-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DftHfEkdUu1/URlE6oLpu5l44bOyq1mrzDRZv5AbO+riaaqF2fkJrMH+1NV80S4z SBqy+3EaW+GqxScKRthd4A== 0000950148-97-000153.txt : 19970124 0000950148-97-000153.hdr.sgml : 19970124 ACCESSION NUMBER: 0000950148-97-000153 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19970123 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOUSING PROGRAMS LTD CENTRAL INDEX KEY: 0000750304 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 953906167 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-13808 FILM NUMBER: 97509705 BUSINESS ADDRESS: STREET 1: 9090 WILSHIRE BLVD STREET 2: STE 201 CITY: BEVERLY HILLS STATE: CA ZIP: 90211 BUSINESS PHONE: 310-278-2191 MAIL ADDRESS: STREET 1: 9090 WILSHIRE BLVD STREET 2: SUITE 201 CITY: BEVERLY HILLS STATE: CA ZIP: 90211 FORMER COMPANY: FORMER CONFORMED NAME: REAL ESTATE ASSOCIATES LTD VIII DATE OF NAME CHANGE: 19840823 10-K/A 1 FORM 10-K AMENDMENT 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended DECEMBER 31, 1995 Commission File Number 2-92352 HOUSING PROGRAMS LIMITED A CALIFORNIA LIMITED PARTNERSHIP (Formerly, Shearson Lehman/Coast Savings Housing Partners, Limited) I.R.S. Employer Identification No. 95-3906167 9090 WILSHIRE BLVD., SUITE 201, BEVERLY HILLS, CALIFORNIA 90211 Registrant's Telephone Number, Including Area Code (310) 278-2191 Securities Registered Pursuant to Section 12(b) or 12(g) of the Act: NONE Indicate by check mark whether the registrant (1) has filed all reports required to be filed with the Commission by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. / / 2 AMENDMENT NO. 1 The undersigned registrant hereby amends the following items, financial statements, exhibits or other portions of its Annual Report on Form 10-K for the year ended December 31, 1995 as set forth in the following pages attached hereto: Item 1. Reports of other Independent Public Accountants Pages 11 to 63 Item 3. Note 2 - Investments in Limited Partnerships Financial Statements of (Evergreen Apartments limited partnership) Oshtemo Limited Dividend Housing Association (a Michigan limited partnership). Pages 24 to 42 Item 4. Item 3 (above) continues - Impairment of Long-Lived Assets Page 69 Item 5. Fees and Expenses Due General Partners, Page 22 Page 73 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Housing Programs Limited ----------------------------------------- Registrant Bob Schafer ----------------------------------------- Vice President and Corporate Controller 3 PART I. ITEM 1. BUSINESS Housing Programs Limited (the "Partnership") is a limited partnership which was formed under the laws of the State of California on May 15, 1984. On September 12, 1984, the Partnership offered 3,000 units consisting of 6,000 Limited Partnership Interests and warrants to purchase a maximum of 6,000 Additional Limited Partnership Interests through a public offering. The general partners of the Partnership are Housing Programs Corporation II, National Partnership Investments Corp. ("NAPICO"), and Coast Housing Investment Associates ("CHIA"). CHIA is a limited partnership formed under the California Limited Partnership Act and consists of Messrs. Nicholas G. Ciriello, an unrelated individual, as general partner and Charles H. Boxenbaum, as limited partner. The business of the Partnership is conducted primarily by its general partners as Housing Programs Limited has no employees of its own. Casden Investment Corporation owns 100 percent of NAPICO's stock. The current members of NAPICO's Board of Directors are Charles H. Boxenbaum, Bruce E. Nelson, Alan I. Casden, Henry C. Casden and Brian D. Goldberg. LBI Group Inc. owns all of the stock of Housing Programs Corporation II. The Partnership holds limited partnership interests in eighteen local limited partnerships as of December 31, 1995. National Partnership Investments Associates II ("NPIA II"), a limited partnership formed under the California Limited Partnership Act and consisting of Messrs. Charles H. Boxenbaum, general partner, and Nicholas G. Ciriello, limited partner, hold a general partnership interest in ten of the local limited partnerships. Each of the local partnerships owns a low income housing project which is subsidized and/or has a mortgage note payable to or insured by agencies of the federal or local government. In order to stimulate private investment in low income housing, the federal government and certain state and local agencies provided significant ownership incentives, including among others, interest subsidies, rent supplements, and mortgage insurance, with the intent of reducing certain market risks and providing investors with certain tax benefits, plus limited cash distributions and the possibility of long-term capital gains. There remains, however, significant risks. The long-term nature of investments in government assisted housing limits the ability of the Partnership to vary its portfolio in response to changing economic, financial and investment conditions; such investments are also subject to changes in local economic circumstances and housing patterns, as well as rising operating costs, vacancies, rent collection difficulties, energy shortages and other factors which have an impact on real estate values. These projects also require greater management expertise and may have higher operating expenses than conventional housing projects. The Partnership became the limited partner in the local limited partnerships pursuant to arm's-length negotiations with the local limited partnerships' general partners who are often the original project developers. In certain other cases, the Partnership invested in newly formed local limited partnerships which, in turn, acquired the projects. As a limited partner, the Partnership's liability for obligations of the local limited partnership is limited to its investment. The general partner of the local limited partnership retains responsibility for maintaining, operating and managing the project. Under certain circumstances, the Partnership has the right to replace the general partner of the limited partnerships. Although each of the partnerships in which the Partnership has invested will generally own a project which must compete in the market place for tenants, interest subsidies and rent supplements from governmental agencies make it possible to offer these dwelling units to eligible "low income" tenants at a cost significantly below the market rate for comparable conventionally financed dwelling units in the area. 2 4 During 1995, all of the projects in which the Partnership had invested were substantially rented. The following is a schedule of the status, as of December 31, 1995, of the projects owned by local partnerships in which the Partnership has invested. SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS IN WHICH HOUSING PROGRAMS LIMITED HAS AN INVESTMENT DECEMBER 31, 1995
Units Authorized For Rental No. of Assistance Under Units Percentage of Name & Location Units Section 8 Occupied Total Units - --------------- ----- --------------- -------- ------------ Bannock Arms Apts. 66 66 60 91% Boise, ID Berkeley Gardens 132 26 125 95% Martinsburg, WV Cape LaCroix 125 0 118 94% Cape Girardeau, MO Cloverdale 100 0 100 100% Crawfordsville, IN Cloverleaf 94 94 91 97% Indianapolis, IN Deep Lake Hermitage 144 18 136 94% Lake Villa, IL Evergreen Apts. 330 330 322 98% Oshtemo, MI Friendship Arms 151 150 151 100% Hyattsville, MD Jenny Lind Hall 78 78 78 100% Springfield, MO Lancaster Heights 198 0 177 89% Normal, IL Locust House 99 98 99 100% Westminster, MD Midpark Towers 202 202 200 99% Dallas, TX Oxford House 156 152 156 100% Decatur, IL
3 5 SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS IN WHICH HOUSING PROGRAMS LIMITED HAS AN INVESTMENT DECEMBER 31, 1995
Units Authorized For Rental No. of Assistance Under Units Percentage of Name & Location Units Section 8 Occupied Total Units - --------------- ----- --------------- -------- ------------ Plaza Village 228 114 214 94% Woonsocket, RI Round Barn Manor 156 156 156 100% Champaign, IL Santa Fe Towers 252 251 252 100% Overland Park, KS Walnut Towers 78 77 78 100% Winfield, KS Westwood Terrace 97 97 96 99% ----- ----- ----- Moline, IL TOTAL 2,686 1,909 2,609 97% ===== ===== =====
4 6 ITEM 2. PROPERTIES Through its participation in local limited partnerships, the Partnership holds interests in real estate properties. See Item 1 and Schedule XI for information pertaining to these properties. ITEM 3. LEGAL PROCEEDINGS As of December 31, 1995, NAPICO was a plaintiff or defendant in several lawsuits. None of these suits are related to the Partnership. In addition, the Partnership is involved in the following lawsuits. In the opinion of management and NAPICO, the claims will not result in any material liability to the Partnership. The Montecito local partnership had been operating at a deficit, and the General Partner was unsuccessful in its attempt to negotiate a mortgage modification with the lender to improve the situation. No mortgage payments to the lender were made subsequent to May 1994. A Notice of Default and Election To Sell Under the Deed of Trust was filed for record on October 27, 1994 in the LA County Recorder's office. On October 26, 1994, the loan servicer, on behalf of the lender, filed a complaint for Specific Performance for Appointment of Receiver and Judicial Foreclosure against the Partnership. The request for an appointment of a receiver was approved on November 10, 1994. Representatives of the Montecito local partnership and the General Partner met with the loan servicer on November 2, 1994 and on February 22, 1995 to discuss a loan modification proposal. However, the lender rejected all mortgage modification proposals submitted and foreclosed upon the property on July 18, 1995. The Partnership's original investment in the Montecito local partnership represents approximately 5% of the Partnership's total capital raised. The Partnership's financial statements reflect no investment in Montecito at December 31, 1995 and 1994. Housing Programs Corporation II, a general partner of the Partnership, and certain of its affiliates, on their own behalf and on behalf of the Partnership and certain other partnerships with which they are associated (collectively, the "Plaintiff Partnerships"), and NAPICO, and certain of its affiliates, have entered into a Memorandum of Understanding dated August 11, 1995. In addition to establishing certain Partnership controls, the Memorandum of Understanding resolves and settles various management and control issues which were under discussion for some time and various claims which were raised in a lawsuit filed in the Los Angeles Superior Court on June 9, 1995 by Housing Programs Corporation II, the Partnership, and others against, among others , NAPICO ("the Lawsuit"). All parties entered into the Memorandum of Understanding without any admission of wrongdoing or liability by any defendant as to any claim in the Lawsuit, in a desire to avoid continued litigation that would be expensive, time consuming and complex. By virtue of the Memorandum of Understanding, the parties thereto have agreed, among other things, that: 1. An analysis was to be prepared of the books and records of the Partnership including an analysis of the books and records of the master disbursement account maintained by an affiliate of NAPICO. The analysis has recently been completed. NAPICO agreed that it and its affiliates will pay to the Partnership any amounts (with interest thereon) properly determined to be owed to the Partnership as a result of the analysis. 2. HAPI Management, Inc. ("HAPI"), an affiliate of NAPICO shall continue to manage the five Partnership properties it currently manages, subject to various agreed-upon modifications to the existing management agreements, and HAPI will not manage the other properties of the Partnership. All future management arrangements with HAPI will be subject to Housing Programs Corporation II's reasonable approval. 3. The Partnership will reimburse Housing Programs Corporation II for professional fees paid on behalf of the Partnership in connection with issues raised in the Memorandum of Understanding. 5 7 4. The Partnership will employ an independent Cash Manager, designated by Housing Programs Corporation II, and approved by NAPICO, to perform cash management services, including maintenance of the Partnership's bank accounts and reserves, payment of property management fees and other accounts payable, payments to affiliates of NAPICO, and payment of cash distributions, if any, to the Limited Partners. NAPICO has agreed to prepare detailed annual budgets to be approved by Housing Programs Corporation II and thereafter used by the Cash Manager as a guide and control over Partnership operations. The Cash Manager has not yet been implemented. 5. The parties to the Memorandum of Understanding agreed to enter into a formal Settlement Agreement and, concurrently therewith, (a) the plaintiffs in the Lawsuit will execute a special release of the defendants with respect to the allegations contained in the Lawsuit, (b) the defendants in the Lawsuit will execute a special release of each plaintiff in the Lawsuit that is a general partner of a Plaintiff Partnership with respect to all claims which would have been compulsory counterclaims thereunder, and (c) the defendants will execute a special release of any claims, other than those regarding specifically scheduled contractual relations, which any defendant may have had against this Partnership or any of the other Plaintiff Partnerships. 6. Upon the uncured breach of certain provisions of the Memorandum of Understanding, or upon a future breach of NAPICO's fiduciary duties, Housing Programs Corporation II could cause NAPICO to resign as a general partner of the Partnership and become a limited partner thereof. As of April 8, 1996, certain of the foregoing items enumerated above had yet to be fully implemented. The parties have had discussions regarding their respective positions and have agreed to participate in a settlement conference. If these matters cannot be resolved by agreement, then the parties will submit their respective positions to arbitration. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. PART II. ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS AND RELATED SECURITY HOLDER MATTERS The Limited Partnership Interests are not traded on a public exchange, and it is not anticipated that any public market will develop for the purchase and sale of any Limited Partnership Interest. Limited Partnership Interests may be transferred only if certain requirements are satisfied. Currently, there are 2,870 registered holders of Limited Partnership Interests in the Partnership. The Partnership has invested in certain government assisted projects under programs which in many instances restrict the cash return available to project owners. The Partnership was not designed to provide cash distributions to investors in circumstances other than refinancing or dispositions of its investments in limited partnerships. 6 8 ITEM 6. SELECTED FINANCIAL DATA:
Year Ended December 31, ---------------------------------------------------------------------------- 1995 1994 1993 1992 1991 ------------ ------------ ------------ ------------ ------------ Loss From Partnership Operations $ (1,727,047) $ (1,690,366) $ (1,699,642) $ (1,707,285) $ (1,695,022) Distribution From Limited Partnerships Recognized as Income 307,474 520,001 473,210 172,080 306,582 Equity in Income (Loss) of Limited Partnerships and amortization of acquisition costs 87,795 (210,249) 616,683 101,166 76,236 ------------ ------------ ------------ ------------ ------------ Net Loss $ (1,331,778) $ (1,380,614) $ (609,749) $ (1,434,039) $ (1,312,204) ============ ============ ============ ============ ============ Net Loss per Limited Partner Interest $ (108) $ (111) $ (49) $ (115) $ (105) ============ ============ ============ ============ ============ Total assets $ 15,191,113 $ 15,692,284 $ 15,858,598 $ 16,566,893 $ 16,843,664 ============ ============ ============ ============ ============ Investments in Limited Partnerships $ 14,470,783 $ 14,533,940 $ 15,184,763 $ 16,065,129 $ 16,184,643 ============ ============ ============ ============ ============ Notes payable $ 10,169,743 $ 10,177,433 $ 10,177,433 $ 10,260,196 $ 10,345,769 ============ ============ ============ ============ ============ Fees and Expenses Due to General Partners $ 990,393 $ 1,092,620 $ 714,742 $ 1,545,846 $ 1,132,504 ============ ============ ============ ============ ============
