Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark
One)
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the
quarterly period ended June 30, 2018
OR
[ ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the
transition period from ________ to ___________
Commission file
number: 333-124115
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
California
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20-2355224
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(State
or other jurisdiction of
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(I.R.S.
Employer
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incorporation
or organization)
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Identification
No.)
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17782
Sky Park Circle
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Irvine,
CA
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92614-6404
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(Address
of principal executive offices)
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(Zip
Code)
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(714)
662-5565
(Telephone
number)
Indicate
by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
Indicate
by check mark whether the registrant has submitted electronically
and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T (232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required
to submit and post such files).
Yes X No
Indicate
by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of "large accelerated
filer," "accelerated filer" and "smaller reporting company" in Rule
12b-2 of the Exchange Act. (Check one):
Large
accelerated filer___ Accelerated filer___ Non-accelerated
filer___X__ Smaller
reporting company___
Indicate
by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).
Yes
___No _X__
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A
California Limited Partnership)
INDEX TO FORM 10-Q
For the Quarterly Period Ended June 30, 2018
PART I.
FINANCIAL INFORMATION
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Item
1.
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Financial
Statements
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Condensed
Balance Sheets
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As of
June 30, 2018 and March 31, 2018
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3
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Condensed
Statements of Operations
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For the
Three Months Ended June 30, 2018 and 2017
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4
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Condensed
Statement of Partners' Equity (Deficit)
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For the
Three Months Ended June 30, 2018
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5
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Condensed
Statements of Cash Flows
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For the
Three Months Ended June 30, 2018 and 2017
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6
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Notes
to Condensed Financial Statements
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7
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Item
2.
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Management's
Discussion and Analysis of Financial
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Condition
and Results of Operations
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19
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Item
3.
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Quantitative and Qualitative Disclosures about Market
Risks
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22
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Item
4.
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Controls and Procedures
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22
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PART
II. OTHER INFORMATION
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Item
1.
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Legal
Proceedings
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23
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Item
1A.
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Risk
Factors
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23
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Item
2.
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Unregistered
Sales of Equity Securities and Use of Proceeds
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23
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Item
3.
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Defaults
Upon Senior Securities
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23
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Item
4.
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Mine
Safety Disclosures
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23
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Item
5.
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Other
Information
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23
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Item
6.
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Exhibits
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23
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Signatures
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24
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WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A
California Limited Partnership)
CONDENSED BALANCE SHEETS
(Unaudited)
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June 30, 2018
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March 31, 2018
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ASSETS
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Cash
and cash equivalents
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$214,572
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$305,043
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Investments
in Local Limited Partnerships, net (Notes
2 and 3)
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837,620
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1,406,121
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Due
from affiliates, net (Note 4)
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-
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-
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Total
Assets
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$1,052,192
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$1,711,164
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LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
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Liabilities:
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Payables
to Local Limited Partnerships (Note 5)
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$245,113
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$245,113
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Accrued
fees and expenses due to
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General
Partner and affiliates (Note 3)
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1,429,892
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1,486,897
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Total Liabilities
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1,675,005
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1,732,010
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Partners’
Equity (Deficit):
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General
Partner
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572,708
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573,310
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Limited
Partners (25,000 Partnership Units authorized;
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20,757 Partnership Units issued and
outstanding)
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(1,195,521)
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(594,156)
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Total Partners’ Equity (Deficit)
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(622,813)
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(20,846)
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Total
Liabilities and Partners’ Equity (Deficit)
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$1,052,192
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$1,711,164
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See accompanying
notes to condensed financial statements
3
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A
California Limited Partnership)
CONDENSED STATEMENTS OF OPERATIONS
For the Three Months Ended June 30, 2018 and 2017
(Unaudited)
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2018
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2017
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Three Months
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Three Months
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Operating
income:
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Reporting
fees
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$1,305
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$-
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Distribution
income
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9,336
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-
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Total
operating income
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10,641
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-
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Operating
expenses and loss:
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Asset
management fees (Note 3)
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14,627
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17,116
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Legal
and accounting fees
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22,375
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2,000
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Impairment
loss (Note 2)
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511,512
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652,206
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Asset
management expenses
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59
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86
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Other
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7,203
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4,286
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Total
operating expenses
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555,776
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675,694
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Loss
from operations
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(545,135)
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(675,694)
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Equity
in losses of Local
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(56,989)
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(61,420)
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Limited
Partnerships (Note 2)
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Other
income
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-
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59,315
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Interest
income
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157
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117
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Net
loss
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$(601,967)
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$(677,682)
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Net
loss allocated to:
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General
Partner
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$(602)
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$(678)
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Limited
Partners
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$(601,365)
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$(677,004)
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Net
loss per Partnership Unit
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$(29)
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$(33)
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Outstanding
weighted Partnership Units
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20,757
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20,807
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See accompanying
notes to condensed financial statements
4
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A
California Limited Partnership)
CONDENSED STATEMENT OF PARTNERS’ EQUITY
(DEFICIT)
For the Three Months Ended June 30, 2018
(Unaudited)
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General
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Limited
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Partner
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Partners
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Total
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Partners’
equity (deficit) at March 31, 2018
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$573,310
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$(594,156)
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$(20,846)
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Net
loss
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(602)
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(601,365)
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(601,967)
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Partners’
equity (deficit) at June 30, 2018
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$572,708
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$(1,195,521)
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$(622,813)
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See
accompanying notes to condensed financial statements
5
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A
California Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
For the Three Months Ended June 30, 2018 and 2017
(Unaudited)
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2018
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2017
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Cash
flows from operating activities:
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Net
loss
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$(601,967)
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$(677,682)
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Adjustments
to reconcile net loss to net
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cash
provided by (used in) operating activities:
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Equity
in losses of Local Limited Partnerships
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56,989
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61,420
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Impairment
loss
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511,512
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652,206
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Decrease
in accrued fees and expenses due to
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General
Partner and affiliates
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(57,005)
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(35,827)
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Net
cash provided by (used in) operating activities
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(90,471)
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117
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Net
increase (decrease) in cash and cash equivalents
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(90,471)
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117
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Cash
and cash equivalents, beginning of period
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305,043
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271,941
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Cash
and cash equivalents, end of period
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$214,572
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$272,058
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SUPPLEMENTAL
DISCLOSURE OF CASH
FLOW INFORMATION
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Taxes
paid
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$-
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$-
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See
accompanying notes to condensed financial statements
6
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A
California Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
For the Quarterly Period Ended June 30, 2018
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
The
accompanying condensed unaudited financial statements have been
prepared in accordance with accounting principles generally
accepted in the United States of America for interim financial
information and with the instructions to Form 10-Q for quarterly
reports under Section 13 or 15(d) of the Securities Exchange Act of
1934. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in
the United States of America for complete financial statements. In
the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three months ended
June 30, 2018 are not necessarily indicative of the results that
may be expected for the fiscal year ending March 31, 2019. For
further information, refer to the financial statements and
footnotes thereto included in the Partnership's annual report on
Form 10-K for the fiscal year ended March 31, 2018.
