INDEPENDENCE TAX CREDIT PLUS PROGRAM - 10-K Annual Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
--- EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2000

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
--- EXCHANGE ACT OF 1934

Commission File Number 0-20476

INDEPENDENCE TAX CREDIT PLUS L.P.
---------------------------------
(Exact name of registrant as specified in its charter)

Delaware 13-3589920
- - - - ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

625 Madison Avenue, New York, New York 10022
- - - - ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (212) 421-5333

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Beneficial Assignment Certificates (including underlying Limited
Partnership Interests)

(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ____

Indicate by check mark 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. [X]

DOCUMENTS INCORPORATED BY REFERENCE

None
Index to exhibits may be found on page 97
Page 1 of 109

PART I

Item 1. Business.

GENERAL

Independence Tax Credit Plus L.P. (the "Partnership") is a limited partnership
which was formed under the laws of the State of Delaware on November 7, 1990.
The general partner of the Partnership is Related Independence Associates L.P.,
a Delaware limited partnership (the "General Partner"). The general partner of
the General Partner is Related Independence Associates Inc., a Delaware
corporation.

On July 1, 1991, the Partnership commenced a public offering (the "Offering") of
Beneficial Assignment Certificates ("BACs") representing assignments of limited
partnership interests in the Partnership ("Limited Partnership Interests"),
managed by Related Equities Corporation (the "Dealer Manager"), pursuant to a
prospectus dated July 1, 1991, as supplemented by Master Supplement No. 1a
thereto dated April 28, 1992 and Master Supplement No. 2a thereto dated November
3, 1992 (as so supplemented, the "Prospectus").

The Partnership received $76,786,000 of Gross Proceeds from the Offering from
5,351 investors and no further issuance of BACs is anticipated.

The Partnership's was formed to invest in other partnerships ("Local
Partnerships") owning apartment complexes ("Apartment Complexes" or
"Properties") that are eligible for the low-income housing tax credit ("Housing
Tax Credit") enacted in the Tax Reform Act of 1986, some of which may also be
eligible for the historic rehabilitation tax credit ("Historic Tax Credit" and
together with Housing Tax Credits, "Tax Credits"). The partnership investment in
each Local Partnership represents from 98% to 98.99% of the Partnership's
interests in the Local Partnership. As of March 31, 2000, the Partnership had
acquired interests in twenty-eight Local Partnerships. As of March 31, 2000,
approximately $59,700,000 (not including acquisition fees of approximately
$4,500,000) of net proceeds have been invested in Local Partnerships of which
approximately $292,000 remains to be paid to the Local Partnerships, as certain
benchmarks such as occupancy levels must be attained prior to the release of the
funds. The Partnership does not intend to acquire additional properties. See
Item 2, Properties, below.

The investment objectives of the Partnership are to:

1. Entitle qualified BACs holders to Tax Credits over the period of the
Partnership's entitlement to claim Tax Credits (for each Property, generally ten
years from the date of investment or, if later, the date the Property is placed
in service; referred to herein as the "Credit Period") with respect to each
Apartment Complex.

2. Preserve and protect the Partnership's capital.

3. Participate in any capital appreciation in the value of the Properties and
provide distributions of Sale or Refinancing Proceeds upon the disposition of
the Properties.

4. Allocate passive losses to individual BACs holders to offset passive income
that they may realize from rental real estate investments and other passive
activities, and allocate passive losses to corporate BACs holders to offset
business income.

One of the Partnership's objectives is to entitle qualified BACs holders to Tax
Credits over the Credit Period. Each of the Local Partnerships in which the
Partnership has acquired an inter-

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est has been allocated by the relevant state credit agencies the authority to
recognize Tax Credits during the Credit Period provided that the Local
Partnership satisfies the rent restriction, minimum set-aside and other
requirements for recognition of the Tax Credits at all times during such period.
Once a Local Partnership has become eligible to recognize Tax Credits, it may
lose such eligibility and suffer an event of "recapture" if its Property fails
to remain in compliance with the Tax Credit requirements. None of the Local
Partnerships in which the Partnership has acquired an interest has suffered an
event of recapture.

There can be no assurance that the Partnership will achieve its investment
objectives as described above.

The Partnership is subject to the risks incident to potential losses arising
from the management and ownership of improved real estate. The Partnership can
also be affected by poor economic conditions generally, however no more than 21%
of the properties are located in any single state. There are also substantial
risks associated with owning properties receiving government assistance, for
example the possibility that Congress may not appropriate funds to enable HUD to
make rental assistance payments. HUD also restricts annual cash distributions to
partners based on operating results and a percentage of the owner's equity
contribution. The Partnership cannot sell or substantially liquidate its
investments in subsidiary partnerships during the period that the subsidy
agreements are in existence, without HUD's approval. Furthermore, there may not
be market demand for apartments at full market rents when the rental assistance
contracts expire.

COMPETITION
The real estate business is highly competitive and substantially all of the
properties acquired by the Partnership are subject to active competition from
similar properties in their respective vicinities. In addition, various other
limited partnerships may, in the future, be formed by the General Partner and/or
its affiliates to engage in businesses which may be competitive with the
Partnership.

EMPLOYEES
The Partnership does not have any direct employees. All services are performed
for the Partnership by its General Partner and its affiliates. The General
Partner receives compensation in connection with such activities as set forth in
Items 11 and 13. In addition, the Partnership reimburses the General Partner and
certain of its affiliates for expenses incurred in connection with the
performance by their employees of services for the Partnership in accordance
with the Partnership's Amended and Restated Agreement of Limited Partnership
(the "Partnership Agreement").

Item 2. Properties.

The Partnership holds a 98.99% limited partnership interest in twenty-seven and
a 98% limited partnership interest in one Local Partnership as of March 31,
2000. Set forth below is a schedule of the Local Partnerships including certain
information concerning their respective Apartment Complexes (the "Local
Partnership Schedule"). Further information concerning these Local Partnerships
and their properties, including any encumbrances affecting the properties, may
be found in Item 14, Schedule III.

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LOCAL PARTNERSHIP SCHEDULE

Name and Location % of Units Occupied At May 1,
---------------------------------------
(Number of Units) Date Acquired 2000 1999 1998 1997 1996
- - - - ----------------- ------------- ---- ---- ---- ---- ----

Harbor Court Limited Partnership December 1991 98% 95% 93% 98% 100%
Staten Island, NY (40)

Old Public Limited Partnership December 1991 48% 87% 80% 76% 77%
Lawrenceburg, TN (30)

Lancaster Terrace Limited Partnership February 1992 97% 99% 97% 98% 99%
Salem, OR (104)

655 North Street Limited Partnership March 1992 80% 74% 81% 84% 83%
Baton Rouge, LA (195)

Landreth Venture March 1992 90% 90% 94% 94% 96%
Philadelphia, PA (47)

Homestead Apartments Associates Ltd. March 1992 96% 94% 91% 94% 93%
Homestead, FL (123)

Bethel Villa Associates, L.P. April 1992 96% 100% 100% 100% 100%
Wilmington, DE (150)

West Diamond Street Associates May 1992 100% 93% 100% 89% 96%
Philadelphia, PA (28)

Susquehanna Partners May 1992 85% 87% 94% 96% 100%
Philadelphia, PA (47)

Boston Bay Limited Partnership August 1992 98% 98% 98% 99% 100%
Boston, MA (130)

Morrant Bay Limited Partnership August 1992 98% 99% 97% 100% 97%
Boston, MA (130)

Hope Bay Limited Partnership August 1992 98% 98% 100% 98% 98%
Boston, MA (45)

Lares Apartments Limited Partnership August 1992 100% 100% 100% 100% 100%
Lares, PR (102)

Lajas Apartments Limited Partnership August 1992 100% 100% 100% 100% 100%
Lajas, PR (99)

Arlington-Rodeo Properties August 1992 100% 100% 100% 100% 100%
Los Angeles, CA (29)

Conifer Bateman Associates August 1992 83% 92% 88% 100% 100%
Lowville, NY (24)

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LOCAL PARTNERSHIP SCHEDULE (continued)

Name and Location % of Units Occupied At May 1,
----------------------------------------
(Number of Units) Date Acquired 2000 1999 1998 1997 1996
- - - - ----------------- ------------- ---- ---- ---- ---- -----
Hampden Hall Associates, L.P. September 1992 100% 93% 97% 100% 99%
St. Louis, MO (75)

Chester Renaissance Associates September 1992 100% 100% 100% 100% 100%
Chester, PA (20)

Homestead Apts. II LTD October 1992 96% 94% 94% 95% 92%
Homestead, FL (112)

P.S. 157 Associates, L.P. November 1992 100% 100% 99% 100% 96%
New York, NY (73)

Cloisters Limited Partnership II November 1992 95% 100% 94% 100% 94%
Philadelphia, PA (65)

Creative Choice Homes II, LTD December 1992 97% 98% 98% 99% 99%
Opa-Locka, FL (328)

Milford Crossing Associates L.P. December 1992 100% 99% 95% 99% 96%
Milford, DE (73)

BX-7F Associates, L.P. January 1993 95% 99% 94% 95% 98%
Bronx, NY (85)

Los Angeles Limited Partnership May 1993 100% 100% 100% 100% 98%
Rio Piedras, PR (124)

Christine Apartments, L.P. June 1993 88% 94% 97% 97% 100%
Buffalo, NY (32)

Plainsboro Housing Partners, L.P. July 1993 98% 98% 99% 100% 98%
Plainsboro, NJ (126)

Rolling Green Associates, L.P. October 1993 94% 92% 96% 91% 97%
Syracuse, NY (395)

All leases are generally for periods not exceeding one to two years and no
tenant occupies more than 10% of the rentable square footage.

Rents from commercial tenants (to which average rental per square foot applies)
comprise less than 5% of the rental revenues of the Partnership. Maximum rents
for the residential units are determined annually by HUD and reflect
increases/decreases in consumer price indices in various geographic areas.
Market conditions, however, determine the amount of rent actually charged.

Management continuously reviews the physical state of the properties and
suggests to the respective Local General Partners budget improvements, which are
generally funded from cash flow from operations or release of replacement
reserve escrows.

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Management annually reviews the insurance coverage of the properties and
believes such coverage is adequate.

See Item 1, Business, above, for the general competitive conditions to which the
properties described above are subject.

Real estate taxes are calculated using rates and assessed valuations determined
by the township or city in which the property is located. Such taxes have
approximated 1% of the aggregate cost of the properties as shown in Schedule III
to the financial statements included herein.

Tax Credits with respect to a given Apartment Complex are available for a
ten-year period that commences when the property is placed into service.
However, the annual Tax Credits available in the year in which the Apartment
Complex is placed in service must be prorated based upon the months remaining in
the year. The amount of the annual Tax Credit not available in the first year
will be available in the eleventh year. In certain cases, the Partnership
acquired its interest in a Local Partnership after the Local Partnership had
placed its Apartment Complex in service. In these cases, the Partnership may be
allocated Tax Credits only beginning in the month following the month in which
it acquired its interest and Tax Credits allocated in any prior period are not
available to the Partnership.

Item 3. Legal Proceedings.

This information is incorporated by reference to the discussion of Old Public in
the Results of Operations of Certain Local Partnerships contained in Item 7,
Management's Discussion and Analysis of Financial Condition and Results of
Operations.

Item 4. Submission of Matters to a Vote of Security Holders.
None.

PART II

Item 5. Market for the Registrant's Common Equity and Related Security Holder
Matters.

As of March 31, 2000, the Partnership had issued and outstanding 76,786 Limited
Partnership Interests, each representing a $1,000 capital contribution to the
Partnership, or an aggregate capital contribution of $76,786,000. All of the
issued and outstanding Limited Partnership Interests have been issued to
Independence Assignor Inc. (the "Assignor Limited Partner"), which has in turn
issued 76,786 BACs to the purchasers thereof for an aggregate purchase price of
$76,786,000. Each BAC represents all of the economic and virtually all of the
ownership rights attributable to a Limited Partnership Interest held by the
Assignor Limited Partner. BACs may be converted into Limited Partnership
Interests at no cost to the holder (other than the payment of transfer costs not
to exceed $100), but Limited Partnership Interests so acquired are not
thereafter convertible into BACs.

Neither the BACs nor the Limited Partnership Interests are traded on any
established trading market. The Partnership does not intend to include the BACs
for quotation on NASDAQ or for listing on any national or regional stock
exchange or any other established securities market. The Revenue Act of 1987
contained provisions which have an adverse impact on investors in "publicly
traded partnerships." Accordingly, the General Partner has imposed limited
restrictions on the transferability of the BACs and the Limited Partnership
Interests in secondary market transactions. These restrictions should prevent a
public trading market from developing but may adversely affect the ability of an
investor to liquidate his or her investment quickly. It is expected that such
procedures will remain in effect until such time, if ever, as

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further revision of the Revenue Act of 1987 may permit the Partnership to lessen
the scope of the restrictions.

As of May 6, 2000, the Partnership has approximately 4,668 registered holders of
an aggregate of 76,786 BACs.

All of the Partnership's general partnership interests, representing an
aggregate capital contribution of $1,000, are held by the General Partner.

There are no material legal restrictions in the Partnership Agreement on the
ability of the Partnership to make distributions. The Partnership has made no
distributions to the BACs holders as of March 31, 2000. The Partnership does not
anticipate providing cash distributions to its BACs holders other than from net
refinancing or sales proceeds.

-7-

Item 6. Selected Financial Data.

The information set forth below presents selected financial data of the
Partnership. Additional financial information is set forth in the audited
consolidated financial statements in Item 8 hereof.

Year Ended March 31,
----------------------------------------------------------------------------
OPERATIONS 2000 1999 1998* 1997* 1996
- - - - ---------- ------------ ------------ ------------ ------------ ------------

Revenues $ 20,786,356 $ 20,525,657 $ 20,204,698 $ 19,663,105 $ 19,169,610

Operating expenses (26,611,223) (25,708,315) (24,944,950) (24,926,568) (24,084,097)
------------ ------------ ------------ ------------ ------------

Loss before (5,824,867) (5,182,658) (4,740,252) (5,263,463) (4,914,487)
minority interest

Minority interest in loss 20,636 17,208 35,144 33,343 32,193
of subsidiaries ------------ ------------ ------------ ------------ ------------

Net loss $ (5,804,231) $ (5,165,450) $ (4,705,108) $ (5,230,120) $ (4,882,294)
============ ============ ============ ============ ============

Net loss per $ (74.85) $ (66.61) $ (60.66) $ (67.43) $ (62.95)
weighted average BAC ============ ============ ============ ============ ============

*Reclassified for comparative purposes.

March 31,
----------------------------------------------------------------------------
FINANCIAL POSITION 2000 1999 1998 1997 1996
- - - - ------------------ ------------ ------------ ------------ ------------ ------------

Total assets $159,362,792 $164,969,973 $170,786,367 $177,448,837 $183,788,219
============ ============ ============ ============ ============

Total liabilities $117,620,369 $117,234,753 $118,016,288 $119,748,949 $120,702,900
============ ============ ============ ============ ============

Minority interest $ 6,412,604 $ 6,601,170 $ 6,470,579 $ 6,695,280 $ 6,850,591
============ ============ ============ ============ ============

Total partners' capital $ 35,329,819 $ 41,134,050 $ 46,299,500 $ 51,004,608 $ 56,234,728
============ ============ ============ ============ ============

During the years ended March 31, 2000 and 1999, total assets and liabilities
decreased primarily due to depreciation partially offset by a mortgage
refinancing (see Note 7). During the year ended March 31, 1998, total assets
decreased primarily due to depreciation and a loss on impairment of assets.
During the years ended March 31, 1997 and 1996, total assets decreased primarily
due to depreciation.

CASH DISTRIBUTIONS
The Partnership has made no distributions to the BACs holders as of
March 31, 2000.

-8-

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.

LIQUIDITY AND CAPITAL RESOURCES
The Partnership's primary source of funds is the cash distributions from the
operations of the Local Partnerships. These funds, which remain relatively
immaterial, are available to meet obligations of the Partnership. Cash
distributions received from the Local Partnerships remain relatively immaterial.
Distributions of approximately $34,000, $66,000 and $143,000 were received
during the years ended March 31, 2000, 1999 and 1998, respectively. However,
management expects that the distributions received from the Local Partnerships
will increase, although not to a level sufficient to permit providing cash
distributions to BACs holders. These distributions, as well as the working
capital reserves and the continued deferral of fees payable to the General
Partner discussed below, will be used to meet the operating expenses of the
Partnership.