7 9 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS: LIQUIDITY The Partnership's primary sources of funds include interest income on money market accounts and certificates of deposit and distributions from local partnerships in which the Partnership has invested. It is not expected that any of the local partnerships in which the Partnership has invested will generate cash flow sufficient to provide for distributions to the Partnership's limited partners in any material amount. CAPITAL RESOURCES The Partnership received $30,920,000 in subscriptions for units of Limited Partnership Interests (at $5,000 per unit) during the period September 12, 1984, to June 30, 1986, pursuant to a registration statement filed on Form S-11. The Partnership made its capital contributions to the local limited partnerships in stages, over a period of two to five years, with each contribution due on a specified date, provided that certain conditions regarding construction or operation of the project were fulfilled. The Partnership has no further capital commitments to the local limited partnerships. In 1993, three limited partnerships (Oxford House, Round Barn Manor and Westwood Terrace) refinanced their mortgages with taxable and tax-exempt bonds issued by the Illinois Housing Development Authority. Proceeds from the refinancing were utilized to retire two secondary mortgages including principal and accrued interest of $1,811,000 and $1,785,000 for Oxford House and Round Barn Manor, respectively. The third secondary mortgage of Westwood Terrace was paid down and has a remaining principal balance of approximately $442,000. After retiring and paying down the secondary mortgages, the Partnership received excess cash proceeds of more than $1,467,000 from the refinancings. The three limited partnerships obtained new mortgage amounts of $5,641,352, $5,318,893 and $3,172,370 financed for a term of 25 years at a taxable rate of 7.6 percent and a tax-exempt rate of 6.3 percent. RESULTS OF OPERATIONS The Partnership was formed to provide various benefits to its partners as discussed in Item 1. It is anticipated that the local partnerships in which the Partnership has invested could produce losses for as long as 20 years from the date of the Partnership investment. Tax benefits will decline over time as the advantages of accelerated depreciation are greatest in the earlier years, as deductions for interest expense decrease as mortgage principal is amortized and as the Tax Reform Act of 1986 limits the deductions available. The Partnership has sought to defer income taxes from capital gains by not selling any projects or project interests. Each individual limited partner's situation varies and limited partners should contact their personal tax advisors for an understanding of his or her tax situation. The Partnership accounts for its investments in the local limited partnerships on the equity method, thereby adjusting its investment balance by its proportionate share of the income or loss of the local limited partnerships. Equity in income (loss) of limited partnerships has significantly been affected as a result of the Partnership not recognizing losses on the limited partnerships after their respective investment balances have been reduced to zero, in accordance with the equity method of accounting. Distributions received from limited partnerships are recognized as return of capital until the investment balance has been reduced to zero or to a negative amount equal to future capital contributions required. Subsequent distributions received are recognized as income. Except for certificates of deposit and money market funds, the Partnership's investments are entirely interests in other limited partnerships owning government assisted projects. Available cash is invested providing interest income as 8 10 reflected in the statements of operations. These funds can be converted to cash to meet obligations as they arise. The Partnership intends to continue investing available funds in this manner. The Montecito local partnership had been operating at a deficit, and the General Partner was unsuccessful in its attempt to negotiate a mortgage modification with the lender to improve the situation. No mortgage payments to the lender were made subsequent to May 1994. A Notice of Default and Election To Sell Under the Deed of Trust was filed for record on October 27, 1994 in the LA County Recorder's office. On October 26, 1994, the loan servicer, on behalf of the lender, filed a complaint for Specific Performance for Appointment of Receiver and Judicial Foreclosure against the Partnership. The request for an appointment of a receiver was approved on November 10, 1994. Representatives of the Montecito local partnership and the General Partner met with the loan servicer on November 2, 1994 and on February 22, 1995 to discuss a loan modification proposal. However, the lender rejected all mortgage modification proposals submitted and foreclosed upon the property on July 18, 1995. The Partnership's original investment in the Montecito local partnership represents approximately 5% of the Partnership's total capital raised. The Partnership's financial statements reflect no investment in Montecito at December 31, 1995 and 1994. A recurring Partnership expense is the management fee. The fee is payable monthly to the general partners of the Partnership and is calculated as a percentage of the Partnership's invested assets. The management fee is paid to the general partners for their continuing management of Partnership affairs. The fee is payable beginning with the month following the Partnership's initial investment in a local partnership. Operating expenses of the Partnership consist substantially of professional fees for services rendered to the Partnership, management fees payable to the general partners and accrued interest on the notes payable. Operating expenses have remained relatively consistent for 1995, 1994 and 1993, except for legal fees which increased as a result of the Montecito foreclosure. The Partnership, as a Limited Partner in the local partnerships in which it has invested, is subject to the risks incident to the construction, management, and ownership of improved real estate. The Partnership investments are also subject to adverse general economic conditions, and, accordingly, the status of the national economy, including substantial unemployment and concurrent inflation, could increase vacancy levels, rental payment defaults, and operating expenses, which in turn, could substantially increase the risk of operating losses for the projects. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA: The Financial Statements and Supplementary Data are listed under Item 14. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE: Not applicable. 9 11 HOUSING PROGRAMS LIMITED (a California limited partnership) FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES AND REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS DECEMBER 31, 1995 10 12 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Partners of Housing Programs Limited (A California limited partnership) We have audited the accompanying balance sheets of Housing Programs Limited (a California limited partnership) as of December 31, 1995 and 1994, and the related statements of operations, partners' equity (deficiency) and cash flows for each of the three years in the period ended December 31, 1995. Our audits also included the financial statement schedules listed in the index on item 14. These financial statements and financial statement schedules are the responsibility of the management of the Partnership. Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits. We did not audit the financial statements of certain limited partnerships, the investments in which are reflected in the accompanying financial statements using the equity method of accounting. The investments in these limited partnerships represent 30 percent and 34 percent of total assets as of December 31, 1995 and 1994, respectively, and the equity in income (loss) of these limited partnerships represent 15 percent, 11 percent and 17 percent of the total net loss of the Partnership for the years ended December 31, 1995, 1994 and 1993, respectively, and represent a substantial portion of the investee information in Note 2 and the financial statement schedules. The financial statements of these limited partnerships are audited by other auditors. Their reports have been furnished to us and our opinion, insofar as it relates to the amounts included for these limited partnerships, is based solely on the reports of the other auditors. 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 our audits and the reports of other auditors provide a reasonable basis for our opinion. In our opinion, based on our audits and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of Housing Programs Limited as of December 31, 1995 and 1994, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1995 in conformity with generally accepted accounting principles. Also, in our opinion, based on our audits and the reports of other auditors, such financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein. DELOITTE & TOUCHE LLP Los Angeles, California March 29, 1996 11 13 [LOGO] [LETTERHEAD] ALTSCHULER, MELVION AND GLASSER LLP INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND ADDITIONAL FINANCIAL DATA REQUIRED BY THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT To the Partners of Bannock Arms Second Limited Partnership We have audited the accompanying balance sheet of BANNOCK ARMS SECOND LIMITED PARTNERSHIP, FHA Project Number 124-35019-PM, (the "Partnership") as of December 31, 1995, 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 Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of the Partnership as of and for the year ended December 31, 1994 were audited by other auditors whose report dated February 9, 1995 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 1995 financial statements referred to above present fairly, in all material respects, the financial position of Bannock Arms Second Limited Partnership as of December 31, 1995, and the results of its operations, changes in its partners' equity, and its cash flows for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated February 15, 1996 on our consideration of the Partnership's internal control structure and a report dated February 15, 1996 on its compliance with laws and regulations 12 14 Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying additional financial data shown on pages 14 through 20 are presented for purposes of additional analysis and are not a required part of the financial statements. 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/ ALTSCHULER, MELVION AND GLASSER LLP Los Angeles, California February 15, 1996 13 15 [LETTERHEAD] REZNICK FEDDER & SILVERMAN INDEPENDENT AUDITORS' REPORT To the Partners Berkeley Gardens Limited Partnership We have audited the accompanying balance sheet of Berkeley Gardens Limited Partnership as of December 31, 1995, and the related statements of profit and loss (on HUD) Form No. 92410), 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 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 at reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Berkeley Gardens Limited Partnership as of December 31, 1995, and the results of its operations, the changes in partners' equity and cash flows for the year then ended, in conformity with generally accepted accounting principles. 14 16 Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 19 through 24 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. In accordance with Government Auditing Standards, we have also issued reports dated January 19, 1996 on our consideration of Berkeley Gardens Limited Partnership internal control structure and on its compliance with specific requirements applicable to major and nonmajor HUD programs, affirmative fair housing, and laws and regulations applicable to the financial statements. /s/ REZNICK FEDDER & SILVERMAN Bethesda, Maryland Federal Employer January 19, 1996 Identification Number: 52-1088612 Audit Principal: Craig Birmingham 15 17 [LETTERHEAD] LANDSMAN FRANK AND BLOCH Independent Auditors' Report Partners Cape La Croix Apts., Ltd, (A Missouri Limited Partnership) FHA Project Number 085-44015-LDP Indianapolis, Indiana We have audited the accompanying balance sheets of Cape La Croix Apts., Ltd. (A Missouri Limited Partnership), FHA Project Number 08544015-LDP, as of December 31, 1995 and 1994, and the related statements of operations, changes in partners' deficiency and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with 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 Cape La Croix Apts., Ltd. (A Missouri Limited Partnership) as of December 31, 1995 and 1994, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. 16 18 Partners Cape La Croix Apts., Ltd. (A Missouri Limited Partnership) Page Two In accordance with Government Auditing Standards, we have also issued a report dated January 19, 1996 on our consideration of the Partnership's internal control structure and reports dated January 19, 1996 on its compliance with laws and regulations. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information (shown on pages 13 through 20) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. LANDSMAN, FRANK AND BLOCH An Accountancy Corporation /s/ LANDSMAN, FRANK AND BLOCH Beverly Hills, California Federal Employer Identification January 19, 1996 Number 95-2783759 Audit Principal: Alan H. Salz, C.P.A. 17 19 [LANDSMAN FRANK AND BLOCH LETTERHEAD] Independent Auditors' Report Partners Cloverdale Heights Apts., Ltd. (An Indiana Limited Partnership) FHA Project Number 073-44131-LDP Indianapolis, Indiana We have audited the accompanying balance sheets of Cloverdale Heights Apts., Ltd. (An Indiana Limited Partnership), FHA Project Number 073-44131-LDP, as of December 31, 1995 and 1994, and the related statements of operations, changes in partners' deficiency and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with 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 Cloverdale Heights Apts., Ltd. (An Indiana Limited Partnership) as of December 31, 1995 and 1994, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. 18 20 Partners Cloverdale Heights Apts., Ltd. (An Indiana Limited Partnership) Page Two In accordance with Government Auditing Standards, we have also issued a report dated January 19, 1996 on our consideration of the Partnership's internal control structure and reports dated January 19, 1996 on its compliance with laws and regulations. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information (shown on pages 13 through 21) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. LANDSMAN, FRANK AND BLOCH An Accountancy Corporation /s/ LANDSMAN, FRANK AND BLOCH Beverly Hills, California Federal Employer Identification January 19, 1996 Number 95-2783759 Audit Principal: Alan H. Salz, C.P.A. 19 21 [LANDSMAN FRANK AND BLOCH LETTERHEAD] Independent Auditors' Report Partners Cloverleaf Apts., Ltd. (An Indiana Limited Partnership) FHA Project Number 073-35092-PM Indianapolis, Indiana We have audited the accompanying balance sheets of Cloverleaf Apts., Ltd. (An Indiana Limited Partnership), FHA Project Number 073-35092-PM, as of December 31, 1995 and 1994, and the related statements of operations, changes in partners' deficiency and cash flows for the years then ended, These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with 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 Cloverleaf Apts., Ltd. (An Indiana Limited Partnership) as of December 31, 1995 and 1994, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. 