Item 1. Business
Organization
Bayfield Low Income Housing Limited Partnership (the "Partnership") is a Delaware limited partnership organized as of July 1, 1990 pursuant to the provisions of a Joint Plan of Reorganization of 52 debtor investor limited partnerships (the "Debtor Investor Partnerships"), dated May 9, 1990, pursuant to the provisions of Chapter 11 of Title 11, United States Code, as confirmed July 13, 1990 and amended from time to time thereafter (the "Plan"). Each of the Debtor Investor Part aware limited partnership which was originally formed to and did acquire equity interests in limited partnerships (the "Operating Partnerships"), each of which has developed and now owns and operates a multi-family apartment complex for low to moderate income tenants (each, a "Project"). (See "Item 2.
Item 2 . Properties.
Each Operating Partnership owns and operates a Project, which generates Tax Credits under Section 42 of the Tax Code. A description of the Projects is contained in the following tables.
The basis for the tabular computation of "Approximate Average Annual Anticipated Federal Credits" on the following tables is the maximum amount of Tax Credits contracted by the general partners of the Operating Partnerships to the Partnership for the balance of the 10-year period which commenced in 1987.
Shaker Housing Credit
In the Fiscal Year ended March 31, 1996 (the "1996 Fiscal Year"), Shaker Housing Credit ("Shaker Housing"), an Operating Partnership, filed for protection under Chapter 11 of the federal bankruptcy laws, following the institution of foreclosure proceedings by its lender, despite advances from the Partnership of $49,000 in excess of its capital commitment. This Operating Partnership's apartment complex, Shaker Housing, located in Cleveland, Ohio, had experienced prolonged vacancies, attributable in part to the failure of its management company to maintain the apartments, and structural damage effectively eliminating one apartment. A new management company had been put in place by the Partnership, which attempted to increase occupancy in order to enable the Operating Partnership to emerge from bankruptcy under a plan of reorganization; however, the bank holding the first mortgage on the apartment complex obtained an order from the bankruptcy court allowing it to proceed with a foreclosure sale of the property. The Partnership determined that is was no longer feasible to incur further costs to attempt to save this apartment complex. The apartment complex was sold to the bank holding the first mortgage at a foreclosure sale.
As a result of the loss of this Operating Partnership's apartment complex, beginning in 1996 the Partnership will not receive, or be entitled to, anticipated aggregate Tax Credits of $210,000 through 1998, or approximately $35 per 0.05% of Limited Partnership Interest per year for each of three years. In prior years, this Operating Partnership provided the Limited Partners approximately $500,000 in Tax Credits of which, in 1996, $165,000 was subject to recapture along with $61,000 in interest, or approximately $113 per 0.05% of Limited Partnership Interest that was passed through to the Limited Partners on their 1996 Schedule K-1. Limited Partners are not expected to be subject to any further tax recapture or interest and penalties with respect to the loss of this apartment complex.
Three Florida Projects
In the fiscal year ended March 31, 1995 (the "1995 Fiscal Year"), the Independent Manager, as general partner of the Partnership, and the Partnership commenced an action in the Circuit Court of Alachua County, Florida as the sole limited partner of, and derivatively on behalf of, two Operating Partnerships, Lake City Village, Ltd. and Alachua Villas, Ltd., against John D. Carver ("Carver"), the general partner of such Operating Partnerships, and a management company affiliated with Carver, G & R Management Services, Inc. ("G & R"). The actions arose as a result of the acceleration by the FmHA, now known as the Rural Development), of the entire balance due on the mortgage against these Operating Partnerships. The FmHA alleged various defaults under such Operating Partnership's loan agreements, promissory notes and mortgages with the FmHA (the "FmHA Documents"), including failure to pay real estate taxes, failure to maintain account balances sufficient to pay current operating and maintenance expenses, failure to maintain adequate records and file required reports, and failure to correct deficiencies previously noted by the FmHA during its supervisory visits to the housing projects.
The Partnership's complaint alleged, among other things, breaches of the partnership agreements of the Operating Partnerships and the management agreements between the Operating Partnerships and G & R (including breaches arising out of the breach of the FmHA Documents), and sought an accounting, the appointment of Megan Asset Management as receiver, compensatory damages, prejudgment interest, costs and interest.
After extensive motion practice and discovery, on January 13, 1995, a settlement agreement was entered into providing for a designated representative of the Partnership (a company under common ownership and control with Megan Asset Management) to take over management of the affected Operating Partnerships for one year, the transfer of the Operating Partnerships' funds into escrow and the replacement of Carver as general partner subject to the consent of the FmHA, and further providing for an audit of such Operating Partnerships and Citrus Terrace Village Ltd., an Operating Partnership unaffiliated with Carver, but which Carver's affiliated company managed ("Citrus Terrace"). Such audit uncovered possible claims of such Operating Partnerships (and Citrus Terrace described below) against the defendants totaling $83,599, which amount has been contested by Carver. Following a hearing on November 13, 1997 in which the Court ruled that it would enter summary judgment in favor of the Partnership, attorneys for both the Partnership and Carver have submitted formal orders to the Court for signature and the entry of a judgment against Carver in favor of Plaintiff. While the Partnership intends to attempt to recover against the defendants with respect to such claims and judgment on behalf of the affected Operating Partnerships, there can be no assurance that any such amounts will be recovered by such Operating Partnerships.
FmHA has not foreclosed on its loans to such Operating Partnerships and has restructured such loans to finance the payment of past due real estate taxes and to permit such Operating Partnerships to remain in operation, notwithstanding the damages suffered by them. This permits the Partnership and its Limited Partners to continue to receive the benefit of the Tax Credits related thereto. Had the FmHA foreclosed on its loans and the Partnership lost its interest in such Operating Partnerships, the Partnership would not have been entitled to anticipated aggregate Tax Credits of $371,500 through 1999, or approximately $186 per 0.05% of Limited Partnership Interest per year for four years. In addition, assuming that 100% of the Tax Credits previously allocated to the Limited Partners relating to these Operating Partnerships were used by them, it is estimated that the Limited Partners would have been subject to a total tax recapture with respect to these Operating Partnerships of $186,000 or approximately $93 per 0.05% of Limited Partnership Interest, plus interest and penalties, if any.
Also in the 1995 Fiscal Year, the Partnership commenced a further action in the Circuit Court of Highlands County, Florida on behalf of Citrus Terrace substantially similar to that described above against George T. Wheeler ("Wheeler"), individually and as its general partner and against Carver, as Trustee of G & R, and G & R , which management company was also managing the apartment complex owned by Citrus Terrace. A substantially similar settlement agreement has been entered into and implemented in connection with and this litigation has also been settled, except for the recovery of the sum of approximately $5,000 wrongfully taken by Carver from Citrus Terrace. It is likely not going to be economically feasible for the Partnership to attempt to recover this latter sum against Carver with respect to such claim, thus it is not likely that such amount will be recovered by Citrus Terrace.
The FmHA did not foreclose on its loan to Citrus Terrace, and it is anticipated that it will restructure the loan to finance the payment of past due real estate taxes to permit this Operating Partnership to remain in operation, notwithstanding the damages suffered by it. This would permit the Partnership and its Limited Partners to continue to receive the benefit of the Tax Credits related thereto. If the FmHA had foreclosed on its loan and the Partnership lost its interest in such Operating Partnership, the Partnership would not have been entitled to anticipated aggregate Tax Credits of $246,500 through 1999, or approximately $123 per 0.05% of Limited Partnership Interest per year for four years. In addition, assuming that 100% of the Tax Credits previously allocated to the Limited Partners relating to this Operating Partnership were used by them, it is estimated that the Limited Partners would have been subject to a total tax recapture with respect to this Operating Partnership of $115,500, or approximately $58 per 0.05% of Limited Partnership Interest, plus interest and penalties, if any.
Further, in the 1996 Fiscal Year, in an attempt to recover its claims and the sums wrongfully taken from the affected Operating Partnerships, other than Citrus Terrace, the Partnership commenced a further action in the Circuit Court of Alachua County, Florida against Mercurio & Bridgford, P.A. and John J. Mercurio (together, "Mercurio"), who provided auditing services to each of Lake City Village, Ltd., Alachua Villas, Ltd. and Citrus Terrace. The complaint alleges that defendants failed to meet the standard of care required of certified public accountants in the preparation of the audited financial statements for the Operating Partnerships which caused the Partnership's and Operating Partnerships' financial loss resulting from improper payments by Carver which should have been reported in the audited financial statements of the Operating Partnerships. While the Partnership intends to attempt to recover against the defendants with respect to such claims on behalf of the affected Operating Partnerships, there can be no assurance that any such amounts will be recovered by such Operating Partnerships.
Flambeau Village
The Partnership was made aware that the Internal Revenue Service (the "IRS") was auditing the 1993 and 1994 income tax returns for one of the Partnership's Operating Partnerships, Flambeau Village Limited Partnership ("Flambeau Village"), the owner of a 53 unit, mixed income, elderly apartment complex (26 units of low income housing tax credit restricted tenants and 27 units of unrestricted market rate income tenants) located in Ladysmith, Wisconsin. The Partnership also became aware that the IRS was criminally investigating the activities of principals, former officers of or persons related to Flambeau Village's developer/general partner, Solsrud Loyal Land Corporation (Developer/General Partner), in connection with allegations of tax fraud.
Flambeau Village was the Partnership's largest, single producer of tax credits with approximately $165,000 in annual tax credits (1999 was the last year in which Flambeau Village was to produce tax credits). Accordingly, the Partnership engage legal and tax counsel and tax credit compliance experts to review the compliance by the Flambeau Village Developer/General Partner with Section 42 of the Internal Revenue Code ("IRC"), meet with the IRS and actively monitored the situation. As a result of a meeting between the experts engaged by the Partnership and the IRS in 1996, the Partnership was informally informed that the IRS had concluded that Flambeau Village had failed to meet the minimum set-aside and rent restriction tests of Section 42 of the IRC and therefore, that it had not qualified for and was not entitled tax credits for any year. The IRS however did not issued a formal report at the time and its investigation and the Developer/General Partner's negotiations with the IRS continued.
In view of the above, the Partnership made the decision not to allocate any of the approximately $165,000 of tax credits for 1996 of Flambeau Village to its Limited Partners in order to minimize or make a provision for potential recapture, penalties and interest if the IRS ultimately should disallow some or all of the previous allocated Flambeau Village tax credits. As no report from the IRS was forthcoming and the Developer/General Partner continued to negotiate with the IRS, the Partnership did allocate the approximately $165,000 of Tax Credits for each of 1997 and 1998 from Flambeau Village to its Limited Partners.
Subsequently, in connection with the IRS's criminal investigation of the activities of principals, former officers of or persons related to Flambeau Village's Developer/General Partner, the Partnership learned that one of the Developer/General Partner's principals and former officers pleaded guilty to charges filed by the IRS relating to other activities and was sentenced to and is serving a two year jail sentence.
Finally by a letter dated September 29, 1999, the IRS formally notified Flambeau Village's Developer/General Partner that it had determined that Flambeau Village was not entitled to claim any Tax Credits in any year that the project was in existence as a result of Flambeau Village's failure to comply with Section 42 of the IRC (the Developer/General Partner's responsibility). However, the IRS further stated that a review of all facts and circumstances with respect to the partners associated with Flambeau Village revealed that numerous partners (the Partnership and its limited partners) had invested in Flambeau Village for the years under examination. In the interest of an efficient and economical operation, the IRS indicated that it had elected to apply the provisions of Internal Revenue Manual policy statement P-2-1 to this case. As a result, no examination adjustments will be proposed by it either at the partnership level, or individual partner level, for the years under examination. However, it reiterated that it was the IRS's position that Flambeau Village is not entitled to claim any Tax Credits for any year of its operation, including 1993 and forward.
It appears from the IRS's letter, that no adjustments will be proposed by it either at the partnership level, or individual partner level, for the years under examination, 1993 and 1994. It is the Partnership's belief that, absent a finding of fraud by the IRS with respect to the activities of the Developer/General Partner with respect to Flambeau Village, the years prior to 1993 have been closed and the statute of limitations has run and the IRS will not be able to make any adjustment for the tax credits allocated by Flambeau Village to the Partnership and by the Partnership to its Limited Partners for those prior years. It is not know what position with respect to any adjustments the IRS will take, if any, for the subsequent years, 1995, 1997 and 1998, for which tax credits were allocated to and passed through by the Partnership to its Limited Partners. No tax credits were passed through by the Partnership for the year 1996 and, in view of the above, the Partnership elected not to pass through Tax Credits allocated by Flambeau Village to it in the amount of $19,188 for the year 1999, which was the last year the Partnership was originally entitled to tax credits.
As the IRS has taken the position in its September 29, 1999 letter, that Flambeau Village was not entitled to claim any tax credits in any year that the project was in existence, if the IRS takes the subsequent position that adjustments will be proposed at the partnership level, or individual partner level, for the years 1995, 1997 and 1998 (i.e. those years not covered by the IRS's September 29, 1999 letter) or the years prior to 1993 for which tax credits were allocated to the Partnership and passed through to its Limited Partners and assuming that 100% of the tax credits so allocated to the Limited Partners relating to Flambeau Village were used by the Limited Partners, it is estimated that the Limited Partners would be subject to a total tax recapture with respect to Flambeau Village of an estimated $495,000 or approximately $247 per 0.05% of Limited Partnership Interest, plus interest and penalties, if any.
As a result of the loss of the 1996 and 1999 Tax Credits not taken by the Partnership in the aggregate amount of $182,233 and in view of the potential recapture and penalties and interest for the years 1995, 1997 and 1998, the Partnership is reviewing the likelihood of successfully pursuing a claim against and attempting to recover compensatory damages for such losses from the Developer/General Partner of Flambeau Village and any affiliate deemed responsible under the terms of Flambeau Village partnership agreement, the Partnership's Plan and common law. However, in the event a claim is filed there can be no assurance that any amounts will be recovered by the Partnership.
Urban Coalition West - Morningside Villas
The Partnership was advised that Urban Coalition West - Morningside Villa Apartments Limited Partnership ("Urban Coalition"), the owner of a fifteen-unit apartment complex which qualified for Tax Credits of $32,541 per year in Phoenix, Arizona, in which the Partnership owns a 99% limited partnership interest, was in substantial default under its permanent mortgage which matured on December 11, 1992. The Partnership was further informed that Urban Coalition could not obtain new financing for the Project, that it did not have the financial ability to continue the Project's operations and, accordingly, that it had closed the Project. After reviewing this Project's problems with the Operating General Partner of Urban Coalition and conducting a site inspection, the Partnership decided not to attempt to intervene to attempt to save the Project.
As a result of the closing of this Project by Urban Coalition, the Partnership would not receive, or be entitled to, anticipated future Tax Credits of $187,000 through 1998 or approximately $15 in credits per 0.05% of Limited Partnership Interest per year for six years. The Limited Partners were subject to a total tax recapture with respect to Urban Coalition of $39,000, or approximately $19 per 0.05% of Limited Partnership Interest, plus interest. The tax recapture was reflected in each Limited Partner's Schedule K-1 for the 1993 and 1992 tax years.
Item 3.
Item 3. Legal Proceedings
See discussion of applicable legal proceedings above in "Item 2. Properties" above and discussion of Plan in "Item 1. Business" above..
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the Partnership's security holders during the fiscal year ended March 31, 1994.
PART II
Item 5.
Item 5. Market for Registrant's Limited Partnership Interests and Related Security Holder Matters
Market Information
The Partnership is a limited partnership and thus has no common stock. There is no established public trading market for limited partnership interests in the Partnership ("Limited Partnership Interests") and it is not anticipated that any such public market will develop.
Article XI of the Partnership Agreement effectively prevents the transfer of Limited Partnership Interests except under very limited circumstances. In order to transfer a Limited Partnership Interest, a Limited Partner must obtain the consent of the General Partner of the Partnership, which has the absolute right to refuse any request for a transfer. In addition, the Partnership Agreement requires the transferring Limited Partner to obtain a legal opinion from counsel, at his or her sole expense, as to certain tax and securities law matters with regard to the proposed transfer. In addition, the proposed transferee must meet all applicable suitability standards and agree to be bound by the Partnership Agreement.
Approximate Number of Security Holders
As of March 31, 2000, there were approximately 1,850 holders of Limited Partnership Interests.
Distributions
An aggregate of $516,901, $37,440, $4,245 and $34,764 was distributed to Limited Partners for fiscal periods ending March 31, 1994, March 31, 1993, March 31, 1992 and December 31, 1991, respectively, in the form of return of Partnership capital. A distribution was also made for the March 31, 1995 fiscal period of $1,030,421.
Item 6.
Item 6. Selected Financial Data
The information set forth below presents selected financial data of the Partnership. Additional detailed information is set forth in the audited financial statements listed in Item 14 hereof
Results of Operations
(1)
For the Period
For the Year
For the Year
For the Year
July 1, 1990
Ended
Ended
Ended
(date of inception) to
March 31, 1994
March 31, 1993
December 31,1991
December 31, 1990
Interest income
$ 208,498
$ 229,328
$ 414,369
$ 205,038
Equity in Losses of Operating Partnerships
(3,748,006)
(4,277,536)
(4,306,771)
(2,691,747)
Expenses
(788,926)
(1,617,498)
(2,063,449)
(1,814,150)
Net Loss Before Gain (Loss) on
Sale of Auction Interest
(4,328,434)
(5,665,706)
(5,955,851)
(4,300,859)
Gain (Loss) on Sale of Auction Interests
(360,954)
27,863
2,632,762
Net Loss
$(4,328,434)
$(6,026,660)
$(5,927,988)
$(1,668,097)
Net Loss Before Sale of Auction Interests
per 0.05% Limited Partnership Interest
$ (2,164)
$ (2,833)
$ (2,978)
$ (2,150)
Net Loss per 0.05% L. P. Interest
$ (2,164)
$ (3,013)
$ (2,964)
$ (834)
Cash Distributions Per 0.05% L.P. Interest
$ 258
$ 0
$ 0
$ 0
(1) Effective October 1992, the Partnership changed its fiscal year-end for financial accounting purposes to March 31. For the quarter January 1 through March 31, 1992, interest income was $100,353, expenses were $419,245, net loss was $318,892 and net loss per 0.05% Limited Partnership interest was $159 (there was no sale of Auction Interests during such period). Due to differences in the reporting periods of the Operating Partnerships from that of the Partnership, no equity in losses of Operating Partnerships is reflected in the results for that period. No distributions were made to the Limited Partners generally during that period.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Except for historical information, the material contained in this Management's Discussion and Analysis or Plan of Operation is forward-looking. For the purposes of the safe harbor protection for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995, readers are urged to review the list of certain important factors set forth in "Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995" below, which may cause actual results to differ materially from those described.
The Partnership was formed as of July 1, 1990, pursuant to the Plan. Its fiscal year-end for accounting purposes was changed to March 31 during 1992, and was formerly December 31. The Partnership's fiscal year-end for tax purposes remains December 31.
Liquidity
Through December 31, 1994, the Partnership's primary source of funds was the payment by Limited Partners of the amounts owed to the Partnership for their capital contributions pursuant to their Investor Notes. Each of the Investor Notes was payable in semi-annual installments through December 31, 1994. As of March 31, 1994, an aggregate of $6,675,237 was owed pursuant to the Investor Notes, of which $1,450,000 was past due, and approximately $370,000 of future installments was payable by Limited Partners whose Investor Notes were past due.
While the Partnership is continuing its collection efforts of past due Investor Notes, the ultimate collection of the bulk thereof is in doubt and the Partnership is evaluating the utility of continuing collection efforts. Unless the Partnership admits additional Limited Partners, the amounts receivable from the Investor Notes are essentially fixed, subject to defaults and to the collection efforts of the Partnership with respect to defaulted Investor Notes.
The Partnership also receives interest income on account balances. In 1993, the Partnership also received non-recurring proceeds of the auction of interests in Operating Partnerships which the Plan required that the Partnership dispose of in order to raise cash (the "Auction Interests"). Such disposition reduced the aggregate Tax Credits estimated to be derived from the Partnership's aggregate interest in the Operating Partnerships by approximately 25%.
