Hill 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 financial statements taken as a whole.

/s/ Carter & Company
Atlanta, Georgia
January 16, 2004

74

[KENNETH W. BRYANT, CERTIFIED PUBLIC ACCOUNTANT Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Lund Hill Associates

I have audited the accompanying balance sheet of Lund Hill Associates, (a
limited partnership), WHEDA Project No. 021, as of December 31, 2002, and the
related statements of profit and loss, changes in partners' equity (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 auditing standards generally accepted in
the United States of America 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 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 Lund Hill Associates as of December
31, 2002, and the results of its operations and its cash flows for the year then
ended in conformity with accounting principles generally accepted in the United
States of America.

In accordance with Government Auditing Standards, I have also issued my reports
dated February 7, 2003 on my consideration of Lund Hill Associates internal
control and on my 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
read in conjunction with this report in considering the results of my audit.

The accompanying supplemental information (shown on pages 14-23) is presented
for purposes of additional analysis and is not a required part of the basic
financial statements of Lund Hill Associates. 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 financial statements taken as a whole.

/s/ Kenneth W. Bryant
Atlanta, Georgia
February 7, 2003

75

[KENNETH W. BRYANT, CERTIFIED PUBLIC ACCOUNTANT Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Lund Hill Associates

I have audited the accompanying balance sheet of Lund Hill Associates, (a
limited partnership), WHEDA Project No. 021, as of December 31, 2001, and the
related statements of partners' equity (deficit), operations and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. My responsibility is to express an opinion on these
financial statements based on my audit.

I conducted my audit 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. 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 Lund Hill Associates as of December
31, 2001, and the results of its operations and its cash flows and its changes
in partners' equity for the year then ended in conformity with accounting
principles generally accepted in the United States of America.

My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 14 to 23) are presented for purposes of additional
analysis and are not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in 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, I have also issued dated
January 30, 2002, on my consideration of the Partnership's internal controls and
a report dated January 30, 2002 on its compliance with laws and regulations.
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 my audit.

/s/ Kenneth W. Bryant
Atlanta, Georgia
January 30, 2002

76

[RICK J. TANNEBERGER, CERTIFIED PUBLIC ACCOUNTANT Letterhead]

Independent Auditor's Report

The Partners
Tanglewood Apartments, A Limited Partnership

We have audited the accompanying balance sheets of Tanglewood Apartments, A
Limited Partnership, as of December 31, 2003 and 2002, 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 audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tanglewood Apartments, A
Limited Partnership as of December 31, 2003 and 2002, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles 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 supplementary information presented
on page 12 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.

/s/ Rick J. Tanneberger, CPA, P.A.
Fayetteville, Arkansas
February 9, 2004

77

[RICK J. TANNEBERGER, CERTIFIED PUBLIC ACCOUNTANT Letterhead]

Independent Auditor's Report

The Partners
Tanglewood Apartments, A Limited Partnership

We have audited the accompanying balance sheets of Tanglewood Apartments, A
Limited Partnership, as of December 31, 2002 and 2001, 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 audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tanglewood Apartments, A
Limited Partnership as of December 31, 2002 and 2001, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information presented
on page 12 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.

/s/ Rick J. Tanneberger, CPA, P.A.
Fayetteville, Arkansas
February 10, 2003

78

[RBG & CO. Letterhead]

Independent Auditors' Report

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

We have audited the accompanying balance sheet of Quality Hill Historic
District-Phase II-A, L.P., a limited partnership, as of December 31, 2003 and
2002, 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 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 Quality Hill Historic
District-Phase II-A, L.P. as of December 31, 2003 and 2002, 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/ Rubin, Brown, Gornstein & Co. LLP
St. Louis, Missouri
February 3, 2004

79

[RBG & CO. Letterhead]

Independent Auditors' Report

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

We have audited the accompanying balance sheet of Quality Hill Historic
District-Phase II-A, L.P., a limited partnership, as of December 31, 2002 and
2001, 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 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 Quality Hill Historic
District-Phase II-A, L.P. as of December 31, 2002 and 2001, 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/ Rubin, Brown, Gornstein & Co. LLP
St. Louis, Missouri
January 31, 2003

80

[HAMILTON & MUSSER, P.C. LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheets of Penn Alto Associates, Limited
Partnership as of December 31, 2003 and 2002 and the related statements of
income, changes in partners' capital, and cash flows for the years then ended.
These financial statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audit in accordance with 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 audit provides a
reasonable basis for the opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Penn Alto Associates, Limited
Partnership, as of December 31, 2003 and 2002, 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 made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplementary information on pages
9 and 10 is presented for the purpose of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.

/s/ Hamilton & Musser, P.C.
Certified Public Accountants
Mechanicsburg, Pennsylvania
February 19, 2004

81

[HAMILTON & MUSSER, P.C. LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheets of Penn Alto Associates, Limited
Partnership as of December 31, 2002 and 2001 and the related statements of
income, changes in partners' capital, and cash flows for the years then ended.
These financial statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audit in accordance with 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 audit provides a
reasonable basis for the opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Penn Alto Associates, Limited
Partnership, as of December 31, 2002 and 2001, 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 made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplementary information on pages
9 and 10 is presented for the purpose of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.

/s/ Hamilton & Musser, P.C.
Certified Public Accountants
Mechanicsburg, Pennsylvania
February 14, 2003

82

[REZNICK FEDDER & SILVERMAN Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Sartain School Venture

We have audited the accompanying balance sheets of Sartain School Venture as of
December 31, 2003 and 2002, and the related statements of profit and loss,
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 auditing standards generally accepted
in the United States of America 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 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 at
December 31, 2003 and 2002, and the results of its operations, the changes in
partners' deficit and its 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, we have also issued our report
for the year ended December 31, 2003, dated February 6, 2004, on our
consideration of Sartain School Venture's internal control over financial
reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts and grants. That 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 audit.

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.

/s/ Reznick Fedder & Silverman
Baltimore, Maryland
February 6, 2004

83

[REZNICK FEDDER & SILVERMAN Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Sartain School Venture

We have audited the accompanying balance sheets of Sartain School Venture as of
December 31, 2002 and 2001, and the related statements of profit and loss,
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 auditing standards generally accepted
in the United States of America 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 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 at
December 31, 2002 and 2001, and the results of its operations, the changes in
partners' deficit and its 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, we have also issued our report
for the year ended December 31, 2002, dated January 31, 2003, on our
consideration of Sartain School Venture's internal control over financial
reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts and grants. That 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 audit.

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 23 through 26
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.

/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January 31, 2003

84

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

ASSETS

March 15,
--------------------------------
2004 2003
------------- -------------

Property and equipment, at cost, less accumulated
depreciation (Notes 2, 4, 7 and 10) $ 120,489,756 $ 133,543,024
Cash and cash equivalents (Notes 2, 3 and 10) 5,224,728 6,067,262
Cash held in escrow (Notes 3 and 5) 15,550,003 13,328,404
Accounts receivable - tenants 938,800 780,278
Deferred costs, less accumulated amortization (Notes 2 and 6) 2,609,060 3,250,600
Other assets 1,373,958 1,583,913
------------- -------------

Total assets $ 146,186,305 $ 158,553,481
============= =============

LIABILITIES AND PARTNERS' DEFICIT

Liabilities

Mortgage notes payable (Notes 3 and 7) $ 136,800,161 $ 147,794,611
Accounts payable and other liabilities 14,571,500 12,746,386
Due to local general partners and affiliates (Note 8) 19,979,284 16,794,330
Due to general partners and affiliates (Note 8) 8,568,329 7,727,769
Due to selling partners 1,292,934 1,303,680
------------- -------------

181,212,208 186,366,776
------------- -------------

Minority interests (Note 2) 1,654,689 1,743,507
------------- -------------

Commitments and contingencies (Notes 7, 8 and 10)

Partners' deficit

Limited partners (15,987.5 BACs issued and
outstanding) (Note 1) (35,583,942) (28,531,390)
General partners (1,096,650) (1,025,412)
------------- -------------

Total partners' deficit (36,680,592) (29,556,802)
------------- -------------

Total liabilities and partners' deficit $ 146,186,305 $ 158,553,481
============= =============

See accompanying notes to consolidated financial statements.

