Company1

HAWTHORN HOUSING LIMITED PARTNERSHIP

071-11069

STATEMENT OF PROFIT AND LOSS

For The Year Ended December 31, 2003

Part 1	Description of Account	Acct. No.		Amount
Rent Revenue 5100	Rent Revenue - Gross Potential	5120	$	1,298,024
	Tenant Assistance Payments	5121	$	543,920
	Rent Revenue - Stores and Commercial	5140	$	-
	Garage and Parking Spaces	5170	$	-
	Flexible Subsidy Revenue	5180	$	-
	Miscellaneous Rent Revenue	5190	$	-
	Excess Rent	5191	$	-
	Rent Revenue/Insurance	5192	$	-
	Special Claims Revenue	5193	$	-
	Retained Excess Income	5194	$	-
	Total Rent Revenue	5100T			$	1,841,944
Vacancies 5200	Apartments	5220	$	310,794
	Stores and Commercial	5240	$	-
	Rental Concessions	5250	$	26,878
	Garage and Parking Space	5270	$	-
	Miscellaneous	5290	$	-
	Total Vacancies	5200T			$	337,672
	Net Rental Revenue Rent Revenue Less Vacancies	5152N			$	1,504,272
5300	Nursing Homes/Assisted Living/Board and Care/Other
5300	Elderly Care/Coop/ and Other Revenues	5300			$	-
Financial Revenue 5400	Financial Revenue - Project Operations	5410	$	2,749
	Revenue from Investments - Residual Receipts	5430	$	-
	Revenue from Investments - Replacement Reserve	5440	$	4,433
	Revenue from Investments - Miscellaneous	5490	$	-
	Total Financial Revenue	5400T			$	7,182
Other Revenue 5900	Laundry and Vending Revenue	5910	$	3,394
	Tenant Charges	5920	$	13,102
	Interest Reduction Payments Revenue	5945	$	-
	Miscellaneous Revenue	5990	$	-
	Total Other Revenue	5900T			$	16,496
	Total Revenue	5000T			$	1,527,950
Administrative Expenses 6200/6300	Conventions and Meetings	6203	$	-
	Management Consultants	6204	$	-
	Advertising and Marketing	6210	$	17,053
	Other Renting Expenses	6250	$	-
	Office Salaries	6310	$	30,149
	Office Expenses	6311	$	23,624
	Office or Model Apartment Rent	6312	$	9,704
	Management Fee	6320	$	90,825
	Manager or Superintendent Salaries	6330	$	48,190
	Administrative Rent Free Unit	6331	$	-
	Legal Expense - Project	6340	$	8,819
	Audit Expense	6350	$	10,775
		6351	$	7,392
	Bad Debts	6370	$	9,103
	Miscellaneous Administrative Expenses	6390	$	5,469
	Total Administrative Expenses	6263T			$	261,103
Utilities Expense 6400	Fuel Oil/Coal	6420	$	-
	Electricity	6450	$	29,332
	Water	6451	$	34,223
	Gas	6452	$	100,612
	Sewer	6453	$	16,321
	Total Utilities Expense	6400T			$	180,488
	Total Expenses (Carry Forward to Page 2)				$	441,591

Page 1 of 2

	Project Name:	Hawthorn Housing Limited Partnership
			Balance Carried Forward			$	441,591
Operating Maintenance Expenses 6500		Payroll	6510	$	126,713
		Supplies	6515	$	41,429
		Contracts	6520	$	114,422
		Operating and Maintenance Rent Free Unit	6521	$	-
		Garbage and Trash Removal	6525	$	9,991
		Security Payroll/Contract	6530	$	-
		Security Rent Free Unit	6531	$	-
		Heating/Cooling Repairs and Maintenance	6546	$	1,088
		Snow Removal	6548	$	9,222
		Vehicle and Maintenance Equipment Operation and Repairs	6570	$	-
		Miscellaneous Operating and Maintenance Expenses	6590	$	2,061
		Total Operating and Maintenance Expenses	6500T			$	304,926
Taxes and Insurance 6700		Real Estate Taxes	6710	$	185,200
		Payroll Taxes (Project's Share)	6711	$	16,443
		Property and Liability Insurance (Hazard)	6720	$	50,356
		Fidelity Bond Insurance	6721	$	1,283
		Workmen's Compensation	6722	$	13,509
		Health Insurance and Other Employee Benefits	6723	$	15,179
		Miscellaneous Taxes, Licenses, Permits and Insurance	6790	$	3,101
		Total Taxes and Insurance	6700T			$	285,071
Financial Expenses 6800		Interest on Mortgage Payable	6820	$	307,877
		Interest on Notes Payable (Long-Term)	6830	$	-
		Interest on Notes Payable (Short-Term)	6840	$	-
		Mortgage Insurance Premium/Service Charge	6850	$	23,040
		Miscellaneous Financial Expenses	6890	$	102
		Total Financial Expenses	6800T			$	331,019
6900		Nursing Homes/ Assisted Living/ Board and Care/ Other
6900		Elderly Care Expenses	6900			$	-
		Total Cost of Operations before Depreciation and Amortization	6000T			$	1,362,607
		Profit (Loss) before Depreciation and Amortization	5060T			$	165,343
		Depreciation Expense	6600	$	219,840
		Amortization Expense	6610	$	14,400
		Total Depreciation and Amortization				$	234,240
		Operating Profit or (Loss)	5060N			$	(68,897)
Corporate or Mortgagor Entity Expenses 7100		Officer's Salaries	7110	$	-
		Legal Expenses	7120	$	7,539
		Federal, State, and Other Income Taxes	7130	$	-
		Interest Income	7140	$	-
		Interest on Notes Payable	7141	$	-
		Interest on Mortgage Payable	7142	$	-
		Other Expenses	7190	$	-
		Net Entity Expenses	7100T			$	7,539
		Profit or Loss (Net Income or Loss)	3250			$	(76,436)
Miscellaneous or other Income and Expense Sub-account Groups. If miscellaneous or other income and/or expense sub-accounts (5190, 5290, 5490, 5990, 6390, 6590, 6790, 6890 and 7190) exceed the Account Groupings by 10% or more, attach a separate schedule describing or explaining the miscellaneous income or expense.
Part II
1.	Total mortgage principal payments required during the audit year (12 monthly payments). This applies to all direct loans and HUD-held and fully insured mortgages. Any HUD approved second mortgages should be included in the figures. (Account S1000-010)					$	51,413
2.	Total of 12 monthly deposits in the audit year into the Replacement Reserve account, as required by the Regulatory Agreement even if payments may be temporarily suspended or reduced. (Account S1000-020)					$	18,600
3.	Replacement Reserve or Residual Receipts releases which are included as expense items on this Profit and Loss Statement. (Account S1000-030)					$	56,897
4.	Project Improvement Reserve Releases under the Flexible Subsidy Program that are included as expense items on this Profit and Loss Statement. (Account S1000-040)					$	-
Page 2 of 2