After December 31, 1994, the Partnership's capital resources consist primarily of mandatory annual payments from the Operating Partnerships in which the Partnership then has an interest ($750 per Operating Partnership through 1999 and thereafter a negotiated amount per Partnership not to exceed $750), a contingency reserve required by the Plan equal to $300,000 as of December 31, 1994 and, at such time as Capital Events (as hereinafter defined) commence, potential distributions from such Capital Events. See "Capital Resources" under this subheading.
The Partnership did not receive material cash distributions from the operations of the Operating Partnerships through December 31, 1994, and does not anticipate that it will derive net cash from its operations generally. Aside from the Investor Notes, the Partnership does not have significant external sources of liquidity. All of the above named sources of liquidity are being used to meet the obligations of the Partnership.
The Partnership's principal uses of funds are its operating expenses and the contractual obligations of the Debtor Investor Partnerships assumed by the Partnership to make (i) capital contributions to the Operating Partnerships and (ii) payments to the Secured Lenders of the Debtor Investor Partnerships. The unpaid balances of such contractual obligations at March 31, 1994 were $2,690,700 with respect to the Operating Partnerships and $1,577,000 with respect to the Secured Lenders, which are payable in installments through 1994; as of March 31, 1993, such unpaid balances were $6,931,352 with respect to the Operating Partnerships and $4,195,600 with respect to the Secured Lenders and as of December 31, 1991, such unpaid balances were $12,903,021 with respect to the Operating Partnerships and $6,937,533 with respect to the Secured Lenders. The Partnership also assumed certain accrued expenses pursuant to the Plan, of which $194,527 were unsatisfied as of March 31, 1994, $354,191 were unsatisfied as of March 31, 1993 and $612,863 were unsatisfied as of December 31, 1991. The Partnership also made distributions to certain Limited Partners, as discussed in this section.
For the fiscal years ended March 31, 1994 (the "March 1994 Fiscal Year"), March 31, 1993 (the "March 1993 Fiscal Year") and December 31, 1991 (the "December 1991 Fiscal Year"), gross cash amounts received by the Partnership were as follows:
(a)$8,769,427, $8,411,695, and $8,466,586, respectively, from payments of capital contributions by Limited Partners pursuant to their Investor Notes;
(b)$208,498, $229,328 and $414,369, respectively, of interest income on the Investor Notes and on deposits maintained in escrow accounts pursuant to the Plan, and lockbox funds held by the Secured Lenders;
(c)non-recurring amounts of $30,000 and $159,820 for the March 1993 Fiscal Year and the December 1991 Fiscal Year respectively, from the proceeds of sale of the Auction Interests; and
For the March 1994 Fiscal Year, the March 1993 Fiscal Year and the December 1991 Fiscal Year, respectively, the uses of funds by the Partnership were as follows:
(a)$4,207,139, $3,327,804 and $4,153,982 (including $450,000 attributable to increased capital obligations of $900,000 arising out of the acceleration of certain Tax Credits for the July 1 through December 31, 1990 period), respectively, for capital contributions to the Operating Partnerships;
(b)$2,618,600, $2,441,517 and $2,868,485, respectively, for principal payments on loans to the Secured Lenders;
(c)$607,223, $588,172 and $828,112, respectively, for interest payments primarily to the Secured Lenders;
(d)$170,861, $402,451 and $583,366, respectively, which amounts for the 1994 Fiscal Year were attributable to professional costs related primarily to refinancing of Investor Notes and the related loans to the Secured Lenders, litigation and settlement with certain Operating Partnerships, collection actions against Limited Partners who defaulted on the payment of their Investor Notes, the preparation and filing of the final order under the Plan, and Investor Committee expenses; such amounts for the March 1993 Fiscal Year were attributable primarily to professional costs related to filings with the Securities and Exchange Commission ("SEC"), the settlement with First American, related bankruptcy court approvals, proxy expenses, legal fees and costs in connection with preparation of the Consent and Solicitation statement relating to the replacement of First American and amendments to the Partnership Agreement as contemplated by the Settlement Agreement, the settlement of outstanding litigation against certain Operating Partnerships, litigation against investors who had defaulted on the payment of their Promissory Notes, reimbursement of legal costs and charges by the Partnership's Secured Lenders and Investor Committee expenses; and for the December 1991 Fiscal Year were attributable primarily to legal and other expenses attributable primarily to the clarification of the Plan as set forth in the Order dated December 11, 1990 (the "Clarification") and the modification of the Plan as set forth in the Order dated March 6, 1991 (the "1991 Modification"), and legal and other expenses associated with the dispute with First American and the acquisition of certain rights;
(e)$207,918 and $50,000 for the March 1993 Fiscal Year and the December 1991 Fiscal Year, respectively, in payment to First American for certain rights acquired by the Partnership under the Settlement Agreement;
(f)$595,711, $457,057 and $738,740, respectively, for operating expenses; and
(g)$516,901, $37,440 and $34,764, respectively, for payments as return of capital made to certain of the Limited Partners in accordance with the Plan.
The distributions to Limited Partners represent a partial distribution, for the March 1994 Fiscal Year, of the $1,014,628 contemplated by the Plan to be distributed to the Limited Partners in each such year. As permitted under the Plan and approved by the Investors Committee, undistributed amounts of $507,314 for the March 1994 Fiscal Year, together with the entire $1,014,628 to have been distributed in the March 1993 Fiscal Year, have been deferred and held in reserve or have been applied to meet the increased obligations of the Partnership. In connection with the Clarification in December 1990 and the 1991 Modification in March 1991, the election by the Partnership to accelerate certain Tax Credits pursuant to the 1990 amendments to the Tax Code and the dispute and settlement with First American, the $507,314 provided by the Plan to be distributed to the Limited Partners on each of June 30, 1991, December 31, 1991, June 30, 1992 and December 31, 1992, has been deferred and applied to meet the increased obligations of the Partnership, as approved by the Investors Committee.
No such distributions are payable after December 31, 1994, except to the extent that the Independent Manager, in consultation with the Investors Committee, determines that the financial resources of the Partnership will permit payment of previously deferred distributions. It is not presently anticipated that any such payments will be made. See, "Item 11. Executive Compensation" and "Item 13. Certain Relationships and Related Transactions."
The net increase in cash held by the Partnership amounted to $887,204 for the March 1994 Fiscal Year, $278,028 for the March 1993 Fiscal Year and $171,305 for the December 1991 Fiscal Year. The Partnership anticipates that it will continue to generate sufficient funds which, together with the current cash, will enable it to meet its operating expenses and contractual obligations.
Capital Resources
The Partnership was formed pursuant to the terms of the Plan, which mandates the Partnership's material commitments for expenditures and the anticipated sources of funds needed to fulfill such commitments. The following summary is qualified in its entirety by the terms of the Plan, which is filed as an Exhibit to this Report and incorporated herein by reference.
In summary, monies paid to or earned by the Partnership shall be distributed by the Independent Manager in the following order of priority:
(a) payments for administration of the bankruptcy proceeding as approved by the Bankruptcy Court and to First American pursuant to the Plan prior to the administration of the Independent Manager;
(b) payment of amounts due the Independent Manager for the administration and operation of the Partnership (see "Item 11. Executive Compensation");
(c) payment of reasonable amounts incurred in connection with the sale and assignment of defaulted Limited Partners' Interests;
(d) payment of legal costs not to exceed $10,000 for each six month period;
(e) provision for a reserve of $50,000 through December 31, 1994 and $300,000 as of January 1, 1995;
(f) payment of amounts due to investors under Article 11.(1)(b-e) and 11.(3) under the Plan;
(g) payment of amounts due to Developers pursuant to the Plan; and
(h) payment of a return of capital to investors as further described in Article 14(1)(i) of the Plan.
If approved by the Investors Committee, distributions to Limited Partners as a return of capital may be deferred and used to pay certain costs and expenses of the Partnership, or to purchase interests in partnerships which own, or are intended to own, projects which are intended to qualify for Tax Credits.
The ability of the Partnership to make all cash distributions to its Limited Partners contemplated by the Plan is dependent upon the receipt by the Partnership of sufficient proceeds of Capital Events from the Operating Partnerships or the Partnership's interests therein. Particularly in view of the previous sale of the Auction Interests to raise cash pursuant to the Plan, there can be no assurance that the proceeds of Capital Events, if any, with respect to the remaining Operating Partnerships will be sufficient to enable the Partnership to make all or any portion of such distributions. In the event that the Independent Manager determines, with the consent of the Investor Committee, to apply funds available for distribution to Limited Partners to pay certain costs and expenses of the Partnership, or to purchase interests in partnerships which own, or are intended to own, projects which are intended to qualify for Tax Credits, there can be no assurance that such decision will ultimately yield an economic benefit to the Limited Partners.
Results of Operations
Expenses, comprised principally of depreciation expenses passed through to the Partnership from the Operating Partnerships, exceeded income, comprised principally of interest income, by $4,328,434 for the March 1994 Fiscal Year, by $6,026,660 for the March 1993 Fiscal Year and by $5,927,988 for the December 1991 Fiscal Year. Expenses for the twelve months ended March 31, 1993 also included a loss of $360,954 recognized by the Partnership, principally in connection with the disposition of the Partnership's interests in certain Operating Partnerships (the "Lockwood Partnerships") pursuant to the settlement of a litigation involving the Lockwood Partnerships and various related parties.
Results for the December 1991 Fiscal Year include the expenses associated with the 1991 Modification and the dispute and settlement with First American and results for the March 1993 Fiscal Year include expenses associated with the solicitation of Limited Partner consent to the amendments to the Partnership Agreement contemplated by the settlement (including related filings with the SEC) and certain refinancing costs. Accordingly, such periods are not comparable. The following discussion attempts to highlight certain elements of the results of operations for such periods.
For the March 1994 Fiscal Year, interest income decreased by 9% from the March 1993 Fiscal Year. Interest income decreased by approximately 45% for the March 1993 Fiscal Year from the December 1991 Fiscal Year. Such decrease for the March 1994 Fiscal Year and the March 1993 Fiscal Year from the December 1991 Fiscal Year was primarily due to a decrease in the amount of the Investor Notes outstanding, and the reduction in interest rates earned by the Partnership on cash balances.
Equity in losses of Operating Partnerships decreased by approximately 12% for in the March 1994 Fiscal Year from the March 1993 Fiscal Year, and by 1% in the March 1993 Fiscal Year from the December 1991 Fiscal Year. The decrease is principally due to the change in amount of depreciation expense of the Operating Partnerships, and also from fluctuations from year to year in rental income, and operating expenses.
Management fees increased by $87,000 in the March 1994 Fiscal Year from the March 1993 Fiscal Year principally due to servicing the Investor Notes related to loan refinancing. Management fees increased by approximately $33,674 in the March 1993 Fiscal Year from the December 1991 Fiscal Year, principally because of the $10,000 monthly increase in such fees contemplated by the Settlement Agreement, partially offset by certain non-recurring payments during the December 1991 Fiscal Year. Professional fees decreased by approximately $280,000 in the March 1994 Fiscal Year from the March 1993 Fiscal Year principally due to a decrease in legal costs. Professional fees of approximately $463,000 in the March 1993 Fiscal Year included fees incurred in connection with the submission of certain matters contemplated by the Settlement Agreement to the bankruptcy court, the preparation of the Partnership's initial Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, the solicitation of consents to the replacement of First American by Megan Asset Management and various amendments to the Partnership's Partnership Agreement, and collection efforts with respect to defaulted Investor Notes, while such fees of approximately $623,000 in the December 1991 Fiscal Year included fees incurred in connection with preparation and filing of the Clarification and the 1991 Modification, collection efforts with respect to defaulted Investor Notes and the dispute with First American; such fees decreased by approximately 26% for the March 1993 Fiscal Year. Other expenses of approximately $142,000 for the December 1991 Fiscal Year included legal fees of the Partnership's Secured Lenders of $64,000, expenses relating to the Partnership's initial SEC filings of approximately $20,000 and the fee payable to the Developer Class Representative pursuant to the Plan of $15,000. Aside from the $15,000 fee for the Developer Class Representative, which is payable annually (commencing in the December 1991 Fiscal Year), and certain legal fees of the Secured Lenders, such expenses are non-recurring.
Interest expense decreased by approximately 60% for the March 1994 Fiscal Year from the March 1993 Fiscal Year and decreased by 24% for the March 1993 Fiscal Year from the December 1991 Fiscal Year. The decrease in interest expense was due to reduction of the Partnership's outstanding indebtedness to the Secured Lenders. Amortization of organization costs on an annual basis dropped to approximately $22,000 for the March 1994 Fiscal Year, and to approximately $86,000 for the March 1993 Fiscal Year from the approximately $107,000 for the December 1991 Fiscal Year, due to the full amortization of such costs for certain of the Projects having an earlier inception date.
Pursuant to the Plan, amounts due and unpaid to Operating Partnerships by the Debtor Investor Partnerships prior to the implementation of the Plan in July 1990 accrue interest at the rate of eight percent (8%). As the non-payment of this interest is not a default under the Plan and any such unpaid interest becomes payable only as a first priority out of Capital Events, a contingent liability, the Partnership is not paying this interest currently and is not accruing it on its financial statements. The amount of this interest which could be payable under the Plan as a first priority from Capital Events is estimated at $2,400,000.
The Partnership is organized as a limited partnership and is a "pass through" entity which does not, itself, pay federal income tax. However, the partners of the Partnership receive their proportionate of share Tax Credits and other tax benefits accruing to the Partnership. For the tax years ended December 31, 1994, 1993, and 1992 respectively, the Limited Partners were allocated an aggregate of $4,993,000, $5,024,000 and $4,941,000 in Tax Credits, or approximately $2,497, $2,470 and $2,466 per 0.05% of Limited Partnership Interest, respectively.
Fiscal Quarters Ended June 30, 1993, September 30, 1993 and December 31, 1993
The following is financial data for the Partnership which reflects the quarterly results of operations for the fiscal quarters ended June 30, September 30, and December 31, 1993.
The expenses for each quarter, which consist primarily of the Partnership's equity in losses passed through to the Partnership from the Operating Partnerships, exceeded income, comprised principally of interest income, for each quarter. For interim periods, the Partnership estimates its equity in losses of the Operating Partnerships based on their operations for the prior calendar year. The losses were $1,284,176 for the quarter ended December 31, 1993, $687,962 for the quarter ended September 30, 1993, and $1,341,736 for the quarter ended June 30, 1993, respectively, as compared to the losses of $1,572,887 for the quarter ended December 31, 1992, $1,457,035 for the quarter ended September 30, 1992, and $1,451,489 for the quarter ended June 30, 1992.
The quarter-to-quarter comparison of interest income, which includes interest income on Investor Notes, may not be meaningful: as the Partnership's collection from the Investor Notes and the related interest were made on an semi-annual basis. Generally interest income has been decreasing in part due to the decrease in the amount of the Investor Notes outstanding.
The interest expense decreased from the respective prior years, quarters as a result of the amortization in the principal of the loan balance and the August 1993 refinancing of the indebtedness to the Secured Lenders.
Impact of the Year 2000 Issue
The Partnership uses primarily "off the shelf" computer software and has been advised by the manufacturers that most of this software, including the Partnership's accounting and financing software, is Year 2000 compliant. Accordingly, the cost of addressing the Year 2000 issue is not expected to be material to the Partnership and any potential cost to the Partnership for incomplete or untimely resolution of Year 2000 issues is not expected to be material.
Item 7A.
Item 8. Financial Statements and Supplementary Data.
See Item 14 for a list of the Partnership's Financial Statements filed as part of this Report.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
[Not Applicable.] [None.]
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant
The Partnership has no directors or executive officers and has no employees of its own.
General Partner
The sole General Partner of the Partnership is Megan Asset Management, whose mailing address is 1424 W. Century Avenue, Suite 102, Bismarck, ND 58501. Megan Asset Management, which is also the Independent Manager of the Partnership, is a corporation whose executive officers are Gary L. Maddock, Chairman, and Paul J. Maddock, President. As of March 31, 1994, the shareholders of Megan Asset Management were Gary L. Maddock (25%), Michele Maddock (25%), and Paul Maddock (50%). Prior to August 31, 1993, the sole shareholder of Megan Asset Management was Gary L. Maddock. Gary L. Maddock and Michelle Maddock are husband and wife. Gary L. Maddock and Paul J. Maddock are brothers. As Megan Asset Management is not the beneficial owner of any limited partnership interests in the Partnership, no forms 3, 4 or 5 were filed with respect to such change in ownership of Megan Asset Management.
The Independent Manager
The Management Agreement between the Partnership and the Independent Manager provides for the Independent Manager to conduct and manage, on the Partnership's behalf, the Partnership's operations in connection with, among other things, the collection, investment and disbursement of funds, maintenance of books and records, preparation of tax returns and review and coordination of related-party tax filings. Pursuant to the Management Agreement, the Independent Manager was appointed the exclusive agent of the Partnership to supervise and manage, on behalf of the Partnership, all of the operations of the Partnership under the Plan. The compensation of the Independent Manager is set forth under "Item 11.
Item 11. Executive Compensation.
The following table shows compensation for management services rendered in all capacities to the Partnership by Megan Asset Management and its predecessor as Independent Manager during the periods indicated.
(1) The Independent Manager for periods prior to January 1, 1993 was Megan Management, a company under common ownership and control with Megan Asset Management. Megan Management assigned its rights and obligations as Independent Manager to Megan Asset Management as of December 31, 1992.
(2) The Partnership changed its fiscal year-end for accounting purposes from December 31 to March 31, effective October 1992.
(3) Does not include $40,000 per year paid to Smith & Radigan for accounting services.
(4) Consists of payment for additional services rendered pursuant to the Management Agreement in connection with excess collections from defaulted investors, and approximately $12,500 for reimbursement of expenses.
(5) Consists of payment for services rendered other than pursuant to the Management Agreement in connection with the preparation and filing of periodic reports and other documents with the SEC, including approximately $13,000 for reimbursement of expenses.
(6) Consists of payment for services rendered other than pursuant to the Management Agreement in connection with the preparation and filing of periodic reports and other documents with the SEC and certain tax filings, including approximately $22,842 for reimbursement of expenses.
Compensation of the Independent Manager
Under the Management Agreement, the Independent Manager was entitled to receive $396,000 annually, plus $40,000 per year to cover the cost of preparation of tax returns and financial statements, for each of the years 1992 through 1994; an additional $35,000 in calendar year 1992, pursuant to the Settlement Agreement; and $119,500 annually, plus $30,000 per year to cover the cost of preparation of tax returns and financial statements, for each of the years 1995 through 1998. Commencing with calendar year 1999, the Independent Manager would be entitled to an annual base fee of $119,500, together with an additional $30,000 to cover the cost of preparation of tax returns and financial statements, less $750 for each Operating Limited Partnership in which the Partnership ceases to own the limited partnership interest during 1999 and thereafter. The foregoing would be in lieu of payment to the General Partner of amounts received by the Partnership pursuant to Sections 6(6)(c) (providing for annual payments from each Operating Partnership to the Partnership of $750 for each of the years 1995 through 1999) and 6(6)(d) (providing for annual payments from each Operating Partnership to the Partnership of an amount to be negotiated but not to exceed $750 for each year commencing with the year 2000) of the Plan.
The Management Agreement prohibits reimbursement of the Independent Manager for any expenses incurred by it in connection with the services rendered by it under the Management Agreement, except as otherwise provided in the Management Agreement or under the Plan or any amendment thereto.
The Independent Manager is also entitled to receive, as incentive compensation, an amount equal to 50% of any distributions with respect to Capital Events originally payable to Continental Construction (an affiliate of First American) under the Plan, and the Independent Manager would be required to pay to the Partnership an amount equal to 25% of gross fees, if any, earned by it or its affiliates directly from any of the Operating Partnerships (not including amounts owed to the Independent Manager pursuant to the Management Agreement). There can be no assurance that any such amounts would be earned or paid.
