8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) September 27, 2006

HOUSING PROGRAMS LIMITED

(Exact name of Registrant as specified in its charter)

            California

  0-13808  

  95-3906167

(State or other jurisdiction

(Commission

     (I.R.S. Employer

     of incorporation

File Number)

  Identification Number)

55 Beattie Place

Post Office Box 1089

Greenville, South Carolina 29602

(Address of principal executive offices)

(864) 239-1000

(Issuer's telephone number)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

[ ]

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01

Entry into a Material Definitive Contract

Please see the description under Item 2.01, below.

Item 2.01

Completion of Acquisition or Disposition of Assets

Housing Programs Limited, a California limited partnership (the “Registrant”) is the 99% limited partner in Plaza Village Group, a Rhode Island limited partnership (“Plaza Village”). Plaza Village is the owner of a 228-unit residential apartment complex located in Woonsocket, Rhode Island.  In conjunction with the Registrant’s acquisition of its limited partnership interest in Plaza Village, the Registrant issued non-recourse notes payable (the “Plaza Notes”) totaling $2,000,000 and bearing interest at a rate of 9.5% per annum.  The Plaza Notes matured in 1999.  The balance of the Plaza Note as of September 27, 2006, including unpaid principal and accrued interest, is approximately $6,038,000.  The principal and accrued interest outstanding under the Plaza Note is collateralized by the Registrant’s investment in Plaza Village.  An affiliate of the corporate general partner of the Regi strant held a 15% interest in and served as custodian with respect to the Plaza Notes.  The remaining 85% interest in the Plaza Notes is held by a third party, SHP Acquisitions II, LLC, a Maine limited liability company (“SHP”).

On September 27, 2006, the affiliate of the Registrant’s corporate general partner assigned its interest in the Plaza Notes as well as its position as custodian of the Plaza Notes to SHP for $1,550,000.

The Registrant’s corporate general partner does not believe that the value of the Registrant’s limited partnership interest in Plaza Village is sufficient to repay the Plaza Notes in full.  Accordingly, on September 27, 2006, the Registrant assigned 49% of its limited partnership interest in Plaza Village to SHP for $24,500 in lieu of SHP exercising its rights under the Plaza Notes. The Registrant expects to assign its remaining 51% limited partnership interest in Plaza Village to SHP at a later date for $25,500 upon SHP’s receipt of certain approvals from the Department of Housing and Urban Development.  SHP has deposited these additional funds in an escrow account to be released to the Registrant upon receipt of the approvals.

The foregoing description is qualified in its entirety by reference to the Assignment of Limited Partnership Interest and Escrow Agreement, copies of which are filed as exhibits 10 and 10.1 to this report.    

In accordance with the Restated Certificate and Agreement of Limited Partners of the Partnership, the Registrant’s corporate general partner intends to utilize the proceeds received in consideration of the assignment described above for Registrant’s operations and reserves.

Item 9.01

Financial Statements and Exhibits

(d)

Exhibits

10

    Assignment of Limited Partnership Interest by and between Housing     Programs Limited, a California limited partnership and SHP           Acquisitions II, LLC, a Maine limited liability company, dated       September 27, 2006.

10.1

 Escrow Agreement by and between Housing Programs Limited, a             California limited partnership and SHP Acquisitions II, LLC, a          Maine limited liability company, dated September 27, 2006.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

HOUSING PROGRAMS LIMITED

By:

National Partnership Investments Corp.

Corporate General Partner

By:

/s/Kathleen Danilchick

Kathleen Danilchick

Senior Vice President and Chief Financial Officer

Date:

October 3, 2006

EX-1

Exhibit 10

ASSIGNMENT OF LIMITED PARTNERSHIP INTEREST

ASSIGNMENT OF LIMITED PARTNERSHIP INTEREST (“Assignment”) made as of this 27^th day of September, 2006 (the “Effective Date”), by and between Housing Programs Limited (f/k/a Shearson Lehman / Coast Savings Housing Partners, Limited), a California limited partnership with a business address of 6100 Center Drive, Suite 800, Los Angeles, California 90045 (“Assignor”) in favor of SHP Acquisitions II, LLC, a Maine limited liability company with a business address of 7 Thomas Drive, Cumberland Foreside, Maine 04110 (“Assignee”).