HAWTHORN HOUSING LIMITED PARTNERSHIP

071-11069

STATEMENT OF PARTNERS' EQUITY (DEFICIT)

For The Year Ended December 31, 2003




S1100-010	Beginning Of Year	$ (373,591)

3250	Net Loss	(76,436)

S1200-420	Distributions	(235,492)

3130	December 31, 2003	$ (685,519)

HAWTHORN HOUSING LIMITED PARTNERSHIP

071-11069

STATEMENT OF CASH FLOWS

Page 1 Of 2

For The Year Ended December 31, 2003


Cash Flows From Operating Activities
	Receipts:
S1200-010		Rental receipts	$ 1,494,208
S1200-020		Interest receipts	7,182
S1200-030		Other operating receipts	16,496
S1200-040		Total Receipts	1,517,886

	Disbursements:
S1200-050		Administrative	169,585
S1200-070		Management fee	91,374
S1200-090		Utilities	179,098
S1200-100		Salaries and wages	124,859
S1200-110		Operating and maintenance	176,032
S1200-120		Real estate taxes	183,168
S1200-140		Property insurance	85,108
S1200-150		Miscellaneous taxes and insurance	19,544
S1200-160		Tenant security deposits	(18,463)
S1200-180		Interest on mortgage	307,877
S1200-210		Mortgage insurance premium (MIP)	23,040
S1200-220		Miscellaneous financial	104
S1200-225		Entity Disbursements:
S1200-226		Entity legal fees	17,069
S1200-230		Total Disbursements	1,358,395
S1200-240		Net Cash Provided By Operating Activities	159,491

Cash Flows From Investing Activities
S1200-245		Net deposits to the mortgage escrow account	(2,457)
S1200-250		Net releases from the reserve for replacement account	33,864
S1200-340		Other investing activities - collection of easement receivable	3,000
S1200-350		Net Cash Provided By Investing Activities	34,407

Cash Flows From Financing Activities
S1200-360		Mortgage principal payments	(51,413)
S1200-420		Distributions	(235,492)
S1200-460		Net Cash Used By Financing Activities	(286,905)

S1200-470		Net Decrease In Cash	(93,007)

S1200-480		Beginning Of Period Cash	270,769

S1200T		End Of Period Cash	$ 177,762

HAWTHORN HOUSING LIMITED PARTNERSHIP

071-11069

STATEMENT OF CASH FLOWS

Page 2 Of 2

For the Year Ended December 31, 2003

Reconciliation Of Net Loss To Net Cash
Provided By Operating Activities
3250	Net loss		$ (76,436)
	Adjustments to reconcile net loss to net cash
	provided by operating activities
6600	Depreciation		219,840
6610	Amortization		14,400
	Change in assets and liabilities:
S1200-490		Increase in tenant accounts receivable	(8,016)
S1200-520		Increase in prepaid expenses	(4,782)
S1200-530		Decrease in cash restricted for tenant security deposits	21,891
S1200-540		Decrease in accounts payable	(5,266)
S1200-560		Increase in accrued liabilities	3,337
S1200-580		Decrease in tenant security deposits held in trust	(3,428)
S1200-590		Decrease in prepaid revenue	(2,049)

S1200-610		Net Cash Provided By Operating Activities	$ 159,491

HAWTHORN HOUSING LIMITED PARTNERSHIP

071-11069

NOTES TO FINANCIAL STATEMENTS

December 31, 2003

1. Organization And Summary Of Significant Accounting Policies

Organization (S3100-010)

Hawthorn Housing Limited Partnership (the Partnership) was organized as a limited partnership during June 1984 for the purpose of constructing and operating a rental housing project (the Project) pursuant to a regulatory agreement with the Illinois Housing Development Authority (IHDA). In November 1997, the Project was refinanced under Section 223(f) of the National Housing Act. The Project consists of 176 units located in Woodridge, Illinois, operating under the name of Hawthorn Ridge Apartments. The Project is regulated by the U.S. Department of Housing and Urban Development (HUD) and IHDA, as administrator of the housing assistance contract, as to rent charges and operating methods.

The regulatory agreement with HUD limits annual distributions of net operating receipts to surplus cash. At December 31, 2003, there was surplus cash in the amount of $137,570 available for distribution.

Significant Accounting Policies (S3100-040)

The following significant accounting policies have been followed in the preparation of the financial statements:

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.

The Partnership considers all temporary cash investments as cash equivalents. These temporary cash investments are securities held for cash management purposes, having maturities of three months or less.

The Partnership deposits its cash in financial institutions. At times, deposits exceed federally insured limits. The Partnership has not experienced losses in such accounts.

Tenant accounts receivable are stated at the amount management expects to collect from outstanding balances. Based on management's assessment of the credit history with tenants having outstanding balances and current relationships with them, it has concluded that realization losses on balances outstanding at year end would be immaterial.