85

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

Year Ended March 15,
------------------------------------------------
2004 2003 2002
------------ ------------ ------------

Revenues

Rental income $ 33,310,564 $ 35,016,201 $ 35,847,433
Other (Notes 7 and 10) 1,610,854 1,711,157 2,071,272
Gain on sale of properties (Note 11) 1,798,361 6,763,125 0
------------ ------------ ------------

Total revenues 36,719,779 43,490,483 37,918,705
------------ ------------ ------------

Expenses

General and administrative 6,815,751 6,550,377 6,700,549
General and administrative-
related parties (Note 8) 2,312,353 2,636,105 2,524,079
Repairs and maintenance 7,693,875 7,181,706 7,239,106
Operating 4,785,903 4,506,866 4,646,526
Taxes 1,585,519 1,784,791 1,621,544
Insurance 1,877,352 1,957,496 1,525,334
Interest 10,183,201 11,713,295 12,831,666
Depreciation and amortization 9,182,368 8,226,767 9,178,573
------------ ------------ ------------

44,436,322 44,557,403 46,267,377
------------ ------------ ------------

Loss before minority interest and
extraordinary item (7,716,543) (1,066,920) (8,348,672)

Minority interest in loss of subsidiaries 479,188 466,991 428,522
------------ ------------ ------------

Loss before extraordinary item . (7,237,355) (599,929) (7,920,150)

Extraordinary item - forgiveness of
indebtedness income (Note 11) 113,565 0 0
------------ ------------ ------------

Net loss $ (7,123,790) $ (599,929) $ (7,920,150)
============ ============ ============

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

Loss before extraordinary item-limited partners $ (7,164,981) $ (593,930) $ (7,840,949)
Extraordinary item-limited partners 112,429 0 0
------------ ------------ ------------
Net loss-limited partners $ (7,052,552) $ (593,930) $ (7,840,949)
============ ============ ============

Loss before extraordinary item per BAC $ (448.16) $ (37.15) $ (490.44)
Extraordinary item per BAC 7.03 0 0
------------ ------------ ------------

Net loss per BAC $ (441.13) $ (37.15) $ (490.44)
============ ============ ============

See accompanying notes to consolidated financial statements.

86

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

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

Partners' deficit - March 16, 2001 $(21,036,723) $(20,096,511) $ (940,212)
Net loss, year ended March 15, 2002 (7,920,150) (7,840,949) (79,201)
------------- ------------- -------------

Partners' deficit - March 15, 2002 (28,956,873) (27,937,460) (1,019,413)
Net loss, year ended March 15, 2003 (599,929) (593,930) (5,999)
------------- ------------- -------------

Partners' deficit - March 15, 2003 (29,556,802) (28,531,390) (1,025,412)
Net loss, year ended March 15, 2004 (7,123,790) (7,052,552) (71,238)
------------- ------------- -------------

Partners' deficit - March 15, 2004 $(36,680,592) $(35,583,942) $ (1,096,650)
============= ============= =============

See accompanying notes to consolidated financial statements.

87

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

Year Ended March 15,
------------------------------------------------
2004 2003 2002
------------ ------------ ------------

Cash flows from operating activities:
Net loss $ (7,123,790) $ (599,929) $ (7,920,150)
------------ ------------ ------------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Gain on sale of properties (Note 11) (1,798,361) (6,763,125) 0
Extraordinary item-forgiveness of
indebtedness income (113,565) 0 0
Write-off of deferred costs 0 287,019 0
Cancellation of indebtedness income (68,571) (68,571) (68,571)
Accrued interest added to principal
of mortgage note payable 215,618 197,846 174,277
Depreciation and amortization 9,182,368 8,226,767 9,178,573
Decrease (increase) in assets:
Cash held in escrow 426,743 (464,404) (46,054)
Accounts receivable - tenants (158,522) (80,267) 248,515
Other assets 202,608 (529,719) 235,297
Increase (decrease) in liabilities:
Accounts payable and other liabilities 1,948,120 448,700 560,243
Due to general partners and affiliates 840,560 1,041,768 666,187
Minority interest in loss of subsidiaries (479,188) (466,991) (428,522)
------------ ------------ ------------

Total adjustments 10,197,810 1,829,023 10,519,945
------------ ------------ ------------

Net cash provided by operating activities 3,074,020 1,229,094 2,599,795
------------ ------------ ------------

Cash flows from investing activities:
Proceeds from sale of properties 8,700,000 200,000 0
Costs paid relating to sale of properties (439,513) 0 0
Improvements to property and equipment (2,100,148) (3,112,269) (1,810,743)
(Increase) decrease in cash held in escrow (2,706,535) 1,488,901 500,824
------------ ------------ ------------

Net cash provided by (used in) investing
activities 3,453,804 (1,423,368) (1,309,919)
------------ ------------ ------------

88

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

Year Ended March 15,
------------------------------------------------
2004 2003 2002
------------ ------------ ------------

Cash flows from financing activities:
Increase in deferred costs (130,827) (663,074) (50,376)
Increase in due to local general
partners and affiliates 4,699,853 1,638,028 1,581,611
Decrease in due to local general
partners and affiliates (1,514,899) (450,931) (342,271)
(Decrease) increase in due to selling partners (10,746) 70,020 91,570
Proceeds from mortgage notes 14,396,048 20,559,376 0
Repayment of mortgage notes (25,200,157) (21,370,732) (2,904,963)
Decrease in capitalization of consolidated
subsidiaries attributable to minority interest 390,370 99,194 54,333
------------ ------------ ------------

Net cash used in financing activities (7,370,358) (118,119) (1,570,096)
------------ ------------ ------------

Net decrease in cash and cash equivalents (842,534) (312,393) (280,220)

Cash and cash equivalents, beginning of year 6,067,262 6,379,655 6,659,875
------------ ------------ ------------

Cash and cash equivalents, end of year $ 5,224,728 $ 6,067,262 $ 6,379,655
============ ============ ============

Supplemental disclosure of cash flows
information:
Cash paid during the year for interest $ 7,988,167 $ 9,309,001 $ 10,509,548
============ ============ ============

Supplemental disclosures of noncash
investing and financing activities:
Increase in accounts payable and other
liabilities for property and equipment
additions $ 0 $ 0 $ 438,546
Increase in due to local general partners
and affiliates for accounts payable and
other liabilities 0 0 31,128
Increase in accounts payable and other
liabilities for deferred loss on sale of
properties 0 63,084 0

89

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

Year Ended March 15,
------------------------------------------------
2004 2003 2002
------------ ------------ ------------

Summarized below are the components
of the gain on sale of properties:
Decrease in property and equipment, net
of accumulated depreciation $ 6,742,616 $ 5,903,905 $ 0
Decrease in cash held in escrow 58,193 355,027 0
Decrease in prepaid expenses and other assets 7,347 18,876 0
Decrease in accounts receivable 0 3,990 0
Decrease in deferred costs 799 188,591 0
Decrease in mortgage notes payable (337,388) (13,019,896) 0
(Decrease) increase in accounts payable, accrued
expenses and other liabilities (9,441) 24,362 0
Decrease in due to general partners and affiliates 0 (37,980) 0

Summarized below are the components
of the forgiveness of indebtedness income:
Decrease in accounts payable, accrued expenses
and other liabilities $ (133,565) $ 0 $ 0

See accompanying notes to consolidated financial statements.

90

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2004

NOTE 1 - General

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

The Partnership's business is to invest as a limited partner in other limited
partnerships ("Local Partnerships," "subsidiaries" or "subsidiary partnerships")
owning leveraged apartment complexes that are eligible for the low-income
housing tax credit (the "Low-Income 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. The
Partnership had originally invested in 31 subsidiary partnerships. During the
year ended March 15, 2004, the Partnership sold the properties and the related
assets and liabilities of one Local Partnership. Through the year ended March
15, 2004, the Partnership sold its limited partnership interest in one Local
Partnership and the properties and the related assets and liabilities of three
Local Partnerships.

The general partners of the Partnership are Related Credit Properties L.P., a
Delaware limited partnership (the "Related General Partner") and Liberty
Associates III L.P., a Delaware limited partnership ("Liberty Associates", and
together with the Related General Partner, the "General Partners"). The Related
General Partner is also the special limited partner of the Partnership. The
general partner of the Related General Partner is Credit Properties GP LLC
("Credit Properties"), a Delaware corporation. The general partner of Liberty
Associates is the Related General Partner. On November 17, 2003, CharterMac
acquired Related Capital Company, which is the indirect parent of RCC Manager
L.L.C., the managing member of Credit Properties. Pursuant to the acquisition,
CharterMac acquired controlling interests in the General Partners. This
acquisition did not affect the Partnership or its day-to-day operations, as the
majority of the General Partners' management team remained unchanged.

