% of Units Occupied at May 1, Name and Location --------------------------------------------------- (Number of Units) Date Acquired 2007 2006 2005 2004 2003 ------------------------------------- ------------- ---- ---- ---- ---- ---- Harbor Court Limited Partnership December 1991 100% 100% 98% 100% 98% Staten Island, NY (40) Old Public Limited Partnership December 1991 77% 57% 67% 63% 93% Lawrenceburg, TN (30) Lancaster Terrace Limited Partnership February 1992 89% 96% 93% 89% 86% Salem, OR (104) 655 North Street Limited Partnership March 1992 96% 96% 92% 94% 87% Baton Rouge, LA (195) Landreth Venture March 1992 96% 92% 96% 92% 96% Philadelphia, PA (47) Homestead Apartments Associates Ltd. March 1992 95% 99% 99% 96% 93% Homestead, FL (123) Bethel Villa Associates, L.P. April 1992 99% 99% 100% 100% 99% Wilmington, DE (150) West Diamond Street Associates May 1992 93% 100% 100% 96% 96% Philadelphia, PA (28) Susquehanna Partners May 1992 96% 91% 87% 98% 96% Philadelphia, PA (47) Boston Bay Limited Partnership August 1992 95% 100% 99% 99% 98% Boston, MA (88) Morrant Bay Limited Partnership August 1992 92% 95% 92% 99% 98% Boston, MA (130) Hope Bay Limited Partnership August 1992 98% 100% 98% 100% 100% 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% 97% 100% Los Angeles, CA (29) Conifer Bateman Associates August 1992 83% 83% 92% 96% 92% Lowville, NY (24) Hampden Hall Associates, L.P. September 1992 96% 84% 95% 93% 99% St. Louis, MO (75)UNITED STATES

%SECURITIES AND ofEXCHANGE Units Occupied at May 1, Name and Location --------------------------------------------------- (Number of Units) Date Acquired 2007 2006 2005 2004 2003 ------------------------------------- ------------- ---- ---- ---- ---- ---- Chester Renaissance Associates September 1992 100% 100% 100% 100% 100% Chester, PA (20) Homestead Apts. II LTD. October 1992 95% 99% 99% 96% 96% Homestead, FL (112) P.S. 157 Associates, L.P. November 1992 (a) 100% 100% 100% 100% New York, NY (73) (a) Cloisters Limited Partnership II November 1992 88% 94% 98% 98% 98% Philadelphia, PA (65) Creative Choice Homes II, LTD. December 1992 100% 91% 95% 98% 97% Opa-Locka, FL (328) Milford Crossing Associates L.P. December 1992 100% 96% 93% 96% 100% Milford, DE (73) BX-7F Associates, L.P. January 1993 98% 98% 97% 96% 100% Bronx, NY (85) Los Angeles Limited Partnership May 1993 99% 100% 100% 100% 100% Rio Piedras, PR (124) Christine Apartments, L.P. June 1993 88% 100% 100% 91% 100% Buffalo, NY (32) Plainsboro Housing Partners, L.P. July 1993 98% 98% 97% 99% 98% Plainsboro, NJ (126) Rolling Green Associates, L.P. October 1993 95% 93% 97% 97% 90% Syracuse, NY (395)COMMISSION

~~Year Ended March 31~~Washington, --------------------------------------------------------------------------------- OPERATIONS 2007 2006* 2005* 2004* 2003* --------------------------------- ------------- ------------- ------------- ------------- ------------- Revenues $ 22,271,513 $ 21,709,270 $ 20,920,145 $ 20,145,075 $ 19,503,012 Operating expenses (28,364,008) (26,461,555) (26,732,019) (27,457,247) (24,693,550) ------------- ------------- ------------- ------------- ------------- Loss from operations before minority interest (6,092,495) (4,752,285) (5,811,874) (7,312,172) (5,190,538) Minority interest in loss of subsidiaries from operations 23,807 28,990 33,026 19,365 14,661 ------------- ------------- ------------- ------------- ------------- Loss from operations (6,068,688) (4,723,295) (5,778,848) (7,292,807) (5,175,877) Loss from discontinued operations (Note 13) (201,062) (347,149) (186,226) (263,762) (167,868) ------------- ------------- ------------- ------------- ------------- Net loss $ (6,269,750) $ (5,070,444) $ (5,965,074) $ (7,556,569) $ (5,343,745) ============= ============= ============= ============= ============= Loss from operations per BAC $ (78 D.~~24) $ (60~~C.~~90)~~ $ (74.51) $ (94.03) $ (66.74) Loss from discontinued operations per BAC (2.59) (4.47) (2.40) (3.40) (2.16) ------------- ------------- ------------- ------------- ------------- Net loss per BAC $ (80.83) $ (65.37) $ (76.91) $ (97.43) $ (68.90) ============= ============= ============= ============= ============= March 31, --------------------------------------------------------------------------------- FINANCIAL POSITION 2007 2006 2005 2004 2003 --------------------------------- ------------- ------------- ------------- ------------- ------------- Total assets $ 130,944,933 $ 130,577,695 $ 135,523,965 $ 139,042,443 $ 142,581,513 ============= ============= ============= ============= ============= Total liabilities $ 131,056,452 $ 124,655,274 $ 124,452,229 $ 122,586,996 $ 118,327,823 ============= ============= ============= ============= ============= Minority interest $ 5,690,316 $ 5,454,506 $ 5,533,377 $ 4,952,014 $ 5,193,688 ============= ============= ============= ============= ============= Total partners' capital (deficit) $ (5,801,835) $ 467,915 $ 5,538,359 $ 11,503,433 $ 19,060,002 ============= ============= ============= ============= =============20549

Less than 1-3 3-5 More than Total 1 Year Years Years 5 Years ----------- ----------- ----------- ----------- ----------- Mortgage notes payable (a) $75,276,001 $ 4,742,022 $10,725,903 $ 7,215,536 $52,592,540 Long term notes payable (b) 1,366,061 979,770 - - 386,291 ----------- ----------- ----------- ----------- ----------- $76,642,062 $ 5,721,792 $10,725,903 $ 7,215,536 $52,978,831 =========== =========== =========== =========== ===========______________

~~Less than 1~~FORM 10-3 3-5 More than Total 1 Year Years Years 5 Years ----------- ----------- ----------- ----------- ----------- Mortgage notes payable (a) $ 9,675,961 $ 1,011,920 $ 366,994 $ 2,683,319 $ 5,613,728 =========== =========== =========== =========== ===========K

Years Ended March 31, --------------------------------------------- 2007 2006* 2005* ------------- ------------- ------------- Interest $ 234,733 $ 163,142 $ 90,720 Other 619,387 713,168 529,717 ------------- ------------- ------------- Total other revenue $ 854,120 $ 876,310 $ 620,437 ============= ============= =============______________

Years Ended March 31, --------------------------------------------- 2007 2006* 2005* ------------- ------------- ------------- Interest $ 671 $ 674 $ 7 Other 26,657 30,289 76,421 ------------- ------------- ------------- Total other revenue $ 27,328 $ 30,963 $ 76,428 ============= ============= =============(Mark One)

~~March~~þ ~~31,~~ANNUAL ~~------------------------------~~REPORT ~~2007~~PURSUANT ~~2006~~TO ~~-------------~~SECTION ~~------------- Operating Assets Property and equipment, at cost, less accumulated depreciation (Notes 2, 4, 7 and 10) $ 100,261,936 $ 115,592,607 Cash and cash equivalents (Notes 2, 3 and~~ 13) ~~2,240,570~~OR ~~1,652,353 Cash held in escrow~~ 15(~~Notes 3 and 5~~d) ~~12,717,862~~OF ~~10,387,831~~THE ~~Deferred~~SECURITIES ~~costs,~~EXCHANGE ~~less~~ACT ~~accumulated~~OF amortization (Notes 2 and 6) 1,159,231 1,334,112 Other assets 3,643,901 1,610,792 ------------- ------------- Total operating assets 120,023,500 130,577,695 ------------- ------------- Assets from discontinued operations (Note 14) Property and equipment held for sale, net of accumulated depreciation (Note 4) 10,374,639 0 Net assets held for sale 546,794 0 ------------- ------------- Total assets from discontinued operations 10,921,433 0 ------------- ------------- Total assets $ 130,944,933 $ 130,577,695 ============= ============= LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) Operating Liabilities Mortgage notes payable (Notes 3 and 7) $ 75,276,001 $ 87,616,444 Accounts payable 6,591,153 4,329,248 Accrued interest payable 10,368,890 9,756,558 Security deposits payable 690,426 778,045 Due to local general partners and affiliates (Note 8) 11,475,587 8,028,225 Due to general partners and affiliates (Note 8) 16,194,617 14,146,754 ------------- ------------- Total operating liabilities 120,596,674 124,655,274 ------------- ------------- Liabilities from discontinued operations (Note 14) Mortgage notes payable of assets held for sale (Note 7) 9,675,961 0 Net liabilities held for sale (including minority interest) 783,817 0 ------------- ------------- Total liabilities from discontinued operations 10,459,778 0 ------------- ------------- Total liabilities 131,056,452 124,655,274 ------------- ------------- Minority interests (Note 2) 5,690,316 5,454,506 ------------- ------------- Commitments and contingencies (Notes 7, 8 and 13) Partners' capital (deficit) Limited partners (76,786 BACs issued and outstanding) (5,060,943) 1,146,110 General partners (740,892) (678,195) ------------- ------------- Total partners' capital (deficit) (5,801,835) 467,915 ------------- ------------- Total liabilities and partners' capital (deficit) $ 130,944,933 $ 130,577,695 ============= =============1934

~~Year~~For the ~~Ended~~fiscal year ended March 31, -------------------------------------------- 2007 2006* 2005* ------------ ------------ ------------ Operations: Revenues Rental income $ 21,417,393 $ 20,832,960 $ 20,299,708 Other (Notes 1 and 13) 854,120 876,310 620,437 ------------ ------------ ------------ Total revenues 22,271,513 21,709,270 20,920,145 ------------ ------------ ------------ Expenses General and administrative 4,632,213 4,053,860 4,015,773 General and administrative-related parties (Note 8) 2,210,127 2,171,459 2,237,146 Repairs and maintenance 5,208,220 5,338,302 5,716,669 Operating 2,732,114 2,527,889 2,281,671 Taxes 1,604,987 1,519,697 1,457,831 Insurance 1,566,181 1,505,040 1,570,227 Interest 4,003,739 4,124,285 4,237,945 Depreciation and amortization 5,241,563 5,221,023 5,214,757 Loss on impairment of property 1,164,864 0 0 ------------ ------------ ------------ Total expenses from operations 28,364,008 26,461,555 26,732,019 ------------ ------------ ------------ Loss from operations before minority interest (6,092,495) (4,752,285) (5,811,874) Minority interest in loss of subsidiaries from operations 23,807 28,990 33,026 ------------ ------------ ------------ (6,068,688) (4,723,295) (5,778,848) Loss from operations Discontinued Operations: Loss from discontinued operations (Note 14) (201,062) (347,149) (186,226) ------------ ------------ ------------ Net loss $ (6,269,750) (5,070,444) (5,965,074) ============ ============ ============ Number of BACs outstanding 76,786 76,786 76,786 ============ ============ ============ Loss from operations - limited partners $ (6,008,002) $ (4,676,062) $ (5,721,059) Loss from discontinued operations - limited partners (199,051) (343,678) (184,364) ------------ ------------ ------------ Net loss - limited partners $ (6,207,053) $ (5,019,740) $ (5,905,423) ============ ============ ============ Loss from operations per BAC $ (78.24) $ (60.90) $ (74.51) Loss from discontinued operations per BAC (2.59) (4.47) (2.40) ------------ ------------ ------------ Net loss per BAC $ (80.83) $ (65.37) $ (76.91) ============ ============ ============2009

Limited General Total Partners Partner ------------- ------------- ------------- Partners' capital (deficit) - April 1, 2004 $ 11,503,433 $ 12,071,273 $ (567,840) Net loss (5,965,074) (5,905,423) (59,651) ------------- ------------- ------------- Partners' capital (deficit) - March 31, 2005 5,538,359 6,165,850 (627,491) Net loss (5,070,444) (5,019,740) (50,704) ------------- ------------- ------------- Partners' capital (deficit) - March 31, 2006 467,915 1,146,110 (678,195) Net loss (6,269,750) (6,207,053) (62,697) ------------- ------------- ------------- Partner's deficit - March 31, 2007 $ (5,801,835) $ (5,060,943) $ (740,892) ============= ============= =============OR

~~Years~~o ~~Ended~~TRANSITION ~~March~~REPORT ~~31,~~PURSUANT ~~-----------------------------------------------~~TO ~~2007~~SECTION ~~2006~~13 ~~2005~~OR ~~------------- ------------- ------------- Cash flows from operating activities: Net loss $~~ 15(~~6,269,750~~d) $OF ~~(5,070,444)~~THE $SECURITIES ~~(5,965,074)~~EXCHANGE ~~-------------~~ACT ~~-------------~~OF ------------- Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 5,636,136 5,608,137 5,600,688 Loss on impairment of fixed assets 1,164,864 0 0 Minority interest in loss of subsidiaries (23,807) (28,990) (33,027) (Increase) decrease in assets: Cash held in escrow (2,312,608) (227,205) 904,809 Other assets (2,179,218) 456,003 (343,289) Increase (decrease) in liabilities: Accounts payable 2,466,842 (2,562,672) 1,230,549 Accrued interest payable 1,104,444 1,469,204 51,257 Security deposit payable 20,092 19,963 (2,685) Due to local general partners and affiliates (1,289,983) 2,134,957 902,074 Due to general partner and affiliates 2,085,364 1,874,926 2,362,743 ------------- ------------- ------------- Total adjustments 6,672,126 8,744,323 10,673,119 ------------- ------------- ------------- Net cash provided by operating activities 402,376 3,673,879 4,708,045 ------------- ------------- ------------- Cash flows from investing activities: Acquisition of property and equipment (1,704,302) (974,534) (1,776,284) Increase in cash held in escrow (252,296) (53,468) (728,341) Increase (decrease) in due to local general partners and affiliates 1,099,986 0 (80,058) Insurance proceeds 4,078,772 0 0 ------------- ------------- ------------- Net cash provided by (used in) investing activities 3,222,160 (1,028,002) (2,584,683) ------------- ------------- ------------- Cash flows from financing activities: Repayments of mortgage notes (2,664,482) (2,691,874) (2,530,037) Decrease in due to local general partners and affiliates (52,720) (41,459) (68,610) (Decrease) increase in capitalization of consolidated subsidiaries attributable to minority interest (187,519) (49,882) 614,390 ------------- ------------- ------------- Net cash used in financing activities (2,904,721) (2,783,215) (1,984,257) ------------- ------------- ------------- Net increase (decrease) in cash and cash equivalents 719,815 (137,338) 139,105 Cash and cash equivalents at beginning of year 1,652,353 1,789,691 1,650,586 ------------- ------------- ------------- Cash and cash equivalents at end of year* $ 2,372,168 $ 1,652,353 $ 1,789,691 ============= ============= ============= Supplemental disclosure of cash flows information: Cash paid during the year for interest $ 3,930,967 $ 3,711,610 $ 3,331,8161934

~~Years~~Commission File ~~Ended~~Number ~~March 31,~~ 0--------------------------------------------- 2007 2006* 2005* ------------- ------------- ------------- Interest $ 234,733 $ 163,142 $ 90,720 Other 619,387 713,168 529,717 ------------- ------------- ------------- Total other revenue $ 854,120 $ 876,310 $ 620,437 ============= ============= =============20476

~~Years~~INDEPENDENCE TAX ~~Ended~~CREDIT ~~March~~PLUS 31, --------------------------------------------- 2007 2006* 2005* ------------- ------------- ------------- Interest $ 671 $ 674 $ 7 Other 26,657 30,289 76,421 ------------- ------------- ------------- Total other revenue $ 27,328 $ 30,963 $ 76,428 ============= ============= =============L.P.