Organization
WNC Housing Tax Credit Fund VI, L.P., Series 13, a California
Limited Partnership (the “Partnership”), was formed on
February 7, 2005 under the laws of the State of California, and
commenced operations on December 14, 2005. The Partnership was
formed to invest primarily in other limited partnerships and
limited liability companies (the “Local Limited
Partnerships”) which own and operate multi-family housing
complexes (the “Housing Complexes”) that are eligible
for Low Income Housing Tax Credits. The local general partners (the
“Local General Partners”) of each Local Limited
Partnership retain responsibility for maintaining, operating and
managing the Housing Complex. Each Local Limited Partnership is
governed by its agreement of limited partnership (the “Local
Limited Partnership Agreement”).
The General Partner of the Partnership is WNC National Partners,
LLC (the “General Partner”). The general partner of the
General Partner is WNC & Associates, Inc.
(“Associates”). The chairman and the president of
Associates owns all of the outstanding stock of Associates. The
business of the Partnership is conducted primarily through
Associates, as the Partnership and General Partner have no
employees of their own.
The
Partnership shall continue in full force and effect until December
31, 2070, unless terminated prior to that date, pursuant to the
partnership agreement or law.
The
financial statements include only activity relating to the business
of the Partnership and do not give effect to any assets that the
partners may have outside of their interests in the Partnership, or
to any obligations, including income taxes of the
partners.
Pursuant
to a registration statement filed with the U.S. Securities and
Exchange Commission (the “SEC”) on April 18, 2005, the
Partnership commenced a public offering of 25,000 units of limited
partnership interest (“Partnership Units”) at a price
of $1,000 per Partnership Unit. The required minimum offering
amount of $1,400,000 was achieved by December 14, 2005. Total
subscriptions for 20,981 Partnership Units had been accepted,
representing $20,965,400, which is net of volume discounts of
$4,540 and dealer discounts of $11,060. Holders of Partnership
Units are referred to herein as “Limited Partners.” As
of June 30, 2018 and March 31, 2018, a total of 20,757 Partnership
Units remain outstanding. The General Partner has a 0.1% interest
in operating profits and losses, taxable income and losses, cash
available for distribution from the Partnership and tax credits.
The Limited Partners will be allocated the remaining 99.9% interest
in proportion to their respective investments.
The
proceeds from the disposition of any of the Housing Complexes will
be used first to pay debts and other obligations per the respective
Local Limited Partnership Agreement. Any remaining proceeds will
then be paid to the partners of the Local Limited Partnership,
including the Partnership, in accordance with the terms of the
particular Local Limited Partnership Agreement. The sale of a
Housing Complex may be subject to other restrictions and
obligations.
7
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A
California Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
For the Quarterly Period Ended June 30, 2018
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
continued
Accordingly,
there can be no assurance that a Local Limited Partnership will be
able to sell its Housing Complex. Even if it does so, there
can be no assurance that any significant amounts of cash will be
distributed to the Partnership. Should such distributions occur,
the Limited Partners will be entitled to receive distributions from
the proceeds remaining after payment of Partnership obligations and
funding reserves, equal to their capital contributions and their
return on investment (as defined in the Partnership Agreement). The
General Partner would then be entitled to receive proceeds equal to
its capital contributions from the remainder. Any additional sale
or refinancing proceeds will be distributed 90% to the Limited
Partners (in proportion to their respective investments) and 10% to
the General Partner.
Risks and Uncertainties
An
investment in the Partnership and the Partnership’s
investments in Local Limited Partnerships and their Housing
Complexes are subject to risks. These risks may impact the tax
benefits of an investment in the Partnership, and the amount of
proceeds available for distribution to the Limited Partners, if
any, on liquidation of the Partnership’s investments. Some of
those risks include the following:
The Low
Income Housing Tax Credits rules are extremely complicated.
Noncompliance with these rules results in the loss of future Low
Income Housing Tax Credits and the fractional recapture of Low
Income Housing Tax Credits already taken. In most cases the annual
amount of Low Income Housing Tax Credits that an individual can use
is limited to the tax liability due on the person’s last
$25,000 of taxable income. The Local Limited Partnerships may be
unable to sell the Housing Complexes at a price which would result
in the Partnership realizing cash distributions or proceeds from
the transaction. Accordingly, the Partnership may be unable to
distribute any cash to its Limited Partners. Low Income Housing Tax
Credits may be the only benefit from an investment in the
Partnership.
The
Partnership has invested in a limited number of Local Limited
Partnerships. Such limited diversity means that the results of
operation of each single Housing Complex will have a greater impact
on the Partnership. With limited diversity, poor performance of one
Housing Complex could impair the Partnership’s ability to
satisfy its investment objectives. Each Housing Complex is subject
to mortgage indebtedness. If a Local Limited Partnership failed to
pay its mortgage, it could lose its Housing Complex in foreclosure.
If foreclosure were to occur during the first 15 years (the
“Compliance Period”), the loss of any remaining future
Low Income Housing Tax Credits, a fractional recapture of prior Low
Income Housing Tax Credits, and a loss of the Partnership’s
investment in the Housing Complex would occur. The Partnership is a
limited partner or a non-managing member of each Local Limited
Partnership. Accordingly, the Partnership will have very limited
rights with respect to management of the Local Limited
Partnerships. The Partnership will rely totally on the Local
General Partners. Neither the Partnership’s investments in
Local Limited Partnerships, nor the Local Limited
Partnerships’ investments in Housing Complexes, are readily
marketable. To the extent the Housing Complexes receive government
financing or operating subsidies, they may be subject to one or
more of the following risks: difficulties in obtaining tenants for
the Housing Complexes; difficulties in obtaining rent increases;
limitations on cash distributions; limitations on sales or
refinancing of Housing Complexes; limitations on transfers of
interests in Local Limited Partnerships; limitations on removal of
Local General Partners; limitations on subsidy programs; and
possible changes in applicable regulations. Uninsured casualties
could result in loss of property and Low Income Housing Tax Credits
and recapture of Low Income Housing Tax Credits previously taken.