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 for the years ended March 15, 2004, 2003
and 2002 include the accounts of the Partnership and 30, 31 and 31 subsidiary
partnerships, respectively, in which the Partnership is a limited partner.
Through the rights of the Partnership and/or a General Partner, which General
Partner has a contractual obligation to act on behalf of the Partnership, to
remove the general partner of the subsidiary partnerships and to approve certain
major operating and financial decisions, the Partnership has a controlling
financial interest in the subsidiary partnerships. All intercompany accounts and
transactions with the subsidiary partnerships have been eliminated in
consolidation.

For financial reporting purposes, the Partnership's fiscal year ends on March
15. All subsidiaries have fiscal years ending December 31. Accounts of
subsidiaries have been adjusted for intercompany transactions from January 1
through March 15. The Partnership's fiscal year ends on March 15 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"). Accounts of the subsidiary partnerships have
been adjusted for intercompany transactions from January 1 through March 15.

91

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2004

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

The Partnership's investment in each subsidiary partnership is equal to the
respective subsidiary partnership's partners' equity less minority interest
capital, if any. Losses attributable to minority interests which exceed the
minority interests' investment in subsidiary partnerships have been charged to
the Partnership. Such losses aggregated approximately $192,000, $15,000 and
$273,000 for the years ended March 15, 2004, 2003 and 2002, respectively. In
consolidation, all subsidiary partnership losses are included in the
Partnership's capital account except for losses allocated to minority interest
capital.

b) Cash and Cash Equivalents

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

c) Property and Equipment

Property and equipment 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. At that time, 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.

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. These
assets are classified as property and equipment-held for sale and are not
depreciated.

Through March 15, 2004, the Partnership has not recorded any loss on impairment
of assets or reduction to estimated fair value.

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 (Note 9).

e) 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.

92

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2004

f) 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 notes payable are as
follows:

March 15, 2004 March 15, 2003
-------------------------- --------------------------
Carrying Carrying
Amount Fair Value Amount Fair Value
------------ ------------ ------------ ------------

Mortgage notes payable for
which it is:
Practicable to estimate fair value $82,599,517 $87,599,429 $68,157,031 $68,157,031
Not practicable $54,240,644 (*) $79,637,580 (*)

(*) 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.

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:

March 15, Estimated
-------------------------------- Useful Lives
2004 2003 (Years)
------------- ------------- --------------

Land $ 9,635,910 $ 11,179,181 --
Buildings and improvements 225,869,584 234,742,544 15 to 40
Other 6,262,969 6,573,947 3 to 20
------------- -------------
241,768,463 252,495,672
Less: Accumulated depreciation (121,278,707) (118,952,648)
------------- -------------
$ 120,489,756 $ 133,543,024
============= =============

93

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2004

Included in property and equipment are $6,859,371 of acquisition fees paid to
the General Partners and $809,661 of acquisition expenses. In addition, as of
March 15, 2004, buildings and improvements include $2,870,719 of capitalized
interest.

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

Depreciation expense for the years ended March 15, 2004, 2003 and 2002 amounted
to $8,410,800, $7,905,317 and $8,810,056, respectively.

During the years ended March 15, 2004 and 2003, there were decreases in
accumulated depreciation in the amounts of $6,084,741 and $6,516,860,
respectively, due to write-offs on dispositions.

NOTE 5 - Cash Held in Escrow

Cash held in escrow consists of the following:

March 15,
--------------------------
2004 2003
----------- -----------

Real estate taxes, insurance, and other $ 2,109,358 $ 2,551,193
Reserve for replacements 12,551,742 9,853,944
Other 888,903 923,267
----------- -----------
$15,550,003 $13,328,404
=========== ===========

NOTE 6 - Deferred Costs

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

March 15,
-------------------------- Period
2004 2003 (Months)
----------- ----------- -----------

Operating guarantee fee $ 510,443 $ 510,443 60
Financing expenses 3,661,218 5,328,418 *
Supervisory salaries 783,020 783,020 60
Other 48,518 48,518 Various
----------- -----------
5,003,199 6,670,399
Less: Accumulated amortization (2,394,139) (3,419,799)
----------- -----------
$ 2,609,060 $ 3,250,600
=========== ===========

*Over the life of the respective mortgages.

Amortization of deferred costs for the years ended March 15, 2004, 2003 and 2002
amounted to $771,568, $321,450 and $368,517, respectively.

During the years ended March 15, 2004 and 2003, deferred costs of $1,798,026 and
$645,561 and accumulated amortization of $1,797,228 and $169,951 were written
off, respectively.

94

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2004

NOTE 7 - Mortgage Notes Payable

The mortgage notes are payable in aggregate monthly installments of
approximately $800,000 including principal and interest at rates varying from 1%
to 10.25% per annum, through 2036. Each subsidiary partnership's mortgage note
payable is collateralized by the land and buildings of the respective subsidiary
partnership and the assignment of certain subsidiary partnership's rents and
leases and is without further recourse.

Annual principal payment requirements as of March 15, 2004 for each of the next
five fiscal years and thereafter are as follows:

Fiscal Year Ending Amount
- ------------------ -------------

2004 $ 8,041,365
2005 8,318,036
2006 4,164,999
2007 10,465,548
2008 12,714,326
Thereafter 93,095,887
------------

$136,800,161
============

On October 21, 2003, Greenleaf Associates Limited Partnership's ("Greenleaf")
mortgage note was refinanced under the Mark-to-Market program sponsored by HUD.
The USGI, Inc. mortgage, in the amount of $4,257,383, was paid-off from proceeds
from a new HUD insured first mortgage held by Heartland Bank at a rate of 6.25%
in the amount of $796,200 and a second mortgage held by Secretary of Department
of Housing and Urban Development, Washington, D.C. at a rate of 1% in the amount
of $3,297,016. Also, a third mortgage provided by Secretary of Department of
Housing and Urban Development, Washington, D.C. at a rate of 1% in the amount of
$543,064 was obtained. The refinancing proceeds were committed to Greenleaf for
the purpose of paying the related finance costs totaling $48,786, and increasing
the amount of reserve for replacement by $276,218

On June 17, 2003, Shiloh-Grove LP ("Shiloh") entered into a mortgage
restructuring agreement for the purpose of refinancing its existing mortgages
and adjusting rents to market rates related to its Mount Vernon Plaza II project
(FHA Project #043-35445). As part of the restructuring agreement, the
partnership refinanced its outstanding mortgage of $3,436,620 by obtaining three
new mortgages. One mortgage is held by Greystone Servicing Corporation, Inc. and
two are held by the Secretary of Housing and Urban Development in the amounts of
$564,000, $2,288,000 and $1,116,120, respectively. All three have maturity dates
of July 1, 2033. Principal and interest payments of $3,117 are made monthly on
the first mortgage and interest will accrue on the second and third mortgage at
the rate of 1% per annum. Tax and insurance escrow payments and replacement
reserve deposits are made monthly.

On April 25, 2003, Shiloh entered into a mortgage restructuring agreement for
the purpose of refinancing its existing mortgages and adjusting rents to market
rates related to its Mount Vernon Plaza I project (FHA project #043-35442). As
part of the restructuring agreement, the partnership refinanced its outstanding
mortgage of $4,710,536 by obtaining three new mortgages. One mortgage is held by
Greystone Servicing Corporation, Inc. and two are held by the Secretary of
Housing and Urban Development in the amounts of $972,400, $3,530,000 and
$1,288,848, respectively. All three have maturity dates of July 1, 2033.
Principal and interest payments of $5,706 are made monthly on the first mortgage
and interest will accrue on the second and third mortgage at the rate of 1% per
annum. Tax and insurance escrow payments and replacement reserve deposits are
made monthly.

On August 29, 2002, B&C Housing Associates, L.P., ("B+C Housing")refinanced its
outstanding mortgage note payable of approximately $5,359,000 under the
Mark-To-Market Program sponsored by HUD. The new mortgages in the amounts of

95

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2004

$1,201,000, $4,157,376 and $1,201,000 bear interest at 7.5%, 4% and 4%,
respectively, through October 30, 2032. The refinancing proceeds were committed
for the Partnership for the purpose of paying for related transaction costs and
increasing the amount of reserve of replacement.

On February 1, 2002, Silver Blue Lake Apartments, LTD., ("Silver Blue")
refinanced its outstanding mortgage payable with a new mortgage note for
$2,500,000, payable to the Local General Partner. The new note matures on
January 31, 2007 and requires monthly payments of interest only at LIBOR plus
2.25%. As a result of this refinancing, the restrictions of the trustee escrow
fund and debt service reserve fund were released and used to pay down the old
mortgage.

