10-K 1 f10k_march2007-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, 2007 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 if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X] Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X] 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(ss.229.405 of this chapter) 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 a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). 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, 2006, was ($1,541,000), based on Limited Partner equity (deficit) as of such date. DOCUMENTS INCORPORATED BY REFERENCE None PART I Item 1. Business General ------- Patriot Tax Credit Properties L.P. (the "Registrant"), a Delaware limited partnership, was formed on May 3, 1989 and will terminate on December 31, 2029 unless terminated sooner under the provisions of the Amended and Restated Agreement of Limited Partnership (the "Partnership Agreement"). The Registrant was formed to invest in low-income, multi-family residential complexes ("Apartment Complexes" or "Properties") and, to a lesser extent, in historic apartment complexes undergoing rehabilitation ("Historic Complexes" or "Properties") through the acquisition of interests (the "Local Partnership Interests") in local partnerships (the "Local Partnerships") that are the owners of the Properties. These investments were made with proceeds from the initial sale of 38,125 Beneficial Unit Certificates ("BUC$"). The Registrant's fiscal year for tax and financial reporting purposes ends on December 31 and March 31, respectively. The primary objective of the Registrant is to provide the limited partners with low-income housing tax credits allowed under Section 42 of the Internal Revenue Code of 1986, as amended ("Tax Credits") over the ten-year credit period ("Tax 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 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. The Registrant expects that in order to avoid recapture of 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. 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. As of March 31, 2007, the Registrant has disposed of five of its eight original Properties. In addition, one Local Partnership has entered into a purchase and sale agreement to sell its property and related assets and liabilities. Subsequently, on April 27, 2007, the property and related assets and liabilities of that Local Partnership were sold (see Notes 12 and 14 in Item 8). As of December 31, 2002, all the Local Partnerships have completed their Tax Credit Periods and the Registrant has met its primary objective of generating Tax Credits for qualified BUC$ holders. However, each Local Partnership must continue to comply with the Tax Credit requirements until the end of the Compliance Period in order to avoid recapture of the Tax Credits. The Compliance Period will end at various dates through December 31, 2007 with respect to the Properties depending upon when the Tax Credit Period commenced. 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, 2007, the Registrant has recorded $2,700,000 as a loss on impairment of assets or reduction to estimated fair value. 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 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. Two Properties had revenue which exceeded 15% of the Registrant's total revenue during the years ended March 31, 2007 and 2006 and one Property had revenue which exceeded 15% of the Registrant's total revenue for the year ended March 31, 2005. Revenue from Cutler Canal II Associates, Ltd. ("Cutler Canal II") as a percentage of the Registrant's total revenue was 16.84% and 19.17% during the years ended March 31, 2007 and 2006. Revenue from Hill Top Homes Apartments Limited Partnership ("Hill Top") as a percentage of the Registrant's total revenue was 38.47% for the year ended March 31, 2007. Revenue from Palm Beach Apartments Ltd. ("Summer Creek Villas") as a percentage of the Registrant's total revenue was 41.04% and 56.03% during the years ended March 31, 2006 and 2005, respectively. Cutler Canal II and Summer Creek Villas were sold during the year ended March 31, 2006. Subsequently, on April 27, 2007, Hill Top was sold (see Note 14 in Item 8). 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, 2007. General Partner --------------- The general partner of the Registrant is RCC Partners 96 L.L.C. (the "General Partner"). The ultimate parent of the General Partner is Centerline Holding Company ("Centerline") (which had been known as CharterMac until April 2007). On March 15, 2007, Centerline announced the retirement of Alan P. Hirmes as Chief Financial Officer of Centerline. Upon his retirement, he also resigned from his position as Member, President, Chief Executive Officer and Chief Financial Officer of the General Partner. Centerline has named Robert L. Levy as Chief Financial Officer and Andrew J. Weil as Chief Executive Officer to replace Mr. Hirmes. 2 Sales of Underlying Properties/Local Partnership Interests ---------------------------------------------------------- The Registrant is currently in the process of disposing of its investments. It is anticipated that this process will take a number of years. As of March 31, 2007, the Registrant has sold the Property and the related assets and liabilities of four Local Partnerships and the limited partnership interest in one Local Partnership. In addition, one Local Partnership entered into a purchase and sales agreement to sell its property and related assets and liabilities. Subsequently, on April 27, 2007, the property and related assets and liabilities of that Local Partnership were sold (see Notes 12 and 14 in Item 8). There can be no assurance as to when the Registrant will dispose of its remaining two investments or the amount of proceeds which may be received. However, based on the historical operating results of the Local Partnerships and the current economic conditions, including changes in tax laws, it is unlikely that the proceeds from such sales received by the Registrant will be sufficient to return to the limited partners their original investment. On November 14, 2006, the Registrant's limited partnership interest in Papillion Heights Apartment, L.P. ("Papillion") was sold to the Local General Partner for a sales price of $25,000. The Registrant received proceeds of $25,000. Because Papillion was sold to a related party of the Local Partnership, the sale resulted in a non-cash contribution to the Local Partnership from the Local General Partner of approximately $205,000. Such contribution flows through minority interest as a result of the write-off of the deficit basis in the property of approximately $180,000 and $25,000 from the sale. The sale resulted in the liquidation of Papillion. On October 31, 2006, the property and the related assets and liabilities of Brookland Park Plaza Limited Partnership ("Brookland") were sold to an unrelated third party purchaser for a sales price of $2,800,000. The Registrant received $467,577 as a distribution from this sale after the repayment of mortgages, other liabilities and closing costs of approximately $2,332,000. The sale resulted in a loss of approximately $134,000, resulting from the write-off of the deficit basis in the property at the date of the sale. The sale resulted in the liquidation of Brookland. On March 28, 2006, the property and the related assets and liabilities of Cutler Canal II were sold to an affiliate of the Local General Partner for a sales price of $9,000,000. The Registrant received $1,800,000 as a distribution from this sale after the repayment of mortgages, other liabilities, closing costs and distributions to minority interests of approximately $7,200,000. The Registrant received an additional distribution of $365,356 relating to the forgiveness of the Florida Housing Finance Corporation promissory note, which was contingent at March 31, 2006. Because Cutler Canal II was sold to a related party of the Local Partnership, the sale resulted in a non-cash contribution to the Local Partnership from the Local General Partner of approximately $1,948,000, which was recognized during the year ended March 31, 2006. Adjustments to the non-cash contribution of approximately $756,000 were recognized during the year ended March 31, 2007, resulting in an overall non-cash contribution of approximately $2,704,000. Such contributions flow through minority interest as a result of the write-off of the deficit basis in the property of approximately $2,704,000. The sale resulted in the liquidation of Cutler Canal II. On January 18, 2006, the property and the related assets and liabilities of RMB Limited Partnership ("Hubbard's Ridge") were sold to an unaffiliated third party purchaser for a sales price of $4,950,000. The Registrant received $73,948 as a distribution from this sale after the repayment of mortgages, other liabilities and closing costs of approximately $4,876,000. The sale resulted in a gain of approximately $2,101,000 resulting from the write-off of the deficit basis in the property at the date of the sale, which was recognized during the year ended March 31, 2006. An additional loss of approximately $6,000 resulting from the write-off of additional basis in the property was recognized during the year ended March 31, 2007, resulting in an overall gain of approximately $2,095,000. The sale resulted in the liquidation of Hubbard's Ridge. On July 14, 2005, the property and the related assets and liabilities of Summer Creek Villas were sold to an unrelated third party purchaser for a sales price of $45,500,000. The entire sales price was used to repay the mortgage, other liabilities, closing costs and certain advances (including accrued interest) made to Summer Creek Villas by the General Partner and its affiliates, as required by the limited partnership agreement of Summer Creek Villas. The sale resulted in a gain of approximately $12,784,000, resulting from the write-off of the deficit basis in the property at the date of the sale and a non-cash contribution by the Local General Partner due to the write-off of related party debt of approximately $3,719,000 and a non-cash contribution by the General Partner of $3,601,000 which were recognized during the year ended March 31, 2006. During the year ended March 31, 2007, an adjustment to the gain of approximately $2,643,000 was recognized which included the forgiveness of amounts due to the Local General Partner and affiliates of Local Partnerships and amounts due to the General Partner and its affiliates of approximately $1,088,000 and $386,000, respectively. Such adjustments resulted in an overall gain of approximately $15,427,000. Asset Held for Sale ------------------- On February 6, 2007, Hill Top entered into a purchase and sale agreement to sell its property and the related assets and liabilities to an unaffiliated third party purchaser for a sales price of $6,125,000. Hill Top is being held as an asset held for sale as of March 31, 2007. As of December 31, 2006, Hill Top had property and equipment, at cost, of approximately $8,105,000, accumulated depreciation of approximately $3,128,000 and mortgage debt of approximately $2,755,000. Subsequently, on April 27, 2007, the property and related assets and liabilities of Hill Top were sold (see Note 14 in Item 8). 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. Financial information about this segment is set forth in Item 8 hereto. Competition ----------- The General Partner and/or its affiliates have 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. 3 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. Inflation --------- 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 1A. Risk Factors The Registrant's investment as a limited partner in the Local Partnerships is subject to the risks incident to the potential losses arising from management and ownership of improved real estate. The Registrant's investments also could be adversely affected by poor economic conditions, generally, which could increase vacancy levels and rental payment defaults, and by increased operating expenses, any or all of which could threaten the financial viability of one or more of the Local Partnerships. There also are substantial risks associated with the operations of Apartment Complexes receiving government assistance. These include governmental regulations concerning tenant eligibility, which may make it more difficult to rent apartments in the complexes; difficulties in obtaining government approval for rent increases; limitations on the percentage of income which low and moderate-income tenants may pay as rent; the possibility that Congress may not appropriate funds to enable the Department of Housing and Urban Development to make the rental assistance payments it has contracted to make; and that when the rental assistance contracts expire there may not be market demand for apartments at full market rents in a Local Partnership's Apartment Complex. Item 1B. Unresolved Staff Comments None Item 2. Properties. As of March 31, 2007, the Registrant held interests in three remaining Local Partnerships (one of which was subsequently sold on April 27, 2007) which own the following Properties which continue to be operated in a manner to qualify for Tax Credits:

Occupancy ~~Rate~~ Rents as of Rate as of Property Number of Units May 1, ~~2006~~2007 May 1, ~~2006~~2007 --------------------------------------------- --------------- ------------- -----------~~---~~ Diamond Street Venture Philadelphia, PA 48 473-540 8879% ~~Papillion Heights Apartments L.P. Papillion, NE 48 495 73%~~ Hill Top Homes Apartments Limited Partnership Arlington, TX 171 565-770 8189% ~~Brookland Park Plaza Limited Partnership Richmond, VA 77 563 83%~~ Compton Townhouses Limited Partnership Cincinnati, OH 39 765 9792%

(a) At March 31, 2007, the Registrant holds a 98% interest in Hill Top and Compton Townhouses Limited Partnership ("Compton Townhouses") and a 98.99% interest in Diamond Street Venture ("Diamond Street"). 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. Hill Top is comprised of a two-story building surrounded by 13 one-story complexes 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. Hill Top was subsequently sold on April 27, 2007 (see Note 14 in Item 8). 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. 4 Item 3. Legal Proceedings In November 2006, a former general partner of Brookland commenced a lawsuit against Brookland, Centerline and an officer of Centerline in the Circuit Court of the City of Richmond, Virginia alleging that Brookland breached an obligation to pay a fee to the former general partner to compensate him for finding the buyer who purchased the apartment complex. The complaint alleges breach of contract and quantum meruit claims against Brookland for $98,000 for failure to pay the fee allegedly owed to the former general partner. The complaint also alleges a defamation claim against the other defendants seeking $600,000 in damages. The parties have reached an agreement in principal to settle this litigation in the amount of $75,000 which will be paid by Centerline and its insurer, and management anticipates that the lawsuit will be withdrawn. Item 4. Submission of Matters to a Vote of Security Holders None 5 PART II Item 5. Market for Registrant's BUC$, Related Limited Partner Matters and Issuer Purchases of Equity Securities As of May 25, 2007, there were 2,192 BUC$ holders of record owning a total of 38,125 BUC$. Additionally, the General Partner holds one BUC$. A significant secondary 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$. There are no material restrictions upon the Registrant's present or future ability to make distributions in accordance with the provisions of the Partnership Agreement; however, the Registrant has paid no distributions from operations or otherwise since inception. No distributions are anticipated in the foreseeable future. Transfer Procedures ------------------- The Registrant from time to time receives requests by unit holders and others to transfer BUC$ and/or limited partnership interests. Such requests may occur in connection with tender offers for the Registrant's units. Such requests implicate the Registrant's policies and procedures concerning transfers generally and tender offers in particular, which were adopted by the Registrant pursuant to the terms of its Registrant Agreement, to ensure compliance with applicable law, avoid adverse tax consequences for the Registrant and its investors, and preserve the Registrant's advantageous tax status. In prior years, the Registrant relied on the 5% safe harbor established by Internal Revenue Service ("IRS") regulations to avoid being characterized as a "publicly-traded partnership" that is taxed as a corporation. The 5% safe harbor, however, expired and is no longer available as of December 31, 2005. Accordingly, the Registrant now relies on a 2% safe harbor established by another IRS regulation to avoid being characterized as a "publicly-traded partnership" that is taxed as a corporation. A brief summary of certain of the Registrant's key policies, practices and requirements with respect to transfers and tender offers is as follows: o No transfer (whether for substitution, assignment or otherwise) is effective or binding on the Registrant unless and until it is approved by the General Partner. o No transfer will be approved unless the transferor and transferee submit complete and properly executed forms of the Registrant's own transfer documentation. The Registrant does not accept forms of transfer documentation other than its own and does not accept signatures made by power of attorney in lieu of original signatures by each of the transferors and transferees. o The Registrant will not approve transfers that in the cumulative aggregate for any tax year exceed the IRS 2% safe harbor, unless a financially responsible person provides the Registrant and its partners with (i) an indemnity (in form and substance in all ways acceptable to the General Partner) for all liability (including, without limitation, any adverse tax consequences) arising from or relating to exceeding the 2% safe harbor and (ii) a legal opinion (in form and substance in all ways acceptable to the General Partner) that there will be no adverse tax consequences to the Registrant and its partners from exceeding the 2% safe harbor. o In order to avoid the undesirable situation of one or more tender offers consuming the entire safe harbor limitation early in the tax year and leaving the Registrant's remaining investors with no liquidity opportunity for the rest of that tax year, the Registrant restricts the cumulative aggregate total of transfers made pursuant to all tender offers to 1.5% of its outstanding units in each tax year, unless a financially responsible person conducting such tender offer provides the Registrant with an acceptable indemnity and legal opinion of the type described above. At the end of each tax year, the General Partner, in its discretion, may allow the cumulative total number of transfers (including those by tender offer) to reach the 2% safe harbor limit. o The Registrant requires that all tender offers for its units be conducted in accordance with all applicable law including, without limitation, the federal securities laws. The foregoing is solely a summary of the Registrant's policies, requirements and practices with respect to transfers and tender offers. More complete information, including a copy of the Registrant's transfer documentation package, may be obtained from the Registrant. 6 Item 6. Selected Financial Data The following table presents selected financial data of the Registrant. This data should be read in conjunction with the consolidated financial statements of the Registrant and the notes thereto set forth in Item 8.

Years Ended March 31, ---------------------------------------------------------------------------- OPERATIONS 2007 2006* 2005* 2004* 2003* 2002* -------------------------------------- ------------- -------------- ------------- ------------- ------------ Rental and other income $ 2565,~~348,790~~401 $ 2612,~~439,020~~573 $ 2629,~~310,407~~690 $ 2648,~~610,786~~146 $ 2694,~~568,170~~438 ============= ============== ============= ============= ============ Interest income $ 584,~~046~~805 $ 4,~~042~~579 $ 3,~~857~~368 $ 32,~~811~~940 $ 152,~~450~~047 ============= ============== ============= ============= ============ Interest expense $ ~~638~~92,~~884~~187 $ ~~666~~91,~~439~~660 $ ~~697~~100,~~321~~585 $ ~~723~~106,~~067~~970 $ ~~740~~126,~~882~~900 ============= ============== ============= ============= ============ Depreciation and amortization expenses $ ~~711~~165,~~019~~305 $ ~~713~~233,~~930~~695 $ ~~669~~234,~~929~~321 $ ~~659~~192,~~121~~215 $ ~~661~~180,~~378~~501 ============= ============== ============= ============= ============ Loss before minority interest and discontinued operations $ (1453,~~230,822~~851) $ (1678,~~116,458~~096) $ (1637,~~188,211~~083) $ (~~917~~560,~~814~~674) $ (~~969~~472,~~549~~141) ============= ============== ============= ============= ============ Minority interest in loss of local partnerships from operations $ ~~1,662~~998 $ ~~1,272~~732 $ ~~1,857~~412 $ ~~1,097~~695 $ ~~1,508~~337 ============= ============== ============= ============= ============ Loss before discontinued operations $ (1452,~~229,160~~853) $ (1677,~~115,186~~364) $ (1636,~~186,354~~671) $ (~~916~~559,~~717~~979) $ (~~968~~471,~~041~~804) ============= ============== ============= ============= ============ Income (loss) from discontinued operations including gain ~~(loss)~~ on sale and minority interest $ 102,~~553~~861,~~528~~054 $ (210,~~983~~001,~~781)~~732 $ (23,~~613~~462,~~484~~296) $ (23,~~720~~239,~~282~~859) $ (23,~~640~~165,~~062~~195) ============= ============== ============= ============= ============ Net income (loss) $ 2,408,201 $ 9,324,368 $ (4,098,967) $ (3,799,838) $ (3,636,999) ~~$ (3,608,103)~~ ============= ============== ============= ============= ============ Loss from operations per limited partner BUC$ $ (3211.0882) $ (2917.1168) $ (3016.9662) $ (2314.9261) $ (2512.2731) Income (loss) from discontinued operations per limited partner BUC$ $ ~~275~~74.4367 $ ~~(77~~261.~~87)~~03 $ (6890.2136) $ (7184.0056) $ (6882.9061) ------------- -------------- ------------- ------------- ------------ Net income (loss) per limited partner BUC$ $ 62.85 $ 243.35 $ (106.98) $ (99.17) $ (94.92) ~~$ (94.17)~~ ============= ============== ============= ============= ============ Total assets $ 8,289,118 $ 15,525,866 $ 53,860,978 $ 55,556,172 $ 58,143,529 ~~$ 60,492,083~~ ============= ============== ============= ============= ============ Mortgage notes payable $ 6,657,567 $ 10,243,965 $ 43,771,002 $ 44,697,118 $ 45,294,215 ~~$ 46,015,770~~ ============= ============== ============= ============= ============