20 22 Partners Cloverleaf Apts., Ltd. (An Indiana Limited Partnership) Page Two In accordance with Government Auditing Standards, we have also issued a report dated January 19, 1996 on our consideration of the Partnership's internal control structure and reports dated January 19, 1996 on its compliance with laws and regulations. our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information (shown on pages 12 through 20) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. LANDSMAN, FRANK AND BLOCH An Accountancy Corporation /s/ LANDSMAN, FRANK AND BLOCH Beverly Hills, California Federal Employer Identification January 19, 1996 Number 95-2783759 Audit Principal: Alan H. Salz, C.P.A. 21 23 [LOGO] [ALTSCHULER, MELVION AND GLASSER LLP LETTERHEAD] INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND ADDITIONAL FINANCIAL DATA REQUIRED BY THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT To the Partners of Deep Lake Shores Associates We have audited the accompanying balance sheet of DEEP LAKE SHORES ASSOCIATES (an Illinois limited partnership), FHA Project Number 071-35320-PM-L8, (the "Partnership") as of December 31, 1995, and the related statements of operations, 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 audit. The financial statements of the Partnership as of and for the year ended December 31, 1994 were audited by other auditors whose report dated February 14, 1995, 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 1995 financial statements referred to above present fairly, in all material respects, the financial position of Deep Lake Shores Associates at December 31, 1995, and the results of its operations, changes in its partners' equity, and its cash flows for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated February 15, 1996 on our consideration of the Partnership's internal control structure and a report dated February 15, 1996 on its compliance with laws and regulations. 22 24 Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying additional financial data shown on pages 14 through 20 are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ ALTSCHULER, MELVOIN AND GLASSER LLP Los Angeles, California February 15, 1996 23 25 [COOPERS & LYBRAND L.L.P. LETTERHEAD] Report of Independent Accountants To the Partners of Oshtemo Limited Dividend Housing Association: We have audited the accompanying balance sheet of Oshtemo Limited Dividend Housing Association (a Michigan limited partnership), MSHDA Development No. 544, as of December 31, 1995 and the related statements of profit and 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. 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 Oshtemo Limited Dividend Housing Association, as of December 31, 1995 and the results of its operations and its cash flows for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated January 25, 1996 on our consideration of Oshtemo Limited Dividend Housing Association's internal control structure and a report dated January 25, 1996 on its compliance with laws and regulations. Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental data included on pages 13 and 14 is presented for purposes of additional analysis and is not a required part of the basic financial statements of Oshtemo Limited Dividend Housing Association. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. 24 26 We have previously audited and expressed an unqualified opinion on the financial statements of Oshtemo Limited Dividend Housing Association for the years 1990 through 1994. In our opinion, the supplemental data included on page 15, relating to the years 1990 through 1995, is fairly stated, in all material respects, in relation to the basic financial statements from which it has been derived. The data on page 15 for the years 1983 through 1989 was not audited by us and, accordingly, we do not express an opinion on such data. That data was audited by other auditors who have ceased operation and whose report, dated January 24, 1990, stated that such information was fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. /s/ COOPERS & LYBRAND L.L.P. Detroit, Michigan January 25, 1996 25 27 OSHTEMO LIMITED DIVIDEND HOUSING ASSOCIATION MSHDA Development No. 544 (a Michigan limited partnership) BALANCE SHEET December 31, 1995
ASSETS Cash: Operating cash $ 530,346 Operating reserve cash 2,354,344 ----------- $ 2,884,690 Accounts receivable: Residents 5,888 MSHDA rent subsidy 19,126 ----------- 25,014 Prepaid expenses 1,984 Escrows: Development cost escrow principal 495,570 Development cost escrow interest 1,423,154 Replacement reserve 2,213,390 Real estate taxes 104,370 Insurance 22,681 ----------- 4,259,165 Other assets: Investments in rental properties, at cost: Land 617,369 Buildings 14,049,790 Furniture and fixtures 653,744 Maintenance equipment 102,500 Vehicles 103,275 ----------- 15,526,678 Less accumulated depreciation (5,577,747) ----------- 9,948,931 ----------- $17,119,784 =========== LIABILITIES Accounts payable, trade $ 26,679 Accrued liabilities: Property taxes $ 128,482 Interest 53,985 Management fees 8,003 Payroll 4,399 ----------- 194,869 Unearned rental income 2,203 Tenants' security deposits 60,065 Less cash held for security deposits (60,065) ----------- -- Mortgage payable 8,779,230 ----------- 9,002,981 PARTNERS' EQUITY Partners' equity 8,116,803 ----------- $17,119,784 ===========
The accompanying notes are an integral part of the financial statements. 26 28 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT STATEMENT OF PROFIT AND LOSS
- ---------------------------------------------------------------------------------------------------------------------------------- For the year January 1, Development Development Name: to December 31, 1995 Number: 544 Oshtemo Limited Dividend Housing HUD-92410 (7/91) Substitute Association (a Michigan limited partnership) - ---------------------------------------------------------------------------------------------------------------------------------- Part I Description of Account Acct. No. - ---------------------------------------------------------------------------------------------------------------------------------- 5000 - REVENUE ACCOUNTS - ---------------------------------------------------------------------------------------------------------------------------------- RENTAL INCOME - 5100 Apartments or Members Carrying Charges (Co-ops) . . . . . . . . . . . . . . . 5120 $ 721,173 Tenant Assistance Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 5121 1,591,295 Furniture and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 5130 Stores and Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5140 Garage and Parking Spaces . . . . . . . . . . . . . . . . . . . . . . . . . . 5170 Flexible Subsidy Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5180 Miscellaneous (specify) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5190 -------------- Total Rent Revenue (Potential at 100% Occupancy) $ 2,312,468 - ---------------------------------------------------------------------------------------------------------------------------------- VACANCIES - 5200 Apartments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5220 (21,974) Furniture and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 5230 Stores and Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5240 Garage and Parking Spaces . . . . . . . . . . . . . . . . . . . . . . . . . . 5270 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5290 -------------- Total Vacancies (21,974) - ---------------------------------------------------------------------------------------------------------------------------------- Net Rental Revenue (Rent Revenue Less Vacancies) 2,290,494 - ---------------------------------------------------------------------------------------------------------------------------------- ELDERLY AND CONGREGATE SERVICES INCOME - 5300 Total Service Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - ---------------------------------------------------------------------------------------------------------------------------------- FINANCIAL REVENUE - 5400 Interest Income - Project Operations . . . . . . . . . . . . . . . . . . . . . 5410 18,411 Income from Investments - Residual Receipts . . . . . . . . . . . . . . . . . 5430 248,123 Income from Investments - Reserve for Replacement . . . . . . . . . . . . . . 5440 126,640 Income from Investments - Miscellaneous . . . . . . . . . . . . . . . . . . . 5490 4,616 -------------- Total Financial Revenue 397,790 - ---------------------------------------------------------------------------------------------------------------------------------- OTHER REVENUE - 5900 Laundry and Vending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5910 2,698 NSF and Late Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5920 342 Damages and Cleaning Fees .. ... . . . . . . . . . . . . . . . . . . . . . . . 5930 4,805 Forfeited Tenant Security Deposits . . . . . . . . . . . . . . . . . . . . . . 5940 Other Revenue (Miscellaneous) . . . . . . . . . . . . . . . . . . . . . . . . 5990 4,266 -------------- Total Other Revenue 12,111 - ---------------------------------------------------------------------------------------------------------------------------------- TOTAL REVENUE $ 2,700,395 - ----------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 27 29 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT STATEMENT OF PROFIT AND LOSS - CONTINUED
- ---------------------------------------------------------------------------------------------------------------------------------- For the year January 1, Development Development Name: to December 31, 1995 Number: 544 Oshtemo Limited Dividend Housing HUD-92410 (7/91) Substitute Association (a Michigan limited partnership) - ---------------------------------------------------------------------------------------------------------------------------------- Part I Description of Account Acct No. - ---------------------------------------------------------------------------------------------------------------------------------- 6000 - PROJECT EXPENSE ACCOUNTS - ---------------------------------------------------------------------------------------------------------------------------------- ADMINISTRATIVE EXPENSES - 6200/6300 Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6210 $ 3,743 Other Administrative Expense . . . . . . . . . . . . . . . . . . . . . . . . . 6250 11,127 Office Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6310 39,944 Office Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6311 13,871 Office or Model Apartment Rent . . . . . . . . . . . . . . . . . . . . . . . . 6312 Management Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6320 112,530 Manager or Superintendent Salaries . . . . . . . . . . . . . . . . . . . . . . 6330 46,365 Manager or Superintendent Rent Free Unit . . . . . . . . . . . . . . . . . . . 6331 251 Legal Expenses (Project) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6340 1,288 Auditing Expenses (Project) . . . . . . . . . . . . . . . . . . . . . . . . . 6350 7,800 Bookkeeping Fees/Accounting Services . . . . . . . . . . . . . . . . . . . . . 6351 Telephone and Answering Service . . . . . . . . . . . . . . . . . . . . . . . 6360 13,280 Bad Debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6370 1,042 Miscellaneous Administrative Expenses (specify) . . . . . . . . . . . . . . . 6390 11,216 -------------- Total Administrative Expenses $262,457 - ---------------------------------------------------------------------------------------------------------------------------------- UTILITIES EXPENSE - 6400 Fuel Oil/Coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6420 Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6450 43,963 Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6451 42,491 Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6452 43,165 Sewer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6453 Total Utilities Expense 129,619 - ---------------------------------------------------------------------------------------------------------------------------------- OPERATING AND MAINTENANCE EXPENSES - 6500 Janitor and Cleaning Payroll . . . . . . . . . . . . . . . . . . . . . . . . . 6510 13,549 Janitor and Cleaning Supplies . . . . . . . . . . . . . . . . . . . . . . . . 6515 19,081 Janitor and Cleaning Contract . . . . . . . . . . . . . . . . . . . . . . . . 6517 3,146 Exterminating Payroll/Contract . . . . . . . . . . . . . . . . . . . . . . . . 6519 Exterminating Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6520 3,537 Garbage and Trash Removal . . . . . . . . . . . . . . . . . . . . . . . . . . 6525 16,239 Security Payroll/Contract . . . . . . . . . . . . . . . . . . . . . . . . . . 6530 2,554 Grounds Payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6535 44,143 Grounds Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6536 10,986 Grounds Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6537 8,128 Repairs Payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6540 89,814 Repairs Material . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6541 47,790 Repairs Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6542 34,511 Elevator Maintenance/Contract . . . . . . . . . . . . . . . . . . . . . . . . 6545 7,480 Heating/Cooling Repairs and Maintenance . . . . . . . . . . . . . . . . . . . 6546 17,511 Swimming Pool Maintenance/Contract . . . . . . . . . . . . . . . . . . . . . . 6547 4,342 Snow Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6548 3,471 Decorating Payroll/Contract . . . . . . . . . . . . . . . . . . . . . . . . . 6560 20,405 Decorating Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6561 7,979 Vehicle & Maint. Equip. Operation and Repairs . . . . . . . . . . . . . . . . 6570 18,017 Miscellaneous Operating & Maintenance Expenses . . . . . . . . . . . . . . . . 6590 4,432 -------------- Total Operating & Maintenance Expenses 377,115 - ---------------------------------------------------------------------------------------------------------------------------------- Total Expenses (Carry forward to Page 6) $ 769,191 - ----------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the Financial statements. 28 30 U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT STATEMENT OF PROFIT AND LOSS - CONTINUED
