MEMPHIS 150 L.P. 2002

FINANCIAL STATEMENTS

December 31, 2006

with

Report of Independent Auditors

 

 

Report of Independent Auditors

 

To the Partners of

Memphis 150 L.P. 2002:

 

We have audited the accompanying balance sheet of Memphis 150 L.P. 2002 as of December 31, 2006, and the related statements of operations, changes in partners’ capital and cash flows for the year then ended. These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our 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 controls 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 Memphis 150 L.P. 2002 as of December 31, 2006, and the results of its operations and its cash flows for the year then ended in conformity with” accounting principles generally accepted in the United States of America.

 

Alpharetta, Georgia
June 28, 2007

 

 

MEMPHIS 150 L.P. 2002

BALANCE SHEET

December 31, 2006

 

ASSETS
Cash and cash equivalents		$	24,227
Accounts receivable			23,978
Land			228,000
Buildings, net of accumulated depreciation			5,349,751
Intangible assets, net of accumulated amortization			80,524
Total assets		$	5,706,480
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities
Accounts payable		$	141
Security deposits payable			28,855
Accrued expenses			95,730
Due to related parties			832,746
Developer fee payable			386,887
Construction loan payable			2,450,000
Total liabilities			3,794,359
Partners’ capital			1,912,121
Total liabilities and partners’ capital		$	5,706,480

 

See accompanying notes

 

 

MEMPHIS 150 L.P. 2002

STATEMENT OF OPERATIONS

For the year ended December 31, 2006

 

REVENUE
Rental revenue		$	483,703
Other revenue			9,767
Total revenue			493,470
OPERATING EXPENSES
General and administrative			6,927
Utilities			6,416
Tax and insurance			97,660
Property management fee			42,837
Asset management fee			7,000
Repairs and maintenance			123,042
Marketing and advertising			8,336
Legal and other professional fees			25,368
Total operating expenses			317,586
OPERATING INCOME			175,884
OTHER INCOME AND (EXPENSES)
Interest income			2
Interest expense			(250,879	)
Depreciation and amortization			(208,990	)
Net other income and (expenses)			(459,867)
NET LOSS		$	(283,983)

 

See accompanying notes

 

 

MEMPHIS 150 L.P. 2002

STATEMENT OF CHANGES IN PARTNERS’ CAPITAL

For the year ended December 31, 2006

 

		General Partner				Limited Partners				Total Partners’ Capital
BALANCE, JANUARY 1,2006		$	(24	)		$	2,060,734			$	2,060,710
Capital contributions			-				135,394				135,394
Net loss			(28	)			(283,955	)			(283,983	)
BALANCE, DECEMBER 31, 2006		$	(52	)		$	1,912,173			$	1,912,121

 

See accompanying notes

 

 

MEMPHIS 150 L.P. 2002

STATEMENT OF CASH FLOWS

For the year ended December 31, 2006

 

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(283,983	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization			208,990
(Increase) decrease in accounts receivable			(23,978	)
Increase (decrease) in accounts payable			141
Increase (decrease) in security deposit payable			18,115
Increase (decrease) in accrued expenses			59,321
Net cash provided by (used in) operating activities			(21,394	)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in due to related parties			31,975
Increase (decrease) in developer fee payable			(122,690	)
Capital contributions			135,394
Net cash provided by (used in) financing activities			44,679
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			23,285
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR			942
CASH AND CASH EQUIVALENTS AT END OF YEAR		$	24,227
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest		$	250,879

 

See accompanying notes

 

 

MEMPHIS 150 2002 L.P.

NOTES TO THE FINANCIAL STATEMENTS

December, 31 2006

 

1.	General
	Memphis 150 L.P. 2002 (the “Partnership”) was formed under the laws of the State of Tennessee to conduct the business of owning and operating real property located in Memphis, Tennessee. The Partnership owns Memphis 150, a 90-home scattered site property (the “Property”), developed and operated under the low-income housing tax credit program.
	The Partnership is owned 99.98% by the limited partner, WNC Housing Tax Credit Fund VI, L.P., Series 11, and 0.01% by the special limited partner, WNC Housing, L.P., collectively, the “Limited Partners.” Harold E. Buehler, Sr. and Jo Ellen Buehler, collectively the “General Partner,” own the remaining 0.01%.
	Profits and losses are generally allocated 0.01% and 99.99% to the General Partner and Limited Partners, respectively, pursuant to the Second Amended and Restated Agreement of Limited Partnership dated April 11, 2005 (“Partnership Agreement”). Under the terms of the Partnership Agreement, the Limited Partners are required to provide capital contributions totaling $2,708,151. The total capital contributions required pursuant to the Partnership Agreement are subject to adjustment based on the amount of low-income housing tax credits allocated to the Partnership. As of December 31, 2006, the General Partner provided $100 in capital contributions. As of December 31, 2006, the Limited Partners provided capital contributions totaling $2,437,092.
2.	Summary of significant accounting policies and nature of operations
	Basis of accounting
	The Partnership prepares its financial statements on the accrual basis of accounting consistent with accounting principles generally accepted in the United States of America.
	Cash and cash equivalents
	Cash and cash equivalents include all cash balances and highly liquid investments with a maturity of three months or less from the acquisition date. Restricted cash is not considered cash equivalents.
	Concentration of credit risk
	The Partnership places its temporary cash investments with high credit quality financial institutions. At times, the account balances may exceed the institution’s federally insured limits. The Partnership has not experienced any losses in such accounts.
	Estimates
	The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.