* Reclassified for comparative purposes. 7 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources ------------------------------- The Registrant originally 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 Tax Credits. As of March 31, 2007, the Registrant sold the Property and the related assets and liabilities of four Local Partnerships and the limited partnership interest of one Local Partnership. See Note 11 in Item 8 for a discussion of Sale of Properties. In addition, as of March 31, 2007, one Local Partnership entered into a purchase and sale agreement to sell its property and related assets and liabilities. Subsequently on April 27, 2007, the property and related assets and liabilities of that Local Partnership were sold. See Notes 12 and 14 in Item 8 for a discussion of Asset Held for Sale and Subsequent Event. Short-Term ---------- The Registrant's primary source of funds is rental revenues, which are fully utilized at the Property level, and cash distributions from operations and sales of the Local Partnerships in which the Registrant has invested. Such funds are available to meet the obligations of the Registrant. During the years ended March 31, 2007, 2006 and 2005, such distributions amounted to approximately $1,012,000, $1,997,000 and $114,000, respectively which included distributions and proceeds from sales amounting to approximately $886,000, $1,846,000 and $0, respectively. For the year ended March 31, 2007, cash and cash equivalents of the Registrant and its consolidated Local Partnerships decreased approximately $1,194,000. The decrease is attributable to net cash used by operating activities ($48,000), payments of mortgage notes ($2,470,000), a decrease in capitalization of consolidated subsidiaries attributable to minority interest of approximately ($2,000), a decrease in development fees payable ($99,000) and distributions ($1,495,000) which exceeded dispositions of property ($74,000), a net increase in due to Local General Partners and affiliates of Local Partnerships, the General Partner and its affiliates ($57,000), net proceeds from sale of property ($2,712,000), and advances from General Partner ($78,000). Included in adjustments to reconcile the net income to net cash provided by operating activities is depreciation and amortization of approximately $483,000 and a gain on sale of property of approximately $2,429,000. 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. A working capital reserve maintained by the Registrant of approximately $956,000 remained unused at March 31, 2007. During the year ended March 31, 2007, distributions from sales proceeds were made to the BUC$ holders of approximately $1,487,000 and the General Partner of approximately $7,000. Long-Term --------- Partnership management fees owed to the General Partner amounting to approximately $466,000 and $1,292,000 were accrued and unpaid as of March 31, 2007 and 2006, respectively. During the year ended March 31, 2007 management deemed the unpaid partnership management fees that were related to the sold properties uncollectible and, as a result, management fees in the amount of approximately $808,000 were written-off, resulting in a non-cash General Partner contribution of the same amount. Without the General Partner's continued allowance of accrual without payment of certain fees, expense reimbursements and advances, the Registrant would not be in a position to meet its obligations. 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 Partnerships in accordance with the respective deficit guaranty agreements. In addition, the Registrant's financial statements as of March 31, 2007 and 2006 also reflect payables of $599,009 and $523,859, respectively, under operating deficit guaranty agreements at Hill Top, which have expired. As of March 31, 2007, all operating deficit guaranty agreements have expired. The resolution of contingencies, if any, affecting Local Partnerships is not anticipated to impact future results of operations, liquidity or financial condition in a material way because the maximum loss the Registrant would be liable for its net investment in the respective Local Partnerships. 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. Management is not aware of any trends or events, commitments or uncertainties which have not otherwise been disclosed that will or are likely to impact liquidity in a material way. Management believes the only impact would be from laws that have not yet been adopted. The portfolio is diversified by the location of the Properties around the United States so that if one area of the country is experiencing downturns in the economy, the remaining Properties in the portfolio may be experiencing upswings. However, the geographic diversification of the portfolio may not protect against a general downturn in the national economy. The Registrant has invested the proceeds of its offering in eight Local Partnerships, all of which have had their Tax Credits fully in place and have expired. The Tax Credits are attached to the Property for a period of ten years, and are transferable with the Property during the remainder of the 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. The Compliance Period will end at various dates through December 31, 2007 with respect to the Properties depending upon when the Tax Credit period commenced. 8 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 2007 vs. Fiscal 2006 --------------------------- Rental income decreased approximately $43,000 for the year ended March 31, 2007 as compared to 2006, primarily due to decreases in occupancy at two Local Partnerships. Interest income increased approximately $80,000 for the year ended March 31, 2007 as compared to 2006, primarily due to higher cash and cash equivalent balances earning interest at the Registrant level. Total expenses, excluding general and administrative, general and administrative-related parties, depreciation and amortization and repairs and maintenance, remained fairly consistent with a decrease of less than 1%. General and administrative increased approximately $105,000 for the year ended March 31, 2007 as compared to 2006, primarily due to an increase in bad debt expense at two Local Partnerships and an increase in audit fees at the Registrant level. General and administrative-related parties decreased approximately $203,000 for the year ended March 31, 2007 as compared to 2006, primarily due to a decrease in partnership management fees resulting from the sale of properties and a decrease in expense reimbursements at the Partnership level. Depreciation and amortization decreased approximately $68,000 for the year ended March 31, 2007 as compared to 2006, primarily due to the dispositions of fixed assets in 2007 at one Local Partnership. Repairs and maintenance decreased approximately $23,000 for the year ended March 31, 2007 as compared to 2006, primarily due to a decrease in carpet replacements and floor repairs at one Local Partnership and a decrease in turnover expenses at a second Local Partnership. Fiscal 2006 vs. Fiscal 2005 --------------------------- Rental income decreased approximately $18,000 for the year ended March 31, 2006 as compared to 2005, primarily due to a decrease in occupancy at one Local Partnership. Total expenses, excluding repairs and maintenance remained fairly consistent with a decrease of approximately 1%. Repairs and maintenance increased approximately $41,000 for the year ended March 31, 2006 as compared to 2005, primarily due to an increase in turnover expenses and trash removal costs at one Local Partnership and an increase in carpet replacements and floor repairs at a second Local Partnership. Tabular Disclosure of Contractual Obligations --------------------------------------------- The following table summarizes the Registrant's commitments from operations as of March 31, 2007 to make future payments under its debt agreements and other contractual obligations.

Less than 1 - 3 3 - 5 More than Total 1 Year Years Years 5 Years ------------ ------------ ------------ ------------ ------------ Mortgage notes payable (a) $10 3,~~243~~902,~~965~~654 $ ~~262~~1,~~461~~119,347 $ 264,~~641,802~~298 $ ~~515~~72,~~143~~330 $ 62,~~824~~646,~~559~~679 ============ ============ ============ ============ ============

(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). The following table summarizes the Registrant's commitments from discontinued operations as of March 31, 2007 to make future payments under its debt agreements and other contractual obligations.

~~Gross~~Less ~~Carrying~~than ~~Value~~1 of- ~~Occupancy~~3 ~~Number~~3 ~~Property~~- at5 ~~Rate~~More atthan ~~Property~~Total ~~(a)~~1 ofYear ~~Units~~Years ~~March~~Years ~~31,~~5 ~~2006~~Years ~~December 31, 2005 (c)~~ ------------ ------------~~-----------------------------~~ ------------ ------------~~---~~ ------------~~---------~~ ~~RMB~~Mortgage ~~Limited~~note ~~Partnership~~payable (~~Hubbard's Ridge~~a) ~~(d) 0~~ $ ~~0 84% Garland, TX Cutler Canal II Associates, Ltd. (e) 0 0 98% Miami, FL Diamond Street Venture (b) 48~~ 2,~~930~~754,~~103~~913 ~~92%~~$ ~~Philadelphia~~141,143 PA$ ~~Papillion Heights Apartments L.P. 48 2~~323,~~222,850~~493 ~~63%~~$ ~~Papillion~~387,415 NE$ ~~Hill Top Homes Apartments Limited Partnership 171 8~~1,~~104~~902,~~661~~862 ~~78%~~============ ~~Arlington,~~============ TX============ ~~Palm~~============ Beach Apartments, Ltd. (Summer Creek Villas) (f) 0 0 0% West Palm Beach, FL Brookland Park Plaza Limited Partnership (g) 77 6,449,682 86% Richmond, VA Compton Townhouses Limited Partnership 39 2,446,958 90% Cincinnati, OH ----------- $22,154,254 ============

(a) The mortgage note is collateralized by land, buildings and improvements and leases related thereto. Off-Balance Sheet Arrangements ------------------------------ The Registrant has no off-balance sheet arrangements. 9 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. Critical Accounting Policies ---------------------------- 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 Registrant complies with Statement of Financial Accounting Standards 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, 2007, the Registrant has recorded $2,700,000 as a loss on impairment of assets or reductions to estimated fair value. 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 Registrant 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 Registrant may be subject to other state and local taxes in jurisdictions in which it operates. For income tax purposes, the Registrant'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 consists primarily of 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. 10 Property Information -------------------- As of March 31, 2007, the Registrant held interests in three of its original eight Local Partnerships (one of which was sold subsequently on April 27, 2007). The following schedule gives specific details about the related Properties.

~~Sequential~~Gross ~~Page~~Carrying Value of Occupancy Number Property at Rate at Property (a) of Units March 31, 2007 December 31, 2006(c) ------------------------------------------------------------ ~~(a)~~-------- 1.-------------- ~~Consolidated~~------------------- ~~Financial~~RMB ~~Statements~~Limited ~~Report~~Partnership of(Hubbard's ~~Independent~~Ridge) ~~Registered~~(d) ~~Public~~Garland, ~~Accounting~~TX ~~Firm~~0 12$ ~~Consolidated~~0 ~~Balance~~0% ~~Sheets~~Cutler atCanal ~~March~~II 31Associates, ~~2006~~Ltd. ~~and~~(e) ~~2005~~Miami, 21FL ~~Consolidated~~0 ~~Statements~~0 of0% ~~Income~~Diamond ~~for~~Street ~~the~~Venture ~~Years~~(b) ~~Ended~~Philadelphia, ~~March~~PA 3148 2,856,052 ~~2006~~77% Papillion Heights Apartments L.P. (Papillion) (h) Papillion, ~~2005~~NE ~~and~~0 ~~2004~~0 220% ~~Consolidated~~Hill ~~Statements~~Top ofHomes ~~Changes~~Apartments inLimited ~~Partners'~~Partnership ~~Capital~~(Hill Top) (~~Deficit~~i) ~~for~~Arlington, ~~the~~TX ~~Years~~171 ~~Ended~~8,104,661 ~~March~~96% ~~31,~~Palm ~~2006~~Beach Apartments, ~~2005~~Ltd. ~~and~~(Summer ~~2004~~Creek 23Villas) ~~Consolidated~~(f) ~~Statements~~West ofPalm ~~Cash~~Beach, ~~Flows~~FL ~~for~~0 ~~the~~0 ~~Years~~0% ~~Ended~~Brookland ~~March~~Park ~~31,~~Plaza ~~2006~~Limited Partnership (Brookland) (g) Richmond, ~~2005~~VA ~~and~~0 ~~2004~~0 240% ~~Notes~~Compton toTownhouses ~~Consolidated~~Limited ~~Financial~~Partnership ~~Statements~~Cincinnati, 25OH 39 2,446,958 84% -------------- $ 13,407,671 ==============