- ---------------------------------------------------------------------------------------------------------------------------------- For the year January 1, Development Development Name: to December 31, 1995 Number: 544 Oshtemo Limited Dividend Housing Association HUD-92410 (7/91) Substitute (a Michigan limited partnership) - ---------------------------------------------------------------------------------------------------------------------------------- Part I Description of Account Acct No. - ---------------------------------------------------------------------------------------------------------------------------------- 6800 - EXPENSE ACCOUNTS (Continued) Balance Carried Forward from Page 5 $ 769,191 - ---------------------------------------------------------------------------------------------------------------------------------- TAXES AND INSURANCE - 6700 Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6710 $ 128,382 Payroll Taxes (FICA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6711 29,014 Miscellaneous Taxes, Licenses and Permits . . . . . . . . . . . . . . . . . . 6719 Property and Liability Insurance (Hazard) . . . . . . . . . . . . . . . . . . 6720 24,172 Fidelity Bond Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6721 Workmen's Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6722 17,339 Health Insurance & Other Employee Benefits . . . . . . . . . . . . . . . . . . 6723 37,273 Other Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6729 1,592 ---------- Total Taxes and Insurance 237,772 - ---------------------------------------------------------------------------------------------------------------------------------- FINANCE EXPENSES - 6800 Memo on Bonds Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6810 Interest on Mortgage Payable . . . . . . . . . . . . . . . . . . . . . . . . . 6820 652,361 Interest on Notes Payable (Long-Term) . . . . . . . . . . . . . . . . . . . . 6830 Interest on Notes Payable (Short-Term) . . . . . . . . . . . . . . . . . . . . 6840 Mortgage Insurance Premium/Service Charge . . . . . . . . . . . . . . . . . . 6850 Miscellaneous Financial Expenses . . . . . . . . . . . . . . . . . . . . . . . 6890 ------------- Total Financial Expenses 652,361 - ---------------------------------------------------------------------------------------------------------------------------------- ELDERLY AND CONGREGATE SERVICE EXPENSES - 6900 6900 ------------- Total Service Expenses (Schedule Attached) . . . . . . . . . . . . . . . . . . . . . -- - ---------------------------------------------------------------------------------------------------------------------------------- Total Cost of Operations before Depreciation 1,659,324 - ---------------------------------------------------------------------------------------------------------------------------------- Profit (Loss) before Depreciation 1,041,071 - ---------------------------------------------------------------------------------------------------------------------------------- Depreciation (Total) - 6600, rental properties, primarily buildings 6600 532,792 - ---------------------------------------------------------------------------------------------------------------------------------- Operating Profit or (Loss) 508,279 - ---------------------------------------------------------------------------------------------------------------------------------- CORPORATE OR MORTGAGOR ENTITY EXPENSES - 7100 Officer Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7110 Legal Expenses (Entity) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7120 Taxes (Federal-State-Entity) . . . . . . . . . . . . . . . . . . . . . . . 7130-32 Other Expenses (specify) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7190 ------------- Total Corporate Expenses -- - ---------------------------------------------------------------------------------------------------------------------------------- Net Profit or (Loss) $ 508,279 - ----------------------------------------------------------------------------------------------------------------------------------
Miscellaneous or other Income and Expense Sub-Account Groups. If miscellaneous or other income and/or expense sub-accounts (5190, 5290, 5490, 5990, 6390, 6729, 6890 and 7190) exceed the Account Groupings by 10% or more, attach a separate schedule describing or explaining the miscellaneous income or expense. No separate schedules are applicable. The accompanying notes are an integral part of the financial statements. 29 31 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT STATEMENT OF PROFIT AND LOSS - CONTINUED
- ---------------------------------------------------------------------------------------------------------------------------------- For the year January 1, Development Development Name: to December 31, 1995 Number: 544 Oshtemo Limited Dividend Housing HUD-92410 (7/91) Substitute Association (a Michigan limited partnership) - ---------------------------------------------------------------------------------------------------------------------------------- Part II - ---------------------------------------------------------------------------------------------------------------------------------- 1. Total principal payments required under the mortgage, even if payments under a Workout Agreement are less or more than those required under the mortgage. $ 132,545 - ---------------------------------------------------------------------------------------------------------------------------------- 2. Replacement Reserve deposits required by Regulatory Agreement or Amendments thereto, even if payments may be temporarily suspended or waived. $ 72,108 - ---------------------------------------------------------------------------------------------------------------------------------- 3. Replacement or Painting Reserve releases which are included as expense items on the Profit and Loss Statement. $ -- - ---------------------------------------------------------------------------------------------------------------------------------- 4. Project Improvement Reserve Releases under the Flexible Subsidy Program that are included as expense items on this Profit and Loss Statement. $ -- - ----------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 30 32 OSHTEMO LIMITED DIVIDEND HOUSING ASSOCIATION MSHDA DEVELOPMENT NO. 544 (a Michigan limited partnership) STATEMENT OF PARTNERS' EQUITY for the year ended December 31, 1995
GENERAL LIMITED PARTNER PARTNER SHEARSON/LEHMAN ASSET COAST SAVINGS MANAGEMENT HOUSING PARTNERS TOTAL GROUP LIMITED ----------- -------- ----------- Profit and loss allocation percentages 100% 1% 99% =========== ========= =========== Balances, beginning of year $ 7,687,011 $ 24,114 $ 7,662,897 Net profit for the year 508,279 5,083 503,196 Cash distributions to partners (78,487) 785 (77,702) Balances, end of year $ 8,116,803 $ 28,412 $ 8,088,391 ----------- -------- -----------
The accompanying notes are an integral part of the financial statements. 31 33 Oshtemo Limited Dividend Housing Association MSHDA Development No, 544 (a Michigan limited partnership) Statement of Cash Flows for the year ended December 31, 1995 Cash flows from operating activities: Rental receipts $ 2,279,231 Interest receipts 397,790 Other receipts 12,111 Administrative (63,367) Management fee (112,337) Utilities (129,619) Salaries and wages (257,160) Operating and maintenance (206,850) Real estate taxes (122,618) Payroll taxes (29,014) Property insurance (23,814) Miscellaneous taxes and insurance (56,204) Interest on mortgage note (653,176) Gain on sale of fixed assets (4,266) ------------ Net cash provided by operating activities $ 1,030,707 Cash flows from investing activities: Investments in rental properties (236,174) Proceeds from sale of fixed assets 29,144 Increase in: Escrows (316,650) Operating cash reserves (132,618) ------------ Net cash used in investing activities (656,298) Cash flows from financing activities: Mortgage principal payments (132,545) Cash distributions paid to partners (78,487) ------------ Net cash used in financing activities (211,032) ------------ Net increase in cash 163,377 Cash, January 1, 1995 366,969 ------------ Cash, December 31, 1995 $ 530,346 Net profit $ 508,279 ============ Adjustments to reconcile net profit to net cash provided by operating activities: Depreciation $ 532,792 Decrease (Increase) in: Accounts receivable, residents (3,703) Accounts receivable, MSHDA rent subsidy (5,603) Prepaid expenses 358 Increase (decrease) in: Accounts payable, trade (198) Accrued interest (815) Accrued property taxes 5,764 Accrued management fees 193 Accrued payroll (137) Unearned rental Income (1,957) Gain on sale of fixed assets (4,266) ------------- Total adjustments 522,428 ------------ Net cash provided by operating activities $ 1,030,707 ------------
The accompanying notes are an integral part of the Financial statements. 32 34 OSHTEMO LIMITED DIVIDEND HOUSING ASSOCIATION MSHDA DEVELOPMENT NO. 544 (a Michigan limited partnership) NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The following is a summary of significant accounting policies followed in the preparation of the financial statements: a. Depreciation deducted in the statement of profit and loss has been computed primarily on the straight-line method. b. Certain real estate taxes are deducted in the statement of profit and loss in the year in which they become a lien on the property. c. Income or loss of the Partnership is allocated 1 percent to the general partners and 99 percent to the limited partner. No income tax provision has been included in the financial statements since income or loss of the Partnership is required to be reported by the partners on their respective income tax returns. d. For purposes of the statement of cash flows, the Partnership considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. 2. ORGANIZATION: The Partnership was formed on August 30, 1984 under the Michigan Uniform Limited Partnership Act for the purpose of acquiring, owning and operating a 330-unit apartment complex located in Kalamazoo, Michigan, financed in part with the proceeds of a mortgage loan from the Michigan State Housing Development Authority ("MSHDA"). Under the terms of the regulatory agreement, executed in connection with obtaining the mortgage loan, MSHDA regulates rental rates and distributions to partners. 3. MORTGAGE PAYABLE: The cost of the project has been financed by partners' capital contributions, cash flow from operations during construction and by a $10,091,166, 40-year, 7.375 percent, nonrecourse, first mortgage note. The first mortgage note is payable in monthly installments approximating $65,500, including interest, and matures in August 2019. 33 35 NOTES TO FINANCIAL STATEMENTS, CONTINUED 3. MORTGAGE PAYABLE, CONTINUED: The mortgage payable is collateralized by rental properties included in the accompanying balance sheet and partners' equity. The Partnership has no liability beyond such collateral with respect to the mortgage. The maturities on the above debt for the years ended December 31 are as follows:
YEAR Amount ------------- 1996 $ 142,658 1997 153,542 1998 165,257 1999 177,864 2000 191,435 Thereafter 7,948,474 ------------- $ 8,779,230 -------------
Due to the unavailability of insurance or similar subsidies for housing programs, it is not practical to determine the fair value of such a loan. 4. DEVELOPMENT COST ESCROW: The development cost escrow is maintained under the control of the mortgagee for the benefit of the development. This fund may be used for operating expenses, additional amenities or replacement of assets as approved by the mortgagee. 5. REPLACEMENT RESERVE: The replacement reserve is controlled by the mortgagee for the benefit of the development. Disbursements from this reserve may be made to the property for reimbursement of capital expenditures, such as the replacement of assets, upon written approval by the mortgagee. 34 36 NOTES TO FINANCIAL STATEMENTS, CONTINUED 6. RELATED PARTY TRANSACTIONS: The following expenses incurred by the development during 1995 were paid or are payable to the general partners or affiliated companies as indicated below: Materials and supplies: Apartment Specialists $ 46,295 ========== West Michigan Supply $ 19,869 ========== Management fee, First Housing corporation, including premium management fee of $16,500. Accrued management fee was $8,003 at December 31, 1995 $ 112,530 ========== Preparation of audit schedules, SAFGO $ 1,800 ========== Aeration of land, SAFGO $ 250 ==========
35 37 OSHTEMO LIMITED DIVIDEND HOUSING ASSOCIATION MSHDA DEVELOPMENT NO. 544 (a Michigan limited partnership) BALANCE SHEET ITEMS December 31, 1995 1. ACCOUNTS RECEIVABLE: Residents' accounts receivable: Current $ 3,775 31 - 60 days 392 Over 60 days 1,721 ---------- 5,888 MSHDA rent subsidy 19,126 ---------- $ 25,014 ==========
2. ACCOUNTS PAYABLE (OPERATING ACCOUNTS PAYABLE ONLY): Trade creditors: Current $ 9,166 31 - 60 days 17,513 ---------- $ 26,679 ==========
3. NONRENTAL UNIT: At December 31, 1995, the development had one nonrental unit. The unit was occupied by Tim Greeley, an employee of the development. 36 38 OSHTEMO LIMITED DIVIDEND HOUSING ASSOCIATION MSHDA DEVELOPMENT NO. 544 (a Michigan limited partnership) FUNDS AVAILABLE FOR DISTRIBUTION - SCHEDULE I December 31, 1995 1. Operating cash $ 530,346 2. MSHDA-held operating reserve account 2,354,344 3. Other nonrestricted cash reserve accounts - ----------- Total available cash (per audit) $ 2,884,690 ----------- Add: 4A. Resident accounts receivable 5,888 4B. Non-resident receivable - 5. HUD/MSHDA subsidy receivable 19,126 6. Development cost escrow interest 1,423,154 7. Tax/insurance escrow surplus (deficit) - 8. Escrow draws receivable - ----------- 9A. Total additions 1,448,168 ----------- 9B. Total cash and additions 4,332,858 ----------- Deduct: 10. Trade accounts and surcharges payable and accrued expenses 39,081 11. Approved undisbursed limited dividend ("L.D.") payments - 12. Prepaid rent/unearned rental income 2,203 13. Delinquent mortgage principal and interest payment - 14. R/R deferrals, delinquent MSHDA loans/grants - 15. Security deposit not funded (over funded) - 16. One month's gross rent potential 191,381 ----------- 17A. Total deductions 232,665 ----------- 17B. Surplus funds available for distribution (Line 9B minus Line 17A) 4,100,193 ----------- Deduct: 18. Current years maximum potential L.D. payment 78,487 ----------- 18A. Subtotal (Line 17B minus Line 18) 4,021,706 ----------- Note: Complete Lines 19 through 23A only for 80/20 developments with deferred interest. Read the instructions before completing Lines 19 through 23A. All others go to Line 24. Deduct: 19. Prior years cumulative limited dividend payment ----------- 19A. Surplus funds available for payment toward deferred interest (Line 18A minus Line 19, if negative, insert zero) ----------- Deduct: 20. Cumulative deferred interest (per MSHDA) =========== 21. Deferred interest payable (lesser of Lines 19A or 20) ----------- 22. Remaining surplus funds (Line 19A minus Line 21) ----------- Add: 23. Prior years cumulative L.D. payment (Line 19) ----------- 23A. Subtotal (Line 22 plus 23) ----------- Deduct: 24. Sum of Lines 2, 6 and 7 3,777,496 ----------- 25. Operating reserve cash (to be transferred to MSHDA) (developments without deferred interest: deduct Line 24 from Line 18A, others go to Line 25A) $ 244,206 =========== 25A. Operating reserve cash (to be transferred to MSHDA) developments with deferred interest, see note below) ===========
Note: If Line 18A is negative, insert "0" on Line 25A. If Line 18A is positive, and Line 19A is zero subtract Line 24 from Line 18A. If Lines 18A and 19A are positive, subtract Line 24 from Line 23A 37 39 OSHTEMO LIMITED DIVIDEND HOUSING ASSOCIATION MSHDA DEVELOPMENT NO. 544 (a Michigan limited partnership) FUNDS AVAILABLE FOR DISTRIBUTION - SCHEDULE II for the years ended December 31, 1983 to 1995 1. Owners' initial equity $ 1,121,239 2. Maximum authorized limited dividend payment $ 78,487 3. Cumulative 3% $ 33,637 4. Noncumulative 4% $ 44,850 Cutoff date August 8, 1979
(II) (III) (IV) (V) (I) SURPLUS FUNDS POTENTIAL LIMITED ANNUAL LIMITED YEAR OF AVAILABLE FOR LIMITED DIVIDEND DIVIDEND OPERATION DISTRIBUTION DIVIDEND PAID CARRYFORWARD --------- ---------------- ---------- -------- ---------------- Initial year, 1983 $ 349,175 $ 78,487 $ 78,487 1984 248,008 78,487 $ 52,598 104,376 1985 637,601 78,487 78,487 104,376 1986 905,664 78,487 78,487 104,376 1987 1,413,082 78,487 78,487 104,376 1988 1,999,852 78,487 78,487 104,376 1989 2,379,278 78,487 78,487 104,376 1990 2,622,981 78,487 78,487 104,376 1991 2,870,529 78,487 78,487 104,376 1992 2,845,144 78,487 78,487 104,376 1993 3,245,547 78,487 78,487 104,376 1994 3,685,176 78,487 78,487 104,376 1995 4,100,193 78,487 78,487 104,376