WITNESSETH:

WHEREAS, Assignee holds legal and beneficial interest as holder of a series of two promissory notes of Assignor, as follows: (i) that certain NON-NEGOTIABLE PURCHASE MONEY PROMISSORY NOTE SECURED BY PERSONAL PROPERTY of Assignor in favor of National Corporation for Housing Partnerships (“NCHP), as custodian for National Housing Partnerships (“NHP”), dated September 30, 1984, in the original principal amount of $309,278.40 (the “NHP Note”), and (ii) that certain NON-NEGOTIABLE PURCHASE MONEY PROMISSORY NOTE SECURED BY PERSONAL PROPERTY of Assignor in favor of NCHP, as custodian for Esther Mertz, dated September 30, 1984, in the original principal amount of $1,690,721.60 (the “Mertz Note” and, together with the NHP Note, the “Notes”);

WHEREAS, the Notes are secured by a purchase money security interest in a 99% limited partnership interest (the “Partnership Interest”) in Plaza Village Group, a Rhode Island limited partnership (the “Partnership”), granted by Assignee pursuant to a certain SECURITY AGREEMENT dated September 30,1984 (“Security Agreement”);

WHEREAS, the Partnership Interest represents the entire limited partnership interest in the Partnership all as more particularly described in an Amended and Restated Certificate and Agreement of Plaza Village Group dated as of September 30, 1984 (the “Partnership Agreement”); and

WHEREAS, the Notes are in default, and in lieu of exercising its rights under the Security Agreement, Assignee has agreed to purchase a 49% ownership interest (the “Transferred

Interest”) in the Partnership Interest from Assignor, and Assignee has agreed to purchase the Transferred Interest, on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of $1.00 and other valuable consideration paid by Assignee to Assignor, the receipt and sufficiency of which are hereby acknowledged, and the respective undertakings and agreements hereinafter set forth, the parties hereby agree as follows:

1.

Assignment of Assignor Interest.  Subject to the terms and conditions hereof and in consideration of the payment by Assignee as provided in paragraph 2 below, Assignor hereby sells, transfers, assigns, and delivers to Assignee without recourse (other than recourse for breach by Assignor of the representations and warranties made in paragraph 3 below) and without representation or warranty of any kind (other than as expressly provided in paragraph 3 below), and Assignee accepts, (a) all of Assignor’s right, title and interest in and to the Transferred Interest, including Assignor’s right to receive all distributions of cash or other property made with respect to the Transferred Interest accruing on or after the Effective Date; and (b) any and all of Assignor’s rights as a limited partner of the Partnership with respect to the Transferred Interest, incl uding any claims of any nature against the Partnership and/or its general partner arising out of the operation of the Partnership with respect thereto.  Assignor covenants and agrees with Assignee to take such further actions within its power as may be reasonably necessary to perfect this assignment.

2.

Consideration.  Concurrently with the execution and delivery of this Assignment, as payment in full for the aforesaid assignment, Assignee shall pay to Assignor Twenty-Four Thousand Five Hundred Dollars ($24,500) in immediately available funds by wire transfer in accordance with Assignor’s written instructions.

3.

Representations and Warranties.  Assignor and National Partnership Investments Corp., its general partner, hereby jointly and severally represent and warrant to Assignee that, subject to compliance with any transfer restrictions set forth in the Partnership Agreement:

(a)

Assignor is the lawful owner of the Transferred Interest, subject only to a purchase money security interest granted to Assignee’s predecessors in interest pursuant to the Security Agreement (the “Security Interest”);

(b)

except for the Security Interest and such restrictions on transfer as provided in the Partnership Agreement or applicable federal and state securities laws, the Transferred Interest is free and clear of all liens, encumbrances, and adverse claims;

(c)

Assignor has the partnership power and authority to execute and deliver this Assignment and to perform its obligations hereunder;

(d)

this Assignment does not conflict with or violate any agreement, judgment, order, law or regulation by which Assignor is bound; and

(e)

this Assignment, and its execution by the undersigned representative of Assignor, has been duly authorized by all necessary partnership action on the part of Assignor and is binding upon and enforceable against Assignor in accordance with its terms, subject only to applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws and subject to general principles of equity.

The forgoing representations and warranties shall survive the delivery of this Assignment until the expiration of the applicable statutory limitations period.