Rental property is carried as cost. Depreciation is provided using straight-line and accelerated methods over estimated useful lives ranging from 5 to 40 years.

The replacement reserve can only be used for improvements to buildings upon prior approval of HUD.

Intangible assets consist of deferred loan costs of $506,303, incurred for obtaining the HUD insured mortgage loan, which are being amortized using the straight‑line method over the life of the mortgage loan. Accumulated amortization amounted to $88,441 at December 31, 2003.

Income or loss of the Partnership is allocated .01 % to the general partner and 99.99 % to the limited partners. No income tax provision has been included in the financial statements since income or loss of the Partnership is required to be reported by the partners on their respective income tax returns.

2. Mortgage Payable (S3100-050)

The mortgage payable is insured by the Department of Housing and Urban Development and collateralized by a deed of trust on the rental property. The mortgage is payable to P/R Mortgage & Investment Corp. and bears interest at the rate of 6.6% per annum. Principal and interest are payable by the Partnership in monthly installments of $29,940 through December 2032.

Under agreements with the mortgage lender and HUD, the Partnership is required to make monthly escrow deposits for property taxes, insurance, mortgage insurance and replacement of Project assets.

The scheduled maturities of the mortgage payable at December 31, 2003 are as follows: (S3100-x1x)

Year	Account	Amount

2004	S3100-060	$ 55,213
2005	S3100-070	58,647
2006	S3100-080	62,637
2007	S3100-090	66,898
2008	S3100-100	71,450
Thereafter	S3100-110	4,317,665

		$ 4,632,510

3. Commitments (S3100-x3x) (S3100-240)

The Partnership has entered into a regulatory agreement with HUD which regulates, among other things, the rents which may be charged for apartment units in the Project, prohibits the sale of the Project without HUD consent, limits the annual distribution of cash flow to the partners and otherwise regulates the relationship between the Partnership and HUD.

The Department of Housing and Urban Development, through a program administered by the Illinois Housing Development Authority, has contracted with the Partnership, effective December 1976, under Section 8 of the National Housing Act of 1968, to make housing assistance payments to the Project on behalf of qualified tenants. The term of the agreement is 5 years with renewal options for terms not to exceed 40 years.

4. Related-Party Transactions (S3100-200)

The Project is managed by Alan A. Fox Real Estate Investment and Management Co., Inc., an affiliate of the special limited partner. The management contract provides for a management fee of 6% of gross collections. Total fees incurred for 2003 were $90,825. At December 31, 2003, management fees of $7,548 are payable to Alan A. Fox Real Estate Investment and Management Co., Inc. (S3100‑230)

Alan A. Fox Real Estate Investment and Management Co., Inc. also receives a monthly accounting services fee of $3.50 per unit. This fee is charged for services which are not included in the monthly management fee. Total fees incurred during 2003 were $7,392. At December 31, 2003, fees of $616 are payable to Alan A. Fox Real Estate Investment and Management Co., Inc.

S3100-210 Company Name Alan A. Fox Real Estate Investment and Management Co, Inc.

S3100-220 Amount Received $98,766

5. Subsequent Event (S3100-x3x) (S3100-240)

On June 6, 2003, the Partnership entered into an agreement to sell its operating assets. Effective January 21, 2004, the operating assets, including property and equipment, were sold in exchange for cash of approximately $3,434,000 plus assumption of the mortgage payable having a principal balance of approximately $4,632,000 on the date of sale.

HAWTHORN HOUSING LIMITED PARTNERSHIP

PROJECT NO. 071-11069

SUPPORTING DATA REQUIRED BY HUD

December 31, 2003

Replacement Reserve

In accordance with the provisions of the regulatory agreement, restricted cash is held by P/R Mortgage & Investment Corp. to be used for replacement of property with the approval of HUD as follows:

1320P Balance at beginning of year	$ 276,956
1320DT Total monthly deposits
($1,550 x 12)	18,600
1320ODT Other deposits	4,433
1320OD-010 Interest income
1320OD-020 $4,433
1320WT Approved withdrawals	(56,897)

1320 Balance at end of year, confirmed
by mortgagee	$ 243,092

Computation of Surplus Cash,
Distributions and Residual
Receipts
PROJECT NAME		FISCAL PERIOD ENDED:		PROJECT NUMBER
Hawthorn Housing Limited Partnership		12/31/2003		071-11069
Part A - Compute Surplus Cash
Cash
1.	Cash (Accounts 1120, 1170, 1191 minus Account 2105) (S1300-010)		$	215,222
2.	Tenant subsidy due for period covered by financial statement (1135)		$
3.	Other (accounts and notes receivable - entity) (S1300-030)		$
	(a) Total Cash (Add Lines 1, 2, and 3) (S1300-040)				$	215,222
Current Obligations
4.	Accrued mortgage interest payable (S1300-050)		$
5.	Delinquent mortgage principal payments (S1300-060)		$
6.	Delinquent deposits to reserve for replacements (S1300-070)		$
7.	Accounts payable - 30 days (S1300-075)		$	24,782
8.	Loans and notes payable (due within 30 days) (S1300-080)		$
9.	Deficient tax insurance or MIP escrow deposits (S1300-090)		$
10.	Accrued expenses (not escrowed) (S1300-100)		$	14,058
11.	Prepaid revenue (2210)		$	1,655
12.	Tenant security deposits liability (2191)		$	37,157
13.	Other current obligations (Describe) (S1300-110)		$
	(b) Total Current Obligations (Add Lines 4 through 13) (S1300-140)				$	77,652
	(c) Surplus Cash (Deficiency) [Line (a) minus Line (b)] (S1300-150)				$	137,570
Part B - Compute Distributions to Owners and Required Deposit to Residual Receipts
1.	Surplus Cash				$
Limited Dividend Projects
2a.	Annual distribution earned during fiscal period covered by the statement (S1300-160)		$
2b.	Distribution accrued and unpaid as of the end of the prior fiscal period (S1300-170)		$
2c.	Distributions and entity expenses paid during fiscal period covered by statement (S1300-180)		$
3.	Distribution earned but unpaid (Line 2a plus 2b minus 2c) (S1300-190)		$
4.	Amount available for distribution during next fiscal period (S1300-200)				$
5.	Deposit due residual receipts (S1300-210)				$