The Management Agreement also provides for the Partnership to indemnify the Independent Manager and its officers, directors and employees against claims arising in connection with the formation of the Partnership and the performance of their duties, except to the extent arising from gross negligence or willful misconduct.
Compensation of the Investors Committee
The Investors Committee received an annual operating budget from the Partnership of up to $50,000, through December 31, 1994, pursuant to a budget approved by the General Partner, to cover the costs, fees and expenses of performing its oversight duties. Through such period, members of the Investors Committee received $100 per hour, plus direct expenses, for time spent in the performance of their duties on behalf of the Investors Committee, including attendance at meetings of the Investors Committee. They are also indemnified by the Partnership against claims arising in connection with the formation of the Partnership and the performance of their duties, except to the extent arising from gross negligence or willful misconduct .
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
No Limited Partner is the holder of 5% or more of Limited Partnership Interests. Neither the General Partner and Independent Manager nor any of its officers or directors holds any Limited Partnership Interests.
As of March 31, 1994 the shareholders of Megan Asset Management were Gary L. Maddock (25%), Michelle Maddock (25%), and Paul J. Maddock (50%).
Item 13.
Item 13. Certain Relationships and Related Transactions.
Development and Consulting Activities
Megan Management has entered into a joint venture agreement with ERC Properties of Arkansas, Inc., a company affiliated with ERC Properties, Inc., the Developer Class Representative under the Plan, for the identification, development and syndication of new projects intended to generate Tax Credits. The Independent Manager does not presently intend to acquire on behalf of the Partnership any interest in any projects in which it or Megan Management is involved in the development.
Independent Manager is not affiliated with any general partners of the Operating Partnerships. However, the Independent Manager or Megan Management have provided syndication and placement consulting services to several Operating General Partners of Operating Partnerships in which the Partnership owns the limited partnership interests with respect to syndication and placement of Tax Credit projects with entities other than the Partnership. See "Item 10. Directors and Executive Officers of the Registrant - The Independent Manager".
Gary L. Maddock, P.C.
Gary L. Maddock, P.C. is a New York corporation of which Megan Asset Management's chairman and shareholder, Gary L. Maddock, is also the president and sole shareholder and through which he practices law and is the only full-time employee. During the fiscal year ended March 31, 1994, the Partnership paid Gary L. Maddock P.C. an aggregate of $28,303 in legal fees and expenses for legal services rendered to the Partnership.
Paul J. Maddock, P.C.
Paul J. Maddock, P.C. is a North Dakota corporation of which Megan Asset Management's president, treasurer and shareholder, Paul J. Maddock, is also the president and sole shareholder and through which he practices public accounting. The Partnership paid Paul J. Maddock P.C. an aggregate of $42,805 in accounting fees which includes tax services rendered to the Operating Partnerships on behalf of the Partnership as set forth in the Independent Manager agreement. Each Operating Partnership is responsible for and is billed for these services which are, when and if collected, reimbursed to the Partnership.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Balance Sheets as of March 31, 1994 and March 31, 1993 Statements of Operations, Changes in Partners' Capital and Cash Flows for the years ended March 31, 1994 and March 31, 1993, and Statements of Operations, Changes in Partners' Capital and Cash Flows for the year ended December 31, 1991 and the three Months Ended March 31, 1992 Notes to Financial Statements as of March 31, 1994, and March 31, 1993 and December 31, 1991
(b) Exhibits (listed according to the number assigned in the table to Item 601 of Regulation S-K)
*2a Joint Plan of Reorganization of 52 Debtors dated May 9, 1990
**2a(i) Order Confirming Plan of Reorganization of the Bankruptcy Court, dated July 10, 1990.
**2a(ii) Order Amending Confirmation Order, dated October 3, 1990.
*2b Order Clarifying Joint Plan dated December 11, 1990.
*2c Order Modifying Joint Plan entered March 6, 1991.
**2c(i)Order Amending Confirmation Order, dated April 8, 1991.
*2d Second Order Modifying Joint Plan entered June 22, 1992.
**2e Final Decree, dated May 20, 1993.
*3a Certificate of Limited Partnership of Bayfield Low Income Housing Limited Partnership.
*4a Amended and Restated Agreement of Limited Partnership of Bayfield Low Income Housing Limited Partnership.
**10a Amended and Restated Management Agreement dated as of December 23, 1991 between Bayfield and Megan Asset Management.
*10b Form of Partnership Interest Security Agreement with Developer.
*10c Form of Unfinanced Note Security Agreement with Developers.
*10d Form of Loan and Security Agreement.
*10e Settlement Agreement dated December 4, 1991 between First American Holdings, Inc., Megan Management Company, Inc., Parkgate International Ltd., The Fidelity Management Company, Inc. and Continental Construction Management Corporation
*10f Amendment dated December 23, 1991 to Settlement Agreement dated December 4, 1991 between First American Holdings, Inc., Megan Management Company, Inc., Parkgate International Ltd., The Fidelity Management Company, Inc. and Continental Construction Management Corporation
21 List of Subsidiaries
*27a Financial Data Schedule (electronic filing only)
*99a Net Worth Formula and Allocation to Investors of Interests in Master Limited Partnership.
*99b Investor Notes.
*99c Agreements and Certificate of Limited Partnership of the Operating Partnerships.
(c) Reports on Form 8-K
[None.]
_________________________
* Incorporated by reference to document filed as an exhibit to Form 10-K for the Fiscal Year Ended March 31, 1993
** Incorporated by reference to document filed as an exhibit filed herein to Form 10-K for the Fiscal Year Ended March 31, 1995
SIGNATURES
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 hereunto duly authorized.
Dated: May 23, 2000
BAYFIELD LOW INCOME HOUSING
LIMITED PARTNERSHIP
By: MEGAN ASSET MANAGEMENT, INC.
General Partner and Independent Manager
By: /s/ Gary L. Maddock
Gary L. Maddock, Chairman
	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 dated indicated.
Dated: May 23, 2000
By:/s/ Gary L. Maddock
Chairman and Director,
Megan Asset Management, Inc.
Dated: May 23, 2000
By:/s/ Paul J. Maddock
President and Director,
Megan Asset Management, Inc.
Dated: May 23, 2000
By:/s/ Michele Maddock
Director,
Megan Asset Management, Inc.
BAYFIELD LOW INCOME HOUSING LIMITED PARTNERSHIP
FINANCIAL STATEMENTS
March 31, 1994
Financial Statements
BAYFIELD LOW INCOME HOUSING LIMITED PARTNERSHIP
March 31, 1994
CONTENTS:
Financial Statements
Independent Auditors' Report
Balance Sheets
Statements of Operations
Statements of Changes in Partners' Capital (Deficit)
Statements of Cash Flows
Notes to Financial Statements
INDEPENDENT AUDITORS' REPORT
To The Partners
Bayfield Low Income Housing Limited Partnership
We have audited the accompanying balance sheets of Bayfield Low Income Housing Limited Partnership ("the Master Limited Partnership") as of March 31, 1994 and March 31, 1993, the related statements of operations, changes in partners' capital (deficit) and cash flows for the years then ended, and the statements of operations and cash flows for the year ended December 31, 1991 and the three months ended March 31, 1992. These financial statements are the responsibility of the Master Limited Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of the 152 Operating Partnerships in 1994, 150 Operating Partnerships in 1993 and 151 Operating Partnerships in 1991 in which Bayfield Low Income Housing Limited Partnership has invested. The financial statements of 49 in 1994, 48 in 1993 and 41 in 1991 of these Operating Partnerships were audited by other auditors whose report has been furnished to us and our opinion, to the extent it relates to the amounts included for these Operating Partnership investments, is based solely on the reports of the other auditors. These investments comprised 29.9 percent and 34.4 percent of the Master Limited Partnership's total assets at March 31, 1994 and March 31, 1993, respectively, and 40.1 and 32.4 percent, respectively, of the total loss of the Master Limited Partnership for the years ended March 31, 1994 and March 31, 1993, zero percent of the total loss of the Master Limited Partnership for the three months ended March 31, 1992, and 30.2 percent of the total loss of the Master Limited Partnership for the year ended December 31, 1991.
Except as discussed in the following paragraph, we conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the reports of other auditors provide a reasonable basis for our opinion.
The financial statements of 103 of the Operating Partnerships in 1994, 102 of the Operating Partnerships in 1993 and 110 of the Operating Partnerships in 1991 were not audited. These investments comprised 47.4 percent and 49.2 percent of the Master Limited Partnership's total assets at March 31, 1994 and March 31, 1993, respectively, 46.5 percent and 38.6 percent, respectively, of the total loss of the Master Limited Partnership for the years ended March 31, 1994 and March 31, 1993 and (42.5) percent of the total loss of the Master Limited Partnership for the year ended December 31, 1991. Furthermore, no income or loss from such investments has been recorded for the three months ended March 31, 1992, as the financial results of the Operating Partnerships are only available on a calendar year basis. We were unable to satisfy ourselves about Bayfield Low Income Housing Limited Partnership's investment in these Operating Partnerships by means of other auditing procedures.
In our opinion, based on our audits and the reports of other auditors, except for the effects of such adjustments, if any, as might have been determined to be necessary had the 103 Operating Partnerships in 1994, 102 Operating Partnerships in 1993 and the 110 Operating Partnerships in 1991 referred to in the preceding paragraph been audited, and had financial results for the Operating Partnerships for the three months ended March 31, 1992 been available, the financial statements referred to above present fairly, in all material respects, the financial position of Bayfield Low Income Housing Limited Partnership as of March 31, 1994 and March 31, 1993, and the results of its operations and its cash flows for the years ended March 31, 1994 and March 31, 1993, the three months ended March 31, 1992, and the year ended December 31, 1991, in conformity with generally accepted accounting principles.
/S/ Smith & Radigan, P.C.
Atlanta, Georgia
December 9, 1994
Balance Sheets
BAYFIELD LOW INCOME HOUSING LIMITED PARTNERSHIP
The Notes to Financial Statements are an integral part of these Statements.
The Notes to Financial Statements are an integral part of these Statements.
The Notes to Financial Statements are an integral part of these Statements.
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid	
$ 396,542
$ 588,172
$ 998,307
$ 116,672
The Notes to Financial Statements are an integral part of these Statements.
	During the year ended March 31, 1993, Investments in Operating Limited Partnerships and Contributions Payable to Operating Partnerships of $265,850 were recorded to reflect the acquisition of eight new Operating Partnership investments. Additionally, Investments in Operating Limited Partnerships and Contributions Payable to Operating Partnerships were reduced by $693,186 to reflect the elimination of eight Operating Partnership investments.
	In connection with the foreclosure of two operating partnerships, investments in operating limited partnerships and contributions payable to operating limited partnerships of $261,583 were eliminated in 1991.
The Notes to Financial Statements are an integral part of these Statements.
Note A - Organization
Bayfield Low Income Housing Limited Partnership (the "Master Limited Partner-ship") was organized as of July 1, 1990 pursuant to the provisions of a Joint Plan of Reorganization of 52 debtor investor limited partnerships ("the Debtor Investor Partnerships"), dated May 9, 1990, pursuant to the provisions of Chapter 11 of Title 11, United States Code, as amended by an Order Clarifying the Joint Plan dated December 11, 1990 and an Order Modifying the Joint Plan entered March 6, 1991 or as may have been otherwise amended or modified by orders settling litigation with non-electing Developers with respect to those Developers or their Operating Partnerships (the "Plan").
The Master Limited Partnership was created under the Plan as the entity into which all of the assets and liabilities of the fifty-two Debtor Investor Partnerships were "rolled-up" as of July 1, 1990 and after which their assets and businesses would be managed.
The fifty-two Debtor Investor Partnerships were the following Delaware limited partnerships:
ARLINGTON Estates Limited Partnership, BARRINGTON Estates Limited Partnership, BAYFIELD Estates Limited Partnership, BEECHFIELD Estates Limited Partnership, BIRCHFIELD Estates Limited Partnership, BLAKEFIELD Estates Limited Partnership, BRIGHTON Estates Limited Partnership, BROOKLINE Estates Limited Partnership, CANDLE RIDGE Estates Limited Partnership, CANTERBURY Estates Limited Partnership, CARLYSLE Estates Limited Partnership, CHERRYWOOD Estates Limited Partnership, CHESTERFIELD Estates Limited Partnership, CLARKSON Estates Limited Partnership, CLAYTON Estates Limited Partnership, CLOVERFIELD Estates Limited Partnership, COPPERFIELD Estates Limited Partnership, CRESCENT Estates Limited Partnership, DEERFIELD Estates Limited Partnership, DELAFIELD Estates Limited Partnership, EDENFIELD Estates Limited Partnership, EMERALD Estates Limited Partnership, EVEREST Estates Limited Partnership, EVERGREEN Realty Investors Limited Partnership, FIRST Estates Limited Partnership, GLENWOOD Estates Limited Partnership, GREENFIELD Estates Limited Partnership, GREENWOOD Estates Limited Partnership, HARBORFIELD Estates Limited Partnership, HOLLY Estates Limited Partnership, HUNTER Estates Limited Partnership, KEHRS MILL Estates Limited Partnership, LITTLEFIELD Estates Limited Partnership, LIVINGSTON Realty Investors Limited Partnership, MEADOWFIELD Estates Limited Partnership, MITCHELLFIELD Estates Limited Partnership, NORTHFIELD Estates Limited Partnership, NORWICH Estates Limited Partnership, OLEANDER Estates Limited Partnership, PINE HOLLOW Estates, A Delaware Ltd. Partnership, PLAINFIELD Estates Limited Partnership, PLANTINGFIELD Estates Limited Partnership, REDWOOD Estates Limited Partnership, ROSEWOOD Estates Limited Partnership, SAGEWOOD Estates Limited Partnership, SOUTHFIELD Estates Limited Partnership, SPRINGFIELD Estates Limited Partnership, SUMMERFIELD Estates Limited Partnership, SYCAMORE Realty Investors Limited Partnership, WALNUT Estates Limited Partnership, WILSHIRE Estates Limited Partnership, WYNNFIELD Estates Limited Partnership.
Each of the Debtor Investor Partnerships was organized as a Delaware limited partnership by First American Holdings, Inc. First American Holdings, Inc. a Delaware corporation, (sometimes referred to herein as "First American") was the sole general partner of each of the Debtor Investor Partnerships and general partner of the Master Limited Partnership. Each Debtor Investor Partnership was formed to acquire equity interests in limited partnerships (the "Operating Partnerships"), each of which was expected to develop, own and operate a multi-family apartment complex for low to moderate income tenants (the "Projects").
The Projects were expected to receive financing from the Farmers Home Administration of the U.S. Department of Agriculture and to receive interest credits and, in some cases, rental assistance payments under Section 515 of the Housing Act of 1949. Each Project was expected to qualify for the low income housing credit ("LIHC") under Section 42 of the Internal Revenue Code of 1986. Section 42 of the Tax Code was enacted by the United States Congress to promote the development of low and moderate income rental housing. In order to generate LIHC, properties must be rented to tenants whose incomes are below certain levels established by the federal government, and the rents which are permitted to be charged are strictly limited by government regulations.
As a result of adverse economic conditions and increased competition, the Debtor Investor Partnerships were placed under the protection of Chapter 11 of the Bankruptcy Code. Principal provisions of the plan of reorganization, as approved July, 1990 and amended ("the Plan"), follow:
In consideration of their contribution of assets to the Master Limited Partnership, each of the Debtor Investor Partnerships received an allocable portion of the limited partnership interests in the Master Limited Partnership. The limited partnership interests in the Master Limited Partnership were then distributed by each of the Debtor Investor Partnerships to the Investors in such Debtor Investor Partnership and so registered in the books of the Master Limited Partnership. The distribution of the interests in the Master Limited Partnership to the Investors was to be complete on the registration of such interests in the books of the Master Limited Partnership, and no certificates of limited partnership interests were distributed to any party. The limited partnership interests in the Master Limited Partnership are subject to the security interests granted under the Plan to Secured Lenders and Developers, and the Master Limited Partnership shall make no transfer of any such limited partnership interest without the consent of the appropriate Secured Party.
All claims against and interests in the Debtor Investor Partnerships were divided into the following classes:
(1) Administration Class consists of all Allowed or Bankruptcy Court approved Administration claims of a Debtor Investor Partnership, including, without limitation, the costs and expenses (including attorneys' and accountants' fees as approved by the Bankruptcy Court) of each official committee of the Debtor Investor Partnerships and the unofficial committee of developers. Each member of such class received on confirmation cash equal to the allowed amount of its administration claim, except to the extent it has agreed to different treatment.
(2) Secured Lender Class consists of all allowed claims based on loan and security agreements giving rise to valid, duly perfected and non-avoidable pre-petition security interests in Investor Notes, to the extent of the value of a Debtor Investor Partnership's interest at confirmation of the plan in the collateral securing such claims, less payments made or applied on account of such claims during the course of the Chapter 11 case. Except to the extent a member of such class has agreed to different treatment, it:
(a) Retained any existing duly perfected security interest until all payments due to it under the plan shall have been paid in full;
(b) Received a note from the Master Limited Partnership, pursuant to the loan repayment and security agreement;
(c) Received a security interest from the Master Limited Partnership pursuant to the loan repayment and security agreement, with respect to: 1) any property of the Debtors that was transferred to the Master Limited Partnership and in which such secured lender held a duly perfected security interest as of the filing of the petition; and 2) those interests in the Master Limited Partnership which were distributed to the Investors whose investor notes are held by such Secured Lender. Such security agreements provide that all property in which a holder receives a security interest shall serve as collateral for all obligations to such holder under the Plan; and
(d) Received cash payments of principal and interest as set forth in the Secured Lender Payment Schedule (after credit for any payments made or applied during the course of the Chapter 11 case).
(3) Developer Class consists of all Allowed Claims held by Operating Partnerships (or the general partners thereof) against a Debtor Investor Partnership exclusive of those specifically included in subsection (b) of the "Other Creditor Class." Except for Developers holding the Auction Interests (Note E), each of the Developers received:
(a) Payments at the times specified in the Plan in amounts determined by a Developer Payment Formula, provided, however, any amount which would otherwise be payable to a non-Electing Developer were reserved and will not be made until the entry of a final order determining all litigation between the Debtor and such Non-Electing Developer and any funds so reserved may be used by the Master Limited Partnership in connection with such litigation;
(b) Payments such that the total of all payments to a Developer shall be equal to the full amount of such Developer's Allowed Claim plus interest at a rate equal to eight percent (8%) per annum; and
(c) To the extent a party held a duly perfected non-avoidable security interest in assets of a Debtor Investor Partnership, such party retained its perfected security interest in such of those assets of that Debtor Investor Partnership which were transferred to the Master Limited Partnership and received the costs and expenses, if any, fixed by a Final Order of the Bankruptcy Court.
The limited partnership agreements between the Debtor Investor Partnerships and each of the Operating Partnerships were to be amended as follows:
(a) The Master Limited Partnership shall become the limited partner of such Operating Partnership in place of the Debtor Investor Partnership;
(b) Commencing January 1, 1995, except as noted below, any cash flow to which a Debtor Investor Partnership is entitled shall be retained by the Developers;
(c) On or before April 1 of each of the five (5) years commencing 1995, each Operating Partnership shall distribute to the Master Limited Partnership $750 per year, provided that such payment is not prohibited by any applicable agreement with a governmental agency or any applicable governmental agency rules or regulations. To the extent the payment or any portion is not paid in any year, the remainder shall accumulate and be paid at the earliest time the payment is not prohibited; and
(d) On or before April 1 of each year commencing 2000, each Operating Partnership shall distribute to the Master Limited Partnership an amount to be negotiated by the Independent Manager and the Developer Class Representative which shall not exceed $750, provided that such payment is not prohibited by any applicable agreement with a governmental agency or any applicable governmental agency rules or regulations. To the extent the payment or any portion is not paid in any year, the remainder shall accumulate and be paid at the earliest time the payment is not prohibited.