As of March 31, 2000, the Partnership has invested all of the net proceeds in
twenty-eight Local Partnerships. Approximately $292,000 of the purchase price
remains to be paid (all of which is held in escrow). During the year ended March
31, 2000, approximately $5,000 was paid from escrow.

Cash and cash equivalents of the Partnership and its twenty-eight consolidated
subsidiary partnerships increased approximately $475,000 during the year ended
March 31, 2000, due to cash provided by operating activities ($3,437,000) and
the writeoff of deferred costs ($224,000) which exceeded net repayments of
mortgage notes ($1,978,000), acquisitions of property and equipment ($375,000),
an increase in cash held in escrow for investing activities ($20,000), a net
decrease in due to local general partners and affiliates relating to investing
and financing activities ($538,000), an increase in deferred costs ($107,000),
and a decrease in capitalization of consolidated subsidiaries attributable to
minority interest ($168,000). Included in the adjustments to reconcile the net
loss to cash flow provided by operations in depreciation and amortization of
approximately $6,208,000.

The working capital reserve at March 31, 2000 and 1999 was approximately $18,000
and $21,000, respectively.

The Partnership has negotiated Operating Deficit Guaranty Agreements with all
Local Partnerships by which the general partners of the Local Partnerships have
agreed to fund operating deficits for a specified period of time. The terms of
the Operating Deficit Guaranty Agreements varied for each Local Partnership,
with maximum dollar amounts to be funded for a specified period of time,
generally three years, commencing on the break-even date. As of March 31, 2000
all operating deficit guarantees have expired. For the year ended March 31,
2000, nothing had been funded by the Local General Partners to meet such
obligations, which includes amounts held in escrow by the Local Partnerships.

Partnership management fees owed to the General Partner amounting to
approximately $2,299,000 were accrued and unpaid as of March 31, 2000. Without
the General Partner's advances and continued accrual without payment of certain
fees and expense reimbursements, the Partnership will not be in a position to
meet its obligations. The General Partner has continued advancing and allowing
the accrual without payment of these amounts but is under no obligation to
continue to do so.

For a discussion of contingencies affecting certain Local Partnerships, see
Results of Operations of Certain Local Partnerships, below. Since the maximum
loss the Partnership would be liable for is its net investment in the respective
subsidiary partnerships, the resolution of the existing

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contingencies is not anticipated to impact future results of operations,
liquidity or financial condition in a material way. However, the Partnership's
loss of its investment in a Local Partnership will eliminate the ability to
generate future tax credits from such Local Partnership and may also result in
recapture of tax credits if the investment is lost before expiration of the
credit period.

Management is not aware of any trends or events, commitments or uncertainties,
which have not otherwise been disclosed, that will or are likely to impact
liquidity in a material way. Management believes the only impact would be from
laws that have not yet been adopted. The portfolio is diversified by the
location of the properties around the United States so that if one area of the
country is experiencing downturns in the economy, the remaining properties in
the portfolio may be experiencing upswings. However, the geographic
diversification of the portfolio may not protect against a general downturn in
the national economy. The Partnership has fully invested the proceeds of its
offering in 28 Local Partnerships, all of which fully have their Tax Credits in
place. The Tax Credits are attached to the project for a period of ten years,
and are transferable with the property during the remainder of the ten-year
period. If trends in the real estate market warranted the sale of a property,
the remaining Tax Credits would transfer to the new owner; thereby adding
significant value to the property on the market, which are not included in the
financial statement carrying amount.

RESULTS OF OPERATIONS
Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, construction period interest
and any other costs incurred in acquiring the properties. The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods. Expenditures for repairs and maintenance are charged
to expense as incurred; major renewals and betterments are capitalized. At the
time property and equipment are retired or otherwise disposed of, the cost and
accumulated depreciation are eliminated from the assets and accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings. A loss on impairment of assets is recorded when management estimates
amounts recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows) when the property is considered to be impaired and the depreciated cost
exceeds estimated fair value.

At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated.

Through March 31, 2000, the Partnership has recorded approximately $500,000 as a
loss on impairment of assets.

The following is a summary of the results of operations of the Partnership for
the years ended March 31, 2000, 1999 and 1998 (the 1999, 1998 and 1997 Fiscal
Years, respectively.)

The Partnership's results of operations for the 1999, 1998 and 1997 Fiscal Years
consisted primarily of the results of the Partnership's investment in the
twenty-eight Local Partnerships. The majority of Local Partnership income
continues to be in the form of rental income with the corresponding expenses
being divided among operations, depreciation and mortgage interest.

The net loss for the 1999, 1998 and 1997 Fiscal Years totaled $5,804,231,
$5,165,450 and $4,705,108, respectively.

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The Partnership and BACs holders began to recognize Housing Tax Credits with
respect to a Property when the Credit Period for such Property commenced.
Because of the time required for the acquisition, completion and rent-up of
Properties, the amount of Tax Credits per BAC gradually increased over the first
three years of the Partnership. Housing Tax Credits not recognized in the first
three years will be recognized in the 11th through 13th years. The Partnership
generated $11,986,066, $11,979,284 and $11,977,461 of Housing Tax Credits during
the 1999, 1998 and 1997 tax years, respectively.

1999 VS. 1998
Rental income remained fairly consistent with an increase of approximately 1%
for the 1999 Fiscal Year as compared to the 1998 Fiscal Year due primarily to
rental rate increases.

Total expenses, excluding general and administrative, remained fairly consistent
with an increase of approximately 2%.

General and administrative increased approximately $495,000 for the 1999 Fiscal
Year as compared to the 1998 Fiscal Year primarily due to the write off of
organization costs that were expensed at one Local Partnership as well as an
increase in payroll and renting expenses at a second Local Partnership.

1998 VS. 1997
Rental income remained fairly consistent with an increase of approximately 2%
for the 1998 Fiscal Year as compared to the 1997 Fiscal Year due primarily to
rental rate increases.

Total expenses excluding general and administrative, general and
administrative-related parties, repairs and maintenance and loss on impairment
of assets remained fairly consistent with a decrease of approximately 3%.

General and administrative increased approximately $414,000 for the 1998 Fiscal
Year as compared to the 1997 Fiscal Year primarily due to the costs spent in
renovating and providing training in a Neighborhood Network Center at one Local
Partnership, an increase in renting expenses, office salaries and security
payroll at a second Local Partnership, and an increase in renting and bad debt
expenses at a third Local Partnership.

General and administrative-related parties increased approximately $854,000 for
the 1998 Fiscal Year, as compared to the 1997 Fiscal Year, due primarily to an
increase in partnership management fees payable to the General Partner.

Repairs and maintenance increased approximately $363,000 for the 1998 Fiscal
Year as compared to the 1997 Fiscal Year, primarily due to masonry work,
painting, cleaning and installation of kitchen cabinets at one Local
Partnership, upgrading apartment units at a second Local Partnership, and carpet
replacement and painting at a third Local Partnership.

RESULTS OF OPERATIONS OF CERTAIN LOCAL PARTNERSHIPS

OLD PUBLIC LIMITED PARTNERSHIP
Old Public Limited Partnership (the "Debtor") originally filed its bankruptcy
case in the United States Bankruptcy Court for the Southern District of New York
on November 17, 1998. The case was transferred to the United States Bankruptcy
Court for the Middle District of Tennessee, Columbia Division before Judge
George Paine, presiding as the result of a venue motion filed by the First
National Bank of Pulaski, Tennessee, the sole secured creditor of the Debtor
(the "Bank").

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The Second Amended Plan of Reorganization, as modified, was confirmed on
February 18, 2000. Pursuant to the plan the Debtor affirmed its obligations to
the Bank, paid the Bank on the Effective Date (ten days following confirmation)
(i) the arrearages due as to principal and interest through a cash infusion by
the current limited partners of the Debtor, (ii) an additional sum of $50,000
and (iii) execution of a three-year nine percent note in the amount of $30,700
in satisfaction of the Bank's accrued attorneys fees. As of March 31, 2000, the
Partnership has advanced approximately $376,000 to Old Public.

The former general partner of the Debtor, Old Public School, Inc. and two of its
principals, Lloyd Carroll and Jane Gay Carvell filed unsecured claims (the
"Litigation Claims") against the Debtor in the amount of approximately $900,000.
The court, on summary judgment filed by the Debtor, disallowed approximately
$750,000 of the asserted claims. The remainder of the claims asserted will be
treated as voluntary loans and will be satisfied in accordance with the terms of
the Partnership Agreement.

OTHER
The Partnership's investment as a limited partner in the Local Partnerships is
subject to the risks incident to the potential losses arising from management
and ownership of improved real estate. The Partnership's investments also could
be adversely affected by poor economic conditions, generally, which could
increase vacancy levels and rental payment defaults and by increased operating
expenses, any or all of which could threaten the financial viability of one or
more of the Local Partnerships.

There also are substantial risks associated with the operations of Apartment
Complexes receiving government assistance. These include governmental
regulations concerning tenant eligibility, which may make it more difficult to
rent apartments in the complexes; difficulties in obtaining government approval
for rent increases; limitations on the percentage of income which low and
moderate-income tenants may pay as rent; the possibility that Congress may not
appropriate funds to enable the Department of Housing and Urban Development to
make the rental assistance payments it has contracted to make; and that when the
rental assistance contracts expire there may not be market demand for apartments
at full market rents in a Local Partnership's Apartment Complex.

The Local Partnerships are impacted by inflation in several ways. Inflation
allows for increases in rental rates generally to reflect the impact of higher
operating and replacement costs. Inflation also affects the Local Partnerships
adversely by increasing operating costs, such as fuel, utilities and labor.

Item7A. Quantitative and Qualitative Disclosure About Market Risk.

Not Applicable.

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Item 8. Financial Statements and Supplementary Data.

Sequential
Page
----------

(a) 1. Consolidated Financial Statements

Independent Auditors' Report 14

Consolidated Balance Sheets at March 31, 2000 and 1999 75

Consolidated Statements of Operations for the Years Ended March 31,
2000, 1999 and 1998 76

Consolidated Statements of Changes in Partners' Capital (Deficit) for
the Years Ended March 31, 2000, 1999 and 1998 77

Consolidated Statements of Cash Flows for the Years Ended March 31,
2000, 1999 and 1998 78

Notes to Consolidated Financial Statements 80

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INDEPENDENT AUDITORS' REPORT

To the Partners of
Independence Tax Credit Plus L.P. and Subsidiaries
(A Delaware Limited Partnership)

We have audited the consolidated balance sheets of Independence Tax Credit Plus
L.P. and Subsidiaries (a Delaware Limited Partnership) as of March 31, 2000 and
1999, and the related consolidated statements of operations, changes in
partners' capital (deficit), and cash flows for the years ended March 31, 2000,
1999 and 1998 (the 1999, 1998 and 1997 Fiscal Years). 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 did not
audit the financial statements for twenty-eight (1999, 1998 and 1997 Fiscal
Years) subsidiary partnerships whose losses aggregated $3,986,583, $3,805,935
and $4,442,094 for the 1999, 1998 and 1997 Fiscal Years, respectively, and whose
assets constituted 99% of the Partnership's assets at March 31, 2000 and 1999,
presented in the accompanying consolidated financial statements. The financial
statements for twenty-seven of these subsidiary partnerships were audited by
other auditors whose reports thereon have been furnished to us and our opinion
expressed herein, insofar as it relates to the amounts included for these
subsidiary partnerships is based solely upon the reports of the other auditors.
The financial statements for one of these subsidiary partnerships were
unaudited.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, based upon our audits, and the reports of the other auditors
referred to above, the consolidated financial statements referred to in the
first paragraph present fairly, in all material respects, the financial position
of Independence Tax Credit Plus L.P. and Subsidiaries at March 31, 2000 and
1999, and the results of their operations and their cash flows for the years
ended March 31, 2000, 1999 and 1998 in conformity with generally accepted
accounting principles.

TRIEN ROSENBERG ROSENBERG
WEINBERG CIULLO & FAZZARI LLP

New York, New York
June 8, 2000

-14-

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Harbor Court L.P.

We have audited the accompanying balance sheets of Harbor Court L.P. as of
December 31, 1999 and 1998, and the related statements of operations, partners'
equity and cash flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Harbor Court L.P., as of
December 31, 1999 and 1998, 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.

/s/ Reznick Fedder & Silverman
Boston, Massachusetts
January 24, 2000

-15-

[Letterhead of KPMG Peat Marwick LLP]

Independent Auditors' Report

The Partners
Harbor Court Limited Partnership:

We have audited the accompanying balance sheets of Harbor Court Limited
Partnership as of December 31, 1997 and 1996, and the related statements of
operations, changes in partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 Harbor Court Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.

/s/ KPMG Peat Marwick LLP
New York, New York
January 29, 1998

-16-

[Letterhead of Mack Roberts & Company, L.L.C.]

INDEPENDENT AUDITOR'S REPORT

The Partners
Lancaster Terrace Limited Partnership
Salem, Oregon

We have audited the balance sheets of Lancaster Terrace Limited Partnership as
of December 31, 1999 and 1998, and the related statements of operations, changes
in partners' capital, and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 Lancaster Terrace Limited
Partnership as of December 31, 1999 and 1998, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.

/s/ Mack, Roberts & Co., L.L.C.
February 15, 2000

-17-

[Letterhead of Mack Roberts & Company, L.L.C.]

INDEPENDENT AUDITOR'S REPORT

The Partners
Lancaster Terrace Limited Partnership
Salem, Oregon

We have audited the balance sheets of Lancaster Terrace Limited Partnership as
of December 31, 1998 and 1997, and the related statements of operations, changes
in partners' capital, and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 Lancaster Terrace Limited
Partnership as of December 31, 1998 and 1997, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.

/s/ Mack, Roberts & Co., L.L.C.
February 5, 1999

-18-

[Letterhead of Pailet, Meunier and LeBlanc, L.L.P.]

INDEPENDENT AUDITOR'S REPORT

To the Partners
of 655 North Street Limited Partnership
New Orleans, Louisiana

We have audited the accompanying balance sheets of 655 North Street Limited
Partnership, HUD Project No. 064-12001, as of December 31, 1999 and 1998, and
the related statements of income, changes in partners' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 655 North Street Limited
Partnership, HUD Project No. 064-12001, as of December 31, 1999 and 1998 and the
results of its operations, changes in partners' equity, and cash flows for the
years then ended in conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 23, 2000, on our
consideration of 655 North Street Limited Partnership's internal control, and
reports dated February 23, 2000, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to
Affirmative Fair Housing.

/s/ Pailet, Meunier and LeBlanc, L.L.P.
Metairie, Louisiana
February 23 2000

-19-

[Letterhead of Pailet, Meunier and LeBlanc, L.L.P.]

INDEPENDENT AUDITOR'S REPORT

To the Partners
of 655 North Street Limited Partnership
New Orleans, Louisiana

We have audited the accompanying balance sheets of 655 North Street Limited
Partnership, HUD Project No. 064-12001, as of December 31, 1998 and 1997, and
the related statements of income, changes in partners' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 655 North Street Limited
Partnership, HUD Project No. 064-12001, as of December 31, 1998 and 1997, and
the results of its operations, changes in partners' equity, and cash flows for
the years then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 28, 1999, on our
consideration of 655 North Street Limited Partnership's internal control, and
reports dated January 28, 1999, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to
Affirmative Fair Housing.

/s/ Pailet, Meunier and LeBlanc, L.L.P.
Metairie, Louisiana
January 28, 1999

-20-

[Letterhead of Ziner, Kennedy, Lehan LLP

INDEPENDENT AUDITORS' REPORT

To the Partners of
Landreth Venture

We have audited the accompanying balance sheets of Landreth Venture (a
Pennsylvania limited partnership) as of December 31, 1999 and 1998 and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. 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. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partners and contracted management agent, 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 Landreth Venture as of December
31, 1999 and 1998, and the results of its operations, changes in partners'
equity and its cash flows for the years then ended in conformity with generally
accepted accounting principles.

/s/ Ziner, Kennedy, Lehan LLP
Quincy, Massachusetts
January 20,2000

-21-

[Letterhead of Ziner, Kennedy, Lehan LLP

INDEPENDENT AUDITORS' REPORT

To the Partners of
Landreth Venture

We have audited the accompanying balance sheets of Landreth Venture (a
Pennsylvania limited partnership) as of December 31, 1998 and 1997 and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. 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. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partners and contracted management agent, 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 Landreth Venture as of December
31, 1998 and 1997, and the results of its operations, changes in partners'
equity and its cash flows for the years then ended in conformity with generally
accepted accounting principles.