HAWTHORN HOUSING LIMITED PARTNERSHIP

071-11069

SUPPORTING DATA REQUIRED BY HUD (Continued)

December 31, 2003

Schedule Of Fixed Assets

	Assets
	Balance			Balance
	January 1,			December 31,
	2003	Additions	Deductions	2003

1410 Land	$ 620,000	$ -	$ -	$ 620,000
1420 Buildings	6,607,108	-	-	6,607,108
1440 Building equipment - portable	488,841	-	-	488,841
Total	7,715,949	-	-	7,715,949

Accumulated depreciation	4,345,150	219,840	-	4,564,990

Net Book Value	$ 3,370,799	$ (219,840)	$ -	$ 3,150,959

S2200-020 Independent Auditors' Report On Internal

Control (Combined Report Applicable To Internal

Control Over Financial Reporting Based On An Audit

Of Financial Statements And Internal Control

Over Compliance For HUD-Assisted Programs)

To The Partners

Hawthorn Housing Limited Partnership

We have audited the financial statements of Hawthorn Housing Limited Partnership as of and for the year ended December 31, 2003, and have issued our report thereon dated January 29, 2004. We have also audited Hawthorn Housing Limited Partnership's compliance with requirements applicable to HUD-assisted programs and have issued our reports thereon dated January 29, 2004.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and the Consolidated Audit Guide for Audits of HUD Programs (the Guide) issued by the U.S. Department of Housing and Urban Development, Office of the Inspector General. Those standards and the Guide require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and about whether Hawthorn Housing Limited Partnership complied with laws and regulations, noncompliance with which would be material to a HUD-assisted program.

The management of Hawthorn Housing Limited Partnership is responsible for establishing and maintaining internal control. In planning and performing our audit of the financial statements, we considered Hawthorn Housing Limited Partnership's internal control over financial reporting and its internal control over compliance with requirements that would have a direct and material effect on a major HUD-assisted program in order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and on compliance and not to provide assurance on the internal control over financial reporting and the internal control over compliance.

Our consideration of internal control would not necessarily disclose all matters in internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements that would be material in relation to the financial statements or that noncompliance with applicable requirements of laws and regulations that would be material in relation to a major HUD-assisted program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving internal control and its operation that we consider to be material weaknesses as defined above.

This report is intended solely for the information and use of management, the Illinois Housing Development Authority and the Department of Housing and Urban Development and is not intended to be and should not be used by anyone other than these specified parties.

/s/ RUBIN, BROWN, GORNSTEIN & CO. LLP

January 29, 2004

S2300-020 Independent Auditors' Report On Compliance

With Specific Requirements Applicable To Major HUD Programs

To The Partners

Hawthorn Housing Limited Partnership

We have audited Hawthorn Housing Limited Partnership's compliance with the specific program requirements governing federal financial reports, mortgage status, replacement reserve, distributions to owners, cash receipts and disbursements, tenant application, eligibility and recertification, and management functions that are applicable to each of its major HUD-assisted programs for the year ended December 31, 2003. The management of Hawthorn Housing Limited Partnership is responsible for compliance with those requirements. Our responsibility is to express an opinion on compliance with those requirements based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and the Consolidated Audit Guide for Audits of HUD Programs (the Guide) issued by the U.S. Department of Housing and Urban Development, Office of Inspector General. Those standards and the Guide require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above that could have a direct and material effect on a major HUD-assisted program occurred. An audit includes examining, on a test basis, evidence about Hawthorn Housing Limited Partnership's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of Hawthorn Housing Limited Partnership's compliance with those requirements.

In our opinion, Hawthorn Housing Limited Partnership complied, in all material respects, with the requirements referred to above that are applicable to each of its major HUD-assisted programs for the year ended December 31, 2003.

/s/ RUBIN, BROWN, GORNSTEIN & CO. LLP

January 29, 2004

S2500-020 Independent Auditors' Report On

Compliance With Specific Requirements

Applicable To Fair Housing And Non-Discrimination

To The Partners

Hawthorn Housing Limited Partnership

We have applied procedures to test Hawthorn Housing Limited Partnership's compliance with the Fair Housing and Non-Discrimination requirements applicable to its HUD-assisted programs for the year ended December 31, 2003.

Our procedures were limited to the applicable compliance requirement described by the Consolidated Audit Guide for Audits of HUD Programs (the Guide) issued by the U.S. Department of Housing and Urban Development, Office of Inspector General. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on Hawthorn Housing Limited Partnership's compliance with the Fair Housing and Non-Discrimination requirements. Accordingly, we do not express such an opinion.

The results of our tests disclosed no instances of noncompliance that are required to be reported herein under the Guide.

/s/ RUBIN, BROWN, GORNSTEIN & CO. LLP

January 29, 2004

Rubin, Brown, Gornstein & Co. LLP	One North Brentwood
Certified Public Accountants/Business Consultants	St. Louis, MO 63105

314/290-3300 TEL www.rbgco.com	314/290-3400 FAX

Miscellaneous or other Income and Expense Sub-account Groups. If miscellaneous or other income and/or expense sub-accounts (5190, 5290, 5490, 5990, 6390, 6590, 6790, 6890 and 7190) exceed the Account Groupings by 10% or more, attach a separate schedule describing or explaining the miscellaneous income or expense.