4.

Allocations.  Assignor agrees that all income (loss) of the Partnership that is allocable to the owner of the Transferred Interest and that arises prior to the Effective Date shall be allocated to the Assignor and all such income (loss) that arises on or after the Effective Date shall be allocated to the Assignee.  

5.

Governance Matters.  Assignee shall not acquire as a result of this Assignment any rights to participate in the governance of the Partnership, including any voting rights that Assignor may have under the Partnership Agreement.  Such rights shall be conditioned upon Assignee’s admission to the Partnership as a substitute limited partner in accordance with the Partnership Agreement and applicable state and federal regulations.  

6.

Release.  Except for such obligations, rights or claims as may be created by or arise out of the terms and conditions of this Assignment, the Escrow Agreement among

Assignee, Assignor and Bernstein Shur, as escrow agent, of even date herewith or the Assignment of Limited Partnership Interest between Assignee and Assignor relating to Assignor’s remaining 51% ownership interest in the Partnership Interest, Assignee, for itself and its successors and assigns, hereby releases and forever discharges Assignor and its general partner, and their respective present and former employees, officers, directors, shareholders, partners, controlling persons, affiliates, successors, predecessors, agents, attorneys and representatives, from any and all claims, demands, damages, debts, liabilities, obligations, contracts, agreements, causes of action, suits, judgments, and costs, of whatever nature, character or description, whether known or unknown, fixed or contingent, anticipated or unanticipated, that Assignee or its predecessors may have, or may here after have or claim to have, against any of them by reason of any matter or omission arising from any cause whatsoever prior to the date of this Assignment, including any matters that arise out of, directly or indirectly, or are in any way connected with the Notes, the Security Agreement, the Partnership, the Partnership Agreement, the Transferred Interest or the relationship between NHP, NCHP and Assignor.

7.

Governing Law.  This Assignment, and the application and interpretation hereof, are, and shall be, governed exclusively by the laws of the State of Rhode Island, without giving effect to the principles of conflict of laws thereof.

8.

Construction.  Whenever the singular number is used in this Assignment and when required by the context, the same shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa.  The use of locative adverbs such as “herein”, “hereunder”, “hereof”, “hereinafter and similar words shall refer to this Assignment as a whole and not only to the paragraph or subparagraph in which any such word appears.  Unless the context otherwise requires, the word “including” and its variants shall be interpreted just as if the phrase “but not limited to” appeared immediately thereafter.

9.

Headings and Pronouns.  The headings in this Assignment are inserted for convenience only and are in no way intended to describe, interpret, define, or limit the scope, extent or intent of this Assignment or any provision hereof.  All pronouns and any variation thereof shall be deemed to refer to masculine, feminine, or neuter, singular or plural as the identity of the person or persons may required.

10.

Waivers.  The failure of any party to seek redress for violation of or to insist upon the strict performance of any covenant or condition of this Assignment shall not prevent a subsequent act, which would have originally constituted a violation, from having the effect of an original violation.

11.

Rights and Remedies Cumulative.  The rights and remedies provided by this Assignment are cumulative and the use of any one right or remedy by any party shall not preclude or waive the right to use any or all other remedies.  Said rights and remedies are given in addition to any other rights the parties may have by law, statute, ordinance or otherwise.

12.

Severability.  If any provision of this Assignment or the application thereof to any person or circumstance shall be invalid, illegal or unenforceable to any extent, the remainder of this Assignment (so long as both the legal and economic substance of the transaction contemplated hereby are not affected in any manner materially adverse to either party) and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted by law.

13.

Heirs, Successors and Assigns.  Each and all of the covenants, terms, provisions and agreements herein contained shall be binding upon and inure to the benefit of the parties hereto and, to the extent permitted by this Assignment, their respective heirs, personal representatives, successors and assigns.  

14.

Third Parties.  None of the provisions of this Assignment shall be for the benefit of or enforceable by any third parties, including any creditor, except as required by the law.

15.

Merger.  This Assignment constitutes the final and exclusive expression of the parties’ agreement on the maters contained herein.  All prior and contemporaneous negotiations and agreements between the parties are expressly merged into and superseded by this Assignment.  In entering into this Assignment, neither party has relied upon any statement, representation or warranty of the other party except for those expressly herein contained.