(a) At March 31, 2007, the Registrant holds, a 98% interest in Hill Top and Compton Townhouses and a 98.99% interest in Diamond Street. (b) The investment in property relating to the Diamond Street (as defined) 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. (d) The property and the related assets and liabilities of Hubbard's Ridge were sold on January 18, 2006. (e) The property and the related assets and liabilities of Cutler Canal II were sold on March 28, 2006. (f) The property and the related assets and liabilities of Summer Creek Villas were sold on July 14, 2005. (g) The property and related assets and liabilities of Brookland were sold on October 31, 2006. (h) The Registrant's limited partnership interest in Papillion was sold on November 14, 2006. (i) Hill Top executed a purchase and sale agreement on February 6, 2007 and is included as an asset held for sale at March 31, 2007. Subsequently, the property and related assets and liabilities were sold on April 27, 2007 (see Notes 12 and 14 in Item 8). 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 5 to the financial statements the fair value of the mortgage notes payable. The Registrant does not have any other market risk sensitive instruments. 11 Item 8. Financial Statements and Supplementary Data Sequential Page ---------- (a) 1. Consolidated Financial Statements Report of Independent Registered Public Accounting Firm 13 Consolidated Balance Sheets at March 31, 2007 and 2006 17 Consolidated Statements of Operations for the Years Ended March 31, 2007, 2006 and 2005 18 Consolidated Statements of Changes in Partners' Capital (Deficit) for the Years Ended March 31, 2007, 2006 and 2005 19 Consolidated Statements of Cash Flows for the Years Ended March 31, 2007, 2006 and 2005 20 Notes to Consolidated Financial Statements 21 12 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, 2007 and 2006, and the related consolidated statements of operations, changes in partners' capital (deficit) and cash flows for the years ended March 31, 2007, 2006 and 2005. 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, 2007 and 2006, we did not audit the financial statements of certain investee partnerships which represent $0 and $6,800,462, respectively, in total assets and $0, $1,495,773 and $(470,468), respectively, of the net income (loss) as of and for the years ended March 31, 2007, 2006 and 2005. 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 financing 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 report 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, 2007 and 2006, and the results of their operations, changes in partners' capital (deficit) and their cash flows for the years ended March 31, 2007, 2006 and 2005, 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 schedules listed under Item 15(a)2 in the index are presented for the purpose of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subject to the auditing procedures applied to the audits of the basic financial statements and, in our opinion, based on our audits and the reports of other auditors, fairly state in all material respects the financial statement data required to be set forth therein in relation to the basic financial statements taken as a whole. /s/ REZNICK GROUP, P.C. Bethesda, Maryland June 21, 2007 13 [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, 2005 and 2004, 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of RMB LIMITED PARTNERSHIP as of December 31, 2005 and 2004, and the results of its operations, 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. /s/ DICKEY, WOLF & HUMBARD, LLC Certified Public Accountants Harrisonville, MO January 26, 2006 14 [Letterhead of Coffman and Company, P.C.] INDEPENDENT AUDITOR'S REPORT To the Partners Papillion Heights Apartments, L.P. Springfield, MO 65804 We have audited the accompanying balance sheet of Papillion Heights Apartments, L.P. (a limited partnership), as of December 31, 2005, and the related statements of income, changes in partners' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor we were engaged to perform, and audit of its internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Papillion Heights Apartments, L.P. (a limited partnership) as of December 31, 2005, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. /s/ Coffman and Company, P.C. Springfield, Missouri February 16, 2006 15 [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, 2005 and 2004, 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 standards of the Pubic Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of HILL TOP HOMES APARTMENTS LIMITED PARTNERSHIP as of December 31, 2005 and 2004, and the results of its operations, 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. /s/ Dickey, Wolf & Humbard, LLC Certified Public Accountants Harrisonville, MO January 26, 2006 16 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

ASSETS March 31, ---------------------------- 2007 2006 ~~2005~~ ------------ ------------ ~~Assets:~~OPERATING ASSETS Investment in property: Land $ ~~694~~27,~~449~~279 $ 4694,~~005,633~~449 ~~Building~~Buildings and improvements 5,275,732 21,459,805 ~~75,814,413~~ Accumulated depreciation (103,~~579~~367,~~027~~301) (3010,~~492~~579,~~001~~027) ------------ ------------ ~~Net~~1,935,710 ~~investment in property~~ 11,575,227 ~~49,328,045~~Net investment in property Cash and cash equivalents 1,021,151 2,214,692 ~~942,431~~ Cash and cash equivalents held in escrow 113,504 300,903 ~~1,987,739~~ Deferred financing costs, net 15,266 191,129 ~~1,009,427~~ Due from General Partner and its affiliates 0 1,030,863 0 Other assets 20,234 213,052 ~~593,336~~ ------------ ------------ Total operating assets $3,105,865 15,525,866 ------------ ------------ Assets from discontinued operations (Note 13) Investment in property held for sale, net 4,976,662 0 Net assets held for sale 206,591 0 ------------ ------------ Total asset from discontinued operations 5,183,253 0 ------------ ------------ Total assets $ 538,~~860~~289,~~978~~118 $ 15,525,866 ============ ============ LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) ~~Liabilities~~Operating liabilities: Mortgage notes payable $ 103,~~243~~902,~~965~~654 $ 4310,~~771~~243,~~002~~965 Accrued interest payable 5,295 77,583 ~~2,358,266~~ Other accrued expenses and liabilities 279,635 1,084,916 ~~2,818,326~~ Due to ~~local~~Local ~~general~~General ~~partners~~Partners and affiliates of ~~local~~Local ~~partnerships~~Partnerships 1,097,535 2,776,738 ~~8,017,084~~ Development fees payable 1,~~151~~052,~~510~~447 1,151,510 Real estate taxes payable 54,527 88,711 ~~571,993~~ Due to General Partner and its affiliates 499,745 3,314,677 ~~11,784,402~~ ------------ ------------ Total operating liabilities 6,891,838 18,738,100 70------------ ------------ Liabilities from discontinued operations (Note 13) Mortgage notes payable of assets held for sale 2,~~472~~754,~~583~~913 0 Net liabilities related to assets held for sale (including minority interest) 292,484 0 ------------ ------------ Total liabilities from discontinued operations 3,047,397 0 ------------ ------------ Minority ~~interests~~interest in ~~local~~Local ~~partnerships~~Partnerships 24,164 183,027 ~~(3,891,976)~~ ------------ ------------ ~~Partners~~PARTNERS' ~~capital~~CAPITAL (~~deficit~~DEFICIT): Limited partners (38,125 BUC$ issued and outstanding) (43,~~127~~218,~~006~~306) (134,~~404~~127,~~752~~006) General partner (1 BUC$ issued and outstanding) 1,544,025 731,745 ~~685,123~~ ------------ ------------ Total partners' capital (deficit) (31,~~395~~674,~~261~~281) (123,~~719~~395,~~629~~261) ------------ ------------ Total liabilities and partners' capital (deficit) $ 158,~~525~~289,~~866~~118 $ 5315,~~860~~525,~~978~~866 ============ ============

See accompanying notes to consolidated financial statements. 17 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS

Year Ended March 31, -------------------------------------------- 2007 2006* 2005* 2004* ------------ ------------ ------------ Operations Revenues Rental income $ 2557,~~316,289~~542 $ 2600,~~411,172~~470 $ 2618,~~264,291~~163 Other income 327,~~501~~859 2712,~~848~~103 4611,~~116~~527 Interest income 584,~~046~~805 4,~~042~~579 3,~~857~~368 ------------ ------------ ------------ Total revenues 2650,~~353,836~~206 2617,~~443,062~~152 2633,~~314,264~~058 ------------ ------------ ------------ Expenses Interest ~~600~~92,~~272~~187 ~~627~~91,~~827~~660 ~~658~~100,~~709~~585 ~~Interest-related parties (Note 6 and 7) 38,612 38,612 38,612~~ Depreciation and amortization ~~711~~165,~~019~~305 ~~713~~233,~~930~~695 ~~669~~234,~~929~~321 Operating and other ~~353~~69,~~502~~862 ~~338~~67,~~032~~106 ~~326~~65,~~760~~034 Taxes and insurance ~~389~~107,~~960~~045 ~~347~~112,~~576~~202 ~~399~~105,~~966~~542 Repairs and maintenance ~~500~~175,~~246~~287 ~~500~~198,~~651~~480 ~~453~~157,~~016~~443 General and administrative ~~508~~284,~~018~~487 ~~497~~179,~~546~~229 ~~492~~185,~~289~~396 General and administrative-related parties (Note 6) ~~483~~209,~~029~~884 ~~495~~412,~~346~~876 ~~463~~421,~~194~~820 ------------ ------------ ------------ Total expenses 31,~~584~~104,~~658~~057 31,~~559~~295,~~520~~248 31,~~502~~270,~~475~~141 ------------ ------------ ------------ Loss from operations before minority interest (1453,~~230,822~~851) (1678,~~116,458~~096) (1637,~~188,211~~083) Minority interest in loss of local partnerships from operations ~~1,662~~998 ~~1,272~~732 ~~1,857~~412 ------------ ------------ ------------ Loss from operations (1452,~~229,160~~853) (1677,~~115,186~~364) (1636,~~186,354~~671) ------------ ------------ ------------ Discontinued operations: Income (loss) from discontinued operations (net of minority interest and gain on sale of $2,429,104, $14,824,690, $0 and $0, respectively) 102,~~553~~861,~~528~~054 (210,~~983~~001,~~781)~~732 (23,~~613~~462,~~484~~296) ------------ ------------ ------------ Net income (loss) $ 2,408,201 $ 9,324,368 $ (4,098,967) ~~$(3,799,838)~~ ============ ============ ============ Loss from operations - limited partners $ (1450,~~223,014~~589) $ (1673,~~109,610~~977) $ (1633,~~180,422~~488) Income (loss) from discontinued operations - limited partners 102,~~500~~846,~~760~~749 (29,~~968~~951,~~862)~~723 (23,~~600~~444,~~417~~984) ------------ ------------ ------------ Net income (loss)-limited partners $ 2,396,160 $ 9,277,746 $ (4,078,472) ~~$(3,780,839)~~ ============ ============ ============ Number of BUC$ outstanding - limited partners 38,125 38,125 38,125 ============ ============ ============ Loss from operations per BUC$ - limited partners $ (3211.0882) $ (2917.1168) $ (3016.9662) Income (loss) from discontinued operations per BUC$ - limited partners ~~275~~74.4367 ~~(77~~261.~~87)~~03 (6890.2136) ------------ ------------ ------------ Net income (loss) per BUC$ - limited partners $ 62.85 $ 243.35 $ (106.98) ~~$ (99.17)~~ ============ ============ ============

