10-K 1 f10k_march2005-pat.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ----- ACT OF 1934 For the fiscal year ended March 31, 2005 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ----- EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 0-20638 PATRIOT TAX CREDIT PROPERTIES L.P. ---------------------------------- (FORMERLY KNOWN AS PRUDENTIAL-BACHE TAX CREDIT PROPERTIES L.P.) (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 13-3519080 ------------------------------------------------- ------------------------ (State or other jurisdiction of incorporation or (I.R.S. Employer organization) Identification No.) 625 Madison Avenue, New York, New York 10022 ------------------------------------------------- ------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (212) 317-5700 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Beneficial Unit Certificates (Title of Class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes No X --- --- The approximate aggregate book value of the voting and non-voting common equity held by non-affiliates of the Registrant as of September 30, 2004, was ($11,062,000), based on Limited Partner equity (deficit) as of such date. DOCUMENTS INCORPORATED BY REFERENCE None PART I Item 1. Business General ------- Patriot Tax Credit Properties L.P. (the "Registrant"), a Delaware limited partnership, was formed on May 3, 1989 and will terminate on December 31, 2029 unless terminated sooner under the provisions of the Amended and Restated Agreement of Limited Partnership (the "Partnership Agreement"). The Registrant was formed to invest in low-income, multi-family residential complexes ("Apartment Complexes" or "Properties") and, to a lesser extent, in historic apartment complexes undergoing rehabilitation ("Historic Complexes" or "Properties") through the acquisition of interests (the "Local Partnership Interests") in local partnerships (the "Local Partnerships") that are the owners of the Properties. These investments were made with proceeds from the initial sale of 38,125 Beneficial Unit Certificates ("BUC$"). The Registrant's fiscal year for tax and financial reporting purposes ends on December 31 and March 31, respectively. The primary objectives of the Registrant are to provide the limited partners with low-income housing tax credits allowed under Section 42 of the Internal Revenue Code of 1986, as amended ("Housing Tax Credits") over the credit period for each Property in which the Registrant has invested and to a lesser extent, 10-year historic rehabilitation tax credits allowed under Section 48(g) of the Internal Revenue Code of 1986, as amended. The Registrant invested only in Local Partnerships that owned Properties which qualified for Housing Tax Credits. No properties were acquired from any entity in which Prudential-Bache Properties, Inc. (the former general partner) or any affiliate had an interest. The Registrant's investments are composed of limited partnership interests in Local Partnerships owning then newly constructed or existing structures that had undergone substantial rehabilitation. The Local Partnerships in which the Registrant has invested must be operated in accordance with the low-income housing rules and regulations to protect the related tax credits. It is not expected that any of the Local Partnerships in which the Registrant has invested will generate any significant cash flow from operations to provide distributions to the holders of BUC$ ("BUC$ holders") or the limited partners. The Registrant expects that in order to avoid recapture of Housing Tax Credits, its holding period with respect to each Local Partnership Interest will be at least as long as the 15-year compliance period ("Compliance Period") and may be substantially longer. The tax credits ("Tax Credits") are attached to a subsidiary partnership ("Local Partnership") for a period of 10 years (the "Tax Credit Period") and are transferable with property during the entirety of such ten year period. If trends in the real estate market warranted the sale of a property, the remaining Tax Credits would transfer to the new owner, thereby adding value to the property on the market. However, such value declines each year and is not included in the financial statement carrying amount. 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). Through March 31, 2005, the Partnership has not recorded any loss on impairment of assets or reduction to estimated fair value. While the value of the remaining Tax Credits are a factor in calculating fair value, the expiration of Tax Credit Period, in and of itself, is not the only factor in determining whether there is an impairment and generally does not have any adverse impact on the fair value of the Local Partnerships. As of December 31, 2002, all the Local Partnerships completed their tax credit periods and the Partnership has met its primary objective of generating Housing Tax Credits for qualified BUC$ holders. However, each Local Partnership must continue to comply with the Housing Tax Credit requirements until the end of the compliance period in order to avoid recapture of the Housing Tax Credits. The compliance period will end at various dates through December 31, 2007 with respect to the Properties depending upon when the Housing Tax Credit Period commenced. Each Property in which the Registrant invested is substantially mortgaged. However, the aggregate indebtedness did not exceed 85% of the appraised fair market value of any Property at the time of acquisition. The first mortgage financing encumbering the Properties was arranged by the general partner of the Local Partnership (the "Local General Partner") owning the Properties prior to the time the Registrant became a limited partner therein. The Registrant acquired its Local Partnership Interest in each Local Partnership by purchasing it directly from the existing limited and/or general partner of the Local Partnership. In each of the Registrant's investments, the Local General Partner of the Local Partnership owning the complex was required to provide personal guarantees and/or establish cash escrows, financial bonds and/or letters of credit to protect the Registrant against, among other things, the failure to meet certain operating criteria. All of these guarantees and escrows have expired. For more information regarding the Properties, see Item 2, Properties. For more information regarding the Registrant's operations, see Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations. One Property had revenue which exceeded 15% of the Registrant's total revenue in each of the three years ended March 31, 2005, 2004 and 2003. Revenue from Palm Beach Apartments Ltd. ("Summer Creek Villas") as a percentage of the Registrant's total revenue was 56.03%, 55.31%, and 52.10% and during the years ended March 31, 2005, 2004 and 2003, respectively. No single tenant accounted for 10% or more of the Registrant's total revenue for any of the three years in the period ended March 31, 2005. General Partner --------------- The general partner of the Registrant is RCC Partners 96 L.L.C. (the "General Partner") and is an affiliate of Related Capital Company ("RCC"). Independence SLP L.P. ("SLP"), an affiliate of RCC, is the special limited partner. On 2 November 17, 2003, CharterMac acquired RCC, which is the indirect parent of RCC Manager L.L.C., the managing member of the General Partner. Pursuant to the acquisition, CharterMac acquired controlling interests in the General Partner. This acquisition did not affect the Registrant or its day-to-day operations, as the majority of the General Partner's management team remained unchanged. Segments -------- The Registrant is engaged solely in the business of investing in Local Partnerships that own Properties; therefore, presentation of industry segment information is not applicable. The Registrant operates in one segment, which is the investment in multi-family residential property. Competition ----------- The General Partner has formed various entities to engage in businesses that may be competitive with the Registrant. The Registrant's business is affected by competition to the extent that the underlying Properties from which it derives tax credits may be subject to competition relating to rental rates and amenities from comparable neighboring properties. Employees --------- The Registrant has no employees. Management and administrative services for the Registrant are performed by the General Partner and its affiliates pursuant to the Partnership Agreement. See Part III and Notes 1, 3 and 6 to the consolidated financial statements set forth in Item 8. 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 2. Properties. As of March 31, 2005, the Registrant holds interests in Local Partnerships which own the following Properties which continue to be operated in a manner to qualify for Housing Tax Credits:

~~Registrant's Low-Income~~ Occupancy ~~Housing TaxCredit~~ Number of Rents as of Rate as of ~~for the YearEnded~~ Property ~~(a) of~~ Units May 1, ~~2003~~2005 May 1, ~~2003~~2005 ~~December 31, 2002~~ ------------ -------- ------------------------- ------------ -------------- ------------- RMB Limited Partnership ~~196 $494 - 755 85% $ 0~~ (Hubbard's Ridge) Garland, TX ~~Cutler~~196 ~~Canal II 216 396~~ $408-755 ~~665 99~~83% 0Cutler Canal II Associates, Ltd. Miami, FL 216 433-744 97% Diamond Street Venture Philadelphia, PA 48 473 - 540 9892% ~~0 Philadelphia, PA~~ Papillion Heights ~~48 495 88% 0~~ Apartments L.P. Papillion, NE 48 495 88% Hill Top Homes ~~171 560 - 770 70% 0~~ Apartments Limited Partnership Arlington, TX ~~Palm~~171 ~~Beach~~ 565-770 ~~605 - 860 92~~82% ~~44,027~~Palm Beach Apartments, Ltd. (Summer Creek Villas) West Palm Beach, FL 770 605-860 90% Brookland Park Plaza ~~77 563 92% 0~~ Limited Partnership Richmond, VA ~~Compton~~77 ~~Townhouses~~563 ~~39 765 91~~95% ~~82,161~~Compton ~~-----------~~Townhouses Limited Partnership Cincinnati, OH $39 ~~126,188~~765 ~~===========~~97%

(a) At March 31, 2005, the Registrant holds a 66.5% interest in Summer Creek Villas, a 98% interest in Hubbard's Ridge, Hill Top Homes and Compton Townhouses and a 98.99% interest in Cutler Canal II, Diamond Street, Papillion Heights and Brookland Park Plaza. Hubbard's Ridge is comprised of seven separate three-story buildings on approximately 6.5 acres. The buildings are wood-framed structures on post-tensioned flat slab grade foundations and have white stucco exteriors with asphalt shingles on sloped roofs. Each building contains an average of 28 units. The unit mix consists of 164 one-bedroom units ranging in size from 657 square feet to 783 square feet and 32 two-bedroom units ranging in size from 1,145 square feet to 1,167 square feet. Cutler Canal II is comprised of 216 units in 13 two-story garden-style residential buildings on approximately 9.4 acres. It borders on a Metro-Dade Water Management District Canal on the east with approximately 1,200 square feet of frontage giving certain units waterfront views. Each building has a laundry room and two storage rooms. There are three basic floor plans with sizes ranging from 700 square feet for a one-bedroom apartment to 1,100 square feet for a three-bedroom unit. 3 Diamond Street consists of 48 units in 16 buildings. The buildings are three-story brownstone row houses with historic features and similar layouts. Of the 48 apartment units, 46 are two-bedroom apartment units and two are efficiency apartment units. Papillion Heights consists of two buildings, each containing 24 units. The buildings are 2 1/2 stories of wood frame and brick exterior with pitched roofs. Of the total 48 apartment units, two are one-bedroom units and 46 are two-bedroom units. Hill Top Homes is comprised of a two-story building surrounded by 13 one-story fourplexes which are brick with wood siding and pitched roofs. The buildings are surrounded by a security gate of brick columns and wrought iron fencing with a guard house at the entrance. Of the total 171 apartment units, 18 are three-bedroom/one bath apartment units, each comprising approximately 925 square feet; 52 are two-bedroom/two bath apartment units, each comprising approximately 1,100 square feet; 98 are two-bedroom/one bath apartment units, each comprising approximately 936 square feet; and three are one-bedroom/one bath apartment units, each comprising approximately 1,000 square feet. Summer Creek Villas consists of 61 concrete block and stucco buildings housing 770 apartment units situated on approximately 60 acres of residential-planned unit-development zoned land. 182 of the units are one-bedroom/one-bath apartments, each comprising 570 square feet; 372 are two-bedroom/one-bath apartments, each comprising 773 square feet; 144 are three-bedroom/two-bath apartments, each comprising 980 square feet; and 72 are three-bedroom/two-bath villa units, each comprising 1,050 square feet. In September 1997, the Local General Partner for Summer Creek Villas decided to divide the apartment complex into two individual entities called the Arbors and the Crossings. Brookland Park Plaza is a three-level brick building and is a registered historic landmark. The building is comprised of stucco and brick exterior and a sloped red glazed tile roof. It is a 77-unit development with 68,564 net rentable square feet. All 77 units are one-bedroom apartment units each comprising approximately 890 square feet. Each unit contains a refrigerator, range oven, carpeting and air-conditioning. Brookland Park Plaza also maintains a community room for tenants. The Compton Townhouses consists of six two-story buildings containing a total of 39 townhouse units. Four of the buildings contain six units; one building has seven units; and one has eight units. All units have three bedrooms and two-and-one-half baths. Total gross building area is 52,595 square feet; net rentable area is 47,814 square feet. The average net area of the subject units is 1,226 square feet. For additional information describing the Registrant's properties and encumbrances, see Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations and Schedule III - Real Estate and Accumulated Depreciation. Item 3. Legal Proceedings None Item 4. Submission of Matters to a Vote of Limited Partners None 4 PART II Item 5. Market for the Registrant BUC$, Related Limited 's artner Matters and PIssuer Purchases of Equity Securities As of May 17, 2005, there were 2,231 BUC$ holders of record owning a total of 38,125 BUC$. Additionally, the General Partner holds one BUC$. A significant Pondary market for BUC$ has not developed, and it is not expected that one will develop in the future. There are also certain restrictions set forth in the Partnership Agreement limiting the ability of a limited partner to transfer BUC$. There are no material restrictions on the Registrant's present or future ab upty to make distributions in accordance ilith the provisions of the Partnership A wiement; however, the Registrant has gred no distributions from operations or paierwise since inception. No distributions are anticipated in the foreseeable future. Item 6. Selected Financial Data The following table presents selected financial data of the Registrant. This data should be read in conjuction with the consolidated financial statements of the Registrant and the notes thereto set forth in Item 8.