38 40 [COOPERS & LYBRAND L.L.P. LETTERHEAD] INDEPENDENT ACCOUNTANTS' REPORT ON INTERNAL CONTROL STRUCTURE To the Partners of Oshtemo Limited Dividend Housing Association: We have audited the financial statements of Oshtemo Limited Dividend Housing Association (a Michigan limited partnership), MSHDA Development No. 544, as of and for the year ended December 31, 1995, and have issued our report thereon dated January 25, 1996. 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. The management of Oshtemo Limited Dividend Housing Association is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the system to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. In planning and performing our audit of the financial statements of Oshtemo Limited Dividend Housing Association for the year ending December 31, 1995, we obtained an understanding of the internal control structure. With respect to the internal control structure, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and do not provide an opinion on the internal control structure. Accordingly, we do not express such an opinion. 39 41 Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control structure and its operation that we consider to be material weaknesses as defined above. Additionally, no management letter was issued in relation to our audit of the financial statements of Oshtemo Limited Dividend Housing Association, as of and for the year ended December 31, 1995. This report is intended for the information of the partners, management and MSHDA. However, this report is a matter of public record, and its distributions is not limited. /s/ COOPERS & LYBRAND L.L.P. Detroit, Michigan January 25, 1996 40 42 [COOPERS & LYBRAND L.L.P. LETTERHEAD] INDEPENDENT ACCOUNTANTS' REPORT ON COMPLIANCE WITH LAWS AND REGULATIONS To the Partners of Oshtemo Limited Dividend Housing Association: We have audited the financial statements of Oshtemo Limited Dividend Housing Association (a Michigan limited partnership), MSHDA Development No. 544, as of and for the year ended December 31, 1995, and have issued our report thereon dated January 25, 1996. 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. Compliance with laws, regulations, contracts and grants applicable to the Oshtemo Limited Dividend Housing Association is the responsibility of the Oshtemo Limited Dividend Housing Association's management. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of the Oshtemo Limited Dividend Housing Association's compliance with certain provisions of laws, regulations, contracts and grants, including compliance with specific provisions of the MSHDA Regulatory Agreement, MSHDA Directives and HUD regulations and procedures included in the HUD subsidy contract and MSHDA Multi-Family Audit Guidelines. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported herein under Government Auditing Standards. 41 43 We have reviewed the December 1995 Monthly Income and Expenditure ("MIE") Report submitted to MSHDA noting that the operating cash, residents accounts receivable, security deposit liability and security deposit funded account balances in such report are in substantial agreement with the corresponding balances in these financial statements. The accounts payable balance was not in substantial agreements as follows: Balance per NNE report $34,682 Reconciling items, management fees (8,003) ------- Balance per the financial statements $26,679 =======
The difference relates to management fees being classified as accrued management fees in the financial statements but included in accounts payable in the December MIE. We have also examined the accounts payable detail for July 31, 1995, as included in the MIE Report submitted to MSHDA noting that the accounts payable listed on Schedule B of the report appears complete. This report is intended for the information of the partners, management and MSHDA. However, this report is a matter of public record, and its distribution is not limited. /s/ COOPERS & LYBRAND L.L.P. Detroit, Michigan January 25, 1996 42 44 [REZNICK FEDDER & SILVERMAN LETTERHEAD] INDEPENDENT AUDITORS' REPORT To the Partners Hyattsville Housing Associates We have audited the accompanying balance sheet of Hyattsville Housing Associates as of December 31, 1995, and the related statements of profit and loss (on HUD Form No. 92410), 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 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 Hyattsville Housing Associates as of December 31, 1995, and the results of its operations, changes in partners' equity and its cash flows for the year then ended, in conformity with generally accepted accounting principles. 43 45 Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 19 through 28 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information, except for that portion marked "unaudited," on which we express no opinion, 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. In accordance with Government Auditing Standards, we have also issued reports dated January 18, 1996, on our consideration of Hyattsville Housing Associates' internal control structure and on its compliance with specific requirements applicable to CDA programs, affirmative fair housing, and laws and regulations applicable to the financial statements. /s/ REZNICK FEDDER & SILVERMAN Baltimore, Maryland Federal Employer January 18, 1996 Identification Number: 52-1088612 Audit Principal: Richard G. Schaefer 44 46 [LANDSMAN, FRANK AND BLOCH LETTERHEAD] Independent Auditors' Report Partners Jenny Lind Hall Second Limited Partnership FHA Project Number 084-35127-L8-PM-WAH Beverly Hills, California We have audited the accompanying balance sheets of Jenny Lind Hall Second Limited Partnership, FHA Project Number 084-35127-L8-PM-WAH, as of December 31, 1995 and 1994, and the related statements of operations, changes in partners' deficiency and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with 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 Jenny Lind Hall Second Limited Partnership as of December 31, 1995 and 1994, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. 45 47 Partners Jenny Lind Hall Second Limited Partnership Page Two In accordance with Government Auditing Standards, we have also issued a report dated January 19, 1996 on our consideration of the Partnership's internal control structure and reports dated January 19, 1996 on its compliance with laws and regulations. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information (shown on pages 12 through 20) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. LANDSMAN, FRANK AND BLOCH An Accountancy Corporation /s/ LANDSMAN, FRANK AND BLOCH Beverly Hills, California Federal Employer Identification January 19, 1996 Number 95-2783759 Audit Principal: Alan H. Salz, C.P.A. 46 48 [LETTERHEAD] ALTSCHULER, MELVOIN AND GLASSER LLP INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND ADDITIONAL FINANCIAL DATA REQUIRED BY THE ILLINOIS HOUSING DEVELOPMENT AUTHORITY AND THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT To the Partners of Lancaster Heights Associates We have audited the accompanying balance sheet of LANCASTER HEIGHTS ASSOCIATES (an Illinois limited partnership), IHDA Project No. ML-7, (the "Partnership") as of December 31, 1995, and the related statements of operations, changes in partners' deficiency and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of the Partnership as of and for the year ended December 31, 1994 were audited by other auditors whose report, dated February 7, 1995 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 1995 financial statements referred to above present fairly, in all material respects, the financial position of Lancaster Heights Associates as of December 31, 1995, and the results of its operations, changes in its partners' deficiency, and its cash flows for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated February 21, 1996 on our consideration of the Partnership's internal control structure and a report dated February 21, 1996 on its compliance with laws and regulations. 47 49 Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The additional financial data shown on pages 16 through 20 is presented for purposes of additional analysis and is not a required part of the financial statements. 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/ ALTSCHULER, MELVION AND GLASSER LLP Los Angeles, California February 21, 1996 48 50 [REZNICK FEDDER & SILVERMAN LETTERHEAD] INDEPENDENT AUDITORS' REPORT To the Partners Locust House Associates We have audited the accompanying balance sheet of Locust House Associates as of December 31, 1995, and the related statements of profit and loss (on HUD Form No. 92410), 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 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 Locust House Associates as of December 31, 1995, and the results of its operations, the changes in partners' equity and its cash flows for the year then ended, in conformity with generally accepted accounting principles. 49 51 Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 20 through 28 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information, except for that portion marked "unaudited," on which we express no opinion, 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. In accordance with Government Auditing Standards, we have also issued reports dated January 8, 1996, on our consideration of Locust House Associates' internal control structure and on its compliance with specific requirements applicable to HUD and CDA programs, affirmative fair housing, and laws and regulations applicable to the financial statements. /s/ REZNICK FEDDER & SILVERMAN Baltimore, Maryland Federal Employer January 6, 1996 Identification Number: 52-1088612 Audit Principal: Richard G. Schaefer 50 52 [LANDSMAN FRANK AND BLOCH LETTERHEAD] Independent Auditors' Report Partners Midpark Towers Second Limited Partnership FHA Project Number 112-38010-PM-L8 Beverly Hills, California We have audited the accompanying balance sheets of Midpark Towers Second Limited Partnership, FHA Project Number 112-38010-PM-L8, as of December 31, 1995 and 1994, and the related statements of operations, changes in partners' deficiency and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with 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 Midpark Towers Second Limited Partnership as of December 31, 1995 and 1994, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. 51 53 Partners Midpark Towers Second Limited Partnership Page Two In accordance with Government Auditing Standards, we have also issued a report dated January 24, 1996 on our consideration of the Partnership's internal control structure and reports dated January 24, 1996 on its compliance with laws and regulations. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information (shown on pages 12 through 20) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. LANDSMAN, FRANK AND BLOCH An Accountancy Corporation /S/ LANDSMAN, FRANK AND BLOCH Beverly Hills, California Federal Employer Identification January 24, 1996 Number 95-2783759 Audit Principal: Alan H. Salz, C.P.A. 52 54 [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD] INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND ADDITIONAL FINANCIAL DATA REQUIRED BY THE ILLINOIS HOUSING DEVELOPMENT AUTHORITY AND THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT To the Partners of OHA Associates We have audited the accompanying balance sheet of OHA ASSOCIATES (an Illinois limited partnership), IHDA Project No. ML-99 (the "Partnership"), as of December 31, 1995, and the related statements of operations, changes in partners' deficiency and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of the Partnership as of and for the year ended December 31, 1994 were audited by other auditors whose report dated February 10, 1995 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 1995 financial statements referred to above present fairly, in all material respects, the financial position of OHA Associates as of December 31, 1995 and the results of its operations, changes in its partners' deficiency, and its cash flows for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated February 15, 1996 on our consideration of the Partnership's internal control structure and a report dated February 15, 1996 on its compliance with laws and regulations. 53 55 Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying additional financial data shown on pages 16 through 20 is presented for purposes of additional analysis and is not a required part of the financial statements. 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/ ALTSCHULER, MELVOIN AND GLASSER LLP Los Angeles, California February 15, 1996 54 56 [KPMG PEAT MARWICK LLP LETTERHEAD] INDEPENDENT AUDITORS' REPORT The Partners Plaza Village Group (A Limited Partnership): We have audited the accompanying balance sheet of Plaza Village Group (A Limited Partnership) FHA Project No. 016-44076-LDT-SUP as of December 31, 1995, and the related statements of profit and loss (in HUD Form 92410) changes in partners' equity and cash flows for the year then ended. These financial statements are the responsibility of 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 Plaza Village Group (A Limited Partnership) FHA Project No. 016-44076-LDT-SUP at December 31, 1995 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 supplementary information required by the U.S. Department of Housing and Urban Development ("HUD") included in Schedules 1 through 7 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly presented in all material respects in relation to the basic financial statements taken as a whole. /S/ KPMG PEAT MARWICK LLP January 26, 1996 55 57 [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD] INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND ADDITIONAL FINANCIAL DATA REQUIRED BY THE ILLINOIS HOUSING DEVELOPMENT AUTHORITY AND THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT To the Partners of Round Barn Manor Associates We have audited the accompanying balance sheet of ROUND BARN MANOR ASSOCIATES (an Illinois limited partnership), IHDA Project No. ML-86, (the "Partnership") as of December 31, 1995, and the related statements of operations, changes in partners' deficiency and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of the Partnership as of and for the year ended December 31, 1994 were audited by other auditors whose report dated February 10, 1995 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 1995 financial statements referred to above present fairly, in all material respects, the financial position of Round Barn Manor Associates as of December 31, 1995, and the results of its operations, changes in its partners' deficiency and its cash flows for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated February 20, 1996 on our consideration of the Partnership's internal control structure and a report dated February 20, 1996 on its compliance with laws and regulations. 56 58 Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying additional financial data shown on pages 16 through 20 is presented for purposes of additional analysis and is not a required part of the financial statements. 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/ ALTSCHULER, MELVOIN AND GLASSER LLP Los Angeles, California February 20, 1996 57 59 [LANDSMAN FRANK AND BLOCH LETTERHEAD] Independent Auditors' Report Partners Santa Fe Towers Second Limited Partnership FHA Project Number 084-35180-L8-PM-WAH Beverly Hills, California We have audited the accompanying balance sheets of Santa Fe Towers Second Limited Partnership, FHA Project Number 084-35180-L8-PM-WAH, as of December 31, 1995 and 1994, and the related statements of operations, changes in partners' deficiency and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with 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 Santa Fe Towers Second Limited Partnership as of December 31, 1995 and 1994, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. 58 60 Partners Santa Fe Towers Second Limited Partnership Page Two In accordance with Government Auditing Standards, we have also issued a report dated January 24, 1996 on our consideration of the Partnership's internal control structure and reports dated January 24, 1996 on its compliance with laws and regulations. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information (shown on pages 12 through 20) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. LANDSMAN, FRANK AND BLOCH An Accountancy Corporation /s/ LANDSMAN, FRANK AND BLOCH Beverly Hills, California Federal Employer Identification January 24, 1996 Number 95-2783759 Audit Principal: Alan H. Salz, C.P.A. 59 61 [LANDSMAN, FRANK AND BLOCH LETTERHEAD] Independent Auditors' Report Partners Walnut Towers Second Limited Partnership FHA Project Number 102-35090-L8-PM-WAH Beverly Hills, California We have audited the accompanying balance sheets of Walnut Towers Second Limited Partnership, FHA Project Number 102-35090-L8-PM-WAH, as of December 31, 1995 and 1994, and the related statements of operations, changes in partners' deficiency and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with 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 Walnut Towers Second Limited Partnership as of December 31, 1995 and 1994, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. 