/s/ Ziner, Kennedy, Lehan LLP
Boston, Massachusetts
January 18, 1999

-22-

[Letterhead of Friedman, Alpern & Green LLP

INDEPENDENT AUDITORS' REPORT

To the Partners
Homestead Apartments Associates, Ltd.

We have audited the accompanying balance sheets of Homestead Apartments
Associates, Ltd.(a limited partnership) as of December 31, 1999 and the related
statements of operations, partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits 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 Homestead Apartments
Associates, Ltd. as of December 31, 1999, and the results of its operations, and
its cash flows for the years then ended, in conformity with generally accepted
accounting principles.

/s/ Friedman, Alpren & Green LLP
New York, New York
January 26, 2000

-23-

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Homestead Apartments Associates, Ltd.

We have audited the accompanying balance sheets of Homestead Apartments
Associates, Ltd., as of December 31, 1998 and 1997, and the related statements
of operations, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Homestead Apartments
Associates, Ltd. as of December 31, 1998 and 1997, and the results of its
operations, and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 16
and 17 is presented for the purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.

/s/ Reznick Fedder & Silverman
Atlanta, Georgia
January 27, 1999

-24-

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Bethel Villa Associates, L.P.

We have audited the accompanying balance sheets of Bethel Villa Associates, L.P.
as of December 31, 1999 and 1998, the related statements of operations,
partners' equity (deficit) and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our 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 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 Bethel Villa Associates, L.P.
as of December 31, 1999, and 1998 and the results of its operations, the changes
in partners' equity (deficit) and cash flows for the year then ended, in
conformity with generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 26
through 30 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 and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 18,
2000 on our consideration of Bethel Villa Associates, L.P.'s internal control
and on its compliance with specific requirements applicable to major HUD and
DSHA programs, and fair housing and non-discrimination.

/s/ Reznick Fedder & Silverman
Lead Auditor: Robert J. Denmark
Bethesda, Maryland
Federal Employer Identification Number: 52-1088612
January 18, 2000

-25-

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Bethel Villa Associates, L.P.

We have audited the accompanying balance sheets of Bethel Villa Associates, L.P.
as of December 31, 1997 and 1996, and the related statements of profit and loss
(on HUD Form No. 92410), partners' equity and cash flows for the years then
ended. These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bethel Villa Associates, L.P.
as of December 31, 1997 and 1996, and the results of its operations, the changes
in partners' equity and cash flows for the years then ended, in conformity with
generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 27
through 32 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 basic financial statements taken as a whole.

In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 22,
1998 on our consideration of Bethel Villa Associates, L.P.'s internal control
and on its compliance with specific requirements applicable to DSHA programs,
fair housing and non-discrimination, and laws and regulations applicable to the
financial statements.

/s/ Reznick Fedder & Silverman
Audit Prncipal: Lester A. Kanis
Bethesda, Maryland
Federal Employer Identification Number: 52-1088612
January 22, 1998

-26-

[Letterhead of Asher & Company Ltd.]

Independent Auditors' Report

The Partners
West Diamond Street Associates
T/A Sedgley Park Apartments
Marlton, New Jersey

We have audited the accompanying balance sheets of West Diamond Street
Associates T/A Sedgley Park Apartments (A Limited Partnership), PHFA Project No.
O-0198, as of December 31, 1999 and 1998 and the related statements of profit
and loss, Partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of West Diamond Street Associates
T/A Sedgley Park Apartments (A Limited Partnership), PHFA Project No. O-0198, as
of December 31, 1999 and 1998, and the results of its operations, changes in its
Partners' capital and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.

In accordance with Government Auditing Standards, we have also issued a report
dated January 13, 2000 on our consideration of West Diamond Street Associates'
T/A Sedgley Park Apartments (A Limited Partnership), PHFA Project No. O-0198,
internal control over financial reporting and our tests of its compliance with
certain provisions of laws, regulations, contracts and grants.

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 13, 2000

-27-

[Letterhead of Asher & Company]

Independent Auditors' Report

The Partners
West Diamond Street Associates
T/A Sledgey Park Apartments
Marlton, New Jersey

We have audited the accompanying balance sheets of West Diamond Street
Associates T/A Sedgly Park Apartments (A Limited Partnership), PHFA Project No.
O-0198, as of December 31, 1998 and 1997 and the related statements of profit
and loss, Partners' capital and cash flow 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 general 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 the assessing the accounting principles used and significant
estimates made by management, as well a evaluating the overall financial
statement presentation. We believe our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of West Diamond Street Associates
T/A Sedgley Park Apartments (A Limited Partnership), PHFA Project No. O-0198, as
of December 31, 1998 and 1997, and the results of its operations, changes in its
Partners' capital and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole . The accompanying supplementary
information is presented for a purposes of additional analysis and is not a
required part of basic financial statements. Such information has been subjected
to auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.

In accordance with Government Auditing Standards, we have also issued a report
dated January 22,1999 on our consideration of West Diamond Street Associates'
T/A Sedgley Park Apartments (A Limited Partnership), PHFA Project No. O-0198,
internal control over financial reporting and our tests of its compliance with
certain provisions of laws, regulations, contracts and grants.

/s/ Asher & Company, Ltd
Philadelphia, Pennsylvania
January 22, 1999

-28-

[Letterhead of J.H. Williams & Co., LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners
Susquehanna Partners (a Limited Partnership)
Philadelphia, Pennsylvania

We have audited the accompanying balance sheets of Susquehanna Partners (a
Limited Partnership) as of December 31, 1999 and 1998 and the related statements
of (loss), changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's general
partner and contracted management agent. 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. 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 the
Partnership's general partner and contracted management agent, 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 Susquehanna Partners (a Limited
Partnership) at December 31, 1999 and 1998, and its results of operations,
changes in partners' equity and cash flows for the years then ended in
conformity with generally accepted accounting principles.

/s/ J.H. Williams & Co., LLP
Kingston, Pennsylvania
February 1, 2000

-29-

[Letterhead of J.H. Williams & Co., LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners
Susquehanna Partners (a Limited Partnership)
Philadelphia, Pennsylvania

We have audited the accompanying balance sheets of Susquehanna Partners (a
Limited Partnership) as of December 31, 1998 and 1997 and the related statements
of (loss), changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's general
partner and contracted management agent. 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. 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 the
Partnership's general partner and contracted management agent, 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 Susquehanna Partners (a Limited
Partnership) at December 31, 1998 and 1997, and its results of operations,
changes in partners' equity and cash flows for the years then ended in
conformity with generally accepted accounting principles.

/s/ J.H. Williams & Co., LLP
Kingston, Pennsylvania
February 11, 1999

-30-

[Letterhead of Robert Ercolini & Company LLP]

INDEPENDENT AUDITOR'S REPORT

To the Partners of
Boston Bay Limited Partnership
Boston, Massachusetts

We have audited the accompanying balance sheet of Boston Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-071-R, as of December
31, 1999, and the related statements of operations, partners' capital, 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 Boston Bay Limited Partnership
as of December 31, 1999, and the results of its operations, changes in partners'
capital, 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 20, 2000 on our consideration of Boston Bay Limited Partnership's
internal control, a report dated January 20, 2000 on its compliance with laws
and regulations, and reports dated January 20, 2000 on its compliance with
specific requirements applicable to HUD programs.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 14 through 27) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency (MHFA) 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.

/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 20, 2000

-31-

[Letterhead of Robert Ercolini & Company LLP]

INDEPENDENT AUDITOR'S REPORT

To the Partners of
Boston Bay Limited Partnership
Boston, Massachusetts

We have audited the accompanying balance sheet of Boston Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-071-R, as of December
31, 1998, and the related statements of operations, partners' capital, 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 Boston Bay Limited Partnership
as of December 31, 1998, and the results of its operations, changes in partners'
capital, 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 17, 1999 on our consideration of Boston Bay Limited Partnership's
internal control, a report dated January 17, 1999 on its compliance with laws
and regulations, and reports dated January 17, 1999 on its compliance with
specific requirements applicable to HUD programs.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 14 through 27) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency (MHFA) 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.

/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 17, 1999

-32-

[Letterhead of Robert Ercolini & Company LLP]

INDEPENDENT AUDITOR'S REPORT

To the Partners of
Boston Bay Limited Partnership
Boston, Massachusetts

We have audited the accompanying balance sheet of Boston Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-071-R, as of December
31, 1997, and the related statements of operations, partners' capital, 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 Boston Bay Limited Partnership
as of December 31, 1997, and the results of its operations, changes in partners'
capital, 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 17, 1998 on our consideration of Boston Bay Limited Partnership's
internal control, a report dated January 17, 1998 on its compliance with laws
and regulations, and reports dated January 17, 1998 on its compliance with
specific requirements applicable to HUD programs.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 15 through 28) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency (MHFA) 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.

/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 17, 1998

-33-

[Letterhead of Robert Ercolini & Company LLP]

INDEPENDENT AUDITOR'S REPORT

To the Partners of
Morrant Bay Limited Partnership
Boston, Massachusetts

We have audited the accompanying balance sheet of Morrant Bay Limited
Partnership (a Massachusetts Limited Partnership), MHFA Project No. 70-095-R, as
of December 31, 1999, and the related statements of operations, partners'
capital, 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 Morrant Bay Limited Partnership
as of December 31, 1999, and the results of its operations, changes in partners'
capital, 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 22, 2000 on our consideration of Morrant Bay Limited Partnership's
internal control, a report dated January 22, 2000 on its compliance with laws
and regulations, and reports dated January 22, 2000 on its compliance with
specific requirements applicable to HUD programs.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 14 through 27) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency 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.

/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 22, 2000

-34-

[Letterhead of Robert Ercolini & Company LLP]

INDEPENDENT AUDITOR'S REPORT

To the Partners of
Morrant Bay Limited Partnership
Boston, Massachusetts

We have audited the accompanying balance sheet of Morrant Bay Limited
Partnership (a Massachusetts Limited Partnership), MHFA Project No. 70-095-R, as
of December 31, 1998, and the related statements of operations, partners'
capital, 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 Morrant Bay Limited Partnership
as of December 31, 1998, and the results of its operations, changes in partners'
capital, 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 19, 1999 on our consideration of Morrant Bay Limited Partnership's
internal control, a report dated January 19, 1999 on its compliance with laws
and regulations, and reports dated January 19, 1999 on its compliance with
specific requirements applicable to HUD programs.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 14 through 27) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency 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.

/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 19, 1999

-35-

[Letterhead of Robert Ercolini & Company LLP]

INDEPENDENT AUDITOR'S REPORT

To the Partners of
Morrant Bay Limited Partnership
Boston, Massachusetts

We have audited the accompanying balance sheet of Morrant Bay Limited
Partnership (a Massachusetts Limited Partnership), MHFA Project No. 70-095-R, as
of December 31, 1997, and the related statements of operations, partners'
capital, 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 Morrant Bay Limited Partnership
as of December 31, 1997, and the results of its operations, changes in partners'
capital, 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 20, 1998 on our consideration of Morrant Bay Limited Partnership's
internal control, a report dated January 20, 1998 on its compliance with laws
and regulations, and reports dated January 20, 1998 on its compliance with
specific requirements applicable to HUD programs.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 15 through 28) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency (MHFA) 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.

/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 20, 1998

-36-

[Letterhead of Robert Ercolini & Company LLP]

INDEPENDENT AUDITOR'S REPORT

To the Partners of
Hope Bay Limited Partnership
Boston, Massachusetts

We have audited the accompanying balance sheet of Hope Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-168-R, as of December
31, 1999, and the related statements of operations, partners' capital, 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 Hope Bay Limited Partnership as
of December 31, 1999, and the results of its operations, changes in partners'
capital, 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 21, 2000 on our consideration of Hope Bay Limited Partnership's
internal control, a report dated January 21,2000 on its compliance with laws and
regulations, and reports dated January 21,2000 on its compliance with specific
requirements applicable to HUD programs.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 14 through 27) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency 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.

/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 21, 2000

-37-

[Letterhead of Robert Ercolini & Company LLP]

INDEPENDENT AUDITOR'S REPORT

To the Partners of
Hope Bay Limited Partnership
Boston, Massachusetts

We have audited the accompanying balance sheet of Hope Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-168-R, as of December
31, 1998, and the related statements of operations, partners' capital, 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 Hope Bay Limited Partnership,
as of December 31, 1998, and the results of its operations, changes in partners'
capital, 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 19, 1999 on our consideration of Hope Bay Limited Partnership's
internal control, a report dated January 19, 1999 on its compliance with laws
and regulations, and reports dated January 19, 1999 on its compliance with
specific requirements applicable to HUD programs.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 14 through 27) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency 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.

/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 19, 1999

-38-

[Letterhead of Robert Ercolini & Company LLP]

INDEPENDENT AUDITOR'S REPORT

To the Partners of
Hope Bay Limited Partnership
Boston, Massachusetts

We have audited the accompanying balance sheet of Hope Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-168-R, as of December
31, 1997, and the related statements of operations, partners' capital, 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 Hope Bay Limited Partnership as
of December 31, 1997, and the results of its operations, changes in partners'
capital, 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 22, 1998 on our consideration of Hope Bay Limited Partnership's
internal control, a report dated January 22, 1998 on its compliance with laws
and regulations, and reports dated January 22, 1998 on its compliance with
specific requirements applicable to HUD programs.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 15 through 28) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency 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.

/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 22, 1998

-39-

[Letterhead of Armando A. Suarez, CPA]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Lares Apartments Limited Partnership

I have audited the accompanying balance sheets of Lares Apartments Limited
Partnership, Rural Development Project No.: 63-034-660467896, as of December 31,
1999 and 1998, and the related statements of income, changes in partners'
capital (deficit), and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audits.

I conducted my audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that I plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. I believe that my audits provide a reasonable basis for my
opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Lares Apartments Limited
Partnership, as of December 31, 1999 and 1998, and the results of its
operations, changes in partners' capital (deficit) and cash flows for the years
then ended in conformity with generally accepted accounting principles.

My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 20 thru 31 is presented for purposes of additional analysis
and is not a required part of the basic financial statements of the Partnership.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in my opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.

/s/ Armando A. Suarez, CPA
San Juan, Puerto Rico
The stamp #1478493 of the CPA's College of PR was affixed to the original of
this report.
January 25, 2000

-40-

[Letterhead of Armando A. Suarez, CPA]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Lares Apartments Limited Partnership

I have audited the accompanying balance sheets of Lares Apartments Limited
Partnership, Rural Development Project No.: 63-034-660467896, as of December 31,
1998 and 1997, and the related statements of income, changes in partners'
capital (deficit), and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audits.

I conducted my audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that I plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. I believe that my audits provide a reasonable basis for my
opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Lares Apartments Limited
Partnership, as of December 31, 1998 and 1997, and the results of its
operations, changes in partners' capital (deficit) and cash flows for the years
then ended in conformity with generally accepted accounting principles.

My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 21 thru 32 is presented for purposes of additional analysis
and is not a required part of the basic financial statements of the Partnership.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in my opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.

/s/ Armando A. Suarez, CPA
San Juan, Puerto Rico
The stamp #1478493 of the CPA's College of PR was affixed to the original of
this report.
February 4, 1999

-41-

[Letterhead of Armando A. Suarez, CPA]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Lajas Apartments Limited Partnership

I have audited the accompanying balance sheets of Lajas Apartments Limited
Partnership, Rural Development Project No.: 63-017-660422313, as of December 31,
1999 and 1998, and the related statements of operations, changes in partners'
capital (deficit), and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audits.

I conducted my audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that I plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. I believe that my audits provide a reasonable basis for my
opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Lajas Apartments Limited
Partnership, as of December 31, 1999 and 1998, and the results of its
operations, changes in partners' capital (deficit) and cash flows for the years
then ended in conformity with generally accepted accounting principles.

My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 20 thru 31 is presented for purposes of additional analysis
and is not a required part of the basic financial statements of the Partnership.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in my opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.

/s/ Armando A. Suarez, CPA
San Juan, Puerto Rico
The stamp #1478496 of the CPA's College of PR was affixed to the original of
this report.
January 25, 2000

-42-

[Letterhead of Armando A. Suarez, CPA]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Lajas Apartments Limited Partnership

I have audited the accompanying balance sheets of Lajas Apartments Limited
Partnership, Rural Development Project No.: 63-017-660422313, as of December 31,
1998 and 1997, and the related statements of income, changes in partners'
capital (deficit), and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audits.

