INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS

At September 30, 2013 and 2012, the Partnership had limited partnership equity interests in two and five Local Partnerships, respectively, owning one and five apartment complexes, respectively. The Partnership still owns the limited partner interest in the Local Partnership that owned Westwood Village (see Note 3.c). The Local Partnership is in the process of dissolution.

A schedule of the apartment complexes owned by the Local Partnerships at September 30, 2013 in which the Partnership is invested is provided below:



PROPERTY	CITY	STATE	UNITS

Chestnut	Fresno	CA	90

Under the terms of the Partnership's investment in each Local Partnership, the Partnership was required to make capital contributions to the Local Partnerships. These contributions were payable in installments upon each Local Partnership achieving specified levels of construction and/or operations. At September 30, 2013 and 2012, all such capital contributions had been paid to the Local Partnerships.

a. Summarized financial information

The combined statements of operations for the two and five Local Partnerships in which the Partnership was invested as of September 30, 2013 and 2012, respectively, follow. The combined statements are compiled from information supplied by the management agent of the Local Partnership properties and are unaudited. The information for each of the periods is presented separately for those Local Partnerships which have investment basis (equity method) and for those Local Partnerships which have cumulative losses in excess of the amount of the Partnership's investments in those Local Partnerships (equity method suspended). Appended after the combined statements is information concerning the Partnership's share of income from partnerships related to cash distributions recorded as income and related to the Partnership's share of income from Local Partnerships.

Combined Statements of Operations

(unaudited)



	For the three months ended
	September 30,

	2013							2012

	Equity Method			Suspended		Total		Equity Method			Suspended			Total
Number of Local Partnerships	2		(a)	—		2		3		(c)	2		(d)	5

Revenue:
Rental	$	350,407		$	—	$	350,407	$	899,941		$	286,080		$	1,186,021
Other	4,928			—		4,928		98,472			6,846			105,318
Gain on sale of property	2,455,833			—		2,455,833		—			—			—
Total revenue	2,811,168			—		2,811,168		998,413			292,926			1,291,339


Expenses:
Operating	154,838			—		154,838		508,667			182,097			690,764
Interest	—			—		—		57,569			39,620			97,189
Depreciation and amortization	22,093			—		22,093		101,942			27,663			129,605
Total expenses	176,931			—		176,931		668,178			249,380			917,558

Net income	$	2,634,237		$	—	$	2,634,237	$	330,235		$	43,546		$	373,781

Cash distributions	$	1,764,047		$	—	$	1,764,047	$	—		$	—		$	—

Cash distributions recorded as reduction of investments
in partnerships	$	1,764,047		$	—	$	1,764,047	$	—		$	—		$	—

Cash distribution recorded as income	$	—		—		$	—	$	—		$	—		$	—

Partnership’s share of Local Partnership net income	1,707,757			—		1,707,757		323,609			—			323,609

Share of income from partnerships	$	1,707,757		$	—	$	1,707,757	$	323,609		$	—		$	323,609



	For the nine months ended
	September 30,

	2013									2012

	Equity Method			Suspended				Total		Equity Method			Suspended			Total
Number of Local Partnerships	2		(a)	1			(b)	3		3		(c)	2		(d)	5

Revenue:
Rental	$	1,146,679		$	165,558			$	1,312,237	$	2,753,429		$	955,874		$	3,709,303
Other	37,609			2,311				39,920		278,957			26,106			305,063
Gain on sale of property	2,455,833			—				2,455,833		—			—			—
Total revenue	3,640,121			167,869				3,807,990		3,032,386			981,980			4,014,366


Expenses:
Operating	723,526			114,333				837,859		1,527,151			676,483			2,203,634
Interest	2,971			36,878				39,849		172,705			121,387			294,092
Depreciation and amortization	69,623			17,340				86,963		305,828			92,545			398,373
Total expenses	796,120			168,551				964,671		2,005,684			890,415			2,896,099

Net income (loss)	$	2,844,001		$	(682	)		$	2,843,319	$	1,026,702		$	91,565		$	1,118,267

Cash distributions	$	1,821,810		$	14,147			$	1,835,957	$	—		$	—		$	—

Cash distributions recorded as reduction
of investments in partnerships	$	1,821,810		$	—			$	1,821,810	$	—		$	—		$	—

Cash distribution recorded as income	$	—		14,147				$	14,147	$	—		$	—		$	—

Partnership’s share of Local Partnership net income	1,913,311			—				1,913,311		1,006,103			—			1,006,103

Share of income from Partnerships	$	1,913,311		$	14,147			$	1,927,458	$	1,006,103		$	—		$	1,006,103

(a) Chestnut,Westwood Village

(b) New Sharon Woods

(d) Hillview Terrace, New Sharon Woods

Cash distributions received from Local Partnerships which have investment basis (equity method) are recorded as a reduction of investments in partnerships and as cash receipts on the respective balance sheets. Cash distributions received from Local Partnerships which have cumulative losses in excess of the amount of the Partnership's investments in those Local Partnerships (equity method suspended) are recorded as share of income from partnerships on the respective statements of operations and as cash receipts on the respective balance sheets. As of September 30, 2013, there were no cumulative losses. As of September 30, 2012, the Partnership's share of cumulative losses to date for two of five Local Partnerships exceeded the amount of the Partnership's investments in those Local Partnerships by $3,267,561. As the Partnership has no further obligation to advance funds or provide financing to these Local Partnerships, the excess losses have not been reflected in the accompanying condensed financial statements.