The value of real estate is subject to risks from fluctuating
economic conditions, including employment rates, inflation, tax,
environmental, land use and zoning policies, supply and demand of
similar Housing Complexes, and neighborhood conditions, among
others.
8
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A
California Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
For the Quarterly Period Ended June 30, 2018
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
continued
The
ability of Limited Partners to claim tax losses from the
Partnership is limited. The IRS may audit the Partnership or a
Local Limited Partnership and challenge the tax treatment of tax
items. The amount of Low Income Housing Tax Credits and tax
losses allocable to Limited Partners could be reduced if the IRS
were successful in such a challenge. The alternative minimum tax
could reduce tax benefits from an investment in the Partnership.
Changes in tax laws could also impact the tax benefits from an
investment in the Partnership and/or the value of the Housing
Complexes.
The
Partnership currently has insufficient working capital to fund its
operations. Associates has agreed to continue providing advances
sufficient enough to fund the operations and working capital
requirements of the Partnership through August 31,
2019.
Anticipated
future and existing cash resources of the Partnership are not
sufficient to pay existing liabilities of the Partnership. A
portion of the existing liabilities are the payables to Local
Limited Partnerships and those payables are the first priority to
be paid. If the Partnership does not have enough cash to pay those
liabilities the General Partner or an affiliate will fund the
necessary cash to pay the liabilities. The remaining portion of the
payables are due to the General Partner or an affiliate. Though the
amounts payable to the General Partner and/or its affiliates are
contractually currently payable, the Partnership anticipates that
the General Partner and/or its affiliates will not require the
payment of these contractual obligations until capital reserves are
in excess of the aggregate of then existing contractual obligations
and then anticipated future foreseeable obligations of the
Partnership. The Partnership would be adversely affected should the
General Partner and/or its affiliates demand current payment of the
existing contractual obligations and/or suspend services for this
or any other reason.
No
trading market for the Partnership Units exists or is expected to
develop. Limited Partners may be unable to sell their Partnership
Units except at a discount and should consider their Partnership
Units to be a long-term investment. Individual Limited Partners
will have no recourse if they disagree with actions authorized by a
vote of the majority of Limited Partners.
Exit Strategy
The
Compliance Period for a Housing Complex is generally 15 years
following construction or rehabilitation completion. Associates was
one of the first in the industry to offer syndicated investments in
Low Income Housing Tax Credits. The initial programs have completed
their Compliance Periods.
Upon
the sale of a Local Limited Partnership interest or Housing Complex
after the end of the Compliance Period, there would be no recapture
of Low Income Housing Tax Credits. A sale prior to the end of the
Compliance Period must satisfy the reasonable belief test outlined
above to avoid recapture. None of the remaining Housing Complexes
have completed their 15-year Compliance Period.
With
that in mind, the General Partner is continuing its review of the
Housing Complexes. The review considers many factors, including
extended use requirements (such as those due to mortgage
restrictions or state compliance agreements), the condition of the
Housing Complexes, and the tax consequences to the Limited Partners
from the sale of the Housing Complexes.
Upon
identifying those Housing Complexes with the highest potential for
a successful sale, refinancing or re-syndication, the Partnership
expects to proceed with efforts to liquidate them. The objective is
to maximize the Limited Partners’ return wherever possible
and, ultimately, to wind down the Partnership as Low Income Housing
Tax Credits are no longer available. Local Limited Partnership
interests may be disposed of any time by the General Partner in its
discretion. While liquidation of the Housing Complexes continues to
be evaluated, the dissolution of the Partnership was not imminent
as of June 30, 2018.
9
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A
California Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
For the Quarterly Period Ended June 30, 2018
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
continued
During
the year ended March 31, 2011, the Partnership sold two Local
Limited Partnerships, Fernwood Meadows, L.P.
(“Fernwood”) and Sierra’s Run, L.P.,
(“Sierra’s Run”), in order to generate sufficient
equity to complete the purchase of additional Low Income Housing
Tax Credits for Davenport VII, L.P.
(“Davenport”).
Fernwood
and Sierra’s Run will complete their Compliance Periods in
2022; therefore, there is a risk of tax credit recapture. The
maximum exposure of recapture (excluding the interest and penalties
related to the recapture) is $177,508 and $170,246, respectively,
for Fernwood and Sierra’s Run, which equates to $16.57 per
Partnership Unit in the aggregate. Under the circumstances,
the General Partner believes there is a reasonable expectation that
each Local Limited Partnership will continue to be operated as
qualified low-income housing for the balance of its Compliance
Period, and, accordingly, does not anticipate that there will be
any recapture.
As of
March 31, 2018, the underlying Housing complexes of Pleasant
Village Limited Partnership (“Pleasant Village”) and
Grove Village Limited Partnership (“Grove Village”) had
been sold, resulting in the termination of the Partnership’s
Local Limited Partnership interest. The Partnership had also gifted
its Local Limited Partnership interest in 909 4th YMCA Limited Partnership to an
unrelated nonprofit corporation. In addition, the Partnership sold
its Local Limited Partnership interest in Head Circle, L.P.
(“Head Circle”). The Compliance Periods for these Local
Limited Partnerships have been completed, therefore, there is no
risk of recapture to the investors of the Partnership.
The
proceeds from the disposition of any of the Housing Complexes will
be used first to pay debts and other obligations per the respective
Local Limited Partnership Agreement. Any remaining proceeds will
then be paid to the partners of the Local Limited Partnership,
including the Partnership, in accordance with the terms of the
particular Local Limited Partnership Agreement. The sale of a
Housing Complex may be subject to other restrictions and
obligations. Accordingly, there can be no assurance that a Local
Limited Partnership will be able to sell its Housing Complex. Even
if it does so, there can be no assurance that any significant
amounts of cash will be distributed to the Partnership, as the
proceeds first would be used to pay Partnership obligations and
funding of reserves.