(4) Other Creditor Class consists of all:
(a) Allowed Claims held by creditors of a Debtor Investor Partnership that are not otherwise classified under the Plan;
(b) Allowed Claims (or those portions of Allowed Claims) which represent the amounts to be reimbursed to the Operating Partnerships (or the general partners thereof) in connection with the filing of an amended partnership agreement for such Operating Partnership prior to the filing of the Petitions; and
(c) Allowed Claims (or those portions of Allowed Claims) which represent the amounts to be paid to Investors in connection with checks which were issued to Investors prior to the filing of the Petitions.
Each holder of an allowed claim in such class received payment in full at Confirmation of the Plan; provided, however, that if the aggregate total of Allowed Claims of this Class exceeds $55,000, each member of the Class shall receive a prorata share of $55,000 based on the amount of its Allowed Claim.
(5) Pre-Petition Legal Class consists of all Allowed Claims held by Stairs, Dillenbeck, Kelly & Merle, attorneys, against a Debtor Investor Partnership for services rendered prior to the filing of the Petition of such Debtor Investor Partnership and not in connection with the Chapter 11 cases of the Debtor Investor Partnerships. Each holder of an Allowed Claim in such class received payments in full of its allowed claim in ten equal semiannual installments commencing July, 1990 .
(6) Fidelity Class consists of all Allowed Claims held by Fidelity Management Corporation, an affiliate of First American, or any broker or dealer whose Claim arises out of the sale of a limited partnership interest in a Debtor Investor Partnership. Holders of the Fidelity Class Allowed Claims shall receive ten semiannual payments of $69,237 each commencing in July, 1990.
(7) First American Class consists of all Allowed Claims (but not interests) held by First American against a Debtor Investor Partnership. Each holder of a First American Class allowed claim shall receive:
(a) Three semiannual payments of $66,667 commencing upon confirmation of First American's plan of reorganization.
(b) Additional amounts, if any, pursuant to Article 15 of the Plan. ("Payments from Capital Events") (Note J). Such amounts will only be paid after payment in full of amounts due from such monies to the Secured Lender Class and Developer Class, and payments have been made to the Investor Class equal to: twenty percent (20%) of its net capital invested; plus interest at a rate of ten percent (10%) per annum from December 31, 1994; plus an additional one hundred percent (100%) of its net capital invested.
(8) Investor Class consists of all interests and Allowed Claims of parties which arise out of the purchase or holding of limited partnership interests in a Debtor Investor Partnership, exclusive of those specifically included in subsection (c) of the "Other Creditor Class." Except as noted below, each of the Investors shall receive:
(a) Limited partnership interests in the Master Limited Partnership (including all rights to allocations and distributions to which a partner is entitled thereunder) equal to the result of the following formula:
(i) the limited partnership units in a Debtor Investor Partnership owned by such investor divided by the total of the limited partnership units in such Debtor Investor Partnership; multiplied by
(ii) the allocation of units in the Master Limited Partnership to a Debtor Investor Partnership as determined by an allocation formula;
(b) Within thirty (30) days after June 30 and December 31 of each year (commencing December 31, 1990 and terminating on December 31, 1994) payments of a return of capital equal to a prorata portion (based on Net Capital Invested) of $507,801 for each period.
Upon written consent of the Investor Committee, payments to be made to Investors pursuant to the above may be deferred and instead paid to Developers or for other costs and expenses for the administration of the Master Limited Partnership .
Pursuant to Articles 14 and 15 of the Plan, Investors are entitled to receive additional payments based on proceeds from capital events and other specified conditions. (Note J.)
(9) General Partner Class consists of all interests held by First American in a Debtor Investor Partnership. The holder became the general partner of the Master Limited Partnership and was entitled to certain payments from the proceeds of capital events pursuant to Article 15 of the Plan. (Note J.)
An order modifying the Plan was entered on March 6, 1991. Under such modification, the Master Limited Partnership, on the written consent of the Investor Committee, may defer payments otherwise to be made to the Investors semi-annually as a return of capital, and use such monies to make payment to the developers or for other costs and expenses for the administration or operation of the Master Limited Partnership or to purchase interests in additional limited partnerships which own or are intended to own, projects which are intended to qualify for LIHC (including the payment of any costs or expenses incurred in connection with such purchases).
Pursuant to an agreement entered into in December, 1991, as amended, First American withdrew as the General Partner of the Master Limited Partnership, subject to the consent of the Limited Partners of the Master Limited Partnership. In connection therewith, First American received a total of $434,968 for the transfer or release of all rights or economic benefits owed by the Master Limited Partnership to First American or its subsidiaries and in full settlement of any outstanding claims. Megan Management Company, the Independent Manager, agreed to become or have an entity under common control with it become General Partner of the Master Limited Partnership in place of First American subject to the approval of the Limited Partners; pending receipt of such approval, First American immediately relinquished to the Independent Manager any remaining management powers and responsibilities as well as all of its rights to income tax items related to its one percent ownership interest in the Master Limited Partnership from January 1, 1991 to December 22, 1991. These tax items were allocated on a prorata basis to the remaining partners. Megan Asset Management, Inc. ("Megan Asset") assumed the one percent ownership interest of First American as of December 31, 1991, subject to the approval of the Limited Partners. The agreement also provided for an increase in the Independent Manager's fees in compensation for the additional duties that it had been performing and would perform pursuant to the agreement of $35,000 at closing (December 31, 1991) to cover its takeover costs and $10,000 per month on the first day of every month subsequent to closing through December 31, 1994, the right to receive an amount equal to one-half of the distributions with respect to capital events previously payable to Continental Construction Management (Note J) and would pay to the Master Limited Partnership an amount equal to twenty-five percent of gross fees, if any, earned by it or its affiliates directly from any of the Operating Partnerships and for an extension of the term of the management agreement.
As of December 31, 1991, the agreement had been approved by the Investor Committee and the Developer Representative and those provisions of the agreement which did not require consent of the Limited Partners of the Master Limited Partnership were implemented promptly. Thereafter, Megan designated Megan Asset Management, Inc., a newly formed affiliate, to be the new General Partner of the Master Limited Partnership, made the required filings under the Securities and Exchange Act of 1934's proxy rules and solicited the consent of the Limited Partners. In September, 1992, the Master Limited Partnership received approval of a majority in interest of its Limited Partners.
With the agreed withdrawal of First American and the transfer of all of its right and responsibilities to the Master Limited Partnership and Megan, maintaining the Independent Manager and General Partner as separate entities was no longer necessary. Accordingly, as of December 31, 1992, Megan assigned to Megan Asset and Megan Asset assumed all of the rights, powers and obligations of the Independent Manager of the Master Limited Partnership. Gary L. Maddock, then President and sole shareholder of both corporations, reaffirmed his personal guarantee of the performance of the Management Agreement by Megan Asset.
Note B - Significant Accounting Policies
Investments in Operating Limited Partnerships
The Master Limited Partnership accounts for its investments in Operating Partnerships (including acquisition costs) using the equity method, under which the Master Limited Partnership's capital investment in each Operating Partnership is adjusted for its share of the Operating Partnership's income or losses and for any distributions received or accrued. Such income and losses are recognized on a calendar year basis. Losses in excess of the Master Limited Partnership's aggregate investment in each Operating Partnership are not recognized.
Costs previously recorded by the Debtor Investor Partnerships for services provided or to be provided by the General Partner and its affiliates relating to acquisitions of Operating Partnerships, including syndication fees, agency fees, investor services fees, partnership operations fees and audit indemnification fees, have been included in the Master Limited Partnership's aggregate investment in each Operating Partnership.
For interim (quarterly) reporting on Form 10-Q, the Master Limited Partnership records its estimated equity in income or losses of the Operating Partnerships for the period presented. For annual reporting purposes, the recorded equity in income or losses is based on the calendar year basis financial information submitted by the Operating Partnerships.
Organization Costs
Organization costs are being amortized over five years using the straight-line method.
Income Taxes
No provision has been made for income taxes in the financial statements, as the partners' shares of the results of the Master Limited Partnership's operations are included in their respective income tax returns. Losses, which were previously allocated one percent to the General Partner and ninety-nine percent to the Limited Partners, will now, pursuant to the agreement of December, 1991, as amended, be allocated to all of the Partners in proportion to the outstanding positive balances of their respective capital accounts until their respective capital accounts are reduced to zero. After capital accounts have been reduced to zero, further losses and LIHC's would be allocated one percent to the General Partner and the remaining ninety-nine percent to all Limited Partners.
Contributions Payable to Operating Partnerships
Contributions payable to Operating Partnerships are recorded at the gross amount due pursuant to the Plan. When the Master Limited Partnership sells or assigns an interest in an Operating Partnership, any remaining balance of contributions payable is included in computing the gain or loss on sale or assignment.
Pursuant to the Plan, amounts due and unpaid to Operating Partnerships by the Debtor Investor Partnerships after the implementation of the plan in July, 1990, accrue interest at the rate of eight percent. Failure to pay this interest is not a default under the Plan and any such unpaid interest is contingently payable as a first priority out of Capital Events. The Master Limited Partnership has not made any payments of this interest and has not recorded such interest on the accompanying financial statements. The maximum amount of interest which may become payable under the Plan as a first priority from Capital Events is estimated at approximately $2,400,000.
Change in Fiscal Year
The Master Limited Partnership changed its fiscal year end from December 31 to March 31 effective with the fiscal year ended March 31, 1993. Statements of operations and cash flows are presented for the years ended March 31, 1994 and 1993, the year ended December 31, 1991, and the three months ended March 31, 1992.
Note C - Cash and Restricted Deposits
Cash included $1,606,009 at March 31, 1994 and $719,777 at March 31, 1993 on deposit with Chemical Bank (formerly Manufacturers Hanover Trust). Additional funds were held in various restricted accounts with secured lenders as follows:
Under the terms of the agreements with the secured lenders, the majority of the investors remit their capital contribution installment note payments to the appropriate secured lender. The lender then applies the installments collected against the scheduled debt service on the Master Limited Partnership's notes payable in accordance with the repayment schedule in the Plan and remits overages, if any, to the Master Limited Partnership. Amounts in lockboxes as of March 31, 1994 represent collections of the investors' capital contribution installments which have not yet been applied by the secured lenders. The other reserves are held by Norwest Bank pursuant to its refinancing agreement with the Master Limited Partnership (Note G).
Note D - Investment in Operating Limited Partnerships
A summary of the Master Limited Partnership's investments in Operating Partnerships accounted for on the equity method as of March 31, 1994 and March 31, 1993 (Note B) is as follows:
At March 31, 1994
Equity in
Capital
Acquisition
Accumulated
Net
Contribution
Operating Limited Partnership
Contributed
Costs
Income (Losses)
Investment
Payable
Partnerships audited by other auditors
Alachua Villas
$ 261,790
$ 72,481
$ (248,239)
$ 86,032
$ 36,622
Aurora Limited
93,018
24,540
(77,660)
39,898
13,682
Baker Heights II Ltd.
204,752
53,782
(156,286)
102,248
22,349
Blades Limited Partnership
269,229
70,838
(257,146)
82,921
Broadway Terrace, Ltd.
228,004
60,864
(260,322)
28,546
22,557
Cedar Grove Apts.
282,782
77,001
(249,090)
110,693
26,098
Citrus Terrace, Ltd.
164,784
43,284
(193,811)
14,257
19,048
Clifford Heights Apts.
224,044
58,940
(269,926)
13,058
40,692
Cottondale Villa Apts.
179,706
47,404
(199,226)
27,884
18,745
Diamond Court II LP
235,482
63,419
(190,909)
107,992
30,200
Donaldsonville Seniors
298,823
79,316
(236,557)
141,582
45,249
Elmwood Estates
295,860
79,205
(293,427)
81,638
24,134
First Street Apts.
324,907
85,344
(231,920)
178,331
95,098
Franklin Vista II
166,138
43,640
(157,630)
52,148
23,157
Gatewood Apts. Ltd.
295,383
78,064
(230,865)
142,582
44,126
Greenleaf Gardens
217,714
57,187
(174,506)
100,395
Hickory Square Apts.
94,754
24,889
(91,055)
28,588
10,957
Hilltop Manor Apts.
215,336
56,761
(214,051)
58,046
23,429
Hitchcock Housing
270,750
71,118
(186,767)
155,101
17,217
Joaquin Apts.
295,621
78,653
(294,088)
80,186
27,193
Lake City Village
284,550
74,743
(359,293)
Lakecrest Apts.
315,954
85,773
(183,793)
217,934
48,260
Lakeview Estates
250,676
65,845
(316,521)
26,264
Lakewood Apts. II
181,777
47,748
(199,040)
30,485
Las Rosas II, Ltd.
265,563
70,012
(227,081)
108,494
Laurel Wood-Capital
205,867
65,524
(131,991)
139,400
32,106
Lead Bayou, Ltd.
212,000
55,686
(190,940)
76,746
13,549
Lillie Mae's Retirement
220,447
58,149
(203,917)
74,679
26,345
Many Seniors Apts.
259,900
62,094
(248,663)
73,331
Maple Hill Apts.
296,560
78,616
(169,303)
205,873
48,904
New Caney Oaks
230,490
60,543
(201,387)
89,646
Oakdale-T F Management
249,384
65,506
(302,450)
12,440
25,830
Old Oak Estates
184,856
48,556
(205,513)
27,899
Onion Creek
306,274
80,449
(301,433)
85,290
38,093
PDC Eighteen LP
199,101
52,298
(187,683)
63,716
21,938
Pecan Villa Apts.
234,202
62,152
(168,522)
127,832
38,332
Pecanwoods Apts. III, Ltd.
262,777
69,024
(286,210)
45,591
21,772
Pocomoke Villas Ltd.
178,638
46,923
(152,728)
72,833
Ridge View Apts.
359,216
95,341
(362,225)
92,332
53,479
Rolling Meadow II L.P.
241,960
64,218
(207,824)
98,354
34,355
Sun Rise Apts. North
354,209
95,182
(279,967)
169,424
56,837
Taft Gardens
151,792
39,871
(158,217)
33,446
12,358
Taft Terrace
202,669
53,235
(255,904)
22,130
Valley Place Assoc.
311,318
81,774
(354,448)
38,644
46,953
West Meadow II Apts.
185,439
49,185
(131,848)
102,776
9,879
Willow Haven-Cross
323,905
85,080
(408,985)
29,233
Wilson Lake
400,896
105,304
(389,173)
117,027
54,181
Wolcott Assoc.
352,880
92,691
(232,010)
213,561
46,735
Woodcrest
233,994
61,464
(295,458
)
19,840
12,076,171
3,199,716
(11,326,008)
3,949,879
1,267,926
At March 31, 1993
Equity in
Capital
Acquisition
Accumulated
Net
Contribution
Operating Limited Partnership
Contributed
Costs
Income (Losses)
Investment
Payable
Partnerships audited by other auditors
Alachua Villas
$ 224,044
$ 58,940
$ (225,984)
$ 57,000
$ 54,929
AFM RRH, Ltd.
322,641
84,977
(210,838)
196,780
69,780
Aurora Limited
180,087
47,404
(166,872)
60,619
37,489
Baker Heights II Ltd.
239,510
63,419
(154,543)
148,386
60,400
Bayshore North Apts.-IV
314,405
83,796
(173,490)
224,711
92,774
Blades Limited Partnership
299,868
79,316
(200,680)
178,504
89,496
Broadway Terrace, Ltd.
298,404
79,205
(250,323)
127,286
91,450
Citrus Terrace, Ltd.
324,907
85,344
(181,427)
228,824
96,848
Cottondale Villa Apts.
166,138
43,640
(127,844)
81,934
46,315
Diamond Court II LP
295,986
78,064
(197,590)
176,460
88,253
Donaldsonville Seniors
217,714
57,187
(149,270)
125,631
44,771
Elmwood Estates
94,754
24,889
(47,535)
72,108
21,914
Forest Park Apts.
212,871
55,915
(237,431)
31,355
56,302
Franklin Vista II
215,336
56,761
(180,276)
91,821
46,857
Gatewood Apts. Ltd.
270,750
71,118
(153,140)
188,728
34,435
Greenleaf Gardens
295,621
78,653
(255,228)
119,046
54,386
Hickory Square Apts.
284,550
74,743
(307,968)
51,325
53,217
Hilltop Manor Apts.
320,595
85,773
(148,582)
257,786
100,462
Hitchcock Housing
250,676
65,845
(282,112)
34,409
52,528
Lakecrest Apts.
266,539
70,012
(199,332)
137,219
53,986
Joaquin Apts.
181,777
47,748
(170,146)
59,379
46,123
Lakeview Estates
206,409
65,524
(105,877)
166,056
80,815
Lakewood Apts. II
212,000
55,686
(157,609)
110,077
27,098
Las Rosas II, Ltd.
220,447
58,149
(179,649)
98,947
52,690
Laurel Wood-Capital
259,302
68,111
(241,519)
85,894
58,574
Lead Bayou, Ltd.
281,354
62,094
(215,867)
127,581
42,064
Lillie Mae's Retirement
296,560
78,616
(134,880)
240,296
97,809
Many Seniors Apts.
230,490
60,543
(165,699)
125,334
58,651
Maple Hill Apts.
249,384
65,506
(264,976)
49,914
66,366
Oakdale-T F Management
184,856
48,556
(193,550)
39,862
24,059
Old Oak Estates
306,274
80,449
(254,829)
131,894
76,185
Onion Creek
199,101
52,298
(140,221)
111,178
43,377
PDC Eighteen LP
236,615
62,152
(140,364)
158,403
76,663
Pecan Villa Apts.
262,777
69,024
(243,699)
88,102
43,543
Pecanwoods Apts. III, Ltd.
178,638
46,923
(125,212)
100,349
39,318
Pocomoke Villas Ltd.
360,466
95,341
(321,254)
134,553
106,957
Ridge View Apts.
312,000
81,953
(325,304)
68,649
80,846
Rolling Meadow II L.P.
242,800
64,218
(182,953)
124,065
68,699
Southeastern Assoc.
314,798
82,688
(256,304)
141,182
60,927
Sun Rise Apts. North
357,426
95,182
(227,735)
224,873
113,675
Taft Gardens
151,792
39,871
(117,401)
74,262
24,216
Taft Terrace
202,669
53,235
(210,966)
44,938
43,761
Valley Place Assoc.
311,318
81,774
(308,103)
84,989
93,907
West Meadow II Apts.
187,250
49,185
(105,141)
131,294
19,759
Willow Haven-Cross
323,905
85,080
(390,596)
18,389
58,465
Wilson Lake
400,896
105,304
(336,848)
169,352
108,363
Wolcott Assoc.
352,880
92,691
(186,117)
259,454
93,470
Woodcrest
233,994
61,464
(291,137
)
4,321
40,149
12,353,574
3,254,366
(9,844,421)
5,763,519
2,993,121
At March 31, 1993
Equity in
Capital
Acquisition
Accumulated
Net
Contribution
Operating Limited Partnership
Contributed
Costs
Income (Losses)
Investment
Payable
Partnerships which were unaudited
Albany Commons, Ltd.
$ 177,559
$ 46,737
$ (122,309)
$ 101,987
$ 55,121
Anderson County Estates
122,268
32,116
(40,955)
113,429
26,438
Belfast Housing Assoc.
282,195
74,124
(246,763)
109,556
78,505
Berea Summit, Ltd.
44,954
11,855
(30,600)
26,209
14,961
Berkshire Apts. #2
136,665
35,898
(170,655)
1,908
26,238
Blanchard Apts.
167,124
43,899
(128,125)
82,898
22,209
Brentwood Apts.
160,800
42,237
(129,662)
73,375
44,967
Briar Hill Apts.
88,475
23,240
(92,941)
18,774
13,990
Bunkie Apts
164,759
43,277
(129,143)
78,893
21,558
Canal Town Assoc.
57,391
15,075
(9,182)
63,284
9,979
Canyon Hills Villas
78,878
20,719
(67,767)
31,830
19,821
Cedar Crest Apts.
95,472
25,078
81,115
201,665
26,872
Cedar Grove Apts.