I conducted my audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that I plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. I believe that my audits provide a reasonable basis for my
opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Lajas Apartments Limited
Partnership, as of December 31, 1998 and 1997, and the results of its
operations, changes in partners' capital (deficit) and cash flows for the years
then ended in conformity with generally accepted accounting principles.

My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 20 thru 31 is presented for purposes of additional analysis
and is not a required part of the basic financial statements of the Partnership.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in my opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.

/s/ Armando A. Suarez, CPA
San Juan, Puerto Rico
The stamp #1478496 of the CPA's College of PR was affixed to the original of
this report.
February 4, 1999

-43-

[Letterhead of Ree & Kim]

To the Partners
Arlington - Rodeo Properties
(A California Limited Partnership)

We have audited the accompanying balance sheets of Arlington - Rodeo Properties
(A California Limited Partnership) as of December 31, 1999 and 1998 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 Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We have conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Arlington - Rodeo Properties as
of December 31, 1999 and 1998 and its results of operations, changes in
partner's equity and its cash flows for the year then ended in conformity with
generally accepted accounting principles.

/s/ Ree & Kim
Los Angeles, California
February 25, 2000

-44-

[Letterhead of Ree & Kim]

To the Partners
Arlington - Rodeo Properties
(A California Limited Partnership)

We have audited the accompanying balance sheet of Arlington - Rodeo Properties
(A California Limited Partnership) as of December 31, 1997 and the related
statements of income, partners' equity, and cash flows for the year then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.

We have conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Arlington - Rodeo Properties as
of December 31, 1997, and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.

/s/ Ree & Kim
Los Angeles, California
February 25, 1998

-45-

[Letterhead of Insero, Kasperski, Ciaccia & Co., P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Conifer Bateman Associates
(A Limited Partnership)
Lowville, New York

We have audited the accompanying balance sheets of Conifer Bateman Associates (A
Limited Partnership) as of December 31, 1999 and 1998 and the related statements
of changes in partners' equity, operations, 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. 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 Conifer Bateman Associates (A
Limited Partnership) as of December 31, 1999 and 1998, and the results of its
operations and cash flows for the years then ended in conformity with generally
accepted accounting principles.

Respectfully Submitted,

/s/ Insero, Kasperski, Ciaccia & Co., P.C.
Certified Public Accountants
Rochester, New York
January 25, 2000

-46-

[Letterhead of Insero, Kasperski, Ciaccia & Co., P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Conifer Bateman Associates
(A Limited Partnership)
Lowville, New York

We have audited the accompanying balance sheets of Conifer Bateman Associates (A
Limited Partnership) as of December 31, 1998 and 1997 and the related statements
of changes in partners' equity, operations, 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. 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 Conifer Bateman Associates (A
Limited Partnership) as of December 31, 1998 and 1997, and the results of its
operations and cash flows for the years then ended in conformity with generally
accepted accounting principles.

Respectfully Submitted,

/s/ Insero, Kasperski, Ciaccia & Co., P.C.
Certified Public Accountants
Rochester, New York
January 19, 1999

-47-

[Letterhead of Mortland & Co. P.C.]

Independent Auditors' Report

To the Partners'
Hampden Hall Associates, L.P.
St. Louis, Missouri

We have audited the accompanying balance sheet of Hampden Hall Associates, L.P.,
as of December 31, 1999 and the related statements of loss, partners' capital,
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 this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require 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 balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet 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 Hampden Hall Associates, L.P.,
as of December 31, 1999 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.

/s/ Mortland & Co. P.C.
St. Louis, Missouri
February 15, 2000

-48-

[Letterhead of Mortland & Co. P.C.]

Independent Auditors' Report

To the Partners'
Hampden Hall Associates, L.P.
St. Louis, Missouri

We have audited the accompanying balance sheet of Hampden Hall Associates, L.P.,
as of December 31, 1998 and the related statements of income, partners' capital,
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 this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require 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 balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet 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 Hampden Hall Associates, L.P.,
as of December 31, 1998 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.

/s/ Mortland & Co. P.C.
St. Louis, Missouri
February 26, 1999

-49-

[Letterhead of Mortland & Co. P.C.]

Independent Auditors' Report

To the Partners
Hampden Hall Associates, L.P.
St. Louis, Missouri

We have audited the accompanying balance sheet of Hampden Hall Associates, L.P.,
as of December 31, 1997 and the related statements of income, partners' capital,
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 this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require 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 balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet 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 Hampden Hall Associates, L.P.,
as of December 31, 1997 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.

/s/ Mortland & Co. P.C.
St. Louis, Missouri
February 13, 1998

-50-

[Letterhead of Ziner & Company, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Chester Renaissance Associates

We have audited the accompanying balance sheets of Chester Renaissance
Associates (a Pennsylvania limited partnership) as of December 31, 1999 and 1998
and the related statements of operations, changes in partners' equity and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's general partners and contracted management
agent. 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. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partners and contracted management agent, 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 Chester Renaissance Associates
as of December 31, 1999 and 1998, and the results of its operations, changes in
partners' equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ Ziner & Company, P.C.
Boston, Massachusetts
January 14, 2000

-51-

[Letterhead of Ziner & Company, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Chester Renaissance Associates

We have audited the accompanying balance sheets of Chester Renaissance
Associates (a Pennsylvania limited partnership) as of December 31, 1998 and 1997
and the related statements of operations, changes in partners' equity and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's general partners and contracted management
agent. 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. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partners and contracted management agent, 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 Chester Renaissance Associates
as of December 31, 1998 and 1997, and the results of its operations, changes in
partners' equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ Ziner & Company, P.C.
Boston, Massachusetts
January 15, 1999

-52-

[Letterhead of Friedman, Alpern & Green L.L.P.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Homestead Apartments Associates II, Ltd.

We have audited the accompanying balance sheets of Homestead Apartments
Associates II, Ltd. (a limited partnership), as of December 31, 1999, and the
related statements of operations, changes in partners' capital and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Homestead Apartments Associates
II, Ltd. as of December 31, 1999, and the results of its operations, and its
cash flows for the years then ended, in conformity with generally accepted
accounting principles.

/s/ Friedman Alpern & Green L.L.P.
New York, New York
January 26, 2000

-53-

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Homestead Apartments Associates II, Ltd.

We have audited the accompanying balance sheets of Homestead Apartments
Associates II, Ltd., as of December 31, 1998 and 1997 and the related statements
of operations, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 Homestead Apartments Associates
II, Ltd. as of December 31, 1998 and 1997, and the results of its operations and
its cash flows for the years then ended in conformity with generally accepted
accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 16
and 17 is presented for the purpose of additional analysis and is not a required
part of the basic financial statements. Such supplemental information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.

/s/ Reznick, Fedder & Silverman
Atlanta, Georgia
January 27, 1999

-54-

[Letterhead of Vengrove, Zapolsky, McCourt, Klein & Petitto, LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners
P.S. 157 Associates, L.P.
Brooklyn, NY

We have audited the accompanying balance sheets of P.S. 157 Associates, L.P. (a
limited partnership), as of December 31, 1999 and 1998 and the related
statements of operations, partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 P.S. 157 Associates, L.P. (a
limited partnership) as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ Vengrove, Zapolsky, McCourt, Klein & Petitto, LLP
Great Neck, NY
January 27, 2000

-55-

[Letterhead of Vengrove, Zapolsky, McCourt, Klein & Petitto, LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners
P.S. 157 Associates, L.P.
Brooklyn, NY

We have audited the accompanying balance sheets of P.S. 157 Associates, L.P. (a
limited partnership), as of December 31, 1998 and 1997 and the related
statements of operations, partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 P.S. 157 Associates, L.P. (a
limited partnership) as of December 31, 1998 and 1997, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ Vengrove, Zapolsky, McCourt, Klein & Petitto, LLP
Great Neck, NY
January 21, 1999

-56-

[Letterhead of Ziner, Kennnedy, & Lehan L.L.P.]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Cloisters Limited Partnership II

We have audited the accompanying balance sheets of Cloisters Limited Partnership
II (a Pennsylvania limited partnership) as of December 31, 1999 and 1998, and
the related statements of operations, changes in partners' equity and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's general partner and contracted management agent. 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. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partner and contracted management agent, 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 Cloisters Limited Partnership
II at December 31, 1999 and 1998, and the results of its operations, changes in
partners' equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ Ziner Kennedy, & Lehan L.L.P.
Quincy, Massachusetts
January 19, 2000

-57-

[Letterhead of Ziner, Kennnedy, & Lehan L.L.P.]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Cloisters Limited Partnership II

We have audited the accompanying balance sheets of Cloisters Limited Partnership
II (a Pennsylvania limited partnership) as of December 31, 1998 and 1997, and
the related statements of operations, changes in partners' equity and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's general partner and contracted management agent. 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. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partner and contracted management agent, 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 Cloisters Limited Partnership
II at December 31, 1998 and 1997, and the results of its operations, changes in
partners' equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ Ziner Kennedy, & Lehan L.L.P.
Boston, Massachusetts
January 18, 1999

-58-

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Creative Choice Homes II, Ltd.
(A Limited Partnership)
d/b/a The Gardens Apartments

We have audited the accompanying balance sheet of Creative Choice Homes II, Ltd.
(A Limited Partnership) d/b/a The Gardens Apartments as of December 31, 1999,
and the related statements of operations, partners' equity (deficit) and cash
flows for the year then ended. These financial statements are the responsibility
of the partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards
and 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 Creative Choice Homes II, Ltd.
(A Limited Partnership) d/b/a The Gardens Apartments as of December 31, 1999,
and the results of its operations, the changes in partners' equity (deficit) and
cash flows for the year then ended, in conformity with generally accepted
accounting principles.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 24 through 28
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 and "Consolidated Audit Guide
for Audits of HUD Programs," we have also issued reports dated January 7, 2000
on our consideration of Creative Choice Homes II, Ltd. (A Limited Partnership)
d/b/a The Gardens Apartments' internal control and on its compliance with
specific requirements applicable to major HUD programs and fair housing and
non-discrimination.

/s/ Reznick Fedder & Silverman
Lead Auditor: James P. Martinko
Bethesda, Maryland
Taxpayer Identification Number: 52-1088612
January 7, 2000

-59-

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Creative Choice Homes II, Ltd.
(A Limited Partnership)
d/b/a The Gardens Apartments

We have audited the accompanying balance sheet of Creative Choice Homes II, Ltd.
(A Limited Partnership) d/b/a The Gardens Apartments as of December 31, 1998,
and the related statements of operations, partners' equity (deficit) and cash
flows for the year then ended. These financial statements are the responsibility
of the partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards
and 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 Creative Choice Homes II, Ltd.
(A Limited Partnership) d/b/a The Gardens Apartments as of December 31, 1998,
and the results of its operations, the changes in partners' equity (deficit) and
cash flows for the year then ended, in conformity with generally accepted
accounting principles.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 23 through 27
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 and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated February 1,
1999 on our consideration of Creative Choice Homes II, Ltd. (A Limited
Partnership) d/b/a The Gardens Apartments' internal control and on its
compliance with specific requirements applicable to major HUD programs and fair
housing and non-discrimination.

/s/ Reznick Fedder & Silverman
Lead Auditor: James P. Martinko
Bethesda, Maryland
Taxpayer Identification Number: 52-1088612
February 1, 1999

-60-

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Creative Choice Homes II, Ltd.
(A Limited Partnership)
d/b/a The Gardens Apartments

We have audited the accompanying balance sheet of Creative Choice Homes II, Ltd.
(A Limited Partnership), d/b/a The Gardens Apartments as of December 31, 1997,
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 Creative Choice Homes II, Ltd.
(A Limited Partnership), d/b/a The Gardens Apartments as of December 31, 1997,
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.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on page 22 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.

-61-

In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated February 4,
1998 on our consideration of Creative Choice Homes II, Ltd. (A Limited
Partnership), d/b/a The Gardens Apartments' internal control and on its
compliance with specific requirements applicable to major HUD programs, fair
housing and non-discrimination, and laws and regulations applicable to the
financial statements.

/s/ Reznick Fedder & Silverman
Audit Principal: Craig Birmingham
Bethesda, Maryland
Federal Employer Identification Number: 52-1088612
February 4, 1998

-62-

[Letterhead of Halbert, Katz & Co., P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Milford Crossing Associates, L.P.
Wilmington, Delaware

We have audited the accompanying balance sheets of Milford Crossing Associates,
L.P., as of December 31, 1999 and December 31, 1998, and the related statements
of loss, partners' capital (capital deficiency) and cash flows for the years
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards
and 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 Milford Crossing Associates,
L.P. as of December 31, 1999 and December 31, 1998 and the results of its
operations, changes in partners' capital (capital deficiency) and cash flows for
the years then ended, in conformity with generally accepted accounting
principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 16 to 28) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements of Milford
Crossing Associates, L.P. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.

In accordance with Government Auditing Standards, we have also issued a report
dated January 31, 2000, on our consideration of Milford Crossing Associates,
L.P's internal controls, and reports dated January 31, 2000, on its compliance
with specific requirements applicable to major HUD programs and specific
requirements applicable to Fair Housing and Non-Discrimination.

/s/ Halbert, Katz & Co., P.C.
Philadelphia, Pennsylvania
January 31, 2000

-63-

[Letterhead of Halbert, Katz & Co., P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Milford Crossing Associates, L.P.
Wilmington, Delaware

We have audited the accompanying balance sheets of Milford Crossing Associates,
L.P., as of December 31, 1998 and December 31, 1997, and the related statements
of loss, partners' capital (capital deficiency) and cash flows for the years
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards
and 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 Milford Crossing Associates,
L.P. as of December 31, 1998 and December 31, 1997 and the results of its
operations, changes in partners' capital (capital deficiency) and cash flows for
the years then ended, in conformity with generally accepted accounting
principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 13 to 18) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements of Milford
Crossing Associates, L.P. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.

In accordance with Government Auditing Standards, we have also issued a report
dated January 29, 1999, on our consideration of Milford Crossing Associates,
L.P's internal controls, and reports dated January 29, 1999, on its compliance
with specific requirements applicable to major HUD programs and specific
requirements applicable to Fair Housing and Non-Discrimination.

/s/ Halbert, Katz & Co., P.C.
Philadelphia, Pennsylvania
January 29, 1999

-64-

[Letterhead of Bernhardt, Karlitz, Hayden & DeCruse LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners
BX-7F ASSOCIATES, L.P.
New York, New York

We have audited the accompanying balance sheets of BX-7F Associates, L.P. as of
December 31, 1999 and 1998 and the related statements of operations, partners'
equity, and cash flows for the years then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 BX-7F Associates, L.P. as of
December 31, 1999 and 1998, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.

/s/ Bernhardt, Karlitz, Hayden & DeCruse LLP
White Plains, New York
January 18, 2000

-65-

[Letterhead of Bernhardt, Karlitz, Hayden & DeCruse LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners
BX-7F ASSOCIATES, L.P.
New York, New York

We have audited the accompanying balance sheets of BX-7F Associates, L.P. as of
December 31, 1998 and 1997 and the related statements of operations, partners'
equity, and cash flows for the years then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 BX-7F Associates, L.P. as of
December 31, 1998 and 1997, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.

/s/ Bernhardt, Karlitz, Hayden & DeCruse LLP
White Plains, New York
January 25, 1999

-66-

[Letterhead of Amilcar Torres Rivera.]

INDEPENDENT AUDITOR'S REPORT

The Partners
Los Angeles Limited Partnership

I have audited the accompanying balance sheets of Los Angeles Limited
Partnership as of December 31, 1999 and 1998, and the related statements of
loss, changes in Partners' capital and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on my audit.

I conducted my audit in accordance with generally accepted auditing standards
which require that I plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. I believe that my audit provides a reasonable basis for my
opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Los Angeles Limited Partnership. as
of December 31, 1999 and 1998 and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

Los Angeles Limited Partnership rent income from subsidies is approximately 86%
of total Partnership revenues. As disclosed in Note 1-A, the actual rent subsidy
contracts are due since July 31, 1999 (82 units) and September 30, 1999 (42
units), respectively.

/s/ Amilcar Torres Rivera, CPA
Stamp #1598369 of the
Puerto Rico Society of
CPA's was affixed to the original.