Method of Accounting for Investments in Local Limited
Partnerships
The
Partnership accounts for its investments in Local Limited
Partnerships using the equity method of accounting, whereby the
Partnership adjusts its investment balance for its share of the
Local Limited Partnerships’ results of operations and for any
contributions made and distributions received. The Partnership
reviews the carrying amount of an individual investment in a Local
Limited Partnership for possible impairment at least annually or
whenever events or changes in circumstances indicate that the
carrying amount of such investment may not be recoverable.
Recoverability of such investment is measured by the estimated
value derived by management, generally consisting of the sum of the
remaining future Low Income Housing Tax Credits estimated to be
allocable to the Partnership and the estimated residual value to
the Partnership. If an investment is considered to be impaired, the
Partnership reduces the carrying value of its investment in any
such Local Limited Partnership. The accounting policies of the
Local Limited Partnerships, generally, are expected to be
consistent with those of the Partnership. Costs incurred by the
Partnership in acquiring the investments are capitalized as part of
the investment account and were being amortized over 27.5 years
(see Notes 2 and 3).
10
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A
California Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
For the Quarterly Period Ended June 30, 2018
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
continued
“Equity
in losses of Local Limited Partnerships” for the periods
ended June 30, 2018 and 2017 has been recorded by the Partnership.
Management’s estimate for the three-month periods is based on
either actual unaudited results reported by the Local Limited
Partnerships or historical trends in the operations of the Local
Limited Partnerships. Equity in losses of Local Limited
Partnerships allocated to the Partnership is not recognized to the
extent that the investment balance would be adjusted below zero. If
the Local Limited Partnerships report net income in future years,
the Partnership will resume applying the equity method only after
its share of such net income equals the share of net losses not
recognized during the period(s) the equity method was
suspended.
In
accordance with the accounting guidance for the consolidation of
variable interest entities, the Partnership determines when it
should include the assets, liabilities, and activities of a
variable interest entity (VIE) in its financial statements, and
when it should disclose information about its relationship with a
VIE. The analysis that must be performed to determine which entity
should consolidate a VIE focuses on control and economic factors. A
VIE is a legal structure used to conduct activities or hold assets,
which must be consolidated by a company if it is the primary
beneficiary because it has (1) the power to direct the activities
of the VIE that most significantly impact the VIE's economic
performance and (2) the obligation to absorb losses or receive
benefits that could potentially be significant to the VIE. If
multiple unrelated parties share such power, as defined, no party
will be required to consolidate the VIE. Further, the guidance
requires continual reconsideration of the primary beneficiary of a
VIE.
Based
on this guidance, the Local Limited Partnerships in which the
Partnership invests meet the definition of a VIE because the owners
of the equity at risk in these entities do not have the power to
direct their operations. However, management does not consolidate
the Partnership's interests in these VIEs, as it is not considered
to be the primary beneficiary since it does not have the power to
direct the activities that are considered most significant to the
economic performance of these entities. The Partnership currently
records the amount of its investment in these Local Limited
Partnerships as an asset on its balance sheets, recognizes its
share of partnership income or losses in the statements of
operations, and discloses how it accounts for material types of
these investments in its financial statements. The Partnership's
balance in investment in Local Limited Partnerships, plus the risk
of recapture of tax credits previously recognized on these
investments, represents its maximum exposure to loss. The
Partnership's exposure to loss on these Local Limited Partnerships
is mitigated by the condition and financial performance of the
underlying Housing Complexes as well as the strength of the Local
General Partners and their guarantee against credit recapture to
the investors in the Partnership.
Distributions
received by the Partnership are accounted for as a reduction of the
investment balance. Distributions received after the investment has
reached zero are recognized as income. As of June 30, 2018 and
March 31, 2018, two of the remaining investment balances had
reached zero.
Use of Estimates
The
preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could materially differ
from those estimates.
Cash and Cash Equivalents
The
Partnership considers all highly liquid investments with original
maturities of three months or less when purchased to be cash
equivalents. As of June 30, 2018 and March 31, 2018, the
Partnership had $214,572 and $305,043 of cash equivalents,
respectively.
11
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited
Partnership)
NOTES TO
CONDENSED FINANCIAL STATEMENTS - CONTINUED
For the Quarterly
Period Ended June 30, 2018
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
continued
Reporting Comprehensive Income
The
Partnership had no items of other comprehensive income for all
periods presented.
Income Taxes
The
Partnership has elected to be treated as a pass-through entity for
income tax purposes and, as such, is not subject to income taxes.
Rather, all items of taxable income, deductions and tax credits are
passed through to and are reported by its owners on their
respective income tax returns. The Partnership’s
federal tax status as a pass-through entity is based on its legal
status as a partnership. Accordingly, the Partnership is not
required to take any tax positions in order to qualify as a
pass-through entity. The Partnership is required to file and does
file tax returns with the Internal Revenue Service and other taxing
authorities. Accordingly, these financial statements do not reflect
a provision for income taxes and the Partnership has no other tax
positions which must be considered for disclosure. Income tax returns
filed by the Partnership are subject to examination by the Internal
Revenue Service for a period of three years. While no income tax
returns are currently being examined by the Internal Revenue
Service, tax years since 2015 remain open.
Net Loss Per Partnership Unit
Net
loss per Partnership Unit includes no dilution and is computed by
dividing net loss available to Limited Partners by the weighted
average number of Partnership Units outstanding during the period.
Calculation of diluted net loss per Partnership Unit is not
required.
Revenue Recognition
The
Partnership is entitled to receive reporting fees from the Local
Limited Partnerships. The intent of the reporting fees is to offset
(in part) administrative costs incurred by the Partnership in
corresponding with the Local Limited Partnerships. Due to the
uncertainty of the collection of these fees, the Partnership
recognizes reporting fees as collections are made.
Impairment
The
Partnership reviews its investments in Local Limited Partnership
for impairment at least annually or whenever events or changes in
circumstances indicate that the carrying value of such investments
may not be recoverable. Recoverability is measured by a comparison
of the carrying amount of the investment to the sum of the total
amount of the remaining Low Income Housing Tax Credits allocated to
the Partnership and any estimated residual value of the investment.
For the three months ended June 30, 2018 and 2017, impairment loss
related to investments in Local Limited Partnerships was $511,512
and $652,206, respectively.
The
Partnership also evaluates its intangibles for impairment in
connection with its investments in Local Limited Partnerships.