60 62 Partners Walnut Towers Second Limited Partnership Page Two In accordance with Government Auditing Standards, we have also issued a report dated January 24, 1996 on our consideration of the Partnership's internal control structure and reports dated January 24, 1996 on its compliance with laws and regulations. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information (shown on pages 12 through 20) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. LANDSMAN, FRANK AND BLOCH An Accountancy Corporation /s/ LANDSMAN, FRANK AND BLOCH Beverly Hills, California Federal Employer Identification January 24, 1996 Number 95-2783759 Audit Principal: Alan H. Salz, C.P.A. 61 63 [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD] INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND ADDITIONAL FINANCIAL DATA REQUIRED BY THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT AND THE ILLINOIS HOUSING DEVELOPMENT AUTHORITY To the Partners of Westwood Terrace Second Limited Partnership We have audited the accompanying balance sheet of WESTWOOD TERRACE SECOND LIMITED PARTNERSHIP, IHDA Project No. ML-100, as of December 31, 1995, and the related statements of operations, changes in partners' deficit and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of Westwood Terrace Second Limited Partnership as of and for the year ended December 31, 1994, were audited by other auditors whose report dated January 30, 1995, 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 an well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the 1995 financial statements referred to above present fairly, in all material respects, the financial position of Westwood Terrace Second Limited Partnership as of December 31, 1995, and the results of its operations, changes in partners' deficit and cash flows for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated January 19, 1996, on our consideration of the Partnership's internal control structure and a report dated January 19, 1996, on its compliance with laws and regulations. 62 64 Our audit was performed for the purpose of forming an opinion on the financial statements taken as a whole. The additional financial data required by the U.S. Department of Housing and Urban Development shown on pages 15 through 19 are presented for purposes of additional analysis and are not a required part of the financial statements. Such information has been subjected to the 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/ ALTSCHULER, MELVOIN AND GLASSER LLP Chicago, Illinois January 19, 1996 63 65 HOUSING PROGRAMS LIMITED (A CALIFORNIA LIMITED PARTNERSHIP) BALANCE SHEETS DECEMBER 31, 1995 AND 1994 ASSETS
1995 1994 ------------ ------------ INVESTMENTS IN LIMITED PARTNERSHIPS (Notes 1 and 2) $ 14,470,783 $ 14,533,940 CASH AND CASH EQUIVALENTS (Note 1) 595,330 624,935 SHORT TERM INVESTMENTS (Note 1) 125,000 533,409 ------------ ------------ TOTAL ASSETS $ 15,191,113 $ 15,692,284 ============ ============ LIABILITIES AND PARTNERS' DEFICIENCY LIABILITIES: Notes payable (Notes 3 and 7) $ 10,169,743 $ 10,177,433 Accrued fees and expenses due general partners (Note 4) 990,393 1,092,620 Accrued interest payable (Notes 3 and 7) 9,864,545 8,917,531 Accounts payable 15,432 21,922 ------------ ------------ 21,040,113 20,209,506 ------------ ------------ COMMITMENTS AND CONTINGENCIES (Notes 2, 4 and 6) PARTNERS' EQUITY (DEFICIENCY): General partners (309,236) (295,918) Limited partners (5,539,764) (4,221,304) ------------ ------------ (5,849,000) (4,517,222) ------------ ------------ TOTAL LIABILITIES AND PARTNERS' DEFICIENCY $ 15,191,113 $ 15,692,284 ============ ============
The accompanying notes are an integral part of these financial statements. 64 66 HOUSING PROGRAMS LIMITED (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993 ----------- ----------- ----------- INTEREST INCOME $ 44,144 $ 26,370 $ 20,316 ----------- ----------- ----------- OPERATING EXPENSES: Management fees - general partner (Note 4) 547,773 568,896 568,896 General and administrative (Note 4) 86,350 88,393 101,445 Legal and accounting 125,941 93,321 83,491 Interest (Note 3) 1,011,127 966,126 966,126 ----------- ----------- ----------- Total operating expenses 1,771,191 1,716,736 1,719,958 ----------- ----------- ----------- LOSS FROM OPERATIONS (1,727,047) (1,690,366) (1,699,642) DISTRIBUTIONS FROM LIMITED PARTNERSHIPS RECOGNIZED AS INCOME 307,474 520,001 473,210 EQUITY IN INCOME (LOSS) OF LIMITED PARTNERSHIPS AND AMORTIZATION OF ACQUISITION COSTS (Note 2) 87,795 (210,249) 616,683 ----------- ----------- ----------- NET LOSS $(1,331,778) $(1,380,614) (609,749) =========== =========== ======== NET LOSS PER LIMITED PARTNERSHIP INTEREST $ (108) $ (111) $ (49) =========== =========== ===========
The accompanying notes are an integral part of these financial statement 65 67 HOUSING PROGRAMS LIMITED (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY) FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
General Limited Partners Partners Total --------- ----------- ----------- DEFICIENCY, January 1, 1993 $(276,015) $(2,250,844) $(2,526,859) Net loss, 1993 (6,097) (603,652) (609,749) --------- ----------- ----------- DEFICIENCY, December 31, 1993 (282,112) (2,854,496) (3,136,608) Net loss, 1994 (13,806) (1,366,808) (1,380,614) --------- ----------- ----------- DEFICIENCY, December 31, 1994 (295,918) (4,221,304) (4,517,222) Net loss, 1995 (13,318) (1,318,460) (1,331,778) --------- ----------- ----------- DEFICIENCY, December 31, 1995 $(309,236) $(5,539,764) $(5,849,000) ========= =========== ===========
The accompanying notes are an integral part of these financial statem 66 68 HOUSING PROGRAMS LIMITED (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993 ----------- ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(1,331,778) $(1,380,614) $ (609,749) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Equity in loss (income) of limited partnerships (126,285) 171,759 (655,173) Amortization of acquisition costs 38,490 38,490 38,490 Decrease in other assets -- -- 3,500 Increase in accrued interest payable 947,014 819,138 828,927 Increase (decrease) in accrued fees and expenses due general partners (102,227) 377,878 (831,104) Increase (decrease) in accounts payable (6,490) 17,284 (13,606) ----------- ----------- ----------- Net cash provided by (used in) operating activities (581,276) 43,935 (1,238,715) ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital contributions to limited partnerships (671,865) (1,391,975) (623,248) Distributions from limited partnerships recognized as a return of capital 822,817 1,832,549 2,120,297 Decrease (increase) in short term investments 408,409 (408,409) -- ----------- ----------- ----------- Net cash provided by investing activities 559,361 32,165 1,497,049 ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Payment of notes payable (7,690) -- (82,763) ----------- ----------- ----------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (29,605) 76,100 175,571 CASH AND CASH EQUIVALENTS, beginning of year 624,935 548,835 373,264 ----------- ----------- ----------- CASH AND CASH EQUIVALENTS, end of year $ 595,330 $ 624,935 $ 548,835 =========== =========== =========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the year for interest $ 64,113 $ 146,986 $ 137,199 =========== =========== ===========
The accompanying notes are an integral part of these financial statements. 67 69 HOUSING PROGRAMS LIMITED (a California limited partnership) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1995 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Housing Programs Limited (the "Partnership"), formed under the California Uniform Limited Partnership Act, was organized on May 15, 1984. The Partnership was formed to invest primarily in other limited partnerships which own or lease and operate federal, state or local government-assisted housing projects. The general partners of the Partnership are Housing Programs Corporation II, National Partnership Investments Corp. (NAPICO), and Coast Housing Investment Associates (CHIA), a limited partnership. LBI Group Inc. owns 100 percent of the stock of Housing Programs Corporation II. Casden Investment Corp. owns 100 percent of NAPICO's stock. The limited partner of CHIA is an officer of NAPICO. The Partnership offered and issued 6,184 units of limited partnership interests through a public offering. Each unit was comprised of two limited partnership interests and one warrant, which entitled the investor two additional limited partnership interests. An additional 6,184 of interests were issued from the exercise of warrants and the sale of interests associated with warrants not exercised. The general partners have a 1 percent interest in profits and losses of the Partnership. The limited partners have the remaining 99 percent interest in proportion to their respective investments. The Partnership shall be dissolved only upon the expiration of 50 complete calendar years (December 31, 2034) from the date of the formation of the Partnership or upon the occurrence of various other events as described in the terms of the Partnership agreement. Upon total or partial liquidation of the Partnership or the disposition or partial disposition of a project or project interest and distribution of the proceeds, the general partners will be entitled to a liquidation fee as stipulated in the Partnership agreement. The limited partners will have a priority return equal to their invested capital attributable to the project(s) or project interest(s) sold and shall receive from the sale of the project(s) or project interest(s) an amount sufficient to pay state and federal income taxes, if any, calculated at the maximum rate then in effect. The general partners' liquidation fee may accrue but shall not be paid until the limited partners have received distributions equal to 100 percent of their capital contributions. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Method of Accounting for Investments in Limited Partnerships The investments in local limited partnerships are accounted for on the equity method. Acquisition, selection and other costs related to the acquisition of the projects have been capitalized to the investment 68 70 HOUSING PROGRAMS LIMITED (a California limited partnership) NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1995 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) account and are being amortized on a straight line basis over the estimated lives of the underlying assets, which is generally 30 years. Net Loss Per Limited Partnership Interest Net loss per limited partnership interest was computed by dividing the limited partners' share of net loss by the number of limited partnership interests outstanding during the year. The number of limited partnership interests was 12,368 for all years presented. Cash and Cash Equivalents Cash and cash equivalents consist of cash and bank certificates of deposit with an original maturity of three months or less. Short Term Investments Short term investments consist of bank certificates of deposit and other securities with original maturities ranging from more than three months to twelve months. The fair value of these securities, which have been classified as held for sale, approximates their carrying value. Impairment of Long-Lived Assets The Partnership reviews long-lived assets to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the sum of the expected future cash flows is less than the carrying amount of the assets, the Partnership recognizes an impairment loss. 2. INVESTMENTS IN LIMITED PARTNERSHIPS The Partnership holds limited partnership interests in 18 limited partnerships. The partnerships own residential rental projects consisting of 2,686 apartment units. The mortgage loans of these projects are insured by various governmental agencies. The Partnership, as a limited partner, is entitled to 99 percent of the profits and losses of the limited partnerships. Equity in losses of limited partnerships is recognized in the financial statements until the limited partnership investment account is reduced to a zero balance. Losses incurred after the investment account is reduced to zero are not recognized. The cumulative amount of unrecognized equity in losses of certain limited partnerships was approximately $10,273,000 and $8,837,000 as of December 31, 1995 and 1994, respectively. Distributions from the limited partnerships are recognized as a reduction of capital until the investment balance has been reduced to zero or to a negative amount equal to further capital contributions required. Subsequent distributions are recognized as income. 69 71 HOUSING PROGRAMS LIMITED (a California limited partnership) NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1995 2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED) The following is a summary of the investments in limited partnerships and reconciliation to the limited partnership accounts:
1995 1994 ----------- -------- Investment balance, beginning of year $14,533,940 $15,184,763 Equity in income (loss) of limited partnerships 126,285 (171,759) Amortization of capitalized acquisition costs and fees (38,490) (38,490) Capital Contributions 671,865 1,391,975 Distributions recognized as a return of capital (822,817) (1,832,549) ------------ ------------ Investment balance, end of year $14,470,783 $14,533,940 =========== ===========
The difference between the investment per the accompanying balance sheets at December 31, 1995 and 1994, and the equity per the limited partnerships' combined financial statements is due primarily to cumulative unrecognized equity in losses of certain limited partnerships, costs capitalized to the investment account and cumulative distributions recognized as income. Selected financial information from the combined financial statements of the limited partnerships at December 31, 1995 and 1994 and for each of the three years in the period ended December 31, 1995 is as follows: Balance Sheets
1995 1994 ---------- -------- (in thousands) Land and buildings, net $ 60,660 $ 63,357 ======== ======== Total assets $ 79,347 $ 81,327 ======== ======== Mortgages payable $ 57,914 $ 58,941 ======== ======== Total liabilities $ 79,556 $ 79,656 ======== ======== Equity of Housing Programs Limited $ 145 $ 2,004 ======== ======== Deficiency of other partners $ (354) $ (333) ======== ========
70 72 HOUSING PROGRAMS LIMITED (a California limited partnership) NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1995 2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED) Statements of Operations
1995 1994 1993 --------- ---------- --------- (in thousands) Total revenues $ 17,132 $ 16,817 $ 18,630 ======== ======== ======== Interest expense $ 3,706 $ 3,772 $ 4,634 ======== ======== ======== Depreciation $ 3,524 $ 3,508 $ 3,812 ======== ======== ======== Total expenses $ 18,525 $ 18,439 $ 20,220 ======== ======== ======== Net loss $ (1,393) $ (1,622) $ (1,590) ======== ======== ======== Net loss allocable to Housing Programs Limited $ (1,379) $ (1,606) $ (1,574) ======== ======== ========
An affiliate of NAPICO is the general partner in 10 of the limited partnerships included above in 1995 and 1994, and another affiliate receives property management fees of approximately 5 to 6 percent of revenues from five of these partnerships. The affiliate received property management fees of $234,903, $236,149 and $235,859 in 1995, 1994 and 1993, respectively. The following sets forth the significant data for these partnerships, reflected in the accompanying financial statements using the equity method of accounting:
1995 1994 1993 ---------- --------- ------- (in thousands) Total assets $ 41,816 $ 43,316 ======== ========= Total liabilities $ 50,007 $ 50,336 ======== ========= Deficiency of Housing Programs Limited $ (7,971) $ (6,815) ======== ========= Deficiency of other partners $ (220) $ (205) ======== ========= Total revenue $ 9,283 $ 9,116 $ 10,748 ======== ========= ========= Net loss $ (828) $ (1,079) $ (1,533) ======== ========= =========