In February 2002, Ludlam Gardens Apartments, LTD., ("Ludlam") mortgage note
payable of $2,486,169 was refinanced and paid in full with the proceeds from a
new mortgage note payable of $2,850,000. The new mortgage note payable is
secured by a deed of trust on the real estate and is due in monthly installments
of $20,070, including interest at 7.25%. Ludlam was sold on January 23, 2003
(see Note 11).

On January 31, 2002, Alameda Towers Associates, L.P., ("Alameda") refinanced its
outstanding mortgage note payable of approximately $7,800,000. The new mortgage
in the amount of $8,650,000 bears interest at 7% through January 31, 2032.

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

NOTE 8 - Related Party Transactions

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

The costs incurred to related parties for the years ended March 15, 2004, 2003
and 2002 were as follows:

A) Related Party Fees

Year Ended March 15,
------------------------------------
2004 2003 2002
---------- ---------- ----------

Partnership management fees (a) $1,010,809 $1,122,750 $1,138,000
Expense reimbursement (b) 187,009 146,661 131,492
Property management fees incurred
to affiliates of the General Partners (c) 100,073 111,324 115,221
Local administrative fee (d) 51,500 66,500 63,965
---------- ---------- ----------
Total general and administrative-
General Partners 1,349,391 1,447,235 1,448,678
---------- ---------- ----------
Property management fees incurred
to affiliates of the Local General Partners (c) 962,962 1,188,870 1,075,401
---------- ---------- ----------

Total general and administrative-
related parties $2,312,353 $2,636,105 $2,524,079
========== ========== ==========

(a) The General Partners are entitled to receive a partnership management fee,
after payment of all Partnership expenses, which together with the local annual
administrative fees will not exceed a maximum of 0.5% per annum of invested
assets (as defined in the Partnership Agreement) for administering the affairs
of the Partnership. The partnership management fee, subject to the foregoing

96

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2004

limitation, will be determined by the General Partners in their sole discretion
based upon their review of the Partnership's investments. Partnership management
fees owed to the General Partners amounting to approximately $7,911,000 and
$7,151,000 were accrued and unpaid as of March 15, 2004 and 2003, respectively.

(b) The Partnership reimburses the General Partners and their affiliates for
actual Partnership operating expenses incurred by the General Partners and their
affiliates on the Partnership's behalf. The amount of reimbursement from the
Partnership is limited by the provisions of the Partnership Agreement. Another
affiliate of the General Partners performs asset monitoring for the Partnership.
These services include site visits and evaluations of the subsidiary
partnerships' performance. Expense reimbursements and asset monitoring fees owed
to Related Credit Properties L.P. amounting to approximately $90,000 and $61,000
were accrued and unpaid as of March 15, 2004 and 2003, respectively.

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

(c) Property management fees incurred by subsidiary partnerships amounted to
$1,826,298, $1,902,472 and $1,961,943 for the years ended March 15, 2004, 2003
and 2002, respectively. Of these fees $962,962, $1,188,870 and $1,075,401 was
incurred to affiliates of the Local General Partners. In addition $100,073,
$111,324 and $115,221 was incurred to affiliates of the Partnership.

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

(e) Liberty Associates received cash distributions of approximately $4,000,
$7,000 and $6,000 during the years ended March 15, 2004, 2003 and 2002,
respectively.

Liberty Associates was allocated Low-Income Housing Tax Credits of approximately
$10, $200 and $200 for the taxable years ended March 15, 2004, 2003 and 2002,
respectively.

(f) Due to local general partners and affiliates at March 15, 2004 and 2003
consists of the following:

March 15,
-----------------------------
2004 2003
------------ ------------

Accrued ground lease $ 363,147 $ 358,147
Operating deficit advances 123,055 123,055
Operating advances 1,218,909 2,008,329
Development fee payable 132,448 132,448
Residual loan payable 52,500 52,500
Interest 7,386,949 6,635,589
Long-term notes payable (g) 8,968,086 5,525,906
Management and other fees 1,734,190 1,958,356
----------- -----------
$19,979,284 $16,794,330
=========== ===========

97

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2004

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

March 15,
------------------------
2004 2003
---------- ----------

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

Dixie Apartment Associates LTD. ("Dixie")
- -----------------------------------------
This promissory note bears interest at 11% payable on demand.
Dixie was sold on January 16, 2003 (see Note 11). 0 105,187

Ludlam
- ------
This promissory note bears interest at 11% payable on demand.
Ludlam was sold on January 23, 2003 (see Note 11). 0 241,049

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

Shiloh
- ------
Two promissory notes each bearing interest at 6%. 3,788,416 0
---------- ----------

$8,968,086 $5,525,906
========== ==========

98

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2004

NOTE 9 - Income Taxes

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

Year Ended December 31,
------------------------------------------
2003 2002 2001
----------- ----------- -----------

Financial statement
Net loss $(7,123,790) $ (599,929) $(7,920,150)
Difference between depreciation and amortization
expense recorded for financial reporting purposes
and the accelerated cost recovery system utilized
for income tax purposes 1,068,460 (341,315) (56,153)
Difference resulting from parent company having a
different fiscal year for income tax and financial
reporting purposes (47,997) (54,280) 71,677
Difference between gain on sale of properties for
financial reporting purposes and for income tax
purposes (529,306) (406,824) 0
Difference between forgiveness of indebtedness
income for financial reporting purposes and for
income tax purposes (113,565) 0 0
Loss allocated to minority interest for income tax
purposes 673,217 0 0
Differences resulting principally from rental income
recognized for income tax purposes and deferred
for financial reporting purposes and interest and
other operating expenses deducted for financial
reporting purposes not deducted for income tax
purposes 304,471 80,359 (335,427)
----------- ----------- -----------
Net loss as shown on the income tax return for the
calendar year ended $(5,768,510) $(1,321,989) $(8,240,053)
=========== =========== ===========

NOTE 10 - Commitments and Contingencies

a) Subsidiary Partnership - Going Concern

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

Redwood Villa Associates, L.P.
- ------------------------------
Redwood Villa Associates, L.P. ("Redwood") has sustained operating losses since
its inception. For the 2003 Fiscal Year, Redwood experienced a loss of $201,871,
including $212,076 of depreciation and $4,553 of amortization, and at December
31, 2003 had a working capital deficiency of $754,531 and a partners' deficit of
$1,729,970. In addition, Redwood has been able to defer ground lease payments
that are due to a related party in the cumulative amount of $363,147 and
$358,147 as of December 31, 2003 and 2002, respectively. These conditions raise
substantial doubt about Redwood's ability to continue as a going concern.
Redwood's continuation as a going concern is dependent upon its ability to
achieve continued profitable operations or obtain future capital contributions
from the partners. The Local General Partner, whenever possible, plans to reduce
operating costs to achieve profitable operations. The financial statements for

99

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2004

the 2003, 2002 and 2001 Fiscal Years for Redwood have been prepared assuming
that Redwood will continue as a going concern. The Partnership's investment in
Redwood at March 15, 2004 and 2003 was reduced to zero by prior years' losses
and the minority interest balance was approximately $397,000 and $399,000,
respectively. Redwood's net loss after minority interest amounted to
approximately $200,000, $157,000 and $193,000 for the 2003, 2002 and 2001 Fiscal
Years, respectively.