b. Property Matters

On December 19, 2002, the Local Partnership which owned the Baltic Plaza apartments sold the property. Cash proceeds received by the Partnership totaled $2,053,358. As part of the consideration, the Local Partnership took back a 30-year purchase money note in the principal amount of $2,300,000, collateralized by the partnership interests of the general partner of the maker/purchaser. The Local Partnership assigned the purchase money note to an escrow for the benefit of its partners (with CRI serving as escrow agent), so that the Local Partnership entity could be dissolved. The purchase money note bore interest at 4.60% compounded annually, and required a minimum annual payment equal to 50% of the maker/purchaser’s annual audited cash flow, as defined, with the balance of unpaid principal, if any, plus accrued interest, due and payable on December 31, 2032. As of March 31, 2013 and 2012, no payments of principal or interest have been received on this purchase money note. The Partnership’s 98% beneficial interest in this purchase money note is reflected in the accompanying balance sheets at December 31, 2012, at its original principal balance of $2,300,000 plus estimated accrued but unpaid interest, all discounted to $619,000 to provide for an effective interest rate commensurate with the investment risk. The resulting discounted amount had been fully reserved due to uncertainty of collection of the purchase money note and related interest. The Partnership entered an agreement to sell the note to an affiliate of SP Baltic Plaza, LP for a sale price of $2,000,000. The note sold on April 29, 2013. The Partnership received $1,960,000 in proceeds from the sale of the note. CRICO Housing Partnership received $39,000 and C.R.H.C. of Atlantic City, Inc. received $200, which represents their interest of 1.99% and .01%, respectively. The proceeds are shown as gain on sale of note on the accompanying condensed statements of operations and accumulated gains.

On November 1, 2011, the mortgage holder for Shallowford Oaks, LSREF2 Chalk 2, LLC, foreclosed on the property and became the new owner of the property pursuant to a non-judicial foreclosure sale under the power of sale clause contained in its law documents. During 2012, the Local Partnership was wound up, and the Partnership no longer held a limited partnership interest in this Local Partnership at December 31, 2012. On April 3, 2013, the Partnership received $6,928, which represents the final liquidation distribution related to Shallowford Oaks. This distribution was recorded as income and is included in the share of income from partnerships on the condensed statements of operations and accumulated gains.

c. Pending and Completed Sales

Pending Sales

On August 2, 2012, the Local Partnership that owns Chestnut Apartments entered into a purchase and sale agreement to sell the Chestnut Apartments for $5,440,000. The Partnership's investment basis in this Local Partnership at September 30, 2013 was $1,338,526. The Partnership expects to receive approximately $3,500,000 as a result of the sale. The sale is expected to close during the fourth quarter of 2013.

Completed Sales

On June 29, 2012, the Partnership entered into a partnership purchase agreement to sell their partnership interest in New Sharon Woods for $1. The Partnership's investment basis in this Local Partnership at both September 30, 2013 and December 31, 2012 was $0. The sale closed on June 4, 2013. Unamortized acquisition fees of $5,777 remained at June 4, 2013 and are included in amortization expense on the accompanying condensed statements of operations and accumulated gains.

On August 29, 2012, the Partnership sold its limited partner interest in Traverse City Elderly, LP, which owns the Hillview Terrace Apartments for $299,990. In accordance with the terms of the Partnership Agreement, in September 2012, the Managing General Partner received a disposition fee of $92,000 related to the sale. The net proceeds received as a result of the sale were $207,990. The Partnership's investments basis at the date of the sale was $0. Net acquisition fees and property purchase costs netted against the gain on disposition of investments during the nine months ended September 30, 2012 were $7,465.

On December 17, 2012, the Partnership sold its limited partner interest in Capital Senior Limited Dividend Housing Association Limited Partnership, which owns the Capital Commons Senior Apartments for $6,245,328.

On August 2, 2012, the Local Partnership that owns Westwood Village entered into a purchase and sale agreement to sell Westwood Village for $3,085,000. The sale occurred on August 13, 2013. At December 31, 2012, the Partnership's investment basis in this Local Partnership was $425,415. The Partnership received an initial distribution of sale proceeds in the amount of $1,764,047 and anticipates to receive an additional $350,000 after the final reconciliation of the Local Partnership accounts. This amount is included in investments in and receivable from partnerships on the condensed balance sheet at September 30, 2013. A disposition fee of $154,250 was paid to the General Managing Partner in connection with the sale, and is netted against the gain on disposition of investment on the accompanying condensed statements of operations and accumulated gains. The net unamortized deferred costs, related to Westwood Village in the amount of $5,547, are included in amortization expense on the accompanying condensed statements of operations and accumulated gains. At September 30, 2013, the Partnership still owns a limited partnership interest in the Local Partnership.

d. Investment Reconciliation

The following is a reconciliation of investments in partnerships at September 30, 2013:



Investments in and receivable from partnerships at December 31, 2012	$	1,597,027

Distributions	(1,835,957		)

Share of income from partnerships	1,927,458

Investments in and receivable from partnerships at September 30, 2013	$	1,688,528