The Montecito local partnership had been operating at a deficit, and the general partner was unsuccessful in its attempt to negotiate a mortgage modification with the lender to improve the situation. No mortgage 71 73 HOUSING PROGRAMS LIMITED (a California limited partnership) NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1995 2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED) payments to the lender were made subsequent to May 1994. A Notice of Default and Election To Sell was filed for record on October 27, 1994 in the LA County Recorder's office. On October 26, 1994, the loan servicer, on behalf of the lender, filed a complaint for Specific Performance for Appointment of Receiver and Judicial Foreclosure against the Partnership. The request for an appointment of a receiver was approved on November 10, 1994. Representatives of the Montecito local partnership and the general partner met with the loan servicer on November 2, 1994 and on February 22, 1995 to discuss a loan modification proposal. However, the lender rejected all mortgage modification proposals submitted and foreclosed upon the property on July 18, 1995. The Partnership's original investment in the Montecito local partnership represents approximately 5% of the Partnership's total capital raised. The Partnership's financial statements reflect no investment in Montecito at December 31, 1995 and 1994. In 1993, three limited partnerships (Oxford House, Round Barn Manor and Westwood Terrace) refinanced their mortgages with taxable and tax-exempt bonds issued by the Illinois Housing Development Authority. Proceeds from the refinancing were utilized to retire two secondary mortgages including principal and accrued interest of $1,811,000 and $1,785,000 for Oxford House and Round Barn Manor, respectively. The third secondary mortgage of Westwood Terrace was paid down and has a remaining principal balance of approximately $442,000. After retiring the secondary mortgages, the Partnership received excess cash proceeds of more than $1,467,000 from the refinancing. The three limited partnerships now have new mortgage amounts of $5,641,352, $5,318,893 and $3,172,370 financed for a term of 25 years at a taxable rate of 7.6 percent and a tax-exempt rate of 6.3 percent. 3. NOTES PAYABLE Certain of the Partnership's investments involved purchases of partnership interests from partners who subsequently withdrew from the operating partnership. The Partnership is obligated for non-recourse notes payable of $10,169,743, bearing interest at 9.5 and 12.5 percent, to the sellers of the partnership interests. The interest rate for a note of $1,500,000 changed in 1995 to 12.5 percent per terms of the note. The notes have principal maturity dates ranging from October 1996 to December 2001 or upon sale or refinancing of the underlying partnership properties. These obligations and the related interest are collateralized by the Partnership's investment in the investee limited partnerships and are payable only out of cash distributions from the investee partnerships, as defined in the notes. Unpaid interest is due at maturity of the notes. The Partnership is currently negotiating for the sale of Deep Lake Hermitage, the property that the $1,500,000 note payable and accrued interest of $1,402,846 due in 1996 relate to. Based on an offer received, there would not be adequate funds to pay approxiamtely $1,800,000 of the note payable and related accrued interest. Because the notes and interest payable are non-recourse liabilities, no loss is expected to be realized by the Partnership if the investment is foreclosed upon by the lender. 72 74 HOUSING PROGRAMS LIMITED (a California limited partnership) NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1995 3. NOTES PAYABLE (CONTINUED) Maturity dates on the notes and related accrued interest payable are as follows:
Accrued Years Ending December 31, Notes Interest Total ------------------------- ----------- ----------- ----------- 1996 $ 1,500,000 $ 1,402,846 $ 2,902,846 1997 - 1998 - 1999 7,669,743 7,444,580 15,114,323 2000 - Thereafter 1,000,000 1,017,119 2,017,119 ----------- ----------- ----------- $10,169,743 $ 9,864,545 $20,034,288 =========== =========== ===========
4. FEES AND EXPENSES DUE GENERAL PARTNERS Under the terms of the Restated Certificate and Agreement of the Limited Partnership, the Partnership is obligated to the general partners for an annual management fee equal to .5% of the original invested assets of the limited partnerships. Invested assets is defined as the costs of acquiring project interests including the proportionate amount of the mortgage loans related to the Partnership's interest in the capital accounts of the respective limited partnerships. As of December 31, 1995, the fees and expenses due the general partners exceeded the Partnership's cash. The general partners, during the forthcoming year, will not demand payment of amounts due in excess of such cash or such that the Partnership would not have sufficient operating cash; however, the Partnership will remain liable for all such amounts. The Partnership reimburses NAPICO for certain expenses. The reimbursement to NAPICO was $29,845, $28,764, and $29,252 in 1995, 1994 and 1993, respectively, and is included in operating expenses. 5. INCOME TAXES No provision has been made for income taxes in the accompanying financial statements since such taxes, if any, are the liability of the individual partners. The major differences in tax and financial reporting result from the use of different bases and depreciation methods for the properties held by the limited partnerships. Differences in tax and financial reporting also arise as losses are not recognized for financial reporting purposes when the investment balance has been reduced to zero or to a negative amount equal to further capital contributions required. 73 75 HOUSING PROGRAMS LIMITED (a California limited partnership) NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1995 6. CONTINGENCIES NAPICO is a plaintiff in various lawsuits and has also been named as a defendant in other lawsuits arising from transactions in the ordinary course of business. In the opinion of management and NAPICO, the claims will not result in any material liability to the Partnership. 7. FAIR VALUE OF FINANCIAL INSTRUMENTS Statement of Financial Accounting Standards No. 107, "Disclosure about Fair Value of Financial Instruments," requires disclosure of fair value information about financial instruments, when it is practicable to estimate that value. The notes payable are collateralized by the Partnership's investments in investee limited partnerships and are payable only out of cash distributions from the investee partnerships. The operations generated by the investee limited partnerships, which account for the Partnership's primary source of revenues, are subject to various government rules, regulations and restrictions which make it impracticable to estimate the fair value of the notes payable and related accrued interest. The carrying amount of other assets and liabilities reported on the balance sheets that require such disclosure approximates fair value due to their short-term maturity. 8. FOURTH-QUARTER ADJUSTMENT The Partnership's policy is to record its equity in the loss of limited partnerships on a quarterly basis using estimated financial information furnished by the various local operating general partners. The equity in income (loss) of limited partnerships reflected in the accompanying financial statements is based primarily upon audited financial statements of the investee limited partnerships. The difference, approximately $31,935, between the estimated nine-month equity in income and the actual year-to-date equity in loss has been recorded in the fourth quarter. 74 76 SCHEDULE (CONTINUED) HOUSING PROGRAMS LIMITED INVESTMENTS IN LIMITED PARTNERSHIPS FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
Year Ended December 31, 1995 ------------------------------------------------------------------------------ Cash Balance Distri- Balance January Capital butions Equity in December Limited Partnerships 1, 1995 Contributions Received Income/(Loss) 31, 1995 - -------------------- ------- ------------- -------- ------------- -------- Bannock Arms $ 490,588 $ 184,684 $ (229,495) $ 108,103 $ 553,880 Berkeley Gardens 497,349 (78,037) 419,312 Cape La Croix 6,405 (6,405) Cloverdale Cloverleaf 6,517 (6,517) Deep Lake Hermitage 1,189,101 (131,745) 1,057,356 Evergreen Apts. 7,971,008 (77,702) 490,871 8,384,177 Friendship Arms 2,364,500 (35,183) 11,247 2,340,564 Jenny Lind Hall 45,504 (45,504) Lancaster Heights 24,881 (24,881) Locust House 1,221,828 (16,897) (67,708) 1,137,223 Midpark Towers 184,124 (184,124) Montecito Apts. 23,641 (23,641) Oxford Towers Plaza Village 799,566 (221,295) 578,271 Round Barn Manor Santa Fe Towers 95,250 (95,250) Walnut Towers 69,618 (69,618) Westwood Terrace 31,241 (31,241) ----------- ---------- ----------- ----------- ----------- $14,533,940 $ 671,865 $ (822,817) $ 87,795 $14,470,783 =========== ========== =========== =========== ===========
75 77 SCHEDULE (CONTINUED) HOUSING PROGRAMS LIMITED INVESTMENTS IN LIMITED PARTNERSHIPS FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
Year Ended December 31, 1994 -------------------------------------------------------------------------------------------------- Cash Balance Distri- Balance Future Capital January Capital butions Equity in December Contributions Limited Partnerships 1, 1994 Contributions Received Income/(Loss) 31, 1994 Payable - -------------------- ------- ------------- -------- ------------- -------- --------- Bannock Arms $ 474,615 $ 334,142 $ (428,773) $ 110,604 $ 490,588 $ Berkeley Gardens 802,066 (304,717) 497,349 Cape La Croix 8,169 (8,169) Cloverdale 1,163 (1,163) Cloverleaf 11,079 (11,079) Deep Lake Hermitage 1,383,038 (21,022) (172,915) 1,189,101 Evergreen Apts. 7,625,595 (77,702) 423,115 7,971,008 Friendship Arms 2,479,083 (35,183) (79,400) 2,364,500 Jenny Lind Hall 150,862 (150,862) Lancaster Heights 18,836 (18,836) Locust House 1,330,089 (16,897) (91,364) 1,221,828 Midpark Towers 430,033 (430,033) Montecito Apts. 90,453 Oxford Towers (19,775) 19,775 Plaza Village 1,090,277 (136,256) (154,455) 799,566 Round Barn Manor (39,108) 39,108 Santa Fe Towers 247,823 (247,823) Walnut Towers 165,284 (165,284) Westwood Terrace 24,584 (24,584) ----------- ---------- ----------- ---------- ----------- --------- $15,184,763 $1,391,975 $(1,832,549) $ (210,249) $14,533,940 $ 90,453 =========== ========== =========== ========== =========== =========
76 78 SCHEDULE (CONTINUED) HOUSING PROGRAMS LIMITED INVESTMENTS IN LIMITED PARTNERSHIPS FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
Year Ended December 31, 1993 -------------------------------------------------------------------------------------------------- Cash Balance Distri- Balance Future Capital January Capital butions Equity in December Contributions Limited Partnerships 1, 1993 Contributions Received Income/(Loss) 31, 1993 Payable - -------------------- ------- ------------- -------- ------------- -------- --------- Bannock Arms $ 229,266 $ 182,910 $ (224,859) $ 287,298 $ 474,615 $ Berkeley Gardens 822,018 (19,952) 802,066 Cape La Croix 23,193 (23,193) Cloverdale 3,658 (3,658) Cloverleaf Deep Lake Hermitage 1,605,143 (104,395) (117,710) 1,383,038 Evergreen Apts. 7,280,591 (77,702) 422,706 7,625,595 Friendship Arms 2,478,793 (35,183) 35,473 2,479,083 Jenny Lind Hall 25,976 (25,976) Lancaster Heights 21,858 (21,858) Locust House 1,408,239 (16,897) (61,253) 1,330,089 Midpark Towers 191,316 (191,316) Montecito Apts. 90,453 Oxford Towers 686,656 (686,656) Plaza Village 1,020,156 70,121 1,090,277 Round Barn Manor 534,267 (534,267) Santa Fe Towers 100,683 (100,683) Walnut Towers 62,842 (62,842) Westwood Terrace 10,812 (10,812) ----------- ---------- ----------- ---------- ----------- --------- $16,065,129 $ 623,248 $(2,120,297) $ 616,683 $15,184,763 $ 90,453 =========== ========== =========== ========== =========== =========
77 79 SCHEDULE (CONTINUED) HOUSING PROGRAMS LIMITED INVESTMENTS IN LIMITED PARTNERSHIPS FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 NOTES: 1. Equity in income (losses) of the limited partnerships represents the Partnership's allocable share of the net income (loss) from the limited partnerships for the year. Equity in losses of the limited partnerships will be recognized until the investment balance is reduced to zero or below zero to an amount equal to future capital contributions to be made by the Partnership. 2. Cash distributions from the limited partnerships will be treated as a return on the investment and will reduce the investment balance until such time as the investment is reduced to an amount equal to additional contributions. Distributions subsequently received will be recognized as income. 78 80 SCHEDULE III HOUSING PROGRAMS LIMITED REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS IN WHICH H P L HAS INVESTMENTS DECEMBER 31, 1995
BUILDINGS, FURNISHINGS & EQUIPMENT NUMBER OUTSTANDING AMOUNT CARRIED OF MORTGAGE AT CLOSE OF ACCUMULATED PARTNERSHIP/LOCATION APTS. LOAN LAND PERIOD TOTAL DEPRECIATION - -------------------- ------ ----------- ---- -------------- ----- ------------ Bannock Arms 66 $ 1,481,365 $ 78,000 $ 2,865,472 $ 2,943,472 $ 1,099,271 Boise, ID Deep Lake Hermitage 144 3,509,305 360,000 6,363,923 6,723,923 2,461,688 Lake Villa, IL Jenny Lind Hall 78 1,457,260 111,000 2,729,647 2,840,647 1,080,249 Springfield, MO Lancaster Heights 198 2,313,884 200,000 4,585,123 4,785,123 1,712,398 Normal, IL Midpark Towers 202 4,255,972 532,593 8,729,209 9,261,802 3,569,902 Dallas, TX Oxford House 156 5,115,619 300,000 4,796,928 5,096,928 1,872,168 Decatur, IL Round Barn Manor 156 5,419,770 200,000 4,936,442 5,136,442 1,938,915 Champaign, IL Santa Fe Towers 252 6,153,921 316,724 11,480,545 11,797,269 4,533,217 Overland Park, KS Walnut Towers 78 1,461,654 85,229 3,056,802 3,142,031 1,200,169 Winfield, KS Westwood Terrace 97 3,045,166 109,200 4,197,190 4,306,390 2,281,076 Moline, IL Friendship Arms 151 4,110,246 262,879 7,713,968 7,976,847 3,521,485 Hyattsville, Mo Locust House 99 2,225,631 201,113 4,498,708 4,699,821 2,170,478 Westminster, Mo Berkeley Gardens 132 1,557,011 149,071 3,786,238 3,935,309 2,193,550 Martinsburg, WV Cape La Croix 125 1,464,549 169,000 2,484,615 2,653,615 1,014,271 Cape Girardeau, MO Cloverdale 100 1,071,011 100,000 2,051,596 2,151,596 814,486 Crawfordsville, IN Cloverleaf 94 978,651 123,000 1,901,424 2,024,424 782,954 Indianapolis, IN Evergreen Apts. 330 8,779,230 617,369 14,909,309 15,526,678 5,577,747 Oshtemo, MI Plaza Village 228 3,513,665 369,700 7,041,412 7,411,112 3,929,536 Woonsocket, RI ----- ----------- ---------- ----------- ------------ ----------- 2,686 $57,913,910 $4,284,878 $98,128,551 $102,413,429 $41,753,560 ===== =========== ========== =========== ============ ===========
79 81 SCHEDULE III (CONTINUED) HOUSING PROGRAMS LIMITED REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS IN WHICH HPL HAS INVESTMENTS DECEMBER 31, 1995 NOTES: 1. Each local limited partnership has developed, owns and operates the housing project. Substantially all project costs, including construction period interest expense, were capitalized by the local limited partnerships. 2. Depreciation is provided for by various methods over the estimated useful lives of the projects. The estimated composite useful lives of the buildings are from 25 to 40 years. 3. Investments in property and equipment - limited partnerships:
Buildings, Furnishings, Land and Equipment Total ----------- ------------- ------------- Balance, January 1, 1993 $ 4,917,424 $ 104,290,516 $ 109,207,940 Net additions in 1993 -- 540,207 540,207 ----------- ------------- ------------- Balance, December 31, 1993 4,917,424 104,830,723 109,748,147 Adjustment for foreclosure of Montecito Property (632,546) (8,060,272) (8,692,818) Net additions in 1994 -- 814,875 814,875 ----------- ------------- ------------- Balance, December 31, 1994 4,284,878 97,585,326 101,870,204 Net additions in 1995 -- 543,225 543,225 ----------- ------------- ------------- Balance, December 31, 1995 $ 4,284,878 $ 98,128,551 $ 102,413,429 =========== ============= =============
80 82 SCHEDULE III (CONTINUED) HOUSING PROGRAMS LIMITED REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS IN WHICH HPL HAS INVESTMENTS DECEMBER 31, 1995