Walnut Park Plaza Associates, L.P. ---------------------------------- The
financial statements for Walnut Park Plaza Associates ("Walnut Park") have been
prepared on the basis that it will continue as a going concern. Walnut Park
incurred a net loss of $594,376 during the year ended December 31, 2003 and as
of that date the Local Partnership's cash flows from operations were
insufficient to pay current liabilities. In addition, Walnut Park is currently
in default in its bond payments to the Redevelopment Authority of the City of
Philadelphia Multifamily Housing Revenue Refunding Bond due to the inability to
pay its monthly obligation. Those factors create an uncertainty about the Local
Partnership's ability to continue as a going concern. Management of the Local
Partnership is developing a plan to obtain additional financing or restructure
its existing bonds. The ability of the Local Partnership to continue as a going
concern is dependent on obtaining additional financing or restructuring its
existing bond. The Partnership's continued existence is dependent on its
resolution of the default under the mortgage loan. No action has been taken by
the first mortgagee to enforce any of its rights under the loan. The financial
statements do not include any adjustments that might be necessary if the Local
Partnership is unable to continue as a going concern. The Partnership's
investment in Walnut Park at March 15, 2004 and 2003 was reduced to zero by
prior years' losses and the minority interest balance was approximately $993,000
and $1,109,000, respectively. Walnut Park's net loss after minority interest
amounted to approximately $588,000, $501,000 and $389,000 for the 2003, 2002 and
2001 Fiscal Years, respectively. Walnut Park was subsequently sold on March 31,
2004.

b) Subsidiary Partnerships - Other

Autumn Park Associates, L.P.
- ----------------------------
Autumn Park Associates, L.P. ("Autumn Park") incurred a net loss of $173,140
during the year ended December 31, 2003, and as of that date, Autumn Park's
total liabilities exceeded its total assets by $815,693. These factors, as well
as uncertain conditions that Autumn Park faces regarding the deterioration and
needed repairs of the buildings, tenants' turnover and vacancies, and debt
service requirements, create uncertainty about Autumn Park's ability to continue
in existence. Autumn Park's management has developed and implemented a plan to
improve tenant selection in order to reduce turnovers and vacancies. The
management is developing a plan to refinance the mortgage to reduce its annual
debt service obligation. The ability of Autumn Park to continue operations is
dependent on increased cash flow from rent collections and/or reduced debt
service requirements. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts and
classification of liabilities that might be necessary if Autumn Park is unable
to continue operations. The Partnership's investment in Autumn Park at March 15,
2004 and 2003 was reduced to zero by prior years' losses and the minority
interest balance was zero at those dates. Autumn Park's net loss after minority
interest amounted to approximately $173,000, $183,000 and $237,000 for the 2003,
2002 and 2001 Fiscal Years, respectively.

c) Lease Commitment

Redwood entered into a forty-year ground lease with a related party for the land
on which the building is built. As stipulated in the lease, the subsidiary
partnership agrees to pay all real estate taxes, license and permit fees, among
other charges that may be assessed upon the land or improvements. At December
31, 2003, Redwood was committed to minimum future rentals on the noncancellable
lease in the amount of $60,000 a year through 2028. The lease payments are
payable from available cash and at December 31, 2003 and 2002 the subsidiary
partnership has accrued lease payments of $363,147 and $358,147, respectively.

100

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2004

d) Uninsured Cash and Cash Equivalents

The Partnership maintains its cash and cash equivalents in various banks.
Accounts at each bank are guaranteed by the Federal Deposit Insurance
Corporation (FDIC) up to $100,000. As of March 15, 2004 uninsured cash and cash
equivalents approximated $3,500,000.

e) 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 19%
of the properties are located in any single state. There are also substantial
risks associated with owning properties receiving government assistance, for
example the possibility that Congress may not appropriate funds to enable HUD to
make rental assistance payments. HUD also restricts annual cash distributions to
partners based on operating results and a percentage of the owners' equity
contribution. The Partnership cannot sell or substantially liquidate its
investments in subsidiary partnerships during the period that the subsidy
agreements are in existence, without HUD's approval. Furthermore, there may not
be market demand for apartments at full market rents when the rental assistance
contracts expire.

f) Tax Credits

A portion of the Tax Credits could be subject to recapture in future years if
(i) a Local Partnership ceases to meet qualification requirements, or (ii) if
there is a decrease in the qualified basis of the Local Partnership property or
(iii) if there is a reduction in the Local Partnership interest in the property
at any time during the 15-year Compliance Period that began with the first tax
year of the Credit Period. As of December 31, 2003, the Tax Credit Period for
each Local Partnership has expired.

NOTE 11 - Sale of Properties

On May 19, 2003, the property and the related assets and liabilities of Silver
Blue were sold to an unaffiliated third party for a purchase price of $3,500,000
resulting in a gain of approximately $408,000. Accrued interest on a note
related to the Local Partnership was forgiven resulting in forgiveness of
indebtedness income of approximately $114,000. The sale resulted in the
liquidation of Silver Blue.

On March 16, 2003, the Partnership recorded the transfer of the deed in lieu of
foreclosure to Bryden Road, one of the properties owned by Shiloh to an
unaffiliated third party. The outstanding mortgage balance paid by the third
party on the day of transfer was $189,871 resulting in a gain of $104,000, which
is included in gain on sale of properties.

On January 23, 2003, the property and the related assets and liabilities of
Ludlam Gardens Apartments, LTD. ("Ludlam") were sold to an unaffiliated third
party for a purchase price of $3,900,000 resulting in a gain of approximately
$959,000. The sale resulted in the liquidation of Ludlam.

On January 16, 2003, the property and the related assets and liabilities of
Dixie Apartment Associates, LTD. ("Dixie") were sold to an unaffiliated third
party for a purchase price of $1,300,000 resulting in a gain of approximately
$327,000. The sale resulted in the liquidation of Dixie.

On December 18, 2002, the Partnership entered into an agreement with the local
general partner to sell its remaining limited partnership interest in Shiloh for
a purchase price of $175,000. The sale is expected to occur in late 2004. No
assurance can be given that the closing will actually occur.

101

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2004

On May 31, 2002, the Partnership's Limited Partnership interest in Apple Creek
Housing Associates, LTD. ("Apple Creek") was sold to an unaffiliated third party
purchaser for $200,000 resulting in a gain of approximately $6,763,000,

NOTE 12 - Subsequent Events

On March 31, 2004, the property and related assets and liabilities of Walnut
Park were sold to the local general partner for a purchase price of $1 plus the
assumption of all the related debt which totaled approximately $7,330,000
resulting in a gain of approximately $1,964,000 which will be recognized in the
June 15, 2004 10-Q.

On May 11, 2004, 2108 Bolton Drive Associated, L.P. ("Bolton") entered into a
purchase and sale agreement to sell the property and the related assets and
liabilities to an unaffiliated third party purchaser for a purchase price of
$9,800,000. The closing is expected to occur in late 2004. No assurances can be
given that the sale will actually occur.

102

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

None

Item 9A. Controls and Procedures

(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Principal Executive
Officer and Principal Financial Officer of Related Credit Properties L.P. and
Liberty Associates III, L.P., the general partners of the Partnership, has
evaluated the effectiveness of the Partnership's disclosure controls and
procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended ("Exchange Act") as of the end of
the period covered by this report. Based on such evaluation, such officer has
concluded that, as of the end of such period, the Partnership's disclosure
controls and procedures are effective.

(b) INTERNAL CONTROL OVER FINANCIAL REPORTING. There have not been any changes
in Partnership's internal control over financial reporting during the fiscal
year to which this report relates that have materially affected, or are
reasonably likely to materially affect, the Partnership's internal control over
financial reporting.

PART III

Item 10. Directors and Executive Officers of the Registrant.

The Partnership has no directors or officers. The Partnership's affairs are
managed and controlled by the General Partners. The Partnership has not adopted
a separate code of ethics because the Partnership has no directors or executive
officers. However, the parent company of Related Capital Company, which controls
our General Partners, has adopted a code of ethics. See
http://www.chartermac.com.

On November 17, 2003, CharterMac acquired Related Capital Company, which is the
indirect parent of RCC Manager L.L.C., the managing member of the general
partner of the Related General Partners. Pursuant to the acquisition, CharterMac
acquired controlling interests in the General Partners. Alan P. Hirmes replaced
Stephen M. Ross as Director of the general partner of the Related General
Partner effective April 1, 2004 as a result of this acquisition. This
acquisition did not affect the Partnership or its day-to-day operations as the
majority of the General Partner's management team remained unchanged.

Certain information concerning the directors and executive officers of Credit
Properties GP LLC, the general partner of the Related General Partner (which, in
turn, is the general partner of Liberty Associates), who may be deemed directors
or executive officers of the Partnership is set forth below.

Credit Properties GP LLC
- ------------------------

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

Alan P. Hirmes Director and President

Stuart J. Boesky Executive Vice President

Glenn F. Hopps Treasurer

Teresa Wicelinski Secretary

ALAN P. HIRMES, 49, 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 Trustees
of CharterMac and American Mortgage Acceptance Company ("AMAC").

STUART J. BOESKY, 48, 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

103

Kaye, Fialkow, Richard & Rothstein and from 1978 to 1980 was a consultant
specializing in real estate at the accounting firm of Laventhol & Horwath. Mr.
Boesky graduated from Michigan State University with a Bachelor of Arts degree
and from Wayne State School of Law with a Juris Doctor degree. He then received
a Master of Laws degree in Taxation from Boston University School of Law. Mr.
Boesky also serves on the Board of Trustees of CharterMac and AMAC.

GLENN F. HOPPS, 41, 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, 38, 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.

Item 11. Executive Compensation.