Impairment on the intangibles is measured by comparing the
Partnership’s total investment balance after impairment of
investments in Local Limited Partnerships to the sum of the total
of the remaining Low Income Housing Tax Credits allocated to the
Partnership and any estimated residual value of the investments.
During the three months ended June 30, 2018 and 2017, no impairment
loss was recorded against related intangibles.
12
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A California Limited
Partnership)
NOTES TO
CONDENSED FINANCIAL STATEMENTS - CONTINUED
For the Quarterly
Period Ended June 30, 2018
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
continued
Impact of Recent Accounting Pronouncements
In
February 2015, the FASB issued ASU No. 2015-02,
“Consolidation (Topic 810): Amendments to the Consolidation
Analysis”. In addition, in October 2016, the FASB issued ASU
No. 2016-17, “Consolidation (Topic 810): Interests Held
Through Related Parties That Are Under Common Control”, to
provide further clarification guidance to ASU No. 2015-02. This
will improve certain areas of consolidation guidance for reporting
organizations that are required to evaluate whether to consolidate
certain legal entities such as limited partnerships, limited
liability corporations and securitization structures.
ASU 2015-02 and ASU 2016-17 simplifies and improves GAAP by:
eliminating the presumption that a general partner should
consolidate a limited partnership, eliminating the indefinite
deferral of FASB Statement No. 167, thereby reducing the number of
Variable Interest Entity (VIE) consolidation models from four to
two (including the limited partnership consolidation model) and
clarifying when fees paid to a decision maker should be a factor to
include in the consolidation of VIEs. ASU 2015-02 is effective
for periods beginning after December 15, 2015. ASU 2016-17 is
effective for periods beginning after December 15, 2016. The
adoption of these updates did not materially affect the
Partnership's financial statements.
13
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A
California Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
For the Quarterly Period Ended June 30, 2018
(Unaudited)
NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS
As of
June 30, 2018 and March 31, 2018, the Partnership owned Local
Limited Partnership interests in 4 Local Limited Partnerships, each
of which owns one Housing Complex consisting of an aggregate of 108
apartment units. The respective Local General Partners of the Local
Limited Partnerships manage the day to day operations of the
entities. Significant Local Limited Partnership business decisions
require approval from the Partnership. The Partnership, as a
limited partner, is generally entitled to 99.98%, as specified in
the Local Limited Partnership Agreements, of the operating profits
and losses, taxable income and losses, and Low Income Housing Tax
Credits of the Local Limited Partnerships.
The
following is a summary of the equity method activity of the
investments in Local Limited Partnerships for the periods presented
below:
|
For the Three Months
Ended
June 30, 2018
|
For the Year
Ended
March 31, 2018
|
Investments per
balance sheet, beginning of period
|
$1,406,121
|
$2,286,745
|
Equity
in losses of Local Limited Partnerships
|
(56,989)
|
(228,418)
|
Impairment
loss
|
(511,512)
|
(652,206)
|
Investments
per balance sheet, end of period
|
$837,620
|
$1,406,121
|
|
For the Three Months
Ended
June 30, 2018
|
For the Year
Ended
March 31, 2018
|
Investments in
Local Limited Partnerships, net
|
$837,620
|
$1,406,121
|
Investments per
balance sheet, end of period
|
$837,620
|
$1,406,121
|
14
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A
California Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
For the Quarterly Period Ended June 30, 2018
(Unaudited)
NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS,
continued
Selected
financial information for the three months ended June 30, 2018 and
2017 from the unaudited combined condensed financial statements of
the Local Limited Partnerships in which the Partnership has
invested is as follows:
COMBINED
CONDENSED STATEMENTS OF OPERATIONS
|
||
|
2018
|
2017
|
|
|
|
Revenues
|
$185,000
|
$292,000
|
|
|
|
Expenses:
|
|
|
Interest
expense
|
39,000
|
84,000
|
Depreciation
and amortization
|
89,000
|
107,000
|
Operating
expenses
|
115,000
|
176,000
|
Total
expenses
|
243,000
|
367,000
|
|
|
|
Net
loss
|
$(58,000)
|
$(75,000)
|
Net
loss allocable to the Partnership
|
$(58,000)
|
$(75,000)
|
Net
loss recorded by the Partnership
|
$(57,000)
|
$(61,000)
|
Certain
Local Limited Partnerships have incurred significant operating
losses and/or have working capital deficiencies. In the event these
Local Limited Partnerships continue to incur significant operating
losses, additional capital contributions by the Partnership may be
required to sustain operations of such Local Limited Partnerships.
If additional capital contributions are not made when they are
required, the Partnership's investments in certain of such Local
Limited Partnerships could be impaired, and the loss and recapture
of the related Low Income Housing Tax Credits could
occur.
Troubled Housing Complexes
Davenport
started construction in October 2006 and was scheduled to be
completed in June 2008. Construction was delayed due to the
original Local General Partner defaulting on his construction
guarantee, and resulting in disputed mechanic liens on the
property. In November 2008, a co-Local General Partner, Shelter
Resource Corporation, was admitted into the Partnership, due to
restrictions implemented by the Iowa Finance Authority
(“IFA”). Subsequently, with IFA’s approval, the
defaulting original Local General Partner was removed from the
Partnership leaving Shelter Resource Corporation as the sole Local
General Partner.
As of
March 31, 2010, the property was 100% completed and a certificate
of occupancy was granted for both buildings in December 2009. The
Partnership engaged all sub-contractors to sign new construction
contracts, along with lien releases for any and all work done after
their engagement. During the year ended March 31, 2011, the
Partnership voluntarily advanced $846,175 to Davenport for
construction related costs. There were no additional advances made
to Davenport due to the additional investment made, as discussed
below.
15
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A
California Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
For the Quarterly Period Ended June 30, 2018
(Unaudited)
NOTE 2- INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS,
continued
The
project was fully completed as of March 31, 2010 and it achieved
stabilized operations by June 2010. In June 2010 the property
achieved 85% occupancy and has maintained occupancy of 80% to 100%
to the date of this filing. Davenport has been awarded state
historical tax credits from the State of Iowa, federal historical
credits and federal Low Income Housing Tax Credits. The State
historical credits are given in the form of a refund check from the
State in conjunction with the State tax return filing. The net
amount of the check after applicable federal taxes will be
contributed back to the property to help fund construction
shortfalls. Davenport was also allocated additional federal Low
Income Housing Tax Credits as well as federal historical tax
credits. Upon the Limited Partners’ approval of the
dispositions of Sierra Run’s and Fernwood, the Partnership
made the additional investment in Davenport. See the exit strategy
in Note 1 regarding the dispositions of Sierra’s Run and
Fernwood. On July 1, 2010, the Partnership committed additional
capital to Davenport in the amount of $2,490,651. This additional
commitment generated $408,710 of federal historic credits and
$3,582,550 of additional federal Low Income Housing Tax Credits
which were allocated to the partners of the
Partnership.