~~For the~~ Years ~~ended~~Ended March 31, ---------------------------------------------------------------------------- OPERATIONS 2005 2004 2003 2002 2001 ~~2000 1999~~ -------------------------------------- ------------ ------------ ------------ ------------ ------------ Rental and other ~~in-~~income $ 10,~~803~~945,~~448~~610 $ 10,~~333~~747,~~034~~362 $ 910,~~761~~803,~~295~~448 $ 710,~~915~~333,~~054~~034 $ 9,~~079~~761,~~891~~295 ~~come~~ ============ ============ ============ ============ ============ Interest income $ 1510,~~827~~174 $ 3812,~~065~~093 $ 3915,~~888~~827 $ 2438,~~826~~065 $ 3239,~~104~~888 ============ ============ ============ ============ ============ Interest expense $ 4,~~747~~804,~~765~~227 $ 4,~~689~~755,~~172~~090 $ 4,~~729~~747,~~740~~765 $ 4,~~408~~689,~~997~~172 $ 4,~~354~~729,~~244~~740 ============ ============ ============ ============ ============ Depreciation and ~~amor-~~amortization ~~tization~~ expenses $ 2,~~429~~412,~~909~~369 $ 2,~~447~~440,~~028~~364 $ 2,~~445~~429,~~646~~909 $ 2,~~433~~447,~~206~~028 $ 2,~~428~~445,~~529~~646 ============ ============ ============ ============ ============ Loss before minority interest and ~~extraord-~~extraordinary ~~inary~~ item $ (45,~~776~~194,~~862~~694) $ (4,~~815~~848,~~277~~759) $ (54,~~563~~776,~~134~~862) $ (54,~~435~~815,~~229~~277) $ (45,~~270~~563,~~762~~134) ============ ============ ============ ============ ============ Minority interest in loss of local partnerships $ 1,~~139~~095,~~863~~727 $ 1,~~207~~048,~~124~~921 $ 1,~~135~~139,~~959~~863 $ ~~637~~1,~~201~~207,124 $ ~~496~~1,~~863~~135,959 ============ ============ ============ ============ ============ Loss before ~~extraordi-~~extraordinary ~~nary~~ item $ (34,~~636~~098,~~999~~967) $ (3,~~608~~799,~~103~~838) $ (43,~~427~~636,~~175~~999) $ (43,~~798~~608,~~028~~103) $ (34,~~773~~427,~~899~~175) ============ ============ ============ ============ ============ Extraordinary item - forgiveness of ~~indebt-~~indebtedness ~~edness~~ $ 0 $ 0 $ ~~833,002~~0 $ ~~1,656,843~~0 $ ~~809~~833,~~460~~002 ============ ============ ============ ============ ============ Net loss $ (34,~~636~~098,~~999~~967) $ (3,~~608~~799,~~103~~838) $ (3,~~594~~636,~~173~~999) $ (3,~~141~~608,~~185~~103) $ (23,~~964~~594,~~439~~173) ============ ============ ============ ============ ============ Loss before ~~extraordi-~~extraordinary ~~nary~~ item per limited ~~partnership~~partner ~~unit~~BUC$ $ (93106.4998) $ (9499.17) $ (~~115~~94.5492) $ (~~125~~94.2217) $ (98115.4954) Extraordinary item per limited ~~partnership~~partner ~~unit~~BUC$ $ 0 $ 0 ~~21.74~~$ ~~43.24~~0 $ 0 $ 21.1374 ------------ ------------ ------------ ------------ ------------ Net loss per limited partner BUC$ $ (93106.4998) $ (9499.17) $ (9394.8092) $ (8194.9817) $ (7793.3680) ============ ============ ============ ============ ============ Total assets $ 5853,~~143~~860,~~529~~978 $ 6055,~~492~~556,~~083~~172 $ 6258,~~137~~143,~~819~~529 $ 6460,~~662~~492,~~321~~083 $ 6562,~~885~~137,~~709~~819 ============ ============ ============ ============ ============ Mortgage notes payable $ 4543,~~294~~771,~~215~~002 $ 4644,~~015~~697,~~770~~118 $ 4345,~~955~~294,~~708~~215 $ 4446,~~569~~015,~~822~~770 $ 4543,~~127~~955,~~197~~708 ============ ============ ============ ============ ============

5 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources ------------------------------- The Registrant invested in eight Local Partnerships that are owners of affordable multi-family residential complexes. The Local Partnerships are operated in accordance with the rules and regulations of Section 42 of the Internal Revenue Code in order to protect the Housing Tax Credits. The Registrant's primary source of funds is rental revenues, which are fully utilized at the property level. As of March 31, 2005, there was approximately $51,000 in working capital reserves available to fund Registrant level expenses. Substantially all of the existing liabilities of the Registrant are payable to the General Partner and/or its affiliates. Though the amounts payable to the General Partner and/or its affiliates are contractually currently payable, the Registrant anticipates that the General Partner and/or its affiliates will not require the payment of these contractual obligations until capital reserves are in excess of the aggregate of then existing contractual obligations and then anticipated future foreseeable obligations of the Registrant. The Registrant is dependent upon the support of the General Partner and certain of its affiliates in order to meet its obligations at the Registrant level. The General Partner and these affiliates have agreed to continue such support for the foreseeable future. Other accrued expenses and liabilities 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 Registrant. Because the provisions of the secondary loans defer the payment of accrued interest of the respective Local Partnerships, the Registrant 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. At the Local Partnership level, certain Local General Partners and/or their affiliates have made deficit guaranty agreements with respect to the Local Partnerships which, under certain circumstances, required the Local General Partners and/or their affiliates to fund cash flow deficits. These operating deficit advances do not bear interest and are repayable by the Local Partnership in accordance with the respective deficit guaranty agreements. In addition, the Registrant's financial statements as of March 31, 2005 and 2004 also reflect payables of $501,271 and $426,961, respectively, under operating deficit guaranty agreements at Hill Top Homes, which have expired. As of March 31, 2005, all operating deficit guaranty agreements have expired. For a discussion of contingencies affecting certain Local Partnerships, see Summer Creek Villas Local Partnership below. Since the maximum loss the Registrant would be liable for is its net investment in the respective Local 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 Registrant's loss of its investment in a Local Partnership may result in recapture of Tax Credits if the investment is lost before expiration of the Compliance Period. Except as described above, 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. Summer Creek Villas Local Partnership ------------------------------------- The Summer Creek Villas has experienced lower than expected economic occupancy levels over the course of the last several years, which has resulted in recurring losses from operations and has adversely affected the liquidity of Summer Creek Villas. Despite an increase in rent levels during 2004 and 2003, Summer Creek Villas' operations are impeded by the inability to raise rents sufficiently to pay for the operating and debt costs. Summer Creek Villas has been unable to obtain maximum rents as potential residents are restricted based on county median income levels, which limit the maximum income that a prospective resident can earn. The Summer Creek Villas has been obligated, since 1996, to repay significant amounts of principal on its mortgage. During 2002, in an effort to improve occupancy, the Summer Creek Villas invested funds to improve the physical condition of the property. Such improvements primarily consisted of painting, landscaping, new playgrounds, and individual units fixture and finish replacements. The Local General Partner of Summer Creek Villas was formerly obligated to fund operating deficits under two separate operating deficit guaranty agreements. Total advances made by the Local General Partner under the operating deficit guaranties totaled $2,742,460. In addition, the Local General Partner has made voluntary loans in excess of its obligations under the guaranties to fund operations of $1,645,074, even though as of December 31, 1997, the Local General Partner was no longer required to fund operations of Summer Creek Villas. Effective January 1, 1999, Summer Creek Villas entered into a funding agreement with Palm Beach Investor, L.P. (the Class C limited partner) which provided for a series of loans to be made to Summer Creek Villas in each of the years 1999, 2000 and 2001, in amounts not to exceed $2,000,000 in the aggregate. On September 9, 2002, Summer Creek Villas entered into a second funding agreement with the Class C limited partner which provides for a second series of loans to Summer Creek Villas in the years 2002, 2003 and 2004, in an amount not to exceed $1,500,000 in aggregate. Although no formal agreements have been reached with the other partners, additional loans from the Registrant (which is the Class A limited partner) are expected to be obtained in accordance with the loans to be provided under the funding agreement. Loans made in 2004 and 2003 under these funding agreements to fund operating deficit's total $2,118,334 and $2,418,647, respectively. Of such amounts, $1,555,000 and $1,913,331 were loaned by the Registrant in 2004 and 2003, respectively. These loans are expected to enable the Summer Creek Villas to continue operations and make payments on its mortgage while management endeavors to improve occupancy rates and rental rates to sufficient levels to sustain operations independent of such funding. During 2003, the management agent, an affiliate of Summer Creek Villas, was reimbursed by Summer Creek Villas for operating advances, made in the current and prior years, in the form of unreimbursed payroll in the net amount of $720,678. As of December 31, 2004 and 2003, the management agent was due $182,719 and $122,649, respectively. The management agent is not obligated to provide such advances. 6 Summer Creek Villas' ability to continue its operations is dependent upon management achieving the plans described in the foregoing paragraphs. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Any adjustments would be limited solely to Summer Creek Villas' financial statements. Results of Operations --------------------- The operating results of the Local Partnerships consolidated herein are for the twelve-month periods ended December 31. Information disclosed below with respect to each Local Partnership is consistent with this method. Fiscal 2005 vs. Fiscal 2004 --------------------------- Rental income increased approximately $274,000 for the year ended March 31, 2005 as compared to 2004, primarily due to increases in occupancy at Hill Top Homes Apartments Limited Partnership and Palm Beach Apartments, Ltd. Total expenses remained fairly consistent with an increase of approximately 3.5%. Fiscal 2004 vs. Fiscal 2003 --------------------------- Rental income decreased approximately $97,000 for the year ended March 31, 2004 as compared to 2003, primarily due to a decrease in occupancy at three Local Partnerships. Interest income decreased approximately $4,000 for the year ended March 31, 2004 as compared to 2003, primarily due to lower cash and cash equivalent balances earning interest at the Local Partnership and Registrant level. Tabular Disclosure of Contractual Obligations --------------------------------------------- The following table summarizes the Registrant's commitments as of March 31, 2005 to make future payments under its debt agreements and other contractual obligations.

~~Registrant's~~Less ~~Gross~~than ~~Carrying~~1-3 ~~Occupancy Low~~3-~~Income~~5 ~~Value~~More ofthan ~~Rate~~Total at1 ~~Housing Tax Credit Number Property at December 31, for the~~ Year ~~Ended~~Years ~~Property~~Years ~~(a)~~5 ofYears ~~Units March 31, 2003 2002 (c) December 31, 2002~~ -----------~~---------------~~ ----------- -----------~~---~~ ----------- -----------~~-------~~ ~~RMB~~Mortgage ~~Limited~~notes ~~Partnership~~payable ~~196~~(a) $ 543,~~310~~771,~~849~~002 ~~90%~~ $ ~~0 (Hubbard's Ridge) Garland~~3, ~~TX Cutler Canal II 216 11~~516,~~489,324~~725 ~~97%~~$ ~~0 Associates~~5, ~~Ltd. Miami~~213,046 ~~FL Diamond Street Venture (b) 48 2~~$22,~~912~~813,~~536~~045 98% 0 Philadelphia, PA Papillion Heights 48 2,206,424 90% 0 Apartments L.P. Papillion, NE Hill Top Homes 171 8,104,661 74% 0 Apartments Limited Partnership Arlington, TX Palm Beach 770 40,832,871 93% 44,027 Apartments, Ltd. (Summer Creek Villas) West Palm Beach, FL Brookland Park Plaza 77 6,449,682 94% 0 Limited Partnership Richmond, VA Compton Townhouses 39 2,445,632 97% 82,161 Limited Partnership -------------- ----------- Cincinnati, OH $ 7912,~~751~~228,~~979~~186 $=========== ~~126,188~~=========== =========== =========== ===========

(a) Mortgage notes are collateralized by land, buildings and improvements and leases related thereto. Mortgage notes consist of both first mortgages and support loans (second and third mortgages). Off Balance Sheet Arrangements ------------------------------ The Partnership has no off-balance sheet arrangements. Critical Accounting Estimates ----------------------------- The preparation of consolidated financial statements requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of accounting estimate considered critical by the Registrant. 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. a) Property and Equipment Property and equipment to be held and used are carried at cost which includes the purchase price, acquisition fees and expenses, 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 are 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. Through March 31, 2005, the Partnership has not recorded any loss on impairment of assets or reductions to estimated fair value. 7 b) 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. c) Income Taxes The Partnership is not required to provide for, or pay, any Federal or state income taxes. Income tax attributes that arise from its operations are passed directly to the partners. The Partnership may be subject to other state and local taxes in jurisdictions in which it operates. For income tax purposes, the Partnership's year ends on December 31. Impairment of Long-Lived Assets ------------------------------- The Registrant is required to assess potential impairments to its long-lived assets, which is primarily property and equipment. If impairment indicators are present, the Registrant must measure the fair value of the assets in accordance with Statement of Financial Standards No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets." to determine if adjustments are to be recorded. New Accounting Pronouncements ----------------------------- On December 16, 2004, the FASB issued Statement of Financial Accounting Standards ("SFAS") No. 153, Exchanges of Nonmonetary Assets - An Amendment of APB Opinion NO. 29 ("SFAS No. 153"). The amendments made by SFAS No. 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments eliminate the narrow exception for exchanges for nonmonetary assets that do not have "commercial substance." SFAS No. 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The Registrant does not believe that the adoption of SFAS No. 153 on June 15, 2005 will have a material effect on the Registrant's consolidated financial statements. In January 2003, the Financial Accounting Standards Board issued FASB Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46"). FIN 46 is applicable immediately for variable interest entities created after January 31, 2003. For variable interest entities created before February 1, 2003, the provisions of FIN 46 are applicable no later than December 15, 2003. The Partnership has not created any variable interest entities after January 31, 2003. In December 2003, the FASB redeliberated certain proposed modifications and revised FIN 46 ("FIN 46 (R)"). The revised provisions were applicable no later than the first reporting period ending after March 15, 2004. The adoption of FIN 46 (R) did not have a material impact on the Registrant's financial reporting and disclosure. In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150 changes the accounting for certain financial instruments that, under previous guidance, could be classified as equity or "mezzanine" equity, by now requiring those instruments to be classified as liabilities ( or assets in some circumstances) in the Consolidated Balance Sheets. Further, SFAS No. 150 requires disclosure regarding the terms of those instruments and settlement alternatives. The guidance in SFAS No. 150 generally was effective for all financial instruments entered into or modified after May 31, 2003, and was otherwise effective at the beginning of the first interim period beginning after June 15, 2003. The Registrant has evaluated SFAS No. 150 and determined that it does not have an impact on the Registrant's financial reporting and disclosures. Property Information -------------------- The Registrant currently holds interests in eight Local Partnerships. The following schedule gives specific details about the related Properties.