 

 

MEMPHIS 150 2002 L.P.

NOTES TO THE FINANCIAL STATEMENTS

December, 31 2006

 

2.	Summary of significant accounting policies and nature of operations (continued)
	Buildings
	Buildings of $5,613,231 are recorded at cost and depreciated over their estimated useful lives of 27.5 years under the straight-line method. Depreciation expense for the year ended December 31, 2006 was $204,120. Accumulated depreciation as of December 31,2006 was $263,480.
	Intangible assets
	Intangible assets include permanent loan fees of $25,500 which are amortized over 30 years, and tax credit monitoring fees of $60,300 which are amortized over 15 years using the straight-line method. Amortization expense for the year ended December 31, 2006 was $4,870. Total accumulated amortization for perm loan and tax credit fees, as of December 31, 2006, was $5,276.
	Impairment of long-lived assets
	The Partnership reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Recoverability is measured by a comparison of the carrying amount to the future net undiscounted cash flow expected to be generated and any estimated proceeds from the eventual disposition. If the long-lived asset is considered to be impaired, the impairment to be recognized is measured at the amount by which the carrying amount exceeds the fair value as determined from an appraisal, discounted cash flows analysis, or other valuation technique. There were no impairment losses recognized during 2006.
	Income taxes
	Income or loss of the Partnership is allocated .01% to the General Partner and 99.99% to the Limited Partners. No income tax provision has been included in the financial statements since profit or loss of the Partnership is required to be reported by the respective partners on their income tax returns.
	Revenue recognition
	Rental revenue attributable to residential leases is recorded when due from residents, generally upon the first day of each month. Leases are for periods of up to one year, with rental payments due monthly. Other revenue results from fees for late payments, cleaning, and damages and is recorded when earned.
	Economic concentrations
	The Partnership operates a scattered site property in Memphis, Tennessee. Future operations could be affected by changes in economic or other conditions in that geographical area or by changes in the demand for such housing.
3.	Related party transactions
	Due to related parties
	The General Partner has advanced funds on behalf of the Partnership to pay costs related to the construction and the repair of the Property. As of December 31, 2006, construction costs payable of $800,771 were included in due to related parties and are payable from available cash flow.
	Buehler Enterprises, Inc. has advanced funds on behalf of the Partnership to pay costs related to operating expenses incurred by the Partnership. As of December 31, 2006, $24,975 of such costs were included in due to related parties on the accompanying balance sheet. This amount is payable from available cash flow.

 

MEMPHIS 150 2002 L.P.

NOTES TO THE FINANCIAL STATEMENTS

December, 31 2006

 

3.	Related party transactions (continued)
	Developer fee payable
	Pursuant to the Development Agreement, Buehler Enterprises, Inc., an affiliate of the General Partner, earned a developer fee of $506,887 related to the development of the Property. The entire developer fee has been capitalized into buildings. As of December 31, 2006, the accompanying balance sheet reflects a developer fee payable in the amount of $386,887 which is payable from available cash flow.
	Property management fees
	Buehler Enterprises, Inc., an affiliate of the General Partner, manages the Property pursuant to a management agreement dated January 2, 2004. The management agreement provides for a management fee of 8% of monthly rental collections. The Partnership incurred property management fees of $42,837 during 2006.
	Asset management fee
	Pursuant to the Partnership Agreement, the Partnership shall pay to the Limited Partner, an annual asset management fee equal to 15% of net operating income, as defined, but no less than $7,000 annually for the Limited Partner’s services in assisting with the preparation of tax returns and other reports. For the year ended December 31, 2006, a fee of $7,000 was expensed to operations. As of December 31, 2006, an accrued asset management fee of $7,000 is included in due to related parties on the accompanying balance sheet. This amount is payable from available cash flow.
4.	Construction loan payable
	The Partnership obtained a construction loan from Wachovia Bank. The terms are set forth below:

 

Maximum loan amount:		$	2,450,000
Interest rate:			9.25	%
Maturity date:			August 31, 2007

 

	The construction loan payable is secured by a deed of trust on the Property. Interest on the loan is payable in monthly installments. As of December 31, 2006, the outstanding balance was $2,450,000. There was no accrued interest as of December 31, 2006.
5.	Low-income housing tax credits
	The Partnership expects to generate an aggregate of $3,660,030 of federal low-income housing tax credits (“Tax Credits”). Generally, such Tax Credits become available for use by its partners pro-rata over a ten-year period that began in 2005. To qualify for the Tax Credits, the Partnership must meet certain requirements, including attaining a qualified eligible basis sufficient to support the allocation and renting the Property pursuant to Internal Revenue Code Section 42 (“Section 42”) which regulates the use of the Property as to occupant eligibility and unit gross rent, among other requirements. In addition, the Partnership executed a land use restriction agreement, which requires the Property to be in compliance with Section 42 for a minimum of 30 years. Because the Tax Credits are subject to complying with certain requirements, there can be no assurance that the aggregate amount of Tax Credits will be realized and failure to meet all such requirements may result in generating a lesser amount of Tax Credits than expected.

 

 

MEMPHIS 150 2002 L.P.

NOTES TO THE FINANCIAL STATEMENTS

December, 31 2006

 

5.	Low-income housing tax credits (continued)
	As of December 31, 2006, the Partnership had generated $370,017 of Tax Credits.
	The Partnership anticipates generating Tax Credits as follows:

 

Year ending December 31,
2007		$	366,003
2008			366,003
2009			366,003
2010			366,003
2011			366,003
Thereafter			1,459,998
Total		$	3,290,013

 

 

FINANCIAL STATEMENTS AND

INDEPENDENT AUDITOR’S REPORT

 

MEMPHIS 150 L.P. 2002

 

DECEMBER 31, 2007

 

 

MEMPHIS 150 LP. 2002

 

TABLE OF CONTENTS

 

		PAGE
INDEPENDENT AUDITOR’S REPORT		2
FINANCIAL STATEMENTS:
BALANCE SHEET		3
STATEMENT OF OPERATIONS		4
STATEMENT OF CHANGES IN PARTNERS’ CAPITAL		5
STATEMENT OF CASH FLOWS		6
NOTES TO FINANCIAL STATEMENTS		7

 

  

 

 

INDEPENDENT AUDITOR’S REPORT

 

To the Partners

MEMPHIS 150 L.P. 2002

 

We have audited the accompanying balance sheet of MEMPHIS 150 LP. 2002, as of December 31, 2007 and the related statements of operations, changes in partners’ capital and cash flows for the year then ended. These financial statements are the responsibility of the company’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 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 MEMPHIS 150 L.P. 2002 as of December 31, 2007 and the results of its operations, changes in partners’ capital and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

 

 

   

Metairie, Louisiana  

July 23, 2008  

 

 

  

MEMPHIS 150 LP. 2002

 

BALANCE SHEET

 

DECEMBER 31, 2007

 

ASSETS
Assets
Cash and equivalents		$	42,773
Accounts receivable			10,728
Land			228,000
Buildings, net of accumulated depreciation			5,145,631
Intangible assets, net of accumulated amortization			143,696
Total assets		$	5,570,828
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities
Accounts payable		$	141
Security deposits payable			25,257
Accrued expenses			199,798
Due to related parties			825,746
Developer fee payable			386,887
Construction loan payable			2,450,000
Total Liabilities			3,887,829
Partners’ capital			1,682,999
Total liabilities and partners’ capital		$	5,570,828

 

See accompanying notes

 

 

MEMPHIS 150 L.P. 2002

 

STATEMENT OF OPERATIONS

 

DECEMBER 31, 2007

 

Revenue
Rental revenue		$	563,633
Other revenue			13,217
Total revenue			576,850
Operating expenses
General and administrative			17,440
Payroll			16,369
Utilities			9,149
Tax and insurance			117,738
Property management fee			52,918
Asset management fee			7,000
Repairs and maintenance			91,776
Marketing and advertising			1,447
Legal and other professional fees			31,094
Total operating expenses			344,931
Operating income			231,919
Other income and (expenses)
Interest income			2
Interest expense			(251,095	)
Depreciation and amortization			(209,948	)
Net other income and (expenses)			(461,041	)
Net income (loss)		$	(229,122	)

 

See accompanying notes

 