Rubin, Brown, Gornstein & Co. LLP	One North Brentwood
Certified Public Accountants/Business Consultants	St. Louis, MO 63105

314/290-3300 TEL www.rbgco.com	314/290-3400 FAX

Rubin, Brown, Gornstein & Co. LLP	One North Brentwood
Certified Public Accountants/Business Consultants	St. Louis, MO 63105

314/290-3300 TEL www.rbgco.com	314/290-3400 FAX

Rubin, Brown, Gornstein & Co. LLP	230 South Bemiston Avenue
Certified Public Accountants/Business Consultants	St. Louis, MO 63105

314/727-8150 TEL www.rbgco.com	314/727-9195 FAX

Rubin, Brown, Gornstein & Co. LLP	230 South Bemiston Avenue
Certified Public Accountants/Business Consultants	St. Louis, MO 63105

314/727-8150 TEL www.rbgco.com	314/727-9195 FAX

Rubin, Brown, Gornstein & Co. LLP	230 South Bemiston Avenue
Certified Public Accountants/Business Consultants	St. Louis, MO 63105

314/727-8150 TEL www.rbgco.com	314/727-9195 FAX

Rubin, Brown, Gornstein & Co. LLP	230 South Bemiston Avenue
Certified Public Accountants/Business Consultants	St. Louis, MO 63105

314/727-8150 TEL www.rbgco.com	314/727-9195 FAX

Assets


Current Assets
1120	Cash - operations	$ 175,683
1125	Cash - entity	2,079
1130	Tenant accounts receivable	15,092
1200	Miscellaneous prepaid expenses	50,093
1100T	Total Current Assets		$ 242,947

Deposits Held In Trust - Funded
1191	Tenant deposits held in trust		39,539

Restricted Deposits And Funded Reserves
1310	Escrow deposits	117,406
1320	Replacement reserve	243,092
1300T	Total Deposits		360,498

Fixed Assets (Note 2)
1410	Land	620,000
1420	Buildings	6,607,108
1440	Building equipment - portable	488,841
1400T	Total Fixed Assets	7,715,949
1495	Less: Accumulated depreciation	4,564,990
1400N	Net Fixed Assets		3,150,959

Other Assets
1520	Intangible assets	417,862
1590	Miscellaneous other assets - easement fee receivable	4,000
1500T	Total Other Assets		421,862

1000T	Total Assets		$ 4,215,805

Liabilities

Current Liabilities
2110	Accounts payable - operations	$ 24,782
2113	Accounts payable - entity	7,539
2120	Accrued wages payable	6,510
2123	Accrued management fee payable (Note 4)	7,548
2150	Accrued property taxes	183,623
2170	Mortgage payable - first mortgage (short-term) (Note 2)	55,213
2210	Prepaid revenue	1,655
2122T	Total Current Liabilities		$ 286,870

Deposit And Prepayment Liabilities
2191	Tenant deposits held in trust (contra)		37,157

Long-Term Liabilities
2320	Mortgage payable - first mortgage (Note 2)		4,577,297

2000T	Total Liabilities		4,901,324

Partners' Equity (Deficit)

3130	Partners' equity (deficit)		(685,519)

2033T	Total Liabilities And Partners' Equity		$ 4,215,805

Contents

Independent Auditor's Report	1

Balance Sheet	2 - 3

Statement of Profit and Loss	4 - 5

Statement of Partners' Equity (Deficit)	6

Statement of Cash Flows	7 - 8

Notes to Financial Statements	9 - 12

Supporting Data Required by HUD	13 - 15

Independent Auditors' Report on Internal Control	16 - 17

Independent Auditors' Report on Compliance With Specific Requirements Applicable to Major HUD Programs	18 - 19

Independent Auditors' Report on Compliance With Specific Requirements Applicable to Fair Housing and Non-Discrimination	20

Auditors' Comment on Audit Resolution Matters Relating To The HUD Programs	21

Current Assets
1120 Cash - operations	$ 268,690
1125 Cash - entity	2,079
1130 Tenant accounts receivable	7,076
1200 Miscellaneous prepaid expenses	45,311
1100T Total Current Assets		$ 323,156

Deposits Held In Trust - Funded
1191 Tenant deposits held in trust		61,430

Restricted Deposits And Funded Reserves
1310 Escrow deposits	114,949
1320 Replacement reserve	276,956
1300T Total Deposits		391,905

Fixed Assets (Note 2)
1410 Land	620,000
1420 Buildings	6,607,108
1440 Building equipment - portable	488,841
1400T Total Fixed Assets	7,715,949
1495 Less: Accumulated depreciation	4,345,150
1400N Net Fixed Assets		3,370,799

Other Assets
1520 Intangible assets	432,262
1590 Miscellaneous other assets	7,000
1500T Total Other Assets		439,262

1000T Total Assets		$ 4,586,552

Current Liabilities
2110 Accounts payable - operations	$ 20,518
2113 Accounts payable - entity	17,069
2120 Accrued wages payable	4,656
2123 Accrued management fee payable (Note 4)	8,097
2150 Accrued property taxes	181,591
2170 Mortgage payable - first mortgage (short-term) (Note 2)	51,413
2210 Prepaid revenue	3,704
2122T Total Current Liabilities		$ 287,048

Deposit And Prepayment Liabilities
2191 Tenant deposits held in trust (contra)		40,585

Long-Term Liabilities
2320 Mortgage payable - first mortgage (Note 2)		4,632,510

2000T Total Liabilities		4,960,143

Partners' Equity (Deficit)

3130 Partners' equity (deficit)		(373,591)

2033T Total Liabilities And Partners' Equity (Deficit)		$ 4,586,552

Page

BALANCE SHEET

Page 1 Of 2

December 31, 2003

BALANCE SHEET

Page 2 Of 2

December 31, 2003

STATEMENT OF PROFIT AND LOSS

STATEMENT OF PARTNERS' EQUITY (DEFICIT)