271,320
72,481
(198,600)
145,201
73,245
Cherrywood (M & W)
58,068
15,253
(68,097)
5,224
7,725
Cle Elum
154,188
40,501
(143,113)
51,576
34,315
Cleveland Courts, Ltd.
127,650
33,530
(44,911)
116,269
41,188
Clifford Heights Apts.
93,018
24,540
(67,311)
50,247
27,522
Cottonwood Seniors Apts.
164,527
43,216
(138,978)
68,765
44,113
Coushatta Seniors Apts.
171,159
44,958
(87,468)
128,649
41,422
Cypress View Estates
164,942
43,712
(93,700)
114,954
45,170
Delta Terrace
180,474
47,405
(166,443)
61,436
36,749
East Magnolia Village
161,503
42,422
(141,281)
62,644
39,953
Edmonson Prop.
118,956
31,246
(64,298)
85,904
35,618
Elliott Manor, Ltd.
184,831
48,550
(169,537)
63,844
57,153
Fieldcrest, Ltd.
114,667
30,120
(97,608)
47,179
33,070
First Street Apts.
204,752
53,782
(117,532)
141,002
44,698
Flambeau Village
779,080
204,642
(615,029)
368,693
225,560
Folson South Venture
90,324
23,725
(30,173)
83,876
24,684
Gaslight Square
179,152
47,058
(197,460)
28,750
39,369
Gibsland Villas Ltd.
206,022
54,116
(143,937)
116,201
51,838
Gilman Senior Apts.
35,221
(2,117)
33,104
13,675
Glenora Apts.
96,605
25,375
(110,177)
11,803
28,165
Greenwood Assoc.
291,628
76,779
(244,766)
123,641
73,815
Hagewood Apts.
134,601
35,356
(147,267)
22,690
21,074
Hidden Hills Apts.
120,404
31,766
(79,740)
72,430
35,522
Hillwood Ltd.
86,050
22,603
(76,764)
31,889
20,707
Housing Partners VI
23,660
23,660
17,678
Housing Partners VIII
12,610
12,610
9,422
Housing Partners IX
12,610
12,610
9,422
Housing Partners XI
37,830
37,830
28,263
Housing Partners XII
56,680
56,680
42,347
Housing Partners XIII
28,340
28,340
21,174
Housing Partners XV
56,680
56,680
42,347
Housing Partners IX
37,440
37,440
26,324
Houston Assoc.
234,799
61,675
(95,082)
201,392
64,127
Hurricane
196,262
53,058
(161,887)
87,433
33,157
Indianwood Apts. II
113,856
29,907
(139,172)
4,591
29,703
Jonesville Apts. for Sr.
135,654
35,936
(64,612)
106,978
35,931
Kent Summit, Ltd.
58,711
15,552
(45,477)
28,786
15,288
Kingswood II, Ltd.
151,543
39,980
(94,701)
96,822
38,911
LaGrange Apts.-II
45,760
12,020
(15,838)
41,942
10,346
Lake City Village
269,229
70,838
(200,375)
139,692
72,978
Larue Properties, Ltd.
185,145
48,632
(78,798)
154,979
53,399
Lewis Apts. Co.
164,323
43,544
(131,645)
76,222
55,008
Lewistown Apts.
67,666
17,774
(31,514)
53,926
18,781
Liberty Terrace Apts.
225,188
59,150
(157,155)
127,183
37,231
Longview Terrace Ltd.
159,185
41,813
(137,914)
63,084
42,190
Magnolia Plaza Apts.
228,004
60,864
(226,549)
62,319
45,114
Manor Apts-Caddo Mills
128,510
33,756
(139,994)
22,272
46,250
Marion Housing
131,346
34,575
(126,390)
39,531
27,437
Meadowland Apts.
129,131
33,919
(99,891)
63,159
40,932
Mills-Shapley Partnership
81,745
21,580
(61,029)
42,296
24,596
Mitchell II Ltd.
180,630
47,668
(130,656)
97,642
50,971
Mosswood Apt.
166,822
43,819
(195,644)
14,997
36,113
Mountain View Apts. II
185,708
48,986
(114,923)
119,771
54,539
Munfordville
81,245
21,341
(63,707)
38,879
15,905
New Caney Oaks
288,012
77,001
(215,210)
149,803
52,196
North Deer Creek, Ltd.
174,358
45,799
(138,794)
81,363
35,063
Oak Leaf Partnership
62,090
16,309
(12,095)
66,304
17,865
Oak Valley Place II
122,084
32,068
(108,573)
45,579
24,806
Oakwood Apartments Ltd.
140,222
36,832
(69,431)
107,623
38,749
Orchard Commons, Ltd.
122,258
32,164
(96,263)
58,159
39,216
Park Place East Assoc.
241,188
63,353
(117,184)
187,357
75,385
Park Place North
146,826
38,570
(83,535)
101,861
42,363
Parkwood Assoc.
164,299
43,262
(91,706)
115,855
48,498
PDC Twenty Two LP
171,475
45,041
(145,221)
71,295
50,895
Perry Apts.
44,222
11,616
(38,852)
16,986
6,557
Pontontoc Ridge Apts.
164,502
43,210
(151,864)
55,848
23,942
Regency Apts. of Reno
138,379
36,348
(70,432)
104,295
38,549
Regency Plaza
158,045
41,514
(94,520)
105,039
29,725
Reservoir Hill L.P.
577,891
151,795
(257,288)
472,398
194,782
Reynolds & Assoc.
93,765
24,629
(41,349)
77,045
29,284
Ridgecrest Apts.
164,784
43,284
(166,583)
41,485
38,097
River View Apts.
21,494
5,646
(12,395)
14,745
5,063
Riverbend Apts.
119,075
31,278
(122,977)
27,376
25,932
Russell September Housing
75,848
20,618
(81,366)
15,100
15,119
Sacramento, Ltd.
187,301
51,004
(111,265)
127,040
40,652
Shaker Housing Credit
335,771
88,197
(241,167)
182,801
98,441
Sleepy Oaks
82,238
21,602
(48,816)
55,024
13,818
Somerset West, Hills II
125,132
32,901
(74,976)
83,057
36,027
Southern Apts.
142,357
37,393
(120,083)
59,667
18,276
Spring Meadow Apts.
183,090
48,092
(142,518)
88,664
42,652
Streamside Assoc.
238,335
62,604
(106,414)
194,525
70,937
St. Rose Assoc.
182,093
47,831
(93,283)
136,641
48,003
Sullivan Garden Apts.
80,933
21,259
(80,357)
21,835
21,702
Summer Place
81,507
21,410
(53,385)
49,532
13,202
Sunrise Apts.
82,532
21,679
(92,550)
11,661
17,340
Timberline
151,443
39,780
(129,493)
61,730
24,878
Urban Coalition West
140,577
36,925
(177,502)
49,476
Valley Limited
128,005
33,777
63,331
225,113
43,343
Wayland Apts.
45,769
12,022
(23,886)
33,905
9,580
Wexford Assoc. L.P.
172,920
46,016
(121,219
)
97,717
54,925
14,902,814
3,846,607
(10,515,468
)
8,233,953
3,938,231
$27,256,388
$7,100,973
$(20,359,889)
$13,997,472
$ 6,931,352
All remaining scheduled payments of contributions payable pursuant to the Plan, as reflected above, are payable during the year ended March 31, 1995.
Note E - Sale of Auction Interests
Pursuant to the Plan, the Master Limited Partnership was to sell, assign and/or release its interests in Operating Partnerships (the "Auction Interests") back to the Operating Partnerships, such that the aggregate Low Income Housing Credit estimated to be derived from its interest in Operating Partnerships would be reduced by approximately twenty five percent. The proceeds of such Auction Interests were to be disbursed in accordance with the Plan. The statement of operations for the year ended March 31, 1993 includes a loss of $360,954 on the sale and assignment of Auction Interests.
Operating Partnerships that receive the Auction Interests are not entitled to payments under the Plan. Such receipt represents a complete divestiture of the Master Limited Partnership's investment in the Operating Partnership. Accordingly, the sale, assignment or release of the entire limited partnership interest to the applicable Operating Partnership was in full satisfaction of any and all claims with respect to such Operating Partnerships, except for those arising under any indemnification set forth in the Plan.
Note F  Subscriptions Receivable
When the investors were admitted as limited partners in one of the Debtor Investor Partnerships, each investor made a cash down payment for his or her limited partnership interest and executed a recourse promissory note for the balance. Contributions receivable represent the remaining balance of the recourse promissory notes executed by investors for their capital contributions which are payable to the Master Limited Partnership. Such contributions are typically payable in fourteen semiannual installments. While the majority of the notes were non-interest bearing, the notes for certain Debtor Investor Partnerships included interest at rates ranging from four and one-half percent to nine percent. Approximately eighty percent of the investor notes receivable are held as collateral by the secured lenders for loans payable by the Master Limited Partnership (Note G).
Future scheduled collections of contributions receivable are as follows:
Year Ended March 31, 1995
$ 5,670,810
Past due installments
1,051,651
Amount representing unearned interest
(47,224)
$ 6,675,237
As of March 31, 1994, the aggregate amount of past due installments from investor notes was $1,051,651. Future contributions scheduled to be made by those investors who were past due as of March 31, 1994, including the past due installments, totaled $1,818,369. The secured lenders and the Master Limited Partnership have recourse against the defaulting investors.
Note G - Long-Term Debt
At March 31, 1993, the Master Limited Partnership had notes payable to secured lenders in the aggregate amount of $4,195,600. Interest accrued on the notes at eleven and one-half percent, the rate set in the Plan. Aggregate notes payable to each secured lender were as follows:
AmSave Credit Corporation
$1,400,905
U.S. West Financial Services
984,913
Consolidated Asset Recovery Corporation
(formerly Citytrust)
1,700,531
The Bank of New York
109,251
$4,195,600
Effective August 13, 1993, the Partnership refinanced the above notes through a private placement by Norwest Bank as placement agent under which the above obligations were purchased and assigned to certain accredited investors. The resulting obligation payable to Norwest Bank, as trustee, had an initial principal amount of $3,105,000, bears interest at six percent, and is secured by investor notes receivable. The remaining balance of this obligation at March 31, 1994 is $1,577,000 and is scheduled to be paid in full during the year ended March 31, 1995.
An additional original secured lender became the holder in due course of certain investor notes receivable as full repayment of the notes payable owed to it by the Master Limited Partnership. The Master Limited Partnership remains contingently liable on the notes payable to the extent there are defaults on the investor notes receivable. The total amount of these notes payable was approximately $144,040 at March 31, 1994.
Note H - Related Party Transactions
In accordance with the provisions of the Plan, First American Holdings was paid fees of approximately $30,000 during the year ended December 31, 1991. Such fees were for management and administrative services rendered during the bankruptcy proceedings and the three month transition period specified in the Plan, after which Megan Management Company, Inc. (Note I) assumed full responsibility for the management and administration of the Master Limited Partnership. The Plan also provided for the payment by Bayfield of approximately $200,000 during 1991 for court-approved liabilities owed to First American.
In accordance with the provisions of the Plan, Fidelity Management Company, a wholly-owned subsidiary of First American Holdings, was paid $138,474 during 1991 for payment of broker and dealer claims. Pursuant to the December 31, 1991 agreement (Note A), such payments were subsequently made directly to the broker/dealers.
Note I - Independent Manager
The Plan provides for the employment of an independent manager for the Master Limited Partnership through December 31, 1998. Effective July 10, 1990, Megan Management Company, Inc. ("Megan") was engaged to be the independent manager. As such, Megan became the Master Limited Partnership's exclusive agent for all operations under the Plan, including those in connection with or relating to (a) collection, investment and disbursement of all funds of the Master Limited Partnership as provided in the Plan and the Escrow Agreement through the Escrow Account maintained at Chemical Bank (formerly Manufacturers Hanover Trust), (b) maintenance of the books and records of the Partnership, (c) preparation of the Master Limited Partnership's tax returns and review of all tax returns relating to the Master Limited Partnership's interests in the Operating Partnerships and (d) furnishing assistance to the Investors with respect to tax information relating to the Investors' interests in the Master Limited Partnership. As of December 31, 1992, all rights, powers and obligations of the Independent Manager were assigned to Megan Asset Management, Inc. (Note A).
As compensation for its services, the Independent Manager received $403,000 for the year ended March 31, 1994, $316,000 for the year ended March 31, 1993, $319,000 for the year ended December 31, 1991 and $144,000 for the three months ended March 31, 1992, including amounts required to cover the costs of tax return preparation and audited financial statements. The management agreement calls for aggregate payments to the Independent Manager, including amounts required to cover the costs of tax return preparation and audited financial statements of the Master Limited Partnership, of $316,000 in the calendar year 1994 and $149,500 in each of the calendar years 1995 through 1998.
Pursuant to the refinancing (Note G), Megan Asset has assumed the responsibility for the monthly billings to investors, for which services Megan Asset shall receive $6,250 per month. The Independent Manager's compensation for the year ended March 31, 1994 includes $50,000 for investing billing services, $35,000 for services rendered related to the refinancing, and $2,000 for work relating to defaulting investors.
Note J - Contingencies
Funding of the operations of the Master Limited Partnership is dependent on the collection of the installment payments receivable from investors on the promissory notes executed for their capital contributions. Accordingly, the Master Limited Partnership must receive a substantial majority of the capital contribution installments on a timely basis in order to continue as a going concern.
Article 15 of the Plan ("Payments from Capital Events") provides for certain further disbursements to the pre-petition creditors of funds resulting from the sale of interests in Operating Partnerships subsequent to December 31, 1994. Such payments, in order of priority, include the following:
a) Prorata payments to the Operating Partnerships of the full amount due from the Debtor Investor Partnerships and assumed by the Master Limited Partnership, with interest at eight percent.
b) In settlement of a claim filed by the Independent Manager against First American on behalf of the Partnership October 12, 1990, alleging possible fraudulent or preferential transfers, or other acts or omissions committed by First American as General Partner of the 52 Debtor Investor Partnerships, the Partnership received an assignment of fifty percent of all sums to be paid to First American's wholly-owned subsidiary, Continental Construction Management Corporation ("Continental"), from Capital Events in accordance with Article 15(1)(6) of the Plan. In conjunction with the replacement of First American by the Independent Manager (Note A), the Partnership purchased from Continental its remaining rights to receive payments with respect to Capital Events under the Plan, in consideration of $234,968, payable in the form of the assumption of liabilities of First American in the amount of $97,050 and a cash payment of $50,000 as of the closing date and the remainder in cash installments payable through April 1, 1992.
c) Prorata payments to investors until each has received an amount equal to twenty percent of its net capital investment plus interest at ten percent calculated from December 31, 1994.
d) A return of capital to the investors until each has received one hundred percent of its capital invested, over and above the payments in c) above.
e) Payment of the remaining portion of the allowed claim of First American, with interest at ten percent compounded from December 31, 1994.
f) Payment of the allowed claims of investors subordinated pursuant to the bankruptcy code.
g) Any remaining amounts in the percentage of ninety percent to the investors and ten percent to the general partner of the Master Limited Partnership.
The Master Limited Partnership and certain of its properties are currently subject to legal proceedings which were brought against the Debtor Investor Partnerships. It is the belief of management, the general partner and counsel that such litigation will be settled or resolved for an amount that will not be material to the operations of the Master Limited Partnership.
[LETTERHEAD OF]
Andrews & Miller, P.A. 	Certified Public Accountants
Daniel M. Andrews, CPA 	 8525 South Highway 441 P.O. Box 491271
Leesburg, Florida 34749-1271
E. F. (Rick) Miller, Jr., CPA Telephone 904/326-8001
Fax 904/326-8011
INDEPENDENT AUDITORS' REPORT
To the Partners
AFM RRH, Limited
	We have audited the accompanying balance sheet of AFM RRH, Limited Hilltop Manor Apartments (Farmers Home Administration Case Number 09-042-0260409707) as of December 31, 1993 and the related statements of loss, 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 AFM RRH, Limited Hilltop Manor Apartments as of December 31, 1992, were audited by other auditors whose report dated February 12, 1993, expressed an unqualified opinion on those statements.
	We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
	In our opinion, the 1993 financial statements referred to above present fairly, in all material respects, the financial position of AFM RRH, Limited Hilltop Manor Apartments as of December 31, 1993, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
/S/ ANDREWS & MILLER, P.A.
February 15, 1994
Members of American Institute of Certified Public Accountants / Florida Institute of Certified Public Accountants
[LETTERHEAD OF]
MERCURIO & BRIDGFORD, PA.
CERTIFIED PUBLIC ACCOUNTANTS
713 SOUTH ORANGE AVENUE
SARASOTA, FLORIDA 34236
TEL: (813) 953-4585
FAX: (813) 364-9138
JOHN J. MERCURIO, C.P.A. 	MEMBERS
JONATHAN S. BRIDGFORD, C.P.A. 	AMERICAN INSTITUTE of CERTIFIED
CARL G SMITH C.P.A. 	PUBLIC ACCOUNTANTS
	FLORIDA INSTITUTE of CERTIFIED
DONALD H. LAMBERT C.P.A. 	PUBLIC ACCOUNTANTS
	 February 10, 1994
To the Partners
Alachua Villas, Ltd
Archer, Florida
Independent Auditors' Report
	We have audited the accompanying statements of assets, liabilities and partners' capital of Alachua Villas, Ltd as of December 31, 1993 and 1992 and the related statements of revenues and expenses, partners' capital and statement of 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 and generally accepted governmental auditing standards issued by the Comptroller General of the United States. 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 assets, liabilities, and partners' capital of Alachua Villas, Ltd. as of December 31, 1993 and 1992 and its revenue and expenses, changes in partners' capital and cash flows for the years then ended in accordance with generally accepted accounting principles.
	Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The additional information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the 1993 and 1992 financial statements. The additional information presented in the Year End Report and Analysis (Form FmHA 1930-8) Parts I through III for the years ended December 31, 1993 and 1992, is presented for purposes of complying with the requirements of the Farmers Home Administration and is also not a required part of the 1993 and 1992 financial statements. Such information has been subjected to the audit procedures applied in the audit of the 1993 and 1992 financial statements and, in our opinion, is fairly stated in all material respects in relation to the 1993 and 1992 financial statements taken as a whole.
/S/ MERCURIO & BRIDGFORD
CERTIFIED PUBLIC ACCOUNTANTS
[LETTERHEAD OF]
B. F. FELLERHOFF & CO.
CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE 	961 25TH STREET
OF CERTIFIED PUBLIC ACCOUNTANTS 	COLUMBUS, INDIANA 47201
	(812) 3794051
Report of Independent Certified Public Accountants
General Partners
Aurora Limited
(An Indiana Limited Partnership)
New Castle, Indiana 47362
We have audited the balance sheet of Aurora Limited (an Indiana limited partnership), owner of River Park Apartments, as of December 31, 1993 and 1992, and the related statements of income and partners' capital, and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and Governmental 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 statements 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 Aurora Limited (an Indiana limited partnership), owner of River Park Apartments, as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year.
Respectfully submitted,
/S/ B.F. FELLERHOFF & CO.
B. F. Fellerhoff & Co.
Certified Public Accountants
February 3, 1994
[LETTERHEAD OF]
ALBRIGHT
CRUMBACKER
HARRELL&MOUL
Certified Public Accountants 	Hagerstown, Maryland
Independent Auditors' Report
Partners
Baker Heights II Limited Partnership
Berkeley Springs, West Virginia
	We have audited the accompanying balance sheet of Baker Heights II Limited Partnership as of December 31, 1993, 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 the Baker Heights II Limited Partnership management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of Baker Heights II Limited Partnership as of December 31, 1992, were audited by other auditors who have ceased operations and whose report dated February 15, 1993, expressed an unqualified opinion on those statements.
	We conducted our audit in accordance with generally accepted auditing standards, 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 statements 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 Baker Heights II Limited Partnership as of December 31, 1993, and the results of operations and cash flows for the years then ended in conformity with generally accepted accounting principles.