As of
June 30, 2018, the property is on the watch list due to a low
year-to-date DCR, and low replacement reserves. During the first
quarter 2018, operating expenses have exceeded the budget by
$2,194, due to higher utility expense incurred during the extreme
winter weather. The property management agent has increased rents
by $23 per unit per month for 2018, and property performance is
trending in a positive direction. However, due to the small size of
the property, any unanticipated expenses will negatively impact
operations and financial performance. Operating deficits were paid
through the operating cash account, which has a balance of $936 as
of the end of the first quarter 2018. While the operating deficit
guarantee has expired, the tax credit guaranty remains in
place.
Grove
Village Limited Partnership and Pleasant Village Limited
Partnership were disposed of during the year ended March 31, 2016.
These Local Limited Partnerships were under IRS audit related to
the LIHTCs and the Partnership filed a lawsuit against the Local
General Partner. During the year ended March 31, 2015, the
Partnership settled the dispute and received $1,300,000 of
settlement proceeds which were included in other income. The
Partnership also received a final escrow release from the sale of
Pleasant Village Limited Partnership totaling $59,315 which was
also included in other income for the year ended March 31,
2018.
16
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A
California Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
For the Quarterly Period Ended June 30, 2018
(Unaudited)
NOTE 3 - RELATED PARTY TRANSACTIONS
Under
the terms of the Partnership Agreement, the Partnership has paid or
is obligated to the General Partner or its affiliates for the
following fees:
(a)
An annual asset
management fee accrues in an amount equal to 0.5% of the Invested
Assets of the Partnership. “Invested Assets” is defined
as the sum of the Partnership’s Investment in Local Limited
Partnerships, plus the reserves of the Partnership of up to 5% of
gross Partnership Unit sales proceeds, and the Partnership’s
allocable share of the amount of the mortgage loans and other debts
related to the Housing Complexes owned by such Local Limited
Partnerships. Asset management fees of $14,627 and $17,116 were
incurred during the three months ended June 30, 2018 and 2017,
respectively. Payments of $0 and $30,000 were made during the three
months ended June 30, 2018 and 2017, respectively.
(b)
The Partnership
reimburses the General Partner or its affiliates for operating
expenses incurred by the Partnership and paid for by the General
Partner or its affiliates on behalf of the Partnership. Operating
expense reimbursements of $101,270 and $29,315 were made during the
three months ended June 30, 2018 and 2017,
respectively.
(c)
A subordinated
disposition fee will be paid in an amount equal to 1% of the sales
price of real estate sold. Payment of this fee is subordinated to
the Limited Partners receiving a return on investment (as defined
in the Partnership Agreement) and is payable only if the General
Partner or its affiliates render services in the sales effort. No
disposition fees have been incurred for all periods
presented.
The
accrued fees and expenses due to the General Partner and affiliates
consist of the following at:
|
June 30, 2018
|
March 31, 2018
|
|
|
|
Asset management
fee payable
|
$1,411,501
|
$1,396,874
|
Reimbursements for
expenses paid by the General Partner or an affiliate
|
18,391
|
90,023
|
|
|
|
Total
|
$1,429,892
|
$1,486,897
|
The
General Partner and/or its affiliates do not anticipate that these
accrued fees will be paid until such time as capital reserves are
in excess of future foreseeable working capital requirements of the
Partnership.
The
Partnership currently has insufficient working capital to fund its
operations. Associates has agreed to continue providing advances
sufficient enough to fund the operations and working capital
requirements of the Partnership through August 31,
2019.
NOTE 4 – DUE FROM AFFILIATES, NET
The
Partnership is not obligated to fund advances to the Local Limited
Partnerships. Occasionally, when Local Limited Partnerships
encounter operational issues the Partnership may decide to advance
funds to assist the Local Limited Partnerships.
As of
June 30, 2018 and March 31, 2018, the Partnership advanced $763,336
to Davenport Housing VII, L.P., in which the Partnership is a
limited partner. All advances were reserved in full in the year
they were advanced.
17
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
(A
California Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
For the Quarterly Period Ended June 30, 2018
(Unaudited)
NOTE 5 – PAYABLES TO LOCAL LIMITED PARTNERSHIPS
Payables
to Local Limited Partnerships amounting to $245,113 at June 30,
2018 and March 31, 2018, represent amounts which are due at various
times based on conditions specified in the Local Limited
Partnership agreements. These contributions are payable in
installments and are generally due upon the Local Limited
Partnerships achieving certain operating and development benchmarks
(generally within two years of the Partnership’s initial
investment). The payables to Local Limited Partnerships are subject
to adjustment in certain circumstances.
18
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Forward Looking Statements
With
the exception of the discussion regarding historical information,
this “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and other discussions
elsewhere in this Form 10-Q contain forward looking statements.
Such statements are based on current expectations subject to
uncertainties and other factors which may involve known and unknown
risks that could cause actual results of operations to differ
materially from those projected or implied. Further, certain
forward-looking statements are based upon assumptions about future
events which may not prove to be accurate.
Risks
and uncertainties inherent in forward looking statements include,
but are not limited to, the Partnership’s future cash flows
and ability to obtain sufficient financing, level of operating
expenses, conditions in the Low Income Housing Tax Credit property
market and the economy in general, as well as legal proceedings.
Historical results are not necessarily indicative of the operating
results for any future period.
Subsequent
written and oral forward looking statements attributable to the
Partnership or persons acting on its behalf are expressly qualified
in their entirety by cautionary statements in this Form 10-Q and in
other reports filed with the SEC.
The
following discussion and analysis compares the results of
operations for the three months ended June 30, 2018 and 2017, and
should be read in conjunction with the condensed financial
statements and accompanying notes included within this
report.