~~2003~~Gross ~~2002~~Carrying ~~2001~~Value of Occupancy Number Property at Rate at Property (a) of Units March 31, 2005 December 31, 2004 (c) --------------------------------------------------- ----------- -------------- --------------------- RMB Limited Partnership (Hubbard's Ridge) $196 ~~329,000~~ $ ~~427~~5,~~000~~310,849 $72% ~~403~~Garland,~~000~~ TX Cutler Canal II ~~737~~Associates,~~000~~ ~~783~~Ltd. 216 11,~~000~~540,233 ~~675~~94% Miami,~~000~~ FL Diamond Street ~~71,000~~Venture 54(b) 48 2,~~000~~912,536 1694% Philadelphia,~~000~~ PA Papillion Heights ~~72,000~~Apartments 64L.P. 48 2,~~000~~222,255 8990% Papillion,~~000~~ NE Hill Top Homes ~~365~~Apartments Limited Partnership 171 8,~~000~~104,661 ~~429~~79% Arlington,~~000~~ ~~437~~TX Palm Beach Apartments,~~000~~ Ltd. (Summer Creek Villas) ~~871,000~~770 ~~679~~40,~~000~~832,871 9997% West Palm Beach,~~000~~ FL Brookland Park Plaza ~~192,000~~Limited ~~160~~Partnership 77 6,~~000~~449,682 ~~193~~96% Richmond,~~000~~ VA Compton Townhouses ~~151,000~~Limited ~~132,000~~Partnership ~~138~~39 2,~~000~~446,959 ~~----------~~97% ---------- --~~--------~~ $2Cincinnati,~~788,000~~ ~~$2,728,000~~OH $2 79,~~050~~820,~~000~~046 ========== ==~~======== ==========~~

8 (a) At March 31, 2005, the Registrant holds a 66.5% interest in Summer Creek Villas, a 98% interest in Hubbard's Ridge, Hill Top Homes and Compton Townhouses and a 98.99% interest in Cutler Canal II, Diamond Street, Papillion Heights and Brookland Park Plaza. (b) The investment in property relating to the Diamond Street Venture was reduced by $2,700,000 as of March 31, 1995 representing a loss on impairment of assets. (c) Occupancies are calculated by dividing occupied units by total available units. Item 7A. Quantitative and Qualitative Disclosure about Market Risk The Registrant 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 Registrant currently discloses in Item 8, Note 3 to the financial statements the fair value of the mortgage notes payable. The Partnership does not have any other market risk sensitive instruments. 9 Item 8. Financial Statements and Supplementary Data

Sequential Page ------------ (a) 1. Consolidated Financial Statements Report of Independent ~~Auditors'~~Registered ~~Reports~~Public 14Accounting Firm 11 Consolidated Balance Sheets asat of March 31, ~~2003~~2005 and ~~2002~~2004 3329 Consolidated Statements of ~~Operations~~Income for the ~~years~~Years ~~ended~~Ended March 31, ~~2003~~2005, ~~2002~~2004 and ~~2001~~2003 3430 Consolidated Statements of Changes in Partners' Capital (Deficit) for the ~~years~~Years ~~ended~~Ended March 31, ~~2003~~2005, ~~2002~~2004 and ~~2001~~2003 3531 Consolidated Statements of Cash Flows for the ~~years~~Years ~~ended~~Ended March 31, ~~2003~~2005, ~~2002~~2004 and ~~2001~~2003 3632 Notes to Consolidated Financial Statements 3733

10 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Partners of Patriot Tax Credit Properties L.P. and Subsidiaries We have audited the accompanying consolidated balance sheets of Patriot Tax Credit Properties L.P. and Subsidiaries as of March 31, 2005 and 2004, and the related consolidated statements of operations, changes in partners' capital (deficit) and cash flows for the years ended March 31, 2005, 2004 and 2003. The consolidated financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. For the years ended March 31, 2005 and 2004, we did not audit the financial statements of certain investee partnerships which represent $11,626,764 and $15,334,378, respectively, in total assets and $597,760 and $915,112, respectively, of the net loss as of and for the years ended March 31, 2005 and 2004. Those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to those investee partnerships, is based solely on the reports of the other auditors. 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, and the reports of the other auditors, provide a reasonable basis for our opinion. In our opinion, based on our audits and the reports of the other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Patriot Tax Credit Properties L.P. and Subsidiaries as of March 31, 2005 and 2004, and the results of their operations, changes in Partners' capital (deficit), and their cash flows for the years ended March 31, 2005, 2004 and 2003, in conformity with accounting principles generally accepted in the United States of America. Our report on the 2005 financial statements of a subsidiary included an explanatory paragraph describing conditions that raised substantial doubt regarding its ability to continue as a going concern, as discussed in note 10 to the consolidated financial statements. REZNICK GROUP, P.C. Bethesda, Maryland May 31, 2005 11 [Letterhead of Dickey, Wolf & Humbard, LLC] INDEPENDENT AUDITORS' REPORT To The Partners RMB Limited Partnership We have audited the accompanying balance sheets of RMB LIMITED PARTNERSHIP (a Texas Limited Partnership) as of December 31, 2004 and 2003, and the related statements of operations, 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 RMB LIMITED PARTNERSHIP as of December 31, 2004 and 2003, 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/ DICKEY, WOLF & HUMBARD, LLC Certified Public Accountants Harrisonville, MO January 27, 2005 12 [Letterhead of Dickey, Wolf & Humbard, LLC] INDEPENDENT AUDITORS' REPORT To The Partners RMB Limited Partnership We have audited the accompanying balance sheets of RMB LIMITED PARTNERSHIP (a Texas Limited Partnership) as of December 31, 2003 and 2002, and the related statements of operations, 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 RMB LIMITED PARTNERSHIP as of December 31, 2003 and 2002, 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/ DICKEY, WOLF & HUMBARD, LLC Certified Public Accountants Harrisonville, MO January 21, 2004 13 [Letterhead of Reznick Group, P.C.] INDEPENDENT AUDITORS' REPORT To the Partners Cutler Canal II Associates, Ltd. We have audited the accompanying balance sheets of Cutler Canal II Associates, Ltd. as of December 31, 2004 and 2003, 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 Cutler Canal II Associates, Ltd. as of December 31, 2004 and 2003, 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 made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on page 20 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 audits of the basic financial statements and, in our opinion, is fairly stated in all material aspects in relation to the basic financial statements taken as a whole. /s/ Reznick Group, P.C. Atlanta, Georgia February 2, 2005 14 [Letterhead of Reznick Fedder & Silverman] INDEPENDENT AUDITORS' REPORT To the Partners Cutler Canal II Associates, Ltd. We have audited the accompanying balance sheet of Cutler Canal II Associates, Ltd. as of December 31, 2003 and 2002, 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 Cutler Canal II Associates, Ltd. as of December 31, 2003 and 2002, 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/ Reznick Fedder & Silverman Atlanta, Georgia January 28, 2004 15 [Letterhead of Reznick Group, P.C.] INDEPENDENT AUDITORS' REPORT To the Partners Diamond Street Venture We have audited the accompanying balance sheets of Diamond Street Venture as of December 31, 2004 and 2003, 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 auditing standards generally accepted in the United States of America 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. 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 Diamond Street Venture as of December 31, 2004 and 2003, and the results of its operations, the changes in partners' equity (deficit) and its 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 for the year ended December 31, 2004, dated January 28, 2005, on our consideration of Diamond Street 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 results of our audit. Our audits were made for the purpose of forming an opinion on the basis financial statements taken as a whole. The 2004 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 January 28, 2005 16 [Letterhead of Reznick Fedder & Silverman] INDEPENDENT AUDITORS' REPORT To the Partners Diamond Street Venture We have audited the accompanying balance sheet of Diamond Street Venture as of December 31, 2003 and 2002, 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 auditing standards generally accepted in the United States of America 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. 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 Diamond Street Venture as of December 31, 2003 and 2002, and the results of its operations, the changes in partners' equity (deficit) and its 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 for the year ended December 31, 2003, dated January 23, 2004, on our consideration of Diamond Street Venture's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is 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. Our audits were made for the purpose of forming an opinion on the basis financial statements taken as a whole. The supplemental information on pages 29 through 32 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 Fedder & Silverman Baltimore, Maryland January 23, 2004 17 [Letterhead of Schultz, Durham & Rapp, P.C.] INDEPENDENT AUDITOR'S REPORT To the Partners Papillion Heights Apartments, L.P. (A Limited Partnership) Springfield, Missouri We have audited the balance sheets of Papillion Heights Apartments, L.P. (a limited partnership), as of December 31, 2004 and 2003, 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 auditing standards generally accepted in the 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. 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 Papillion Heights Apartments, L.P. (a limited partnership) as of December 31, 2004 and 2003, 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/ Schultz, Durham & Rapp, P.C. Springfield, Missouri February 8, 2005 18 [Letterhead of Schultz, Durham & Rapp, P.C.] INDEPENDENT AUDITOR'S REPORT To the Partners Papillion Heights Apartments, L.P. (A Limited Partnership) Springfield, Missouri We have audited the balance sheets of Papillion Heights Apartments, L.P. (a limited partnership), as of December 31, 2003 and 2002, 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 auditing standards generally accepted in the 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. 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 Papillion Heights Apartments, L.P. (a limited partnership) as of December 31, 2003 and 2002, 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/ Schultz, Durham & Rapp, P.C. Springfield, Missouri February 11, 2004 19 [Letterhead of Dickey, Wolf & Humbard, LLC] INDEPENDENT AUDITORS' REPORT To the Partners Hill Top Homes Apartments Limited Partnership We have audited the accompanying balance sheets of HILL TOP HOMES APARTMENTS LIMITED PARTNERSHIP, (a Texas Limited Partnership) as of December 31, 2004 and 2003, and the related statements of operations, 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 auditing standards generally accepted in the 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. 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 HILL TOP HOMES APARTMENTS LIMITED PARTNERSHIP as of December 31, 2004 and 2003, 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/ Dickey, Wolf & Humbard, LLC Certified Public Accountants Harrisonville, MO January 27, 2005 20 [Letterhead of Dickey, Wolf & Humbard, LLC] INDEPENDENT AUDITORS' REPORT To the Partners Hill Top Homes Apartments Limited Partnership We have audited the accompanying balance sheets of HILL TOP HOMES APARTMENTS LIMITED PARTNERSHIP, (a Texas Limited Partnership) as of December 31, 2003 and 2002, and the related statements of operations, 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 auditing standards generally accepted in the 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. 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 HILL TOP HOMES APARTMENTS LIMITED PARTNERSHIP as of December 31, 2003 and 2002, 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/ Dickey, Wolf & Humbard, LLC Certified Public Accountants Harrisonville, MO January 21, 2004 21 [Letterhead of Reznick Group, P.C.] INDEPENDENT AUDITORS' REPORT To the Partners Palm Beach Apartments, Ltd. We have audited the accompanying balance sheets of Palm Beach Apartments, Ltd. as of December 31, 2004 and 2003, 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 Palm Beach Apartments, Ltd., as of December 31, 2004 and 2003, 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. The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. As discussed in Note 14 to the financial statements, the Partnership has suffered recurring losses from operations and has a capital deficiency that raises substantial doubt regarding its ability to continue as a going concern. Management's plans in connection with these matters are also described in Note 14. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on page 22 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 audits 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. Atlanta, Georgia February 8, 2005 22 [Letterhead of Reznick Fedder & Silverman] INDEPENDENT AUDITORS' REPORT To the Partners Palm Beach Apartments, Ltd. We have audited the accompanying balance sheets of Palm Beach Apartments, Ltd. as of December 31, 2003 and 2002, 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 Palm Beach Apartments, Ltd., as of December 31, 2003 and 2002, 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. The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. As discussed in Note 14 to the financial statements, the Partnership has suffered recurring losses from operations and has a capital deficiency that raises substantial doubt regarding its ability to continue as a going concern. Management's plans in connection with these matters are also described in Note 14. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on page 23 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 audits 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 Fedder & Silverman Atlanta, Georgia February 13, 2004 23 [Letterhead of Reznick Group, P.C.] INDEPENDENT AUDITORS' REPORT To the Partners Brookland Park Plaza Limited Partnership We have audited the accompanying balance sheet of Brookland Park Plaza Limited Partnership as of December 31, 2004, and the related statements of operations, 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 auditing standards generally accepted in the United States of America 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. 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 Brookland Park Plaza Limited Partnership as of December 31, 2004, and the results of its operations, the changes in partners' equity (deficit) and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. As discussed in Note J to the financial statements, the Partnership has not generated sufficient cash flow from operations to cover its debt service requirements and there is surplus cash (deficiency) as of December 31, 2004. These conditions raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note J. The ultimate outcome of the above matters cannot presently be determined, and the financial statements do not include any adjustments that might result from the outcome of this uncertainty. In accordance with Government Auditing Standards and the "Consolidated Audit Guide for Audits for HUD Programs" (the "Guide"), we have also issued reports dated February 26, 2005 on our consideration of Brookland Park Plaza Limited Partnership's internal control over financial reporting and on our tests of its compliance with specific requirements applicable to major HUD programs and fair housing and non-discrimination. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and the Guide and should be considered in assessing the results of our audit. Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental information on pages 20 through 32 is presented for purposes of additional analysis and is not a required part of the basic financial statements of BROOKLAND PARK PLAZA LIMITED PARTNERSHIP. 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 Taxpayer Identification Number: 52-1088612 February 26, 2005 Lead Auditor: Richard G. Schaefer 24 [Letterhead of Dickey, Wolf & Humbard, LLC] INDEPENDENT AUDITORS' REPORT To the Partners Brookland Park Plaza Limited Partnership We have audited the accompanying balance sheet of BROOKLAND PARK PLAZA LIMITED PARTNERSHIP (a Maryland Limited Partnership), HUD Project No. 051-36617, as of December 31, 2003, and the related statements of operations, 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 auditing standards generally accepted in the United States of America 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. 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 BROOKLAND PARK PLAZA LIMITED PARTNERSHIP as of December 31, 2003, and the results of its operations, the changes in partners' equity/(deficit), and cash flows for the year 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 reports dated January 21, 2004, on our consideration OF BROOKLAND PARK PLAZA LIMITED PARTNERSHIP'S internal control and on our tests of its compliance with certain provisions of laws, regulations, contracts and grants. 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. Our audit was 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 24 is presented for purposes of additional analysis and is not a required part of the basic financial statements of BROOKLAND PARK PLAZA LIMITED PARTNERSHIP. 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/ Dickey, Wolf & Humbard, LLC Certified Public Accountants Harrisonville, MO January 21, 2004 25 [Letterhead of Reznick Fedder & Silverman] INDEPENDENT AUDITORS' REPORT To the Partners Brookland Park Plaza Limited Partnership We have audited the accompanying balance sheet of Brookland Park Plaza Limited Partnership as of December 31, 2002, and the related statements of operations, 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 auditing standards generally accepted in the United States of America 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. 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 Brookland Park Plaza Limited Partnership as of December 31, 2002, and the results of its operations, the changes in partners' equity (deficit) and cash flows for the year 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," we have also issued reports dated January 27, 2003 on our consideration of Brookland Park Plaza Limited Partnership's internal control and on its compliance with specific requirements applicable to major HUD programs and 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. Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental information on pages 21 through 26 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the partnership. 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 Fedder & Silverman Bethesda, Maryland Taxpayer Identification Number: 52-1088612 January 27, 2003 Lead Auditor: Renee G. Scruggs 26 [Letterhead of Barnes, Dennig & Co., Ltd.] Report of Independent Certified Public Accountants To the Partners Compton Townhouses Limited Partnership We have audited the accompanying balance sheets of Compton Townhouses Limited Partnership (Ohio Limited Partnership), as of December 31, 2004 and 2003, and the related statements of operations, changes in partners' capital (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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 Compton Townhouses Limited Partnership as of December 31, 2004 and 2003, 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/ Barnes, Dennig & Co., Ltd. Cincinnati, Ohio January 14, 2005 27 [Letterhead of Barnes, Dennig & Co., Ltd.] Report of Independent Certified Public Accountants To the Partners Compton Townhouses Limited Partnership We have audited the accompanying balance sheets of Compton Townhouses Limited Partnership (An Ohio Limited Partnership), as of December 31, 2003 and 2002, and the related statements of operations, changes in partners' capital (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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 Compton Townhouses Limited Partnership as of December 31, 2003 and 2002, 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/ Barnes, Dennig & Co., Ltd. Cincinnati, Ohio January 16, 2004 28 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