* Reclassified for comparative purposes. See accompanying notes to consolidated financial statements. 18 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, ~~2003~~2004 $ (48,~~820~~620,~~824~~662) $ (59,~~545~~326,~~441~~280) $ ~~724~~705,~~617~~618 $ 38,126 Net Loss (34,~~799~~098,~~838~~967) (34,~~780~~078,~~839~~472) (1820,~~999~~495) 0 ------------ ------------ ------------ ------------ Partners' capital (deficit) March 31, ~~2004~~2005 (812,~~620~~719,~~662~~629) (913,~~326~~404,~~280~~752) ~~705~~685,~~618~~123 38,126 Net Loss (49,~~098~~324,~~967)~~368 (49,~~078~~277,~~472)~~746 ~~(20~~46,~~495)~~622 0 ------------ ------------ ------------ ------------ Partners' capital (deficit) March 31, ~~2005~~2006 (123,~~719~~395,~~629~~261) (134,~~404~~127,~~752~~006) ~~685~~731,~~123~~745 38,126 Net income 92,~~324~~408,~~368~~201 92,~~277~~396,~~746~~160 4612,~~622~~041 0 Distribution (1,494,932) (1,487,460) (7,472) 0 Contribution - write-off of partnership management fee related to sold properties 807,711 0 807,711 0 ------------ ------------ ------------ ------------ Partners' capital (deficit) March 31, ~~2006~~2007 $ (31,~~395~~674,~~261~~281) $ (43,~~127~~218,~~006~~306) $ ~~731~~1,~~745~~544,025 $ 38,126 ============ ============ ============ ============

See accompanying notes to consolidated financial statements. 19 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended March 31, -------------------------------------------- 2007 2006 2005 ~~2004~~ ------------ ------------ ------------ Cash flows from operating activities: Net income (loss) $ 2,408,201 $ 9,324,368 $ (4,098,967) ~~$ (3,799,838)~~ ------------ ------------ ------------ Adjustments to reconcile net income (loss) to net cash used in operating activities: Gain on sale of property (2,429,104) (14,824,690) 0 Capital contribution - General Partner 807,711 0 0 Depreciation and amortization 483,047 1,884,192 2,412,369 ~~2,440,364~~ Minority interest in ~~income~~ (loss) income of local partnerships (1,118,763) 2,126,807 (1,095,727) ~~(1,048,921)~~Decrease (~~Increase~~increase) ~~decrease~~ in cash held in escrow 39,616 (5,801,152) (765,438) ~~96,043~~ Increase ~~(decrease)~~ in real estate taxes payable 25,715 7,630 397,975 ~~(5,858)~~ Increase in accrued interest payable 16,325 241,752 177,522 ~~58,326~~ Increase in other assets (93,168) (1,130,310) (209,528) (~~16,353~~Decrease) ~~Decrease (~~increase) in other accrued expenses and liabilities (187,933) 1,340,015 863,352 ~~(150,028)~~ ------------ ------------ ------------ Total adjustments (2,456,554) (16,155,756) 1,780,525 ~~1,373,573~~ ------------ ------------ ------------ Net cash used in operating activities (48,353) (6,831,388) (2,318,442) ~~(2,426,265)~~ ------------ ------------ ------------ Cash flows from investing activities: ~~Investments~~Dispositions (investments) in property 74,051 (18,162) (15,831) ~~(52,236)~~ Proceeds from sale of property 2,825,000 45,500,000 0 0 Costs paid relating to sale of property (113,442) (7,671,272) 0 0 ------------ ------------ ------------ Net cash provided by (used in) investing activities 2,785,609 37,810,566 (15,831) ~~(52,236)~~ ------------ ------------ ------------ Cash flows from financing activities ~~Proceeds~~Payments ~~from~~on mortgage notes ~~0 0 1~~(2,~~197~~469,~~500~~871) ~~Payments on mortgage notes~~ (23,565,444) (926,116) ~~(1,794,597)~~Decrease ~~Increase~~ in ~~deferred~~development ~~costs~~fees 0payable 0 (999,~~362~~063) 0 0 Advances (Repayments) ~~Advances~~ from General Partner 77,922 (8,156,642) 1,348,459 ~~1,663,375~~ Increase in due to Local General Partners and affiliates of Local Partnerships, General Partner and its affiliates 56,679 2,015,169 1,074,974 ~~847,278 Decrease in due to Local General Partners and affiliates of Local Partnerships, General Partner and its affiliates 0 0 (59,353)~~ Advance from local limited partner 0 0 563,334 ~~505,316~~Distribution ~~Decrease (increase) in capitalization of consolidated subsidiaries attributable~~ to minority interest partner (1,532) 0 0 Distribution (~~557~~1,494,932) 0 0 ------------ ------------ ------------ Net cash (used in) (provided by) financing activities (3,930,797) (29,706,917) 2,060,651 ~~2,349,600~~ ------------ ------------ ------------ Net ~~increase~~ (decrease) increase in cash and cash equivalents (1,193,541) 1,272,261 (273,622) ~~(128,901)~~ Cash and cash equivalents at beginning of year 2,214,692 942,431 1,216,053 ~~1,344,954~~ ------------ ------------ ------------ Cash and cash equivalents at end of year $ 1,021,151 $ 2,214,692 $ 942,431 ~~$ 1,216,053~~ ============ ============ ============ Supplemental disclosures of cash flow information: Interest paid $ 728,483 $ 5,677,068 $ 4,626,705 ~~$ 4,696,764~~ ============ ============ ============ Summarized below are the components of the gain on sale of property: Proceeds from sale of investments - net $ (2,711,558) $(37,828,728) $ 0 Decrease in investment in property, net of accumulated depreciation $4,119,691 36,075,214 $ 0 ~~$ 0~~ Decrease in deferred costs 48,889 629,872 0 0 Decrease in other assets 1,277,056 479,731 0 0 Decrease in cash held in escrow 94,026 7,487,988 0 0Decrease ~~Increase~~ in other liabilities 4(1,~~920~~475,~~129~~422) 0(2,751,143) 0 Decrease in real estate taxes payable (59,899) (490,912) 0 0 Decrease in accrued interest payable (2,927) (2,522,435) 0 0 Decrease in mortgage notes payable (1,116,527) (9,961,593) 0 0 Decrease in due to Local General Partners and affiliates of Local Partnerships, General Partner and its affiliates (1,735,882) (5,698,828) 0 0 Decrease in due to General Partner and affiliates (1,827,984) (2,192,053) 0 0 Noncash contribution from sale to related party 961,433 1,948,197 0 0

See accompanying notes to consolidated financial statements. 20 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007 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"). The ultimate parent of the General Partner is Centerline Holding Company ("Centerline") (which had been known as CharterMac until April 2007). On March 15, 2007, Centerline announced the retirement of Alan P. Hirmes as Chief Financial Officer of Centerline. Upon his retirement, he also resigned from his position as Member, President, Chief Executive Officer and Chief Financial Officer of the General Partner. Centerline has named Robert L. Levy as Chief Financial Officer and Andrew J. Weil as Chief Executive Officer to replace Mr. Hirmes. Independence SLP L.P. ("SLP"), an affiliate of Centerline Capital, 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, 2007, the Partnership has investments in three Local Partnerships. Through the year ended March 31, 2007, the Partnership has sold the Property and the related assets and liabilities of four Local Partnerships and the limited partnership interest of one Local Partnership (see Note 11 for discussion of sales). In addition, as of March 31, 2007, one Local Partnership entered into a purchase and sale agreement to sell its property and related assets and liabilities. Subsequently, on April 27, 2007, the property and related assets and liabilities of that Local Partnership were sold (see Notes 12 and 14). 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. For the years ended March 31, 2007, 2006 and 2005, the consolidated financial statements include the accounts of the Partnership and 7, 8 and 8 subsidiary partnerships, respectively (originally 8), 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 the date of acquisition whose cost approximates market value. 21 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007 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 the date of acquisition held for payment of real estate taxes and insurance, tenant security deposits and replacement reserves. 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. During the year ended March 31, 2007, distributions from sales proceeds were made to the limited partners of approximately $1,487,000 and to the General Partners of approximately $7,000. 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 components of deferred financing costs and their periods of amortization from operating assets are as follows:

March 31, ---------------------------- Period 2007 2006 ~~2005~~ (Months) ------------ ------------ ------------- Deferred financing costs $ ~~421~~76,~~989~~373 $ 5421,~~328,863~~989 ** Less: Accumulated amortization (~~230~~61,~~860~~107) (4230,~~319,436~~860) ------------ ------------ $ ~~191~~15,~~129~~266 $ 1191,~~009,427~~129 ============ ============

** Over the life of the respective mortgages. Amortization of deferred financing costs from operations amounted to $812 for each of the years ended March 31, 2007, 2006 and 2005 and is estimated to be $812 for each of the next five years. During the years ended March 31, 2007 and 2006, there were net decreases in deferred costs of $92,502 and $4,906,874 and net decreases in accumulated amortization of $43,613 and $4,277,002, respectively, due to write-offs from discontinued operations. 22 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007 The components of deferred costs and their periods of amortization from discontinued assets are as follows:

~~Net~~March ~~Investment~~31, ~~in Property Mortgage Notes Payable~~ -------------------------- --~~-----------------------~~ ~~Description~~2007 ~~(a)~~ 2006 ~~2005~~Period ~~2006 2005~~ ------------~~---------------------------------~~ ------------ ----------- --~~---------~~ ~~-----------~~Financing ~~Apartment~~expenses ~~Complexes: RMB Limited Partnership (Hubbard's Ridge) (c)~~ $ ~~0 $ 2~~253,~~762,678~~114 $ 0 $* ~~4,473,400~~Less: ~~Garland,~~Accumulated TXamortization ~~Cutler Canal II Associates, Ltd.~~ (~~c) 0 7~~140,~~568,352 0 5,610,221 Miami, FL Diamond Street Venture (b~~073) 1,264,341 1,386,121 2,841,492 2,866,414 Philadelphia, PA Papillion Heights Apartments L.P. 1,346,855 1,400,163 1,137,316 1,160,969 Papillion, NE Hill Top Homes Apartments Limited Partnership 5,161,645 5,346,661 2,883,887 3,001,742 Arlington, TX Palm Beach Apartments, Ltd. (Summer Creed Villas) (c) 0 26,743,429 0 23,202,835 West Palm Beach, FL Brookland Park Plaza Limited Partnership 2,892,474 3,117,193 2,249,935 2,285,018 Richmond, VA Compton Townhouses Limited Partnership 909,912 1,003,448 1,131,335 1,170,403 Cincinnati, OH ----------- -~~----------~~ ----------- -~~----------~~ $~~11,575,227~~ ~~$49~~113,~~328,045~~041 $~~10,243,965~~ ~~$43,771,002~~0 =========== =~~==========~~ =========== =~~==========~~

* Over the life of the respective related mortgages Amortization expense from discontinued operations for the years ended March 31, 2007, 2006 and 2005 amounted to $13,121, $187,614 and $291,931, 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 6). 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 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 from operations at March 31 were:

~~Years~~Net ~~Ended~~Investment ~~March~~in ~~31,~~Property Mortgage Notes Payable --------------------------~~----~~ 2006 2005* 2004* -------- -------- --------- ~~Partnership~~Description ~~management fees~~ (a) ~~$153,911~~2007 ~~$236,760~~2006 ~~$252,986~~2007 ~~Expense~~2006 ~~reimbursement (b) 211,161 134,454 95,165 Local administrative fees (d) 10,000 12,500 12,500~~ -------- -------- --------------------------------- ~~Total general and administrative~~ ----------- ~~General Partner 375,072 383,714 360,651~~ ----------- ----------- ----------- ~~Property~~Apartment ~~management~~Complexes: ~~fees~~Diamond ~~incurred~~Street toVenture ~~affiliates~~(b) ofPhiladelphia, ~~the~~PA ~~subsidiary~~$ ~~partnerships'~~1,119,333 ~~general~~$ ~~partners~~1,264,341 $ 2,812,727 $ 2,841,492 Papillion Heights Apartments L.P. (d) Papillion, NE 0 1,346,855 0 1,137,316 Hill Top Homes Apartments Limited Partnership (e) Arlington, TX 0 5,161,645 0 2,883,887 Brookland Park Plaza Limited Partnership (c) ~~107~~Richmond,~~957~~ ~~111~~VA 0 2,~~632~~892,474 ~~102~~0 2,~~543~~249,935 Compton Townhouses Limited Partnership Cincinnati, OH 816,377 909,912 1,089,927 1,131,335 ----------- ----------- ----------- ~~Total general and administrative~~ ----------- ~~related~~$ ~~parties~~1,935,710 $~~483~~11,~~029~~575,227 $~~495~~ 3,~~346~~902,654 $~~463~~10,~~194~~243,965 =========== =========== =========== ===========

(a) The Partnership holds a 98% interest in Compton Townhouses and a 98.99% interest in Diamond Street, and held a 98% interest in Hill Top (as defined). (b) The investment in property relating to the Diamond Street was reduced by $2,700,000 as of March 31, 1995 representing a loss on impairment of assets. 23 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007 (c) The property and the related assets and liabilities were sold during the year ended March 31, 2007. (d) The limited partnership interest was sold during the year ended March 31, 2007. (e) Hill Top executed a purchase and sale agreement on February 6, 2007. Subsequently, the property was sold on April 27, 2007. The Partnership's Property and related debt from discontinued operations at March 31 was:

~~Years~~Net ~~Ended~~Investment ~~March~~in ~~31,~~Property Mortgage Notes Payable --------------------------~~----~~ ~~2006 2005 2004~~ -------- -------- --------- ~~Local~~Description ~~administrative fees~~ (da) $2007 ~~6,709~~2006 $2007 ~~7,750~~2006 ~~$ 7,750~~ -------- -------- -------- ~~Total general and administrative~~ - ~~general partner 6,709 7,750 7,750~~ -------- ---------------- ----------- ~~Property management fees incurred to affiliates of the subsidiary partnerships' general partners (c) 208,022 272,824 290,776~~ ----------- ----------- ----------- ~~Total~~Apartment ~~general~~Complex: ~~and~~Hill ~~administrative~~Top -Homes ~~related~~Apartments ~~parties~~Limited ~~$214~~Partnership (b) Arlington,~~731~~ TX $~~280~~ 4,~~574~~976,662 $~~298~~ 0 $ 2,~~526~~754,913 $ 0 =========== =========== =========== ===========

(a) The Partnership held a 98% interest in Hill Top. (b) The Property executed a purchase and sale agreement on February 6, 2007. Subsequently, the property was sold on April 27, 2007. NOTE 5 - Mortgage Notes Payable Mortgage notes from operations 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:

~~Years~~Amount ~~Ended March 31,~~ -------------~~-----------------------~~ ~~2006~~2007 ~~2005~~$ ~~2004~~1,119,347 ~~--------~~2008 31,203 2009 33,095 2010 35,101 2011 37,229 Thereafter 2,646,679 -------- ----~~----~~ ~~Hill Top (a)~~ $ 383,~~612 $ 38~~902,~~612~~654 ~~$ 38,612~~ ======== ====~~==== ========~~

Mortgage notes from operations consist of both first mortgages and support loans (second and third mortgages). First mortgages amounting to $1,462,654 bear interest at rates 5.83% and 7.35% and have final maturities on August 1, 2007 and January 1, 2016. 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. At March 31, 2007 and 2006, the estimated fair values of the mortgage notes payable from operations were $1,089,927 and $7,402,473, 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. The mortgage note from discontinued operations is 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 Partnership is reporting, and thereafter is as follows:

~~Years~~Amount ~~Ended March 31,~~ ------------~~------------------------~~ ~~2006~~2007 ~~2005~~$ ~~2004~~141,443 ~~--------~~2008 154,460 2009 169,033 2010 184,981 2011 202,434 Thereafter 1,902,862 -------- ----~~----~~ ~~Summer Creek Villas (b)~~ $~~658,327~~ ~~$811~~2,~~153 $668~~754,~~373~~193 ======== ====~~==== ========~~

24 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007 The mortgage note from discontinued operations bears interest at a rate 9.05% and has final maturities on July 1, 2018. At March 31, 2007 and 2006, the estimated fair values of the mortgage note payable from discontinued operations were $2,754,913 and $0, respectively. This estimate is based upon the present value of expected cash flows discounted at rates currently available to the Local Partnership for similar loans. Fair value estimate is made at a specific point in time, based on relevant market information, and is subjective in nature and involve uncertainties and matters of significant judgment. Accordingly, the estimate presented herein is not necessarily indicative of the amounts that the Local Partnership would pay upon maturity or disposition of the loan. 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 from operations for the years ended March 31, 2007, 2006 and 2005 were as follows:

~~First~~Years ~~Quarter~~Ended ~~Second~~March ~~Quarter~~31, ~~Third Quarter Fourth Quarter~~ ------------- -------------- -----~~--------~~ ~~--------------~~2007 ~~Fiscal Year~~ 2006* 2005* -------- -------- --------~~------------------------~~ ~~Operations:~~Partnership ~~Total~~management ~~Revenue~~fees ~~$ 575,985 $ 582,537 $ 557,053 $ 638,261 =========== =========== =========== =========== Loss from operations $~~ (~~308,496~~a) $ ~~(269~~55,~~822)~~167 $ (290,536) $ (360,306) =========== =========== =========== =========== Loss from operations per BUC$ - limited partners $ (8.05) $ (7.04) $ (7.58) $ (9.41) =========== =========== =========== =========== Discontinued Operations: Total Revenue $ 2,031,415 $ 2,153,~~973 $~~ 911~~,893~~ $ ~~913~~236,~~613~~760 ~~===========~~Expense ~~===========~~reimbursement ~~=========== ===========~~ (~~Loss~~b) ~~income from discontinued operations $ (501~~116,~~358)~~348 ~~$10~~211,336,609**161 ~~$ (62~~134,~~185)~~454 $Local ~~780,462~~administrative ~~===========~~fees ~~=========== =========== ===========~~ (~~Loss~~d) ~~income from discontinued operations per BUC$ - limited partners $ (13.08) $ 269.77 $ (1.62) $ 20.36 =========== =========== =========== =========== Net (loss) income $ (809~~2,~~854)~~500 ~~$10~~2,~~066,787~~500 ~~$ (352~~5,~~721)~~000 $ 420,156 =========== =========== =========== =========== Net (loss) income per BUC$ $ (21.13) $ 262.73 $ (9.20) $ 10.95 =========== =========== =========== =========== Fiscal Year 2005* -------- -------- -------- Total general and administrative - General Partner 174,015 367,572 376,214 -------- -------- -------- ~~Operations:~~Property ~~Total~~management ~~Revenue~~fees $incurred ~~612,729~~to $affiliates ~~635,605~~of $the ~~611,043~~subsidiary $partnerships' ~~583,685~~general ~~===========~~partners ~~=========== =========== =========== Loss from operations $~~ (~~273,478~~c) ~~$ (245~~35,~~393)~~869 ~~$ (255~~45,~~920)~~304 ~~$ (340~~45,~~395)~~606 ~~===========~~-------- ~~===========~~-------- ~~=========== =========== Loss from operations per BUC$~~ -------- ~~limited partners $ (7.14) $ (6.40) $ (6.68) $ (8.89) =========== =========== =========== =========== Discontinued Operations:~~ Total ~~Revenue~~general $and ~~1,977,119~~administrative $ 2,034,537 $ 1,932,903 $ 2,568,163 =========== =========== =========== =========== Loss from discontinued operations $ (587,984) $ (637,166) $ (693,476) $(1,065,155) =========== =========== =========== =========== Loss from discontinued operations per BUC$ - ~~limited~~related ~~partners~~parties $ ~~(15.34) $ (16.63) $ (18.10) $ (27.80) =========== =========== =========== =========== Net loss $ (861~~209,~~462)~~884 $ ~~(882~~412,~~559)~~876 $ ~~(949~~421,~~396)~~820 ~~$(1,405,550)~~ ========~~===~~ ========~~===~~ ========~~=== =========== Net loss per BUC$ $ (22.48) $ (23.03) $ (24.78) $ (36.69) =========== =========== =========== ===========~~