For The Year Ended December 31, 2003

STATEMENT OF CASH FLOWS

Page 1 Of 2

For The Year Ended December 31, 2003

STATEMENT OF CASH FLOWS

NOTES TO FINANCIAL STATEMENTS

HAWTHORN HOUSING LIMITED PARTNERSHIP

December 31, 2003

SUPPORTING DATA REQUIRED BY HUD (Continued)

December 31, 2003

		Balance Carried Forward		$ 408,094

Part 1	Description of Account	Acct. No.	Amount
	Payroll	6510	$ 116,930
	Supplies	6515	$ 38,336
	Contracts	6520	$ 132,913
Operating	Operating and Maintenance Rent Free Unit	6521	$
Maintenance	Garbage and Trash Removal	6525	$ 9,428
Expenses	Security Payroll/Contract	6530	$
6500	Security Rent Free Unit	6531	$
	Heating/Cooling Repairs and Maintenance	6546	$ 95
	Snow Removal	6548	$ 8,048
	Vehicle and Maintenance Equipment Operation and Repairs	6570	$
	Miscellaneous Operating and Maintenance Expenses	6590	$ 235
	Total Operating and Maintenance Expenses	6500T		$ 305,985
	Real Estate Taxes	6710	$ 175,200
	Payroll Taxes (Project's Share)	6711	$ 15,148
Taxes	Property and Liability Insurance (Hazard)	6720	$ 35,188
and	Fidelity Bond Insurance	6721	$ 1,160
Insurance	Workmen's Compensation	6722	$ 4,686
6700	Health Insurance and Other Employee Benefits	6723	$ 9,402
	Miscellaneous Taxes, Licenses, Permits and Insurance	6790	$ 3,095
	Total Taxes and Insurance	6700T		$ 243,879
	Interest on Mortgage Payable	6820	$ 310,887
Financial	Interest on Notes Payable (Long-Term)	6830	$
Expenses	Interest on Notes Payable (Short-Term)	6840	$
6800	Mortgage Insurance Premium/Service Charge	6850	$ 23,100
	Miscellaneous Financial Expenses	6890	$ 190
	Total Financial Expenses			$ 334,177
6900	Nursing Homes/ Assisted Living/ Board and Care/ Other Elderly Care Expenses	6900	$
	Total Cost of Operations before Depreciation and Amortization	6000T		$ 1,292,135
	Profit (Loss) before Depreciation and Amortization	5060T		$ 277,267
	Depreciation Expense	6600	$ 220,120
	Amortization Expense	6610	$ 14,400
	Total Depreciation and Amortization			$ 234,520
	Operating Profit or (Loss)	5060N		$ 42,747
	Officer's Salaries	7110	$
Corporate or	Legal Expenses	7120	$ 703
Mortgagor	Federal, State, and Other Income Taxes	7130	$
Entity	Interest Income	7140	$
Expenses	Interest on Notes Payable	7141	$
7100	Interest on Mortgage Payable	7142	$
	Other Expenses Amortization of organization costs	7190	$
	Net Entity Expenses	7100T		$ 703
	Profit or Loss (Net Income or Loss)	3250		$ 42,044

1.	Total mortgage principal payments required during the audit year (12 monthly payments). This applies to all direct loans and HUD-held and fully insured mortgages. Any HUD approved second mortgages should be included in the figures. (S1000-010)	$ 48,404

2.	Total of 12 monthly deposits in the audit year into the Replacement Reserve account, as required by the Regulatory Agreement even if payments may be temporarily suspended or reduced. (Account S1000-020)	$ 18,600

3.	Replacement Reserve or Residual Receipts releases which are included as expense items on this Profit and Loss Statement. (Account S1000-030)	$ 59,754

4.	Project Improvement Reserve Releases under the Flexible Subsidy Program that are included as expense items on this Profit and Loss Statement. (Account S1000-040)	$

S1100-010	Beginning Of Year	$ (12,288)

3250	Net Income	42,044

S1200-420	Distributions	(403,347)

3130	End Of Year	$(373,591)

Reconciliation Of Net Income To Net Cash Provided By Operating Activities	Account	Amount
3250 Net income		$ 42,044
Adjustments to reconcile net income to net cash provided by operating activities:
6600 Depreciation		220,120
6610 Amortization		14,400
Change in assets and liabilities:
S1200-490 Increase in tenant accounts receivable		(2,227)
S1200-520 Increase in prepaid expenses		(9,993)
S1200-530 Increase in cash restricted for tenant security deposits		(3,600)
S1200-540 Decrease in accounts payable		(9,371)
S1200-560 Increase in accrued liabilities		10,614
S1200-580 Decrease in tenant security deposits held in trust		(6,260)
S1200-590 Decrease in prepaid revenue		(5,918)
S1200-605 Increase in entity liability accounts:
S1200-606 Increase in accounts payable - entity	S1200-607	703

S1200-610 Net Cash Provided By Operating Activities		$ 250,512

Year		Amount

2003	S3100-060	52,413
2004	S3100-070	54,911
2005	S3100-080	58,647
2006	S3100-090	62,637
2007	S3100-100	66,898
Thereafter	S3100-110	4,389,417

		$ 4,683,923

S3100-210	Company Name	Alan A. Fox Real Estate Investment and Management Co., Inc.