~~March~~(Formerly known ~~31,~~as ~~2007~~Independence ~~March~~Tax ~~31,~~Credit ~~2006~~Plus ------------------------- ------------------------- Carrying Carrying Amount Fair Value Amount Fair Value ----------- ----------- ----------- ----------- Mortgage notes payable for which it is: Practicable to estimate fair value $41,580,846 $40,729,357 $39,819,378 $35,886,832 Not practicable $33,695,155 * $47,797,006 *Program)

~~March~~(Exact name ~~31,~~of ~~2007~~registrant ~~March~~as ~~31,~~specified ~~2006~~in ~~-------------------------~~its ------------------------- Carrying Carrying Amount Fair Value Amount Fair Value ----------- ----------- ----------- ----------- Mortgage notes payable for which it is: Practicable to estimate fair value $ 9,675,961 $ 6,660,885 $ 0 $ 0 Not practicable $ 0 * $ 0 *charter)

March 31, Estimated ------------------------------ Usefule Lives 2007 2006 (Years) ------------- ------------- -------------- Land $ 5,313,563 $ 5,692,516 - Building and improvements 162,672,612 177,510,742 15-40 Furniture and fixtures 3,254,210 3,433,279 3-10 ------------- ------------- 171,240,385 186,636,537 Less: Accumulated depreciation (70,978,449) (71,043,930) ------------- ------------- $ 100,261,936 $ 115,592,607 ============= =============

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

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

~~March~~Registrant’s telephone 31number, ~~Estimated~~including ~~------------------------------~~area ~~Usefule~~code ~~Lives 2007 2006~~ (~~Years~~212) 317------------- ------------- -------------- Land $ 377,368 $ 0 - Building and improvements 15,189,402 0 15-40 Furniture and fixtures 298,933 0 3-10 ------------- ------------- 15,865,703 0 Less: Accumulated depreciation (5,491,064) 0 ------------- ------------- $ 10,374,639 $ 0 ============= =============5700

~~March~~Securities registered ~~31,~~pursuant ~~-----------------------------~~to ~~2007~~Section 2006 ------------- ------------- Purchase price payments* $ 8,607 $ 17,941 Real estate taxes, insurance and other 7,005,330 4,844,441 Reserve for replacements 4,997,496 4,735,866 Tenant security deposits 706,429 789,583 ------------- ------------- $ 12~~,717,862~~(b) $of ~~10,387,831~~the ~~============= =============~~Act:

March 31, ----------------------------- 2007 2006 ------------- ------------- Real estate taxes, insurance and other $ 132,392 $ 0 Tenant security deposits 102,481 0 ------------- ------------- $ 234,873 $ 0 ============= =============None

~~March~~Securities registered ~~31,~~pursuant ~~-----------------------------~~to ~~2007~~Section ~~2006 Period ------------- ------------- ------------- Financing expenses $ 3,049,894 $ 3,183,310 * Less: Accumulated amortization~~ 12(~~1,890,663~~g) ~~(1,849,198)~~of ~~-------------~~the ~~------------- $ 1,159,231 $ 1,334,112 ============= =============~~Act:

~~March~~Beneficial ~~31,~~Assignment ~~----------------------------- 2007 2006 Period ------------- ------------- ------------- Financing expenses $ 133,416 $ 0 * Less: Accumulated amortization~~ Certificates (~~99,201)~~including 0underlying ~~-------------~~Limited ~~-------------~~Partnership ~~$ 34,215 $ 0 ============= =============~~Interests)

~~Years Ended March 31, --------------------------------------------- 2007 2006* 2005* ------------- ------------- ------------- Partnership management fees~~ (i)Title ~~$ 880,000 $ 880,000 $ 880,000 Expense reimbursement (ii) 190,309 273,640 197,664 Local administrative fee (iv) 49,500 49,500 59,500 Property management fees incurred to affiliates~~ of the General Partners 155,155 144,489 139,872 ------------- ------------- ------------- Total general and administrative - General Partner 1,274,964 1,347,629 1,277,036 ------------- ------------- ------------- Property management fees incurred to affiliates of the Local General Partners (iiiClass) ~~935,163 823,830 960,110 ------------- ------------- ------------- Total general and administrative - related parties $ 2,210,127 $ 2,171,459 $ 2,237,146 ============= ============= =============~~

~~Years~~Indicate ~~Ended~~by ~~March~~check ~~31,~~mark ~~---------------------------------------------~~if ~~2007~~the registrant 2006*is 2005*a well-~~------------~~known ~~-------------~~seasoned ~~------------- Local administrative fee (iv) $ 5~~issuer,~~000~~ $as ~~5,000~~defined $in ~~5,000~~Rule ~~-------------~~405 ~~------------- ------------- Total general and administrative-General Partners 5,000 5,000 5,000 ------------- ------------- ------------- Property management fees incurred to affiliates~~ of the Securities Local General Partners (iii) 71,248 51,231 49,043 ------------- ------------- ------------- Total general and administrative-related parties $ 76,248 $ 56,231 $ 54,043 ============= ============= =============Act. Yes o No þ

~~March~~Indicate ~~31,~~by ~~----------------------------~~check ~~2007~~mark ~~2006~~if ------------ ------------ Development deficit advances $ 0 $ 50,000 Operating advances (i) 1,727,780 2,018,163 Development fee payable 1,396,993 1,391,293 Long-term notes payable (ii) 1,366,061 1,418,781 Accrued interest on long-term notes payable 1,052,466 958,882 Management and other fees 759,229 2,191,106 Construction costs 5,173,058 0 ------------ ------------ $ 11,475,587 $ 8,028,225 ============ ============ (i) Operating advances include the registrant ~~following loan: Christine Apartments, L.P. $ 116,100 $ 116,100 -------------------------- This loan~~ is ~~non-interest~~not ~~bearing~~required and has no set repayment terms (ii) Long-term notes payable consist of the following: Creative Choice Homes II, LTD $ 979,770 $ 979,770 ----------------------------- The first note bears interest at 7% payable monthly. Principal on the loan is due and payable in full on December 31, 2009. No payments were made during the current year on this note. Delinquent principal payments as of December 31, 2006 amounted to ~~$467,489,~~file ~~and~~reports ~~thus,~~pursuant this note is technically in default. The second note bears interest at 12% payable monthly. Principal on the loan is due and payable in full on December 31, 2009. No payments were made during the current year on this note. Delinquent principal payments as of December 31, 2006 amounted to ~~$547,034,~~Section ~~and~~13 ~~thus,~~or ~~this~~Section 15(d) ~~note is technically in default. Accrued interest as~~ of December 31, 2006 and 2005, totaled $1,052,466 and $958,882, respectively Plainsboro Housing Partners, L.P. $ 386,291 $ 439,011 --------------------------------- This loan accrues interest at a rate of 7.34% per annum on the ~~outstanding principal balance~~Act. 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 2033 Interest expense incurred on such long-term notes payable amounted to approximately $122,000, $126,000 and $129,000 for the 2006, 2005 and 2004 Fiscal Years, respectively Yes o No þ

~~March~~Indicate ~~31,~~by ~~----------------------------~~check ~~2007~~mark ~~2006~~whether ~~------------~~the registrant ~~------------~~(1) ~~Development~~has ~~deficit~~filed ~~advances~~all $reports ~~50,000~~required $to 0be ~~Operating~~filed ~~advances~~by ~~414,493~~Section 013 ~~Management~~or ~~and~~15(d) of ~~other~~the ~~fees~~Securities Exchange Act of 1934 during the preceding 12 months (75or for such shorter period that the registrant was required to file such reports),~~800~~ and (2) 0has ~~------------~~been ~~------------~~subject $to ~~388,693~~such $filing 0requirements ~~============~~for ~~============~~the past 90 days. Yes þ No o

~~Years~~Indicate ~~Ended~~by ~~December~~checkmark ~~31,~~whether ~~-----------------------------------------~~the registrant ~~2006~~has ~~2005~~submitted ~~2004~~electronically ~~----------- ----------- ----------- Financial statement net loss $(6,269,750) $(5,070,444) $(5,965,074) Differences between depreciation~~ and ~~amortization~~posted ~~expense~~on ~~recorded~~its ~~for~~corporate ~~financial reporting purposes and the accelerated cost recovery system utilized for income tax purposes (983~~Website,~~042)~~ ~~(961~~if any,~~689)~~ ~~(1,136,800)~~every ~~Differences~~Interactive ~~resulting~~Data ~~from~~File ~~parent~~required ~~company~~to ~~having~~be asubmitted ~~different fiscal year for income tax~~ and ~~financial~~posted ~~reporting~~pursuant ~~purposes~~to Rule ~~(16,893)~~405 ~~32,009~~of ~~(22,493)~~Regulation ~~Non~~S-~~deductible~~T ~~loss~~(§229.405 ~~on impairment~~ of ~~property~~this ~~1,164,864~~chapter) 0during 0the ~~Other,~~preceeding ~~including~~12 months ~~related party accruals not deductible until paid 1,825,310~~ (~~191,835)~~or ~~(645,283)~~for ~~-----------~~such ~~-----------~~shorter ~~-----------~~period ~~Taxable~~that ~~net loss as shown on~~ the ~~income~~registrant ~~tax~~was ~~return~~required ~~for~~to ~~the~~submit and ~~calendar~~post ~~year~~such ~~ended $(4,279,511~~files) ~~$(6,191,959) $(7,769,650) =========== =========== ===========~~. Yes o No o

~~Quarter~~Indicate ~~Ended~~by ~~--------------------------------------------------------~~check ~~June~~mark ~~30,~~if ~~September~~disclosure ~~30,~~of delinquent ~~December~~filers ~~31,~~pursuant ~~March~~to ~~31,~~Item ~~OPERATIONS~~405 ~~2006~~of ~~2006~~Regulation ~~2006 2007~~ S-~~------------------------------------------------~~K ~~----------- ----------- ----------- ----------- Revenues $ 5,522,975 $ 5,145,717 $ 5,292,024 $ 6,310,797 Operating expenses~~ (~~6,829,916)~~§229.405 ~~(6,651,490)~~of ~~(6,287,888~~this chapter) ~~(8,594,714)~~is ~~-----------~~not ~~-----------~~contained ~~-----------~~herein, ~~-----------~~and ~~Loss~~will ~~before~~not ~~minority~~be ~~interest (1~~contained,~~306,941)~~ ~~(1,505,773)~~to ~~(995,864)~~the ~~(2,283,917)~~best ~~----------- ----------- ----------- ----------- Minority interest in loss~~ of registrant’s ~~subsidiaries from operations 6~~knowledge,~~934~~ ~~6,930~~in ~~5,024~~definitive ~~4,919~~proxy ~~-----------~~or ~~-----------~~information ~~-----------~~statements incorporated ~~-----------~~by ~~Loss~~reference ~~from~~in ~~operations~~Part ~~(1,300,007)~~III ~~(1,498,843)~~of ~~(990,840)~~this ~~(2,278,998)~~Form ~~(Loss) income from discontinued operations (160,000) (27,950) 94,701 (107,813)~~ 10-~~----------~~K ~~-----------~~or ~~-----------~~any ~~-----------~~amendment ~~Net~~to ~~loss~~this Form $(1,460,007) $(1,526,793) $ (896,139) $(2,386,811) =========== =========== =========== =========== Net loss per weighted average BAC from operations $ (16.76) $ (19.33) $ (12.77) $ (29.38) Net (loss) income per weighted average BAC from discontinued operations (2.06) (0.36) 1.22 (1.39) 10-~~---------- ----------- ----------- ----------- Net loss per weighted average BAC $ (18~~K.~~82) $ (19.69) $ (11.55) $ (30.77) =========== =========== =========== ===========~~ þ

~~Quarter~~Indicate ~~Ended~~by ~~--------------------------------------------------------~~check ~~June~~mark ~~30,~~whether ~~September~~the registrant ~~30,~~is ~~December~~a ~~31,~~large ~~March~~accelerated 31filer, ~~OPERATIONS~~an 2005*accelerated ~~2005* 2005* 2006* ------------------------------------------------- ----------- ----------- ----------- ----------- Revenues $ 5~~filer,~~318,197~~ $a ~~4,990,999 $ 5,420,354 $ 5,979,720 Operating expenses (6,789,068) (6,398,839) (6,544,821) (6,728,827)~~ non-~~---------- ----------- ----------- ----------- Loss before minority interest (1~~accelerated filer,~~470,871)~~ ~~(1,407,840)~~or ~~(1,124,467)~~a ~~(749,107)~~smaller ~~Minority~~reporting ~~interest~~company. See inthe ~~loss~~definitions of ~~subsidiaries~~“large accelerated 10filer”,~~294~~ ~~2,706~~“accelerated ~~5,989~~filer” ~~10,001~~and ~~-----------~~“smaller ~~-----------~~reporting ~~-----------~~company” ~~-----------~~in ~~Loss from operations (1,460,577) (1,405,134) (1,118,478) (739,106) Loss from discontinued operations (70,981) (134,102) (6,361) (135,705)~~ Rule 12b-~~----------~~2 ~~-----------~~of ~~-----------~~the ~~-----------~~Exchange ~~Net loss $(1,531,558) $(1,539,236) $(1,124,839) $ (874,811) =========== =========== =========== =========== Net loss per weighted average BAC from operations $ (18~~Act.~~83) $~~ (~~18.12)~~Check ~~$ (14.42~~one) $ (9.53) Net loss per weighted average BAC from discontinued operations (0.92) (1.73) (0.08) (1.74) ----------- ----------- ----------- ----------- Net loss per weighted average BAC $ (19.75) $ (19.85) $ (14.50) $ (11.27) =========== =========== =========== ===========:

~~March~~Large ~~31,~~accelerated ~~------------------------------~~filer ~~2007~~o ~~2006~~Accelerated ~~-------------~~filer ~~-------------~~o ~~Assets Property and equipment~~ Non-accelerated ~~less~~filer ~~accumulated~~o ~~depreciation~~(Do ofnot ~~$5,491,064~~check ~~and~~if ~~$0,~~a ~~respectively~~smaller $reporting 10,374,639 $ 0 Cash and cash equivalents 131,598 0 Cash held in escrow 234,873 0 Deferred costs, net of accumulated amortization of $99,201 and $0, respectively 34,215 0 Other assets 146,108 0 ------------- ------------- Total assets $ 10,921,433 $ 0 ============= ============= Liabilities Mortgage notes payable $ 9,675,961 $ 0 Accounts payable 204,937 0 Accrued interest payable 492,112 0 Security deposit payable 107,711 0 Due to local general partners and affiliates 388,693 0 Due to general partners and affiliates 37,500 0 Minority interest (447,136company) 0Smaller ~~-------------~~reporting ~~-------------~~company ~~Total liabilities $ 10,459,778 $ 0 ============= =============~~þ

~~Year~~Indicate ~~Ended~~by ~~March~~check ~~31,~~mark ~~-----------------------------------------~~whether ~~2007~~the registrant ~~2006~~is ~~2005~~a ~~-----------~~shell ~~-----------~~company ~~----------- Revenues Rental income $ 1,700,875 $ 1,632,690 $ 1,524,378 Other~~ (~~Note~~as 2)defined ~~27,328~~in ~~30,963~~Rule ~~76,428~~ 12b----------- ----------- ----------- Total revenue 1,728,203 1,663,653 1,600,806 ----------- ----------- ----------- Expenses General and administrative 291,654 321,892 288,901 General and administrative-related parties (Note 8) 76,248 56,231 54,043 Repairs and maintenance 411,337 467,814 290,912 Operating and other 210,530 236,949 207,048 Real estate taxes 66,420 91,000 83,323 Insurance 156,064 116,571 133,579 Interest 322,439 333,231 343,295 Depreciation and amortization 394,573 387,114 385,931 ----------- ----------- ----------- Total expenses 1,929,265 2~~,010,802~~ 1,787,032 ----------- ----------- ----------- Loss from discontinued operations $ (201,062) $ (347,149) $ (186,226) =========== =========== =========== Loss - limited partners from discontinued operations $ (199,051) $ (343,678) $ (184,364) =========== =========== =========== Number of ~~BACs outstanding 76,786 76,786 76,786 =========== =========== =========== Loss from discontinued operations $ (2.59~~the Act) ~~$ (4~~.~~47) $ (2.40) =========== =========== ===========~~ Yes o No þ

~~Year~~The ~~Ended~~approximate ~~March~~aggregate ~~31,~~book ~~-----------------------------------------~~value ~~2007~~of the ~~2006~~voting ~~2005~~and non-~~----------~~voting ~~-----------~~common ~~-----------~~equity ~~Net~~held ~~cash provided~~ by ~~operating~~non-affiliates ~~activities~~of $the ~~225,350~~Registrant as $of ~~98,179~~September ~~$ 249~~30,~~147~~ ~~Net~~2008 ~~cash~~was ~~provided by (used in) investing activities~~ $ ~~1,698 $ 22,371 $~~ (3218,~~705~~097,000), ~~Net~~based ~~cash~~on ~~(used~~Limited ~~in)~~Partner ~~provided by financing activities $~~ equity (~~280,683~~deficit) $as ~~27,911~~of $such ~~(188,932)~~date.

~~2007~~DOCUMENTS INCORPORATED ~~2006~~BY ----------- ----------- Cash and cash equivalents $ 31,266 $ 88,808 Advances and investment in subsidiary partnerships 19,668,019 21,848,931 Cash held in escrow 8,607 17,941 Other assets 2,112,848 116,299 ----------- ----------- Total assets $21,820,740 $22,071,979 =========== =========== LIABILITIES AND PARTNERS' CAPITAL Other liabilities $ 2,001,244 $ 14,867 Due to general partners and affiliates 16,190,153 14,044,479 ----------- ----------- Total liabilities 18,191,397 14,059,346 ----------- ----------- Partners' capital* 3,629,343 8,012,633 ----------- ----------- Total liabilities and partners' capital $21,820,740 $22,071,979 =========== ===========REFERENCE

Years Ended March 31, ----------------------------------------- 2007 2006 2005 ----------- ----------- ----------- Revenues $ 10,426 $ 6,928 $ 5,690 ----------- ----------- ----------- Expenses Administrative and management 178,403 129,867 105,867 Administrative and management-related parties 1,070,309 1,153,640 1,077,664 ----------- ----------- ----------- Total expenses 1,248,712 1,283,507 1,183,531 ----------- ----------- ----------- Loss from operations (1,238,286) (1,276,579) (1,177,841) Distribution income of subsidiary partnerships in excess of investments 16,486 0 0 Equity in loss of subsidiary partnerships (3,161,490) (2,092,313) (3,295,109) ----------- ----------- ----------- Net loss $(4,383,290) $(3,368,892) $(4,472,950) =========== =========== ===========None

Years Ended March 31, ----------------------------------------- 2007 2006 2005 ----------- ----------- ----------- Cash flows from operating activities: Net loss $(4,383,290) $(3,368,892) $(4,472,950) ----------- ----------- ----------- Adjustments to reconcile net loss to net cash provided by operating activities: Distribution income of subsidiary partnerships in excess of investments (16,486) 0 0 Equity in loss of subsidiary partnerships 3,161,490 2,092,313 3,295,109 Increase in other assets (1,982,727) 0 0 Increase (decrease) in other liabilities 1,986,377 1,972 (11,492) Increase in due to general partner and affiliates 2,145,674 1,888,697 2,559,429 ----------- ----------- ----------- Total adjustments 5,294,328 3,982,982 5,843,046 ----------- ----------- ----------- Net cash provided by operating activities 911,038 614,090 1,370,096 ----------- ----------- ----------- Cash flows from investing activities: Decrease in cash held in escrow-purchase price payments 9,334 0 10,059 Investment in subsidiary partnerships (9,334) 0 (10,059) Distributions from subsidiary partnerships 81,847 102,265 119,319 Advances to subsidiary partnerships (1,050,427) (688,640) (1,460,859) ----------- ----------- ----------- Net cash used in investing activities (968,580) (586,375) (1,341,540) ----------- ----------- ----------- Net (decrease) increase in cash and cash equivalents (57,542) 27,715 28,556 Cash and cash equivalents, beginning of year 88,808 61,093 32,537 ----------- ----------- ----------- Cash and cash equivalents, end of year $ 31,266 $ 88,808 $ 61,093 =========== =========== ===========PART I