ASSETS March 31, ---------------------------- ~~2003~~2005 ~~2002~~2004 ------------ ------------ Investment in property: Land $ 4,005,633 $ 4,005,633 Building and improvements 75,~~746~~814,~~346~~413 75,~~707~~798,~~158~~582 Accumulated depreciation (2630,~~237~~492,~~792~~001) (2428,~~091~~372,~~263~~375) ------------ ------------ Net investment in property 5349,~~514~~328,~~187~~045 5551,~~621~~431,~~528~~840 Cash and cash equivalents 1942,~~344,954~~431 1,~~005~~216,~~628~~053 Cash and cash equivalents held in escrow 1,~~318~~987,~~344~~739 1,~~681~~222,~~511~~301 Deferred financing costs, net 1,~~596~~009,~~650~~427 1,~~879~~302,~~582~~170 Other assets ~~369~~593,~~394~~336 ~~303~~383,~~834~~808 ------------ ------------ Total assets $ 5853,~~143~~860,~~529~~978 $ 6055,~~492~~556,~~083~~172 ============ ============ LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) Liabilities: Mortgage notes payable $ 4543,~~294~~771,~~215~~002 $ 4644,~~015~~697,~~770~~118 Accrued interest payable 2,~~122~~358,~~418~~266 2,~~040~~180,~~908~~744 Other accrued expenses and liabilities 2,~~643~~818,~~043~~326 12,~~775~~200,~~134~~263 Due to local general partners and affiliates of local partnerships 58,~~085~~017,~~535~~084 46,~~651~~378,~~838~~776 Development fees payable 1,151,510 1,151,510 Real estate taxes payable ~~179~~571,~~876~~993 81174,~~878~~018 Due to General Partner and its affiliates 811,~~234~~784,~~527~~402 610,~~565~~190,~~471~~654 ------------ ------------ Total liabilities 6470,~~711~~472,~~124~~583 6266,~~282~~973,~~509~~083 ------------ ------------ Minority interests in local partnerships (13,~~746~~891,~~771~~976) (~~606~~2,~~601~~796,249) ------------ ------------ Partners' capital (deficit): Limited partners (38,125 BUC$ issued and outstanding) (513,~~545~~404,~~441~~752) (19,~~926~~326,~~627~~280) General partner (1 BUC$ issued and outstanding) ~~724~~685,~~617~~123 ~~742~~705,~~802~~618 ------------ ------------ Total partners' capital (deficit) (412,~~820~~719,~~824~~629) (18,~~183~~620,~~825~~662) ------------ ------------ Total liabilities and partners' capital (deficit) $ 5853,~~143~~860,~~529~~978 $ 6055,~~492~~556,~~083~~172 ============ ============

See accompanying notes to consolidated financial statements. 29 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS

Year Ended March 31, -----------------------------------------~~---~~ ~~2003~~2005 ~~2002~~2004* ~~2001~~2003* ------------ ------------ ------------ Revenues Rental income $ 910,~~973~~150,~~773~~683 $ 9,~~530~~876,~~921~~634 $ 9,~~006~~973,~~505~~773 Other income ~~829~~794,~~675~~927 ~~802~~870,~~113~~728 ~~754~~829,~~790~~675 Interest income 1510,~~827~~174 3812,~~065~~093 3915,~~888~~827 ------------ ------------ ------------ 10,~~819~~955,~~275~~784 10,~~371~~759,~~099~~455 910,~~801~~819,~~183~~275 ------------ ------------ ------------ Expenses Interest 3,954,462 4,~~747~~048,~~765~~105 4,~~689~~170,172 4Interest-related parties (Note 6 and 7) 849,~~729~~765 706,~~740~~985 577,593 Depreciation and amortization 2,~~429~~412,~~909~~369 2,~~447~~440,~~028~~364 2,~~445~~429,~~646~~909 Operating and other ~~914~~996,~~339~~430 ~~918~~921,~~938~~634 ~~921~~914,~~562~~339 Taxes and insurance 1,~~374~~555,~~659~~257 1,~~158~~501,~~871~~816 1,~~079~~374,~~256~~659 Repairs and maintenance 2,~~749~~696,~~023~~126 2,~~540~~483,~~544~~200 2,~~618~~749,~~238~~023 General and administrative 2,~~699~~910,~~222~~149 2,~~762~~744,~~046~~390 2,~~929~~618,~~956~~709 ~~Property~~General ~~management~~and ~~fees~~administrative-related ~~440,564~~parties ~~424,360~~(Note ~~395,297~~6) ~~Partnership management fees 240~~775,~~656~~920 ~~245~~761,~~367~~720 ~~244~~761,~~622~~733 ------------ ------------ ------------ Total expenses 1516,~~596~~150,~~137~~478 15,~~186~~608,~~326~~214 15,~~364~~596,~~317~~137 ------------ ------------ ------------ Loss before minority interest ~~and extraordinary item~~ (45,~~776~~194,~~862~~694) (4,~~815~~848,~~277~~759) (54,~~563~~776,~~134~~862) Minority interest in loss of local partnerships 1,~~139~~095,~~863~~727 1,~~207~~048,~~124~~921 1,~~135~~139,~~959~~863 ------------ ------------ ------------ ~~Loss before extraordinary item (3,636,999) (3,608,103) (4,427,175) Extraordinary item - forgiveness of indebtedness income (Note 10) 0 0 833,002 ------------ ------------ ------------~~ Net loss $ (34,~~636~~098,~~999~~967) $ (3,~~608~~799,~~103~~838) $ (3,~~594~~636,~~173~~999) ============ ============ ============ ~~Loss~~Net ~~before extraordinary item~~ loss- limited partners $ (34,~~618~~078,~~814~~472) $ (3,~~590~~780,~~062~~839) $ (~~4,405,039) Extraordinary item-limited partners 0 0 828,837 ------------ ------------ ------------ Net loss-limited partners $ (~~3,618,814) ~~$ (3,590,062) $ (3,576,202)~~ ============ ============ ============ Number of ~~limited~~BUC$ ~~partnership~~outstanding ~~units~~- ~~outstanding~~limited partners 38,125 38,125 38,125 ============ ============ ============ ~~Loss~~Net ~~before~~loss ~~extraordinary item~~ per ~~limited partnership unit~~ BUC$ ~~(94.92) $ (94.17) $ (115.54) Extraordinary item per limited partnership unit 0 0 21.74~~ -~~-----------~~ ~~------------ ------------ Net loss per~~ limited ~~partnership~~partners ~~unit~~ $ (94106.9298) $ (9499.17) $ (9394.8092) ============ ============ ============

* Reclassified for comparative purposes. See accompanying notes to consolidated financial statements. 30 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)

Limited General Total Partners Partner BUC$ ------------ ------------ ------------ ------------ Partners' capital (deficit) April 1, ~~2000~~2002 $ 6(1,~~018~~183,~~451~~825) $ 5(1,~~239~~926,~~637~~627) $ ~~778~~742,~~814~~802 $ 38,126 Net Loss (3,~~594~~636,~~173~~999) (3,~~576~~618,~~202~~814) (1718,~~971~~185) 0 ------------ ------------ ------------ ------------ Partners' capital (deficit) March 31, ~~2001~~2003 2(4,~~424~~820,~~278~~824) 1(5,~~663~~545,~~435~~441) ~~760~~724,~~843~~617 38,126 Net Loss (3,~~608~~799,~~103~~838) (3,~~590~~780,~~062~~839) (18,~~041~~999) 0 ------------ ------------ ------------ ------------ Partners' capital (deficit) March 31, ~~2002~~2004 (18,~~183~~620,~~825~~662) (19,~~926~~326,~~627~~280) ~~742~~705,~~802~~618 38,126 Net Loss (34,~~636~~098,~~999~~967) (34,~~618~~078,~~814~~472) (1820,~~185~~495) 0 ------------ ------------ ------------ ------------ Partners' capital (deficit) March 31, ~~2003~~2005 $(412,~~820~~719,~~824~~629) $(513,~~545~~404,~~441~~752) $ ~~724~~685,~~617~~123 $ 38,126 ============ ============ ============ ============

See accompanying notes to consolidated financial statements. 31 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended March 31, ----------------------------------------- ~~2003~~2005 ~~2002~~2004 ~~2001~~2003 ----------- ----------- ----------- Cash flows from operating activities: Net loss $(34,~~636~~098,~~999~~967) $(3,~~608~~799,~~103~~838) $(3,~~594~~636,~~173~~999) ----------- ----------- ----------- Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 2,~~429~~412,~~909~~369 2,~~447~~440,~~028~~364 2,~~445~~429,~~646~~909 Minority interest in loss of local partnerships (1,~~139~~095,~~863~~727) (1,~~207~~048,~~124~~921) (1,~~135~~139,~~959~~863) ~~Forgiveness of debt~~ (~~Note 9~~Increase) 0decrease ~~0 (833,002) Decrease (increase)~~ in cash held in escrow ~~363,167~~ (~~194~~765,~~178~~438) ~~(203~~96,~~440)~~043 363,167 Increase (decrease) in real estate taxes payable 97397,~~998~~975 (575,~~527~~858) 1597,~~391~~998 Increase ~~(decrease)~~ in accrued interest payable 81177,~~510~~522 (258,~~820)~~326 ~~765~~81,~~364~~510 (Increase) ~~decrease~~ in other assets (66209,~~008~~528) (7616,~~455~~353) 79(66,~~511~~008) Increase (decrease) in other accrued expenses and liabilities 1863,~~084,764~~352 (~~390~~150,~~253~~028) ~~(230~~1,~~107)~~084,764 ----------- ----------- ----------- Total adjustments 21,~~851~~780,~~477~~525 ~~518~~1,~~671~~373,573 ~~903~~2,~~404~~851,477 ----------- ----------- ----------- Net cash used in operating activities (~~785~~2,~~522~~318,442) (32,~~089~~426,~~432~~265) (2785,~~690,769~~522) ----------- ----------- ----------- Cash flows from investing activities: Investments in property (3915,~~188~~831) (6252,~~881~~236) (8639,~~750~~188) ----------- ----------- ----------- Net cash used in investing activities (3915,~~188~~831) (6252,~~881~~236) (8639,~~750~~188) ----------- ----------- ----------- Cash flows from financing activities Proceeds from mortgage notes 0 41,~~600~~197,~~000~~500 0 Payments on mortgage notes (~~721~~926,~~555~~116) (21,~~539~~794,~~938~~597) (~~614~~721,~~114~~555) Increase in deferred costs 0 (~~129~~9,~~521~~362) 0 ~~Decrease~~Advances ~~in development fees payable 0 (299,199) 0 Advance~~ from General Partner 1,~~452~~348,~~201~~459 1,~~373~~663,~~146~~375 01,452,201 Increase in due to Local General Partners and affiliates of Local Partnerships, General Partner and its affiliates 611,~~202~~074,974 ~~557~~847,~~174~~278 261,~~249,564~~202 Decrease in due to Local General Partners and affiliates of Local Partnerships, General Partner and its affiliates 0 (~~355~~59,~~920~~353) (~~420~~355,~~675~~920) 0 Advance from local limited partner ~~728~~563,~~415~~334 ~~350~~505,~~000~~316 ~~852~~728,~~935~~415 Distribution to minority interest ~~(307)~~0 (~~417~~557) (~~401~~307) ----------- ----------- ----------- Net cash provided by financing activities 12,~~164~~060,~~036~~651 32,~~490~~349,~~570~~600 21,~~487~~164,~~984~~036 ----------- ----------- ----------- Net ~~increase~~ (decrease) increase in cash and cash equivalents ~~339~~(273,~~326~~622) ~~338,257~~ (~~289~~128,~~535~~901) 339,326 Cash and cash equivalents at beginning of year 1,~~005~~216,~~628~~053 ~~667~~1,~~371~~344,954 ~~956~~1,~~906~~005,628 ----------- ----------- ----------- Cash and cash equivalents at end of year $ 1942,~~344,954~~431 $ 1,~~005~~216,~~628~~053 $ ~~667~~1,~~371~~344,954 =========== =========== =========== Supplemental disclosures of cash flow ~~infor- mation~~information: Interest paid $ 4,~~666~~626,~~255~~705 $ 34,~~020~~696,~~853~~764 $ 34,~~570~~666,~~449~~255 =========== =========== ===========

