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&lt;p style="line-height: normal; margin-bottom: 0pt;" class="msonormal"&gt;&lt;font size="2" style="font-family:times new roman,times"&gt;The Fund is involved with the Local Limited Partnerships in which it invests as a non-controlling equity holder.&amp;#160;&amp;#160;The investments in Local Limited Partnerships are made primarily to obtain federal income Tax Credits on behalf of the Fund&amp;#8217;s investors.&amp;#160;&amp;#160;Such Tax Credits are not reflected on the books of the Fund.&amp;#160;&amp;#160;The Local Limited Partnerships are Variable Interest Entities ("VIE"s) because the owners of the equity at risk do not have the power to direct their operations.&amp;#160;&amp;#160;A&amp;#160;&amp;#160;VIE&amp;#160;&amp;#160;must&amp;#160;&amp;#160;be&amp;#160;&amp;#160;consolidated&amp;#160;&amp;#160;by&amp;#160;&amp;#160;the&amp;#160;&amp;#160;entity which&amp;#160;&amp;#160;is determined&amp;#160;&amp;#160;to be the VIE&amp;#8217;s primary beneficiary&lt;/font&gt;&lt;/p&gt;
&lt;p style="line-height: normal; margin-bottom: 0pt;" class="msonormal"&gt;&lt;font size="2" style="font-family:times new roman,times"&gt;whichis the entity that has both (i) the power to direct the activities of the VIE and (ii) the obligation to absorb losses or receive benefits that could potentially be significant to the VIE.&amp;#160;&amp;#160;Additionally, a VIE requires continued reassessment of the primary beneficiary.&amp;#160;&amp;#160;&lt;/font&gt;&lt;/p&gt;
&lt;p style="line-height: normal; margin-bottom: 0pt;" class="msonormal"&gt;&lt;font size="2" style="font-family:times new roman,times"&gt;The general partners or managing members of the Local Limited Partnerships (the &amp;#8220;Local General Partners&amp;#8221;), who are considered to be the primary beneficiaries, direct the activities of the Local Limited Partnerships and are responsible for maintaining compliance with the Tax Credit program and for providing subordinated financial support in the event operations cannot support debt and Property tax payments.&amp;#160;&amp;#160;Because the Fund is not the primary beneficiary of these Local Limited Partnerships, it accounts for its investments using the equity method of accounting.&lt;/font&gt;&lt;/p&gt;
&lt;p style="line-height: normal; margin-bottom: 0pt;" class="msonormal"&gt;&lt;font size="2" style="font-family:times new roman,times"&gt;Under the equity method, the investments in Local Limited Partnerships are carried at cost, adjusted for the Fund&amp;#8217;s share of net income or loss and for cash distributions from the Local Limited Partnerships.&amp;#160;&amp;#160;Equity in income or loss of the Local Limited Partnerships is included currently in the Fund's operations.&amp;#160;&amp;#160;A liability is recorded for delayed equity capital contributions to Local Limited Partnerships. In the event that a Local Limited Partnership records other comprehensive income or loss, the Fund will evaluate its impact on the Fund and determine whether it should be recorded as other comprehensive income or loss.&amp;#160;&amp;#160;Under the equity method, a Local Limited Partnership investment will not be carried below zero.&amp;#160;&amp;#160;To the extent that a Local Limited Partnership with a carrying value of zero incurs additional losses, the excess losses will be suspended and offset against future income.&amp;#160;&amp;#160;Income from these Local Limited Partnerships will not be recorded until all of the related suspended losses have been offset.&amp;#160;&amp;#160;To the extent that a Local Limited Partnership with a carrying value of zero distributes cash to the Fund, the distribution is recorded as income in the Fund&amp;#8217;s statement of operations.&lt;/font&gt;&lt;/p&gt;
&lt;p style="line-height: normal; margin-bottom: 0pt;" class="msonormal"&gt;&lt;font size="2" style="font-family:times new roman,times"&gt;The Fund's&amp;#160;exposure to economic and financial statement losses is limited to its investment balance in the Local Limited Partnership and estimated future funding commitments.&amp;#160;&amp;#160;To the extent that the Fund does not receive the full amount of Tax Credits specified in its initial investment contribution agreement, it may be eligible to receive payments from the Local General Partner under the provisions of Tax Credit guarantees.&amp;#160;&amp;#160;The Fund may be subject to additional losses to the extent of any additional financial support that the Fund voluntarily provides in the future. The Fund, through its ownership percentages, may participate in Property disposition proceeds, the timing and amounts of which are unknown.&amp;#160;&amp;#160;The Fund does not guarantee any of the mortgages or other debt of the Local Limited Partnerships.&lt;/font&gt;&lt;/p&gt;