Initial Cost to Partnership ----------------------------- Cost Capitalized Subsequent to Buildings and Acquisition: Description Encumbrances Land Improvements Improvements ---------------------------------------- ------------ ------------ ------------- ---------------- Apartment Complexes Harbor Court Limited Partnership Staten Island, NY $ 0 $ 137,450 $ Item 1,007,966 $ 69,289 Old Public Limited Partnership Lawrenceburg, TN 398,048 10,000 1,713,310 81,678 Lancaster Terrace Limited Partnership Salem, OR 1,380,920 161,269 3,679,601 95,741 655 North Street Limited Partnership Baton Rouge, LA 4,893,776 125,500 3,040,980 6,236,976 Landreth Venture Philadelphia, PA 3,187,080 1,761 5,903,337 128,668 Homestead Apartments Associates Ltd. ~~(b) Homestead, FL 3,311,363 329,402 0 5,943,165 Bethel Villa Associates, L~~ Business.P. Wilmington, DE 3,260,659 270,000 5,969,354 3,173,906 West Diamond Street Associates Philadelphia, PA 1,576,000 30,829 3,444,649 (948,348) Susquehanna Partners Philadelphia, PA 1,674,879 16,000 0 4,007,315 Boston Bay Limited Partnership Boston, MA 2,189,885 440,000 4,143,758 891,334 Morrant Bay Limited Partnership Boston, MA 3,209,760 650,000 5,522,250 1,485,897 Hope Bay Limited Partnership Boston, MA 1,159,592 225,000 1,435,185 701,062 Lares Apartments Limited Partnership Lares, PR 4,368,439 137,000 0 5,270,882 Lajas Apartments Limited Partnership Lajas, PR 4,032,581 110,090 4,952,929 281,522 Arlington-Rodeo Properties Los Angeles, CA 3,543,123 624,052 0 5,090,262 Conifer Bateman Associates Lowville, NY 912,477 15,000 2,525,729 92,118 Hampden Hall Associates, L.P. St. Louis, MO 2,061,176 0 0 7,559,181 Chester Renaissance Associates Chester, PA 853,000 33,667 168,333 1,782,784 Homestead Apartments II, LTD. Homestead, FL 3,248,464 338,966 0 5,287,011 P.S. 157 Associates, L.P. (a)(b) New York, NY 6,364,598 36,500 9,350,642 205,994 Buildings and Accumulated Description Land Improvements Total Depreciation ---------------------------------------- ------------ ------------- ------------ ------------ Apartment Complexes Harbor Court Limited Partnership Staten Island, NY $ 140,813 $ 1,073,892 $ 1,214,705 $ 450,586 Old Public Limited Partnership Lawrenceburg, TN 13,640 1,791,348 1,804,988 952,541 Lancaster Terrace Limited Partnership Salem, OR 163,105 3,773,506 3,936,611 2,214,776 655 North Street Limited Partnership Baton Rouge, LA 127,751 9,275,705 9,403,456 4,598,946 Landreth Venture Philadelphia, PA 3,645 6,030,121 6,033,766 2,243,499 Homestead Apartments Associates Ltd. (b) Homestead, FL 340,868 5,931,699 6,272,567 2,140,541 Bethel Villa Associates, L.P. Wilmington, DE 275,100 9,138,160 9,413,260 3,842,632 West Diamond Street Associates Philadelphia, PA 32,414 2,494,716 2,527,130 1,667,484 Susquehanna Partners Philadelphia, PA 17,585 4,005,730 4,023,315 1,441,040 Boston Bay Limited Partnership Boston, MA 441,585 5,033,507 5,475,092 2,744,509 Morrant Bay Limited Partnership Boston, MA 651,585 7,006,562 7,658,147 3,661,497 Hope Bay Limited Partnership Boston, MA 226,585 2,134,662 2,361,247 1,133,339 Lares Apartments Limited Partnership Lares, PR 151,585 5,256,297 5,407,882 1,831,597 Lajas Apartments Limited Partnership Lajas, PR 111,675 5,232,866 5,344,541 1,966,947 Arlington-Rodeo Properties Los Angeles, CA 625,637 5,088,677 5,714,314 2,022,844 Conifer Bateman Associates Lowville, NY 16,585 2,616,262 2,632,847 1,418,273 Hampden Hall Associates, L.P. St. Louis, MO 1,585 7,557,596 7,559,181 3,598,747 Chester Renaissance Associates Chester, PA 42,153 1,942,631 1,984,784 691,079 Homestead Apartments II, LTD. Homestead, FL 340,551 5,285,426 5,625,977 1,831,666 P.S. 157 Associates, L.P. (a)(b) New York, NY 36,500 9,556,636 9,593,136 3,350,523 Life on which Depreciation in Year of Latest Income Construction/ Date Statement is Description Renovation Acquired Computed* ---------------------------------------- ------------ ------------ ---------------- Apartment Complexes Harbor Court Limited Partnership Staten Island, NY 1991 Dec. 1991 27.5 years Old Public Limited Partnership Lawrenceburg, TN 1991 Dec. 1991 27.5 years Lancaster Terrace Limited Partnership Salem, OR 1992 Feb. 1992 15-27.5 years 655 North Street Limited Partnership Baton Rouge, LA 1992 Mar. 1992 27.5 years Landreth Venture Philadelphia, PA 1992 Mar. 1992 40 years Homestead Apartments Associates Ltd. (b) Homestead, FL 1992 Mar. 1992 40 years Bethel Villa Associates, L.P. Wilmington, DE 1992 Apr. 1992 27.5 years West Diamond Street Associates Philadelphia, PA 1992 May 1992 40 years Susquehanna Partners Philadelphia, PA 1992 May 1992 20-40 years Boston Bay Limited Partnership Boston, MA 1991 Aug. 1992 27.5 years Morrant Bay Limited Partnership Boston, MA 1991 Aug. 1992 27.5 years Hope Bay Limited Partnership Boston, MA 1991 Aug. 1992 27.5 years Lares Apartments Limited Partnership Lares, PR 1992 Aug. 1992 40 years Lajas Apartments Limited Partnership Lajas, PR 1992 Aug. 1992 40 years Arlington-Rodeo Properties Los Angeles, CA 1992 Aug. 1992 27.5 years Conifer Bateman Associates Lowville, NY 1990 Aug. 1992 15-27.5 years Hampden Hall Associates, L.P. St. Louis, MO 1992 Sep. 1992 27.5 years Chester Renaissance Associates Chester, PA 1992 Sep. 1992 40 years Homestead Apartments II, LTD. Homestead, FL 1992 Oct. 1992 40 years P.S. 157 Associates, L.P. (a)(b) New York, NY 1992 Nov. 1992 40 years

~~Cost~~Independence Tax ofCredit ~~Property~~Plus ~~and~~L.P. ~~Equipment~~(the ~~Accumulated~~“Partnership”) ~~Depreciation~~is ~~---------------------------------------------~~a ~~---------------------------------------------~~limited ~~Years~~partnership ~~Ended~~which ~~March~~was formed ~~31,~~under ~~---------------------------------------------------------------------------------------------~~the ~~2007~~laws ~~2006~~of ~~2005~~the ~~2007~~State ~~2006 2005 ------------- ------------- ------------- ------------- ------------- ------------- Balance at beginning~~ of ~~period~~Delaware $on ~~186,636,537~~November ~~$ 185~~7,~~665,410~~ $1990. ~~183,934,736~~The $general partner ~~71,043,930~~of $the ~~65,579,865~~Partnership $is ~~60,170,732~~Related ~~Additions~~Independence ~~during~~Associates ~~period: Improvements 1~~L.P.,~~717,395~~ ~~974,534~~a ~~1,840,217~~Delaware limited ~~Depreciation~~partnership ~~expense~~(the ~~5,495,470~~“General ~~5,467,472~~Partner”). ~~5,454,743~~The ~~Deductions~~general ~~during~~partner ~~period:~~of ~~Discontinued~~the ~~operations,~~General Partner ~~dispositions,~~is ~~and~~Related ~~impairments~~Independence ~~(17,113,547)~~Associates (3Inc.,~~407)~~ ~~(109,543)~~a ~~(5,560,951)~~Delaware corporation (~~3,407~~“RIAI”). The ~~(45,610)~~ultimate ~~-------------~~parent ~~------------- ------------- ------------- ------------- ------------- Balance at close~~ of ~~period~~the $General ~~171,240,385~~Partner $is ~~186,636,537~~Centerline Holding $Company ~~185,665,410 $ 70,978,449 $ 71,043,930 $ 65,579,865 ============= ============= ============= ============= ============= =============~~(“Centerline”).

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 was formed to invest as a limited partner in other partnerships (“Local Partnerships”, “subsidiaries” or “subsidiary partnerships”) that own apartment complexes (“Apartment Complexes” or “Properties”) that are eligible for the low-income housing tax credit (“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”). The Partnership’s investment in each Local Partnership represents from 98% to 98.99% of the Partnership’s interests in the Local Partnership. The Partnership originally held ownership interests in twenty-eight Local Partnerships. The Partnership does not intend to acquire additional properties. As of March 31, 2009, approximately $59,700,000 (not including acquisition fees of approximately $4,500,000) of the net proceeds of the Offering has been invested in Local Partnerships, of which all has been paid to the Local Partnerships, as certain benchmarks such as occupancy levels were attained prior to the release of the funds. As of March 31, 2009, the Partnership has disposed of sixteen of the twenty-eight original Properties. During the year ended March 31, 2009, one Local Partnership sold its property and the related assets and liabilities and the Partnership sold its limited partnership interests in nine Local Partnerships. Through March 31, 2009, three Local Partnerships have sold their property and the related assets and liabilities, the Partnership has sold its limited partnership interests in twelve Local Partnerships and one Local Partnership has transferred the deed to the property and related assets and liabilities of such Local Partnership. In addition, as of March 31, 2009, three Local Partnerships entered into agreements to sell their property and related assets and liabilities. See discussion on Sales of Underlying Local Partnerships and Assets Held for Sale below.

The investment objectives of the Partnership are to:

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.

Preserve and protect the Partnership’s capital.

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.

Provide cash distributions, when available, from operations of Properties.

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 interest 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.

Tax Credits with respect to a given Apartment Complex are available for a ten-year period that commences when the Property is leased to qualified tenants. However, the annual Tax Credits available in the year in which the Apartment Complex is leased to qualified tenants must be prorated based upon the months remaining in the year. The amount of the annual Tax Credits not available in the first year will be available in the eleventh year. Internal Revenue Code Section 42 regulates the use of the Apartment Complexes as to occupancy, eligibility, and unit gross rent, among other requirements. Each Apartment Complex must meet the provisions of these regulations during each of fifteen consecutive years (the “Compliance Period”) in order to remain qualified to receive the credits. Certain Apartment Complexes have extended compliance periods of up to fifty years. The Partnership generated $0 and $11,579 in Tax Credits during the years ending December 31, 2008 and 2007, respectively.

As of December 31, 2007, all Credit Periods have expired, and the Partnership has met its primary objective of generating Tax Credits for qualified BACs holders. However, each Local Partnership must continue to comply with the Tax Credit requirements until the end of the Compliance Period in order to avoid recapture of the Tax Credits. The Compliance Periods will continue through December 31, 2013 with respect to the Properties depending upon when the Tax Credit Periods commenced.

- 2 -

As of March 31, 2009, the Partnership has not met its investment objective of providing cash distributions from the operations of the Properties. The Partnership does not anticipate providing cash distributions to BACs holders other than distributions of sale or refinancing proceeds upon the disposition of Properties. Furthermore, at this time there can be no assurance that the Partnership will achieve this investment objective.

The Partnership also continues to meet its objective of allocating passive losses to individual BACs holders to offset passive income that they may realize from rental real estate investment and other passive activities, and allocating passive losses to the corporate BACs holders to offset business income. At this time, there can be no assurance that the Partnership will continue to meet this investment objective.

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

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 the Property investments themselves are reduced to estimated fair value (generally using the discounted cash flow valuation method). During the year ended March 31, 2009 and 2008, the Partnership recorded approximately $9,706,000 and $6,360,000, respectively, as an aggregate loss on impairment of assets. Through March 31, 2009, the Partnership has recorded approximately $17,731,000 as an aggregate loss on impairment of assets or reduction to estimated fair value.

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 25% of the Properties are located in any single state. There are also substantial risks associated with owning interests in properties, as does the Partnership, which receive government assistance, for example the possibility that Congress may not appropriate funds to enable the 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.

Segments

The Partnership operates in one segment, which is the investment in multi-family residential property. Financial information about this segment is set forth in Item 8 hereto.

Sales of Underlying Local Partnerships

The Partnership is currently in the process of disposing of its investments. It is anticipated that the process will continue to take a number of years. During the year ended March 31, 2009, one Local Partnership sold its property and the related assets and liabilities and the Partnership sold its limited partnership interests in nine Local Partnerships. Through March 31, 2009, three Local Partnerships have sold their property and the related assets and liabilities, the Partnership has sold its limited partnership interests in twelve Local Partnerships and one Local Partnership has transferred the deed to the property and related assets and liabilities of such Local Partnership. In addition, three Local Partnerships have entered into agreements to sell their property and the related assets and liabilities. There can be no assurance as to when the Partnership will dispose of its remaining investments or the amount of proceeds which may be received. However, based on the historical operating results of the Local Partnerships and the current economic conditions, including changes in tax laws, it is unlikely that the proceeds from such sales received by the Partnership will be sufficient to return to the limited partners their original investment.

On January 23, 2009, the Partnership sold its limited partnership interest in Plainsboro Housing Partners, L.P. (“Plainsboro”) to an affiliate of the Local General Partner for a sales price of $1,401,000. During the quarter ended December 31, 2008, in accordance with SFAS No. 144, the Partnership deemed the building impaired and wrote it down to its fair value, resulting in a loss on impairment of $800,000. The sale resulted in a gain of approximately $153,000 resulting from the write-off of the basis in the Local Partnership of approximately $1,248,000 at the date of the sale and the receipt of $1,401,000 in cash from the sale. The sale also resulted in a non-cash contribution to the Local Partnership from the General Partner of approximately $3,000 as a result of write-off of the fees owed by the Local Partnership to an affiliate of the General Partner.

On December 31, 2008, the Partnership sold its limited partnership interest in Christine Apartments L.P. (“Christine Apartments”) to the Local General Partner for a sales price of $50,000. The sale resulted in a gain of approximately $737,000 resulting from the write-off of the deficit basis in the Local Partnership of approximately $687,000 at the date of the sale and the receipt of $50,000 in cash from the sale, which was recorded during the quarter ended December 31, 2008. An adjustment to the gain of approximately $(5,000) was recorded during the quarter ended March 31, 2009, resulting in an overall gain of approximately $732,000.

On December 17, 2008, the property and the related assets and liabilities of West Diamond Street Associates (“West Diamond”) were sold to an unaffiliated third party purchaser for a sales price of $1 plus the assumption of the outstanding mortgage notes. The sale resulted in a gain of approximately $1,066,000 resulting from the write-off of the deficit basis in the property at the date of sale.

On November 30, 2008, the Partnership sold its limited partnership interest in Conifer Bateman Associates (“Bateman Hotel”) to the Local General Partner for a sales price of $50. The sale resulted in a loss of approximately $87,000 resulting from the write-off of the basis in the Local Partnership of approximately $87,000 at the date of the sale, which was recorded during the quarter ended December 31, 2008. An adjustment to the loss of approximately $(5,000) was recorded during the quarter ended March 31, 2009, resulting in an overall loss of approximately $82,000. The sale also resulted in a non-cash contribution to the Local Partnership from the General Partner of approximately $14,000 as a result of write-off of the fees owed by the Local Partnership to an affiliate of the General Partner.

On October 21, 2008, the Partnership sold its limited partnership interest in Lancaster Terrace L.P. (“Lancaster”) to the Local General Partner for a sales price of $1,564,990. The sale resulted in a gain of approximately $904,000 resulting from the write-off of the basis in the Local Partnership of approximately $660,000 at the date of the sale and the receipt of $1,564,190 in cash from the sale, which was recorded during the quarter ended December 31, 2008. An adjustment to the gain of approximately $111,000 was recorded during the quarter ended March 31, 2009, resulting in an overall gain of approximately $1,015,000. The sale also resulted in a non-cash contribution to the Local Partnership from the General Partner of approximately $2,000 as a result of write-off of the fees owed by the Local Partnership to an affiliate of the General Partner.

- 3 -

On October 17, 2008, the Partnership sold its limited partnership interest in Bethel Villa Associates, L.P. (“Bethel Villa”) to the Local General Partner for a sales price of $750,000. During the quarters ended March 31, 2008 and December 31, 2008, in accordance with Statement of Financial Accounting Standards No. 144 (“SFAS No. 144”) Accounting for the Impairment or Disposal of Long-Lived Assets, the Partnership deemed the building impaired and wrote it down to its fair value, which resulted in a loss on impairment of $5,000,000 and $720,000, respectively. The sale resulted in a loss of approximately $28,000 resulting from the write-off of the basis in the Local Partnership of approximately $778,000 at the date of the sale and the receipt of $750,000 in cash from the sale, which was recorded during the quarter ended December 31, 2008. An adjustment to the loss of approximately $373,000 was recorded during the quarter ended March 31, 2009, resulting in an overall gain of approximately $345,000.

On August 22, 2008, the Partnership sold its limited partnership interest in Lares Apartments Limited Partnership (“Lares”) to the Local General Partner for a sales price of $125,000. The sale resulted in a gain of approximately $691,000 resulting from the write-off of the deficit basis in the Local Partnership at the date of the sale of approximately $566,000 and the receipt of $125,000 in cash from the sale, which was recorded during the quarter ended December 31, 2008. An adjustment to the gain of approximately $(31,000) was recorded during the quarter ended March 31, 2009, resulting in an overall gain of approximately $660,000.

On August 22, 2008, the Partnership sold its limited partnership interest in Lajas Apartments Limited Partnership (“Lajas”) to the Local General Partner for a sales price of $121,250. The sale resulted in a gain of approximately $690,000, resulting from the write-off of the deficit basis in the Local Partnership at the date of the sale of approximately $568,000 and the receipt of $121,730 in cash from the sale, which was recorded during the quarter ended December 31, 2008. An adjustment to the gain of approximately $(40,000) was recorded during the quarter ended March 31, 2009, resulting in an overall gain of approximately $650,000.

