3. Investments in Local Limited Partnerships

The Fund currently has a limited partner interest in one Local Limited Partnership which was organized for the purpose of owning and operating a government-assisted, multi-family housing complex. The Fund's ownership interest in the Local Limited Partnership is 77%. The Fund may have negotiated or may negotiate options with the Local General Partner to purchase or sell the Fund’s interest in the Local Limited Partnership at the end of the 15-year period during which properties that receive tax credits must remain in compliance with rent restrictions and set-aside requirements (the “Compliance Period”) for nominal prices. In the event that the Properties are sold to third parties, or upon dissolution of the Local Limited Partnerships, proceeds will be distributed according to the terms of each Local Limited Partnership’s partnership agreement.

The following is a summary of investments in Local Limited Partnerships at March 31, 2014 and 2013:

		2014		2013

Capital contributions paid to Local Limited Partnerships	$	1,697,298	$	4,015,376

Cumulative equity in losses of Local Limited Partnerships (excluding
cumulative unrecognized losses of $595,386 and $945,515 at
March 31, 2014 and 2013, respectively)		(1,712,856)		(2,971,814)

Cumulative cash distributions received from Local Limited Partnerships		-		(43,323)

Investments in Local Limited Partnerships before adjustments		(15,558)		1,000,239

Excess investment costs over the underlying assets acquired:

Acquisition fees and expenses		21,077		49,892

Cumulative amortization of acquisition fees and expenses		(5,519)		(15,131)

Investments in Local Limited Partnerships before impairment		-		1,035,000

Cumulative impairment on investments in Local Limited Partnerships		-		(1,035,000)

Investments in Local Limited Partnerships	$	-	$	-

The Fund has recorded an impairment for its investments in certain Local Limited Partnerships in order to appropriately reflect the estimated net realizable value of these investments.

The following is the summarized December 31, 2013 and 2012 financial information of the Local Limited Partnerships in which the Fund invested during the years ended March 31, 2014 and 2013, respectively (due to the Fund's policy of reporting the financial information of its Local Limited Partnership interests on a 90 day lag basis). The following financial information excludes the financial statements of one Local Limited Partnership for each of the years ended December 31, 2013 and 2012.

Summarized Combined Balance Sheets - as of December 31,

		2013		2012
Assets:
Investment property, net	$	2,470,378	$	5,931,273
Other assets		855,038		1,269,534
Total Assets	$	3,325,416	$	7,200,807

Liabilities and Partners' Deficiency:
Mortgage notes payable	$	4,502,758	$	7,027,109
Other liabilities		123,046		760,120
Total Liabilities		4,625,804		7,787,229

Fund's equity (deficiency)		(610,947)		97,450
Other partners' deficiency		(689,441)		(683,872)
Total Partners' Deficiency		(1,300,388)		(586,422)
Total Liabilities and Partners' Deficiency	$	3,325,416	$	7,200,807

Summarized Combined Statements of Operations - for the years ended

December 31,

		2013		2012

Rental and other income	$	1,028,339	$	5,336,402

Expenses:
Operating		873,044		2,244,537
Interest		-		789,298
Depreciation and amortization		290,504		806,722
Total Expenses		1,163,548		3,840,557

Net Income (Loss)	$	(135,209)	$	1,495,845

Fund’s share of Net Income (Loss)	$	(104,111)	$	1,489,300
Other partners' share of Net Income (Loss)	$	(31,098)	$	6,545

The 2013 financial information of one Local Limited Partnership, which was disposed of during the year ended March 31, 2014 as discussed below, is not included in the above summarized combined financial information. The Fund’s estimated equity in income of this Local Limited Partnership is $821,143 for the year ended March 31, 2014, a portion of which is not recognized since it is offset by previously unrecognized losses as described below.

The 2012 financial information of one Local Limited Partnership, which was disposed of during the year ended March 31, 2013, as discussed below, is not included in the above summarized combined financial information. The Fund's estimated equity in income of this Local Limited Partnership is $5,000 for the year ended March 31, 2013.

For the years ended March 31, 2014 and 2013, the Fund has not recognized $104,111 and $38,647, respectively, of equity in losses relating to certain Local Limited Partnerships in which cumulative equity in losses and distributions exceeded its total investment in the Local Limited Partnerships. Previously unrecognized losses of $454,240 and $1,527,947 are included in losses recognized in the years ended March 31, 2014 and 2013, respectively.

The Fund’s equity (deficiency) as reflected by the Local Limited Partnerships of ($610,947) and $97,450 at December 31, 2013 and 2012, respectively, differs from the Fund’s investments in Local Limited Partnerships before adjustments of ($15,558) and $1,000,239 at March 31, 2014 and 2013, respectively, due to cumulative unrecognized losses as described above and differences in the accounting treatment of miscellaneous items.

During the year ended March 31, 2014, the property owned by one of the Local Limited Partnerships was sold. The sale resulted in a distribution to the Fund of $1,425,429. As a result of the property sale, the Local Limited Partnership was dissolved and the Fund no longer has an interest in this Local Limited Partnership as of March 31, 2014. The Fund's net investment value at the time of the disposition was zero.

During the year ended March 31, 2013, the Fund disposed of its interest in two Local Limited Partnerships. The Fund's aggregate net investment value at the time of the dispositions was $1,989,681. The Fund received $2,015,000 during the year ended March 31, 2013 from the disposition of these interests, resulting in a net gain on disposition of investments in Local Limited Partnerships of $25,319.