/S/ ALBRIGHT CRUMBACKER HARRELL & MOUL
March 21, 1994
[LETTERHEAD OF]
TESTONE,
MARSHALL
& DISCENZA
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
To the Partners
Bayshore North Apartments - Phase IV
Fayetteville, New York
	We have audited the accompanying statements of financial position of Bayshore North Apartments - Phase IV (A Limited Partnership) as of December 31, 1993 and 1992, and the related statements of revenues and expenses and 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 audits based on generally accepted auditing standards and government auditing standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
	In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bayshore North Apartments - Phase IV as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/S/ TESTONE, MARSHALL & DISCENZA
February 12, 1994
[LETTERHEAD OF]
Grubman & Company
certified public accountants
New York office:
10 East 21st Street
New York, N. Y. 10010
(212)460-52S5 . Fax (212)995-9525
East Hampton office:
2 Newton Lane
East Hampton, N.Y. 11937
(516)324-1155 ~ Fax(516)324-7915
Washington, D.C. Office:
101 Chestnut Street, Suite 120
Gaithersburg, MD 20877
(301) 948-3464 ~ Fax (301)762- 7350
INDEPENDENT AUDITOR' S REPORT
To the Partners
Blades Limited Partnership
T/A Hunters Court
	We have audited the accompanying balance sheet of the Blades Limited Partnership T/A Hunters Court FmHA Project No.: 07-004-521529005 as of December 31, 1993, and the related statements of income, partners' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
	We conducted our audit in accordance with generally accepted auditing standards and generally accepted government auditing standards for financial and compliance audits 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 disclosure 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 Blades Limited Partnership T/A Hunters Court FmHA Project No.: 007-004-521529005 as of December 31, 1993, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
	Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplementary information presented in the Year End Report and Analysis Form FmHA 1930-8 Part I for the years ended December 31, 1993 and 1992 is presented for purposes of complying with the requirement of the Farmers Home Administration and is also not a required part of the basic financial statements. Such information has been subjected to the audit procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/S/ GRUBMAN & COMPANY
Grubman & Company
New York, New York
January 26, 1994
[LETTERHEAD OF] Grubman & Company
[LETTERHEAD OF]
PILTZ, WILLIAMS, LA ROSA & CO.
(A PROFESSIONAL ASSOCIATION)
CERTIFIED PUBLIC ACCOUNTANTS
P.O. BOX 231 	Gerald Piltz, CPA
BILOX1, MS 39533 	Consultant
Stanford A. Wliliams, Jr., CPA 	 MEMBERS
Sam J. LaRosa, Jr., CPA 	American Institute of CPA's
William S. Thompson, CPA 	AICPA Division of CPA Firms-
Gene M. Clark, Jr., CPA 	Private Companies Practice Section
Stephen R. Theobald, CPA 	 Mississippi Society of CPAs
Marmot D. Closson, CPA
Darrell L. Galey CPA 	Biloxi, MS 374-4141
Timothy H. Menius, CPA 	Ocean Springs, MS 875-7501
Independent Auditors' Report
To the Partners
Broadway Terrace Of Drew, L.P.
Drew, Mississippi
	We have audited the accompanying balance sheets of Broadway Terrace Of Drew, L.P. (A Mississippi Limited Partnership), as of December 31, 1993 and 1992, and the related statements of income (loss), changes in partners' deficit, and cash flows for the years then ended. These financial statements are the responsibility of the project's management. Our responsibility is to express an opinion on these financial statements based on our audit.
	We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
	In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Broadway Terrace of Drew, L.P. (A Mississippi Limited Partnership), at December 31, 1993 and 1992, 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 supporting information, including the Schedule of Federal Financial Assistance and the Schedule of Federal Financial Assistance Loans, included in this report (shown on Pages 9-10) is presented for the purposes of additional analysis and is not a required part of the financial statements of the Project. 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/ PILTZ, WILLIAMS, LAROSA & CO.
Certified Public Accountants
Biloxi, Mississippi
January 28, 1994
[LETTERHEAD OF]
UNDERWOOD, FISTER, ROUTH & FREEMAN P.S.C.
CERTIFIED PUBLIC ACCOUNTANTS
JAMES W. UNDERWOOD, CPA 1150 SOUTH THIRD STREET
PHILIP A. FISTER, CPA LOUISVILLE, KY 40203
WILLIAM F. ROUTH, CPA TELEPHONE 502/584-3981
J. STEPHEN FREEMAN, CPA FAX 502/584-7023
INDEPENDENT AUDITORS' REPORT
General Partner
Cedar Grove Apartments, Ltd.
Shepherdsville, Kentucky
We have audited the accompanying balance sheets of Cedar Grove Apartments, Ltd., a segment of Cedar Grove Apartments, Ltd. (a Kentucky limited partnership), as of December 3l, 1993, and the related statements of income, 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 Cedar Grove Apartments, Ltd., as of December 31, 1992, were audited by another auditor whose report dated January 25, 1993, expressed an unqualified opinion on those statements.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Cedar Grove Apartments, Ltd., as of December 31, 1993, and the results of its operations and cash flows for the year ended December 31, 1993 in conformity with generally accepted accounting principles.
/S/ UNDERWOOD, FISTER, ROUTH & FREEMAN
UNDERWOOD, FISTER, ROUTH & FREEMAN, PSC
Certified Public Accountants
March 4, 1994
[LETTERHEAD OF]
MERCURIO & BRIDGFORD, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
713 S0UTH ORANGE AVENUE
SARASOTA, FLORIDA 34236
TEL: (813) 953-4585
FAX: (813) 364-9138
JOHN J. MERCURIO, C.P.A. 	MEMBERS
JONATHAN S. BRIDGFORD, C.P.A. 	AMERICAN INSTITUTE OF CERTIFIED
CARL G. SMITH, C.P.A. 	PUBLIC ACCOUNTANTS
	FLORIDA INSTITUTE OF CERTIFIED
DONALD H. LAMBERT, C.P.A. 	PUBLIC ACCOUNTANTS
February 9, 1994
To the Partners
Citrus Terrace, Ltd.
Wauchula, Florida
Independent Auditors' Report
	We have audited the accompanying statements of assets, liabilities and partners' capital of Citrus Terrace, Ltd as of December 31, 1993 and 1992 and the related statements of revenues and expenses, partners' capital, and statements of 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 and generally accepted 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 assets, liabilities, and partners' capital of Citrus Terrace, Ltd. as of December 31, 1993 and 1992 and its revenue and expenses, changes in partners' capital and cash flows for the years then ended in conformity with generally accepted accounting principles.
	Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The additional information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the 1993 and 1992 financial statements. The additional information presented in the Year End Report and Analysis (Form FmHA 1930-8) Parts I through III for the years ended December 31, 1993 and 1992, is presented for purposes of complying with the requirements of the Farmers Home Administration and is also not a required part of the 1993 and 1992 financial statements. Such information has been subjected to the audit procedures applied in the audit of the 1993 and 1992 financial statements and, in our opinion, is fairly stated in all material respects in relation to the 1993 and 1992 financial statements taken as a whole.
/S/ MERCURIO & BRIDGFORD
CERTIFIED PUBLIC ACCOUNTANTS
[LETTERHEAD OF]
BARTLETT & GUNTER
CERTIFIED PUBLIC ACCOUNTANTS 	2206 EXECUTIVE PARK DRIVE
	OPELIKA, ALABAMA 36801
DAVIS W. BARTLETT, C.P.A. 	(205)749-8500
JAYNE R. GUN1TR, C.P A. 	FAX (205)749-8502
Report of Independent Certified Public Accountants
To the Partners
Cottondale Villa Apartments, Ltd.
(A Limited Partnership)
We have audited the accompanying balance sheets of Cottondale Villa Apartments, Ltd. (a limited partnership) as of December 31, 1993 and 1992, and the related statements of operations, partners' capital and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and Governmental 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 Cottondale Villa Apartments, Ltd. (a limited partnership) as of December 31, 1993 and 1992, and the results of its operations, changes in partners' capital and cash flows for the years then ended in conformity with generally accepted accounting principles.
/S/ BARTLETT & GUNTER CPA'S P.C.
March 12, 1994
[LETTERHEAD OF]
Grubman & Company
certified public accountants
New York office:
10 East 21st Street
New York, N. Y. 10010
(212)460-52S5 . Fax (212)995-9525
East Hampton office:
2 Newton Lane
East Hampton, N.Y. 11937
(516)324-1155 ~ Fax(516)324-7915
Washington, D.C. Office:
101 Chestnut Street, Suite 120
Gaithersburg, MD 20877
(301) 948-3464 ~ Fax (301)762- 7350
INDEPENDENT AUDITOR' S REPORT
To the Partners
Diamond Court II Limited Partnership
	We have audited the accompanying balance sheet of the Diamond Court II Limited Partnership FmHA Project No.: 07-001-521528112 as of December 31, 1993, and the related statements of income, partners' equity (deficit), and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
	We conducted our audit in accordance with generally accepted auditing standards and generally accepted government auditing standards for financial and compliance audits 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 disclosure 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 Diamond Court II Limited Partnership FmHA Project No.: 07-001-521528112 as of December 31, 1993, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplementary information presented in the Year End Report and Analysis Form FmHA 1930-8 Part I for the years ended December 31, 1993 and 1992 is presented for purposes of complying with the requirement of the Farmers Home Administration and is also not a required part of the basic financial statements. Such information has been subjected to the audit procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/S/ GRUBMAN & COMPANY
Grubman & Company
New York, New York
January 25, 1994
[LETTERHEAD OF] Grubman & Company
[LETTERHEAD OF]
M. ALTON EVANS, JR., C.P.A. 	COLE, EVANS & PETERSON
WILLIAM JEFFERSON COLE, C.P.A. 	 CERTIFIED PUBLIC ACCOUNTANTS
WILLIAM PETERSON, C.P.A.
CAROL T. BARNES, C.P.A.
C. WILLIAM GERARDY, JR., C.P.A.
BARRY S. SHIPP, C.P.A. 	FIFTH FLOOR TRAVIS PLACE
STEVEN W. HEDGEPETH, C.P.A.
STEVEN R. BAYER, C.P.A. 		POST OFFICE DRAWER 1768
GWENDOLYN H. HARJU, C.P.A.
TIMOTHER R. DURR, C.P.A. 	SHREVEPORT, LOUISIANA 71166-1768
R. STEPHEN TILLEY, C.P.A.
JOHN A. CASKEY, C.P.A. 	TELEPHONE (318)222-8367
ROBERT A. BUSBY, C.P.A. 	TELECOPIER (318)425-4101
BAILEY B. BAYNHAM, C.P.A.
DEBORAH N. SHIVERS, C.P.A. January 20, 1994
JUDY E. MONCRIEF, C.P.A.
ANNE-MARIE COLE CAIN, C.P.A.
TIMOTHY W. BORST, C.P.A.
REYNELLE H. THOMPSON, C.P.A.
JENA JOEL MCSWAIN, C.P.A.
BRENDA BISHOP LEACH, C.P.A.
MARY WELLS CARMODY, C.P.A.
DOUGLAS E. WHITE, C.P.A.
WILLIAM MASTIN SCOTT, C.P.A.
INDEPENDENT AUDITORS' REPORT
To the Partners
Donaldsonville Seniors Apartments
Mansfield, Louisiana
	We have audited the accompanying balance sheets of Donaldsonville Seniors Apartments at December 31, 1993 and December 31, 1992, and the related statements of income, partners' capital, and cash flows for the years then ended. These financial statements are the responsibility of the Project's management. Our responsibility is to express an opinion on these financial statements based on our audits.
	We conducted our audits in accordance with generally accepted auditing standards and with 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 Donaldsonville Seniors Apartments at December 31, 1993 and December 31, 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/S/ COLE, EVANS & PETERSON
Cole, Evans & Peterson
[LETTERHEAD OF]
James N. Rachel
Certified Public Accountant
920 Pierremont Road 	 (318) 868-8715
Suite 415
Shreveport, Louisiana 71106
INDEPENDENT AUDITOR'S REPORT
To the Partners
Elmwood Estates, Ltd.
I have audited the accompanying balance sheets of Elmwood Estates, Ltd., a limited partnership, as of December 31, 1993, and 1992, and the related statements of income, partnership equity, and cash flows for the years then ended. These financial statements are the responsibility Elmwood Estates, Ltd.'s management. My responsibility is to express an opinion on these financial statements based on my audits.
I conducted my audits in accordance with generally accepted auditing standards and Governmental 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 Elmwood Estates, Ltd. as of December 31, 1993, and 1992, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles.
/S/ J. N. RACHEL
Shreveport, Louisiana
March 8, 1994
Member - American Institute of Certified Public Accountants
[LETTERHEAD OF]
CASEY J. RUSSELL, C.P.A., INC.
P.O. BOX 720506
OKLAHOMA CITY, OK 73172-0506
405-728-3403
The General Partner
Reynolds and Associates II
DBA First Street Apartments II
P.O. Box 100
Durant, Oklahoma 74701
We have audited the accompanying balance sheet of Reynolds and Associates, II, DBA First Street Apartments II FmHA Case Number 42-007-405924621 as of December 31, 1993 and 1992, and the related statement of operations and partners' deficit and cash flows for the years then ended. These financial statements are the responsibility of Reynolds and Associates, Durant, Oklahoma DBA First Street Apartments II'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 Governmental 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 Reynolds and Associates II, DBA First Street Apartments II FmHA case number 42-007-405924621, at December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in accordance with generally accepted accounting principles.
/S/ CASEY J. RUSSELL CPA INC.
Casey J. Russell, C.P.A., Inc.
March 15, 1994
[LETTERHEAD OF]
Moore & Moore, Certified Public Accountants
4035 N.W. 43rd Street
Gainesville, Florida 32606
INDEPENDENT AUDITOR'S REPORT
To the Partners
Forest Park Apartments
775 N.E. 1st Street
Lake Butler, Florida 32054
We have audited the accompanying balance sheets of Forest Park Apartments as of December 31, 1993 and 1992, and the related statements of income (loss), changes in entity equity, and cash flows for the years then ended. These financial statements are the responsibility of the entity's management. Our responsibility is to express an opinion on these financial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards issued by the Comptroller General of the United States and audit-related guides issued by Farmers Home Administration. Those standards and guides 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.
We were unable to form an opinion regarding the amounts at which rents receivable are recorded in the accompanying balance sheet at December 31, 1993 (stated at $5,404) because of the inadequacy of accounting records of rents receivable and because we were unable to confirm such rents receivable and were unable to satisfy ourselves of the balance through alternative procedures.
The accompanying financial statements have been prepared assuming the entity will continue as a going concern.
[LETTERHEAD OF]
Forest Park Apartments
Independent Auditor's Report
Page Two
May 23, 1994
In our opinion, except for the effects of such adjustments, if any, as might have been determined to be necessary had rent records been adequate and had we been able to confirm rents receivable, the financial statements referred to above present fairly, in all material respects, the financial position of Forest Park Apartments as of December 31, 1993 and 1992, and the results of its operations, changes in entity equity, and cash flows for the years then ended in conformity with generally accepted accounting principles.
As discussed in note 3, the entity is not in compliance with provisions of its loan agreement with Farmers Home Administration.
/S/ MOORE & MOORE
Moore & Moore, CPAs
May 23, 1994
[LETTERHEAD OF]
McGEE & ASSOCIATES, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
Independent Auditors' Report
To the Partners
Franklin Vista II, Ltd.
and Farmers Home Administration
We have audited the accompanying balance sheets of Franklin Vista II, Ltd. (a limited partnership) as of December 31, 1993 and 1992, and the related statements of operations, partners' equity and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Franklin Vista II, Ltd. as of December 31, 1993 and 1992, and the results of its operations and the changes in partners' equity and cash flows for the years then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The supplemental information included in the report is presented for the purpose of additional analysis and is not a required part of the financial statements of Franklin Vista II, Ltd. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
/S/ MCGEE & ASSOICATES, P.C.
March 9, 1994
Farmington, New Mexico
[LETTERHEAD OF]
SMITH, MILES & COMPANY, P.A.
CERTIFIED PUBLIC ACCOUNTANTS 		1230 AIRPORT ROAD
	P.O. BOX 1177
	PANAMA CITY. FLORIDA 32402
	(904) 78~0261
INDEPENDENT AUDITORS' REPORT
To the Partners
Gatewood Apartments, Ltd.
Panama City, Florida
	We have audited the accompanying balance sheets of Gatewood Apartments, Ltd., FmHA Project No: 09-003-0592782216, as of December 31, 1993 and 1992, 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 abatements based on our audits.
	We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a teat 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 Gatewood Apartments, Ltd., as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
	Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional 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 audit procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/S/ SMITH MILES & COMPANY, P.A.
Panama City, Florida
February 8, 1994
[LETTERHEAD OF]
DUGGAN.JOINER			
BIRKENMEYER.
STAFFORD & FURMAN.P.A.
CERTIFIED PUBLIC ACCOUNTANTS				February 8, 1994
MALCOLM R. DUGGAN, JR., C.P.A.
C.D. JOINER, JR., C.PA., RETIRED
WAYNE J. 81RKENMEYER, C.RA.
FRANK E. STAFFORD, JR., C.PA.
EDWARD J. FURMAN, C.P.A.
O.H. DANIELS, JR., C.RA.
R. PHILLIP BLEDSOE, C.PA.
CAROLE A. WRIGHT C.PA.
ANNETTE C. FURMAN, C.P.A.
LAURA J. ALLEN, C.P
JAMIE S. HAMPY, C.PA
PATRICUA. LANCASTER, C.P.A.
JULIE A. POOLE, C.RA.
DAVID A. YOUNG, JR., C.RA.
JOHN A. KASPAR, C.RIL
MEMBERS:
AMERICAN INSTITUTE OF
CERTIFIED PUBLIC ACCOUNTANTS
FLORIDA INSTITUTE OF
CERTIFIED PUBLIC ACCOUNTANTS
334 N.W. THIRD AVENUE
OCALA, FLORIDA 34475
PHONE (904) 732-0171
FAX (904) 867-1370
INDEPENDENT AUDITORS' REPORT
To the Partners
Greenleaf Gardens, Ltd.
We have audited the accompanying basic financial statements of Greenleaf Gardens Apartments, the rental activity of Greenleaf Gardens, Ltd. As of and for the years ended December 31, 1993, and 1992, as listed in financial table of contents. The 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 Government Auditing Standards, issued by the Comptroller General of the United States.
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 used 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 basic financial statements referred to above present fairly, in all material respects, the financial position of Greenleaf Gardens Apartments as of December 31, 1993, and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional information as listed in the table of contents 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 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/ DUGGAN, JOINER, BIRKENMEYER
STAFFORD & FURMAN P.A.
Duggan, Joiner, Birkenmeyer,
Stafford & Furman, P.A.
Certified Public Accountants
[LETTERHEAD OF]
FLISS & ASSOCIATES, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
#9 SHACKLEFORD PIAZA
LITTLB ROCK, ARKANSAS 72211
PHONE (501)224-4170 FAX (501)224-8632
JACKIE R. FLISS, CPA 	MEMBER AMERICAN INSTITUTE
	OF
LAURENCE R. FLISS, CPA 	CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
	MEMBER ARKANSAS SOCIETY
	 OF
	CERTIFIED PUBLIC ACCOUNTANT
S To The Partners
Hickory Square Limited Partnership
	We have audited the accompanying balance sheets of Hickory Square Limited Partnership, FmHA Project No.: 01-003-710650913, as of December 31, 1993 and 1992, and the related statements of operations, changes in partners' capital and cash flows for the years then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
	We conducted our audits in accordance with generally accepted auditing standards 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 Hickory Square Limited Partnership as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
	Our audits were made for the purpose of forming an opinion on the basic financial Statements taken as a whole. The supplemental information on page 9 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the audit procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/S/ FLISS & ASSOICATES, P.A.
March 28, 1994 FLISS & ASSOCIATES, P.A.