On May 6, 2008, the Partnership sold its limited partnership interest in Susquehanna Partners (“Susquehanna”) to an affiliate of the Local General Partner for a sales price of $1. During the quarter ended March 31, 2008, in accordance with SFAS No. 144, the Partnership deemed the building impaired and wrote it down to its fair value, which resulted in a loss on impairment of $630,000. The sale resulted in a loss of approximately $49,000, resulting from the write-off of the basis in the Local Partnership of approximately $49,000 at the date of the sale, which was recorded during the quarter ended June 30, 2008. Adjustments to the loss of approximately $(1,000) and $(37,000) were recorded during the quarters ended September 30, 2008 and March 31, 2009, resulting in an overall loss of approximately $11,000. The sale also resulted in a non-cash contribution to the Local Partnership from the General Partner of approximately $41,000 as a result of write-off of the fees owed by the Local Partnership to an affiliate of the General Partner.

On April 1, 2008, the Partnership sold its limited partnership interest in Landreth Venture (“Landreth”) to the Local General Partner for a sales price of $17,500. During the year ended March 31, 2009 and 2008, in accordance with SFAS No. 144, the building was deemed impaired and written down to its fair value, resulting in a loss on impairment of approximately $3,000,000 and $730,000, respectively. The sale resulted in a gain of approximately $10,000, resulting from the write-off of the basis in the Local Partnership at the date of the sale of approximately $7,000 and the $17,500 cash received from the sale, which was recorded during the quarter ended June 30, 2008. Adjustments to the gain of approximately $1,000 and $3,009,000 were recorded during the quarter ended September 30, 2008 and March 31, 2009, resulting in an overall gain of approximately $3,020,000.

On March 20, 2008, the property and the related assets and liabilities of Homestead Apartments Associates Ltd. (“Homestead”) were sold to an unaffiliated third party purchaser for a sales price of $4,000,000. The Partnership received $32,500 as a distribution from this sale after the repayment of the mortgages, other liabilities and closing costs of approximately $3,967,500. The sale resulted in a gain of approximately $75,000 resulting from the write-off of the deficit basis in the property at the date of sale, which was recorded during the quarter ended June 30, 2008. Adjustments to the gain of approximately $201,000, $(7,000) and $(324,000) were recorded during the quarters ended September 30, 2008, December 31, 2008 and March 31, 2009, resulting in an overall loss of approximately $55,000.

On February 1, 2008, the Partnership sold its limited partnership interest in Hampden Hall Associates, L.P. (“Hampden Hall”) to an affiliate of the Local General Partner for a sales price of approximately $955,000. The sale resulted in a loss of approximately $1,173,000, resulting from the write-off of the basis in the Local Partnership of approximately $2,128,000 at the date of the sale and the $955,000 cash received from the sale.

On January 17, 2008, the Partnership sold its limited partnership interest in BX-7F Associates (“Beaumont”) to the Local General Partner for a sales price of $2,090,000. The sale resulted in a gain of approximately $311,000, resulting from the write-off of the basis in the Local Partnership at the date of the sale of approximately $1,711,000 and the $2,022,299 cash received from the sale.

On November 30, 2007, the property and the related assets and liabilities of Harbor Court Limited Partnership (“Harbor Court”) were sold to an unaffiliated third party purchaser for a sales price of $2,100,000. The Partnership received $1,991,996 as a distribution from this sale after the repayment of other liabilities, closing costs and distributions to minority interests of approximately $108,000. The sale resulted in a gain of approximately $1,260,000, which was recorded during the quarter ended March 31, 2008.

On October 31, 2007, Old Public Limited Partnership (“Old Public”) transferred the deed to the property and the related assets and liabilities to an unaffiliated third party in lieu of foreclosure. The transfer of assets of approximately $851,000 and liabilities of $1,138,000 resulted in a gain of approximately $287,000 at the date of the transfer. An adjustment to the gain of approximately $(193,000) was recorded during the quarter ended March 31, 2008, resulting in an overall gain of approximately $94,000.

On March 29, 2007, the Partnership sold its limited partnership interest in P.S. 157 Associates, L.P. (“P.S. 157”) to the Local General Partner for a sales price of $1,996,490. The sale resulted in a gain of approximately $2,010,000 resulting from the write-off of the deficit basis in the Local Partnership of approximately $13,000 at the date of the sale and the $2,023,209 cash received from the sale. An adjustment to the gain of approximately $6,000 was recorded during the quarter ended March 31, 2008, resulting in an overall gain of approximately $2,016,000.

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Assets Held for Sale

On May 9, 2008, Creative Choice Homes II, Ltd. (“Opa-Locka”) entered into a purchase and sale agreement to sell the property and the related assets and liabilities to an unaffiliated third party purchaser for a sales price of $17,000,000. This agreement expired in April of 2009. The property is currently being actively marketed for sale and management is seeking a potential buyer. As of December 31, 2008, Opa-Locka had property and equipment, at cost, of approximately $22,812,000, accumulated depreciation of approximately $7,946,000 and mortgage debt of approximately $5,417,000.

On April 18, 2008, Rolling Green Associates, L.P. (“Rolling Green”) entered into a purchase and sale agreement to sell the property and the related assets and liabilities to an unaffiliated third party purchaser for a sales price of $14,000,000. This agreement expired in April of 2009. The property is currently being actively marketed for sale and management is seeking a potential buyer. As of December 31, 2008, Rolling Green had property and equipment, at cost, of approximately $22,318,000, accumulated depreciation of approximately $11,734,000 and mortgage debt of approximately $10,663,000.

On April 1, 2008, Homestead Apartments Associates II Ltd. (“Homestead II”) entered into a purchase and sale agreement to sell the property and the related assets and liabilities to an unaffiliated third party purchaser for a sales price of $4,000,000. This agreement expired in April of 2009. The property is currently being actively marketed for sale and management is seeking a potential buyer. As of December 31, 2008, Homestead II had property and equipment, at cost, of approximately $5,594,000, accumulated depreciation of approximately $2,076,000 and mortgage debt of approximately $3,169,000.

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 have, in the past, and 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. The General Partner is also the general partner of Independence Tax Credit Plus L.P. II.

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 1A. Risk Factors

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 Apartment 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 HUD 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. Furthermore, inflation generally does not impact the fixed long-term financing under which real property investments were purchased. Inflation also affects the Local Partnerships adversely by increasing operating costs, such as fuel, utilities, and labor.

Item 1B. Unresolved Staff Comments

None

Item 2. Properties

As of March 31, 2009, the Partnership held a 98.99% limited partnership interest in ten Local Partnerships, a 98% limited partnership interest in one Local Partnership and a 88.99% interest in another Local Partnership. 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 15, Schedule III.

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Local Partnership Schedule

Name and Location (Number of Units)	Date Acquired	% of Units Occupied at May 1,
Name and Location (Number of Units)	Date Acquired	2009		2008		2007		2006		2005

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

Old Public Limited Partnership	December 1991	(d)		(d)		77	%	57	%	67	%
Lawrenceburg, TN (30)

Lancaster Terrace Limited Partnership	February 1992	(f)		98	%	89	%	96	%	93	%
Salem, OR (104)

655 North Street Limited Partnership	March 1992	90	%	93	%	96	%	96	%	92	%
Baton Rouge, LA (195)

Landreth Venture	March 1992	(f)		100	%	96	%	92	%	96	%
Philadelphia, PA (47)

Homestead Apartments Associates Ltd.	March 1992	(b)		(b)		95	%	99	%	99	%
Homestead, FL (123)

Bethel Villa Associates, L.P.	April 1992	(f)		97	%	99	%	99	%	100	%
Wilmington, DE (150)

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

Susquehanna Partners	May 1992	(f)		87	%	96	%	91	%	87	%
Philadelphia, PA (47)

Boston Bay Limited Partnership	August 1992	98	%	93	%	95	%	100	%	99	%
Boston, MA (88)

Morrant Bay Limited Partnership	August 1992	97	%	91	%	92	%	95	%	92	%
Boston, MA (130)

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

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

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

Arlington-Rodeo Properties	August 1992	93	%	100	%	100	%	100	%	100	%
Los Angeles, CA (29)

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

Hampden Hall Associates, L.P.	September 1992	(c)		(c)		96	%	84	%	95	%
St. Louis, MO (75)

Chester Renaissance Associates	September 1992	95	%	95	%	100	%	100	%	100	%
Chester, PA (20)

Homestead Apts. II LTD.	October 1992	89	%	96	%	95	%	99	%	99	%
Homestead, FL (112)

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

Cloisters Limited Partnership II	November 1992	34	%	62	%	88	%	94	%	98	%
Philadelphia, PA (65) (g)

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Local Partnership Schedule

(continued)

Name and Location (Number of Units)	Date Acquired	% of Units Occupied at May 1,
Name and Location (Number of Units)	Date Acquired	2009	2008	2007	2006	2005

Creative Choice Homes II, LTD.	December 1992	98	%	95	%	100	%	91	%	95	%
Opa-Locka, FL (328)

Milford Crossing Associates L.P.	December 1992	97	%	99	%	100	%	96	%	93	%
Milford, DE (73)

BX-7F Associates, L.P.	January 1993	(c)		(c)		98	%	98	%	97	%
Bronx, NY (85)

Los Angeles Limited Partnership	May 1993	99	%	100	%	99	%	100	%	100	%
Rio Piedras, PR (124)

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

Plainsboro Housing Partners, L.P.	July 1993	(f)		94	%	98	%	98	%	97	%
Plainsboro, NJ (126)

Rolling Green Associates, L.P.	October 1993	97	%	98	%	95	%	93	%	97	%
Syracuse, NY (395)

(a)	The Partnership’s limited partnership interest was sold during the fiscal year ended March 31, 2007 (see Note 10 in Item 8).

(b)	The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2008 (see Note 10 in Item 8).

(c)	The Partnership’s limited partnership interest was sold during the fiscal year ended March 31, 2008 (see Note 10 in Item 8).

(d)	The deed to the property and related assets and liabilities was transferred during the fiscal year ended March 31, 2008 (see Note 10 in Item 8).

(e)	The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2009 (see Note 10 in Item 8).

(f)	The Partnership’s limited partnership interest was sold during the fiscal year ended March 31, 2009 (see Note 10 in Item 8).

(g)	See discussion under the heading, “Results of Operations of Certain Local Partnerships” in Item 7.

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

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 annually reviews the physical state of the Properties and suggests to the respective general partners of the Local Partnerships (“Local General Partners”) budget improvements, which are generally funded from cash flow from operations or release of replacement reserve escrows to the extent available.

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.

Item 3. Legal Proceedings

None

Item 4. Submission of Matters to a Vote of Security Holders

None

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchaser of Equity Securities

As of March 31, 2009, 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 further revision of the Revenue Act of 1987 may permit the Partnership to lessen the scope of the restrictions.

As of May 28, 2009, the Partnership had approximately 4,556 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, 2009. The Partnership does not anticipate providing cash distributions to its BACs holders other than from net refinancing or sales proceeds.

Transfer Procedures

The Partnership from time to time receives requests by unit holders and others to transfer BACs and/or Limited Partnership Interests. Such requests may occur in connection with tender offers for the Partnership’s units. Such requests implicate the Partnership’s policies and procedures concerning transfers generally and tender offers in particular, which were adopted by the Partnership pursuant to the terms of its Partnership Agreement, to ensure compliance with applicable law, avoid adverse tax consequences for the Partnership and its investors, and preserve the Partnership’s advantageous tax status.

In prior years, the Partnership relied on the 5% safe harbor established by Internal Revenue Service (“IRS”) regulations to avoid being characterized as a “publicly-traded partnership” that is taxed as a corporation. The 5% safe harbor, however, expired and is no longer available as of December 31, 2005. Accordingly, the Partnership now relies on a 2% safe harbor established by another IRS regulation to avoid being characterized as a “publicly-traded partnership” that is taxed as a corporation.

A brief summary of certain of the Partnership’s key policies, practices and requirements with respect to transfers and tender offers is as follows:

·	No transfer (whether for substitution, assignment or otherwise) is effective or binding on the Partnership unless and until it is approved by the General Partner.

No transfer will be approved unless the transferor and transferee submit complete and properly executed forms of the Partnership’s own transfer documentation. The Partnership does not accept forms of transfer documentation other than its own and does not accept signatures made by power of attorney in lieu of original signatures by each of the transferors and transferees.

The Partnership will not approve transfers that in the cumulative aggregate for any tax year exceed the IRS 2% safe harbor, unless a financially responsible person provides the Partnership and its partners with (i) an indemnity (in form and substance in all ways acceptable to the General Partner) for all liability (including, without limitation, any adverse tax consequences) arising from or relating to exceeding the 2% safe harbor and (ii) a legal opinion (in form and substance in all ways acceptable to the General Partner) that there will be no adverse tax consequences to the Partnership and its partners from exceeding the 2% safe harbor.

In order to avoid the undesirable situation of one or more tender offers consuming the entire safe harbor limitation early in the tax year and leaving the Partnership’s remaining investors with no liquidity opportunity for the rest of that tax year, the Partnership restricts the cumulative aggregate total of transfers made pursuant to all tender offers to 1.5% of its outstanding units in each tax year, unless a financially responsible person conducting such tender offer provides the Partnership with an acceptable indemnity and legal opinion of the type described above. At the end of each tax year, the General Partner, in its discretion, may allow the cumulative total number of transfers (including those by tender offer) to reach the 2% safe harbor limit.

·	The Partnership requires that all tender offers for its units be conducted in accordance with all applicable law including, without limitation, the federal securities laws.

The foregoing is solely a summary of the Partnership’s policies, requirements and practices with respect to transfers and tender offers. More complete information, including a copy of the Partnership’s transfer documentation package, may be obtained from the Partnership.

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

Liquidity and Capital Resources

As of March 31, 2009, approximately $59,700,000 (not including acquisition fees of approximately $4,500,000) of the net proceeds of the Offering has been invested in Local Partnerships. During the year ended March 31, 2009, one Local Partnership sold its property and the related assets and liabilities and the Partnership sold its limited partnership interests in nine Local Partnerships. Through March 31, 2009, three Local Partnerships have sold their property and the related assets and liabilities, the Partnership has sold its limited partnership interests in twelve Local Partnerships and one Local Partnership transferred the deed to the property and related assets and liabilities of such Local Partnership. In addition, three Local Partnerships entered into agreements to sell their property and the related assets and liabilities (see Notes 10 and 11 in Item 8).

Short-Term

During the year ended March 31, 2009, cash and cash equivalents of the Partnership and its consolidated subsidiary partnership increased approximately $878,000. This increase is due to net cash provided by operating activities ($1,529,000), net proceeds from sales ($9,605,000), an increase in due to local general partners and affiliates relating to financing activities ($411,000) and an increase in due to local general partners and affiliates relating to investing activities ($1,505,000) which exceeded costs related to sales ($53,000), acquisitions of property and equipment ($1,414,000), repayments of mortgage notes ($7,498,000), an increase in cash held in escrow relating to investing activities ($2,943,000) and a decrease in capitalization of consolidated subsidiaries attributable to minority interest ($264,000). Included in the adjustments to reconcile the net loss to net cash provided by operating activities are depreciation and amortization ($3,181,000), gain on sale of properties ($7,495,000) and loss on impairment of properties ($9,706,000).

Total expenses from operations for the years ended March 31, 2009 and 2008, excluding depreciation and amortization, interest, general and administrative-related parties and loss on impairment of property, totaled $5,959,302 and $6,006,951, respectively.

Accounts payable from operations as of March 31, 2009 and 2008 were $1,181,205 and $3,914,793, respectively. Accounts payable are short term liabilities which are expected to be paid from operating cash flows, working capital balances at the Local Partnership level, Local General Partner advances and in certain circumstances advances from the Partnership. Accounts payable from discontinued operations totaled $2,685,081 and $291,398 as of March 31, 2009 and 2008, respectively. Because the provisions of the secondary loans defer the payment of accrued interest of the respective Local Partnerships, the Partnership believes it (and the applicable Local Partnerships) has sufficient liquidity and ability to generate cash and to meet existing and known or reasonably likely future cash requirements over both the short and long term.

Accrued interest payable from operations as of March 31, 2009 and 2008 was $10,496,943 and $11,332,424, respectively. Accrued interest payable represents the accrued interest on all mortgage loans, which include primary and secondary loans. Certain secondary loans have provisions such that interest is accrued but not payable until a future date. Accrued interest payable from discontinued operations totaled $680,348 and $516,823 as of March 31, 2009 and 2008, respectively. The Partnership anticipates the payment of accrued interest on the secondary loans (which make up the majority of the accrued interest payable amount owed and which have been accumulating since the Partnership’s investment in the respective Local Partnership) will be made from future refinancings or sales proceeds of the respective Local Partnerships. In addition, each Local Partnership’s mortgage notes are collateralized by the land and buildings of the respective Local Partnership, and are without further recourse to the Partnership.

During the year ended March 31, 2009, the Partnership’s primary sources of funds included: (i) working capital reserves; (ii) interest earned on the working capital reserves; (iii) cash distributions from operations of the Local Partnerships; and (iv) sales proceeds and distributions. Such funds are available to meet the obligations of the Partnership. The Partnership does not anticipate providing cash distributions to BACs holders in circumstances other than refinancing or sales. Cash distributions received from the Local Partnerships, as well as the working capital reserves referred to above, will be used towards the future operating expenses of the Partnership. During the years ended March 31, 2009 and 2008, the amounts received from operations of the Local Partnerships were approximately $75,000 and $86,000, respectively. Additionally, during the years ended March 31, 2009 and 2008, the Partnership received approximately $33,000 and $1,992,000 of distributions from the sale of properties and approximately $3,979,000 in proceeds from the sale of Local Partnerships’ limited partnership interest, respectively. The Partnership does not anticipate being able to make distributions sufficient to return to BACs holders their original capital contributions.

The Partnership’s unconsolidated working capital reserve at March 31, 2009 was approximately $5,044,000.