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

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

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

The general partnership interests in the Partnership are owned as follows:

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

General Partnership Related Credit $1,000 capital contribution 98%
Interest in the Properties L.P. - directly owned
Partnership 625 Madison Avenue
New York, NY 10022

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

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

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

104

Item 13. Certain Relationships and Related Transactions.

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

Item 14. Principal Accountant Fees and Services.

Audit Fees
- ----------
The aggregate fees billed by Trien Rosenberg Rosenberg Weinberg Ciullo and
Fazzari LLP and their respective affiliates (collectively, "Trien") for
professional services rendered for the audit of our annual financial statements
for the years ended March 15, 2004 and 2003 and for the reviews of the financial
statements included in the Partnership's Quarterly Reports on Form 10-Q for
those years were $56,400 and $56,400, respectively.

Audit Related Fees
- ------------------
None.

Tax Fees
- --------
The aggregate fees billed by Weiser LLP (formerly, Rubin and Katz LLP) and their
respective affiliates (collectively, "Weiser") for professional services
rendered for the preparation of our annual tax returns for the years ended
December 31, 2003 and 2002 were approximately $8,000 and $8,000, respectively.

All Other Fees
- --------------
None.

The Partnership is not required to have, and does not have, a stand-alone audit
committee.

105

PART IV

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

Sequential
Page
----------

(a) 1. Financial Statements

Report of Independent Registered Public Accounting Firm 18

Consolidated Balance Sheets at March 15, 2004 and 2003 85

Consolidated Statements of Operations for the Years Ended
March 15, 2004, 2003 and 2002 86

Consolidated Statements of Changes in Partners' Deficit
for the Years Ended March 15, 2004, 2003 and 2002 87

Consolidated Statements of Cash Flows for the Years Ended
March 15, 2004, 2003 and 2002 88

Notes to Consolidated Financial Statements 91

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

Report of Independent Registered Public Accounting Firm 113

Schedule I - Condensed Financial Information of Registrant 114

Schedule III - Real Estate and Accumulated Depreciation 117

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

(a) 3. Exhibits
--------

(3A) Limited Partnership Agreement of Liberty Tax Credit Plus L.P.
dated October 9, 1987 **

(3B) Form of Amended and Restated Agreement of Partnership of
Liberty Tax Credit Plus L.P. (attached to Prospectus as
Exhibit A) **

(3C) Certificate of Limited Partnership of Liberty Tax Credit
Plus L.P., together with amendments filed September 14, 1987
and October 8, 1987 **

(10A) Form of Subscription Agreement (attached to Prospectus as
Exhibit B) **

(10B) Form of Purchase Agreement for purchase of Local Partnership
Interests **

(10C) Form of Local Partnership Agreement **

106

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

Sequential
Page
----------

(21) Subsidiaries of the Registrant - the Local Partnerships
set forth in Item 2 may be considered subsidiaries of
the Registrant. 107

(31.1) Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a). 110

(32.1) Certification Pursuant to Rule 13a-14(b) or Rule 15d-14(b)
and Section 1350 of Title 18 of the United States Code
(18 U.S.C. 1350). 112

** Incorporated herein as an exhibit by reference to
exhibits filed with Amendment No. 1 to Liberty Tax
Credit Plus L.P.'s Registration Statement on Form S-11,
file No. 33-15479.

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

No reports on Form 8-K were filed during the year ended
March 15, 2004.

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

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

(d) Not applicable

107

SIGNATURES

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

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

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

By: Credit Properties GP LLC,
its General Partner

Date: June 9, 2004
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
President and Chief
Executive Officer
(Principal Executive and
Financial Officer)

By: LIBERTY ASSOCIATES III, L.P.,
a General Partner

By: Related Credit Properties L.P.,
its General Partner

By: Related Credit Properties Inc.,
its General Partner

Date: June 9, 2004
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 Inc., general
partner of Related Credit
Properties L.P.(a General Partner
of Registrant) which is also the
/s/ Alan P. Hirmes general partner of Liberty Associ-
- ------------------ ates III, L.P. (a General Partner
Alan P. Hirmes of Registrant) June 9, 2004

Treasurer (principal accounting
officer) of Credit Properties GP LLC,
general partner of Related Credit
Properties L.P. (a General Partner
of Registrant) which is also the
/s/ Glenn F. Hopps general partner of Liberty Associates
- ------------------ III, L.P. (a General Partner of
Glenn F. Hopps Registrant) June 9, 2004

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE
13a-14(a) OR RULE 15d-14(a)

I, Alan P. Hirmes, Principal Executive Officer and Principal Financial Officer
of Related Credit Properties L.P. and Liberty Associates III, L.P. (the "General
Partners"), each of which is a general partner of Liberty Tax Credit Plus L.P.
(the "Partnership"), hereby certify that:

1. I have reviewed this annual report on Form 10-K for the period ending
March 15, 2004 of the Partnership;

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

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

4. I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Partnership and
I have:

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

b) designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under my
supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles; and

c) evaluated the effectiveness of the Partnership's disclosure
controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures as
of the end of the period covered by this annual report based on such
evaluation; and

d) disclosed in this annual report any change in the Partnership's
internal control over financial reporting that occurred during the
period ending March 15, 2004 that has materially affected, or is
reasonably likely to materially affect, the Partnership's internal
control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal
control over financial reporting, to the Partnership's auditors and to
the boards of directors of the General Partners:

a) all significant deficiencies and material weakness in the design or
operation of internal controls over financial reporting which are
reasonably likely to adversely affect the Partnership's ability to
record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Partnership's
internal controls over financial reporting.

By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Principal Executive Officer and
Principal Financial Officer
June 9, 2004

Exhibit 32.1

CERTIFICATION PURSUANT TO
RULE 13a-14(b) OR RULE 15d-14(b) AND
SECTION 1350
OF TITLE 18 OF THE UNITED STATES
CODE (18 U.S.C. 1350)

In connection with the Annual Report of Liberty Tax Credit Plus L.P. (the
"Partnership") on Form 10-K for the period ending March 15, 2004 as filed with
the Securities and Exchange Commission ("SEC") on the date hereof (the
"Report"), I, Alan P. Hirmes, Principal Executive Officer and Principal
Financial Officer of Related Credit Properties L.P. and Liberty Associates III,
L.P., the general partners of the Partnership, certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2003, that:

(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.

A signed original of this written statement required by Section 906 has been
provided to the Partnership and will be retained by the Partnership and
furnished to the SEC or its staff upon request.

By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Principal Executive Officer and Principal Financial Officer
June 9, 2004

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------

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

In connection with our audits of the consolidated financial statements of
Liberty Tax Credit Plus L.P. and Subsidiaries included in the Form 10-K as
presented in our opinion dated June 7, 2004 on page 18 and based on the reports
of other auditors, we have also audited supporting Schedule I for the 2003, 2002
and 2001 Fiscal Years and Schedule III at March 15, 2004. In our opinion, and
based on the reports of the other auditors (certain of which were modified due
to the uncertainty of these subsidiary partnerships' abilities to continue in
existence), these consolidated schedules present fairly, when read in
conjunction with the related consolidated financial statements, the financial
data required to be set forth therein.

As discussed in Note 10(a), the consolidated financial statements include the
financial statements of two subsidiary partnerships with significant
contingencies and uncertainties regarding their continuing operations. During
the 2003 Fiscal Year, these subsidiary partnerships incurred significant
operating losses and have significant equity deficiencies. These conditions
raise substantial doubt about the subsidiary partnerships' abilities to continue
as going concerns. The financial statements of these two subsidiary partnerships
were prepared assuming that each will continue as a going concern. The two
subsidiary partnerships' losses aggregated $796,247 (2003 Fiscal Year), $663,949
(2002 Fiscal Year) and $240,856 (2001 Fiscal Year) and their assets aggregated
$10,260,761 and $10,746,963 at March 15, 2004 and 2003, respectively.
Management's plans regarding these matters are also discussed 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 7, 2004

113

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

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

LIBERTY TAX CREDIT PLUS L.P.
CONDENSED BALANCE SHEETS

ASSETS

March 15,
-------------------------
2004 2003
----------- -----------

Cash and cash equivalents $ 2,603,215 $ 3,637,764
Investment in subsidiary partnerships 11,403,625 12,845,366
Other assets 78,236 165,466
----------- -----------

Total assets $14,085,076 $16,648,596
=========== ===========

LIABILITIES AND PARTNERS' EQUITY

Due to general partner and affiliates $ 7,401,505 $ 7,211,781
----------- -----------