S3100-220	Amount Received	$95,416

1320P	Balance at beginning of year	$ 333,283
1320DT	Total monthly deposits
	($1,550 x 12)	18,600

1320ODT	Other deposits	6,174
1320OD-010	Interest income
1320OD-020	$6,174
1320WT	Approved withdrawals	(81,101)

1320	Balance at end of year, confirmed by mortgagee	$ 276,956

PROJECT NAME Hawthorne Housing Limited Partnership		FISCAL PERIOD ENDED: 12/31/02	PROJECT NUMBER: 071-11069

Part A - Compute Surplus Cash
Cash
1.	Cash (Accounts 1120, 1170, 1191 minus Account 2105) (S1300-010)			$ 330,120
2.	Tenant subsidy due for period covered by financial statement (1135)			$
3.	Other (describe) (S1300-030)			$
	(a) Total Cash (Add Lines 1, 2, and 3) (S1300-040)				$ 330,120
Current Obligations
4.	Accrued mortgage interest payable (S1300-050)			$
5.	Delinquent mortgage principal payments (S1300-060)			$
6.	Delinquent deposits to reserve for replacements (S1300-070)			$
7.	Accounts payable - 30 days (S1300-075)			$ 20,518
8.	Loans and notes payable (due within 30 days) (S1300-080)			$
9.	Deficient tax insurance or MIP escrow deposits (S1300-090)			$
10.	Accrued expenses (not escrowed) (S1300-100)			$ 12,753
11.	Prepaid revenue (2210)			$ 3,704
12.	Tenant security deposits liability (2191)			$ 40,585
13.	Other current obligations (Describe) (S1300-110)			$
	(b) Total Current Obligations (Add Lines 4 through 13) (S1300-140)				$ 77,560
	(c) Surplus Cash (Deficiency) [Line (a) minus Line (b)] (S1300-150)				$ 252,560
Part B - Compute Distributions to Owners and Required Deposit to Residual Receipts
1.	Surplus Cash				$
Limited Dividend Projects
2a.	Annual distribution earned during fiscal period covered by the statement (S1300-160)			$
2b.	Distribution accrued and unpaid as of the end of the prior fiscal period (S1300-170)			$
2c.	Distributions and entity expenses paid during fiscal period covered by statement (S1300-180)			$
3.	Distribution earned but unpaid (Line 2a plus 2b minus 2c) (S1300-190)			$
4.	Amount available for distribution during next fiscal period (S1300-200)				$
5.	Deposit due residual receipts (S1300-210)				$

			Assets
		Balance January 1, 2002	Additions	Deductions	Balance December 31, 2002

1410	Land	$ 620,000	$ -	$ -	$ 620,000
1420	Buildings	6,595,513	11,595	-	6,607,108
1410	Building equipment - portable	479,089	9,752	-	488,841
	Total	7,694,602	21,347	-	7,715,949


Accumulated depreciation		4,125,030	220,120	-	4,345,150

	Net Book Value	$ 3,569,572	$(198,773)	$ -	$ 3,370,799

S2800-005	Previous Finding Reference Number - 2001 - 1


S2800-010	Narrative - Fidelity bond coverage amount is less than two months potential collections.


S2800-020	Status CLEARED


S2800-030	Reporting Period December 31, 2001

Current Assets
1120 Cash - operations	$ 444,034
1125 Cash - entity	2,051
1130 Tenant accounts receivable	4,849
1200 Miscellaneous prepaid expenses	35,318
1100T Total Current Assets		$ 486,252

Deposits Held In Trust - Funded
1191 Tenant deposits held in trust		57,830

Restricted Deposits And Funded Reserves
1310 Escrow deposits	102,892
1320 Replacement reserve	333,283
1300T Total Deposits		436,175

Fixed Assets (Note 2)
1410 Land	620,000
1420 Buildings	6,595,513
1440 Building equipment - portable	479,089
1400T Total Fixed Assets	7,694,602
1495 Less: Accumulated depreciation	4,125,030
1400N Net Fixed Assets		3,569,572

Other Assets
1520 Intangible assets	446,662
1590 Miscellaneous other assets	10,000
1500T Total Other Assets		456,662

1000T Total Assets		$ 5,006,491

Current Liabilities
2110 Accounts payable - operations	$ 29,889
2113 Accounts payable - entity	16,366
2120 Accrued wages payable	4,273
2123 Accrued management fee payable	7,888
2150 Accrued property taxes	171,569
2170 Mortgage payable - first mortgage (short-term) (Note 2)	48,138
2210 Prepaid revenue	9,622
2122T Total Current Liabilities		$ 287,745

Deposit And Prepayment Liabilities
2191 Tenant deposits held in trust (contra)		46,845

Long-Term Liabilities
2320 Mortgage payable - first mortgage (Note 2)		4,684,189

2000T Total Liabilities		5,018,779

Partners' Equity (Deficit)

3130 Partners' equity (deficit)		(12,288)

2033T Total Liabilities And Partners' Equity (Deficit)		$ 5,006,491

		Balance Carried Forward		$ 435,744

Part 1	Description of Account	Acct. No.	Amount
	Payroll	6510	$ 111,355
	Supplies	6515	$ 35,493
	Contracts	6520	$ 133,730
Operating	Operating and Maintenance Rent Free Unit	6521	$
Maintenance	Garbage and Trash Removal	6525	$ 9,099
Expenses	Security Payroll/Contract	6530	$
6500	Security Rent Free Unit	6531	$
	Heating/Cooling Repairs and Maintenance	6546	$
	Snow Removal	6548	$ 4,730
	Vehicle and Maintenance Equipment Operation and Repairs	6570	$
	Miscellaneous Operating and Maintenance Expenses	6590	$ 429
	Total Operating and Maintenance Expenses	6500T		$ 294,836
	Real Estate Taxes	6710	$ 169,720
	Payroll Taxes (Project's Share)	6711	$ 13,938
Taxes	Property and Liability Insurance (Hazard)	6720	$ 21,720
and	Fidelity Bond Insurance	6721	$ 888
Insurance	Workmen's Compensation	6722	$ 3,218
6700	Health Insurance and Other Employee Benefits	6723	$ 8,748
	Miscellaneous Taxes, Licenses, Permits and Insurance	6790	$ 3,095
	Total Taxes and Insurance	6700T		$ 221,327
	Interest on Mortgage Payable	6820	$ 313,970
Financial	Interest on Notes Payable (Long-Term)	6830	$
Expenses	Interest on Notes Payable (Short-Term)	6840	$
6800	Mortgage Insurance Premium/Service Charge	6850	$ 23,786
	Miscellaneous Financial Expenses	6890	$ 791
	Total Financial Expenses			$ 338,547
6900	Nursing Homes/ Assisted Living/ Board and Care/ Other Elderly Care Expenses	6900	$
	Total Cost of Operations before Depreciation and Amortization	6000T		$ 1,290,454
	Profit (Loss) before Depreciation and Amortization	5060T		$ 365,833
	Depreciation Expense	6600	$ 228,035
	Amortization Expense	6610	$ 14,465
	Total Depreciation and Amortization			$ 242,500
	Operating Profit or (Loss)	5060N		$ 123,333
	Officer's Salaries	7110	$
Corporate or	Legal Expenses	7120	$ 16,366
Mortgagor	Federal, State, and Other Income Taxes	7130	$
Entity	Interest Income	7140	$ (73)
Expenses	Interest on Notes Payable	7141	$
7100	Interest on Mortgage Payable	7142	$
	Other Expenses Amortization of organization costs	7190	$
	Net Entity Expenses	7100T		$ 16,293
	Profit or Loss (Net Income or Loss)	3250		$ 107,040