Partnership management fees owed to the General Partner amounting to approximately $6,219,000 and $9,228,000 were accrued and unpaid as of March 31, 2009 and 2008, respectively. During the year ended March 31, 2009, management deemed the unpaid partnership management fees related to sold properties uncollectible and wrote off approximately $3,752,000, resulting in a non-cash General Partner contribution of the same amount. 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.

Long-Term

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 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 may also result in recapture of Tax Credits if the investment is lost before expiration of the Compliance 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 had fully invested the proceeds of its Offering in 28 Local Partnerships, all of which had their Tax Credits fully in place. As of December 31, 2007, all Credit Periods had expired. The Compliance Periods will continue through December 31, 2013 with respect to the Properties depending upon when the Tax Compliance Periods commenced.

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Discontinued Operations

For a discussion of discontinued operations, see Note 14 in Item 8.

Sale of Underlying Properties/Local Partnership Interests

For a discussion of the sale of Properties in which the Partnership owns direct interests, see Note 10 in Item 8.

Tabular Disclosure of Contractual Obligations

The following table summarizes the Partnership’s commitments as of March 31, 2009 to make future payments under its debt agreements and other contractual obligations.

	Total		Less than 1 Year		1 – 3 Years		3 -5 Years		More than 5 Years
Mortgage notes payable (a)	$	20,705,851	$	758,369	$	1,659,837	$	1,358,990	$	16,928,655
Long term notes payable (b)		129,274		25,854		51,710		51,710		0
	$	20,835,125	$	784,223	$	1,711,547	$	1,410,700	$	16,928,655
(a) The mortgage notes are payable in aggregate monthly installments of approximately $109,000, including principal and interest at rates varying from 1% to 8% per annum, through the year 2048. Each subsidiary partnership’s mortgage note payable is collateralized by the land and buildings of the respective subsidiary partnership, the assignment of certain subsidiary partnerships’ rents and leases, and is without further recourse. (b) See Note 8 (B) ii in Item 8. Financial Statements and Supplementary Data.

The following table summarizes the Partnership’s commitments from discontinued operations as of March 31, 2009 to make future payments under its debt agreements and other contractual obligations.

	Total		Less than 1 Year		1 – 3 Years		3 -5 Years		More than 5 Years

Mortgage notes payable (a)	$	19,248,504	$	6,901,650	$	3,829,354	$	1,630,000	$	6,887,500
Long term notes payable (b)		979,770		979,770		0		0		0
	$	20,228,274	$	7,881,420	$	3,829,354	$	1,630,000	$	6,887,500

(a) The mortgage notes are payable in aggregate monthly installments of approximately $219,000, including principal and interest at rates varying from 5% to 9% per annum, through the year 2020. Each subsidiary partnership’s mortgage note payable is collateralized by the land and buildings of the respective subsidiary partnership, the assignment of certain subsidiary partnerships’ rents and leases, and is without further recourse. (b) See Note 8 (B) iii in Item 8. Financial Statements and Supplementary Data.

Off-Balance Sheet Arrangements

The Partnership has no off-balance sheet arrangements.

Critical Accounting Policies

In preparing the consolidated financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Set forth below is a summary of the accounting policies that management believes are critical to the preparation of the consolidated financial statements. The summary should be read in conjunction with the more complete discussion of the Partnership’s accounting policies included in Note 2 to the consolidated financial statements in this annual report on Form 10-K.

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. The Partnership complies with Statement of Financial Accounting Standards (“SFAS”) No. 144 Accounting for the Impairment or Disposal of Long-Lived Assets. 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 is 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 their carrying amount or fair value less costs to sell. These assets are classified as property and equipment-held for sale and are not depreciated. Property and equipment that are held for sale are included in discontinued operations. There are three assets classified as property and equipment-held for sale as of March 31, 2009 (see Note 11 in Item 8).

During the year ended March 31, 2009 and 2008, the Partnership recorded approximately $9,706,000 and $6,360,000, respectively, as an aggregate loss on impairment of assets. Through March 31, 2009, the Partnership has recorded approximately $17,731,000 as an aggregate loss on impairment of assets.

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Revenue Recognition

Rental income is earned primarily under standard residential operating leases and is typically due the first day of each month, but can vary by Property due to the terms of the tenant leases. Rental income is recognized when earned and charged to tenants’ accounts receivable if not received by the due date. Rental payments received in advance of the due date are deferred until earned. Rental subsidies are recognized as rental income during the month in which it is earned.

Other revenues are recorded when earned and consist of the following items: Interest income earned on cash and cash equivalent balances and cash held in escrow balances, income from forfeited security deposits, late charges, laundry and vending income and other rental related items.

Other revenues from operations include the following amounts at both the Partnership and Local Partnership level:

	Years Ended March 31,
	2009		2008*

Interest	$	82,988	$	85,110
Other		64,564		69,646

Total other revenue	$	147,552	$	154,756

Other revenues from discontinued operations from operations include the following amounts at both the Partnership and Local Partnership level:

	Years Ended March 31,
	2009		2008*

Interest	$	86,830	$	191,960
Other		850,807		629,244
Total other revenue	$	937,637	$	821,204
* Reclassified for comparative purposes.

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.

Recent Accounting Pronouncements

In April 2009, the Financial Accounting Standards Board (“FASB”) issued FSP No. FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments”. This FSP amends FASB Statement No. 107 to require disclosures about fair values of financial instruments for interim reporting periods as well as in annual financial statements. The FSP also amends APB Opinion No. 28 to require those disclosures in summarized financial information at interim reporting periods. This FSP becomes effective for interim reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The adoption of this FSP is not expected to have a material impact on the Partnership’s consolidated financial statements.

In April 2009, the FASB issued FSP NO. FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly”. This FSP provides additional guidance on determining fair value when the volume and level of activity for the asset or liability have significantly decreased when compared with normal market activity for the asset or liability. A significant decrease in the volume or level of activity for the asset of liability is an indication that transactions or quoted prices may not be determinative of fair value because transactions may not be orderly. In that circumstance, further analysis of transactions or quoted prices is needed, and an adjustment to the transactions or quoted prices may be necessary to estimate fair value. This FSP becomes effective for interim reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The adoption of this FSP is not expected to have a material impact on the Partnership’s consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements”. This statement was issued with the intent to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements for those entities that have outstanding non-controlling interest in one or more subsidiaries. The effective date for this provision is for fiscal years beginning after December 15, 2008. The Partnership is currently evaluating the impact of the provisions of this statement on the consolidated financial statements.

Results of Operations

The following is a summary of the results of operations of the Partnership for the years ended March 31, 2009 and 2008 (the 2008 and 2007 Fiscal Years, respectively), excluding the results of its discontinued operations which are not reflected in the following discussion.

The Partnership’s results of operations for the 2008 and 2007 Fiscal Years consisted primarily of the results of the Partnership’s investment in 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.

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The net loss for the 2008 and 2007 Fiscal Years totaled $4,894,349 and $10,467,870, respectively.

2008 vs. 2007

Rental income increased approximately 3% for the 2008 Fiscal Year as compared to the 2007 Fiscal Year, primarily due to annual rent increases and decreases in vacancies at several Local Partnerships, partially offset by a decrease in occupancy at one Local Partnership.

Total expenses, excluding loss on impairment of property, remained fairly consistent with a decrease of approximately 1% for the 2008 Fiscal Year as compared to the 2007 Fiscal Year.

Results of Operations of Certain Local Partnerships

a)	Subsidiary Partnerships – Going Concern

Creative Choice Homes II L.P. (“Opa-Locka”)

The financial statements for Opa-Locka were prepared assuming that Opa-Locka will continue as a going concern. Opa-Locka is in default on its third and fourth mortgage notes, which were incurred to affiliates of the Local General Partner. The Local General Partner has not sent a notice of default with respect to the notes as of the year ended March 31, 2009 and will be unable to call the notes until the first and second mortgage notes, which are current, are paid in full.

Opa-Locka has also continued to incur significant operating losses resulting, in part, from the effects of a major hurricane, which created additional losses. These conditions raise substantial doubt about Opa-Locka’s ability to continue as a going concern. The ability for Opa-Locka to continue as a going concern is based on the Local General Partner’s continuing ability to fund operating losses and insurance proceeds to cover the damages to the Property. This condition is alleviated in part by the fact that the property has had positive operating cash flow for the past several years. The financial statements do not include any adjustments that might be necessary if Opa-Locka is unable to continue as a going concern.

The Partnership’s investment in Opa-Locka at March 31, 2009 and 2008 was reduced to zero as a result of prior years’ losses, and the minority interest balance was zero at each date. Opa-Locka’s net (income) loss after minority interest amounted to approximately $(366,000) and $2,400,000 for the 2008 and 2007 Fiscal Years.

In October 2005, Opa-Locka suffered property damage and business interruption due to a severe hurricane. Opa-Locka contracted to complete repairs and renovations of the buildings damaged for a cost of $7,489,000. Opa-Locka expects to be reimbursed by insurance proceeds in the amount of approximately $4,420,000. As of December 31, 2008, $4,000,000 of insurance proceeds has been received by the mortgage company which is acting as administrator and trustee of the funds. A balance of $3,970,717 remains payable to the construction company as of December 31, 2008 related to the rehabilitation.

The above circumstances have called into question the recoverability of the carrying amounts of the building. On May 9, 2008, Opa-Locka entered into a purchase and sale agreement to sell its property and related assets and liabilities to an unaffiliated third party purchaser, which expired in April 2009. The property is currently being actively marketed for sale and management is seeking a potential buyer (see Note 11 in Item 8).

Morrant Bay Limited Partnership (“Morrant Bay”)

The financial statements for Morrant Bay have been prepared assuming that Morrant Bay will continue as a going concern. Morrant Bay has been experiencing higher operating costs, attributable in part to escalating energy and repair costs. These conditions, in addition to regulatory rent restrictions imposed under HUD guidelines, has resulted in operating cash flow not meeting all current obligations as they become due. At December 31, 2008, current liabilities exceed current assets by approximately $327,000. This raises doubt as to whether Morrant Bay will be able to continue as a going concern. Management continually monitors operating costs and will request additional rent increases when allowed by HUD. Additionally, management is in the process of evaluating refinancing plans. During 2008, Morrant Bay entered into negotiations with a local non-profit to re-syndicate the property. In connection with this, Morrant Bay is negotiating with the General Partner to redeem their interest in Morrant Bay for a nominal amount. There can be no assurance if or when such negotiations will result in an actual redemption of the Local Partnership’s interests.

The Partnership’s investment in Morrant Bay at March 31, 2009 and 2008 was reduced to zero as a result of prior years’ losses and the minority interest balance was approximately $228,000 at each date. Morrant Bay’s net loss after minority interest amounted to approximately $474,000 and $712,000 for the 2008 and 2007 Fiscal Years. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Boston Bay Limited Partnership (“Boston Bay”)

The financial statements for Boston Bay have been prepared assuming that Boston Bay will continue as a going concern. Boston Bay has been experiencing higher operating costs, attributable in part to escalating energy and repair costs. These conditions, in addition to regulatory rent restrictions imposed under HUD guidelines, has resulted in operating cash flow not meeting all current obligations as they become due. At December 31, 2008, current liabilities exceed current assets by approximately $330,000. This raises doubt as to whether Boston Bay will be able to continue as a going concern. Management continually monitors operating costs and will request additional rent increases when allowed by HUD. Additionally, management is in the process of evaluating refinancing plans. During 2008, Boston Bay entered into negotiations with a local non-profit to re-syndicate the property. In connection with this, Boston Bay is negotiating with the General Partner to redeem their interest in Boston Bay for a nominal amount. There can be no assurance if or when such negotiations will result in an actual redemption of the Local Partnership’s interests.

The Partnership’s investment in Boston Bay at March 31, 2009 and 2008 was reduced to zero as a result of prior years’ losses and the minority interest balance was approximately $87,000 at each date. Boston Bay’s net loss after minority interest amounted to approximately $342,000 and $540,000 for the 2008 and 2007 Fiscal Years. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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b)	Subsidiary Partnerships – Commitments and Contingencies

Cloisters Limited Partnership II (“Cloister”)

Cloisters is in the process of converting the project from rental to for sale condominiums. Cloisters is currently in negotiations to finalize a construction agreement in the estimated amount of $2,146,000 and construction financing in the estimated amount of $800,000 related to the renovation of the units for sale. There can be no assurance for when the conversion will actually take place.

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.

Item 7A. Quantitative and Qualitative Disclosure about Market Risk

Mortgage notes are payable in aggregate monthly installments including principal and interest at rates varying from1% to 9% per annum. The Partnership does not believe there is a material risk associated with the various interest rates associated with the mortgage notes as the majority of the Local Partnership mortgage notes have fixed rates. The Partnership currently discloses in Note 3 Item 8 of the Notes to Consolidated Financial Statements, the fair value of the mortgage notes payable.

The Partnership does not have any other market risk sensitive instruments.

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Item 8.	Financial Statements and Supplementary Data
		Sequential Page

(a) 1.	Consolidated Financial Statements

	Report of Independent Registered Public Accounting Firm	15

	Consolidated Balance Sheets at March 31, 2009 and 2008	47

	Consolidated Statements of Operations for the Years Ended March 31, 2009 and 2008	48

	Consolidated Statements of Changes in Partners’ Capital (Deficit) for the Years Ended March 31, 2009 and 2008	49

	Consolidated Statements of Cash Flows for the Years Ended March 31, 2009 and 2008	50

	Notes to Consolidated Financial Statements	52

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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, 2009 and 2008, and the related consolidated statements of operations, changes in partners’ capital (deficit), and cash flows for the years ended March 31, 2009 and 2008 (the 2008 and 2007 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 nineteen (2008 Fiscal Year) and twenty two (2007 Fiscal Year) subsidiary partnerships whose losses aggregated $11,647,146 and $8,011,225 for the 2008 and 2007 Fiscal Years, respectively, and whose assets constituted 91% and 71% of the Partnership’s assets at both March 31, 2009 and 2008, respectively, presented in the accompanying consolidated financial statements. The financial statements for seventeen (2008 Fiscal Year) and twenty one (2007 Fiscal Year) 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 two (2008 Fiscal Year) and one (2007 Fiscal Year) of these subsidiary partnerships were unaudited.

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, 2009 and 2008, and the results of their operations and their cash flows for the years ended March 31, 2009 and 2008, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 13(a), the consolidated financial statements include the financial statements of three subsidiary partnerships with significant uncertainties. The financial statements of these subsidiary partnerships were prepared assuming that they will continue as going concerns. These three subsidiary partnerships’ net losses aggregated $551,341 (2008 Fiscal Year) and $3,651,851 (2007 Fiscal Year) and their assets aggregated $23,400,218 and $23,381,182 at March 31, 2009 and 2008, respectively. Management’s plan in regard to this matter is also described in Note 13(a). The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

TRIEN ROSENBERG ROSENBERG

WEINBERG CIULLO & FAZZARI LLP

New York, New York

June 24, 2009

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[Letterhead of Reznick Group, P.C.]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners

Harbor Court L.P.

We have audited the accompanying balance sheet of Harbor Court L.P. as of December 31, 2007, and the related statements of operations, partners' equity (deficit) and cash flows for 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 the standards of the Public Company Accounting Oversight Board (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. The Partnership has determined that it is not required to have, nor we were engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. 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, 2007, and the results of its operations, the changes in partners' equity (deficit) and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ Reznick Group, P.C.

Bethesda, Maryland

April 10, 2008

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[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 October 21, 2008 and December 31, 2007, and the related statements of operations, changes in partners' capital and cash flows for the period from January 1, 2008 to October 21, 2008 and the year ended December 31, 2007. 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.

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 October 21, 2008 and December 31, 2007 and the results of its operations, changes in partners’ capital and its cash flows for the period from January 1, 2008 to October 21, 2008 and the year ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America.

/s/ Mack, Roberts & Co., L.L.C.

Portland, Oregon

February 2, 2009

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

INDEPENDENT AUDITOR'S REPORT

To the Partners

655 NORTH STREET LIMITED PARTNERSHIP

New Orleans, Louisiana

We have audited the accompanying balance sheets of 655 NORTH STREET LIMITED PARTNERSHIP HUD Project No. 064-44801, as of December 31, 2008 and 2007, 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.

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. 064-44801, as of December 31, 2008 and 2007 and the results of its operations, changes in partners' equity, and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

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 March 30, 2009, on our consideration of 655 NORTH STREET LIMITED PARTNERSHIP's internal control, and reports dated March 30, 2009, on its compliance with specific requirements applicable to major HUD programs and specific requirements applicable to Fair Housing and Non-Discrimination. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.

/s/ Pailet, Meunier & LeBlanc, L.L.P.

Metairie, Louisiana

March 30, 2009

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[Letterhead of Reznick Group, P.C.]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners

Landreth Venture

We have audited the accompanying balance sheet of Landreth Venture as of April 1, 2008 and the related statements of operations, changes in partners' equity (deficit) and cash flows for the period January 1, 2008 through April 1, 2008 (date of investor transfer). 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 the standards of the Public Company Accounting Oversight Board (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. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Landreth Venture, as of April 1, 2008, and the results of its operations, the changes in partners' equity (deficit) and cash flows for the period January 1, 2008 through April 1, 2008 (date of investor transfer), in conformity with accounting principles generally accepted in the United States of America.

/s/ Reznick Group, P.C.

Baltimore, Maryland

April 2, 2009

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[Letterhead of Reznick Group, P.C.]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners

Landreth Venture

We have audited the accompanying balance sheets of Landreth Venture as of December 31, 2007 and 2006 and the related statements of profit and loss, changes in 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 audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States) and the standards applicable to financial audits contained in 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. The Partnership has determined that it is not required to have, nor we were engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Landreth Venture, as of December 31, 2007 and 2006, and the results of its operations, the changes in partners' equity (deficit) and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated March 25, 2008, on our consideration of Landreth Venture’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the result of our audit.

Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The 2007 supplemental information on pages 27 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.

/s/ Reznick Group, P.C.