* Reclassified for comparative purposes. The costs incurred to related parties from discontinued operations for the years ended March 31, 2007, 2006 and 2005 were as follows:

Years Ended March 31, --------------------------------~~------------~~ 2007 2006* 2005* ~~2004~~ --------~~----~~ --------~~----~~ --------~~----~~ ~~Revenues~~Local ~~Rental~~administrative ~~income~~fees (d) $ 522,~~601,466~~083 $ 714,~~739,511~~209 $ 715,~~612,343~~250 ~~Other 407,011 767,079 824,612 Interest 2,417 6,132 8,236~~ --------~~----~~ --------~~----~~ --------~~----~~ Total ~~revenue~~general ~~6,010,894 8,512,722 8,445,191 ------------ ------------ ------------ Expenses Interest 2,099,174 3,326,635 3,389,396 Interest-related parties (Note 6) 658,327 811,153 668,373 Depreciation~~ and ~~amortization 1,173,173 1,698,439 1,770,435 Operating and other 461,195 658,398 594,874 Taxes and insurance 873,192 1,207,681 1,101,850 Repairs and maintenance 1,258,352 2,195,475 2,030,184 General and~~ administrative ~~1,415,443 2,412,603 2,252,101 General and administrative~~ - ~~related~~general ~~parties~~partner ~~(Note 6) 214~~22,~~731~~083 ~~280~~14,~~574~~209 ~~298~~15,~~526~~250 --------~~----~~ --------~~----~~ --------~~----~~ ~~Total~~Property ~~expenses~~management ~~8,153,587~~fees ~~12,590,958~~incurred ~~12,105,739~~to ~~------------~~affiliates ~~------------ ------------ (Loss) income before minority interest and gain on sale~~ of ~~property~~the ~~(2,142,693)~~subsidiary ~~(4,078,236)~~partnerships' ~~(3,660,548)~~general ~~Gain~~partners ~~on sale of property 14,824,690 0 0 Minority interest in income~~ (~~loss~~c) ~~of subsidiaries from discontinued operations (2~~487,~~128,469)~~740 1270,~~094,455~~675 1338,~~047,064~~850 --------~~----~~ --------~~----~~ --------~~----~~ Total ~~income~~general ~~(loss)~~and ~~from~~administrative ~~discontinued operations $ 10,553,528 $ (2,983,781) $ (2,613,484) ============ ============ ============ Income (loss)~~ - ~~limited~~related ~~partners~~parties ~~from discontinued operations~~ $ 10509,~~500,760~~823 $ (2284,~~968,862)~~844 $ (2354,~~600,417)~~100 ========~~====~~ ========~~====~~ ============ Number of BUC$ units outstanding 38,125 38,125 38,125 ============ ============ ============ Income (loss) discontinued operations per BUC$ $ 275.43 $ (77.87) $ (68.21) ============ ============ ============

* Reclassified for comparative purposes (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 $466,000 and $1,292,000 were accrued and unpaid as of March 31, 2007 and 2006, respectively. During the year ended March 31, 2007, management deemed the unpaid partnership management fees that were related to the sold properties uncollectible and, as a result, management fees in the amount of approximately $808,000 were written-off, resulting in a non-cash General Partner contribution of the same amount. (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 $34,000 and $273,000 were accrued and unpaid as of March 31, 2007 and 2006, respectively. (c) As of December 31, 2006, the properties owned by three of the Local Partnerships were managed by a Local General Partner or its affiliates. Property management fees incurred by subsidiary partnerships amounted to $545,692, $338,637 and $410,854 for the years ended March 31, 2007, 2006 and 2005, respectively. Of these fees $525,524, $315,979 and $384,456 were earned by affiliates of the Local General Partners, (which includes $487,740, $270,675 and $338,850 relating to discontinued operations) of which $0, $97,956 and $167,238 were also earned by affiliates of the Partnership. 25 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007 (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. B) Interest Related Party Expenses Interest expense incurred to related parties from discontinued operations for the years ended March 31, 2007, 2006 and 2005 was as follows:

Years Ended March 31, --------------------------------~~------------~~ 2007 2006 2005 ~~2004~~ --------~~----~~ --------~~----~~ --------~~----~~ ~~Net~~Hill ~~cash~~Top ~~used in operating activities $~~(~~17,466,785~~a) $ (238,~~150,461)~~612 $ (238,~~225,135)~~612 ~~Net cash provided by(used in) investing activities~~ $ 5438,~~679,811~~612 $Summer 0Creek $Villas (~~50,909~~b) ~~Net~~0 ~~cash~~658,327 ~~(used~~811,153 ~~in)~~-------- ~~provided~~-------- by-------- ~~financing~~$ ~~activities~~38,612 $~~(32~~696,~~692,293)~~939 $ 2849,~~130,178~~765 $======== ~~2,203,275~~======== ========

a) In connection with the construction, financing and development of the apartment complex, one of the Local General Partners of Hill Top Homes Apartments Limited Partnership ("Hill Top") made a loan with a principal balance at March 31, 2007 of $426,647 bearing interest at 9.05%. The principal and accrued interests are due at the earlier of the sale or refinancing of the property or December 31, 2007. Interest expense incurred to Hill Top's Local General Partners and their affiliates for the years ended March 31, 2007, 2006 and 2005 are included in the line item "Interest-related parties" in the financial statements. Hill Top entered into a purchase and sale agreement on February 6, 2007. Subsequently, the property was sold on April 27, 2007 (see Notes 12 and 14). b) On July 14, 2005, the property and the related assets and liabilities of Summer Creek Villas Local Partnership ("Summer Creek Villas") were sold to an unrelated third party purchaser (see Note 11). The General Partner and its affiliates had made advances to the Partnership to make operating advances to Summer Creek Villas prior to its sale. As of March 31, 2007 and March 31, 2006, total advances outstanding to Summer Creek Villas from the General Partner (and, in turn, the Partnership) were $0 and $1,618,835, respectively. The advances were unsecured, bearing interest at prime + 2%, and were payable from cash flow as defined by the local partnership agreement. In addition, the Local General Partners made a loan to Summer Creek Villas in connection with the construction, financing and development of the property in the amount of $3,700,000, bearing interest at prime + 2%, with repayments to be made from available cash flows or out of available net sale or refinancing proceeds of Summer Creek Villas. As of March 31, 2007 and 2006, the outstanding balance of this loan was $0 and $1,519,567, respectively. Certain advances and loans (including accrued interest) made to Summer Creek Villas were repaid from available net sale proceeds as defined by the limited partnership agreement of Summer Creek Villas. Interest expense recorded by Summer Creek Villas relating to such advances and loans for the years ended March 31, 2007, 2006 and 2005 is included in the line item "Interest-related parties" in the financial statements (see Note 13). NOTE 7 - Local General Partners and Affiliates of Local Partnerships 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 had 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 varied 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, 2007, all operating deficit guaranty agreements have expired. The Local General Partner of Summer Creek Villas was obligated to fund operating deficits pursuant to two separate operating deficit guaranty agreements. All operating deficit guaranty agreements have either been fully funded or have expired. In prior years the General Partner had elected to treat all advances made under the operating deficit guaranty agreements as non-repayable. As of March 31, 2007 and 2006, development fees of $1,052,447 and $1,151,510 were payable to various Local General Partners. 26 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007 NOTE 8 - Quarterly Financial Information (Unaudited)