See accompanying notes to consolidated financial statements. 32 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2005 NOTE 1 - General Patriot Tax Credit Properties L.P., a Delaware limited partnership (the "Partnership"), was formed on May 3, 1989, and will terminate on December 31, 2029, unless terminated sooner under the provisions of the Amended and Restated Agreement of Limited Partnership (the "Partnership Agreement"). The Partnership was formed to invest as a limited partner in other partnerships ("Local Partnerships" or "subsidiaries") owning apartment complexes ("Apartment Complexes" or "Properties") that are eligible for the low-income housing tax credit or the historic rehabilitation tax credit ("Tax Credit"). The general partner of the Partnership is RCC Partners 96, L.L.C. (the "General Partner") and is an affiliate of Related Capital Company ("RCC"). On November 17, 2003, CharterMac acquired RCC, which is the indirect parent of RCC Manager L.L.C., the managing member of the General Partner. Pursuant to the acquisition, CharterMac acquired controlling interests in the General Partner. This acquisition did not affect the Partnership or its day-to-day operations, as the majority of the General Partner's management team remained unchanged. Independence SLP L.P. ("SLP"), an affiliate of RCC, is the special limited partner. The SLP acts as special limited partner of each Local Partnership entitling it to certain rights with respect to the operation and management of each Local Partnership. At March 31, 2005, the Partnership has investments in eight Local Partnerships. NOTE 2 - Summary of Significant Accounting Policies a) Basis of Accounting and Principles of Consolidation 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. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the General Partner to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The consolidated financial statements include the accounts of the Partnership and 8 subsidiary partnerships, in which the Partnership is a limited partner, with an ownership interest ranging from approximately 66.5% to 98.99%. All intercompany accounts and transactions with the subsidiary partnerships have been eliminated in consolidation. All subsidiary partnerships have fiscal years ending December 31. The Partnership has a controlling financial interest in the subsidiary partnerships through its rights to remove the general partner of the subsidiary partnerships and to approve certain major operating and financial decisions. These rights may be exercised by the General Partner of the Partnership and/or an affiliate, which affiliate has a contractual obligation to act on behalf of the Partnership. Minority interest in Local Partnerships relates to the general partner interests in the Local Partnerships (the "Local General Partners") not owned by the Partnership. The local general partners and their affiliates have advanced funds to the operating partnerships under the terms of various deficit guarantees, which are reported as a liability in the accompanying consolidated balance sheets. Therefore, the Partnership continues to allocate losses to the minority interests to the extent of the local general partners' capital investment plus advances. The local general partner advances generally carry a repayment priority from distributable cash flow generated by the local partnerships. b) Investment in Property The impairment of Properties to be held and used is determined to exist when estimated amounts recoverable through future operations on an undiscounted basis are below the Properties' carrying value. If a property is determined to be impaired, it is recorded at the lower of its carrying value or its estimated fair value. The determination of estimated fair value is based not only upon future cash flows, which rely upon estimates and assumptions including expense growth, occupancy and rental rates, and Tax Credits, but also upon market capitalization and discount rates as well as other market indicators. However, changes in market conditions and circumstances may occur in the near term which would cause these estimates and assumptions to change, which, in turn, could cause the amounts ultimately realized upon the sale or other disposition of the Properties to differ materially from their estimated fair value. Such changes may also require write-downs in future years. The cost of buildings and improvements is depreciated using the straight-line method over their estimated useful lives, which range from 27.5 to 40 years. c) Cash and Cash Equivalents Cash and cash equivalents include money market funds with original maturities of three months or less from date of acquisition whose cost approximates market value. d) Cash and Cash Equivalents Held in Escrow Cash and cash equivalents held in escrow include restricted funds with original maturities of three months or less from date of acquisition held for payment of real estate taxes and insurance, tenant security deposits and replacement reserves. 33 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2005 e) 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 tenant's 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. f) Income Taxes The Partnership is not required to provide for, or pay, any Federal or state income taxes. Income tax attributes that arise from its operations are passed directly to the partners. The Partnership may be subject to other state and local taxes in jurisdictions in which it operates. For income tax purposes, the Partnership's year ends on December 31. g) Profits and Loss Allocations/Distributions Net income or loss is allocated 99.5% to the limited partners and .5% to the General Partner. Distributions of cash may be made in accordance with the Partnership Agreement and, if made, are allocated 99.5% to the limited partners and .5% to the General Partner. As of March 31, 2005, no distributions have been paid. h) New Accounting Pronouncements On December 16, 2004, the FASB issued Statement of Financial Accounting Standards ("SFAS") No. 153, Exchanges of Nonmonetary Assets - An Amendment of APB Opinion No. 29 ("SFAS No. 153"). The amendments made by SFAS No. 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments eliminate the narrow exception for exchanges for nonmonetary assets that do not have "commercial substance." SFAS No. 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The Partnership does not believe that the adoption of SFAS No. 153 on June 15, 2005 will have a material effect on the Partnership's consolidated financial statements. In January 2003, the Financial Accounting Standards Board issued FASB Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46"). FIN 46 is applicable immediately for variable interest entities created after January 31, 2003. For variable interest entities created before February 1, 2003, the provisions of FIN 46 are applicable no later than December 15, 2003. The Partnership has not created any variable interest entities after January 31, 2003. In December 2003, the FASB redeliberated certain proposed modifications and revised FIN 46 ("FIN 46 (R)"). The revised provisions were applicable no later than the first reporting period ending after March 15, 2004. The adoption of FIN 46 (R) did not have a material impact on the Partnership's financial reporting and disclosure. In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150 changes the accounting for certain financial instruments that, under previous guidance, could be classified as equity or "mezzanine" equity, by now requiring those instruments to be classified as liabilities ( or assets in some circumstances) in the Consolidated Balance Sheets. Further, SFAS No. 150 requires disclosure regarding the terms of those instruments and settlement alternatives. The guidance in SFAS No. 150 generally was effective for all financial instruments entered into or modified after May 31, 2003, and was otherwise effective at the beginning of the first interim period beginning after June 15, 2003. The Partnership has evaluated SFAS No. 150 and determined that it does not have an impact on the Partnership's financial reporting and disclosures. NOTE 3 - Costs, Fees and Expenses a) Deferred Financing Costs Deferred financing costs include amounts paid for services rendered in arranging the financing for the Local Partnerships. These costs were capitalized and are being amortized over the lives of the related debt. The accumulated amortization as of March 31, 2005 and 2004 is $4,319,436 and $4,019,979, respectively. b) Management Fees Each individual Property has a managing agent who performs the necessary functions in operating the Property. The property management fee is equal to a percentage of the annual gross revenues of a Property paid in consideration of the property management services provided (See Note 7). The General Partner is entitled to receive a partnership management fee, payable from operations and reserves, in an amount not to exceed the difference between .375% per annum of Invested Assets (as defined in the Partnership Agreement) and the local administrative fee payable to the SLP. This partnership management fee 34 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2005 is for administering the affairs of the Partnership (See Note 6). Unpaid portions of the management fee for any year accrue without interest. c) General and Administrative The Partnership reimburses the General Partner and its affiliates for actual Partnership operating expenses payable by or allocable to the Partnership (See Note 6). The Partnership also pays amounts directly to unrelated third parties for certain operating expenses. NOTE 4 - Investment in Property The Partnership's Properties and related debt at March 31 were:

Net Investment in Property Mortgage Notes Payable -------------------------- ------------------------- Description (a) ~~2003~~2005 ~~2002~~2004 ~~2003~~2005 ~~2002~~2004 ------------------------------------------ ----------- ----------- ----------- ----------- Apartment Complexes: RMB Limited Partnership (Hubbard's Ridge) $ 32,~~104~~762,~~050~~678 $ 32,~~274~~933,~~780~~334 $ 4,~~562~~473,~~398~~400 $ 4,~~600~~519,~~000~~054 ~~(Hubbard's Ridge)~~ Garland, TX Cutler Canal II 8Associates,~~131~~ Ltd. 7,~~281~~568,352 87,~~390~~875,~~718~~271 5,~~733~~610,~~478~~221 5,~~786~~675,~~090~~068 ~~Associates, Ltd.~~ Miami, FL Diamond Street Venture (b) 1,~~610~~386,~~420~~121 1,~~693~~526,~~504~~094 2,~~913~~866,~~484~~414 2,~~934~~891,~~097~~356 Philadelphia, PA Papillion Heights Apartments L.P. 1,~~490~~400,~~423~~163 1,~~543~~437,~~073~~773 ~~958~~1,~~143~~160,969 ~~972~~1,~~787~~183,317 ~~Apartments L.P.~~ Papillion, NE Hill Top Homes Apartments Limited Partnership 5,~~717~~346,~~040~~661 5,~~902~~531,~~229~~851 3,~~207~~001,~~845~~742 3,~~297~~109,~~769~~436 ~~Apartments Limited Partnership~~ Arlington, TX Palm Beach ~~28,700,604 29,734,352 24,327,859 24,776,886~~ Apartments, Ltd. (Summer Creek Villas) 26,743,429 27,686,049 23,202,835 23,793,641 West Palm Beach, FL Brookland Park Plaza Limited Partnership 3,~~571~~117,~~140~~193 3,~~800~~344,~~107~~485 2,~~348~~285,~~964~~018 2,~~378~~317,~~063~~981 ~~Limited Partnership~~ Richmond, VA Compton Townhouses Limited Partnership 1,~~189~~003,~~229~~448 1,~~282~~096,~~765~~983 1,~~242~~170,~~044~~403 1,~~270~~207,~~078~~265 ~~Limited Partnership~~ ----------- ----------- ----------- ----------- Cincinnati, OH $5349,~~514~~328,~~187~~045 $5551,~~621~~431,~~528~~840 $4543,~~294~~771,~~215~~002 $4644,~~015~~697,~~770~~118 =========== =========== =========== ===========

(a) The Partnership holds a 66.5% interest in Summer Creek Villas, a 98% interest in Hubbard's Ridge, Hill Top Homes and Compton Townhouses and a 98.99% interest in Cutler Canal II, Diamond Street, Papillion Heights and Brookland Park Plaza. (b) The investment in property relating to the Diamond Street Venture was reduced by $2,700,000 as of March 31, 1995 representing a loss on impairment of assets. NOTE 5 - Mortgage Notes Payable Mortgage notes are collateralized by land, buildings and improvements and leases related thereto. Annual principal payment requirements for each of the next five years ending December 31, the date at which the Local Partnerships are reporting, and thereafter are as follows:

Amount ------------ ~~2003~~2005 $ ~~845,997 2004 928,578 2005~~ 3,~~520~~516,~~427~~725 2006 4,~~079~~074,~~644~~760 2007 1,~~990~~138,~~858~~286 2008 22,450,105 2009 362,940 Thereafter 3312,~~928~~228,~~711~~186 ------------ $45 43,~~294~~771,~~215~~002 ============

Mortgage notes consist of both first mortgages and support loans (second and third mortgages). First mortgages amounting to $38,831,002 bear interest at rates ranging from 5.83% to 10.5% and have final maturities ranging from September 1, 2006 to May 1, 2031. First mortgages include $23,202,835 in the form of a guaranteed bond bearing interest at 10.451% (including a .125% service fee payable to an affiliate of the Local General Partner) maturing on June 20, 2008. The support loans include two loans totaling $2,440,000 maturing on December 15, 2014 and March 1, 2031, the latter of which bears interest at 1%, and the former being non-interest bearing, and a $2,500,000 loan bearing interest at a maximum rate of 9% and maturing on January 16, 2005. The $2,500,000 loan includes a base interest rate of 3% and an additional interest 35 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2005 rate of 6%. The base interest rate is payable annually from Project Income, as defined in the loan agreement, and can be deferred if Project Income is inadequate. The additional interest is payable from Project Income, if available, and only after payment of a cumulative annual 12% return on capital to the limited partners of the Local Partnership. Currently, only the base interest rate is being paid; however, the additional interest of 6% continues to be accrued in the accompanying consolidated financial statements. In April 2003, Papillion Heights refinanced its outstanding mortgage note payable in the amount of $958,143. The new mortgage in the amount of $1,197,500 is payable in monthly installments of $7,679 including interest at the rate of 5.95% per annum through March 17, 2008 with a balloon payment of approximately $1,078,500 due April 17, 2008. At March 31, 2005 and 2004, the estimated fair values of the mortgage notes payable were approximately $38,405,367 and $39,307,053, respectively. These estimates were based upon the present value of expected cash flows discounted at rates currently available to the Local Partnerships for similar loans. Fair value estimates are made at a specific point in time, based on relevant market information, and are subjective in nature and involve uncertainties and matters of significant judgment. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Local Partnerships would pay upon maturity or disposition of the loans. NOTE 6 - Related Parties An affiliate of the General Partner has a .01% interest as a special limited partner in each of the subsidiary partnerships. An affiliate of the General Partner also has a minority interest in certain local partnerships. A) General and Administrative Related Party Expenses The costs incurred to related parties for the years ended March 31, 2005, 2004 and 2003 were as follows:

~~Year~~Years Ended March 31, ------------------------------~~------~~ ~~2003~~2005 ~~2002~~2004 ~~2001~~2003 -------- -------- -------- Partnership management fees (a) $~~240~~236,~~656~~760 $~~245~~252,~~367~~986 $~~244~~240,~~622~~656 ~~Property~~Expense ~~management~~reimbursement ~~fees~~(b) ~~157~~134,~~983~~454 ~~149~~95,~~693~~165 ~~126~~85,~~630~~781 Local administrative fees (d) 20,250 20,250 20,250 ~~General~~-------- -------- -------- Total general and administrative 85- General Partner 391,~~781~~464 64368,~~867~~401 ~~114~~346,~~145~~687 ~~Interest~~-------- ~~378~~-------- -------- Property management fees incurred to affiliates of the subsidiary partnerships' general partners (c) 384,~~534~~456 ~~365~~393,~~789~~319 ~~330~~415,~~667~~046 -------- -------- -------- Total general and administrative - related parties $~~883~~775,~~204~~920 $~~845~~761,~~966~~720 $~~836~~761,~~314~~733 ======== ======== ========