Baltimore, Maryland

March 25, 2008

Lead Auditor: Michael A. Cumming, CPA

Email id: mike.cumming@reznickgroup.com

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[Letterhead of Reznick Group, P.C.]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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, 2007 and 2006, and the related statements of profit and loss, 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 audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States) and the standards applicable to financial audits contained in 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. The Partnership has determined that it is not required to have, nor we were engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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, 2007 and 2006, and the results of its operations, the changes in partners' equity (deficit) and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated February 29, 2008, on our consideration of Bethel Villa Associates, L.P.’s internal control over financial reporting. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting. In accordance with Government Auditing Standards, we have also issued an opinion February 29, 2008 on Bethel Villa Associates, L.P.’s compliance with certain provisions of laws, regulations, contracts, and grant agreements, and other matters that could have a direct and material effect on a major HUD-assisted program. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audits.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The 2007 supplemental information on pages 29 through 48 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the partnership. Such information, except 2007 budget included in comparison of budget to actual marked “Unaudited”, on which we express no opinion, 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/ Reznick Group, P.C.

Bethesda, Maryland Taxpayer Identification Number: 52-1088612

February 29, 2008

Audit Principal: Nelson D. Gomez

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

INDEPENDENT AUDITORS' REPORT

To the Partners of

Susquehanna Partners

(a Limited Partnership)

Philadelphia, Pennsylvania

We have audited the accompanying balance sheet of Susquehanna Partners (a Limited Partnership) as of May 6, 2008 and the related statement of income, change in partners' equity and cash flows for the period then ended. These financial statements are the responsibility of the Partnership's management 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 the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by the Partnership’s management 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 May 6, 2008, and the results of its operations and cash flows for the period then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ J.H. Williams & Co., LLP

Kingston, Pennsylvania

May 9, 2009

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[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, 2007 and 2006 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 and contracted management agent. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by the Partnership’s management 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, 2007 and 2006, and the results of its operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ J.H. Williams & Co., LLP

Kingston, Pennsylvania

May 9, 2008

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[Letterhead of Ercolini & Company LLP]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of

Boston Bay Limited Partnership

Boston, Massachusetts

We have audited the accompanying balance sheet of Boston Bay Limited Partnership as of December 31, 2008 and the related statement of operations, partners' deficiency, and cash flows for the year ended December 31, 2008. 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 the standards of the Public Company Accounting Oversight Board (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. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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.

The accompanying financial statements have been prepared assuming that the Partnership will continue as going concern. As discussed in Note 14, the Partnership is incurring liquidity problems which raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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, 2008 and the results of its operations and its cash flows for the year ended December 31, 2008 in conformity with accounting principles generally accepted in the United States of America.

/s/ Ercolini & Company LLP

Boston, Massachusetts

January 22, 2009

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[Letterhead of Ercolini & Company LLP]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of

Boston Bay Limited Partnership

Boston, Massachusetts

We have audited the accompanying balance sheet of Boston Bay Limited Partnership as of December 31, 2007 and the related statement of operations, partners' deficiency, and cash flows for the year ended December 31, 2007. 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 the standards of the Public Company Accounting Oversight Board (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. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Boston Bay Limited Partnership as of December 31, 2007 and the result of its operations and its cash flows for the year ended December 31, 2007 in conformity with accounting principles generally accepted in the United States of America.

/s/ Ercolini & Company LLP

Boston, Massachusetts

February 18, 2008

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[Letterhead of Ercolini & Company LLP]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of

Morrant Bay Limited Partnership

Boston, Massachusetts

We have audited the accompanying balance sheet of Morrant Bay Limited Partnership as of December 31, 2008 and the related statement of operations, partners' deficiency, and cash flow for the year ended December 31, 2008. 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 the standards of the Public Company Accounting Oversight Board (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. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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, 2008, and the results of its operations and its cash flows for the year ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America.

/s/ Ercolini & Company LLP

Boston, Massachusetts

January 23, 2009

- 26 -

[Letterhead of Ercolini & Company LLP]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of

Morrant Bay Limited Partnership

Boston, Massachusetts

We have audited the accompanying balance sheet of Morrant Bay Limited Partnership as of December 31, 2007 and the related statement of operations, partners' deficiency, and cash flow for the year ended December 31, 2007. 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 the standards of the Public Company Accounting Oversight Board (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. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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.

The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. As discussed in Note 14, the Partnership is incurring liquidity problems which raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.

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, 2007, and the results of its operations and its cash flows for the year ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America.

/s/ Ercolini & Company LLP

Boston, Massachusetts

February 18, 2008

- 27 -

[Letterhead of Ercolini & Company LLP]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of

Hope Bay Limited Partnership

Boston, Massachusetts

We have audited the accompanying balance sheet of Hope Bay Limited Partnership as of December 31, 2008 and the related statement of operations, partners' deficiency, and cash flow for the year ended December 31, 2008. 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 the standards of the Public Company Accounting Oversight Board (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. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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, 2008, and the results of its operations and its cash flows for the year ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America.

/s/ Ercolini & Company LLP

Boston, Massachusetts

January 26, 2009

- 28 -

[Letterhead of Ercolini & Company LLP]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of

Hope Bay Limited Partnership

Boston, Massachusetts

We have audited the accompanying balance sheet of Hope Bay Limited Partnership as of December 31, 2007 and the related statement of operations, partners' deficiency, and cash flow for the year ended December 31, 2007. 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 the standards of the Public Company Accounting Oversight Board (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. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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, 2007, and the results of its operations and its cash flows for the year ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America.

/s/ Ercolini & Company LLP

Boston, Massachusetts

February 18, 2008

- 29 -

[Letterhead of JOSE E. ROSARIO & CO., CPA, P.S.C.]

INDEPENDENT AUDITORS’ REPORT

To the Partners of

Lares Apartments Limited Partnership

San Juan, Puerto Rico

We have audited the accompanying balance sheet of Lares Apartments Limited Partnership, Rural Development Project No. 63-034-660467896, as of August 15, 2008 and the related statement of operations, changes in partners’ 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 standards of the Public Company Accounting Oversight Board (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. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. 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 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 Lares Apartments Limited Partnership as of August 15, 2008 and the results of its operations, changes in partners' deficit, and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Jose E. Rosario & Co, CPA, P.S.C.

Jose E. Rosario & Co., CPA, P.S.C.

License No. 176

Expires December 1, 2009

December 4, 2008

San Juan, Puerto Rico

Stamp No. 2400423 of the Puerto Rico College of CPA was affixed to the original.

- 30 -

[Letterhead of JOSE E. ROSARIO & CO., CPA, P.S.C.]

INDEPENDENT AUDITORS’ REPORT

To the Partners of

Lares Apartments Limited Partnership

San Juan, Puerto Rico

We have audited the accompanying balance sheets of Lares Apartments Limited Partnership, Rural Development Project No. 63-034-660467896, as of December 31, 2007 and 2006, and the related statements of operations, changes in partners’ 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 audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (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. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. 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 Lares Apartments Limited Partnership as of December 31, 2007 and 2006 and the results of its operations, changes in partners' deficit, and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Jose E. Rosario & Co, CPA, P.S.C.

Jose E. Rosario & Co., CPA, P.S.C.

License No. 176

Expires December 1, 2009

February 26, 2008

San Juan, Puerto Rico

Stamp No. 2298021 of the Puerto Rico College of CPA was affixed to the original.

- 31 -

[Letterhead of JOSE E. ROSARIO & CO., CPA, P.S.C.]

INDEPENDENT AUDITOR’S REPORT

To the Partners

Lajas Apartments Limited Partnership

San Juan, Puerto Rico

We have audited the accompanying balance sheet of Lajas Apartments Limited Partnership, Rural Development Project No. 63-034-660467896, as of August 15, 2008 and the related statement of operations, changes in partners’ 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 standards of the Public Company Accounting Oversight Board (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. The Partnership has determined that it is not required to have, nor we were engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. 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 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 Lajas Apartments Limited Partnership as of August 15, 2008 and the results of its operations, changes in partners' deficit, and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Jose E. Rosario & Co, CPA, P.S.C.

Jose E. Rosario & Co., CPA, P.S.C.

License No. 176

Expires December 1, 2009

December 4, 2008

San Juan, Puerto Rico

Stamp No. 2400424 of the Puerto Rico College of CPA was affixed to the original.

- 32 -

[Letterhead of JOSE E. ROSARIO & CO., CPA, P.S.C.]

INDEPENDENT AUDITO'’S REPORT

To the Partners

Lajas Apartments Limited Partnership

San Juan, Puerto Rico

We have audited the accompanying balance sheets of Lajas Apartments Limited Partnership, Rural Development Project No. 63-017-0660467895, as of December 31, 2007 and 2006, and the related statements of operations, changes in partners’ 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 audits.

In our 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, 2007 and 2006 and the results of its operations, changes in partners' deficit and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Jose E. Rosario & Co, CPA, P.S.C.

Jose E. Rosario & Co., CPA, P.S.C.

License No. 176

Expires December 1, 2009

February 26, 2008

San Juan, Puerto Rico

Stamp No. 2306143 of the Puerto Rico College of CPA was affixed to the original.

- 33 -

[Letterhead of Kim & Lee]

To the Partners

Arlington - Rodeo Properties

(California Limited Partnership)

We have audited the accompanying balance sheet of Arlington - Rodeo Properties (A California Limited Partnership) as of December 31, 2008 and 2007, 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 management. Our responsibility is to express an opinion on these financial statements based on our audit.

We have conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (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. The partnership has determined that it is not required to have, nor we were engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. 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 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 Arlington - Rodeo Properties as of December 31, 2008 and 2007 and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

/s/ Kim & Lee

Los Angeles, California

February 28, 2009

- 34 -

[Letterhead of Reznick Group, P.C.]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners

Chester Renaissance Associates

We have audited the accompanying balance sheets of Chester Renaissance Associates as of December 31, 2008 and 2007, and the related statements of profit and loss, changes in 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 audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States) and the standards applicable to financial audits contained in 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. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Chester Renaissance Associates as of December 31, 2008, and 2007, and the results of its operations, the changes in partners' equity (deficit) and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated March 20, 2009, on our consideration of Chester Renaissance Associates’ internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The 2008 supplemental information on pages 26 through 29 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.

/s/ Reznick Group, P.C.

Baltimore, Maryland

March 20, 2009

Lead Auditor: Michael A. Cumming, CPA

Email Address: mike.cumming@reznickgroup.com

- 35 -

[Letterhead of Rosen, Seymour, Shapss, Martin & Company, LLP]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners

P.S. 157 Associates, L.P.:

We have audited the accompanying balance sheet of P.S. 157 Associates, L.P. (a limited partnership), as of March 31, 2007, and the related statements of operations, partners' capital, and cash flows for the three months 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 the standards of the Public Company Accounting Oversight Board (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. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. 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 P.S. 157 Associates, L.P. (a limited partnership) as of March 31, 2007, and the results of its operations and its cash flows for the three months then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Rosen, Seymour, Shapss, Martin & Company, LLP

CERTIFIED PUBLIC ACCOUNTANTS

New York, New York

May 8, 2007

- 36 -

[Letterhead of Reznick Group, P.C.]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of

Cloisters Limited Partnership II

We have audited the accompanying balance sheet of Cloisters Limited Partnership II as of December 31, 2008, and the related statements of operations, changes in 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 the standards of the Public Company Accounting Oversight Board (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. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Cloisters Limited Partnership II as of December 31, 2008, and the results of its operations, the changes in partners' equity (deficit) and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ Reznick Group

Baltimore, Maryland

April 2, 2009

- 37 -

[Letterhead of Reznick Group, P.C.]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of

Cloisters Limited Partnership II

We have audited the accompanying balance sheet of Cloisters Limited Partnership II as of December 31, 2007, and the related statements of operations, changes in 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 the standards of the Public Company Accounting Oversight Board (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. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Cloisters Limited Partnership II as of December 31, 2007, and the results of its operations, the changes in partners' equity (deficit) and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

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 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 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/ Reznick Group

Baltimore, Maryland

March 25, 2008

- 38 -

[Letterhead of Bagell, Josephs, Levine & Company, L.L.C.]

INDEPENDENT AUDITORS’ REPORT

To the Partners of Milford Crossing Associates, L.P.

Wilmington, DE

We have audited the accompanying balance sheets of Milford Crossing Associates, L.P. as of December 31, 2008 and 2007 and the related statements of operations, partners' deficiency, 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.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Milford Crossing Place Associates, L.P. as of December 31, 2008 and 2007, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental information on pages 14 through 22 is presented for purposes 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 basic financial statements taken as a whole.

/s/ Bagell, Josephs, Levine & Company, L.L.C.

BAGELL, JOSEPHS, LEVINE & COMPANY, L.L.C.

Certified Public Accountants

Marlton, New Jersey

January 21, 2009

- 39 -

[Letterhead of Citrin Cooperman & Company, LLP]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners

BX-7F ASSOCIATES, L.P.

We have audited the accompanying balance sheets of BX-7F Associates, L.P. (a limited partnership) as of December 31, 2007 and 2006, 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 the standards of the Public Company Accounting Oversight Board (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. We were not engaged to perform an audit of the Partnership’s internal control over financial reporting. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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, 2007 and 2006, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ Citrin Cooperman & Company, L.L.P.

CERTIFIED PUBLIC ACCOUNTANTS

White Plains, New York

February 29, 2008

- 40 -

[Letterhead of Amílcar Torres Rivera, CPA]

INDEPENDENT AUDITORS' REPORT

To the Partners of

Los Angeles Limited Partnership

I have audited the accompanying balance sheets of LOS ANGELES LIMITED PARTNERSHIP as of December 31, 2008 and 2007, 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. My responsibility is to express an opinion on these financial statements based on my audits.

I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor I was engaged to perform, an audit of its internal control over financial reporting. My audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, I express no such opinion. 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 LOS ANGELES LIMITED PARTNERSHIP as of December 31, 2008 and 2007, and the results of its operations, changes in partners’ equity and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ Amílcar Torres Rivera, CPA

License 1876

Expires December 1, 2010

San Juan, Puerto Rico

February 10, 2009

Stamp #2335342 of the

Puerto Rico Society of

Certified Public Accountants

was affixed to the original.

- 41 -

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

INDEPENDENT AUDITOR'S REPORT

The Partners

Christine Apartments, L.P.:

We have audited the accompanying balance sheet of Christine Apartments, L.P. as of August 31, 2008 and the related statements of operations, partners' equity and cash flows for the eight months ended August 31, 2008. 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 the standards of the Public Company Accounting Oversight Board (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. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. 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 August 31, 2008 and the results of its operations, changes in partners' equity and cash flows for the eight months ended August 31, 2008, in conformity with accounting principles generally accepted in the United States of America.

As discussed in note 12, the Partnership ceased operations on August 31, 2008 with the purchase by the general partner of the partnership interest of the limited partners.

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

/s/ Toski, Schaefer & Co., P.C.

Williamsville, New York

February 13, 2009

- 42 -

[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, 2007 and 2006 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 the standards of the Public Company Accounting Oversight Board (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. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. 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, 2007 and 2006 and the results of its operations, changes in partners' equity and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental 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.

/s/ Toski, Schaefer & Co., P.C.

Williamsville, New York

February 8, 2008

- 43 -

[Letterhead of Reznick Group, P.C.]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners

Plainsboro Housing Partners, L.P.

We have audited the accompanying balance sheet of Plainsboro Housing Partners, L.P. as of December 31, 2008, and the related statements of revenue and expenses, changes in 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 the standards of the Public Company Accounting Oversight Board (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. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Plainsboro Housing Partners, L.P. as of December 31, 2008, and the results of its operations, the changes in partners' equity and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ Reznick Group, P.C.

Baltimore, Maryland

March 19, 2009

- 44 -

[Letterhead of Reznick Group, P.C.]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners

Plainsboro Housing Partners Limited Partnership

We have audited the accompanying balance sheet of Plainsboro Housing Partners Limited Partnership as of December 31, 2007, and the related statements of revenue and expenses, changes in 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 the standards of the Public Company Accounting Oversight Board (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. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Plainsboro Housing Partners Limited Partnership as of December 31, 2007, and the results of its operations, the changes in partners' equity and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ Reznick Group, P.C.

Baltimore, Maryland

March 6, 2008

- 45 -

[Letterhead of Koch Group & Company, LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners

Rolling Green Associates, L.P. (A Limited Partnership)

We have audited the accompanying balance sheets of Rolling Green Associates, L.P. (A Limited Partnership) as of December 31, 2008 and 2007, and the related statements of operations, changes in partners' equity (deficiency), 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 standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor we were engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership’s internal control over financial reporting. Accordingly, we express no such opinion. 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, 2008 and 2007, and the results of its operations, changes in partners' equity (deficiency) and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information on pages 12 to 18 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 financial statements taken as a whole.

/s/ Koch Group & Company, LLP

New York, New York

February 12, 2009

- 46 -

INDEPENDENCE TAX CREDIT PLUS L.P.

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

ASSETS

	March 31,
	2009			2008

Operating Assets
Property and equipment, at cost, less accumulated depreciation (Notes 2, 4, 7 and 10)	$	22,693,155		$	78,650,906
Cash and cash equivalents (Notes 2, 3 and 13)		5,253,902			4,056,150
Cash held in escrow (Notes 3 and 5)		2,005,856			7,140,700
Deferred costs, less accumulated amortization (Notes 2 and 6)		199,544			656,411
Other assets		792,384			1,355,639
Total operating assets		30,944,841			91,859,806
Assets from discontinued operations (Note 14)
Property and equipment held for sale, net of accumulated depreciation (Note 4)		29,015,203			6,378,404
Net assets held for sale		4,246,142			3,791,881
Total assets from discontinued operations		33,261,345			10,170,285
Total assets	$	64,206,186		$	102,030,091


LIABILITIES AND PARTNERS’ CAPITAL (DEFICIT)


Operating Liabilities
Mortgage notes payable (Notes 3 and 7)	$	20,705,851		$	63,332,026
Accounts payable		1,181,205			3,914,793
Accrued interest payable		10,496,943			11,332,424
Security deposits payable		169,564			555,107
Due to local general partners and affiliates (Note 8)		745,843			12,498,138
Due to general partners and affiliates (Note 8)		9,756,202			13,688,107
Total operating liabilities		43,055,608			105,320,595
Liabilities from discontinued operations (Note 14)
Mortgage notes payable of assets held for sale (Note 7)		19,248,504			7,478,590
Net liabilities held for sale (including minority interest)		14,934,389			730,900
Total liabilities from discontinued operations		34,182,893			8,209,490
Total liabilities		77,238,501			113,530,085
Minority interests (Note 2)		4,312,640			4,761,586
Commitments and contingencies (Notes 7, 8 and 13)
Partners’ capital (deficit)
Limited partners (76,786 BACs issued and outstanding)		(20,269,539	)		(15,424,134	)
General partners		2,924,584			(837,446	)
Total partners’ capital (deficit)		(17,344,955	)		(16,261,580	)
Total liabilities and partners’ capital (deficit)	$	64,206,186		$	102,030,091



See accompanying notes to consolidated financial statements.