Little Rock, Arkansas CERTIFIED PUBLIC ACCOUNTANTS
[LETTERHEAD OF]
H. D. MORRIS CO., INC., P.C.
Certified Public Accountants
	San Felipe Tower
	 5599 San Felipe, Suite 1040
	 Houston, Texas 77056
	Off. (713)965-9771 Fax (713)965-9774
INDEPENDENT AUDITOR'S REPORT
To The Partners:
Hitchcock Housing, Ltd.
Mesquite Woods Apartments
We have audited the accompanying balance sheet of Mesquite Woods Apartments (An Apartment complex owned by Hitchcock Manor, Ltd.), FmHA Case No.: 49-084-760136950 as of December 31, 1993 and the related statement of loss, changes in partners' equity and cash flows for the year then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. The financial statements of Mesquite Woods Apartments (An Apartment complex owned by Hitchcock Manor, Ltd.) as of December 31, 1992, were audited by other auditors whose report was dated February 25, 1993, expressed an unqualified opinion on those statements.
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 audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audit 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 Mesquite Woods Apartments (An Apartment complex owned by Hitchcock Manor, Ltd.) as of December 31, 1993 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 made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information presented in the Year End Report/Analysis (Form FmHA 1930-8) Parts I through III for year ended December 31, 1993 is presented for purposes of complying with the requirements of the Farmers Home Administration and is not a required part of the basic financial statements.
/S/ H.D. MORRIS CO., INC., P.C.
[LETTERHEAD OF]
M. ALTON EVANS, JR., C.P.A. 	COLE, EVANS & PETERSON
WILLIAM JEFFERSON COLE, C.P.A. 	CERTIFIED PUBLIC ACCOUNTANTS
WILLIAM PETERSON, C.P.A.
CAROL T. BARNES, C.P.A.
C. WILLIAM GERARDY, JR., C.P.A.
BARRY S. SHIPP, C.P.A. 	FIFTH FLOOR TRAVIS PLACE
STEVEN W. HEDGEPETH, C.P.A.
STEVEN R. BAYER, C.P.A. 	POST OFFICE DRAWER 1768
GWENDOLYN H. HARJU, C.P.A.
TIMOTHER R. DURR, C.P.A. 	 SHREVEPORT, LOUISIANA 71166-1768
R. STEPHEN TILLEY, C.P.A.
JOHN A. CASKEY, C.P.A. 	TELEPHONE (318)222-8367
ROBERT A. BUSBY, C.P.A. 	 TELECOPIER (318)425-4101
BAILEY B. BAYNHAM, C.P.A.
DEBORAH N. SHIVERS, C.P.A. January 27, 1994
JUDY E. MONCRIEF, C.P.A.
ANNE-MARIE COLE CAIN, C.P.A.
TIMOTHY W. BORST, C.P.A.
REYNELLE H. THOMPSON, C.P.A.
JENA JOEL MCSWAIN, C.P.A.
BRENDA BISHOP LEACH, C.P.A.
MARY WELLS CARMODY, C.P.A.
DOUGLAS E. WHITE, C.P.A.
WILLIAM MASTIN SCOTT, C.P.A.
INDEPENDENT AUDITORS' REPORT
To the Partners
Joaquin Apartments, Ltd.
Mansfield, Louisiana
	We have audited the accompanying balance sheets of Joaquin Apartments, Ltd. at December 31, 1993 and December 31, 1992, and the related statements of income, partners' capital, and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
	We conducted our audits in accordance with generally accepted auditing standards and with 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 Joaquin Apartments, Ltd. at December 31, 1993 and December 31, 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/S/ COLE, EVANS & PETERSON
Cole, Evans & Peterson
[LETTERHEAD OF]
MERCURIO & BRIDGFORD, PA.
CERTIFIED PUBLIC ACCOUNTANTS
713 SOUTH ORANGE AVENUE
SARASOTA, FLORIDA 34236
TEL: (813) 953-4585
FAX: (813) 364-9138
JOHN J. MERCURIO, C.P.A. 	MEMBERS
JONATHAN S. BRIDGFORD, C.P.A. 	AMERICAN INSTITUTE of CERTIFIED
CARL G SMITH C.P.A. 	PUBLIC ACCOUNTANTS
	 FLORIDA INSTITUTE of CERTIFIED
DONALD H. LAMBERT C.P.A. 	PUBLIC ACCOUNTANTS
	February 8, 1994
To the Partners
Lake City Village, Ltd
Archer, Florida
Independent Auditors' Report
	We have a audited the accompanying statements of assets, liabilities and partners' capital of Lake City Village, Ltd as of December 31, 1993 and 1992 and the related statements of revenues and expenses, partners' capital and statement of 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 and generally accepted governmental auditing standards issued by the Comptroller General of the United States. 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 assets, liabilities , and partners' capital of Lake City Village, Ltd as of December 31, 1993 and 1992 and its revenue and expenses, changes in pertness' capital and cash flows for the years then ended in accordance with generally accepted accounting principles.
	Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The additional information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the 1993 and 1992 financial statements. The additional information presented in the Year End Report and Analysis (Form FmHA 1930-8) Parts I through III for the years ended December 31, 1993 and 1992, is presented for purposes of complying with the requirements of the Farmers Home Administration and is also not a required part of the 1993 and 1992 financial statements. Such information has been subjected to the audit procedures applied in the audit of the 1993 and 1992 financial statements and, in our opinion, is fairly stated in all material respects in relation to the 1993 and 1992 financial statements taken as a whole.
/S/ MERCURIO & BRIDGFORD
CERTIFIED PUBLIC ACCOUNTANTS
[LETTERHEAD OF]
DANIEL G. DRANE
CERTIFIED PUBLIC ACCOUNTANT
209 East Third Street
P. O. Box 577
Hardinsburg, Kentucky 40143
(502) 756-5704
INDEPENDENT AUDITOR'S REPORT
To the Partners
Lakecrest, Ltd.Elizabethtown, Kentucky
I have audited the accompanying balance sheets of Lakecrest, Ltd. (a Kentucky limited partnership), FmHA Project No.: 20-047-611059430 as of December 31, 1993 and 1992, 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. My responsibility is to express an opinion on these financial statements based on my audits.
I conducted my audits as of December 31, 1993 and 1992 in accordance with Government Auditing Standards, issued by the Comptroller General of the United States. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lakecrest, Ltd., as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/S/ DANIEL G. DRANE
Daniel G. Drane
Certified Public Accountant
March 16, 1994
[LETTERHEAD OF]
GILLON AND COMPANY, LTD.
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
To the Partners
Lakeview Estates, Ltd.
We have audited the accompanying balance sheets of Lakeview Estates, Ltd. (A Limited Partnership), as of December 31, 1993 and 1992, and the related statements of income and expense, changes in partners' equity, and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lakeview Estates, Ltd. as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/S/ GILLON AND COMPANY LTD.
Natchez, Mississippi
February 22, 1994
522 MAIN STREET POST OFFICE BOX 1103 NATCHEZ, MISSISSIPPI 39121 TELEPHONE 601-446-6681
[LETTERHEAD OF]
SMITH, MILES & COMPANY, P.A.
CERTIFIED PUBLIC ACCOUNTANTS 	230 AIRPORT ROAD
	P.O. BOX 1177
	 PANAMA CITY. FLORIDA 32402
	 (904) 78~0261
INDEPENDENT AUDITORS' REPORT
To the Partners
Lakewood Apartments, Ltd., Phase II
Panama City, Florida
	We have audited the accompanying balance sheets of Lakewood Apartments, Ltd., Phase II, FmHA Project No: 09-012-592825075, as of December 31, 1993 and 1992, and the related statements of operations, partners' equity and cash flows for the years then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
	We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
	In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lakewood Apartments, Ltd., Phase II, as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
	Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional 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 audit procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/S/ SMITH, MILES & COMPANY, P.A.
Panama City, Florida
February 9, 1994
[LETTERHEAD OF]
McGEE & ASSOCIATES, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
Independent Auditors' Report
To the Partners
Las Rosas II, Ltd.
and Farmers Home Administration
We have audited the accompanying balance sheets of Las Rosas II, Ltd. (a limited partnership) as of December 31, 1993 and 1992, and the related statements of operations, partners' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Las Rosas II, Ltd. as of December 31, 1993 and 1992, and the results of its operations and the changes in partners' equity and cash flows for the years then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The supplemental information included in the report is presented for the purpose of additional analysis and is not a required part of the financial statements of Las Rosas II, Ltd. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
/S/ MCGEE & ASSOCIATES, P.C.
March 9, 1994
Farmington, New Mexico
[LETTERHEAD OF]
MILLER, MAYER, SULLIVAN & STEVENS
CERTIFIED PUBLIC ACCOUNTANTS
"INNOVATORS OF SOLUTION TECHNOLOGY"
INDEPENDENT AUDITORS' REPORT
To the Partners Farmers Home Administration
Laurel Wood Apartments, Ltd. Jackson, Tennessee
We have audited the accompanying balance sheets of Laurel Wood Apartments, Ltd., (a limited partnership) Case No. 48-079-611057371, as of December 31, 1993 and 1992 and the related statements of operations, 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 generally accepted auditing standards and the standards for 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 Laurel Wood Apartments, Ltd. as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared in conformance with instructions issued by the U. S. Department of Agriculture, Farmers Home Administration, for borrowers and grantees.
/S/ MILLER, MAYER, SULLIVAN & STEVENS
Lexington, Kentucky
February 24, 1994
2365 HARRODSBURG ROAD LEXINGTON. KENTUCKY 40504-3399 (606)223-3095 FAX: (606)223-2143
[LETTERHEAD OF]
GILLON AND COMPANY, LTD.
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
To the Partners
Lead Bayou, Ltd.
We have audited the accompanying balance sheets of Lead Bayou, Ltd. (A Limited Partnership), as of December 31, 1993 and 1992, and the related statements of income and expense, changes in partners' equity, and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lead Bayou, Ltd. as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/S/ GILLON AND COMPANY LTD.
Natchez, Mississippi
February 6, 1994
522 MAIN STREET POST OFFICE BOX 1103 NATCHEZ, MISSISSIPPI 39121 TELEPHONE 601-446-6681
[LETTERHEAD OF]
BEALL & COMPANY, PLC
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
Lillie Mae's Retirement Village Apartments, Ltd.
(A Limited Partnership)
Inola, Oklahoma
We have audited the accompanying balance sheets of Lillie Mae's Retirement Village Apartments, Ltd.(A Limited Partnership), FmHA Project No.:42-026-0731282026, as of December 31, 1993 and 1992 and the related statements of operations, partners' capital, and cash flows for the years then ended. These financial statements are the responsibility the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lillie Mae's Retirement Village Apartments, Ltd. at December 31, 1993 and 1992 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/S/ BEALL & COMPANY
BEALL & COMPANY, PLC
Certified Public Accountants
Fort Smith, Arkansas
February 8, 1994
[LETTERHEAD OF]
Lionel Sims, CPA
411 N. Sam Houston Parkway
Suite 300
Houston, Texas 77060
(713) 448-0491 fax (713) 448-2497
INDEPENDENT AUDITOR' S REPORT
To The Partners:
Magnolia Plaza Apartments, Ltd.
I have audited the accompanying balance sheets of Magnolia Plaza Apartments, Ltd., FmHA CASE NO.: 50-70-0760129844, as of December 31, 1993 and 1992, and the related statements of loss, changes in partners' equity 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.
Except as discussed in the following paragraph, I conducted my 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 I 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. I believe that my audits provide a reasonable basis for my opinion.
I was unable to confirm capital subscriptions receivable and amounts due to related parties as of December 31, 1993, and 1992, stated at $33,835, $30,466 and $56,393, and $52,274 respectively. The receivables are amounts due from investors. Due to related parties represents amounts payable to the general partner for development services, and Continental Construction Management Corporation for construction management services. In addition, I was unable to determine the validity of these accounts through the use of alternative procedures.
In my opinion, except for the effects of such adjustment, if any, as might have been determined to be necessary had I been able to determine the validity of capital subscriptions receivable and amounts due to related parties, the financial statements referred to above present fairly, in all material respects, the financial position of Magnolia Plaza Apartments, Ltd. as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
[LETTERHEAD OF]
INDEPENDENT AUDITOR' S REPORT
My audits are made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information presented in the Year End Report/Analysis (Form FmHA 1930-8) Parts I through III for year ended December 31, 1993 is presented for purposes of complying with the requirements of the Farmers Home Administration and is not a required part of the basic financial statements.
Such information has been subjected to the audit procedures applied in the audit of the basic financial statements and, in my opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/S/ LIONEL SIMS, CPA
Lionel Sims CPA
Houston, Texas
March 24, 1994
[LETTERHEAD OF]
M. ALTON EVANS, JR., C.P.A. 	COLE, EVANS & PETERSON
WILLIAM JEFFERSON COLE, C.P.A. 	CERTIFIED PUBLIC ACCOUNTANTS
WILLIAM PETERSON, C.P.A.
CAROL T. BARNES, C.P.A.
C. WILLIAM GERARDY, JR., C.P.A.
BARRY S. SHIPP, C.P.A. 	FIFTH FLOOR TRAVIS PLACE
STEVEN W. HEDGEPETH, C.P.A.
STEVEN R. BAYER, C.P.A. 	POST OFFICE DRAWER 1768
GWENDOLYN H. HARJU, C.P.A.
TIMOTHER R. DURR, C.P.A. 	SHREVEPORT, LOUISIANA 71166-1768
R. STEPHEN TILLEY, C.P.A.
JOHN A. CASKEY, C.P.A. 	TELEPHONE (318)222-8367
ROBERT A. BUSBY, C.P.A. 	TELECOPIER (318)425-4101
BAILEY B. BAYNHAM, C.P.A.
DEBORAH N. SHIVERS, C.P.A. February 1, 1994
JUDY E. MONCRIEF, C.P.A.
ANNE-MARIE COLE CAIN, C.P.A.
TIMOTHY W. BORST, C.P.A.
REYNELLE H. THOMPSON, C.P.A.
JENA JOEL MCSWAIN, C.P.A.
BRENDA BISHOP LEACH, C.P.A.
MARY WELLS CARMODY, C.P.A.
DOUGLAS E. WHITE, C.P.A.
WILLIAM MASTIN SCOTT, C.P.A.
INDEPENDENT AUDITORS' REPORT
To the Partners
Many Seniors Apartments
Mansfield, Louisiana
	We have audited the accompanying balance sheets of Many Seniors Apartments at December 31, 1993 and December 31, 1992, and the related statements of income, partners' capital, and cash flows for the years then ended. These financial statements are the responsibility of the Project's management. Our responsibility is to express an opinion on these financial statements based on-our audits.
	We conducted our audits in accordance with generally accepted auditing standards and with 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 Many Seniors Apartments at December 31, 1993 and December 31, 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles
/S/ COLE, EVANS & PETERSON
Cole, Evans & Peterson
[LETTERHEAD OF]
MILLER, MAYER, SULLIVAN & STEVENS
CERTIFIED PUBLIC ACCOUNTANTS
"INNOVATORS OF SOLUTION TECHNOLOGY"
INDEPENDENT AUDITORS' REPORT
To the Partners 	Farmers Home Administration
Maple Hill Estates, Ltd. 	 Lexington, Kentucky
We have audited the accompanying balance sheets of Maple Hill Estates, Ltd., (a limited partnership) Case No. 20-040-611063882, as of December 31, 1993 and 1992 and the related statements of operations, 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 generally accepted auditing standards and the standards for 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 Maple Hill Estates, Ltd. as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared in conformance with instructions issued by the U. S. Department of Agriculture, Farmers Home Administration, for borrowers and grantees.
/S/ MILLER, MAYER, SULLIVAN & STEVENS
Lexington, Kentucky
February 4, 1994
2365 HARRODSBURG ROAD LEXINGTON, KENTUCKY 405O4-3399 (606)223-3095 FAX:(606) 223-2143
[LETTERHEAD OF]
Marshall & Shafer, P.C.
Certified Public Accountant
15915 Katy Freeway, Suite 340
Houston, Texas 77094
713/579-3366
FAX 713/579-3307
Independent Auditor's Report
March 2, 1994
To the Partners:
New Caney Oaks Apartments
(A Segment of New Caney Oaks, Ltd.)
We have audited the accompanying balance sheet of New Caney Apartments Phase Apartments (A Segment of New Caney Oaks, Ltd.) as of December 31, 1993 and 1992, and the related statements of operation, partners' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
As described in Note A to the financial statements, the financial statements referred to above include the assets, liabilities, revenue and expenses which are shown in the accounting records of the apartment complex.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of New Caney Oaks Apartments (A Segment of New Caney Oaks, Ltd.) as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended, on the basis of accounting as described in Note A.
/S/ MARSHALL & SHAFER, P.C.
Marshall & Shafer, P.C.
Houston, Texas
[LETTERHEAD OF]
M. ALTON EVANS, JR., C.P.A. 	COLE, EVANS & PETERSON
WILLIAM JEFFERSON COLE, C.P.A. 	CERTIFIED PUBLIC ACCOUNTANTS
WILLIAM PETERSON, C.P.A.
CAROL T. BARNES, C.P.A.
C. WILLIAM GERARDY, JR., C.P.A.
BARRY S. SHIPP, C.P.A. 	FIFTH FLOOR TRAVIS PLACE
STEVEN W. HEDGEPETH, C.P.A.
STEVEN R. BAYER, C.P.A. 	 POST OFFICE DRAWER 1768
GWENDOLYN H. HARJU, C.P.A.
TIMOTHER R. DURR, C.P.A. 	SHREVEPORT, LOUISIANA 71166-1768
R. STEPHEN TILLEY, C.P.A.
JOHN A. CASKEY, C.P.A. 	TELEPHONE (318)222-8367
ROBERT A. BUSBY, C.P.A. 	TELECOPIER (318)425-4101
BAILEY B. BAYNHAM, C.P.A.
DEBORAH N. SHIVERS, C.P.A. February 12, 1994
JUDY E. MONCRIEF, C.P.A.
ANNE-MARIE COLE CAIN, C.P.A.
TIMOTHY W. BORST, C.P.A.
REYNELLE H. THOMPSON, C.P.A.
JENA JOEL MCSWAIN, C.P.A.
BRENDA BISHOP LEACH, C.P.A.
MARY WELLS CARMODY, C.P.A.
DOUGLAS E. WHITE, C.P.A.
WILLIAM MASTIN SCOTT, C.P.A.
INDEPENDENT AUDITORS' REPORT
To the Partners
Oakdale Seniors Apartments
Mansfield, Louisiana
	We have audited the accompanying balance sheets of Oakdale Seniors Apartments at December 31, 1993 and December 31, 1992, and the related statements of income, partners' capital, and cash flows for the years then ended. These financial statements are the responsibility of the Project's management. Our responsibility is to express an opinion on these financial statements based on our audits.
	We conducted our audits in accordance with generally accepted auditing standards and with 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 Oakdale Seniors Apartments at December 31, 1993 and December 31, 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/S/ COLE, EVANS & PETERSON
Cole, Evans & Peterson
[LETTERHEAD OF]
James N. Rachel
Certified Public Accountant
920 Pierremont Road 	(318) 868-8715
Suite 415
Shreveport, Louisiana 71106
INDEPENDENT AUDITOR'S REPORT
To the Partners
Old Oak Estates, Ltd.
I have audited the accompanying balance sheets of Old Oak Estates, Ltd., a limited partnership, as of December 31, 1993, and 1992, and the related statements of income, partnership equity, and cash flows for the years then ended. These financial statements are the responsibility of Old Oak Estates, Ltd.'s management. My responsibility is to express an opinion on these financial statements based on my audits.
I conducted my audits in accordance with generally accepted auditing standards and Governmental 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 Old Oak Estates, Ltd. as of December 31, 1993, and 1992, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles.
/S/ J.N. RACHEL
Shreveport, Louisiana
March 8, 1994
Member - American Institute of Certified Public Accountants
[LETTERHEAD OF]
BRENDA P. McELWEE P.C.
CERTIFIED PUBLIC ACCOUNTANT
INDEPENDENT AUDITOR'S REPORT
Onion Creek, Ltd.