Total liabilities 7,401,505 7,211,781

Partners' equity 6,683,571 9,436,815
----------- -----------

Total liabilities and partners' equity $14,085,076 $16,648,596
=========== ===========

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

114

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

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

Year Ended March 15,
-----------------------------------------
2004 2003 2002
----------- ----------- -----------

Revenues $ 12,850 $ 12,847 $ 43,008
----------- ----------- -----------

Expenses

Administrative and management 187,487 142,844 207,206
Administrative and management-related parties 1,197,818 1,269,411 1,269,492
----------- ----------- -----------

Total expenses 1,385,305 1,412,255 1,476,698
----------- ----------- -----------

Loss from operations (1,372,455) (1,399,408) (1,433,690)

Gain on sale on investment in subsidiary
partnerships 0 6,497,938 0

Equity in loss of subsidiary partnerships (*) (1,422,006) (7,528,994) (872,379)

Distribution income from subsidiary partnerships 41,217 577,613 906,188
----------- ----------- -----------

Net loss $(2,753,244) $(1,852,851) $(1,399,881)
=========== =========== ===========

(*) Includes suspended prior year losses in excess of investment in accordance
with equity method of accounting amounting to $1,444,277, $6,336,652 and $0
for the years ended March 15, 2004, 2003, and 2002, respectively.

115

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

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

Year Ended March 15,
-----------------------------------------
2004 2003 2002
----------- ----------- -----------

Cash flows from operating activities:

Net loss $(2,753,244) $(1,852,851) $(1,399,881)
----------- ----------- -----------

Adjustments to reconcile net loss to net cash
used in operating activities:
Gain on sale on investment of subsidiary
partnerships 0 (6,497,938) 0
Equity in loss of subsidiary partnerships 1,422,006 7,528,994 872,379
Distribution income from subsidiary
partnerships (41,217) (577,613) (906,188)
(Increase) decrease in assets:
Other assets 24,143 (15,344) 66,396
Increase (decrease) in liabilities:
Due to general partners and affiliates 189,724 976,371 689,920
----------- ----------- -----------

Total adjustments 1,594,656 1,414,470 722,507
----------- ----------- -----------

Net cash used in operating activities (1,158,588) (438,381) (677,374)
----------- ----------- -----------

Cash flows from investing activities:

Proceeds from sale of investment in
subsidiaries 0 200,000 0
Distributions from subsidiaries 124,039 854,659 1,027,779
----------- ----------- -----------

Net cash provided by investing activities 124,039 1,054,659 1,027,779
----------- ----------- -----------

Net (decrease) increase in cash and cash
equivalents (1,034,549) 616,278 350,405

Cash and cash equivalents, beginning of year 3,637,764 3,021,486 2,671,081
----------- ----------- -----------

Cash and cash equivalents, end of year $ 2,603,215 $ 3,637,764 $ 3,021,486
=========== =========== ===========

116

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 15, 2004

Initial Cost to Partnership Cost Capitalized
--------------------------- Subsequent to
Buildings and Acquisition:
Subsidiary Partnership's Residential Property Encumbrances Land Improvements Improvements
- --------------------------------------------- ------------- ----------- ------------- ----------------

B & C Housing Associates, L.P.
Tulsa, OK $ 6,545,316 $ 727,300 $ 5,420,791 $ 2,802,417
State Street 86 Associates, L.P.
Camden, NJ 6,321,108 861,947 12,460,882 516,613
Fox Glenn Investors, L.P.
Seat Pleasant, MD 5,423,350 491,209 6,548,849 593,731
Shiloh Grove L.P. (Mt Vernon) (f)
Columbus, OH 9,749,362 764,874 16,618,743 922,072
Silver Blue Lake Apartments Ltd. (e)
Miami, FL 0 537,204 4,755,176 (5,292,380)
Lancaster Towers Associates, Ltd.
Lancaster, NY 1,781,042 147,000 3,673,921 816,625
West Kinney Associates, L.P.
Newark, NJ 3,798,412 262,466 6,072,924 598,134
Autumn Park Associates, L.P.
Wilsonville, OR 3,769,774 369,932 2,251,887 3,564,042
Regent Street Associates, L.P.
Philadelphia, PA 3,708,385 40,000 7,387,283 275,779
Magnolia Arms Associates, Ltd.
Jacksonville, FL 6,133,004 125,000 8,165,738 892,220
Greenleaf Associates L.P.
Kansas City, MO 4,635,068 695,000 5,125,103 311,941
Alameda Towers, Associates L.P.
San Juan, PR 8,476,018 644,000 15,157,047 885,996
Dixie Apartment Associates, Ltd. (c)
Miami, FL 0 194,480 1,354,562 (1,549,042)
Ludlam Gardens Apartments, Ltd. (c)
Miami, FL 0 755,057 3,943,234 (4,698,291)
Grove Parc Associates, L.P. (Woodlawn)
Chicago, IL 11,766,986 600,000 9,386,536 11,606,255
2108 Bolton Drive Associates, L.P.
Atlanta, GA 7,292,712 835,000 6,599,896 6,214,133
Apple Creek Housing Associates, Ltd. (d)
Arvada, CO 0 618,136 10,973,665 (11,591,801)
Redwood Villa Associates
San Diego, CA 3,801,788 0 5,931,183 98,327
Charles Drew Court Associates, L.P.
Atlantic City, NJ 3,812,599 100 7,893,416 408,849
Walnut Park Plaza Associates, L.P.
Philadelphia, PA 7,330,000 454,707 7,690,675 2,859,139
Bayridge Associates, L.P.
Beaverton, OR 9,885,415 917,682 488,333 11,590,171

Gross Amount at which Carried at close of Period
------------------------------------------------
Buildings and
Subsidiary Partnership's Residential Property Land Improvements Total
- --------------------------------------------- ------------- -------------- -------------

B & C Housing Associates, L.P.
Tulsa, OK $ 729,685 $ 8,220,823 $ 8,950,508
State Street 86 Associates, L.P.
Camden, NJ 864,332 12,975,110 13,839,442
Fox Glenn Investors, L.P.
Seat Pleasant, MD 493,594 7,140,195 7,633,789
Shiloh Grove L.P. (Mt Vernon) (f)
Columbus, OH 713,114 17,592,575 18,305,689
Silver Blue Lake Apartments Ltd. (e)
Miami, FL 0 0 0
Lancaster Towers Associates, Ltd.
Lancaster, NY 149,385 4,488,161 4,637,546
West Kinney Associates, L.P.
Newark, NJ 264,850 6,668,674 6,933,524
Autumn Park Associates, L.P.
Wilsonville, OR 938,336 5,247,525 6,185,861
Regent Street Associates, L.P.
Philadelphia, PA 42,384 7,660,678 7,703,062
Magnolia Arms Associates, Ltd.
Jacksonville, FL 127,384 9,055,574 9,182,958
Greenleaf Associates L.P.
Kansas City, MO 697,384 5,434,660 6,132,044
Alameda Towers, Associates L.P.
San Juan, PR 646,384 16,040,659 16,687,043
Dixie Apartment Associates, Ltd. (c)
Miami, FL 0 0 0
Ludlam Gardens Apartments, Ltd. (c)
Miami, FL 0 0 0
Grove Parc Associates, L.P. (Woodlawn)
Chicago, IL 602,384 20,990,407 21,592,791
2108 Bolton Drive Associates, L.P.
Atlanta, GA 837,384 12,811,645 13,649,029
Apple Creek Housing Associates, Ltd. (d)
Arvada, CO 0 0 0
Redwood Villa Associates
San Diego, CA 2,384 6,027,126 6,029,510
Charles Drew Court Associates, L.P.
Atlantic City, NJ 143,846 8,158,519 8,302,365
Walnut Park Plaza Associates, L.P.
Philadelphia, PA 457,091 10,547,430 11,004,521
Bayridge Associates, L.P.
Beaverton, OR 920,066 12,076,120 12,996,186

Life on which
Depreciation in
Year of Latest Latest Income
Accumulated Construction/ Date Statement is
Subsidiary Partnership's Residential Property Depreciation Renovation Acquired Computed (a)(b)
- --------------------------------------------- ------------- ------------- ---------- ----------------