(a) A Partnership management fee for managing the affairs of the Partnership equal to 0.375% of invested assets is payable from operations and reserves to the General Partner and its affiliates. Partnership management fees owed to the General Partner amounting to approximately $1,138,000 and $901,000 were accrued and unpaid as of March 31, 2005 and 2004, respectively. (b) 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 and asset monitoring fees owed to the General Partner and its affiliates amounting to approximately $105,000 and $96,000 were accrued and unpaid as of March 31, 2005 and 2004, respectively. (c) As of December 31, 2004, the properties owned by six of the Local Partnerships are managed by a Local General Partner or its affiliates and one Local Partnership is managed by an affiliate of the General Partner and Local General Partner. Property management fees incurred by subsidiary partnerships amounted to $410,854, $431,166 and $440,564 for the years ended March 31, 2005, 2004 and 2003, respectively. Of these fees $384,456, $393,319 and $415,046 were earned by affiliates of the Local General Partners, of which $167,238, $159,865 and $157,983 were also earned by affiliates of the Partnership. (d) Independence SLP L.P., a special limited partner of the subsidiary partnerships, is entitled to receive a local administrative fee of up to $5,000 per year from each subsidiary partnership. Substantially all of the existing liabilities of the Partnership are payable to the General Partner and/or its affiliates. Though the amounts payable to the General Partner and/or its affiliates are contractually currently payable, the Partnership anticipates that the General Partner and/or its affiliates will not require the payment of these contractual obligations until capital reserves are in excess of the aggregate of then existing contractual obligations and then anticipated future foreseeable obligations of the Partnership. The Partnership is dependent upon the support of the General Partner and certain of its affiliates in order to meet its obligations at the Partnership level. The General Partner and these affiliates have agreed to continue such support for the foreseeable future. 36 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2005 B) Interest Related Party Expenses During the year ended March 31, 2005, the General Partner and its affiliates advanced $1,593,748 to the Partnership and as of March 31, 2005 and 2004, total advances outstanding are $11,784,402 and $10,190,654, respectively. The advances are unsecured, and bear interest at prime +2% and are due on demand. Interest expense incurred at the Partnership level for the years ended March 31, 2005, 2004 and 2003 totaled $595,442, $475,640 and $378,534, respectively. Such interest expense was eliminated in consolidation. The Partnership, in turn, used these funds to make operating advances to Summer Creek Villas (see Note 9). The advances are unsecured, bear interest at prime +2%, and are payable from cash flow as defined by the local partnership agreement. Interest expense recorded by Summer Creek Villas relating to such advances for the years ended March 31, 2005, 2004 and 2003 totaled $811,153, $668,373 and $538,981, respectively. Such interest expense is included in the line item "Interest-related parties" in the financial statements. NOTE 7 - Local General Partners and Affiliates of Local Partnerships Certain Local General Partners and their affiliates provided services in connection with the construction, financing and development of the Apartment Complexes. Interest is accrued on certain loans made by two of the Local General Partners during the years ended March 31, 2005, 2004 and 2003, respectively. One of the loans is by one of the Local General Partners in Summer Creek Villas, Ltd. with a principal balance at March 31, 2005 of $3,500,000 bearing interest at prime + 2%, with repayments to be made from available cash flows or out of available net sale or refinancing proceeds of the Local Partnership. The other loan is by one of the Local General Partners of Hill Top Homes Apartments Limited Partnership ("Hill Top") with a principal balance at March 31, 2004 of $426,647 bearing interest at 9.05%. The principal and accrued interest are due at the earlier of the sale or refinancing of the property or December 31, 2007. Interest expense incurred to the Local General Partners and their affiliates for the years ended March 31, 2005, 2004, and 2003 are included in the line item "Interest-related parties" in the financial statements and are summarized below:

Year Ended March 31, ------------------------------~~------------~~ ~~2003~~2005 ~~2002~~2004 ~~2001~~2003 -------- -------- -------- ~~Interest~~Summer Creek Villas (1) $~~199~~214,~~058~~442 $~~213~~175,~~276~~022 $~~240~~160,~~174~~446 ~~Management~~Hill ~~fees~~Tops ~~415~~38,~~046~~612 ~~330~~38,~~218~~612 ~~282~~38,~~710~~612 -------- -------- -------- $~~614~~253,~~104~~054 $~~543~~213,~~494~~634 $~~522~~199,~~884~~058 ======== ======== ========

(1) This interest expense is included in the total interest expense amounts disclosed in Note 6. Due to Local General Partners and affiliates of Local Partnerships includes amounts payable for accrued interest, advances, property management fees and operating loans made in accordance with operating deficit guaranty agreements. The Partnership has negotiated Operating Deficit Guaranty Agreements with certain Local General Partners and/or their affiliates by which the general partners and/or their affiliates of the Local Partnerships have agreed to fund operating deficits for a specified period of time. The terms of the Operating Deficit Guaranty Agreements vary for each Local Partnership, with maximum dollar amounts to be funded for a specified period of time, generally three years, commencing on the break-even date. As of March 31, 2005, all Operating Deficit Guaranty Agreements have expired. The Local General Partner of Summer Creek Villas was formerly obligated to fund operating deficits under two separate operating deficit guaranty agreements. Total advances made by the Local General Partner under the operating deficit guaranties totaled $2,742,460. In addition, the Local General Partner has made voluntary loans in excess of its obligations under the guaranties to fund operations of $1,645,074, even though as of December 31, 1997, the Local General Partner was no longer required to fund operations of the Summer Creek Villas. Additional voluntary loans during the year ended March 31, 2005 and 2004 of $2,118,334 and $2,418,647, respectively, have been received from the Partnership and Palm Beach Investors, L.P. (Washington Mutual). At both March 31, 2005 and 2004, development fees of $1,151,510 were payable to various Local General Partners. 37 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2005 NOTE 8 - Quarterly Financial Information (Unaudited)

First Quarter Second Quarter Third Quarter Fourth Quarter --------------- --------------- --------------- --------------- Fiscal Year ~~2003~~2005 ----------------------- Total Revenue $ 2,~~545~~589,~~134~~848 $ 2,~~543~~670,~~989~~142 $ 2,~~575~~543,~~969~~946 $ 3,151,848 ============== ============== ============== ============== Net loss $ (~~749~~861,~~442~~462) $ (~~655~~882,~~482~~559) $ (~~663~~949,~~174~~396) $ (1,405,550) ============== ============== ============== ============== Net loss per BUC$ - limited partners $ (22.48) $ (23.03) $ (24.78) $ (36.69) ============== ============== ============== ============== Fiscal Year ~~2002~~2004 ----------------------- Total Revenue $ 2,~~473~~499,~~781~~145 $ 2,~~436~~545,~~074~~149 $ 2,~~439~~596,~~119~~534 $ 3,118,627 ============== ============== ============== ============== Net loss $ (~~793~~799,~~678~~405) $ (~~583~~832,~~395~~173) $ (~~872~~904,~~262~~421) $ (1,263,839) ============== ============== ============== ============== Net loss per BUC$ - limited partners $ (20.86) $ (21.72) $ (23.60) $ (32.99) ============== ============== ============== ==============

NOTE 9 - Concentration of Credit Risk The Partnership maintains its cash in several banks which are insured by the Federal Deposit Insurance Corporation (FDIC) for a balance up to $100,000. At times during 2004, the account balances exceeded the FDIC limit. NOTE 10 - Commitments and Contingencies Subsidiary Partnership - Going Concern Summer Creek Villas Local Partnership ------------------------------------- Summer Creek Villas has experienced lower than expected economic occupancy levels over the course of the last several years, which has resulted in recurring losses from operations and has adversely affected the liquidity of Summer Creek Villas. Despite an increase in rent levels during 2004 and 2003, Summer Creek Villas' operations are impeded by the inability to raise rents sufficiently to pay for the operating and debt costs. Summer Creek Villas has been unable to obtain maximum rents as potential residents are restricted based on county median income levels, which limit the maximum income that a prospective resident can earn. The Summer Creek Villas has been obligated, since 1996, to repay significant amounts of principal on its mortgage. During 2002, in an effort to improve occupancy, Summer Creek Villas invested funds to improve the physical condition of the property. Such improvements primarily consisted of painting, landscaping, new playgrounds, and individual units fixture and finish replacements. The Local General Partner of Summer Creek Villas was formerly obligated to fund operating deficits under two separate operating deficit guaranty agreements. Total advances made by the Local General Partner under the operating deficit guaranties totaled $2,742,460. In addition, the Local General Partner has made voluntary loans in excess of its obligations under the guaranties to fund operations of $1,645,074, even though as of December 31, 1997, the Local General Partner was no longer required to fund operations of Summer Creek Villas. Effective January 1, 1999, Summer Creek Villas entered into a funding agreement with Palm Beach Investor, L.P. (the Class C limited partner) which provided for a series of loans to be made to Summer Creek Villas in each of the years 1999, 2000 and 2001, in amounts not to exceed $2,000,000 in the aggregate. On September 9, 2002, Summer Creek Villas entered into a second funding agreement with the Class C limited partner which provides for a second series of loans to Summer Creek Villas in the years 2002, 2003 and 2004, in amount not to exceed $1,500,000 in aggregate. Although no formal agreements have been reached with the other partners, additional loans from the Partnership (which is the Class A limited partner) are expected to be obtained in accordance with the loans to be provided under the funding agreement. Loans made in 2004 and 2003 under these funding agreements to fund operating deficit's total $2,118,334 and $2,418,647, respectively. Of such amounts, $1,555,000 and $1,913,331 were loaned by the Partnership in 2004 and 2003, respectively. These loans are expected to enable the Summer Creek Villas to continue operations and make payments on its mortgage while management endeavors to improve occupancy rates and rental rates to sufficient levels to sustain operations independent of such funding. During 2003, the management agent, an affiliate of Summer Creek Villas, was reimbursed by Summer Creek Villas for operating advances, made in the current and prior years, in the form of unreimbursed payroll in the net amount of $720,678. As of December 31, 2004 and 2003, the management agent was due $182,719 and $122,649, respectively. The management agent is not obligated to provide such advances. 38 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2005 As of March 31, 2005 and 2004, the consolidated financial statements include total assets of $28,892,115 and $29,513,452, respectively, total liabilities of $43,016,433 and $40,265,248, respectively, and a minority interest of $4,076,665 and $2,982,210, respectively, attributable to this subsidiary. Summer Creek Villas' ability to continue its operations is dependent upon management achieving the plans described in the foregoing paragraphs. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Any adjustments would be limited solely to Summer Creek Villas' financial statements. Subsidiary Partnership - Other Summer Creek Villas ------------------- On September 3, 2004 Summer Creek Villas was damaged by Hurricane Frances. Additional damage was caused by Hurricane Jeanne on September 25, 2004. The hurricanes caused extensive damage which will require roofing to be replaced on substantially all of the buildings of Summer Creek Villas. In addition, Summer Creek Villas has incurred costs to clean up after the hurricanes and costs to repair damages to certain units. In total, damages are estimated to be approximately $1,218,000. As of December 31, 2004 the claim had not been settled and repairs have not begun. The delay is because the insurance company is in the process of determining whether the entire roof of each building is needed to be replaced. Repairs are expected to consist of removing existing roofing material and installing new roofing material. Through December 31, 2004 the Partnership incurred $188,000 of costs associated with temporary repairs and clean-up. These costs have been deferred pending resolution of the insurance claim. Insurance proceeds are expected to cover the cost of all expenses related to the hurricane damage. 39 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None Item 9A. Controls and Procedures (a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Chief Executive Officer and Chief Financial Officer of RCC Partners 96, L.L.C., the General Partner of the Registrant, has evaluated the effectiveness of the Registrant's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended ("Exchange Act") as of the end of the period covered by this report. Based on such evaluation, such officer has concluded that, as of the end of such period, the Registrant's disclosure controls and procedures are effective. (b) INTERNAL CONTROL OVER FINANCIAL REPORTING. There have not been any changes in Registrant's internal control over financial reporting during the fiscal year to which this report relates that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting. 40 PART III Item 10. Directors and Executive Officers of the Registrant There are no directors or executive officers of the Registrant. The Registrant is managed by the General Partner. The Registrant, the Registrant's General Partner and its members and executive officers, and any persons holding more than ten percent of the Registrant's BUC$ are required to report their initial ownership of such BUC$ and any subsequent changes in that ownership to the Securities and Exchange Commission on Forms 3, 4 and 5. Such executive officers, directors, and persons who own greater than ten percent of the Registrant's BUC$ are required by Securities and Exchange Commission regulations to furnish the Registrant with copies of all Forms 3, 4 and 5 they file. All of these filing requirements were satisfied on a timely basis. In making these disclosures, the Registrant relied solely on written representations of the General Partner, and its members and certain officers, if any, or copies of the reports they have filed with the Securities and Exchange Commission during and with respect to its most recent fiscal year. The Partnership has not adopted a separate code of ethics because the Partnership has no directors or executive officers. However, the parent company of Related Capital Company ("RCC") which controls the General Partner has adopted a code of ethics. See http://www.chartermac.com On November 17, 2003, CharterMac acquired RCC, which is the indirect parent of RCC Manager L.L.C., the managing member of the General Partner. Pursuant to the acquisition, CharterMac acquired controlling interests in the General Partner. This acquisition did not affect the Registrant or its day-to-day operations, as a majority of the General Partner's management team remained unchanged. The members and executive officers of the General Partner and their positions with regard to managing the Registrant are as follows: Name Position ------------------- -------------------------------- Alan P. Hirmes Member, President and Chief Executive and Financial Officer Stuart J. Boesky Member, Executive Vice President and Chief Operating Officer Denise L. Kiley (1) Vice President Marc D. Schnitzer Vice President Glenn F. Hopps Treasurer Teresa Wicelinski Secretary (1) On February 25, 2005, Ms. Kiley announced her retirement as Chief Credit Officer and trustee of CharterMac, the indirect parent of RCC Manager LLC, the managing member of the General Partner. Upon her retirement, she will also resign from her position as Vice President of the General Partner. ALAN P. HIRMES, 50, is the sole stockholder of one of the general partners of RCC, the real estate finance affiliate of The Related Companies, L.P. ("TRCLP"). Mr. Hirmes has been a Certified Public Accountant in New York since 1978. Prior to joining Related in October 1983, Mr. Hirmes was employed by Wiener & Co., certified public accountants. Mr. Hirmes graduated from Hofstra University with a Bachelor of Arts degree. Mr. Hirmes also serves on the Board of Trustees of CharterMac and American Mortgage Acceptance Company ("AMAC"). STUART J. BOESKY, 49, is the sole stockholder of one of the general partners of RCC, the real estate finance affiliate of TRCLP. Mr. Boesky practiced real estate and tax law in New York City with the law firm of Shipley & Rothstein from 1984 until February 1986 when he joined Related. From 1983 to 1984 Mr. Boesky practiced law with the Boston law firm of Kaye, Fialkow, Richmond & Rothstein (which subsequently merged with Strook & Strook & Lavan) and from 1978 to 1980 was a consultant specializing in real estate at the accounting firm of Laventhol & Horwath. Mr. Boesky graduated from Michigan State University with a Bachelor of Arts degree and from Wayne State School of Law with a Juris Doctor degree. He then received a Master of Laws degree in Taxation from Boston University School of Law. Mr. Boesky also serves on the Board of Trustees of CharterMac and AMAC. DENISE L. KILEY, 45, is an Executive Vice President and Chief Underwriter for RCC, responsible for overseeing the investment underwriting and approval of all multifamily residential properties invested in RCC-sponsored corporate, public and private equity and debt funds. Ms. Kiley is also responsible for the strategic planning and implementation of the firm's mortgage financing programs. Prior to joining Related in 1990, Ms. Kiley had experience acquiring, financing, and managing the assets of multifamily residential properties. From 1981 through 1985 she was an auditor with a national accounting firm. Ms. Kiley holds a Bachelor of Science degree in Accounting from Boston College and is a Member of the Affordable Housing Roundtable. Ms. Kiley also serves on the Board of Trustees of CharterMac. As noted above, Ms. Kiley is retiring from CharterMac. MARK D. SCHNITZER, 44, is an Executive Vice President of RCC and Director of the firm's Tax Credit Acquisitions Group. Mr. Schnitzer received a Master of Business Administration degree from The Wharton School of the University of Pennsylvania in December 1987, and joined Related in January 1988. From 1983 to 1986, Mr. Schnitzer was a Financial Analyst in the Fixed Income Research department of The First Boston Corporation in New York. Mr. Schnitzer received a Bachelor of Science degree, summa cum laude, in Business Administration from the School of Management at Boston University. Mr. Schnitzer also serves on the Board of Trustees of CharterMac. 41 GLENN F. HOPPS, 42, joined RCC in December, 1990, and prior to that date was employed by Marks Shron & Company and Weissbarth, Altman and Michaelson, certified public accountants. Mr. Hopps graduated from New York State University at Albany with a Bachelor of Science degree in Accounting. TERESA WICELINSKI, 39, joined RCC in June 1992, and prior to that date was employed by Friedman, Alpren & Green, certified public accountants. Ms. Wicelinski graduated from Pace University with a Bachelor of Arts Degree in Accounting. Item 11. Executive Compensation The Registrant does not pay or accrue any fees, salaries or any other form of compensation to directors and officers of the General Partner for its services. Certain executive officers and directors of the General Partner receive compensation from affiliates of the General Partner, not from the Registrant, for services performed for various affiliated entities, which may include services performed for the Registrant; however, the General Partner believes that any compensation attributable to services performed for the Registrant is immaterial. See Item 13, Certain Relationships and Related Transactions, for information regarding compensation to the General Partner. Tabular information concerning salaries, bonuses and other types of compensation payable to executive officers has not been included in this annual report. As noted above, the Registrant has no executive officers. The levels of compensation payable to the General Partners and/or their affiliates is limited by the terms of the Partnership Agreement and may not be increased therefrom on a discretionary basis. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Limited Partner Matters As of June 2, 2005, Messrs. Boesky and Hirmes each own directly or beneficially 6.8% of the economic interest in the General Partner. 100% of the voting securities are owned by RCC Manager LLC, which is wholly owned by RCC. As of June 2, 2005, no director or executive officer of the General Partner owns directly or beneficially any of the BUC$ issued by the Registrant. As of June 2, 2005, no limited partner beneficially owns more than five percent (5%) of the BUC$ issued by the Registrant. Item 13. Certain Relationships and Related Transactions The Registrant has and will continue to have certain relationships with the General Partner and its affiliates. However, there have been no direct financial transactions between the Registrant and the directors or executive officers of the General Partner. Reference is made to Notes 1, 3, 6 and 7, to the consolidated financial statements in the Registrant's financial statements, which identify the related parties and discuss the services provided by these parties and the amounts paid or payable for their services. Item 14. Principal Accountant Fees and Services Audit Fees ---------- The aggregate fees billed by Reznick Group, P.C. (formerly Reznick, Fedder and Silverman, CPAs) and their respective affiliates (collectively, "Reznick") for professional services rendered for the audit of our annual financial statements for the years ended December 31, 2004 and 2003 and for the reviews of the financial statements included in the Registrant's Quarterly Reports on Form 10-Q for those years were $27,500 and $25,000, respectively. Audit Related Fees ------------------ None Tax Fees -------- The aggregate fees billed by Weiser LLP (formerly, Rubin and Katz LLP) and their respective affiliates (collectively, "Weiser") for professional services rendered for the preparation of our annual tax returns for the years ended December 31, 2004 and 2003 were $27,000 and $27,500, respectively. All Other Fees -------------- The aggregate fee billed by Reznick for consulting services for the year ended March 31, 2005 was $8,717. The Registrant is not required to have, and does not have, a stand alone audit committee. 42 PART IV Item 15. Exhibits and Financial Statement Schedules