(A Texas Limited Partnership)
P.O. Box 1357
Aransas Pass, TX 78335
I have audited the accompanying financial statements of Onion Creek, Ltd.(a Texas Limited Partnership) as of December 31, 1993 and 1992, and for the years then ended, as listed in the table of contents. These financial statements are the responsibility of Onion Creek, Ltd. management. My responsibility is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Onion Creek, Ltd., as of December 31, 1993 and 1992, and the results of its operation and its cash flows for the years then ended in conformity with generally accepted accounting principles.
My audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying information listed as supplemental information is presented for purposes of additional analysis and is not a required part of the financial statements of Onion Creek, Ltd. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in my opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole.
/S/ BRENDA P. MCELWEE, P.C.
March 17, 1994
ROCKPORT ARANASAS PASS
(512) 729-9150 (512) 758-7131
FAX (512) 729-9216 P.O.BOX 33
1213 HWY 35 SOUTH ARANSAS PASS, TEXAS 78335
ROCKPORT, TEXAS 78382
Member Texas Society of Certified Public Accountants and American Institute of Certified Public Accounts
[LETTERHEAD OF]
James N. Rachel
Certified Public Accountant
920 Pierremont Road 	(318) 868-8715
Suite 415
Shreveport, Louisiana 71106
INDEPENDENT AUDITOR'S REPORT
To the Partners
Pecan Villa Apartments, Ltd.
I have audited the accompanying balance sheets of Pecan Villa Apartments, Ltd., a limited partnership, as of December 31, 1993, and 1992, and the related statements of income, partnership equity, and cash flows for the years then ended. These financial statements are the responsibility of Pecan Villa Apartments, Ltd.'s management. My responsibility is to express an opinion on these financial statements based on my audits.
I conducted my audits in accordance with generally accepted auditing standards and Governmental 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 find statement presentation. I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the finance statement referred to above present fairly, in all material respects, the financial position of Pecan Villa Apartments, Ltd. as of December 31, 1993, and 1992, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles.
/S/ J.N. RACHEL
Shreveport, Louisiana
March 8, 1994
Member - American Institute of Certified Public Accountants
[LETTERHEAD OF]
Grubman & Company
certified public accountants
New York office:
10 East 21st Street
New York, N. Y. 10010
(212)460-52S5 . Fax (212)995-9525
East Hampton office:
2 Newton Lane
East Hampton, N.Y. 11937
(516)324-1155 ~ Fax(516)324-7915
Washington, D.C. Office:
101 Chestnut Street, Suite 120
Gaithersburg, MD 20877
(301) 948-3464 ~ Fax (301)762- 7350
INDEPENDENT AUDITOR'S REPORT
To the Partners
Pocomoke Villas Limited Partnership
	We have audited the accompanying balance sheet of Pocomoke Villas Limited Partnership FmHA Project No.: 24-024-521572645 as of December 31, 1993, and the related statements of income, 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 of these financial statements based on our audit.
	We conducted our audit in accordance with generally accepted auditing standards and generally accepted government auditing standards for financial and compliance audits 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 disclosure 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 Pocomoke Villas Limited Partnership FmHA Project No.: 24-024-521572645 as of December 31, 1993, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
[LETTERHEAD OF]
	Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplementary information presented in the Year End Report and Analysis Form FmHA 1930-8 Part I for the years ended December 31, 1993 and 1992 is presented for purposes of complying with the requirement of the Farmers Home Administration and is also not a required part of the basic financial statements. Such information has been subjected to the audit procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/S/ GRUBMAN & COMPANY
Grubman & Company
New York, New York
January 26, 1994
[LETTERHEAD OF]
M. ALTON EVANS, JR., C.P.A. 	COLE, EVANS & PETERSON
WILLIAM JEFFERSON COLE, C.P.A. 	CERTIFIED PUBLIC ACCOUNTANTS
WILLIAM PETERSON, C.P.A.
CAROL T. BARNES, C.P.A.
C. WILLIAM GERARDY, JR., C.P.A.
BARRY S. SHIPP, C.P.A. 		FIFTH FLOOR TRAVIS PLACE
STEVEN W. HEDGEPETH, C.P.A.
STEVEN R. BAYER, C.P.A. 	POST OFFICE DRAWER 1768
GWENDOLYN H. HARJU, C.P.A.
TIMOTHER R. DURR, C.P.A. 	SHREVEPORT, LOUISIANA 71166-1768
R. STEPHEN TILLEY, C.P.A.
JOHN A. CASKEY, C.P.A. 	TELEPHONE (318)222-8367
ROBERT A. BUSBY, C.P.A. 	TELECOPIER (318)425-4101
BAILEY B. BAYNHAM, C.P.A.
DEBORAH N. SHIVERS, C.P.A. 	 February 2, 1994
JUDY E. MONCRIEF, C.P.A.
ANNE-MARIE COLE CAIN, C.P.A.
TIMOTHY W. BORST, C.P.A.
REYNELLE H. THOMPSON, C.P.A.
JENA JOEL MCSWAIN, C.P.A.
BRENDA BISHOP LEACH, C.P.A.
MARY WELLS CARMODY, C.P.A.
DOUGLAS E. WHITE, C.P.A.
WILLIAM MASTIN SCOTT, C.P.A.
INDEPENDENT AUDITORS' REPORT
To the Partners
Pecanwood Apartments III, Ltd.
Mansfield, Louisiana
	We have audited the accompanying balance sheets of Pecanwood Apartments III, Ltd. at December 31, 1993 and December 31, 1992, and the related statements of income, partners' capital, and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
	We conducted our audits in accordance with generally accepted auditing standards and with 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 Pecanwood Apartments III, Ltd. at December 31, 1993 and December 31, 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/S/ COLE, EVANS & PETERSON
Cole, Evans & Peterson
[LETTERHEAD OF]
LITTLE, SHANEYFELT & CO.
CERTIFIED PUBLIC ACCOUNTANTS
L501 N. UNIVERSITY, SUITE 300
LITTLE ROCK, ARKANSAS 72207-5232
TELEPHONE(501)666-2879
INDEPENDENT AUDITOR'S REPORT
To the Partners
P.D.C. Eighteen Limited Partnership
We have audited the accompanying balance sheets of P.D.C. Eighteen Limited Partnership, FmHA Project No. 03-34-710652405 (the Partnership), as of December 31, 1993 and 1992, and the related statements of profit (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 generally accepted auditing standards and Government Auditing Standards" issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of P.D.C. Eighteen Limited Partnership as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/S/ LITTLE, SHANEYFELT & CO.
Little, Shaneyfelt & Co.
February 26, 1994
[LETTERHEAD OF]
SMITH, MILES & COMPANY, P.A.
CERTIFIED PUBLIC ACCOUNTANTS 	1230 AIRPORT ROAD
	P.O. BOX 1177
	PANAMA CITY. FLORIDA 32402
	(904) 78~0261
INDEPENDENT AUDITORS' REPORT
To the Partners
Ridgeview Apartments, Ltd.
Panama City, Florida
	We have audited the accompanying balance sheets of Ridgeview Apartments, Ltd., FmHA Project No: 09-009592695879, as of December 31, 1993 and 1992, and the related statements of operations, partners' deficit and cash flows for the years then ended. These financial Statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
	We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
	In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Ridgeview Apartments, Ltd., as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
	Our audits were made for the purpose of forming an opinion on the basic financial Statements taken as a whole. The additional information is presented for purposes of additional analysis and is not a required part of the basic financial abatements. Such information has been subjected to the audit procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/S/ SMITH, MILES & COMPANY, P.A.
Panama City, Florida
February 10, 1994
[LETTERHEAD OF]
Grubman & Company
certified public accountants
New York office:
10 East 21st Street
New York, N. Y. 10010
(212)460-52S5 . Fax (212)995-9525
East Hampton office:
2 Newton Lane
East Hampton, N.Y. 11937
(516)324-1155 ~ Fax(516)324-7915
Washington, D.C. Office:
101 Chestnut Street, Suite 120
Gaithersburg, MD 20877
(301) 948-3464 ~ Fax (301)762- 7350
INDEPENDENT AUDITOR' S REPORT
To the Partners
Rolling Meadow II Limited Partnership
	We have audited the accompanying balance sheet of Rolling Meadow II Limited Partnership FmHA Project No.: 24-006-521537063 as of December 31, 1993 and the related statements of income, 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 of these financial statements based on our audit.
	We conducted our audit in accordance with generally accepted auditing standards and generally accepted government auditing standards for financial and compliance audits 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 disclosure 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 Rolling Meadow II Limited Partnership FmHA Project No.: 24-006-521537063 as of December 31, 1993 and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles.
[LETTERHEAD OF]
	Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplementary information, presented in the Year End Report and Analysis Form FmHA 1930-8 Part I for the years ended December 31, 1993 and 1992 is presented for purposes of complying with the requirement of the Farmers Home Administration and is also not a required part of the basic financial statements. Such information has been subjected to the audit procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/S/ GRUBMAN & COMPANY
Grubman & Company
New York, New York
January 26, 1994
[LETTERHEAD OF]
PAILET, MEUNIER and LEBLANC, L.L.P
Certified Public Accountants
3421 North Causeway Boulevard, Suite 701
Metairie, Louisiana 70002
Tel. (504) 837-0770 Fax (504) 837-7102
Independent Auditors' Report
To the Partners
Clifford E. Olsen-Southeastern Associates, Ltd.
	We have audited the accompanying balance sheets of Clifford E. Olsen-Southeastern Associates, Ltd. (a Louisiana limited partnership), FmHA Project No: 22-053-721100096, as of December 31, 1993 and 1992 and the related statements of operations, partners' equity and cash flows for the years then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
	We conducted our audits in accordance with generally accepted auditing standards 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 Clifford E. Olsen-Southeastern Associates, Ltd. as of December 31, 1993 and 1992 and the results of its operations, the changes in partner's equity and cash flows for the years then ended in conformity with generally accepted accounting principles.
	Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplementary information presented in the Year End Report and Analysis Form FmHA 1930-8 Parts I through III for years ended December 31, 1993 and 1992, is presented for purposes of complying with the requirements of the Farmers Home Administration and is also not a required part of the basic financial statements.
Member of
International Group of Accounting Firms - Member Firms in Principal Cities
AICPA SEC Practice Section - AICPA Private Companies Practice Section
[LETTERHEAD OF]
	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/ PAILET, MEUNIER & LEBLANC
Metairie, Louisiana
January 28, 1994
[LETTERHEAD OF]
GANT, CROFT & ASSOCIATES, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
611 EAST LAUREL STREET - P. O. BOX 757
SCOTTSBORO, ALABAMA 35768
TELEPHONE 259-1120
TELECOPIER 259-0858
JOHN W. GANT, C.P.A.	MEMBERS: AICPA
DON W. CROFT, C.P.A.	ALABAMA SOCIETY
MARY S. CROFT, C.P.A.	OF CPA'S
HOYT BOWEN. C.P.A.
INDEPENDENT AUDITORS' REPORT
Partners
Sun Rise North, Ltd.
Guntersville, Alabama
We have audited the accompanying balance sheet of Sun Rise North, Ltd. as of December 31, 1993, and the related statements of operations, retained earnings 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 audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Sun Rise North, Ltd. as of December 31, 1993, and the results of its operations and cash flows for the year then ended in conformity with generally accepted accounting principles.
/S/ GANT, CROFT & ASSOCIATES, P.C.
GANT, CROFT & ASSOCIATES, P. C.
March 4, 1994
[LETTERHEAD OF]
BRENDA P. McELWEE P.C.
CERTIFIED PUBLIC ACCOUNTANT
INDEPENDENT AUDITOR'S REPORT
Taft Gardens, Ltd.
(A Texas Limited Partnership)
P.O. Box 1357
Aransas Pass, TX 78335
I have audited the accompanying financial statements of Taft Gardens, Ltd.(a Texas Limited Partnership) as of December 31, 1993 and 1992, and for the years then ended, as listed in the table of contents. These financial statements are the responsibility of Taft Gardens, Ltd. management. My responsibility is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Taft Gardens, Ltd., as of December 31, 1993 and 1992, and the results of its operation and its cash flows for the years then ended in conformity with generally accepted accounting principles.
My audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying information listed as supplemental information is presented for purposes of additional analysis and is not a required part of the financial statements of Taft Gardens, Ltd. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in my opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole.
/S/ BRENDA P. MCELWEE, P.C.
March 15, 1994
ROCKPORT ARANSAS PASS
(512) 729-9150 (512) 758-7131
FAX (512) 729-9216 P.O.BOX 33
1213 HWY 35 SOUTH ARANSAS PASS, TEXAS 78335
ROCKPORT, TEXAS 78382
Member Texas Society of Certified Public Accountants and American Institute of Certified Public Accounts
[LETTERHEAD OF]
BRENDA P. McELWEE P.C.
CERTIFIED PUBLIC ACCOUNTANT
INDEPENDENT AUDITOR'S REPORT
Taft Terrace, Ltd.
(A Texas Limited Partnership)
P.O. Box 1357
Aransas Pass, TX 78335
I have audited the accompanying financial statements of Taft Terrace, Ltd.(a Texas Limited Partnership) as of December 31, 1993 and 1992, and for the years then ended, as listed in the table of contents. These financial statements are the responsibility of Taft Terrace, Ltd. management. My responsibility is to express an opinion on these financial statements based on mar audit.
I conducted my audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respect, the financial position of Taft Terrace, Ltd., as of December 31, 1993 and 1992, and the results of its operation and its cash flows for the years then ended in conformity with generally accepted accounting principles.
My audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying information listed as supplemental information is presented for purposes of additional analysis and is not a required part of the financial statements of Taft Terrace, Ltd. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in my opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole.
/S/ BRENDA P. MCELWEE, P.C.
March 4, 1994
ROCKPORT ARANSAS PASS
(512) 729-9150 (512) 758-7131
FAX (512) 729-9216 P.O.BOX 33
1213 HWY 35 SOUTH ARANSAS PASS, TEXAS 78335
ROCKPORT, TEXAS 78382
Member Texas Society of Certified Public Accountants and American Institute of Certified Public Accounts
[LETTERHEAD OF]
PARENTE, RANDOLPH, ORLANDO
CAREY & ASSOCIATES
CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
To the Partners of
Valley Place Associates
Turbotville, Pennsylvania:
	We have audited the accompanying balance sheets of Valley Place Associates (a limited Partnership) as of December 31, 1993 and 1992, and the related statements of loss, changes in partners' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the management of Valley Place Associates. Our responsibility is to express an opinion on these financial statements based on our audits.
	We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
	In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Valley Place Associates as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
/S/ PARENTE, RANDOLPH, ORLANDO, CAREY & ASSOCIATES
Williamsport, Pennsylvania
January 31, 1994
[LETTERHEAD OF]
SMITH, MILES & COMPANY, P.A.
CERTIFIED PUBLIC ACCOUNTANTS	1230 AIRPORT ROAD
	P.O. BOX 1177
	PANAMA CITY. FLORIDA 32402
	(904) 785-0261
INDEPENDENT AUDITORS' REPORT
To the Partners
West Meadow Apartments II, Ltd.
Panama City, Florida
	We have audited the accompanying balance sheets of West Meadow Apartments II, Ltd., FmHA Project No: 01-031592806818 as of December 31, 1993 and 1992, and the related statements of operations, partners' equity and cash flows for the years then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
	We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
	In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of West Meadow Apartments II, Ltd., as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
	Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional 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 audit procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/S/ SMITH, MILES & COMPANY, P.A.
Panama City, Florida
February 11, 1994
[LETTERHEAD OF]
James N. Rachel
Certified Public Accountant
920 Pierremont Road	(318) 868-8715
Suite 415
Shreveport, Louisiana 71106
INDEPENDENT AUDITOR'S REPORT
To the Partners
Willow Haven Apartments, Ltd.
I have audited the accompanying balance sheets of Widow Haven Apartments, Ltd., a limited partnership, as of December 31, 1993, and 1992, and the related statements of income, partnership equity, and cash flows for the years then ended. These financial statements are the responsibility of Willow Haven Apartments, Ltd.'s management. My responsibility is to express an opinion on these financial statements based on my audits.
I conducted my audits in accordance with generally accepted auditing standards and Governmental Auditing Standards issued by the Comptroller General of the United States. Those stand require that I plan and perform the audit to obtain reasonable assurance about whether the financial statement 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 Willow Haven Apartments, Ltd. as of December 31, 1993, and 1992, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles.
/S/ J.N. RACHEL
Shreveport, Louisiana
March 8, 1994
Member - American Institute of Certified Public Accountants
[LETTERHEAD OF]
OTIS, ATWELL & TIMBERLAKE
Professional Association
CERTIFIED PUBLIC ACCOUNTANTS
James C. Otis, C.P.A., CFP	980 Forest Avenue
Stephen W. Atwell C.P.A	Portland, Maine O4103
Fred I. Timberlake, C.P.A.	(207) 797-0990
Bruce E. Fritzson, C.P.A.	FAX (207) 797-8618
Thomas J. Gioa, C.P.A.
INDEPENDENT AUDITOR'S REPORT
To the Partners
Wilson Lake Associates
We have audited the accompanying balance sheets of Wilson Lake Associates, a limited partnership, FmHA Case No. 23-004-010390750, as of December 31, 1993 and 1992, and the related statements of income and partners' equity, and cash flows for the years then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing th
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Wilson Lake Associates, a limited partnership, as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying additional information on pages 14 through 16 is presented solely for the use of the Farmers Home Administration and is not a required part of the basic financial statements. The additional information presented in the Multiple Family Housing Borrower Balance Sheet, Form FmHA 1930-8, as of December 31, 1993 and 1992 has been subjected to the auditing procedu
January 26, 1994 /S/ OTIS, ATWELL & TIMBERLAKE, P.A.
Portland, Maine Certified Public Accountants
[LETTERHEAD OF]
Bain, Brown & DeLaura
Certified Public Accountants
107 Montrose Avenue	Phone (315)488-2001
Syracuse, New York 13219	Fax (315)468-6373
INDEPENDENT AUDITORS REPORT
Portland, Maine Certified Public Accountants
[LETTERHEAD OF]
Bain, Brown & DeLaura
Certified Public Accountants
107 Montrose Avenue	Phone (315)488-2001
Syracuse, New York 13219	Fax (315)468-6373
INDEPENDENT AUDITORS REPORT
To the Partners
Wolcott Associates
We have audited the accompanying balance sheets of Wolcott Associates, as of November 30, 1993 and 1992 and the related statements of operations and partners' capital and of cash flows for the years then ended. These financial statements are the responsibility of the general partner of Wolcott Associates. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards and government auditing standards issued by the Controller General of the United States. These standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing th d 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 Wolcott Associates as of November 30, 1993 and 1992, and the results of its operations and partners' capital and of cash flows for the years then ended in conformity with generally accepted accounting principles
/S/ BAIN BROWN & DELURA
January 28, 1994
[LETTERHEAD OF]
MILLER, MAYER, SULLIVAN & STEVENS
CERTIFIED PUBLIC ACCOUNTANTS
"INNOVATORS OF SOLUTION TECHNOLOGY"
INDEPENDENT AUDITORS' REPORT
To the Partners Farmers Home Administration
Woodcrest Apartments, Ltd.	Cookeville, Tennessee
We have audited the accompanying balance sheets of Woodcrest Apartments, Ltd., (a limited partnership) Case No. 48-056-611047118, as of December 31, 1993 and 1992 and the related statements of operations, 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 generally accepted auditing standards and the standards for 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 financi a ludes 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 Woodcrest Apartments, Ltd. as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared in conformance with instructions issued by the U. S. Department of Agriculture, Farmers Home Administration, for borrowers and grantees.
/S/ MILLER, MAYER, SULLIVAN & STEVENS
February 1, 1994
2365 HARRODSBURG ROAD LEXINGTON. KENTUCKY 40504-3399 (606)223-3095 FAX: (606) 223-2143