B & C Housing Associates, L.P.
Tulsa, OK $ 4,556,674 1987 Dec. 1987 27.5 years
State Street 86 Associates, L.P.
Camden, NJ 8,127,555 1987 Feb. 1988 27.5 years
Fox Glenn Investors, L.P.
Seat Pleasant, MD 4,114,341 1987 Mar. 1988 15 to 27.5 years
Shiloh Grove L.P. (Mt Vernon) (f)
Columbus, OH 9,098,921 1987 Feb. 1988 27.5 years
Silver Blue Lake Apartments Ltd. (e)
Miami, FL 0 1987 Feb. 1988 27.5 years
Lancaster Towers Associates, Ltd.
Lancaster, NY 2,546,309 1987 May 1988 27.5 years
West Kinney Associates, L.P.
Newark, NJ 3,637,297 1983 June 1988 27.5 years
Autumn Park Associates, L.P.
Wilsonville, OR 3,341,893 1988 June 1988 15 to 27.5 years
Regent Street Associates, L.P.
Philadelphia, PA 4,295,462 1987 June 1988 27.5 years
Magnolia Arms Associates, Ltd.
Jacksonville, FL 5,460,135 1987 July 1988 27.5 years
Greenleaf Associates L.P.
Kansas City, MO 3,414,509 1987 July 1988 27.5 years
Alameda Towers, Associates L.P.
San Juan, PR 5,862,149 1987 July 1988 40 years
Dixie Apartment Associates, Ltd. (c)
Miami, FL 0 1987 July 1988 27.5 years
Ludlam Gardens Apartments, Ltd. (c)
Miami, FL 0 1987 July 1988 27.5 years
Grove Parc Associates, L.P. (Woodlawn)
Chicago, IL 9,738,221 1988 July 1988 27.5 to 31.5 years
2108 Bolton Drive Associates, L.P.
Atlanta, GA 7,572,178 1988 July 1988 15 to 27.5 years
Apple Creek Housing Associates, Ltd. (d)
Arvada, CO 0 1988 June 1988 28 years
Redwood Villa Associates
San Diego, CA 3,298,198 1988 Sept. 1988 27.5 years
Charles Drew Court Associates, L.P.
Atlantic City, NJ 4,852,617 1987 Sept. 1988 27.5 years
Walnut Park Plaza Associates, L.P.
Philadelphia, PA 4,466,102 1988 Sept. 1988 35 years
Bayridge Associates, L.P.
Beaverton, OR 6,390,656 1988 Dec. 1988 15 to 27.5 years

117

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 15, 2004

Initial Cost to Partnership Cost Capitalized
--------------------------- Subsequent to
Buildings and Acquisition:
Subsidiary Partnership's Residential Property Encumbrances Land Improvements Improvements
- --------------------------------------------- ------------- ----------- ------------- ----------------

United-Pennsylvanian, L.P.
Erie, PA 3,270,576 217,000 4,191,327 1,517,878
2051 Grand Concourse Associates, L.P.
Bronx, NY 3,492,288 31,500 5,221,117 63,211
Concourse Artists Housing Associates, L.P.
Bronx, NY 1,462,489 5,750 16,100 2,310,570
Willoughby-Wycoff Housing Associates, L.P.
Bronx, NY 4,091,290 17,000 47,600 6,173,703
Robin Housing
Bronx, NY 5,068,769 26,750 70,700 8,188,254
Lund Hill Associates, L.P.
Superior, WI 3,093,888 205,000 4,877,828 980,518
Tanglewood Apartments, L.P.
Joplin, MO 2,896,073 114,932 5,233,022 106,732
Quality Hill Historic District-Phase II-A, L.P.
Kansas City, MO 3,530,320 215,181 6,403,141 217,102
Penn Alto Associates, L.P.
Altoona, PA 3,763,117 60,000 2,731,082 9,114,581
Sartain School Venture, L.P.
Philadelphia, PA 1,901,012 3,883 3,486,875 154,258
------------- ----------- ------------- -------------
$ 136,800,161 $10,938,090 $ 180,178,636 $ 50,651,737
============= =========== ============= =============

Gross Amount at which Carried at close of Period
------------------------------------------------
Buildings and
Subsidiary Partnership's Residential Property Land Improvements Total
- --------------------------------------------- ------------- -------------- -------------

United-Pennsylvanian, L.P.
Erie, PA 219,385 5,706,820 5,926,205
2051 Grand Concourse Associates, L.P.
Bronx, NY 33,885 5,281,943 5,315,828
Concourse Artists Housing Associates, L.P.
Bronx, NY 8,135 2,324,285 2,332,420
Willoughby-Wycoff Housing Associates, L.P.
Bronx, NY 19,386 6,218,917 6,238,303
Robin Housing
Bronx, NY 29,136 8,256,568 8,285,704
Lund Hill Associates, L.P.
Superior, WI 207,900 5,855,446 6,063,346
Tanglewood Apartments, L.P.
Joplin, MO 117,832 5,336,854 5,454,686
Quality Hill Historic District-Phase II-A, L.P.
Kansas City, MO 267,233 6,568,191 6,835,424
Penn Alto Associates, L.P.
Altoona, PA 93,905 11,811,758 11,905,663
Sartain School Venture, L.P.
Philadelphia, PA 9,126 3,635,890 3,645,016
------------- -------------- -------------
$ 9,635,910 $ 232,132,553 $ 241,768,463
============= ============== =============

Life on which
Depreciation in
Year of Latest Latest Income
Accumulated Construction/ Date Statement is
Subsidiary Partnership's Residential Property Depreciation Renovation Acquired Computed (a)(b)
- --------------------------------------------- ------------- ------------- ---------- ----------------

United-Pennsylvanian, L.P.
Erie, PA 3,922,460 1988 Dec. 1988 15 to 25 years
2051 Grand Concourse Associates, L.P.
Bronx, NY 2,898,013 1986 Nov. 1988 27.5 years
Concourse Artists Housing Associates, L.P.
Bronx, NY 1,262,478 1986 Nov. 1988 27.5 years
Willoughby-Wycoff Housing Associates, L.P.
Bronx, NY 3,395,281 1987 Nov. 1988 27.5 years
Robin Housing
Bronx, NY 4,522,968 1986 Nov. 1988 27.5 years
Lund Hill Associates, L.P.
Superior, WI 2,246,925 1988 Jan. 1989 20 to 40 years
Tanglewood Apartments, L.P.
Joplin, MO 3,043,392 1988 Oct. 1988 27.5 years
Quality Hill Historic District-Phase II-A, L.P.
Kansas City, MO 2,398,846 1988 Mar. 1989 20 to 40 years
Penn Alto Associates, L.P.
Altoona, PA 5,554,959 1989 June 1989 27.5 years
Sartain School Venture, L.P.
Philadelphia, PA 1,260,168 1989 Aug. 1990 15 to 40 years
-------------
$ 121,278,707
=============

(a) Since all properties were acquired as operating properties, depreciation is
computed using primarily the straight line method over the estimated useful
lives determined by the Partnership date of acquisition.
(b) Furniture and fixtures, included in buildings and improvements, are
depreciated primarily by the straight line method over their estimated
useful lives ranging from 3 to 20 years.
(c) The Property and the related assets and liabilities were sold during the
fiscal year ended March 15, 2003. See Note 11 in Item 8, Financial
Statements and Supplementary Data.
(d) The Partnership's Local Partnership Interests in this Local Partnership was
sold during the fiscal year ended March 15, 2003. See Note 11 in Item 8.,
Financial Statements and Supplementary Data.
(e) The Property and the related assets and liabilities were sold during the
fiscal year ended March 15, 2004. See Note 11 in Item 8, Financial
Statements and Supplementary Data.
(f) The Partnership recorded the transfer of the deed in lieu of foreclosure to
Bryden Road, a property owned by Shiloh. See Note 11 in Item 8, Financial
Statements and Supplementary Data.

Cost of Property and Equipment Accumulated Depreciation
----------------------------------------------- -----------------------------------------------
Year Ended March 15,
-------------------------------------------------------------------------------------------------
2004 2003 2002 2004 2003 2002
------------- ------------- ------------- ------------- ------------- -------------

Balance at beginning of period $ 252,495,672 $ 261,867,252 $ 259,617,963 $ 118,952,648 $ 117,564,191 $ 108,754,135
Additions during period:
Improvements 2,100,148 3,112,269 2,249,289
Depreciation expense 8,410,800 7,905,317 8,810,056
Deduction during period:
Dispositions (12,827,357) (12,483,849) 0 (6,084,741) (6,516,860) 0
------------- ------------- ------------- ------------- ------------- -------------
Balance at end of period $ 241,768,463 $ 252,495,672 $ 261,867,252 $ 121,278,707 $ 118,952,648 $ 117,564,191
============= ============= ============= ============= ============= =============

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

117