- 47 -

INDEPENDENCE TAX CREDIT PLUS L.P.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Years Ended March 31,
	2009			2008*

Operations:
Revenues
Rental income	$	6,902,109		$	6,719,066
Other (Notes 1 and 13)		147,552			154,756
Total revenues		7,049,661			6,873,822
Expenses
General and administrative		1,482,992			1,363,226
General and administrative-related parties (Note 8)		1,412,076			1,471,240
Repairs and maintenance		2,168,562			2,381,535
Operating		1,358,530			1,292,087
Taxes		498,893			516,768
Insurance		450,325			453,335
Interest		1,459,593			1,450,343
Depreciation and amortization		1,628,015			1,613,563
Loss on impairment of property		5,186,710			0
Total expenses from operations		15,645,696			10,542,097
Loss from operations before minority interest		(8,596,035	)		(3,668,275	)
Minority interest in loss of subsidiaries from operations		608,772			32,756
Loss from operations		(7,987,263	)		(3,635,519	)
Discontinued Operations:
Income (loss) from discontinued operations (including gain on sale of properties and minority interest) (Note 14)		3,092,914			(6,832,351	)
Net loss	$	(4,894,349	)		(10,467,870	)
Loss from operations – limited partners	$	(7,907,390	)	$	(3,599,164	)
Income (loss) from discontinued operations (including gain on sale of properties and minority interest) – limited partners		3,061,985			(6,764,027	)
Net loss – limited partners	$	(4,845,405	)	$	(10,363,191	)
Number of BACs outstanding		76,786			76,786
Loss from operations per BAC	$	(102.98	)	$	(46.87	)
Income (loss) from discontinued operations (including gain on sale of properties and minority interest) – per BAC		39.88			(88.09	)
Net loss per BAC	$	(63.10	)	$	(134.96	)


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

- 48 -

INDEPENDENCE TAX CREDIT PLUS L.P.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL (DEFICIT)

	Total			Limited Partners			General Partner

Partners’ capital (deficit) – April 1, 2006	$	467,915		$	1,146,110		$	(678,195	)
Net loss		(6,269,750	)		(6,207,053	)		(62,697	)
Partner’s capital (deficit) – March 31, 2007		(5,801,835	)		(5,060,943	)		(740,892	)
Net loss		(10,467,870	)		(10,363,191	)		(104,679	)
Contribution – write off of related party debt		8,125			0			8,125
Partner’s capital (deficit) – March 31, 2008		(16,261,580	)		(15,424,134	)		(837,446	)
Net loss		(4,894,349	)		(4,845,405	)		(48,944	)
Contribution – write off of related party debt		59,450			0			59,450
Contribution – write off of partnership management fees related to sold properties		3,751,524			0			3,751,524
Partner’s capital (deficit) – March 31, 2009	$	(17,344,955	)	$	(20,269,539	)	$	2,924,584
See accompanying notes to consolidated financial statements.

- 49 -

INDEPENDENCE TAX CREDIT PLUS L.P.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

	Years Ended March 31,
	2009			2008

Cash flows from operating activities:
Net loss	$	(4,894,349	)	$	(10,467,870	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Gain on sale		(7,494,728	)		(2,508,563	)
Depreciation and amortization		3,180,992			5,420,827
Loss on impairment of fixed assets		9,706,033			6,360,000
Minority interest in loss of subsidiaries		(920,944	)		(814,334	)
(Increase) decrease in assets:
Cash held in escrow		2,688,444			1,722,698
Other assets		(65,510	)		1,978,039
Increase (decrease) in liabilities:
Accounts payable		98,672			(1,856,642	)
Accrued interest payable		407,777			999,244
Security deposit payable		(22,241	)		72,456
Due to local general partners and affiliates		(819,536	)		1,172,756
Due to general partner and affiliates		(336,084	)		(2,482,135	)
Total adjustments		6,422,875			10,064,346
Net cash provided by (used in) operating activities		1,528,526			(403,524	)

Cash flows from investing activities:
Proceeds from sales		9,605,431			7,164,093
Cost related to sales		(53,194	)		(155,803	)
Acquisition of property and equipment		(1,414,288	)		(1,211,078	)
(Increase) decrease in cash held in escrow		(2,942,866	)		482,008
Increase in due to local general partners and affiliates		1,504,855			862,115
Net cash provided by investing activities		6,699,938			7,141,335

Cash flows from financing activities:
Increase in deferred costs		0			(25,736	)
Repayments of mortgage notes		(7,497,888	)		(4,292,442	)
Increase (decrease) in due to local general partners and affiliates		411,137			(52,377	)
Decrease in capitalization of consolidated subsidiaries attributable to minority interest		(263,533	)		(325,571	)
Net cash used in financing activities		(7,350,284	)		(4,696,126	)

Net increase in cash and cash equivalents		878,180			2,041,685

Cash and cash equivalents at beginning of year		4,413,853			2,372,168

Cash and cash equivalents at end of year*	$	5,292,033		$	4,413,853

Supplemental disclosure of cash flows information:
Cash paid during the year for interest	$	2,753,554		$	3,608,868

* Cash and cash equivalents, end of year, for the years ended March 31, 2009 and 2008, includes cash and cash equivalents from discontinued operations of $38,131 and $357,703, respectively.

See accompanying notes to consolidated financial statements.

- 50 -

INDEPENDENCE TAX CREDIT PLUS L.P.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

	Years Ended March 31,
	2009			2008

Summarized below are the components of the gain on sale of investments and properties:
Proceeds from sale of investments and properties – net	$	(9,552,237	)	$	(7,008,290	)
Decrease in property and equipment, net of accumulated depreciation		21,922,479			15,174,776
Decrease in cash held in escrow		4,846,860			578,513
Decrease in prepaid expenses and other assets		443,570			242,599
Decrease in deferred costs		336,369			233,874
Decrease in mortgage notes payable		(23,358,373	)		(9,848,904	)
Decrease in accounts payable and other liabilities		(438,576	)		(733,250	)
Decrease in accrued interest payable		(1,079,733	)		(10,999	)
Decrease in security deposits payable		(350,230	)		(188,068	)
Increase (decrease) in due to general partners and affiliates		599,991			(16,875	)
Decrease in due to local general partners and affiliate		(1,375,975	)		(1,126,467	)
Increase in capitalization of consolidated subsidiaries attributable to minority interest		451,677			186,403
Contribution from write-off of related party debt		59,450			8,125
Supplemental disclosures of non-cash investing and financing activities:
Contribution from write-off of partnership management fees related to sold properties	$	3,751,524		$	0

- 51 -

INDEPENDENCE TAX CREDIT PLUS L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

NOTE 1 – General

Independence Tax Credit Plus L.P. (the “Partnership”), a Delaware limited 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 general partner of the General Partner is Related Independence Associates Inc., a Delaware corporation (“RIAI”). The ultimate parent of the General Partner is Centerline Holding Company (“Centerline”).

The Partnership’s business is to invest as a limited partner in other partnerships (“Local Partnerships,” “subsidiaries” or “subsidiary partnerships”) that own leveraged apartment complexes (“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 may also be eligible for the historic rehabilitation tax credit. Qualified Beneficial Assignment Certificates (“BACs”) holders are entitled 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.

The Partnership is currently in the process of disposing of its investments. As of March 31, 2009, the Partnership has disposed of sixteen of the twenty-eight original Properties. During the year ended March 31, 2009, one Local Partnership sold its property and the related assets and liabilities and the Partnership sold its limited partnership interests in nine Local Partnerships. Through March 31, 2009, three Local Partnerships have sold their property and the related assets and liabilities, the Partnership has sold its limited partnership interests in twelve Local Partnerships and one Local Partnership has transferred the deed to the property and related assets and liabilities of such Local Partnership (see Note 10). In addition, as of March 31, 2009, three Local Partnerships entered into agreements to sell their property and the related assets and liabilities (see Note 11).

The Partnership was authorized to issue a total of 200,000 BACs which were 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, 2009, 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 accounting principles generally accepted in the United States of America (“GAAP”).

b) Basis of Consolidation

The consolidated financial statements include the accounts of the Partnership and twenty-three subsidiary partnerships in which the Partnership is a limited partner (including the subsidiary partnership in which the Partnership sold its limited partnership interest). 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.

Increases (decreases) in the capitalization of consolidated subsidiaries attributable to minority interest arise from cash contributions and cash distributions, respectively, 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 $27,000 and $80,000 for the years ended March 31, 2009 and 2008, respectively (the 2008 and 2007 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.

- 52 -

INDEPENDENCE TAX CREDIT PLUS L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

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. The Partnership complies with Statement of Financial Accounting Standards No. 144 (“SFAS No. 144”) “Accounting for the Impairment or Disposal of Long-Lived Assets”. 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 is 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. Property and equipment that are held for sale are included in discontinued operations. There are three assets classified as property and equipment-held for sale as of March 31, 2009 (see Note 11).

e) Income Taxes

f) Revenue Recognition

Rental income is earned primarily under standard residential operating leases and is typically due the first day of each month, but can vary by property due to the terms of the tenant leases. Rental income is recognized when earned and charged to tenants’ accounts receivable if not received by the due date. Rental payments received in advance of the due date are deferred until earned. Rental subsidies are recognized as rental income during the month in which it is earned.

Other revenues from operations include the following amounts at both the Partnership and Local Partnership level:

	Years Ended March 31,
	2009		2008*

Interest	$	82,988	$	85,110
Other		64,564		69,646

Total other revenue	$	147,552	$	154,756

Other revenues from discontinued operations from operations include the following amounts at both the Partnership and Local Partnership level:

	Years Ended March 31,
	2009		2008*

Interest	$	86,830	$	191,960
Other		850,807		629,244
Total other revenue	$	937,637	$	821,204
* Reclassified for comparative purposes.

- 53 -

INDEPENDENCE TAX CREDIT PLUS L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

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 GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

j) Recent Accounting Pronouncements

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, Investments Available-for-Sale and Cash Held in Escrow

The carrying amount approximates fair value.

Mortgage Notes Payable

During the first quarter of 2008, we adopted the provisions required by SFAS No. 157 relating to financial assets and liabilities. SFAS No. 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. SFAS No. 157 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances.

As permitted, we chose not to elect the fair value option as prescribed by FASB SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” – Including an Amendment of FASB Statement No. 115, for our financial assets and liabilities that had not been previously carried at fair value. Therefore, we did not elect to fair value any additional items under SFAS No. 159.

The estimated fair value of financial instruments has been determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange. The following are financial instruments for which the Partnership’s estimate of fair value differs from the carrying amounts:

	At March 31, 2009				At March 31, 2008
	Carrying Amount		Fair Estimated Value		Carrying Amount		Fair Estimated Value
LIABILITIES:
Mortgage notes	$	39,954,355	$	39,954,355	$	70,810,616	$	69,979,454

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INDEPENDENCE TAX CREDIT PLUS L.P.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

NOTE 4 – Property and Equipment

The components of property and equipment from operations are as follows:

	March 31,						Estimated Useful Lives (Years)
	March 31,
	2009			2008

Land	$	2,470,944		$	4,717,143		-
Building and improvements		40,984,897			132,103,886		15-40
Furniture and fixtures		1,552,462			3,356,074		3-10
		45,008,303			140,177,103

Less: Accumulated depreciation		(22,315,148	)		(61,526,197	)

	$	22,693,155		$	78,650,906

The initial cost to the Partnership, as shown in Schedule III in Item 15 includes approximately $4,500,000 of acquisition fees paid to the General Partner and $1,057,104 of acquisition expenses.

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

Depreciation expense for the years ended March 31, 2009 and 2008 amounted to $1,615,050 and $1,600,597, respectively.

During the years ended March 31, 2009 and 2008, there were write-offs of accumulated depreciation in the amounts of $24,461,998 and $10,966,585, which were related to the discontinued assets.

The components of property and equipment from discontinued operations are as follows:

	March 31,						Estimated Useful Lives (Years)
	March 31,
	2009			2008

Land	$	1,097,362		$	777,006		-
Building and improvements		48,908,038			14,344,435		15-40
Furniture and fixtures		825,306			499,959		3-10
		50,830,706			15,621,400

Less: Accumulated depreciation		(21,815,503	)		(9,242,996	)

	$	29,015,203		$	6,378,404

Depreciation expense for the discontinued property and equipment for the years ended March 31, 2009 and 2008 amounted to $1,491,675 and $3,682,969, respectively.

Impairment of property

During the year ended March 31, 2009, in accordance with SFAS No. 144, Landreth Venture (“Landreth”) deemed the building impaired and wrote it down to its fair value of approximately $592,000, which resulted in a loss on impairment of approximately $2,999,000 (consisting of approximately $5,184,000 of fixed assets and approximately $2,185,000 of accumulated depreciation). Fair value was obtained from an assessment made by the management after indications that the remaining cost of its rental property will not be recovered through normal operations evidenced by a history of net operating losses over the past few years.

During the years ended March 31, 2009 and 2008, in accordance with SFAS No. 144, the Partnership deemed the building of Bethel Villa Associates (“Bethel Villa”) impaired and wrote it down to its fair value, which resulted in a loss on impairment of $720,000 and $5,000,000, respectively. Fair value was obtained from the contracted sales price (see Note 10). Bethel Villa entered into a contract for sale during the year ended March 31, 2008 and was sold during the year ended March 31, 2009.

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

During the year ended March 31, 2009, in accordance with SFAS No. 144, the Partnership deemed the building of Plainsboro Housing Partners L.P. (“Plainsboro”) impaired and wrote it down to its fair value, which resulted in a loss on impairment of $800,000. Fair value was obtained from the contracted sales price (see Note 10).

During the year ended March 31, 2009, in accordance with SFAS No. 144, Cloisters L. P. II (“Cloisters”) deemed the building impaired and wrote it down to its fair value of approximately $674,000, which resulted in a loss on impairment of approximately $5,187,000 (consisting of approximately $8,846,000 of fixed assets and approximately $3,659,000 of accumulated depreciation). Fair value was obtained from an assessment made by the management after indications that the remaining cost of its rental property will not be recovered through normal operations evidenced by a history of net operating losses over the past few years.

During the year ended March 31, 2008, in accordance with SFAS No. 144, the Partnership deemed the building of Landreth Venture (“Landreth”) impaired and wrote it down to its fair value, which resulted in a loss on impairment of $730,000. Fair value was obtained from the contracted sales price (see Note 10).

During the year ended March 31, 2008, in accordance with SFAS No. 144, the Partnership deemed the building of Susquehanna Partners (“Susquehanna”) impaired and wrote it down to its fair value, which resulted in a loss on impairment of $630,000. Fair value was obtained from the contracted sales price (see Note 10).

NOTE 5 – Cash Held in Escrow

Cash held in escrow consists of the following:

	March 31,
	2009		2008

Real estate taxes, insurance and other	$	434,600	$	2,930,927
Reserve for replacements		1,398,684		3,640,467
Tenant security deposits		172,572		569,306

	$	2,005,856	$	7,140,700

Cash held in escrow included in the discontinued assets consists of the following:

	March 31,
	2009		2008

Real estate taxes, insurance and other	$	2,214,019	$	2,386,962
Reserve for replacements		1,126,310		433,795
Tenant security deposits		230,893		208,059

	$	3,571,222	$	3,028,816

NOTE 6 – Deferred Costs

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

	March 31,						Period
	2009			2008			Period

Financing expenses	$	469,039		$	1,940,437		*
Less: Accumulated amortization		(269,495	)		(1,284,026	)

	$	199,544		$	656,411

Amortization expense from operations for the years ended March 31, 2009 and 2008 amounted to $12,965 and $12,966, respectively. During the years ended March 31, 2009 and 2008, deferred costs of $1,289,092 and $318,332 were written off due to discontinued assets. In addition, during the year ended March 31, 2009 and 2008, $952,723 and $110,194 of accumulated amortization was written off due to discontinued assets.

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

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

	March 31,						Period
	2009			2008			Period

Financing expenses	$	1,106,847		$	924,541		*
Less: Accumulated amortization		(868,985	)		(732,911	)

	$	237,862		$	191,630

* Over the life of the respective mortgages.

Amortization expense from discontinued operations for the years ended March 31, 2009 and 2008 amounted to $61,301 and $124,295, respectively.

NOTE 7 – Mortgage Notes Payable

The mortgage notes from operations are payable in aggregate monthly installments of approximately $109,000, including principal and interest at rates varying from 1% to 8% per annum, through the year 2048. Each subsidiary partnership’s mortgage 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 $4,560,000 and $13,092,000 at December 31, 2008 and 2007, respectively, which bear interest at rates ranging from 7.5% 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.

Annual principal payment requirements on the mortgage notes from operations, as of March 31, 2009, for each of the next five fiscal years and thereafter, are as follows:

Fiscal Year	Amount

2009	$	758,369
2010		805,172
2011		854,665
2012		984,337
2013		374,653
Thereafter		16,928,655

	$	20,705,851

Accrued interest payable as of March 31, 2009 and 2008 was approximately $10,497,000 and $11,332,000, respectively. Interest accrues on all mortgage loans, which include primary and secondary loans. Certain secondary loans have provisions such that interest is accrued but not payable until a future date. The Partnership anticipates the payment of accrued interest on the secondary loans (which make up the majority of the accrued interest payable amount and which have been accumulating since the Partnership’s investment in the respective Local Partnership) will be made from future refinancings or sales proceeds of the respective Local Partnerships.