1.	Total mortgage principal payments required during the audit year (12 monthly payments). This applies to all direct loans and HUD-held and fully insured mortgages. Any HUD approved second mortgages should be included in the figures. (S1000-010)	$ 45,320

2.	Total of 12 monthly deposits in the audit year into the Replacement Reserve account, as required by the Regulatory Agreement even if payments may be temporarily suspended or reduced. (Account S1000-020)	$ 18,600

3.	Replacement Reserve or Residual Receipts releases which are included as expense items on this Profit and Loss Statement. (Account S1000-030)	$ 104,164

4.	Project Improvement Reserve Releases under the Flexible Subsidy Program that are included as expense items on this Profit and Loss Statement. (Account S1000-040)	$

S1100-010	Beginning Of Year	$ 257,927

3250	Net Income	107,040

S1200-420	Distributions	(377,255)

3130	End Of Year	$ (12,288)

Year		Amount

2002	S3100-060	48,138
2003	S3100-070	51,413
2004	S3100-080	54,911
2005	S3100-090	58,647
2006	S3100-100	62,637
Thereafter	S3100-110	4,456,581

		$ 4,732,327

1320P	Balance at beginning of year	$ 397,669
1320DT	Total monthly deposits
	($1,550 x 12)	18,600

1320ODT	Other deposits	21,178
1320OD-010	Interest income
1320OD-020	$21,178
1320WT	Approved withdrawals	(104,164)

1320	Balance at end of year, confirmed by mortgagee	$ 333,283

PROJECT NAME Hawthorne Housing Limited Partnership		FISCAL PERIOD ENDED: 12/31/01	PROJECT NUMBER: 071-11069

Part A - Compute Surplus Cash
Cash
1.	Cash (Accounts 1120, 1170, 1191 minus Account 2105) (S1300-010)			$ 501,864
2.	Tenant subsidy due for period covered by financial statement (1135)			$
3.	Other (describe) (S1300-030)			$
	(a) Total Cash (Add Lines 1, 2, and 3) (S1300-040)				$ 501,864
Current Obligations
4.	Accrued mortgage interest payable (S1300-050)			$
5.	Delinquent mortgage principal payments (S1300-060)			$
6.	Delinquent deposits to reserve for replacements (S1300-070)			$
7.	Accounts payable - 30 days (S1300-075)			$ 29,889
8.	Loans and notes payable (due within 30 days) (S1300-080)			$
9.	Deficient tax insurance or MIP escrow deposits (S1300-090)			$
10.	Accrued expenses (not escrowed) (S1300-100)			$ 12,161
11.	Prepaid revenue (2210)			$ 9,622
12.	Tenant security deposits liability (2191)			$ 46,845
13.	Other current obligations (Describe) (S1300-110)			$
	(b) Total Current Obligations (Add Lines 4 through 13) (S1300-140)				$ 98,517
	(c) Surplus Cash (Deficiency) [Line (a) minus Line (b)] (S1300-150)				$ 403,347
Part B - Compute Distributions to Owners and Required Deposit to Residual Receipts
1.	Surplus Cash				$
Limited Dividend Projects
2a.	Annual distribution earned during fiscal period covered by the statement (S1300-160)			$
2b.	Distribution accrued and unpaid as of the end of the prior fiscal period (S1300-170)			$
2c.	Distributions and entity expenses paid during fiscal period covered by statement (S1300-180)			$
3.	Distribution earned but unpaid (Line 2a plus 2b minus 2c) (S1300-190)			$
4.	Amount available for distribution during next fiscal period (S1300-200)				$
5.	Deposit due residual receipts (S1300-210)				$

			Assets
		Balance January 1, 2001	Additions	Deductions	Balance December 31, 2001

1410	Land	$ 620,000	$ -	$ -	$ 620,000
1420	Buildings	6,595,513	-	-	6,595,513
1410	Building equipment - portable	479,089	-	-	479,089
	Total	7,694,602	-	-	7,694,602


Accumulated depreciation		3,896,995	228,035	-	4,125,030

	Net Book Value	$ 3,797,607	$(228,035)	$ -	$ 3,569,572

S2700-005	Finding Reference Number - 2001 - 1

S2700-010	Statement of Condition - Fidelity bond coverage amount is less than two months potential collections.

S2700-020	Criteria - HUD requires fidelity bond coverage be equal to at least two months potential collections.

S2700-050	Recommendation - Project management should obtain increased fidelity bond coverage.

S2700-055	Auditor Non-Compliance Code - Other

S2700-065	Amount of Questioned Costs - $0