San Juan, Puerto Rico
January 28, 2000

-67-

[Letterhead of Amilcar Torres Rivera.]

INDEPENDENT AUDITOR'S REPORT

The Partners
Los Angeles Limited Partnership

I have audited the accompanying balance sheets of Los Angeles Limited
Partnership as of December 31, 1998 and 1997, and the related statements of
loss, changes in Partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
my audit.

I conducted my audit in accordance with generally accepted auditing standards
which require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a reasonable basis
for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Los Angeles Limited Partnership as
of December 31, 1998 and 1997, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

/s/ Amilcar Torres Rivera, CPA
Stamp #1545214 of the
Puerto Rico Society of
CPA's was affixed to the original.

San Juan, Puerto Rico
January 27, 1999

-68-

[Letterhead of Toski, Schaefer & Co., P.C.]

INDEPENDENT AUDITOR'S REPORT

The Partners
Christine Apartments, L.P.:

We have audited the accompanying balance sheets of Christine Apartments, L.P. as
of December 31, 1999 and 1998 and the related statements of operations,
partners' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Christine Apartments, L.P. as
of December 31, 1999 and 1998 and the results of its operations, changes in
partners' equity and cash flows for the years then ended, in conformity with
generally accepted accounting principles.

In accordance with Government Auditing standards, we have also issued reports
dated February 8, 2000 on our consideration of the Partnership's internal
control and on its compliance with laws and regulations applicable to the
financial statements.

/s/ Toski, Schaefer & Co., P.C.
Williamsville, New York
February 8, 2000

-69-

[Letterhead of Toski, Schaefer & Co., P.C.]

INDEPENDENT AUDITOR'S REPORT

The Partners
Christine Apartments, L.P.:

We have audited the accompanying balance sheets of Christine Apartments, L.P. as
of December 31, 1998 and 1997 and the related statements of operations,
partners' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Christine Apartments, L.P. as
of December 31, 1998 and 1997 and the results of its operations, changes in
partners' equity and cash flows for the years then ended, in conformity with
generally accepted accounting principles.

In accordance with Government Auditing standards, we have also issued reports
dated February 8, 1999 on our consideration of the Partnership's internal
control and on its compliance with laws and regulations applicable to the
financial statements.

/s/ Toski, Schaefer & Co., P.C.
Williamsville, New York
February 8, 1999

-70-

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Plainsboro Housing Partners Limited Partnership

We have audited the accompanying balance sheets of Plainsboro Housing Partners
Limited Partnership as of December 31, 1999 and 1998, and the related statements
of revenue and expenses, changes in partners' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 Plainsboro Housing Partners
Limited Partnership as of December 31, 1999 and 1998, and the results of its
operations, changes in partners' equity and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January 5, 2000

-71-

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Plainsboro Housing Partners Limited Partnership

We have audited the accompanying balance sheets of Plainsboro Housing Partners
Limited Partnership as of December 31, 1998 and 1997, and the related statements
of revenue and expenses, changes in partners' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 Plainsboro Housing Partners
Limited Partnership as of December 31, 1998 and 1997, and the results of its
operations, changes in partners' equity and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January 8, 1999

-72-

[Letterhead of Asher & Company, Ltd.]

Independent Auditors' Report

The Partners
Rolling Green Associates, L.P.
Marlton, New Jersey

We have audited the accompanying balance sheets of Rolling Green Associates,
L.P. (A Limited Partnership) as of December 31, 1999 and 1998 and the related
statements of profit and loss, Partners' capital and cash flows for the year
ended December 31, 1999. 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 Rolling Green Associates, L.P.
(A Limited Partnership) as of December 31, 1999 and 1998 and the results of its
operations, changes in its Partners' capital, and its cash flows for the year
ended December 31, 1999 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 accompanying supplementary information is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the 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 and the Consolidated Audit
Guide for Audits of HUD Programs, issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 27, 2000 on our
consideration of Rolling Green Associates, L.P.'s (A Limited Partnership)
internal control and reports dated January 27, 2000 on its compliance with
specific requirements applicable to its major HUD program and specific
requirements applicable to fair housing and non-discrimination.

/s/ Asher & Company Ltd.
Philadelphia, Pennsylvania
January 27, 2000

-73-

[Letterhead of Asher & Company, Ltd.]

Independent Auditors' Report

The Partners
Rolling Green Associates, L.P.
Marlton, New Jersey

We have audited the accompanying balance sheets of Rolling Green Associates,
L.P. (A Limited Partnership) as of December 31, 1998 and 1997 and the related
statements of profit and loss, Partners' capital and cash flows for the year
ended December 31, 1998. 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 Rolling Green Associates, L.P.
(A Limited Partnership) as of December 31, 1998 and 1997 and the results of its
operations, changes in its Partners' capital, and its cash flows for the year
ended December 31, 1998 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 accompanying supplementary information is
presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected to the 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 and the Consolidated Audit
Guide for Audits of HUD Programs, issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 22, 1999 on our
consideration of Rolling Green Associates, L.P.'s (A Limited Partnership)
internal control and reports dated January 22, 1999 on its compliance with
specific requirements applicable to its major HUD program and specific
requirements applicable to fair housing and non-discrimination.

/s/ Asher & Company Ltd.
Philadelphia, Pennsylvania
January 22, 1999

-74-

INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

ASSETS
MARCH 31,
---------------------------------
2000 1999
--------------- ---------------

Property and equipment - net of accumulated depreciation
(Notes 2 and 4) $ 144,177,016 $ 149,574,764
Cash and cash equivalents (Notes 2 and 10) 2,256,497 1,781,472
Cash held in escrow (Note 5) 9,140,249 9,045,621
Deferred costs, less accumulated amortization (Notes 2 and 6) 2,025,646 2,577,339
Other assets 1,763,384 1,990,777
--------------- ---------------
Total assets $ 159,362,792 $ 164,969,973
=============== ===============

LIABILITIES AND PARTNERS' CAPITAL

Liabilities
Mortgage notes payable (Note 7) $ 92,458,812 $ 94,436,642
Construction notes payable (Note 7) 6,740,018 6,740,018
Accounts payable and other liabilities 9,058,332 7,581,362
Due to local general partners and affiliates (Note 8) 5,821,007 6,375,134
Due to general partner and affiliates (Note 8) 3,542,200 2,101,597
--------------- ---------------

Total liabilities 117,620,369 117,234,753
--------------- ---------------

Minority interest (Note 2) 6,412,604 6,601,170
--------------- ---------------

Commitments and contingencies (Notes 8 and 10)

Partners' capital
Limited partners (76,786 BACs issued and outstanding) 35,659,395 41,405,584
General partner (329,576) (271,534)
--------------- ---------------

Total partners' capital 35,329,819 41,134,050
--------------- ---------------

Total liabilities and partners' capital $ 159,362,792 $ 164,969,973
=============== ===============

See accompanying notes to consolidated financial statements.

-75-

INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

Year Ended March 31,
-----------------------------------------------------
2000 1999 1998*
--------------- --------------- ---------------

Revenues
Rental income $ 19,685,737 $ 19,518,095 $ 19,155,670
Other 1,100,619 1,007,562 934,100
Gain on sale of land (Note 4) 0 0 114,928
--------------- --------------- ---------------

20,786,356 20,525,657 20,204,698
--------------- --------------- ---------------

Expenses
General and management 4,651,071 4,155,900 3,742,154
General and management-related parties 2,043,369 2,028,254 1,173,780
Repairs and maintenance 3,982,080 3,730,566 3,367,161
Operating 2,087,822 1,950,367 2,006,347
Taxes 1,284,332 1,348,556 1,279,922
Insurance 742,869 798,835 868,249
Financial, primarily interest 5,611,437 5,701,379 5,640,082
Depreciation and amortization 6,208,243 5,994,458 6,367,255
Loss on impairment of assets (Note 4) 0 0 500,000
--------------- --------------- ---------------

Total expenses 26,611,223 25,708,315 24,944,950
--------------- --------------- ---------------

Loss before minority interest (5,824,867) (5,182,658) (4,740,252)

Minority interest in loss of subsidiaries 20,636 17,208 35,144
--------------- --------------- ---------------

Net loss $ (5,804,231) $ (5,165,450) $ (4,705,108)
=============== =============== ===============

Net loss-limited partners $ (5,746,189) $ (5,113,795) $ (4,658,057)
=============== =============== ===============

Number of BACs outstanding 76,768 76,768 76,768
=============== =============== ===============

Net loss per BAC $ (74.85) $ (66.61) $ (60.66)
=============== =============== ===============

*Reclassified for comparative purposes.
See accompanying notes to consolidated financial statements.

-76-

INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)

Limited General
Total Partners Partner
--------------- --------------- ---------------

Partners' capital (deficit) - April 1, 1997 $ 51,004,608 $ 51,177,436 $ (172,828)

Net loss (4,705,108) (4,658,057) (47,051)
--------------- --------------- ---------------

Partners' capital (deficit) - March 31, 1998 46,299,500 46,519,379 (219,879)

Net loss (5,165,450) (5,113,795) (51,655)
--------------- --------------- ---------------

Partners' capital (deficit) - March 31, 1999 41,134,050 41,405,584 (271,534)

Net loss (5,804,231) (5,746,189) (58,042)
--------------- --------------- ---------------

Partners' capital (deficit) - March 31, 2000 $ 35,329,819 $ 35,659,395 $ (329,576)
=============== =============== ===============

See accompanying notes to consolidated financial statements.

-77-

INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

Year Ended March 31,
-----------------------------------------------------
2000 1999 1998
--------------- --------------- ---------------

Cash flows from operating activities:
Net loss $ (5,804,231) $ (5,165,450) $ (4,705,108)
--------------- --------------- ---------------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 6,208,243 5,994,458 6,367,255
Gain on sale of land 0 0 (114,928)
Loss on impairment 0 0 500,000
Minority interest in loss of subsidiaries (20,636) (17,208) (35,144)
(Increase) decrease in assets:
Cash held in escrow (75,072) 141,667 243,633
Deferred costs 0 22,664 0
Other assets 227,393 (147,591) (100,347)
Increase (decrease) in liabilities:
Accounts payable and other liabilities 1,476,970 407,656 449,888
Due to local general partners and affiliates (16,445) (545,499) (28,959)
Due to general partner and affiliates 1,440,603 1,172,396 168,691
--------------- --------------- ---------------
Total adjustments 9,241,056 7,028,543 7,450,089
--------------- --------------- ---------------
Net cash provided by operating activities 3,436,825 1,863,093 2,744,981
--------------- --------------- ---------------

Cash flows from investing activities:
Acquisition of property and equipment (375,405) (237,987) (316,410)
Increase in cash held in escrow (19,556) (598,017) (55,795)
Proceeds from the sale of land 0 0 210,000
Decrease in due to local general partners
and affiliates (465,061) (203,824) (190,818)
--------------- --------------- ---------------
Net cash used in investing activities (860,022) (1,039,828) (353,023)
--------------- --------------- ---------------

Cash flows from financing activities:
Increase in deferred costs (107,442) (127,223) (8,100)
Writeoff of deferred costs 224,045 0 0
Proceeds from mortgage notes 5,356,000 2,257,500 0
Repayment of mortgage notes (7,333,830) (3,672,016) (1,981,997)
(Decrease) increase in due to local general partners
and affiliates (72,621) 468,242 (149,466)
Decrease in capitalization of
consolidated subsidiaries attributable
to minority interest (167,930) (118,191) (189,557)
--------------- --------------- ---------------
Net cash used in financing activities (2,101,778) (1,191,688) (2,329,120)
--------------- --------------- ---------------

-78-

INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(CONTINUED)

Year Ended March 31,
-----------------------------------------------------
2000 1999 1998
--------------- --------------- ---------------

Net increase (decrease) in cash and cash equivalents 475,025 (368,423) 62,838

Cash and cash equivalents at beginning of year 1,781,472 2,149,895 2,087,057
--------------- --------------- ---------------

Cash and cash equivalents at end of year $ 2,256,497 $ 1,781,472 $ 2,149,895
=============== =============== ===============

Supplemental disclosure of cash flows information:
Cash paid during the year for interest $ 4,361,742 $ 4,609,063 $ 4,811,327
=============== =============== ===============

Supplemental disclosures of noncash investing and
financing activities:
Increase in mortgage notes payable reclassified
from accounts payable and other liabilities $ 0 $ 47,181 $ 43,715

Decrease in mortgage notes payable of $1,350,000
and increase in due to local general partners and
affiliates of $9,010 as contribution by minority
interest shareholders 0 1,340,990 0

Decrease in property and equipment of $400,000
and increase in due to local general partners and
affiliates of $675,000 as distribution to minority
interest shareholders 0 1,075,000 0

Summarized below are the components of the
gain on sale of land:
Decrease in property and equipment 0 0 95,072

See accompanying notes to consolidated financial statements.

-79-

INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000

NOTE 1 - General

Independence Tax Credit Plus L.P., a Delaware limited partnership (the
"Partnership"), was organized on November 7, 1990, but had no activity until May
31, 1991 (which date is considered to be inception for financial accounting
purposes) and commenced its public offering on July 1, 1991. The general partner
of the Partnership is Related Independence Associates L.P., a Delaware limited
partnership (the "General Partner").

The Partnership's business is to invest in other partnerships ("Local
Partnerships," "subsidiaries" or "subsidiary partnerships") owning leveraged
Apartment Complexes that are eligible for the low-income housing tax credit
("Tax Credit") enacted in the Tax Reform Act of 1986, some of which complexes
may also be eligible for the historic rehabilitation tax credit.

The Partnership has interests in twenty-eight Local Partnerships as of March 31,
2000.

The Partnership was authorized to issue a total of 200,000 Beneficial Assignment
Certificates ("BACs") which have been registered with the Securities and
Exchange Commission for sale to the public. Each BAC represents all of the
economic and virtually all of the ownership rights attributable to a limited
partnership interest. As of March 31, 2000, the Partnership had raised a total
of $76,786,000 representing 76,786 BACs and no further issuance of BACs is
anticipated.

The terms of the Partnership's Amended and Restated Agreement of Limited
Partnership (the "Partnership Agreement") provide, among other things, that net
profits or losses and distributions of cash flow are, in general, allocated 99%
to the limited partners and BACs holders and 1% to the General Partner.

NOTE 2 - Summary of Significant Accounting Policies

a) Basis of Accounting

For financial reporting purposes the Partnership's fiscal year ends on March 31.
All subsidiaries have fiscal years ending December 31. Accounts of the
subsidiaries have been adjusted for intercompany transactions from January 1
through March 31. The Partnership's fiscal year ends March 31 in order to allow
adequate time for the subsidiaries financial statements to be prepared and
consolidated. The books and records of the Partnership are maintained on the
accrual basis of accounting, in accordance with generally accepted accounting
principles ("GAAP").

b) Basis of Consolidation

The consolidated financial statements include the accounts of the Partnership
and twenty-eight subsidiary partnerships in which the Partnership is a limited
partner. Through the rights of the Partnership and/or an affiliate of the
General Partner, which affiliate has a contractual obligation to act on behalf
of the Partnership, to remove the general partner of the subsidiary local
partnerships and to approve certain major operating and financial decisions, the
Partnership has a controlling financial interest in the subsidiary local
partnerships. All intercompany accounts and transactions with the subsidiary
partnerships have been eliminated in consolidation.

-80-

INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000

Increases (decreases) in the capitalization of consolidated subsidiaries
attributable to minority interest arise from cash contributions and cash
distributions to the minority interest partners.

Losses attributable to minority interest which exceed the minority interests'
investment in a subsidiary have been charged to the Partnership. Such losses
aggregated approximately $31,000, $27,000 and $21,000 for the years ended March
31, 2000, 1999 and 1998, respectively (the 1999, 1998 and 1997 Fiscal Years,
respectively). The Partnership's investment in each subsidiary is equal to the
respective subsidiary's partners' equity less minority interest capital, if any.
In consolidation, all subsidiary partnership losses are included in the
Partnership's capital account except for losses allocated to minority interest
capital.

c) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, cash in banks, and investments
in short-term highly liquid instruments purchased with original maturities of
three months or less.

d) Property and Equipment

Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, construction period interest
and any other costs incurred in acquiring the properties. The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods. Expenditures for repairs and maintenance are charged
to expense as incurred; major renewals and betterments are capitalized. At the
time property and equipment are retired or otherwise disposed of, the cost and
accumulated depreciation are eliminated from the assets and accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings. A loss on impairment of assets is recorded when management estimates
amounts recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows) when the property is considered to be impaired and the depreciated cost
exceeds estimated fair value.