Financial Condition
The
Partnership’s assets at June 30, 2018 consisted of $215,000
in cash and cash equivalents and investments in Local Limited
Partnerships of $838,000 (See “Method of Accounting for
Investments in Local Limited Partnerships”). Liabilities at
June 30, 2018 consisted of $245,000 of payables to Local Limited
Partnerships and $1,430,000 in accrued fees and expenses due to the
General Partner and affiliates.
Results of Operations
Three Months Ended June 30, 2018 Compared to Three Months Ended
June 30, 2017 The Partnership’s net loss for the three
months ended June 30, 2018 was $602,000, reflecting a decrease of
$76,000 from the $678,000 net loss experienced for the three months
ended June 30, 2017. Impairment loss decreased by $141,000 for the
three months ended June 30, 2018 compared to the three months ended
June 30, 2017. Impairment loss can vary from year to year depending
on the operations of the Local Limited Partnerships and the amount
of Low Income Housing Tax Credits that are allocated each year to
the Partnership. There was an increase in accounting and legal fees
of $20,000 for the three months ended June 30, 2018 due to timing
of services and payments. Asset management fees decreased by $2,000
during the three months ended June 30, 2018. The fees are
calculated based on the value of invested assets, which decreased
due to the sales of Local Limited Partnerships. Other income
decreased by $59,000 for the three months ended June 30, 2018. The
Partnership received $59,000 from the release of a lien account
related to the disposition of a Local Limited Partnership, which
was included in other income during the three months ended June 30,
2017. Other expenses increased by $3,000 mainly due to tax and
license expenses incurred during the three months ended June 30,
2018. The equity in losses of Local Limited Partnerships decreased
by $4,000 for the three months ended June 30, 2018. Equity in
losses can vary based on the operations of the underlying Housing
Complexes of the Local Limited Partnerships. The Partnership
received $11,000 in reporting fees and distribution income during
the three months ended June 30, 2018 compared to no payments
received during the three months ended June 30, 2017. Local Limited
Partnerships pay the reporting fees and distribution income to the
Partnership when the Local Limited Partnerships’ cash flows
will allow for the payment.
19
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations, continued
Liquidity and Capital Resources
Three Months Ended June 30, 2018 Compared to Three Months Ended
June 30, 2017 The decrease in cash and cash
equivalents during the three months ended June 30, 2018 was $90,000
compared to a $117 increase in cash and cash equivalents during the
three months ended June 30, 2017. During the three months ended
June 30, 2017, the Partnership received $59,000
from the final release of an escrow account related to the
disposition of a Local Limited Partnership. During the three months
ended June 30, 2018,
the Partnership received $11,000 in reporting fees
and distribution income compared to no payments received during the
three months ended June 30, 2017. During the three months ended
June 30, 2018, the Partnership paid $0 in accrued asset management
fees and $101,000 in operating expenses to the General Partner or
affiliates compared to $30,000 and $29,000, respectively, paid
during the three months ended June 30, 2017. Each quarter the
Partnership evaluates its cash position and determines how much of
operating expense reimbursements and accrued asset management fees
will be paid to the General Partner or affiliates. The
reimbursement of operating expenses and advances are paid after
management reviews the cash position of the
Partnership.
During
the three months ended June 30, 2018, accrued payables, which
consist primarily of related party asset management fees and
advances due to the General Partner and affiliates, decreased by
$57,000. The General Partner does not anticipate that these accrued
fees and advances will be paid until such time as capital reserves
are in excess of foreseeable working capital requirements of the
Partnership.
The
Partnership expects its future cash flows, together with its net
available assets as of June 30, 2018, to be insufficient to meet
all currently foreseeable future cash requirements. Associates has
agreed to continue providing advances sufficient enough to fund the
operations and working capital requirements of the Partnership
through August 31, 2019.
Recent Accounting Changes
In
February 2015, the FASB issued ASU No. 2015-02,
“Consolidation (Topic 810): Amendments to the Consolidation
Analysis”. In addition, in October 2016, the FASB issued ASU
No. 2016-17, “Consolidation (Topic 810): Interests Held
Through Related Parties That Are Under Common Control”, to
provide further clarification guidance to ASU No. 2015-02. This
will improve certain areas of consolidation guidance for reporting
organizations that are required to evaluate whether to consolidate
certain legal entities such as limited partnerships, limited
liability corporations and securitization structures.
ASU 2015-02 and ASU 2016-17 simplifies and improves GAAP by:
eliminating the presumption that a general partner should
consolidate a limited partnership, eliminating the indefinite
deferral of FASB Statement No. 167, thereby reducing the number of
Variable Interest Entity (VIE) consolidation models from four to
two (including the limited partnership consolidation model) and
clarifying when fees paid to a decision maker should be a factor to
include in the consolidation of VIEs. ASU 2015-02 is effective
for periods beginning after December 15, 2015. ASU 2016-17 is
effective for periods beginning after December 15, 2016. The
adoption of these updates did not materially affect the
Partnership's financial statements.
20
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations, continued
Other Matters
Davenport
started construction in October 2006 and was scheduled to be
completed in June 2008. Construction was delayed due to the
original Local General Partner defaulting on his construction
guarantee, and resulting in disputed mechanic liens on the
property. In November 2008, a co-Local General Partner, Shelter
Resource Corporation, was admitted into the Partnership, due to
restrictions implemented by the Iowa Finance Authority
(“IFA”). Subsequently, with IFA’s approval, the
defaulting original Local General Partner was removed from the
Partnership leaving Shelter Resource Corporation as the sole Local
General Partner.
As of
March 31, 2010, the property was 100% completed and a certificate
of occupancy was granted for both buildings in December 2009. The
Partnership engaged all sub-contractors to sign new construction
contracts, along with lien releases for any and all work done after
their engagement. During the year ended March 31, 2011, the
Partnership voluntarily advanced $846,175 to Davenport for
construction related costs. There were no additional advances made
to Davenport due to the additional investment made, as discussed
below.