  

MEMPHIS 150 L.P. 2002

 

STATEMENT OF CHANGES IN PARTNERS’ CAPITAL

 

DECEMBER 31, 2007

 

		General Partner				Limited Partners				Total Partners’ Capital
Balance - January 1, 2007		$	(52	)		$	1,912,173			$	1,912,121
Net Income (Loss)			(23	)			(229,099	)			(229,122	)
Balance - December 31, 2007		$	(75	)		$	1,683,074			$	1,682,999

 

See accompanying notes

  

  

MEMPHIS 150 L.P. 2002

 

STATEMENT OF CASH FLOWS

 

DECEMBER 31, 2007

 

Cash flows from operating activities:
Net Income		$	(229,122	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			209,948
(Increase) decrease in accounts receivable			13,250
Increase (decrease) in accrued liabilities			97,068
Increase (decrease) in security deposits			(3,598	)
Total adjustments			316,668
Net cash provided (used) by operating activities			87,546
Cash flows from financing activities:
Loan fees			(69,000	)
Net cash provided (used) by financing activities			(69,000	)
Net increase (decrease) in cash and equivalents			18,546
Cash and equivalents, beginning of year			24,227
Cash and equivalents, end of year		$	42,773

 

See accompanying notes

 

  

MEMPHIS 150 L.P. 2002

 

NOTES TO FINANCIAL STATEMENTS

 

DECEMBER 31, 2007

 

NOTE A - NATURE OF OPERATIONS

 

Memphis 150 L.P. 2002 (the “Partnership”) was formed under the laws of the State of Tennessee to conduct the business of owning and operating real property located in Memphis, Tennessee. The Partnership owns Memphis 150, a 90-home scattered site property (the “Property”), developed and operated under the low-income housing tax credit program.

 

The Partnership is owned 99.98% by the limited partner, WNC Housing Tax Credit Fund VI, L.P., Series 11, and 0.01% by the special limited partner, WNC Housing, L.P., collectively, the “Limited Partners.” Harold E, Buehler, Sr. and Jo Ellen Buehler, collectively the “General Partner,” own the remaining 0.01%.

 

Profits and losses are generally allocated 0.01% and 99.99% to the General Partner and Limited Partners, respectively, pursuant to the Second Amended and Restated Agreement of Limited Partnership dated April 11, 2005 (“Partnership Agreement”). Under the terms of the Partnership Agreement, the Limited Partners are required to provide capital contributions totaling $2,708,151. The total capital contributions required pursuant to the Partnership Agreement are subject to adjustment based on the amount of low-income housing tax credits allocated to the Partnership. As of December 31, 2007, the General Partner provided no capital contributions. As of December 31, 2007, the Limited Partners provided capital contributions totaling $2,437,092.

 

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of accounting

 

The Partnership prepares its financial statements on the accrual basis of accounting consistent with accounting principles generally accepted in the United States of America.

 

Cash and cash equivalents

 

Cash and cash equivalents include all cash balances and highly liquid investments with a maturity of three months or less from the acquisition date. Restricted cash is not considered cash equivalents.

 

Concentration of credit risk

 

The Partnership places its temporary cash investments with high credit quality financial institutions. At times, the account balances may exceed the institutions’ federally insured limits. The Partnership has not experienced any losses in such accounts.

 

 

MEMPHIS 150 L.P. 2002

 

NOTES TO FINANCIAL STATEMENTS

 

DECEMBER 31, 2007

 

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.

 

Buildings

 

Buildings are recorded at cost and depreciated over their estimated useful lives of 27.5 years under the straight-line method. Depreciation expense for the year ended December 31, 2007 was $204,120. Accumulated depreciation as of December 31, 2007 was $467,600.

 

Intangible assets

 

Intangible assets include permanent loan fees of $94,500 which are amortized over 30 years, and tax credit monitoring fees of $60,300 which are amortized over 15 years using the straight-line method. Amortization expense for the year ended December 31, 2007 was $5,828. Total accumulated amortization for permanent loan and tax credit fees, as of December 31, 2007, was $11,104.

 

Impairment of long-lived assets

 

The Partnership reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Recoverability is measured by a comparison of the carrying amount to the future net undiscounted cash flow expected to be generated and any estimated proceeds from the eventual disposition. If the long-lived asset is considered to be impaired, the impairment to be recognized is measured at the amount by which the carrying amount exceeds the fair value as determined from an appraisal, discounted cash flows analysis, or other valuation technique. There were no impairment losses recognized during 2007.