The mortgage agreements from operations require monthly deposits to replacement reserves of approximately $37,000 and monthly deposits to escrow accounts for real estate taxes, hazard and mortgage insurance and other (Note 5).

The mortgage notes from discontinued operations are payable in aggregate monthly installments of approximately $219,000, including principal and interest at rates varying from 5% to 9% per annum, through the year 2020. Each subsidiary partnership’s mortgage 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

Annual principal payment requirements on the mortgage notes from discontinued operations, as of March 31, 2009, for each of the next five fiscal years and thereafter, are as follows:

Fiscal Year	Amount

2009	$	6,901,650
2010		3,074,354
2011		755,000
2012		795,000
2013		835,000
Thereafter		6,887,500

	$	19,248,504

Accrued interest payable as of March 31, 2009 and 2008 was approximately $680,000 and $517,000, respectively. Interest accrues on all mortgage loans, which include primary and secondary loans. Certain secondary loans have provisions such that interest is accrued but not payable until a future date. The Partnership anticipates the payment of accrued interest on the secondary loans (which make up the majority of the accrued interest payable amount and which have been accumulating since the Partnership’s investment in the respective Local Partnership) will be made from future refinancings or sales proceeds of the respective Local Partnerships.

The mortgage agreements from discontinued operations require monthly deposits to replacement reserves of approximately $25,000 and monthly deposits to escrow accounts for real estate taxes, hazard and mortgage insurance and other (Note 5).

Creative Choice Homes II, Ltd. (“Opa-Locka”)

The first mortgage note dated November 3, 1993 in the original amount of $9,500,000 was payable to the Federal Home Loan Mortgage Corporation in monthly principal and interest installments with interest accrued at the rate of 8.81% per annum. At December 31, 2008, the outstanding balance of this note was $557,300 which was due in full on February 1, 2009. Opa-Locka has applied for an extension, but no refinancing arrangement has been completed as of the date of this report.

The second mortgage note dated February 1, 1994 in the original amount of $3,000,000 was payable to Florida Housing Finance Agency with interest rate of 7.03% per annum, of which 4.03% of interest was deferred and added back to principal. Payments of interest only at 3% were payable from cash flow on every June 30 through the maturity date of the note. At December 31, 2008, the outstanding balance of this note was $4,859,930 including deferred interest of $1,859,930. A balloon payment of principal and all accrued interest was due on March 24, 2009. Opa-Locka has applied for an extension, but no refinancing arrangement has been completed as of the date of this report.

The property is currently being actively marketed for sale and management is seeking a potential buyer (see Note11).

NOTE 8 – Related Party Transactions

An affiliate of the General Partner, Independence SLP L.P., has a 0.1% 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.

As of March 31, 2009 and 2008, the Partnership owes an affiliate of the General Partner approximately $2,441,000 and $2,953,000, respectively, for operating advances. These advances are non-interest bearing and have no set repayment terms. The Partnership has advanced these monies to one Local Partnership to fund its operations.

A) Other Related Party Expenses

The General Partner and its affiliates perform services for the Partnership. The costs incurred from operations for the years ended March 31, 2009 and 2008 were as follows:

	Years Ended March 31,
	2009		2008*

Partnership management fees (i)	$	742,000	$	869,000
Expense reimbursement (ii)		244,875		181,166
Local administrative fee (iv)		8,867		22,500
Total general and administrative - General Partner		995,742		1,072,666
Property management fees incurred to affiliates of the Local General Partners (iii)		416,334		398,574
Total general and administrative - related parties	$	1,412,076	$	1,471,240

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

The General Partner and its affiliates perform services for the Partnership. The cost incurred from discontinued operations for the years ended March 31, 2009 and 2008 were as follows:

	Years Ended March 31,
	2009		2008*

Local administrative fee (iv)	$	28,250	$	32,000
Property management fees incurred to affiliates of the General Partners		0		181,607
Total general and administrative-General Partners		28,250		213,607
Property management fees incurred to affiliates of the Local General Partners (iii)		297,928		661,803
Total general and administrative-related parties	$	326,178	$	875,410
* Reclassified for comparative purposes.

(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 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). During the year ended March 31, 2009, management deemed the unpaid partnership management fees related to sold properties uncollectible and wrote off approximately $3,752,000, resulting in a non-cash General Partner contribution of the same amount. Partnership management fees owed to the General Partner amounting to approximately $6,219,000 and $9,228,000 were accrued and unpaid as of March 31, 2009 and 2008, 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. Expense reimbursements owed to the General Partners and its affiliates amounting to approximately $963,000 and $1,825,000 were accrued and unpaid as of March 31, 2009 and 2008, respectively.

(iii)

Property management fees incurred by the subsidiary partnerships amounted to $1,035,476 and $1,378,224 for the years ended March 31, 2009 and 2008, respectively. Of these fees, $714,262 and $1,060,377 were incurred to affiliates of the general partners of the Local Partnerships (the “Local General Partners”) which includes $297,928 and $661,803 of fees relating to discontinued operations and $0 and $181,607 were incurred to affiliates 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.

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

B) Due to Local General Partners and Affiliates

Due to local general partners and affiliates included in operating liabilities consists of the following:

	March 31,
	2009		2008

Operating advances (i)	$	165,038	$	1,497,761
Development fee payable		163,223		1,385,161
Long-term notes payable (ii)		129,274		1,474,672
Accrued interest on long-term notes payable		9,094		1,314,233
Management and other fees		279,214		738,441
Construction costs		0		6,087,870
	$	745,843	$	12,498,138

(i) Operating advances include the following loan:

Christine Apartments, L.P.	$	0	$	116,100
This loan was non-interest bearing and had no set repayment terms. The Partnership’s limited partnership interest in Christine Apartments was sold on December 31, 2008 (see Note 10).

(ii) Long-term notes payable consist of the following:
655 North Street L.P. In December 2003, 655 North Street was refinanced as part of the mark-to-market program and the owner was required to make an additional investment. This capital recovery payment is payable over ten years with interest accruing at 7.5% per annum.	$	129,274	$	160,988
Creative Choice Homes II, LTD.	$	0	$	979,770
The first note bears interest at 7% payable monthly. Principal on the loan is due and payable in full on December 31, 2009. No payments were made during the current year on this note. Delinquent principal payments as of December 31, 2008 amounted to $479,770, and thus, this note is technically in default. The second note bears interest at 12% payable monthly. Principal on the loan is due and payable in full on December 31, 2009. No payments were made during the current year on this note. Delinquent principal payments as of December 31, 2008 amounted to $500,000, and thus, this note is technically in default.

Plainsboro Housing Partners, L.P.	$	0	$	333,914
This loan accrued interest at a rate of 7.34% per annum on the outstanding principal balance. Repayment of the principal and interest were to be made from net cash flow to the extent available pursuant to the promissory note. All accrued interest and principal were due in a balloon payment in December 2013. The Partnership sold its limited partnership interest in Plainsboro on January 23, 2009 (see Note 10).

Interest expense incurred on such long-term notes payable amounted to approximately $136,000 and $286,000 for the 2008 and 2007 Fiscal Years, respectively.

Due to local general partners and affiliates included in the discontinued liabilities consists of the following:

	March 31,
	2009		2008

Operating deficit advances	$	1,204,533	$	0
Operating advances		245,311		215,093
Development fee payable		1,120,234		9,135
Long-term notes payable (iii)		979,770		0
Accrued interest on long-term notes payable		1,449,870		0
Management and other fees		301,619		(2,059	)
Construction costs		6,393,608		0
	$	11,694,945	$	222,169

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

(iii) Long-term notes payable included in the discontinued liabilities consist of the following:
Creative Choice Homes II, LTD.	$	979,770	$	0
The first note bears interest at 7% payable monthly. Principal on the loan is due and payable in full on December 31, 2009. No payments were made during the current year on this note. Delinquent principal payments as of December 31, 2008 amounted to $479,770, and thus, this note is technically in default. The second note bears interest at 12% payable monthly. Principal on the loan is due and payable in full on December 31, 2009. No payments were made during the current year on this note. Delinquent principal payments as of December 31, 2008 amounted to $500,000, and thus, this note is technically in default.

C) Other

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

NOTE 9 – Taxable Net Loss

Our adoption of FASB Interpretation (“FIN”) No. 48 did not have a material impact on the consolidated financial statements and does not impact our financial position at March 31, 2009.

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

	2008			2007

Financial statement net loss	$	(4,894,349	)	$	(10,467,870	)
Differences between depreciation and amortization expense recorded for financial reporting purposes and the accelerated cost recovery system utilized for income tax purposes		(900,088	)		(756,303	)
Differences resulting from parent company having a different fiscal year for income tax and financial reporting purposes		(75,487	)		27,737
Tax exempt interest income		(75,941	)		(142,516	)
Non-deductible loss on impairment of property		9,706,034			6,360,000
Difference resulting from forgiveness of related-party debt considered a General Partner contribution for financial purposes and income for tax purposes.		3,177,916			0
Cost from hurricane events not deducted for income tax purposes		0			2,309,923
Difference between gain on sale of properties for financial reporting purposes and gain on sale for income tax purposes		(5,888,036	)		1,841,300
Other, including related party accruals not deductible until paid		(1,333,576	)		1,319,955
Taxable net (loss) income as shown on the income tax return for the calendar year ended	$	(283,527	)	$	492,226

NOTE 10 – Sale of Properties

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INDEPENDENCE TAX CREDIT PLUS L.P.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

On April 1, 2008, the Partnership sold its limited partnership interest in Landreth Venture (“Landreth”) to the Local General Partner for a sales price of $17,500. During the years ended March 31, 2009 and 2008, in accordance with SFAS No. 144, the building was deemed impaired and written down to its fair value, resulting in a loss on impairment of approximately $3,000,000 and $730,000, respectively. The sale resulted in a gain of approximately $10,000, resulting from the write-off of the basis in the Local Partnership at the date of the sale of approximately $7,000 and the $17,500 cash received from the sale, which was recorded during the quarter ended June 30, 2008. Adjustments to the gain of approximately $1,000 and $3,009,000 were recorded during the quarter ended September 30, 2008 and March 31, 2009, resulting in an overall gain of approximately $3,020,000.

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INDEPENDENCE TAX CREDIT PLUS L.P.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

NOTE 11 – Assets Held for Sale

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INDEPENDENCE TAX CREDIT PLUS L.P.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

NOTE 12 – Selected Quarterly Financial Data (Unaudited)

The following table summarizes the Partnership’s quarterly results of operations for the years ended March 31, 2009 and 2008.

OPERATIONS	Quarter Ended
OPERATIONS	June 30, 2008*			September 30, 2008*			December 31, 2008*			March 31, 2009

Revenues	$	1,755,934		$	1,756,752		$	1,819,754		$	1,717,221
Operating expenses		(2,699,117	)		(2,584,868	)		(2,410,160	)		(7,951,551	)
Loss before minority interest		(943,183	)		(828,116	)		(590,406	)		(6,234,330	)
Minority interest in loss of subsidiaries from operations		7,036			10,174			10,755			580,807
Loss from operations		(936,147	)		(817,942	)		(579,651	)		(5,653,523	)
(Loss) income from discontinued operations		(1,251,719	)		305,782			740,712			3,298,139
Net (loss) income	$	(2,187,866	)	$	(512,160	)	$	161,061		$	(2,355,384	)
Net loss per weighted average BAC from operations	$	(12.07	)	$	(10.55	)	$	(7.47	)	$	(72.89	)
Net (loss) income per weighted average BAC from discontinued operations		(16.14	)		3.94			9.55			42.53
Net (loss) income per weighted average BAC	$	(28.21	)	$	(6.61	)	$	2.08		$	(30.36	)

OPERATIONS	Quarter Ended
OPERATIONS	June 30, 2007*			September 30, 2007*			December 31, 2007*			March 31, 2008*

Revenues	$	1,769,065		$	1,688,238		$	1,773,638		$	1,642,881
Operating expenses		(2,794,801	)		(2,541,859	)		(2,611,360	)		(2,594,077	)
Loss before minority interest		(1,025,736	)		(853,621	)		(837,722	)		(951,196	)
Minority interest in loss of subsidiaries from operations		5,529			6,451			6,856			13,920
Loss from operations		(1,020,207	)		(847,170	)		(830,866	)		(937,276	)
Income (loss) from discontinued operations		1,085,173			(99,640	)		(306,419	)		(7,511,465	)
Net income (loss)	$	64,966		$	(946,810	)	$	(1,137,285	)	$	(8,448,741	)
Net loss per weighted average BAC from operations	$	(13.15	)	$	(10.93	)	$	(10.71	)	$	(12.08	)
Net income (loss) per weighted average BAC from discontinued operations		13.99			(1.28	)		(3.95	)		(96.85	)
Net income (loss) per weighted average BAC	$	0.84		$	(12.21	)	$	(14.66	)	$	(108.93	)

* Reclassified for comparative purposes.

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

NOTE 13 – Commitments and Contingencies

a) Subsidiary Partnerships – Going Concern

Creative Choice Homes II L.P. (“Opa-Locka”)

The above circumstances have called into question the recoverability of the carrying amounts of the building. On May 9, 2008, Opa-Locka entered into a purchase and sale agreement to sell its property and related assets and liabilities to an unaffiliated third party purchaser, which expired in April 2009. The property is currently being marketed for sale and management is seeking a potential buyer (see Note 11).

Morrant Bay Limited Partnership (“Morrant Bay”)

Boston Bay Limited Partnership (“Boston Bay”)

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INDEPENDENCE TAX CREDIT PLUS L.P.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

b)	Subsidiary Partnerships – Commitments and Contingencies

Cloisters Limited Partnership II (“Cloister”)

c) 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 $250,000. As of March 31, 2009, uninsured cash and cash equivalents approximated $5,864,000.

d) Cash Distributions

Cash distributions from the Local Partnerships to the Partnership are restricted by the provisions of the respective partnership agreements of the Local Partnerships and the U.S. Department of Housing and Urban Development (“HUD”) based on operating results and a percentage of the owner’s equity contribution. Such cash distributions are typically made for surplus cash flow.

e) Tax Credits

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 25% 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.

The Partnership and BACs holders began to recognize Tax Credits with respect to an Apartment Complex when the Credit Period for such Apartment Complex commenced. As of December 31, 2007, all Credit Periods have expired.

NOTE 14 – Discontinued Operations

The following table summarizes the financial position of the Local Partnerships that are classified as discontinued operations because the respective Local Partnerships were classified as assets held for sale. As of March 31, 2009, Homestead II, Rolling Green and Opa-Locka were classified as discontinued operations on the consolidated balance sheets. As of March 31, 2008, Homestead, Harbor Court, Bethel Villa and Lancaster were classified as discontinued operations on the consolidated balance sheets.

Consolidated Balance Sheets:

	March 31,
	2009			2008

Assets
Property and equipment – less accumulated depreciation of $21,815,503 and $9,242,996, respectively	$	29,015,203		$	6,378,404
Cash and cash equivalents		38,131			357,703
Cash held in escrow		3,571,222			3,028,816
Deferred costs, net of accumulated amortization of $868,985 and $732,911, respectively		237,862			191,630
Other assets		398,927			213,732
Total assets	$	33,261,345		$	10,170,285

Liabilities
Mortgage notes payable	$	19,248,504		$	7,478,590
Accounts payable		2,685,081			291,398
Accrued interest payable		680,348			516,823
Security deposit payable		140,490			127,418
Due to local general partners and affiliates		11,694,945			222,169
Due to general partners and affiliates		489,288			45,000
Minority interest		(755,763	)		(471,908	)
Total liabilities	$	34,182,893		$	8,209,490

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009

The following table summarizes the results of operations of the Local Partnerships that are classified as discontinued operations. For the year ended March 31, 2009, Plainsboro, Lancaster, Bateman Hotel, West Diamond, Bethel Villa, Christine Apartments, Lares, Lajas, Landreth and Susquehanna, which were sold during the current year, Homestead, which was sold during the year ended March 31, 2008, and Homestead II, Rolling Green and Opa-Locka, which are classified as assets held for sale, were all classified as discontinued operations in the consolidated financial statements. For the year ended March 31, 2008, P.S. 157, Old Public, Harbor Court, Beaumont, Hampden Hall and Homestead, which were sold during the year, Bethel Villa and Lancaster, which were classified as assets held for sale, and Plainsboro, Bateman Hotel, West Diamond, Christine Apartments, Lares, Lajas, Landreth, Susquehanna, Homestead II, Rolling Green and Opa-Locka, in order to present comparable results to the year ended March 31, 2009, were all classified as discontinued operations in the consolidated financial statements.

Consolidated Statements of Discontinued Operations:

	Years Ended March 31,
	2009		2008*

Revenues
Rental income	$	11,449,962	$	16,279,132
Other (Note 2)		937,637		821,204
Gain on sale of properties		7,494,728		2,508,563
Total revenue		19,882,327		19,608,899
Expenses
General and administrative		2,556,895		3,294,610
General and administrative-related parties (Note 8)		326,178		875,410
Repairs and maintenance		3,108,393		3,628,713
Operating and other		1,201,073		1,724,236
Real estate taxes		1,061,131		1,218,086
Insurance		816,549		1,257,092
Interest		1,959,067		2,747,494
Depreciation and amortization		1,552,976		3,807,264
Costs from hurricane events		0		2,309,923
Loss on impairment of property		4,519,323		6,360,000
Total expenses		17,101,585		27,222,828
Income (loss) before minority interest		2,780,742		(7,613,929	)
Minority interest in loss of subsidiaries from discontinued operations		312,172		781,578
Total income (loss) from discontinued operations (including gain on sale of properties)	$	3,092,914	$	(6,832,351	)
Income (loss) – limited partners from discontinued operations (including gain on sale of properties)	$	3,061,985	$	(6,764,027	)
Number of BACs outstanding		76,786		76,786
Income (loss) discontinued operations (including gain on sale of properties) per BAC	$	39.88	$	(88.09

Filing Compare · INDEPENDENCE TAX CREDIT PLUS PROGRAM