The
project was fully completed as of March 31, 2010 and it achieved
stabilized operations by June 2010. In June 2010 the property
achieved 85% occupancy and has maintained occupancy of 80% to 100%
to the date of this filing. Davenport has been awarded state
historical tax credits from the State of Iowa, federal historical
credits and federal Low Income Housing Tax Credits. The State
historical credits are given in the form of a refund check from the
State in conjunction with the State tax return filing. The net
amount of the check after applicable federal taxes will be
contributed back to the property to help fund construction
shortfalls. Davenport was also allocated additional federal Low
Income Housing Tax Credits as well as federal historical tax
credits. Upon the Limited Partners’ approval of the
dispositions of Sierra Run’s and Fernwood, the Partnership
made the additional investment in Davenport. See the exit strategy
in Note 1 regarding the dispositions of Sierra’s Run and
Fernwood. On July 1, 2010, the Partnership committed additional
capital to Davenport in the amount of $2,490,651. This additional
commitment generated $408,710 of federal historic credits and
$3,582,550 of additional federal Low Income Housing Tax Credits
which were allocated to the partners of the
Partnership.
As of
June 30, 2018, the property is on the watch list due to a low
year-to-date DCR, and low replacement reserves. During the first
quarter 2018, operating expenses have exceeded the budget by
$2,194, due to higher utility expense incurred during the extreme
winter weather. The property management agent has increased rents
by $23 per unit per month for 2018, and property performance is
trending in a positive direction. However, due to the small size of
the property, any unanticipated expenses will negatively impact
operations and financial performance. Operating deficits were paid
through the operating cash account, which has a balance of $936 as
of the end of the first quarter 2018. While the operating deficit
guarantee has expired, the tax credit guaranty remains in
place.
Grove
Village Limited Partnership and Pleasant Village Limited
Partnership were disposed of during the year ended March 31, 2016.
These Local Limited partnerships were under IRS audit related to
the LIHTCs and the Partnership filed a lawsuit against the Local
General Partner. During the year ended March 31, 2015, the
Partnership settled the dispute and received $1,300,000 of
settlement proceeds which were included in other income. The
Partnership also received a final escrow release from the sale of
Pleasant Village Limited Partnership totaling $59,315 which was
also included in other income for the year ended March 31,
2018.
21
Item 3. Quantitative and Qualitative Disclosures About Market
Risks
NOT
APPLICABLE
Item 4. Controls and Procedures
(a)
Disclosure controls and procedures
As of
the end of the period covered by this report, the
Partnership’s General Partner, under the supervision and with
the participation of the Chief Executive Officer and Chief
Financial Officer of Associates, carried out an evaluation of the
effectiveness of the Partnership’s “disclosure controls
and procedures” as defined in Securities Exchange Act of 1934
Rule 13a-15 and 15d-15. Based on that evaluation, the Chief
Executive Officer and Chief Financial Officer have concluded that,
as of the end of the period covered by this report, the
Partnership’s disclosure controls and procedures were not
effective to ensure that material information required to be
disclosed in the Partnership’s periodic report filings with
SEC is recorded, processed, summarized and reported within the time
period specified by the SEC’s rules and forms, consistent
with the definition of “disclosure controls and
procedures” under the Securities Exchange Act of
1934.
The
Partnership must rely on the Local Limited Partnerships to provide
the Partnership with certain information necessary to the timely
filing of the Partnership’s periodic reports. Factors in the
accounting at the Local Limited Partnerships have caused delays in
the provision of such information during past reporting periods,
and resulted in the Partnership’s inability to file its
periodic reports in a timely manner.
Once
the Partnership has received the necessary information from the
Local Limited Partnerships, the Chief Executive Officer and the
Chief Financial Officer of Associates believe that the material
information required to be disclosed in the Partnership’s
periodic report filings with SEC is effectively recorded,
processed, summarized and reported, albeit not in a timely manner.
Going forward, the Partnership will use the means reasonably within
its power to impose procedures designed to obtain from the Local
Limited Partnerships the information necessary to the timely filing
of the Partnership’s periodic reports.
(b)
Changes in internal controls
There
were no changes in the Partnership’s internal control over
financial reporting that occurred during the quarter ended June 30,
2018 that materially affected, or are reasonably likely to
materially affect, the Partnership’s internal control over
financial reporting.
22
Part II.
|
Other Information
|
|
|
Item 1.
|
Legal Proceedings
NONE
|
Item 1A.
|
Risk Factors
|
|
|
|
No
material changes in risk factors as previously disclosed in the
Partnership’s Form 10-K.
|
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of
Proceeds
|
|
|
|
NONE
|
Item 3.
|
Defaults Upon Senior Securities
|
|
|
|
NONE
|
|
|
Item 4.
|
Mine Safety Disclosures
NOT
APPLICABLE
|
|
|
Item 5.
|
Other Information
|
|
|
|
NONE
|
|
|
Item 6.
|
Exhibits
|
Certification of
the Principal Executive Officer pursuant to Rule 13a-14 and 15d-14,
as adopted pursuant to section 302 of the Sarbanes-Oxley Act of
2002. (filed herewith)
Certification of
the Principal Financial Officer pursuant to Rule 13a-14 and 15d-14,
as adopted pursuant to section 302 of the Sarbanes-Oxley Act of
2002. (filed herewith)
Section 1350
Certification of the Chief Executive Officer. (filed
herewith)
Section 1350
Certification of the Chief Financial Officer. (filed
herewith)
101
Interactive data
files pursuant to Rule 405 of Regulation S-T: (i) the Condensed
Balance Sheets at June 30, 2018 and March 31, 2018, (ii) the
Condensed Statements of Operations for the three months ended June
30, 2018 and June 30, 2017, (iii) the Condensed Statement of
Partners’ Equity (Deficit) for the three months ended June
30, 2018, (iv) the Condensed Statements of Cash Flows for the three
months ended June 30, 2018 and June 30, 2017 and (v) the Notes to
Condensed Financial Statements.
Exhibits 32.1,
32.2 and 101 shall not be deemed “filed” for purposes
of Section 18 of the Securities Exchange Act of 1934, or
otherwise subject to the liability of that Section. Such exhibits
shall not be deemed incorporated by reference into any filing under
the Securities Act of 1933 or Securities Exchange Act of
1934.
23
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 13
By: WNC National
Partners,
LLC
General
Partner
By:
/s/ Wilfred N. Cooper,
Jr.
Wilfred
N. Cooper, Jr.
President and Chief Executive Officer of WNC & Associates,
Inc.
Date: July 31, 2018
By:
/s/ Melanie R.
Wenk
Melanie
R. Wenk
Senior
Vice President - Chief Financial Officer of WNC & Associates,
Inc.
Date: July 31, 2018
24