 

Income taxes

 

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

 

Revenue recognition

 

Rental revenue attributable to residential leases is recorded when due from residents, generally upon the first day of each month. Leases are for periods of up to one year, with rental payments due monthly. Other revenue results from fees for late payments, cleaning, and damages and is recorded when earned.

 

 

MEMPHIS 150 L.P. 2002

 

NOTES TO FINANCIAL STATEMENTS

 

DECEMBER 31, 2007

 

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Economic concentrations

 

The Partnership operates a scattered site property in Memphis, Tennessee. Future operations could be affected by changes in economic or other conditions in that geographical area or by changes in the demand for such housing.

 

NOTE C - RELATED PARTY TRANSACTIONS

 

Due to related parties

 

The General Partner has advanced funds on behalf of the Partnership to pay costs related to the construction of the Property. As of December 31, 2007, construction costs payable of $790,771 were included in due to related parties and are payable from available cash flow.

 

Buehler Enterprises, Inc. has advanced funds on behalf of the Partnership to pay costs related to operating expenses incurred by the Partnership. As of December 31, 2007, $34,975 of such costs were included in due to related parties on the accompanying balance sheet. This amount is payable from available cash flow.

 

Developer fee payable

 

Pursuant to the Development Agreement, Buehler Enterprises, Inc., an affiliate of the General Partner, earned a developer fee of $509,577 related to the development of the Property. The entire developer fee has been capitalized into buildings. As of December 31, 2007, the balance sheet reflects a developer fee payable in the amount of $386,887 which is payable from available cash flow.

 

Property management fee

 

Buehler Enterprises, Inc., an affiliate of the General Partner, manages the Property pursuant to a management agreement dated January 2, 2004. The management agreement provides for a management fee of 8% of monthly rental collections. The Partnership incurred property management fees of $52,918 during 2007.

 

Asset management fee

 

Pursuant to the Partnership Agreement, the Partnership shall pay to the Limited Partner, an annual asset management fee equal to 15% of net operating income, as defined, but no less than $7,000 annually for the Limited Partner’s services in assisting with the preparation of tax returns and other reports. For the year ended December 31, 2007, a fee of $7,000 was expensed to operations. As of December 31, 2007, an accrued asset management fee of $7,000 is included in accrued expenses on the accompanying balance sheet. This amount is payable from available cash flow.

 

 

MEMPHIS 150 L.P. 2002

 

NOTES TO FINANCIAL STATEMENTS

 

DECEMBER 31, 2007

 

NOTE D - CONSTRUCTION LOAN PAYABLE

 

The Partnership obtained a construction loan from Wachovia Bank. The terms are set forth below:

 

Maximum loan amount:		$	2,450,000
Interest rate:			Variable
Maturity date:			September 23, 2006

 

The construction loan payable is secured by a deed of trust on the Property. Interest on the loan is payable in monthly installments. As of December 31, 2007, the outstanding balance was $2,450,000. There was no accrued interest as of December 31, 2007.

 

NOTE E - LOW-INCOME HOUSING TAX CREDITS

 

The Partnership expects to generate an aggregate of $3,660,030 of federal low-income housing tax credits (“Tax Credits”). Generally, such Tax Credits become available for use by its partners pro-rata over a ten-year period that began in 2005. To qualify for the Tax Credits, the Partnership must meet certain requirements, including attaining a qualified eligible basis sufficient to support the allocation and renting the Property pursuant to Internal Revenue Code Section 42 (“Section 42”) which regulates the use of the Property as to occupant eligibility and unit gross rent, among other requirements. In addition, the Partnership executed a land use restriction agreement, which requires the Property to be in compliance with Section 42 for a minimum of 30 years. Because the Tax Credits are subject to complying with certain requirements, there can be no assurance that the aggregate amount of Tax Credits will be realized and failure to meet all such requirements may result in generating a lesser amount of Tax Credits than expected.

 

As of December 31, 2007, the Partnership had generated $736,289 of Tax Credits. The Partnership anticipates generating Tax Credits as follows:

 

Year ending December 31,
2008		$	366,003
2009			366,003
2010			366,003
2011			366,003
2012			366,003
Thereafter			1,093,726
Total		$	2,923,741

 

  

MEMPHIS 150 L.P. 2002

 

NOTES TO FINANCIAL STATEMENTS

 

DECEMBER 31, 2007

 

NOTE F - SUBSEQUENT EVENT

 

On March 25, 2008, the construction loan was converted into a permanent mortgage loan secured by the Project. The mortgage payable has been allocated to each of the 90 homes and a mortgage deed has been executed for each separate building. The terms are set forth below:

 

Loan amount:		$	2,700,000
Maturity date:			March 26, 2023
Interest rate:			6.59	%