Sequential Page ----------- (a) 1. Financial Statements -------------------- Report of Independent ~~Auditors'~~Registered ~~Report~~Public 14Accounting Firm 11 Consolidated Balance Sheets asat of March 31, ~~2003~~2005 and ~~2002~~2004 3329 Consolidated Statements of ~~Operations~~Income for the ~~years~~Years ~~ended~~Ended March 31, ~~2003~~2005, ~~2002~~2004 and ~~2001~~2003 3430 Consolidated Statements of Changes in Partners' Capital (Deficit) for the ~~years~~Years ~~ended~~Ended March 31, ~~2003~~2005, ~~2002~~2004 and ~~2001~~2003 3531 Consolidated Statements of Cash Flows for the ~~years~~Years ~~ended~~Ended March 31, ~~2003~~2005, ~~2002~~2004 and ~~2001~~2003 3632 Notes to Consolidated Financial Statements 3733 (a) 2. Financial Statement Schedules and Report of Independent ~~Auditors'~~Registered ~~Report~~Public onAccounting ~~--------------------------------------------------------------------~~Firm on Schedules ~~---------~~Report of Independent ~~Auditors'~~Registered ~~Report~~Public Accounting Firm on Schedules 5649 Schedule III - Real Estate and Accumulated Depreciation 5750 All other schedules have been omitted because they are not required or because the required information is contained in the financial ~~state-~~statements ~~ments~~ or notes thereto. (a) 3. Exhibits -------- (3.1) The Partnership's Agreement of Limited Partnership as adopted on May 3, 1989 and Amendments thereto dated May 25, 1989 and June 21, 1989* (3.2) Amendment Number 1 to Prudential-Bache Tax Credit Properties L.P. Amended and Restated Agreement of Limited Partnership, dated October 1, 1997*** (3.3) Form of Amended and Restated Agreement of Limited Partnership (included in Prospectus as Exhibit A)** (3.4) Certificate of Limited Partnership as filed on May 3, 1989 and Amendments thereto dated May 25, 1989 and June 21, 1989* (3.5) Amendment to Certificate of Limited Partnership dated October 1, 1997*** (10.1) Form of Purchase and Sale Agreement pertaining to the Partnership's acquisition of Local Partnership Interests** (10.2) Form of Amended and Restated Agreement of Local Limited Partnership of Local Partnerships** (21) Subsidiaries of the Registrant - the Local Partnerships set forth in Item 2 may be considered subsidiaries of the Registrant 44 (31.1) Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) 47 (32.1) Certification Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Title 18 of the United States Code (18 U.S.C. 1350) 48 (99.1) Balance Sheet and Report of Independent Registered Public Accounting Firm 54

43 Item 15. Exhibits and Financial Statement Schedules (continued)

~~Sequential~~Jurisdiction ~~Page~~Subsidiaries of the Registrant (Exhibit 21) of Organization ------------------------------ ~~(a)~~---------------- 3.RMB ~~Exhibits (3.1) The Partnership's Agreement of~~ Limited Partnership asTX ~~adopted~~Culter onCanal ~~May~~II 3Associates, ~~1989 and Amendments thereto dated May 25, 1989 and June 21, 1989* (3~~Ltd.2) ~~Amendmen~~FL ~~Number~~Diamond 1Street toVenture ~~Prudential-Bache~~PA ~~Tax~~Papillion ~~Credit~~Heights ~~Properties~~Apartments L.P. ~~Amended~~MO ~~and~~Hill ~~Restated~~Top ~~Agreement~~Homes ofApartments Limited Partnership, ~~dated~~TX ~~Oc-~~Palm ~~tober~~Beach 1Apartments, ~~1997*** (3~~Ltd.3) ~~Form~~FL ofBrookland ~~Amended~~Park ~~and~~Plaza ~~Restated Agreement of~~ Limited Partnership ~~(included~~MD inCompton ~~Prospectus~~Townhouses ~~as Exhibit A)** (3.4) Certificate of~~ Limited Partnership as filed on May 3, 1989 and Amendments thereto dated May 25, 1989 and June 21, 1989* (3.5) Amendment to Certificate of Limited Partnership dated October 1, 1997*** (10.1) Form of Purchase and Sale Agreement pertaining to the Partnership's acquisition of Local Partnership Interests** (10.2) Form of Amended and Restated Agreement of Local Limited Partner- ship of Local Partnerships** (21) Subsidiaries of the Registrant - the Local Partnerships set forth in Item 2 may be considered subsidiaries of the Registrant. 51 (99.1) Balance Sheet and Independent Auditors' Report, RCC Partners 96, L.L.C., March 31, 2003. 59 (99.2) Certification Pursuant to Title 18 U.S.C. Section 1350, as adopted pur- suant to Section 906 of the Sarbanes-Oxley Act of 2002. 67 (b) Reports on Form 8-K Current report on Form 8-K dated April 28, 1999 was filed on May 13, 1999 relating to the change in Registrant's accountant. *Filed as an exhibit to Pre-Effective Amendment No. 1 to Form S-11 Registration Statement (No. 33-28571) and incorporated herein by ref- erence. **Filed as an exhibit to Pre-Effective Amendment No. 2 to Form S-11 Registration Statement (No. 33-28571) and incorporated herein by ref- erence. ***Filed as an exhibit to Registrants Current Report on Form 8-K dated October 1, 1997 and incorporated herein by reference.OH

44 SIGNATURES ---------- Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PATRIOT TAX CREDIT PROPERTIES L.P. ---------------------------------- (Registrant) By: RCC PARTNERS 96, L.L.C., General Partner Date: June 17, 2005 By: /s/ Alan P. Hirmes ------------- ------------------ Alan P. Hirmes Member, President and Chief Executive and Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: Signature Title Date -------------------- ------------------------------------ -------------- /s/ Alan P. Hirmes Member and President ------------------ (Chief Executive and Financial June 17, 2005 Alan P. Hirmes Officer) of RCC Partners 96., L.L.C. ------------- /s/ Stuart J. Boesky Member and Executive Vice President -------------------- (Chief Operating Officer) of June 17, 2005 Stuart J. Boesky RCC Partners 96., L.L.C. ------------- /s/ Glenn F. Hopps ------------------ Treasurer (Chief Accounting Officer) June 17, 2005 Glenn F. Hopps of RCC Partners 96., L.L.C. ------------- 45 Exhibit 31.1 CERTIFICATION PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a) I, Alan P. Hirmes, Chief Executive Officer and Chief Financial Officer of RCC Partners 96 L.L.C. (the "General Partner"), the General Partner of Patriot Tax Credit Plus L.P. (the "Partnership"), hereby certify that: 1. I have reviewed this report on Form 10-K for the period ending March 31, 2005 of the Partnership; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Partnership as of, and for, the periods presented in this report; 4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Partnership and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the Partnership, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the Partnership's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the Partnership's internal control over financial reporting that occurred during the Partnership's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Partnership's internal control over financial reporting; and 5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Partnership's auditors and to the boards of directors of the General Partners: a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Partnership's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Partnership's internal control over financial reporting. Date: June 17, 2005 By: /s/ Alan P. Hirmes ------------- ------------------ Alan P. Hirmes Chief Executive Officer and Chief Financial Officer Exhibit 32.1 CERTIFICATION PURSUANT TO RULE 13a-14(b) OR RULE 15d-14(b) AND SECTION 1350 OF TITLE 18 OF THE UNITED STATES CODE (18 U.S.C. 1350) In connection with the Annual Report of Patriot Tax Credit Plus L.P. (the "Partnership") on Form 10-K for the period ending March 31, 2005 as filed with the Securities and Exchange Commission ("SEC") on the date hereof (the "Report"), I, Alan P. Hirmes, Chief Executive Officer and Chief Financial Officer of RCC Partners 96, L.L.C., the General Partner of the Partnership, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Partnership. A signed original of this written statement required by Section 906 has been provided to the Partnership and will be retained by the Partnership and furnished to the SEC or its staff upon request. By: /s/ Alan P. Hirmes ------------------ Alan P. Hirmes Chief Executive Officer and Chief Financial Officer June 17, 2005 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Partners of Patriot Tax Credit Properties L.P. and Subsidiaries In connection with our audits of the consolidated financial statements of Patriot Tax Credit Properties L.P. and Subsidiaries included in this Form 10-K, we have also audited supporting Schedule III for the year ended March 31, 2005. In our opinion, based on our audit and the reports of the other auditors, the consolidated schedule presents fairly, in all material respects, when read in conjunction with the related consolidated financial statements, the financial data required to be set forth therein. REZNICK GROUP, P.C. Bethesda, Maryland May 31, 2005 49 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION MARCH 31, 2005