16.

Counterparts.  This Assignment may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.

17.

Transactional Costs.  Each party shall be responsible for paying its own legal and accounting costs.  

IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the Effective Date.

ASSIGNOR:

Housing Programs Limited (f/k/a Shearson Lehman / Coast Savings Housing Partners, Limited)

By:  National Partnership Investments Corp., its general partner

By:/s/ Lance Graber_________

Name: Lance Graber

Title: Executive Vice President

ASSIGNEE:

SHP Acquisitions II, LLC

By: /s/ Chris Bowden_____

Name:

Chris Bowden_____

Title:

Manager

National Partnership Investments Corp. hereby joins in this Assignment for purposes of paragraph 3 only.

National Partnership Investments Corp.

By:/s/ Lance Graber_________

Name: Lance Graber

Title: Executive Vice President

EX-2

Exhibit 10.1

ESCROW AGREEMENT

ESCROW AGREEMENT, dated as of September 27, 2006, by and among Housing Programs Limited (f/k/a Shearson Lehman / Coast Savings Housing Partners, Limited), a California limited partnership (“Seller”), SHP Acquisitions II, LLC, a Maine limited liability company (“Purchaser”), and Bernstein Shur, a Maine professional corporation (the “Escrow Agent”).

WHEREAS:

A.

Seller is the owner of a 99% limited partnership interest (the “Partnership Interest”) in Plaza Village Group, a Rhode Island limited partnership (the “Partnership”) representing the entire limited partnership interest in the Partnership as more particularly described in an Amended and Restated Certificate and Agreement of Plaza Village Group dated as of September 30, 1984.

B.

The Partnership owns and operates a federally subsidized housing project (the “Project”) that is financed by an FHA-insured mortgage loan (the “Mortgage Loan”) and regulated by the U.S. Department of Housing and Urban Development (“HUD”).

C.

Seller and Purchaser have entered into an Assignment of Limited Partnership Interest of even date herewith by which Seller assigned to Purchaser a 49% ownership interest in the Partnership Interest, and entered into a second undated Assignment of Limited Partnership Interest (the “Assignment”) by which Seller shall assign to Purchaser the balance of the Partnership Interest (the “Remaining Interest”), subject to a purchase money security interest in the Partnership Interest securing certain non-negotiable purchase money promissory notes held by Purchaser, in consideration for payment of Fifty Thousand Dollars ($50,000.00) (the “Purchase Price”).

D.

The assignment of the Remaining Interest is subject to the certain HUD approvals, including the requirements of obtaining (1) so-called “Modified TPA Approval” in accordance with Chapter 13 of the HUD Handbook 4350.1 so long as the Project is subject to the Mortgage Loan, and (2) so-called “2530 Clearance” so long as the Project rents are being subsidized under the HUD’s Section 8 Program (the “HUD Approvals”).

E.  

Pending receipt of the HUD Approvals, Seller and Purchaser wish to place the Assignment and a portion of the Purchase Price in escrow with the Escrow Agent to be held by the Escrow Agent pursuant to the terms of this Escrow Agreement (the Assignment and such portion of the Purchase Price being hereinafter referred to as the “Escrowed Property”).

F.

The Escrow Agent is willing to act as Escrow Agent pursuant to the terms of this Escrow Agreement with respect to the Escrowed Property.

NOW, THEREFORE, IT IS AGREED:

1.

On the date hereof, Seller has delivered to Escrow Agent (a) a duly executed Assignment that is undated and (b) a true copy of an Irrevocable Letter of Direction from Seller to Ferland Corporation (“Ferland”) as the general partner of the Partnership (the “Letter of Direction”), directing that all Partnership distributions on account of the Remaining Interest (“Partnership Distributions”) be made to the Escrow Agent until the Escrow Agent notifies Ferland that this Escrow Agreement has terminated.  On the date hereof, Purchaser has delivered to Escrow Agent $25,500 of the Purchase Price (the “Holdback”), receipt of which is hereby acknowledged by the Escrow Agent, and a duly executed counterpart of the Assignment.  Escrow Agent shall hold and distribute the Escrowed Property pursuant to the terms of this Agreement.   ;

2.