Buildings, Furnishings, and Equipment ------------- ACCUMULATED DEPRECIATION: Balance, January 1, 1993 $ 33,202,228 Net additions for 1993 3,470,933 ------------ Balance, December 31, 1993 36,673,161 Adjustment for foreclosure of Montecito Property (1,805,052) Net additions for 1994 3,645,567 ------------ Balance, December 31, 1994 38,513,676 Net additions for 1995 3,239,884 ------------ Balance, December 31, 1995 $ 41,753,560 ============
81 83 PART III. ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT: HOUSING PROGRAMS LIMITED (the "Partnership") has no directors or executive officers of its own. The general partners of the Partnership are National Partnership Investments Corp. ("NAPICO"), Coast Housing Investments Associates (an affiliate of NAPICO) and Housing Programs Corporation II. NAPICO is a wholly-owned subsidiary of Casden Investment Company, an affiliate of The Casden Company. Housing Programs Corporation II is a wholly-owned subsidiary of LBI Group Inc. The following biographical information is presented for the directors and executive officers of NAPICO and officers of Housing Programs Corporation II with principal responsibility for the Partnership's affairs. CHARLES H. BOXENBAUM, 66, Chairman of the Board of Directors and Chief Executive Officer of NAPICO. Mr. Boxenbaum has been associated with NAPICO since its inception. He has been active in the real estate industry since 1960, and prior to joining NAPICO was a real estate broker with the Beverly Hills firm of Carl Rhodes Company. Mr. Boxenbaum has been a guest lecturer at national and state realty conventions, certified properties exchanger's seminars, Los Angeles Town Hall, National Association of Home Builders, International Council of Shopping Centers, Society of Conventional Appraisers, California Real Estate Association, National Institute of Real Estate Brokers, Appraisal Institute, various mortgage banking seminars, and the North American Property Forum held in London, England. In 1963, he was the winner of the Snyder Award, the highest annual award offered by the National Association of Real Estate Boards for Best Exchange. He is one of the founders and a past director of the First Los Angeles Bank, organized in November 1974. Mr. Boxenbaum was a member of the Board of Directors of the National Housing Council. Mr. Boxenbaum received his Bachelor of Arts degree from the University of Chicago. BRUCE E. NELSON, 44, President and a director of NAPICO. Mr. Nelson joined NAPICO in 1980 and became President in February 1989. He is responsible for the operations of all NAPICO sponsored limited partnerships. Prior to that he was primarily responsible for the securities aspects of the publicly offered real estate investment programs. Mr. Nelson is also involved in the identification, analysis, and negotiation of real estate investments. From February 1979 to October 1980, Mr. Nelson held the position of Associate General Counsel at Western Consulting Group, Inc., private residential and commercial real estate syndicators. Prior to that time Mr. Nelson was engaged in the private practice of law in Los Angeles. Mr. Nelson received his Bachelor of Arts degree from the University of Wisconsin and is a graduate of the University of Colorado School of Law. He is a member of the State Bar of California and is a licensed real estate broker in California and Texas. ALAN I. CASDEN, 50, Chairman of The Casden Company, an affiliate of Casden Properties (formerly CoastFed Properties), a director and member of the audit committee of NAPICO, and chairman of the Executive Committee of NAPICO. Mr. Casden is Chairman of the Board, Chief Executive Officer and sole shareholder of The Casden Company and Casden Investment Corporation. Prior to that, he was the president and chairman of Mayer Group, Inc., which he joined in 1975. He is also chairman of Mayer Management, Inc., a real estate management firm. Mr. Casden has been involved in approximately $3 billion of real estate financings and sales and has been responsible for the development and construction of more than 12,000 apartment units and 5,000 single-family homes and condominiums. 82 84 Mr. Casden is a member of the American Institute of Certified Public Accountants and of the California Society of Certified Public Accountants. Mr. Casden is a member of the advisory board of the National Multi-Family Housing Conference, the Multi-Family Housing Council, and the President's Council of the California Building Industry Association. He also serves on the advisory board to the School of Accounting of the University of Southern California. He holds a Bachelor of Science and a Masters in Business Administration degree from the University of Southern California. HENRY C. CASDEN, 52, President, Chief Operating Officer and Secretary of The Casden Company and a director and secretary of NAPICO. Mr. Casden has been President and Chief Operating Officer of The Casden Company, as well as a director of NAPICO since February 1988. He became secretary of both companies in late 1994. From 1982 to 1988, Mr. Casden was of counsel and a partner in the Los Angeles law firm of Troy, Casden & Gould. From 1978 to 1981, he was of counsel and a partner in the Los Angeles law firm of Loeb & Loeb. From 1972 to 1978, Mr. Casden was a member of the Beverly Hills law firm of Fink & Casden, Professional Corporation. Mr. Casden received his Bachelor of Arts degree from the University of California at Los Angeles, and is a graduate of the University of San Diego Law School. Mr. Casden is a member of the State Bar of California and has numerous professional affiliations. BRIAN D. GOLDBERG, 32, Chief Financial Officer of The Casden Company and a director of NAPICO. Mr. Goldberg joined The Casden Company in 1990 as Vice President of Finance and became Chief Financial Officer in March 1991. Prior to joining The Casden Company, Mr. Goldberg was with Arthur Andersen & Co., an international public accounting firm, from August 1985 until July 1990 in their Los Angeles office. He received his bachelor of science degree in Accounting from the University of Denver. Mr. Goldberg is a member of the American Institute of Certified Public Accountants and the California Society of Certified Public Accountants. SHAWN HORWITZ, 36, Executive Vice President and Chief Financial Officer. Mr. Horwitz joined NAPICO in 1990 and is responsible for the financial affairs of NAPICO and the limited partnerships sponsored by NAPICO. Prior to joining NAPICO, Mr. Horwitz was President of Star Sub Shops, Inc. a corporation engaged in the business of selling fast food franchises, for approximately one year, was an audit manager in the real estate industry group for Altschuler, Melvoin & Glasser for six years, and was an auditor with Arthur Young & Co. for 3 years. Mr. Horwitz received his Bachelor of Commerce degree in accounting from Rhodes University in South Africa and is a member of the Illinois Society of Certified Public Accountants, the American Institute of Certified Public Accountants and the South African Institute of Chartered Accountants. BOB SCHAFER, 54, Vice President and Corporate Controller. Mr. Schafer joined NAPICO in 1984 and is the Corporate Controller responsible for the financial reporting function of the Company. Prior to this, he was a Group and Division Controller at Bergen Brunswig for over eight years, Controller at a Flintkote subsidiary for over four years, and Assistant Controller at an electronics subsidiary of General Electric for two years. Mr. Schafer is a member of the California Society of Certified Public Accountants. He holds a Bachelor of Science degree in accounting from Woodbury University, Los Angeles. 83 85 PATRICIA W. TOY, 66, Senior Vice President - Communications and Assistant Secretary. Mrs. Toy joined NAPICO in 1977, following her receipt of an MBA from the Graduate School of Management, UCLA. From 1952 to 1956, Mrs. Toy served as a U.S. Naval Officer in communications and personnel assignments. She holds a Bachelor of Arts Degree from the University of Nebraska. MARK L. WALTHER, 35, Executive Vice President, General Counsel and Assistant Secretary. Mr. Walther joined NAPICO in 1987 and is responsible for the legal affairs of the NAPICO sponsored limited partnerships. Prior to joining NAPICO, Mr. Walther worked in the San Francisco law firm of Browne and Kahn which specialized in construction litigation. Mr. Walther received his Bachelor of Arts Degree in Political Science from the University of California, Santa Barbara and is a graduate of the University of California, Davis, School of Law. He is a member of the State Bar of Hawaii. ROCCO F. ANDRIOLA, 37, serves as President and Chief Financial Officer of Housing Programs Corporation II and Senior Vice President of Lehman Brothers Inc. in its Diversified Asset Group. He has held such position with Lehman since June 1991. From June 1989 through May 1991, Mr. Andriola held the position of First Vice President in Lehman's Capital Preservation and Restructuring Group. From November 1986 through May 1989, Mr. Andriola held the position of Vice President in the Corporate Transactions Group with the General Counsel's Office of Lehman. From September 1982 through October 1986, Mr. Andriola was employed by the law firm of Donovan Leisure Newton & Irvine as a corporate and securities attorney. Mr. Andriola graduated summa cum laude from Fordham University in 1979 with a B.A. degree in Economics and Political Science. Mr. Andriola received a J.D. degree and an LL.M degree in Corporate Law from New York University School of Law in 1982 and 1986, respectively. JOHN H. NG, 45, is a Vice President of Housing Programs Corporation II and Vice President of Lehman Brothers Inc. He has been employed by Lehman since November 1977. He is an asset manager of the Diversified Asset Group of Lehman and has held such position since 1985. From 1980 to 1985, Mr. Ng served as Senior Financial Analyst in the Corporate Planning and Development Department and from 1977 to 1980 he was an analyst in the Controller's Department. Prior to joining Lehman, he served as a Teaching Assistant in Finance and Economics at the University of Minnesota. Mr. Ng received an M.B.A. with a concentration in Corporate Finance from the University of Minnesota in 1977 and a B.A. magna cum laude in Economics with a specialization in Monetary Economics from Moorhead State University in 1975. MARK J. MARCUCCI, 33, is a Vice President of Housing Programs Corporation II and Vice President of Lehman Brothers Inc. in its Diversified Asset Group. Since joining Lehman Brothers in 1988, Mr. Marcucci's responsibilities have been concentrated in the restructuring, asset management, leasing, financing, refinancing and disposition of commercial office and residential real estate. Prior to joining Lehman Brothers, Mr. Marcucci was employed in a corporation lending capacity at Republic National Bank of New York. Mr. Marcucci received a B.B.A. in Finance from Hofstra University and a Master of Science in Real Estate from New York University. In addition, Mr. Marcucci holds both Series 7 and Series 63 securities licenses. 84 86 ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS: Housing Programs Limited has no officers, employees, or directors. However, under the terms of the Restated Certificate and Agreement of Limited Partnership, the Partnership is obligated to pay the general partners an annual management fee. The annual management fee is approximately equal to .5% of the invested assets, including the Partnership's allocable share of the mortgages related to real estate properties held by local limited partnerships. The fee is earned beginning in the month the Partnership makes its initial contribution to the lcoal partnership. In addition, the Partnership reimburses NAPICO for certain expenses. An affiliate of NAPICO is responsible for the on-site property management for certain properties owned by the limited partnerships in which the Partnership has invested. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT: (a) Security Ownership of Certain Beneficial Owners The general partners own all of the outstanding general partnership interests of Housing Programs Limited. No person is known to own beneficially in excess of 5% of the outstanding limited partnership interests. (b) With the exception of the Initial Limited Partner, Bruce Nelson, who is an officer of NAPICO, none of the officers or directors of NAPICO own directly or beneficially any limited partnership interests in the Partnership. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS: The Partnership has no officers, directors or employees of its own. All of its affairs are managed by the general partners. The transactions with the general partners are primarily in the form of fees paid by the Partnership to the general partners for services rendered to the Partnership, as discussed in Item 11 and in the notes to the accompanying financial statements. 85 87 ITEM 14. FINANCIAL STATEMENTS, SCHEDULES, EXHIBITS AND REPORT ON FORM 8-K: FINANCIAL STATEMENTS Reports of Independent Public Accountants. Balance Sheets as of December 31, 1995 and 1994. Statements of Operations for the years ended December 31, 1995, 1994 and 1993. Statements of Partners' Equity (Deficiency) for the years ended December 31, 1995, 1994 and 1993. Statements of Cash Flows for the years ended December 31, 1995, 1994 and 1993. Notes to Financial Statements. FINANCIAL STATEMENT SCHEDULES APPLICABLE TO HOUSING PROGRAMS LIMITED AND LIMITED PARTNERSHIPS IN WHICH HOUSING PROGRAMS LIMITED HAS INVESTMENTS Schedule - Investments in Limited Partnerships for the years ended December 31, 1995, 1994 and 1993. Schedule III - Real Estate and Accumulated Depreciation of Property Held by Local Limited Partnerships, December 31, 1995. The remaining schedules are omitted because the required information is included in the financial statements and notes thereto or they are not applicable or not required. EXHIBITS (3) Articles of incorporation and bylaws: The registrant is not incorporated. The Partnership Agreement was filed with Form S-11 #2-92352 incorporated herein by reference. (10) Material contracts: The registrant is not party to any material contracts, other than the Restated Certificate and Agreement of Limited Partnership dated May 15, 1984, and the nineteen contracts representing the partnership's investment in local limited partnerships as previously filed at the Securities Exchange Commission, File #2-92352 which is hereby incorporated by reference. (13) Annual report to security holders: Pages 64 to 74. Reports on Form 8-K No reports on Form 8-K were filed during the year ended December 31, 1995. 86 88 HOUSING PROGRAMS LIMITED (A CALIFORNIA LIMITED PARTNERSHIP) DECEMBER 31, 1995 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Los Angeles, State of California. HOUSING PROGRAMS LIMITED (a California limited partnership) By: NATIONAL PARTNERSHIP INVESTMENTS CORP. The General Partner /s/ CHARLES H. BOXENBAUM - -------------------------------------- Charles H. Boxenbaum Chairman of the Board of Directors and Chief Executive Officer /s/ BRUCE E. NELSON - -------------------------------------- Bruce E. Nelson Director and President /s/ ALAN I. CASDEN - -------------------------------------- Alan I. Casden Director /s/ HENRY C. CASDEN - -------------------------------------- Henry C. Casden Director /s/ BRIAN D. GOLDBERG - -------------------------------------- Brian D. Goldberg Director /s/ SHAWN D. HORWITZ - -------------------------------------- Shawn D. Horwitz Executive Vice President and Chief Financial Officer /s/ BOB E. SCHAFER - -------------------------------------- Bob E. Schafer Vice President and Corporate Controller 87 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE PARTNERSHIP'S STATEMENTS OF EARNINGS AND BALANCE SHEETS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000750304 HOUSING PROGRAMS LTD 12-MOS DEC-31-1995 JAN-01-1995 DEC-31-1995 595,330 0 0 0 0 720,330 0 0 15,191,113 15,432 0 0 0 0 (5,849,000) 15,191,113 0 439,413 0 0 760,064 0 1,011,127 (1,331,778) 0 (1,331,778) 0 0 0 (1,331,778) 0 0
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