&lt;p style="line-height: normal; margin-bottom: 0pt;" class="msonormal"&gt;&lt;font size="2" style="font-family:times new roman,times"&gt;Excess investment costs over the underlying net assets acquired have arisen from acquisition fees and expenses paid.&amp;#160;&amp;#160;These fees&amp;#160;and expenses are included in the Fund's investments in Local Limited Partnerships and are being amortized on a straight-line basis over 35 years once construction of the Properties is completed and until a Local Limited Partnership&amp;#8217;s respective investment balance has been reduced to zero.&lt;/font&gt;&lt;/p&gt;
&lt;p style="line-height: normal; margin-bottom: 0pt;" class="msonormal"&gt;&lt;font size="2" style="font-family:times new roman,times"&gt;&amp;#160;&lt;/font&gt;&lt;font size="2" style="font-family:times new roman,times"&gt;The Fund is subject to risks inherent in the ownership of Property whicharebeyond its control, such as fluctuations in occupancy rates and operating expenses, variations in rental schedules, proper maintenance of facilities and continued eligibility of Tax Credits.&amp;#160;&amp;#160;If the cost of operating a Property exceeds the rental income earned thereon, the Fund may deem it in its best interest to voluntarily provide funds and advances in order to protect its investment. The Fund assesses the collectability of any advances at the time the advance is made and records a reserve if collectability is not reasonably assured.&lt;/font&gt;&lt;/p&gt;
&lt;p style="line-height: normal; margin-bottom: 0pt;" class="msonormal"&gt;&lt;font size="2" style="font-family:times new roman,times"&gt;Periodically, the carrying value of each investment in Local Limited Partnership is tested for other-than-temporary impairment. Ifan other-than-temporary decline in carrying value exists, a provision is recorded to reduce the investment to the sum of the estimated remaining benefits. The estimated remaining benefits for each Local Limited Partnership consists of the estimated future benefit from tax losses, Tax Credits and distributions over the estimated life of&amp;#160;&amp;#160;the&amp;#160;&amp;#160;investment and&amp;#160;&amp;#160;the estimated residual proceeds at disposition.&amp;#160;&amp;#160;Estimated residual proceeds are allocated in accordance with the terms of each Local Limited Partnership Agreement.&amp;#160;&amp;#160;Generally, the carrying values of most Local Limited Partnerships will decline through losses and
 distributions.&amp;#160;&amp;#160;However, the Fund may record an impairment loss if the expiration of Tax Credits outpaces losses and distributions from a Local Limited Partnership.&lt;/font&gt;&lt;/p&gt;
&lt;p style="line-height: normal; margin-bottom: 0pt;" class="msonormal"&gt;&lt;font size="2" style="font-family:times new roman,times"&gt;Management has elected to report results of the Local Limited Partnerships on a 90-day lag basis because the Local Limited Partnerships report their results on a calendar year basis.&amp;#160;&amp;#160;Accordingly, the financial information of the Local Limited Partnerships that is included in the accompanying financial statements is as of December 31, 2012 and 2011 and for the years then ended.&lt;/font&gt;&lt;/p&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>Disclosure of accounting policy for investments in financial assets, including marketable securities (debt and equity securities with readily determinable fair values), investments accounted for under the equity method and cost method, securities borrowed and loaned, and repurchase and resale agreements. For marketable securities, the disclosure may include the entity's accounting treatment for transfers between investment categories and how the fair values for such securities are determined. Also, for all investments, an entity may describe its policy for assessing, recognizing and measuring impairment of the investment.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef

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 -Name Statement of Position (SOP)

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