Escrow Agent shall cause the Holdback and all Partnership Distributions hereinafter received by Escrow Agent to be held in the Escrow Agent’s non-interest-bearing IOLTA (or clients’) account.  Escrow Agent shall have no duty to invest the Escrowed Property.

3.

(a)

The Escrow Agent shall hold the Escrowed Property and shall not deliver all or any of it to any party other than (i) pursuant to clauses (b) and (c) below, (ii) pursuant to written instructions executed and delivered to the Escrow Agent by Seller and Purchaser, or (iii) by depositing the Escrowed Property with a court of competent jurisdiction in accordance with the provisions of paragraph 8 hereof or with a successor escrow agent in accordance with the provisions of paragraph 8 hereof.  Until such time, if ever, that the Escrow Agent delivers the Assignment to Purchaser, Seller shall retain all voting rights with respect to the Remaining Interest.

(b)

Within three (3) business days following receipt of a written notice from either Seller and Purchaser, jointly, or Monica Sussman, Esq. of the law firm of Nixon Peabody LLP (in the case of the Nixon Peabody notice, the notice shall be addressed to Seller and Purchaser as well as the Escrow Agent)  to the effect that Purchaser has obtained all HUD Approvals necessary to complete the Assignment (the “Approval Notice”), Escrow Agent shall (i) date the Assignment and deliver it to Purchaser with a copy thereof to Seller, and (ii) disburse the Holdback to Seller.  With respect to any Partnership Distributions then being held by Escrow Agent, unless otherwise directed in writing by both Seller and Purchaser, Escrow Agent shall disburse an amount equal to the Tax Offset (as hereinafter defined) to Seller and the balance to Purchaser within three (3) business days after it i s notified in writing by the Partnership’s regular accountant of the amount of the Tax Offset, whereupon this Escrow Agreement shall terminate.  As used in the preceding sentence, “Tax Offset” means the sum of (i) the estimated amount of additional state and federal income taxes of Seller because of the allocation to Seller of any Partnership income accruing between the date of this Agreement and the date of the Assignment, plus or minus (ii) the estimated amount of of any increase or decrease, respectively,  in state and federal income taxes of Seller from the sale of the Remaining Interest because of the reduction, if any, in Seller’s tax basis in the Remaining Interest as a result of those Partnership Distributions made to Escrow Agent or an increase, if any, in Seller’s tax basis in the Remaining Interest as a result of allocation to Seller of any Partnership income accruing between the date of this Agreement and the date of the Assignment, assuming for purposes of such estimates that Seller is subject to combined federal and state rates on ordinary income and capital gain of 44% and 20%, respectively.  The sum so calculated shall be “grossed up” for the state and federal income tax associated with the payment of the Tax Offset to Seller.  The calculation of the Tax Offset shall be made by the regular accountant for the Partnership.

(c)

If the Escrow Agent has not received the Approval Notice by the first anniversary of the date of this Agreement, Escrow Agent, within three (3) business days thereafter, shall (i) return the Assignment to Seller, (ii) disburse the amount of any Partnership Distributions received by it to Seller, and (iii) disburse the Holdback to Purchaser, whereupon this Escrow Agreement shall terminate.

4.

It is agreed that the duties and obligations of Escrow Agent are only such as are herein specifically provided and no other.  Escrow Agent’s duties are as a depositary only, and Escrow Agent shall incur no liability whatsoever, except for its willful misconduct or gross negligence.  Escrow Agent may consult with counsel of its choice, and shall not be liable for any action taken, suffered or omitted by it in accordance with the advice of such counsel.  Escrow Agent shall not be bound in any way by any other terms of any other agreement to which Seller and Purchaser are parties, whether or not Escrow Agent has knowledge thereof, and Escrow Agent shall not in any way be required to determine whether or not any other agreement has been complied with by Seller or Purchaser or any other party thereto.  Escrow Agent shall not be bound by any modificat ion, amendment, termination, cancellation, rescission or supersession of this Escrow Agreement unless the same shall be in writing and signed jointly by Seller and Purchaser and agreed to by Escrow Agent.  In the event that Escrow Agent shall be uncertain as to its duties or rights hereunder or shall receive instructions, claims or demands which, in its opinion, are in conflict with any of the provisions of this Escrow Agreement, it shall be entitled to refrain from taking any action other than to keep safely, all property held in escrow until it shall jointly be directed otherwise in writing by Seller and Purchaser or by a final judgment of a court of competent jurisdiction.