At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated.

Through March 31, 2000, the Partnership has recorded approximately $500,000 as a
loss on impairment of assets.

e) Income Taxes

The Partnership is not required to provide for, or pay, any federal income
taxes. Net income or loss generated by the Partnership is passed through to the
partners and is required to be reported by them. The Partnership may be subject
to state and local taxes in jurisdictions in which it operates. For income tax
purposes, the Partnership has a fiscal year ending December 31.

-81-

INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000

f) Offering Costs

Costs incurred to sell BACs, including brokerage and the nonaccountable expense
allowance, are considered selling and offering expenses. These costs are charged
directly to limited partners' capital.

g) Loss Contingencies

The Partnership records loss contingencies as a charge to income when
information becomes available which indicates that it is probable that an asset
has been impaired or a liability has been incurred as of the date of the
financial statements and the amount of loss can be reasonably estimated.

h) Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.

i) Reclassification of Financial Statement Presentation

Certain reclassifications have been made to the Fiscal 1997 financial statements
to conform with the Fiscal 1998 financial statement presentation. Such
reclassifications had no effect on net loss as previously reported.

j) Recent Pronouncements

In April 1998, the AICPA issued SOP No. 98-5 "Reporting on the Costs of Start-Up
Activities." SOP No. 98.5, which was adopted April 1, 1999, requires that costs
of start-up activities including organizational costs be expensed as incurred.
In addition, at the time of adoption the unamortizied balance of any previously
deferred organizational costs must be expensed. This adoption resulted in
$618,573 being fully expensed and included in depreciation and amortization on
the consolidated statements for the operations for the year ended March 31,
2000.

NOTE 3 - Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments (all of which are held for nontrading
purposes) for which it is practicable to estimate that value:

CASH AND CASH EQUIVALENTS AND CASH HELD IN ESCROW
The carrying amount approximates fair value.

-82-

INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000

MORTGAGE NOTES PAYABLE
The fair value of mortgage notes payable is estimated, where practicable, based
on the borrowing rate currently available for similar loans.

The estimated fair values of the Partnership's mortgage notes payable are
as follows:

March 31, 2000 March 31, 1999
------------------------ ------------------------
Carrying Carrying
Amount Fair Value Amount Fair Value
----------- ----------- ----------- -----------

Mortgage notes payable for
which it is:
Practicable to estimate fair value $33,458,068 $32,435,549 $44,989,858 $44,454,861
Not practicable $59,000,745 * $49,446,784 *

*Management believes it is not practical to estimate the fair value of these
mortgage notes payable because mortgage programs with similar characteristics
are not currently available to the partnerships.

The carrying amount of other financial instruments that require such disclosure
approximates fair value.

NOTE 4 - Property and Equipment

The components of property and equipment are as follows:

March 31, Estimated
---------------------------------- Useful Lives
2000 1999 (Years)
--------------- --------------- ------------

Land $ 5,692,516 $ 5,683,116 --
Building and improvements 174,104,493 174,259,412 15-40
Furniture and fixtures 2,644,400 2,168,170 3-10
--------------- ---------------
182,441,409 182,110,698

Less: Accumulated depreciation (38,264,393) (32,535,934)
--------------- ---------------
$ 144,177,016 $ 149,574,764
=============== ===============

Included in property and equipment is approximately $4,500,000 of acquisition
fees paid to the general partner and $1,057,104 of acquisition expenses as of
March 31, 2000 and 1999. In addition, as of March 31, 2000 and 1999, building
and improvements include approximately $4,378,000 of capitalized interest.

In connection with the rehabilitation of the properties, the subsidiary
partnerships have incurred developer's fees of approximately $14,500,000 to the
local general partners and affili-

-83-

INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000

ates, net of approximately $979,000 earned by the Partnership. Such fees have
been included in the cost of property and equipment.

Depreciation expense for the years ended March 31, 2000, 1999 and 1998 amounted
to $5,773,153, $5,794,508 and $6,087,958, respectively.

During the years ended March 31, 2000 and 1999, accumulated depreciation of
$44,694 and $19,747, respectively, was written off.

West Diamond Street Associates ("West Diamond") analyzes the carrying value of
its fixed assets on an ongoing basis to determine that the recorded amounts are
reasonable and are not impaired. During 1997, the buildings were deemed to be
impaired and were written down to their fair value. Fair value, which was
determined by reference to the present value of the estimated future cash
inflows of such fixed assets, inclusive of the low-income housing tax credits,
exceeding the carrying value by approximately $500,000. This impairment loss was
charged to operations for 1997. As a result of the impairment loss on the fixed
assets, buildings and the related accumulated depreciation were reduced by
$1,098,853 and $598,853, respectively.

NOTE 5 - Cash Held in Escrow

Cash held in escrow consists of the following:

March 31,
-------------------------
2000 1999
----------- -----------

Purchase price payments* $ 292,000 $ 296,700
Real estate taxes, insurance and other 4,636,444 4,606,568
Reserve for replacements 3,544,405 3,520,149
Tenant security deposits 667,400 622,204
----------- -----------
$ 9,140,249 $ 9,045,621
=========== ===========

*Represents amounts to be paid to seller after completion of properties under
construction and upon meeting specified rental achievement criteria.

-84-

INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000

NOTE 6 - Deferred Costs

The components of deferred costs and their periods of amortization are as
follows:

March 31,
--------------------------
2000 1999 Period
---------- ---------- ---------

Financing expenses $2,981,958 $3,484,768 *
Organization expenses 0 618,783 60 months
---------- ----------
2,981,958 4,103,551
Less: Accumulated amortization (956,312) (1,526,212)
---------- ----------
$2,025,646 $2,577,339
========== ==========

*Over the life of the related mortgages.

Amortization expense for the years ended March 31, 2000, 1999 and 1998 amounted
to $435,090, $199,950 and $279,297, respectively.

During the years ended March 31, 2000 and 1999, deferred costs of $1,229,035 and
$227,331 and accumulated amortization of $1,004,990 and $121,060 were written
off.

NOTE 7 - Mortgage and Construction Notes Payable

The mortgage and construction notes are payable in aggregate monthly
installments of approximately $550,000, including principal and interest at
rates varying from 0% to 10.29% per annum, through the year 2048. Each
subsidiary partnership's mortgage or construction note payable is collateralized
by the land and buildings of the respective subsidiary partnership, the
assignment of certain subsidiary partnership's rents and leases, and is without
further recourse.

Certain mortgage notes with balances aggregating $9,946,411 and $10,992,817 at
December 31, 1999 and 1998, respectively, which bear interest at rates ranging
from 8.5% to 9% per annum, were eligible for interest rate subsidies.
Accordingly, the subsidiary partnerships paid only that portion of the monthly
payments that would be required if the interest rate was 1% and the balance was
subsidized under Sections 236 and 551(b) of the National Housing Act.

-85-

INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000

Annual principal payment requirements, as of March 31, 2000, for each of the
next five fiscal years and thereafter, are as follows:

Fiscal Year Ending Amount
- - - - ------------------ ------------

2000 $ 2,155,613
2001 7,640,776
2002 2,434,916
2003 2,584,568
2004 2,737,856
Thereafter 74,905,083
-----------
$92,458,812
===========

At both December 31, 1999 and 1998, one subsidiary partnership had a
construction loan commitment totaling $6,890,000. At both December 31, 1999 and
1998, such loan had an outstanding balance of $6,740,018. Subsequently on March
14, 2000 this construction loan was converted to a permanent mortgage loan.

The mortgage agreements require monthly deposits to replacement reserves of
approximately $50,000 and monthly deposits to escrow accounts for real estate
taxes, hazard and mortgage insurance and other (Note 5).

On November 5, 1999, the Homestead Apartments Associates, Ltd. ("Homestead I")
refinanced its 9% first mortgage loan. The new loan, with a principal balance of
$2,668,000, bears interest at 7% and requires monthly payments of interest only
through maturity on November 5, 2001. Monthly escrow deposits for taxes are
required. The Homestead I has the right to extend the maturity date to November
5, 2010 upon satisfaction of certain conditions. The existing first mortgage of
$2,667,927 was paid off.

On November 5, 1999, the Homestead Apartments Associates II, Ltd. ("Homestead
II") refinanced its 9% mortgage loan. The new loan, with a principal balance of
$2,678,000, bears interest at 7% and requires monthly payments of interest only
through maturity on November 5, 2001. Monthly escrow deposits for taxes are
required and the Homestead II is subject to restrictions on distributions to the
general partner. The Homestead II has the right to extend the maturity date to
November 5, 2010 upon satisfaction of certain conditions. The existing first
mortgage of $2,677,489 was paid off.

On March 20, 1998, Hampden Hall Associates, L.P. ("Hampden Hall") refinanced its
primary debt under the HUD 223(f) program. The amount of this new mortgage is
$2,257,500. It carries a term of 35 years and has an interest rate of
approximately 6.5%. The existing $1,760,000 tax-exempt bonds were paid off with
the proceeds of the new mortgage and the balance of the proceeds were used to
pay closing costs and a portion of a note payable to the special limited partner
of the Local General Partner. The Local General Partner also purchased three
notes to the City of St. Louis totaling $1,350,000 and amounts due to a former
Local General Partner for a discounted price resulting in a contribution to
capital of approximately $1,340,000.

-86-

INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000

NOTE 8 - Related Party Transactions

An affiliate of the General Partner, Independence SLP L.P., has either a 0.1% or
1% interest as a special limited partner in each of the Local Partnerships. An
affiliate of the General Partner also has a minority interest in certain Local
Partnerships.

A) Guarantees

The Partnership has negotiated Operating Deficit Guaranty Agreements with all
Local Partnerships by which the general partners of the Local Partnerships have
agreed to fund operating deficits for a specified period of time. The terms of
the Operating Deficit Guaranty Agreements vary for each Local Partnership, with
maximum dollar amounts to be funded for a specified period of time, generally
three years, commencing on the break-even date. As of March 31, 2000 all
operating deficit guarantees have expired. For the year ended March 31, 2000,
nothing has been funded by the Local General Partners to meet such obligations,
which includes amounts held in escrow by the Local Partnerships.

B) Other Related Party Expenses

The General Partner and its affiliates perform services for the Partnership. The
costs incurred for the years ended March 31, 2000, 1999 and 1998 were as
follows:

Year Ended March 31,
-----------------------------------------------------
2000 1999 1998
--------------- --------------- ---------------

Partnership management fees (i) $ 880,000 $ 880,000 $ 50,000
Expense reimbursement (ii) 137,662 142,194 145,804
Property management fees incurred to
affiliates of the General Partner (iii) 0 0 63,309
Local administrative fee (iv) 79,000 72,000 73,600
--------------- --------------- ---------------
Total general and administrative-
General Partner 1,096,662 1,094,194 332,713
--------------- --------------- ---------------

Property management fees incurred to
affiliates of the subsidiary partnerships'
general partners (iii) 946,707 933,974 841,067
--------------- --------------- ---------------
Total general and administrative-
related parties $ 2,043,369 $ 2,028,168 $ 1,173,780
=============== =============== ===============

(i) The General Partner is entitled to receive a partnership management fee,
after payment of all partnership expenses, which together with the local annual
administrative fees will not exceed a maximum of 0.5% per annum of invested
assets (as defined in the Partnership Agreement), for administering the affairs
of the Partnership. Subject to the foregoing limitation, the partnership
management fee will be determined by the General Partner in its sole discretion
based upon its review of the Partnership's investments. Unpaid partnership
management fees for any year have been, and will continue to be, accrued without
interest and will be payable only to the extent of available funds after the
Partnership has made distributions to

-87-

INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000

the limited partners of sale or refinancing proceeds equal to their original
capital contributions plus a 10% priority return thereon (to the extent not
theretofore paid out of cash flow). Partnership management fees owed to the
General Partner amounting to approximately $2,299,000 and $1,419,000 were
accrued and unpaid as of March 31, 2000 and 1999, respectively.

(ii) The Partnership reimburses the General Partner and its affiliates for
actual Partnership operating expenses incurred by the General Partner and its
affiliates on the Partnership's behalf. The amount of reimbursement from the
Partnership is limited by the provisions of the Partnership Agreement. Another
affiliate of the General Partner performs asset monitoring for the Partnership.
These services include site visits and evaluations of the subsidiary
partnerships' performance.

(iii) Property management fees incurred to affiliates of the subsidiary
partnerships amounted to $946,707, $933,974 and $904,376 for the 1999, 1998 and
1997 Fiscal Years, respectively. Included in amounts incurred to affiliates of
the subsidiary partnerships were $0, $0 and $63,309 for the 1999, 1998 and 1997
Fiscal Years, respectively, which were also incurred to an affiliate of the
General Partner.

(iv) Independence SLP L.P. is entitled to receive a local administrative fee of
up to $2,500 per year from each subsidiary partnership.

-88-

INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000

C) Due to Local General Partners and Affiliates

Due to local general partners and affiliates consists of the following:

March 31,
-----------------------
2000 1999
---------- ----------

Development deficit advances $ 50,000 $ 50,000
Operating advances (i) 1,527,807 1,571,182
Development fee payable 2,554,447 3,019,508
Long-term notes payable (ii) 1,163,572 1,192,818
Management and other fees 525,181 541,626
---------- ----------

$5,821,007 $6,375,134
========== ==========

(i) Operating advances include the following loans:

CREATIVE CHOICE HOMES II, LTD $ 59,700 $ 105,805
This loan is noninterest bearing and is payable from cash
flow of the project with the approval of HUD

CHRISTINE APARTMENTS, L.P. $ 116,100 $ 116,000
This loan is noninterest bearing and has no set repayment
terms

(ii) Long-term notes payable consist of the following:

CREATIVE CHOICE HOMES II, LTD $ 500,000 $ 500,000
This note bears interest at 12% payable monthly.
Principal on the loan is due and payable in full on
December 31, 2008.

PLAINSBORO HOUSING PARTNERS, L.P. $ 663,572 $ 692,818

This loan, dated December 11, 1992, accrues interest at
a rate of 7.34% per annum on the outstanding principal
balance for 20 years. Repayment of the principal and
interest shall be made from net cash flow to the extent
available pursuant to the promissory note. All accrued
interest and principal are due in a balloon payment in
December 2012.

Interest expense incurred on such long-term notes payable
amounted to approximately $107,000, $113,000 and $117,000
for the 1999, 1998 and 1997 Fiscal Years, respectively.

-89-

INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000

D) Other

Pursuant to the Partnership Agreement and the Local Partnership Agreements, the
General Partner and Independence SLP L.P. received their pro rata share of
profits, losses and tax credits.

NOTE 9 - Income Taxes

A reconciliation of the financial statements net loss to the income tax loss for
the Partnership and its consolidated subsidiaries follows:

Year Ended December 31,
-----------------------------------------------------
1999 1998 1997
--------------- --------------- ---------------

Financial statement net loss $ (5,804,231) $ (5,165,450) $ (4,705,108)

Differences between depreciation and amortization
expense recorded for financial reporting purposes
and the accelerated cost recovery system utilized
for income tax purposes (1,392,656) (1,006,466) (1,149,478)

Differences resulting from parent company having
a different fiscal year for income tax and
financial reporting purposes 58,644 274,161 15,857

Loss on impairment of assets 0 0 500,000

Other 209,033 362,544 (73,249)
--------------- --------------- ---------------

Net loss as shown on the income tax return for
the calendar year ended $ (6,929,210) $ (5,535,211) $ (5,411,978)
=============== =============== ===============

NOTE 10 - Commitments and Contingencies

OLD PUBLIC LIMITED PARTNERSHIP

Old Public Limited Partnership (the "Debtor") originally filed its bankruptcy
case in the United States Bankruptcy Court for the Southern District of New York
on November 17, 1998. The case was transferred to the United States Bankruptcy
Court for the Middle District of Tennessee, Columbia Division before Judge
George Paine, presiding as the result of a venue motion filed by the First
National Bank of Pulaski, Tennessee, the sole secured creditor of the Debtor
(the "Bank").