Cost Capitalized Initial Cost to Partnership ~~Cost~~Subsequent ~~Capitalized~~to Acquisition (7) ---------------------------~~-----------------~~ ~~Subsequent to Acquisition (7) Buildings and~~ ------------------------------- Buildings and Description (4) (6) Encumbrances Land Improvements Improvements Carrying Costs ------------------------------------- ------------ ----------- ------------- ------------ -------------- Apartment Complexes: RMB Limited Partnership (Hubbard's Ridge) (1) Garland, TX $ 4,~~562~~473,~~398~~400 $ 107,237 $ 965,136 $ 4,053,296 $ 185,180 Cutler Canal II Associates, Ltd. (2) Miami, FL 5,~~733~~610,~~478~~221 807,071 1,388,350 9,~~226~~277,~~175~~084 67,728 Diamond Street Venture (3) Philadelphia, PA 2,~~913~~866,~~484~~414 9,729 234,465 2,395,124 273,218 Papillion Heights Apartments L.P. (1) Papillion, NE ~~958~~1,~~143~~160,969 63,329 1,816,598 ~~259~~275,~~945~~776 66,552 Hill Top Homes Apartments L.P. (1) Arlington, TX 3,~~207~~001,~~845~~742 553,841 3,690,150 3,544,302 316,368 Palm Beach Apartments Ltd, (1) (Summer Creek Villas) West Palm Beach, FL 2423,~~327~~202,~~859~~835 2,396,876 10,578,563 25,980,637 1,876,795 Brookland Park Plaza L.P. (1) Richmond, VA 2,~~348~~285,~~964~~018 50,000 109,850 5,913,667 376,165 Compton Townhouses L.P. (1) Cincinnati, OH 1,~~242~~170,~~044~~403 17,550 476,708 1,~~923~~924,~~171~~498 28,203 ------------ ----------- ----------- ------------ ----------- $ 4543,~~294~~771,~~215~~002 $ 4,005,633 $19,259,820 $ 53,~~296~~364,~~317~~384 $ 3,190,209 ============ =========== =========== ============ =========== Gross Amounts at which Carried Atat Close of Period (5) -----------------------------------------~~---~~ Buildings and Accumulated Description (4) (6) Land Improvements Total Depreciation ------------------------------------- ----------- ------------- ----------- ------------ Apartment Complexes: RMB Limited Partnership (Hubbard's Ridge) (1) Garland, TX $ 107,237 $ 5,203,612 $ 5,310,849 $ 2,548,172 Cutler Canal II Associates, Ltd. (2) Miami, FL 807,071 10,~~682~~733,~~253~~162 11,~~489~~540,~~324~~233 3,971,881 Diamond Street Venture (3) Philadelphia, PA 9,729 2,902,807 2,912,536 1,526,414 Papillion Heights Apartments L.P. (1) Papillion, NE 63,329 2,~~143~~158,~~095~~926 2,~~206~~222,~~424~~255 822,092 Hill Top Homes Apartments L.P. (1) Arlington, TX 553,841 7,550,820 8,104,661 2,758,000 Palm Beach Apartments Ltd, (1) (Summer Creek Villas) West Palm Beach, FL 2,396,876 38,435,995 40,832,871 14,089,442 Brookland Park Plaza L.P. (1) Richmond, VA 50,000 6,399,682 6,449,682 3,332,489 Compton Townhouses L.P. (1) Cincinnati, OH 17,550 2,~~428~~429,~~082~~409 2,~~445~~446,~~632~~959 1,443,511 ----------- ------------ ----------- ----------- $ 4,005,633 $ 75,~~746~~814,~~346~~413 $ 79,~~751~~820,~~979~~046 $30,492,001 =========== ============ =========== =========== Life on which Depreciation in Date Latest Income ~~Accumulated~~ Construction Date Statements are Description (4) (6) ~~Depreciation~~ Completed Acquired Computed ------------------ ------------------- ------------ -------- --------------- Apartment Complexes: RMB Limited Partnership (Hubbard's Ridge) (1) Garland, TX ~~$ 2,206,799~~ 5/90 12/89 30 Cutler Canal II Associates, Ltd. (2) Miami, FL ~~3,358,043~~ 1/91 1/90 40 Diamond Street Venture (3) Philadelphia, PA ~~1,302,116~~ 12/90 1/90 40 Papillion Heights Apartments L.P. (1) Papillion, NE ~~716,001~~ 12/90 4/90 40 Hill Top Homes Apartments L.P. (1) Arlington, TX ~~2,387,621~~ 12/90 6/90 40 Palm Beach Apartments Ltd, (1) (Summer Creek Villas) West Palm Beach, FL ~~12,132,267~~ 8/91 6/90 40 Brookland Park Plaza L.P. (1) Richmond, VA ~~2,878,542~~ 12/90 7/90 27.5 Compton Townhouses L.P. (1) Cincinnati, OH ~~1,256,403~~ 6/92 1/92 40 ~~------------ $ 26,237,792 ============~~

(1) First mortgage (2) Includes first and second mortgages (3) Includes first, second and third mortgages (4) At March 31, 2005, the Partnership holds a 66.5% interest in the Local Partnerships of Summer Creek Villas, a 98% interest in Hubbard's Ridge, Hill Top Homes and Compton Townhouses and a 98.99% interest in Cutler Canal II, Diamond Street, Papillion Heights and Brookland Park Plaza. (5) The cost basis of Land and Buildings and Improvements for federal income tax purposes as of December 31, 2002 is $80,614,671. (6) The Partnership believes the properties are adequately insured. (7) Costs Capitalized Subsequent to Acquisition included a write-down of $2,700,000 for Diamond Street Venture recorded as of March 31, 1995. 50 50 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION MARCH 31, 2005 (continued)

Cost of Property and Equipment Accumulated Depreciation ------------------------------------------ ------------------------------------------ ~~Year~~Years Ended March 31, --------------------------------------------------------------------------------------- Note A - Reconciliation ~~2003~~2005 ~~2002~~2004 ~~2001~~ 2003 ~~2002~~2005 ~~2001~~2004 2003 ---------------------------- ------------ ------------ ------------ ------------ ------------ ------------ Balance at beginning of year $ 79,~~712~~804,~~791~~215 $ 79,~~649~~751,~~910~~979 $ 79,~~563~~712,~~160~~791 $24 28,~~091~~372,~~263~~375 $21 26,~~934~~237,~~135~~792 $19 24,~~762~~091,~~979~~263 Additions during year: Improvements 3915,~~188~~831 6252,~~881~~236 8639,~~750~~188 ~~Depreciation expense (1) 2,146,529 2,157,128 2,171,156~~ ------------ ------------ ------------ Depreciation expense (1) 2,119,626 2,134,583 2,146,529 ------------ ------------ ------------ Balance at close of year $ 79,~~751~~820,~~979~~046 $ 79,~~712~~804,~~791~~215 $ 79,~~649~~751,~~910~~979 $26 30,~~237~~492,~~792~~001 $24 28,~~091~~372,~~263~~375 $21 26,~~934~~237,~~135~~792 ============ ============ ============ ============ ============ ============

(1) Refer to Notes 2 and 4 to the consolidated financial statements for additional information. 51 Exhibit 99.1 BALANCE SHEET AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM RCC PARTNERS 96, L.L.C. MARCH 31, 2005 52 RCC Partners 96, L.L.C. TABLE OF CONTENTS PAGE ---- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 54 FINANCIAL STATEMENTS BALANCE SHEET 55 NOTES TO BALANCE SHEET 56 53 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Members of RCC Partners 96, L.L.C. We have audited the accompanying balance sheet of RCC Partners 96, L.L.C. as of March 31, 2005. This balance sheet is the responsibility of the Company's management. Our responsibility is to express an opinion on this balance sheet 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 balance sheet is 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 expressed no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the balance sheet. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall balance sheet presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the balance sheet referred to above presents fairly, in all material respects, the financial position of RCC Partners 96, L.L.C. as of March 31, 2005, in conformity with accounting principles generally accepted in the United States of America. Reznick Group, P.C. Bethesda, Maryland May 31, 2005 54 RCC Partners 96, L.L.C. BALANCE SHEET March 31, 2005

ASSETS ~~Investment in limited partnership $ 0~~ Due from limited partnership ~~676~~$1,~~972~~151,196 ---------- $~~676~~1,~~972~~151,196 ========== LIABILITIES AND MEMBERS' EQUITY Due to affiliate $~~676~~1,~~972~~151,196 Members' equity 0 ---------- $~~676~~ 1,~~972~~151,196 ===========

The accompanying notes are an integral part of this balance sheet 55 RCC Partners 96, L.L.C. NOTES TO BALANCE SHEET March 31, 2005 NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES RCC Partners 96, L.L.C. (the "Company") was organized under the laws of the State of Delaware as of July 23, 1996, to act as the general partner of, and to acquire and hold a general partnership interest in Patriot Tax Credit Properties, L.P. ("Patriot"). On October 1, 1997, as part of a settlement of class litigation known as Prudential Securities Inc. Limited Partnership Litigation, MDL No. 1005, Prudential-Bache Properties, Inc. ("PBP") withdrew as the general partner and transferred its General Partner interest in the Partnership to the Company, an affiliate of Related Capital Company ("RCC") pursuant to a purchase agreement dated as of December 19, 1996 among PBP and its affiliates and RCC. On November 17, 2003, CharterMac acquired RCC, which is the indirect parent of RCC Manager LLC, the sole shareholder of the Company. Pursuant to the acquisition, CharterMac acquired controlling interests in the Company. This acquisition did not affect Patriot or its day-to-day operations, as the majority of the Company's management team remained unchanged. Affiliates of the Company and RCC have had significant involvement with Patriot and the Local Partnerships, of which five are owned by RCC affiliates. RCC in the past provided, and will continue to provide ongoing monitoring services with respect to the Limited Partnership's investments pursuant to the Property Investment Monitoring Agreement. Investment in Limited Partnership --------------------------------- The Company accounts for its investment in Patriot using the equity method, whereby the Company adjusts the investment cost for its share of Patriot's results of operations and for any distributions received or accrued. The Company regularly assesses the carrying value of its investment in Patriot. If the carrying value is considered to exceed the estimated value derived by management (which contemplates remaining Low-income Tax Credits and potential residual value, among other things), the Company reduces its investment in Patriot. Use of 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 reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. 56 RCC Partners 96, L.L.C. NOTES TO BALANCE SHEET - CONTINUED March 31, 2005 NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Income Taxes ------------ The Company is not a taxpaying entity for income tax purposes and, accordingly, no provision has been made for income taxes. The member's allocable shares of the Company's taxable income or loss are reportable on their income tax returns. NOTE B - RELATED PARTY TRANSACTIONS Due to/from affiliates ---------------------- As of March 31, 2005, Patriot owes the Company $1,151,196 for partnership management fees pursuant to the Limited Partnership Agreement. The Company owes $1,151,196 to their affiliates as of March 31, 2005. NOTE C - INVESTMENT IN LIMITED PARTNERSHIP On October 1, 1997, the Company was admitted as the general partner in Patriot Tax Credit Properties, L.P. which was formed to invest as a limited partner in other partnerships owning apartment complexes that are eligible for the low-income housing tax credit or the rehabilitation tax credit. The investment in Limited Partnership is as follows:

General Partner capital at ~~December~~March 31, ~~2002~~2005 $ ~~724~~685,~~617~~123 Less: Adjustment to estimated realizable value (~~724~~685,~~617~~123) --------- Balance - March 31, ~~2003~~2005 $ 0 =========

57 RCC Partners 96, L.L.C. NOTES TO BALANCE SHEET - CONTINUED March 31, 2005 NOTE C - INVESTMENT IN LIMITED PARTNERSHIP (continued) The summarized consolidated balance sheet at March 31, 2005 and the summarized consolidated statement of operations for the year then ended for Patriot Tax Credit Properties, L.P. are as follows: CONSOLIDATED BALANCE SHEET

~~CONSOLIDATED BALANCE SHEET~~ ASSETS INVESTMENT IN PROPERTY $ 5349,~~514~~328,~~187~~045 OTHER ASSETS Cash and cash equivalents 1942,~~344,954~~431 Cash and cash equivalents, held in escrow 1,~~318~~987,~~344~~739 Deferred financing costs, net 1,~~596~~009,~~650~~427 Other assets ~~369~~593,~~394~~336 ------------ Total assets $ 5853,~~143~~860,~~529~~978 ============ LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) LIABILITIES Mortgage notes payable $ 4543,~~294~~771,~~215~~002 Accrued interest payable 2,~~122~~358,~~418~~266 Other accrued expenses and liabilities 2,~~643~~818,~~043~~326 Due to general partners and affiliates of local partnerships 58,~~085~~017,~~535~~084 Development fees payable 1,151,510 Real estate taxes payable ~~179~~571,~~876~~993 Due to general partners and its affiliates 811,~~234~~784,~~527~~402 ------------ Total liabilities 6470,~~711~~472,~~124~~583 ------------ Minority interest in local partnerships (13,~~746~~891,~~771~~976) ------------ Partners' capital (deficit) Limited partners (38,125 BUC$ issued and outstanding) (513,~~545~~404,~~441~~752) General partner (1 BUC$ issued and outstanding) ~~724~~685,~~617~~123 ------------ Total partners' capital (deficit) (412,~~820~~719,~~824~~629) ------------ Total liabilities and partners' capital (deficit) $ 5853,~~143~~860,~~529~~978 ============

58 RCC Partners 96, L.L.C. NOTES TO BALANCE SHEET - CONTINUED March 31, 2005 NOTE C - INVESTMENT IN LIMITED PARTNERSHIP (continued) CONSOLIDATED STATEMENT OF OPERATIONS

~~CONSOLIDATED STATEMENT OF OPERATIONS~~ Revenues Rental income $ 910,~~973~~150,~~773~~683 Other income ~~829~~794,~~675~~927 Interest income 1510,~~827~~174 ------------ 10,~~819~~955,~~275~~784 Expenses Interest 4,~~747~~804,~~765~~227 Depreciation and amortization 2,~~429~~412,~~909~~369 Operating and other ~~914~~996,~~339~~430 Taxes and insurance 1,~~374~~555,~~659~~257 Repairs and maintenance 2,~~749~~696,~~023~~126 General and administrative 23,~~699~~038,~~222~~455 Property management fees ~~440~~410,~~564~~854 Partnership management fees ~~240~~236,~~656~~760 ------------ Total expenses 1516,~~596~~150,~~137~~478 ------------ Loss before minority interest (45,~~776~~194,~~862~~694) Minority interest in loss of local partnership 1,~~139~~095,~~863~~727 ------------ Net loss $ (34,~~636~~098,~~999~~967) ============

NOTE D - CONTINGENCIES The Company is contingently liable for all debts, liabilities and other obligations of Patriot Tax Credit Properties L.P. to the extent not paid by the partnership.

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