5.

Escrow Agent is fully protected in relying upon any written notice, demand, certificate or document which it, in good faith, believes to be genuine.

6.

Escrow Agent shall not be required to institute legal proceedings of any kind and shall not be required to defend any legal proceedings which may be instituted against it.

7.

Seller acknowledges that Escrow Agent also serves as counsel for Purchaser and, for purposes of this Agreement, waives any claim of bias, impartiality, conflict of interest, breach of fiduciary duty or other claim that may arise out of such attorney-client relationship.

8.

If Escrow Agent at any time, in its sole discretion, deems it necessary or advisable to relinquish custody of the Escrowed Property, it may do so by delivering the same to any other escrow agent mutually agreeable to Seller and Purchaser and if no such escrow agent shall be selected, then Escrow Agent may do so by delivering the Escrowed Property (a) to any bank or trust company in the State of Rhode Island, which is willing to act as escrow agent thereunder in place and instead of Escrow Agent or (b) to the clerk or other proper officer of a court of competent jurisdiction as may be permitted by law within the State, County and City of Rhode Island.  The fee of any such bank or trust company or court officer shall be borne jointly and severally by Seller and Purchaser.  Upon such delivery, Escrow Agent shall be discharged from any and all further responsibility or liability with respect to the Escrowed Property except as herein provided.

9.

The Escrow Agreement shall not create any fiduciary duty on Escrow Agent’s part to Seller or Purchaser or any of their respective affiliates, nor disqualify Escrow Agent from representing Purchaser or any of its affiliates in any dispute with Seller or any of its affiliates including, without limitation, any dispute with respect to the Assignment.

10.

The out-of-pocket expenses paid or incurred by Escrow Agent in the administration of its duties hereunder, including, but not limited to, all counsel and advisors’ and agents’ fees including, without limitation, counsel fees under paragraph 8 hereof, and all taxes or other governmental charges, if any, shall be paid by Purchaser.

11.

Seller and Purchaser, jointly and severally, hereby indemnify and hold Escrow Agent harmless from and against any and all loss, damage, tax, liability and expense that may be incurred by Escrow Agent, arising out of or in connection with its acceptance of appointment as Escrow Agent hereunder, or the performance of its duties pursuant to this Escrow Agreement, including all legal costs and expenses of Escrow Agent defending itself against any claim or liability in connection with its performance hereunder, except for any loss, damage, tax, liability or expense arising out of the Escrow Agent’s willful misconduct or gross negligence.

12.

All notices, requests, demands and other communications hereunder shall be in writing, with copies to all the other parties hereto, and shall be deemed to have been duly given (i) when delivered, if by hand, (ii) when delivered, if sent by Federal Express or other overnight courier service or (iii) five days after the mailing thereof by first class registered or certified mail, return receipt requested, postage prepaid, as follows: (a) if to Seller, 6100 Center Drive, Suite 800, Los Angeles, California 90045 with a copy to Rodney F. Page, Esq., Bryan Cave LLP, 700 13^th Street, N.W, Washington, DC  20005, (b) if to Purchaser, c/o Subsidized Housing Partners, 7 Thomas Drive, Cumberland Foreside, ME 04110 with a copy to Eric F. Saunders, Esq., Bernstein Shur, 100 Middle Street, Portland, ME 04104-5029; and (c) if to Escrow Agent, to Bernstein Shur, 100 Midd le Street, Portland, ME 04104-5029, Attn: Eric F. Saunders, Esq., or in any case to such other address as a party may determine by delivery of notice pursuant to this paragraph 12.

13.

This Escrow Agreement shall be construed and enforced in accordance with the law of the State of Rhode Island applicable to contracts entered into and performed entirely within State of Rhode Island.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be signed the day and year first above written.

Housing Programs Limited, Seller

By: National Partnership Investments Corp.,

Its General Partner

By:

/s/ Lance Graber
Name: Lance Graber
Title:   Executive Vice President

SHP Acquisitions II, LLC, Purchaser

By:/s/ Chris Bowden

      Name: Chris Bowden

      Title: Manager

Bernstein Shur, Escrow Agent

By: /s/ Eric Saunders

      Name: Eric Saunders

      Title: Vice President