The Second Amended Plan of Reorganization, as modified, was confirmed on
February 18, 2000. Pursuant to the plan the Debtor affirmed its obligations to
the Bank, paid the Bank on the Effective Date (ten days following confirmation)
(i) the arrearages due as to principal and interest through a cash infusion by
the current limited partners of the Debtor, (ii) an additional sum of $50,000
and (iii) execution of a three-year nine percent note in the amount of $30,700
in

-90-

INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000

satisfaction of the Bank's accrued attorneys fees. As of March 31, 2000, the
Partnership has advanced approximately $376,000.

The former general partner of the Debtor, Old Public School, Inc. and two of its
principals, Lloyd Carroll and Jane Gay Carvell filed unsecured claims (the
"Litigation Claims") against the Debtor in the amount of approximately $900,000.
The court, on summary judgment filed by the Debtor, disallowed approximately
$750,000 of the asserted claims. The remainder of the claims asserted will be
treated as voluntary loans and will be satisfied in accordance with the terms of
the Partnership Agreement.

a) Uninsured Cash and Cash Equivalents

The Partnership maintains its cash and cash equivalents in various banks.
Accounts at each bank are guaranteed by the Federal Deposit Insurance
Corporation up to $100,000. As of March 31, 2000, uninsured cash and cash
equivalents approximated $789,000.

b) Letters of Credit

As of December 31, 1999, the subsidiary partnerships were contingently liable on
open letters of credit as follows:

Description Amount
- - - - ----------- ---------

Development contingency $ 16,000
Operating deficit 333,476
---------
$ 349,476
=========

c) Other

The Partnership is subject to the risks incident to potential losses arising
from the management and ownership of improved real estate. The Partnership can
also be affected by poor economic conditions generally, however no more than %
of the properties are located in any single state. There are also substantial
risks associated with owning properties receiving government assistance; for
example the possibility that Congress may not appropriate funds to enable the
U.S. Department of Housing and Urban Development ("HUD") to make rental
assistance payments. HUD also restricts annual cash distributions to partners
based on operating results and a percentage of the owner's equity contribution.
The Partnership cannot sell or substantially liquidate its investments in
subsidiary partnerships during the period that the subsidy agreements are in
existence, without HUD's approval. Furthermore, there may not be market demand
for apartments at full market rents when the rental assistance contracts expire.

The Partnership and BACs holders began to recognize Housing Tax Credits with
respect to a Property when the Credit Period for such Property commenced.
Because of the time required for the acquisition, completion and rent-up of
Properties, the amount of Tax Credits per BAC gradually increased over the first
three years of the Partnership. Housing Tax Credits not recognized in the first
three years will be recognized in the 11th through 13th years. The Partnership
generated $11,986,066, $11,979,284 and $11,977,461 Housing Tax Credits during
the 1999, 1998 and 1997 tax years, respectively.

-91-

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

None

PART III

Item 10. Directors and Executive Officers of the Registrant.

The Partnership has no directors or executive officers. The Partnership's
affairs are managed and controlled by the General Partner. Certain information
concerning the directors and executive officers of Related Independence
Associates Inc. ("RIAI"), the sole general partner of Related Independence
Associates L.P., the General Partner, is set forth below.

Name Position
- - - - ---- --------

Stephen M. Ross Director

Michael Brenner President

Alan P. Hirmes Senior Vice President

Stuart J. Boesky Senior Vice President

Marc D. Schnitzer Vice President

Denise L. Kiley Vice President

Glenn F. Hopps Treasurer

Teresa Wicelinski Secretary

STEPHEN M. ROSS, 60, is also President, Director and shareholder of The Related
Realty Group, Inc., the General Partner of The Related Companies, L.P. He
graduated from the University of Michigan School of Business Administration with
a Bachelor of Science degree and from Wayne State University School of Law with
a Juris Doctor degree. Mr. Ross than received a Master of Laws degree in
taxation from New York University School of Law. He joined the accounting firm
of Coopers & Lybrand in Detroit as a tax specialist and later moved to New York,
where he worked for two large Wall Street investment banking firms in their real
estate and corporate finance departments. Mr. Ross formed the predecessor of The
Related Companies, L.P. in 1972 to develop, manage, finance and acquire
subsidized and conventional apartment developments. Mr. Ross also serves on the
Board of Trustees of Charter Municipal Mortgage Acceptance Company.

MICHAEL BRENNER, 54, is a Director of Aegis, and is the Executive Vice President
and Chief Financial Officer of TRCLP. Prior to joining TRCLP in 1996, Mr.
Brenner was a partner with Coopers & Lybrand, having served as managing partner
of its Industry Programs and Client Satisfaction initiatives from 1993-1996,
managing partner of the Detroit group of offices from 1986-1993 and the Chairman
of its National Real Estate Industry Group from 1984-1986. Mr. Brenner graduated
summa cum laude from the University of Detroit with a Bachelors degree in
Business Administration and from the University of Michigan with a Masters of
Business Administration, with distinction. Mr. Brenner also serves on the Board
of Trustees of Charter Municipal Mortgage Acceptance Company and Aegis Realty,
Inc.

-92-

ALAN P. HIRMES, 45, has been a Certified Public Accountant in New York since
1978. Prior to joining Capital in October 1983, Mr. Hirmes was employed by
Weiner & Co., Certified Public Accountants. Mr. Hirmes is also a Vice President
of Capital. Mr. Hirmes graduated from Hofstra University with a Bachelor of Arts
degree.

STUART J. BOESKY, 44, practiced real estate and tax law in New York City with
the law firm of Shipley & Rothstein from 1984 until February 1986 when he joined
Capital. From 1983 to 1984, Mr. Boesky practiced law with the Boston law firm of
Kaye Fialkow Richard & Rothstein (which subsequently merged with Strook & Strook
& Lavan) and from 1978 to 1980 was a consultant specializing in real estate at
the accounting firm of Laventhol & Horwath. Mr. Boesky graduated from Michigan
State University with a Bachelor of Arts degree and from Wayne State School of
Law with a Juris Doctor degree. He then received a Master of Laws degree in
Taxation from Boston University School of Law.

MARC D. SCHNITZER, 39, is responsible both for financial restructurings of real
estate properties and directing Capital's acquisitions of properties generating
Housing Tax Credits. Mr. Schnitzer received a Masters of Business Administration
from The Wharton School of the University of Pennsylvania in December 1987
before joining Related in January 1988. From 1983 to January 1986, he was a
financial analyst for the First Boston Corporation in New York. Mr. Schnitzer
graduated summa cum laude with a Bachelor of Science in Business Administration
from the School of Management at Boston University in May 1983.

DENISE L. KILEY, 40, is responsible for overseeing the due diligence and asset
management of all multifamily residential properties invested in RCC sponsored
corporate, public and private equity and debt funds. Prior to joining Related in
1990, Ms. Kiley had experience acquiring, financing and asset managing
multifamily residential properties. From 1981-1985 she was an auditor with Price
Waterhouse. Ms. Kiley holds a Bachelor of Science in Accounting from Boston
College.

GLENN F. HOPPS, 37, was employed, prior to joining Related in December 1, 1990,
by Mark Shron & Company and Weissbarth, Altman and Michaelson certified public
accountants. Mr. Hopps graduated from New York State University at Albany with a
Bachelor of Science Degree in Accounting

TERESA WICELINSKI, 34, joined Related in June 1992, and prior to that date was
employed by Friedman, Alpren & Green, certified public accountants. Ms.
Wicelinski graduated from Pace University with a Bachelor of Arts Degree in
Accounting.

-93-

Item 11. Executive Compensation.

The Partnership has no officers or directors. The Partnership does not pay or
accrue any fees, salaries or other forms of compensation to directors or
officers of the general partner of the General Partner for their services. Under
the terms of the Partnership Agreement, the General Partner and its affiliates
are entitled to receive compensation from the Partnership in consideration of
certain services rendered to the Partnership by such parties. In addition, the
General Partner is entitled to 1% of all cash distributions and Tax Credit
allocations and a subordinated 15% interest in Net Sales or Refinancings
Proceeds. See Note 8 to the Financial Statements in Item 8 above for a
presentation of the types and amounts of compensation paid to the General
Partner and its affiliates, which is incorporated herein by reference thereto.

Tabular information concerning salaries, bonuses and other types of compensation
payable to executive officers has not been included in this annual report. As
noted above, the Partnership has no executive officers. The levels of
compensation payable to the General Partner and/or its affiliates is limited by
the terms of the Partnership Agreement and may not be increased therefrom on a
discretionary basis.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

Name and Address of Amount and Nature of Percentage
Title of Class Beneficial Ownership Beneficial Ownership of Class
- - - - -------------- -------------------- -------------------- ----------

General Partnership Related Independence $1,000 capital contribution 100%
Interest in the Associates L.P. -directly owned
Partnership 625 Madison Avenue
New York, NY 10022

Independence SLP L.P., a limited partnership whose general partner is the
General Partner of the Partnership and which acts as the special limited partner
of each Local Partnership, holds either a 0.1% or 1% limited partnership
interest in each Local Partnership. See Note 8 to the Financial Statements in
Item 8 above, which information is incorporated herein by reference thereto.

Except as set forth in the table below, no person is known by the Partnership to
be the beneficial owner of more than 5% of the Limited Partnership Interests and
neither the Related General Partner nor any director or executive officer of the
Related General Partner owns any Limited Partnership Interests. The following
table sets forth the number of BACs beneficially owned, as of June 1, 2000, by
(i) each BACs holder known to the Partnership to be a beneficial owner of more
than 5% of the BACs, (ii) each director and executive officer of the general
partner of the Related General Partner and (iii) the directors and executive
officers of the general partner of the Related General Partner as a group.
Unless otherwise noted, all BACs are owned directly with sole voting and
dispositive powers.

-94-

Amount and Nature of
Name of Beneficial Owner (1) Beneficial Ownership Percent of Class
- - - - ------------------------ -------------------- ----------------

Lehigh Tax Credit Partners, Inc. 6,846.30 (2) (3) 8.9%

J. Michael Fried 6,846.30 (2) (3) (4) 8.9%

Alan P. Hirmes 6,846.30 (2) (3) (4) 8.9%

Stuart J. Boesky 6,846.30 (2) (3) (4) 8.9%

Stephen M. Ross - -

Michael Brenner - -

Marc D. Schnitzer 6,846.30 (2) (3) (4) 8.9%

Denise L. Kiley 6,846.30 (2) (3) (4) 8.9%

Glenn F. Hopps - -

Teresa Wicelinski - -

All directors and executive officers 6,846.30 (2) (3) (4) 8.9%
of the general partner of the
Related General Partner as a group
(ten persons)

(1) The address for each of the persons in the table is 625 Madison Avenue, New
York, New York 10022.

(2) As set forth in Schedule 13D filed by Lehigh Tax Credit Partners L.L.C.
("Lehigh I") and Lehigh Tax Credit Partners, Inc., (the "Managing Member") on
June 10, 1997 with the Securities and Exchange Commission (the "Commission") and
pursuant to a letter agreement dated May 28, 1997 among the Partnership, Lehigh
I and the Related General Partner (the "Standstill Agreement"), Lehigh I agreed
that, prior to May 28, 2007 (the "Standstill Expiration Date"), it will not and
it will cause certain affiliates including (Lehigh II) not to (i) acquire,
attempt to acquire or make a proposal to acquire, directly or indirectly, more
than 45% (including BACs acquired through all other means) of the outstanding
BACs, (ii) seek to propose to enter into, directly or indirectly, any merger,
consolidation, business combination, sale or acquisition of assets, liquidation,
dissolution or other similar transaction involving the Partnership, (iii) make,
or in any way participate, directly or indirectly, in any "solicitation" of
"proxies" or "consents" (as such terms are used in the proxy rules of the
Commission) to vote any voting securities of the Partnership, (iv) form, join or
otherwise participate in a "group" (within the meaning of Section 13 (d)(3) of
the Securities and Exchange Act of 1934) with respect to any voting securities
of the Partnership, except those affiliates bound by the Standstill Agreement
will not be deemed to have violated it and formed a "group" solely by acting in
accordance with the Standstill Agreement, (v) disclose in writing to any third
party any intention, plan or arrangement inconsistent with the terms of the
Standstill Agreement, or (vi) loan money to, advise, assist or encourage any
person in connection with any action inconsistent with the terms of the

-95-

Standstill Agreement. In addition, Lehigh I agreed that until the Standstill
Expiration Date it will not sell any BACs acquired by it unless the buyer of
such BACs agrees to be bound by the Standstill Agreement; provided, however,
Lehigh I may make transfers in the secondary market to any purchaser which
represents that following such sale it will not own three (3%) percent or more
of the BACs outstanding. By the terms of the Standstill Agreement, Lehigh I also
agreed to vote its BACs in the same manner as a majority of all voting BACs
holders; provided, however, Lehigh I is entitled to vote its BACs as it
determines with regard to any proposal (i) to remove the Related General Partner
as a general partner of the Partnership or (ii) concerning the reduction of any
fees, profits, distributions or allocations for the benefit of the Related
General Partner or its affiliates. The addresses of each of the Partnership,
Lehigh I and the Related General Partner is 625 Madison Avenue, New York, New
York 10022.

(3) All of such BACs represent BACs owned directly by Lehigh, I and Lehigh Tax
Credit Partners II, L.L.C. ("Lehigh II") for which the Managing Member serves as
managing member. As of June 1, 2000, Lehigh I held 3,410.65 BACs and Lehigh II
held 3,435.65 BACs.

(4) Each such party serves as a director and executive officer of the Managing
Member and owns an equity interest therein except J. Michael Fried who owns only
an economic interest.

Item 13. Certain Relationships and Related Transactions.

The Partnership has and will continue to have certain relationships with the
General Partner and its affiliates, as discussed in Item 11 and also Note 8 to
the Financial Statements in Item 8 above, which is incorporated herein by
reference. However, there have been no direct financial transactions between the
Partnership and the directors and officers of the general partner of the General
Partner.

-96-

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

Sequential
Page
----------

(a) 1. Financial Statements

Independent Auditors' Report 14

Consolidated Balance Sheets at March 31, 2000 and 1999 75

Consolidated Statements of Operations for the Years Ended
March 31, 2000, 1999 and 1998 76

Consolidated Statements of Changes in Partners' Capital
(Deficit) for the Years Ended March 31, 2000, 1999 and 1998 77

Consolidated Statements of Cash Flows for the Years Ended
March 31, 2000, 1999 and 1998 78

Notes to Consolidated Financial Statements 80

(a) 2. CONSOLIDATED FINANCIAL STATEMENT SCHEDULES

Independent Auditors' Report 102

Schedule I- Condensed Financial Information of Registrant 103

Schedule III - Real Estate and Accumulated Depreciation 106

(a) 3. EXHIBITS

(3A) Form of Amended and Restated Agreement of Limited
Partnership of Independence Tax Credit Plus L.P., attached
to the Prospectus as Exhibit A*

(3B) Amended and Restated Certificate of Limited Partnership
of Independence Tax Credit Plus L.P.*

(10A) Form of Subscription Agreement attached to the
Prospectus as Exhibit B*

(10B) Form of Purchase and Sales Agreement pertaining to
the Partnership's acquisition of Local Partnership
Interests*

(10C) Form of Amended and Restated Agreement of Limited
Partnership of Local Partnerships*

(21) Subsidiaries of the Registrant 99

-97-

Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K (continued)

Sequential
Page
----------

(27) Financial Data Schedule (filed herewith) 109

*Incorporated herein as an exhibit by reference to
exhibits filed with Pre-Effective Amendment No. 1 to
the Independence Tax Credit Plus L.P. Registration
Statement on Form S-11 (Registration No. 33-37704)

(b) REPORTS ON FORM 8-K

No reports on Form 8-K were filed during the quarter.

-98-

Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K. (continued)

Jurisdiction
(c) Subsidiaries of the Registrant (Exhibit 21) of Organization
------------------------------ ---------------

Harbor Court Limited Partnership NY
Old Public Limited Partnership TN
Lancaster Terrace Limited Partnership OR
655 North Street Limited Partnership LA
Landreth Venture PA
Homestead Apartments Associates Ltd. FL
Bethel Villa Associates, L.P. DE
West Diamond Street Associates PA
Susquehanna Partners PA
Boston Bay Limited Partnership MA
Morrant Bay Limited Partnership MA
Hope Bay Limited Partnership MA
Lares Apartments Limited Partnership PR
Lajas Apartments Limited Partnership PR
Arlington-Rodeo Properties CA
Conifer Bateman Associates NY
Hampden Hall Associates, L.P. MO
Chester Renaissance Associates PA
Homestead Apartments II, LTD. FL
P.S. 157 Associates, L.P. NY
Cloisters Limited Partnership II PA
Creative Choice Homes II, LTD. FL
Milford Crossing Associates L.P. DE
BX-7F Associates, L.P. NY
Los Angeles Limited Partnership PR
Christine Apartments, L.P. NY
Plainsboro Housing Partners, L.P. NJ
Rolling Green Associates, L.P. NY

(d) Not applicable

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.

INDEPENDENCE TAX CREDIT PLUS L.P.
(Registrant)

By: RELATED INDEPENDENCE ASSOCIATES L.P.,
its General Partner

By: RELATED INDEPENDENCE ASSOCIATES INC.,
a General Partner

Date: June 9, 2000 By: /s/ MICHAEL BRENNER
-------------------
Michael Brenner
President and Chief Executive Officer
(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:

Signature Title Date
- - - - ------------------- ------------------------------------- ------------

President and Chief Executive Officer
/s/ Michael Brenner (principal executive officer)
- - - - ------------------- of Related Independence Associates Inc. June 9, 2000
Michael Brenner

Senior Vice President
/s/ Alan P. Hirmes (principal financial officer)
- - - - ------------------- of Related Independence Associates Inc. June 9, 2000
Alan P. Hirmes

Treasurer
/s/ Glenn F. Hopps (principal accounting officer) of
- - - - ------------------- Related Independence Associates Inc. June 9, 2000
Glenn F. Hopps

/s/ Stephen M. Ross Director of
- - - - ------------------- Related Independence Associates Inc. June 9, 2000
Stephen M. Ross

INDEPENDENT AUDITORS' REPORT
----------------------------

To the Partners of
Independence Tax Credit Plus L.P. and Subsidiaries
(A Delaware Limited Partnership)

In connection with our audits of the consolidated financial statements of
Independence Tax Credit Plus L.P. and Subsidiaries included in the Form 10-K as
presented in our opinion dated June 8, 2000 on page 14, and based on the reports
of other auditors, we have also audited supporting Schedule I for the 1999, 1998
and 1997 Fiscal Years and Schedule III at March 31, 2000. In our opinion, and
based upon the reports of the other auditors, these consolidated schedules
present fairly, when read in conjunction with the related consolidated financial
statements, the financial data required to be set forth therein.

TRIEN ROSENBERG ROSENBERG
WEINBERG CIULLO & FAZZARI LLP

New York, New York
June 8, 2000

INDEPENDENCE TAX CREDIT PLUS L.P.
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(NOT INCLUDING CONSOLIDATED SUBSIDIARY PARTNERSHIPS)

CONDENSED BALANCE SHEETS

ASSETS

March 31,
------------------------------
2000 1999
------------- ------------

Cash and cash equivalents $ 17,570 $ 20,997
Advances and investment in subsidiary partnerships 38,904,862 43,297,860
Cash held in escrow 292,000 296,700
Other assets 131,800 131,800
----------- -----------

Total assets $ 39,346,232 $ 43,747,357
=========== ===========

LIABILITIES AND PARTNERS' CAPITAL

Other liabilities $ 60,360 $ 68,863
Due to general partners and affiliates 3,226,368 1,779,164
----------- -----------

Total liabilities 3,286,728 1,848,027

Partners' capital** 36,059,504 41,899,330
----------- -----------

Total liabilities and partners' capital $ 39,346,232 $ 43,747,357
=========== ===========

Investments in subsidiary partnerships are recorded in accordance with the
equity method of accounting, wherein the investments are not reduced below zero.

**Condensed partners' capital includes $729,865 and $765,280 of related party
income at March 31, 2000 and 1999, respectively.

INDEPENDENCE TAX CREDIT PLUS L.P.
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(NOT INCLUDING CONSOLIDATED SUBSIDIARY PARTNERSHIPS)

CONDENSED STATEMENTS OF OPERATIONS

Year Ended March 31,
--------------------------------------------
2000 1999 1998
------------ ------------ ------------

Revenues $ 8,421 $ 8,948 $ 12,468
------------ ------------ ------------

Expenses

Administrative and management 242,889 294,373 113,897
Administrative and management-related parties 1,017,662 1,022,194 195,804
------------ ------------ ------------

Total expenses 1,260,551 1,316,567 309,701
------------ ------------ ------------

Loss from operations (1,252,130) (1,307,619) (297,233)

Equity in loss of subsidiary partnerships (4,587,696) (3,893,426) (4,443,470)
------------ ------------ ------------

Net loss $ (5,839,826) $ (5,201,045) $ (4,740,703)
============ ============ ============

INDEPENDENCE TAX CREDIT PLUS L.P.
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(NOT INCLUDING CONSOLIDATED SUBSIDIARY PARTNERSHIPS)

CONDENSED STATEMENTS OF CASH FLOWS

Year Ended March 31,
-------------------------------------------
2000 1999 1998
----------- ----------- -----------

Cash flows from operating activities:

Net loss $(5,839,826) $(5,201,045) $(4,740,703)
----------- ----------- -----------

Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:

Equity in loss of subsidiary partnerships 4,587,696 3,893,426 4,443,470
(Decrease) increase in other liabilities (8,503) 66,560 (787)
Increase in due to general partner
and affiliates 1,447,204 1,138,947 102,112
----------- ----------- -----------

Total adjustments 6,026,397 5,098,933 4,544,795
----------- ----------- -----------

Net cash provided by (used in) operating
activities 186,571 (102,112) (195,908)
----------- ----------- -----------

Cash flows from investing activities:

Decrease in cash
held in escrow-purchase price payments 4,700 63,000 627,436
(Increase) in other assets 0 (414) 0
Investment in subsidiary partnerships (4,700) (63,000) (627,436)
Distributions from subsidiary partnerships 33,844 66,408 142,589
Advances to subsidiary partnerships (223,842) (62,330) (8,138)
----------- ----------- -----------

Net cash (used in) provided by
investing activities (189,998) 3,664 134,451
----------- ----------- -----------

Net decrease in cash and cash equivalents (3,427) (98,448) (61,457)

Cash and cash equivalents, beginning of year 20,997 119,445 180,902
----------- ----------- -----------

Cash and cash equivalents, end of year $ 17,570 $ 20,997 $ 119,445
=========== =========== ===========

INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 2000

Gross Amount at which
Initial Cost to Partnership Cost Capitalized Carried At Close of Period
--------------------------- Subsequent to ----------------------------
Buildings and Acquisition: Buildings and
Description Encumbrances Land Improvements Improvements Land Improvements
- - - - ------------------------------------- ------------ --------- -------------- --------------- -------- -----------------

Apartment Complexes

Harbor Court Limited Partnership
Staten Island, NY $ 0 $ 137,450 $ 1,007,966 $ 69,289 $ 140,813 $ 1,073,892
Old Public Limited Partnership
Lawrenceburg, TN 499,355 10,000 1,713,310 74,504 13,640 1,784,174
Lancaster Terrace Limited Partnership
Salem, OR 1,640,654 161,269 3,679,601 40,470 163,105 3,718,235
655 North Street Limited Partnership
Baton Rouge, LA 4,582,460 125,500 3,040,980 5,617,173 127,751 8,655,902
Landreth Venture
Philadelphia, PA 3,362,903 1,761 5,903,337 34,388 3,645 5,935,841
Homestead Apartments Associates Ltd.
Homestead, FL 3,511,000 329,402 0 5,943,165 340,868 5,931,699
Bethel Villa Associates, L.P.
Wilmington, DE 5,560,631 270,000 5,969,354 3,112,416 275,099 9,076,671
West Diamond Street Associates
Philadelphia, PA 1,576,000 30,829 3,444,649 (1,025,162) 32,414 2,417,902
Susquehanna Partners
Philadelphia, PA 1,865,209 16,000 0 3,993,864 17,585 3,992,279
Boston Bay Limited Partnership
Boston, MA 3,019,514 440,000 4,143,758 663,872 441,585 4,806,045
Morrant Bay Limited Partnership
Boston, MA 4,535,518 650,000 5,522,250 995,796 651,585 6,516,461
Hope Bay Limited Partnership
Boston, MA 1,413,265 225,000 1,435,185 531,590 226,585 1,965,190
Lares Apartments Limited Partnership
Lares, PR 4,475,513 137,000 0 5,521,639 151,585 5,507,054
Lajas Apartments Limited Partnership
Lajas, PR 4,127,621 110,090 4,952,929 145,332 111,675 5,096,676
Arlington-Rodeo Properties
Los Angeles, CA 3,543,123 624,052 0 5,024,507 625,637 5,022,922
Conifer Bateman Associates
Lowville, NY 996,394 15,000 2,525,729 63,390 16,585 2,587,534
Hampden Hall Associates, L.P.
St. Louis, MO 2,227,787 0 0 7,446,002 1,585 7,444,417
Chester Renaissance Associates
Chester, PA 853,000 33,667 168,333 1,773,823 42,153 1,933,670
Homestead Apartments II, LTD.
Homestead, FL 3,448,000 338,966 0 5,287,011 340,551 5,285,426

Life on which
Gross Amount at which Depreciation in
Carried At Close of Period Year of Latest Income
-------------------------- Accumulated Construction/ Date Statement is
Total Depreciation Renovation Acquired Computed*
-------------------------- ------------ ------------- ---------- ---------------

Apartment Complexes

Harbor Court Limited Partnership
Staten Island, NY $ 1,214,705 $ 279,526 1991 Dec. 1991 27.5 years
Old Public Limited Partnership
Lawrenceburg, TN 1,797,814 511,140 1991 Dec. 1991 27.5 years
Lancaster Terrace Limited Partnership
Salem, OR 3,881,340 1,241,122 1992 Feb. 1992 15-27.5 years
655 North Street Limited Partnership
Baton Rouge, LA 8,783,653 2,276,928 1992 Mar. 1992 27.5 years
Landreth Venture
Philadelphia, PA 5,939,486 1,139,600 1992 Mar. 1992 40 years
Homestead Apartments Associates Ltd.
Homestead, FL 6,272,567 1,066,282 1992 Mar. 1992 40 years
Bethel Villa Associates, L.P.
Wilmington, DE 9,351,770 2,216,772 1992 Apr. 1992 27.5 years
West Diamond Street Associates
Philadelphia, PA 2,450,316 441,921 1992 May 1992 40 years
Susquehanna Partners
Philadelphia, PA 4,009,864 711,950 1992 May 1992 20-40 years
Boston Bay Limited Partnership
Boston, MA 5,247,630 1,387,751 1991 Aug. 1992 27.5 years
Morrant Bay Limited Partnership
Boston, MA 7,168,046 1,899,606 1991 Aug. 1992 27.5 years
Hope Bay Limited Partnership
Boston, MA 2,191,775 569,310 1991 Aug. 1992 27.5 years
Lares Apartments Limited Partnership
Lares, PR 5,658,639 1,168,951 1992 Aug. 1992 40 years
Lajas Apartments Limited Partnership
Lajas, PR 5,208,351 976,400 1992 Aug. 1992 40 years
Arlington-Rodeo Properties
Los Angeles, CA 5,648,559 1,110,699 1992 Aug. 1992 27.5 years
Conifer Bateman Associates
Lowville, NY 2,604,119 722,631 1990 Aug. 1992 15-27.5 years
Hampden Hall Associates, L.P.
St. Louis, MO 7,446,002 1,781,243 1992 Sep. 1992 27.5 years
Chester Renaissance Associates
Chester, PA 1,975,823 323,959 1992 Sep. 1992 40 years
Homestead Apartments II, LTD.
Homestead, FL 5,625,977 868,282 1992 Oct. 1992 40 years

INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 2000
(continued)

Gross Amount at which
Initial Cost to Partnership Cost Capitalized Carried At Close of Period
--------------------------- Subsequent to ----------------------------
Buildings and Acquisition: Buildings and
Description Encumbrances Land Improvements Improvements Land Improvements
- - - - ------------------------------------- ------------ --------- -------------- --------------- -------- -----------------

Apartment Complexes

P.S. 157 Associates, L.P.
New York, NY 0 36,500 9,350,642 76,382 38,085 9,425,439
Cloisters Limited Partnership II
Philadelphia, PA 0 35,160 0 9,548,955 36,745 9,547,370
Creative Choice Homes II, LTD.
Opa-Locka, FL 10,821,045 0 0 21,433,650 574,637 20,859,013
Milford Crossing Associates L.P. (**)
Milford, DE 2,550,487 203,006 0 4,374,192 115,519 4,461,679
BX-7F Associates, L.P.
Bronx, NY 3,533,881 4 5,705,064 55,643 2,178 5,766,905
Los Angeles Limited Partnership
Rio Piedras, PR 3,747,077 201,210 0 6,609,917 203,384 6,607,743
Christine Apartments, L.P.
Buffalo, NY 1,245,000 10,000 2,351,072 83,267 13,174 2,431,165
Plainsboro Housing Partners, L.P.
Plainsboro, NJ 4,018,375 800,000 0 8,851,487 802,174 8,849,313
Rolling Green Associates, L.P.
Syracuse, NY 15,305,000 180,000 19,583,101 467,349 182,174 20,048,276
---------- --------- ---------- ----------- --------- ------------

$92,458,812 $5,121,866 $80,497,260 $96,813,911 $5,692,516 $176,748,893
=========== ========== =========== =========== ========== ============

Life on which
Gross Amount at which Depreciation in
Carried At Close of Period Year of Latest Income
-------------------------- Accumulated Construction/ Date Statement is
Total Depreciation Renovation Acquired Computed*
-------------------------- ------------ ------------- ---------- ---------------

P.S. 157 Associates, L.P.
New York, NY 9,463,524 1,702,351 1992 Nov 1992 40 years
Cloisters Limited Partnership II
Philadelphia, PA 9,584,115 1,607,119 1992 Nov 1992 40 years
Creative Choice Homes II, LTD.
Opa-Locka, FL 21,433,650 3,413,721 1988 Dec 1992 40 years
Milford Crossing Associates L.P. (**)
Milford, DE 4,577,198 1,181,138 1992 Dec. 1992 27.5 years
BX-7F Associates, L.P.
Bronx, NY 5,769,083 1,034,982 1993 Jan. 1993 40 years
Los Angeles Limited Partnership
Rio Piedras, PR 6,811,127 1,110,662 1994 Apr. 1993 40 years
Christine Apartments, L.P.
Buffalo, NY 2,444,339 570,590 1993 June 1993 27.5 years
Plainsboro Housing Partners, L.P.
Plainsboro, NJ 9,651,487 1,800,727 1994 July 1993 27.5 years
Rolling Green Associates, L.P.
Syracuse, NY 20,230,450 5,149,030 1992 Oct. 1993 27.5 years
------------ -----------

$182,441,409 $38,264,393
============ ===========

* Personal property is depreciated over the estimated useful life ranging from
3 to 10 years.
** During the year ended December 31, 1997, the Partnership sold a parcel of
land for $210,000 to an entity with a member who is also the general partner
of the Partnership.

INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 31, 2000
(continued)

Cost of Property and Equipment
---------------------------------------------------------
Year Ended March 31,
---------------------------------------------------------
2000 1999 1998
---------------- ---------------- ----------------

Balance at beginning of period $182,110,698 $182,292,458 $183,169,973

Additions during period:
Improvements 375,405 236,795 316,410
Depreciation expense
Deductions during period:

Dispositions (44,694) (418,555) (95,072)
Loss on impairment 0 0 (1,098,853)
---------------- ---------------- ----------------

Balance at close of period $182,441,409 $182,110,698 $182,292,458
================ ================ ================

Accumulated Depreciation
---------------------------------------------------------
Year Ended March 31,
---------------------------------------------------------
2000 1999 1998
---------------- ---------------- ----------------

Balance at beginning of period $32,535,934 $26,761,173 $21,272,068

Additions during period:
Improvements
Depreciation expense 5,773,153 5,794,508 6,087,958
Deductions during period:

Dispositions (44,694) (19,747) 0
Loss on impairment 0 0 (598,853)
---------------- ---------------- -----------

Balance at close of period $38,264,393 $32,535,932 $26,761,173
================ ================ ================

At the time the Local Partnerships were acquired by Independence Tax Credit Plus
L.P., the entire purchase price paid by Independence Tax Credit Plus L.P. was
pushed down to the local partnerships as property and equipment with an
offsetting credit to capital. Since the projects were in the construction phase
at the time of acquisition, the capital accounts were insignificant at the time
of purchase. Therefore, there are no material differences between the original
cost basis for tax and GAAP.