~~Sequential~~First ~~Page~~Quarter ~~----------~~Second ~~(a)~~Quarter 1.Third ~~Financial~~Quarter ~~Statements~~Fourth Quarter ---------------~~-----~~ Report of Independent Registered Public Accounting Firm 12 Consolidated Balance Sheets at March 31, 2006 and 2005 21 Consolidated Statements of Income for the Years Ended March 31, 2006, 2005 and 2004 22 Consolidated Statements of Changes in Partners' Capital (Deficit) for the Years Ended March 31, 2006, 2005 and 2004 23 Consolidated Statements of Cash Flows for the Years Ended March 31, 2006, 2005 and 2004 24 Notes to Consolidated Financial Statements 25 (a) 2. Financial Statement Schedules and Report of Independent Registered -------------- -------------- -------------- Fiscal Year 2007 ---------------------------- ~~Public Accounting Firm on Schedules~~ --------------~~---------------------~~ ~~Report~~Operations: ofTotal ~~Independent~~Revenue ~~Registered~~$ ~~Public~~159,360 ~~Accounting~~$ ~~Firm~~167,540 on$ ~~Schedules~~166,515 43$ ~~Schedule~~156,791 ~~III~~============== -============== ~~Real~~============== ~~Estate~~============== ~~and~~Loss ~~Accumulated~~from ~~Depreciation~~operations 44$ ~~All~~(104,031) ~~other~~$ ~~schedules~~(121,714) ~~have~~$ ~~been~~(147,936) ~~omitted~~$ ~~because~~(79,172) ~~they~~============== ~~are~~============== ~~not~~============== ~~required~~============== orLoss ~~because~~from ~~the~~operations ~~required~~per ~~information~~BUC$ is- ~~contained~~limited inpartners ~~the~~$ ~~financial statements or notes thereto~~(2.72) $ (a3.18) $ (3.86) ~~Exhibits~~$ ~~--------~~ (32.106) ~~The~~============== ~~Partnership's~~============== ~~Agreement~~============== of============== ~~Limited~~Discontinued ~~Partnership~~Operations: asTotal ~~adopted~~Revenue on$ ~~May~~786,070 3$ 648,411 ~~1989~~$ ~~and~~481,164 ~~Amendments~~$ ~~thereto~~410,991 ~~dated~~============== ~~May~~============== 25============== ============== Income (loss) from discontinued operations $ 2,914,657 ~~1989~~$ ~~and~~(89,431) ~~June~~$ 2186,444 1989*$ (~~3.2~~50,616) ~~Amendment~~============== ~~Number~~============== 1============== to============== ~~Prudential~~Income (loss) from discontinued operations per BUC$ -~~Bache~~ ~~Tax~~limited ~~Credit~~partners ~~Properties~~$ L76.P07 $ (2.33) ~~Amended~~$ ~~and~~2.26 ~~Restated~~$ ~~Agreement~~(1.33) of============== ~~Limited~~============== ~~Partnership,~~============== ~~dated~~============== ~~October~~Net 1(loss) income $ 2,810,626 1997***$ (~~3.3~~211,146) ~~Form~~$ of(61,492) ~~Amended~~$ ~~and~~(129,787) ~~Restated~~============== ~~Agreement~~============== of============== ~~Limited~~============== ~~Partnership~~Net (~~included~~loss) inincome ~~Prospectus~~per asBUC$ ~~Exhibit~~$ A73.36 $ (5.52)** $ (31.460) ~~Certificate~~$ of(3.39) ~~Limited~~============== ~~Partnership~~============== as============== ~~filed~~============== onFiscal ~~May~~Year 3,2006* ~~1989~~------------------------------------------ ~~and~~Operations: ~~Amendments~~Total ~~thereto~~Revenue ~~dated~~$ ~~May~~144,669 25$ 163,370 ~~1989~~$ ~~and~~143,994 ~~June~~$ 21165,119 1989*============== ~~(3.5)~~============== ~~Amendment~~============== to============== ~~Certificate~~Loss offrom ~~Limited~~operations ~~Partnership~~$ ~~dated~~(182,693) ~~October~~$ 1(151,507) 1997***$ (~~10.1~~154,116) ~~Form~~$ of(189,048) ~~Purchase~~============== ~~and~~============== ~~Sale~~============== ~~Agreement~~============== ~~pertaining~~Loss tofrom ~~the~~operations ~~Partnership's~~per ~~acquisition~~BUC$ of- ~~Local~~limited ~~Partnership~~partners Interests**$ (104.277) ~~Form~~$ of(3.95) ~~Amended~~$ ~~and~~(4.02) ~~Restated~~$ ~~Agreement~~(4.94) of============== ~~Local~~============== ~~Limited~~============== ~~Partnership~~============== ofDiscontinued ~~Local~~Operations: Partnerships**Total ~~(21)~~Revenue ~~Subsidiaries~~$ of2,462,731 ~~the~~$ ~~Registrant~~2,573,140 -$ ~~the~~1,324,952 ~~Local~~$ ~~Partnerships~~1,386,755 ~~set~~============== ~~forth~~============== in============== ~~Item~~============== 2Loss ~~may~~(income) befrom ~~considered~~discontinued ~~subsidiaries~~operations of$ ~~the~~(627,161) ~~Registrant~~$ 3810,218,295** $ (~~31.1~~198,605) ~~Certification~~$ ~~Pursuant~~609,203 to============== ~~Rule~~============== ~~13a-14(a)~~============== or============== ~~Rule~~Loss ~~15d-14~~(aincome) 41from ~~(32.1)~~discontinued ~~Certification~~operations ~~Pursuant~~per toBUC$ ~~Rule 13a~~-~~14(b)~~ orlimited ~~Rule~~partners ~~15d-14~~$ (b16.37) ~~and~~$ ~~Section~~266.68 ~~1350~~$ of(5.18) ~~Title~~$ 1815.90 of============== ~~the~~============== ~~United~~============== ~~States~~============== ~~Code~~Net loss (18income) ~~U.S.C.~~$ ~~1350~~(809,854) 42$ 10,066,787 $ (~~99.1~~352,721) ~~Balance~~$ ~~Sheet~~420,156 ~~and~~============== ~~Report~~============== of============== ~~Independent~~============== ~~Registered~~Net ~~Public~~loss ~~Accounting~~(income) ~~Firm,~~per ~~RCC~~BUC$ ~~Partners~~$ ~~96,~~(21.14) ~~LLC,~~$ ~~March~~262.73 ~~31,~~$ ~~2006~~(9.20) 46$ 10.96 ============== ============== ============== ==============

* Reclassified for comparative purposes. ** The second quarter income from discontinued operations and net income previously reported on the 10-Q have been adjusted to reflect a change in estimate of forgiveness of debt associated with the sale of property totaling approximately $3.6 million which had been reflected as a non-cash contribution by the general partner 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 2006, the account balances exceeded the FDIC limit. NOTE 10 - Commitments and Contingencies Subsidiary Partnership - Other Summer Creek Villas Local Partnership ------------------------------------- On July 14, 2005, the Property and the related assets and liabilities of Summer Creek Villas were sold to an unrelated third party purchaser (see Note 11). The buyer absorbed any and all costs to the Property caused by recent hurricanes (see below) that had been unrepaired at closing. At the date of sale, the insurance claim with respect to the hurricane damage was in the resolution stage with the insurance company; all insurance proceeds will be paid to Summer Creek Villas, rather than the buyer, with no further potential liability on the part of Summer Creek Villas. For several years prior to its sale, Summer Creek Villas had experienced lower than expected economic occupancy levels, which resulted in recurring losses from operations and adversely affected the liquidity of Summer Creek Villas. Despite 27 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007 an increase in rent levels during 2004 and 2003, Summer Creek Villas' operations were impeded by its inability to raise rents sufficiently to pay for its operating and debt costs. Summer Creek Villas was unable to obtain maximum rents as potential residents were restricted based on county median income levels, which limit the maximum income that a prospective resident can earn. Summer Creek Villas had been obligated, since 1996, to repay significant amounts of principal on its mortgage. Effective January 1, 1999, Summer Creek Villas entered into a funding agreement with Palm Beach Investor, L.P. (Summer Creek Villas' "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 provided for a second series of loans to Summer Creek Villas in each of the years 2002, 2003 and 2004, in amounts not to exceed $1,500,000 in the aggregate. Although no formal agreements were reached with the other partners, additional loans from the Partnership (which is the Class A limited partner) were obtained in accordance with the loans to be provided under the funding agreement. Loans made through July 14, 2005 to fund operating deficits totaled $14,493,656 and were comprised of $10,993,656 from the Partnership (which was eliminated in consolidation) and $3,700,000 from the Class C limited partner, which included an emergency hurricane repair advance of $200,000. Brookland Park Plaza Limited Partnership ("Brookland") ------------------------------------------------------ In November 2006, a former general partner of Brookland commenced a lawsuit against Brookland, Centerline and an officer of Centerline in the Circuit Court of the City of Richmond, Virginia alleging that Brookland breached an obligation to pay a fee to the former general partner to compensate him for finding the buyer who purchased the apartment complex. The complaint alleges breach of contract and quantum meruit claims against Brookland for $98,000 for failure to pay the fee allegedly owed to the former general partner. The complaint also alleges a defamation claim against the other defendants seeking $600,000 in damages. The parties have reached an agreement in principal to settle this litigation in the amount of $75,000 which will be paid by Centerline and its insurer, and management anticipates that the lawsuit will be withdrawn. NOTE 11 - Sale of Properties/Local Partnership Interests The Partnership is currently in the process of disposing of its investments. It is anticipated that this process will take a number of years. As of March 31, 2007, the Partnership sold the Property and the related assets and liabilities of four Local Partnerships and the limited partnership interest in one Local Partnership. In addition, one Local Partnership entered into a purchase and sales agreement to sell its property and related assets and liabilities. Subsequently, on April 27, 2007, the property and related assets and liabilities of one Local Partnership were sold (see Notes 12 and 14). There can be no assurance as to when the Partnership will dispose of its two remaining investments or the amount of proceeds which may be received. However, based on the historical operating results of the Local Partnerships and the current economic conditions, including changes in tax laws, it is unlikely that the proceeds from such sales received by the Partnership will be sufficient to return to the limited partners their original investment. On November 14, 2006, the Partnership's limited partnership interest in Papillion Heights Apartment, L.P. ("Papillion") was sold to the Local General Partner for a sales price of $25,000. The Partnership received proceeds of $25,000. Because Papillion was sold to a related party of the Local Partnership, the sale resulted in a non-cash contribution to the Local Partnership from the Local General Partner of approximately $205,000. Such contribution flows through minority interest as a result of the write-off of the deficit basis in the property of approximately $180,000 and $25,000 from the sale. The sale resulted in the liquidation of Papillion. On October 31, 2006, the property and related assets and liabilities of Brookland were sold to an unrelated third party purchaser for a sales price of $2,800,000. The Partnership received $467,577 as a distribution from this sale after the repayment of mortgages, other liabilities and closing costs of approximately $2,332,000. The sale resulted in a loss of approximately $134,000, resulting from the write-off of the deficit basis in the property at the date of the sale. The sale resulted in the liquidation of Brookland. On March 28, 2006, the property and the related assets and liabilities of Cutler Canal II Associates, Ltd. ("Cutler Canal II") were sold to an affiliate of the Local General Partner for a sales price of $9,000,000. The Partnership received $1,800,000 as a distribution from this sale after the repayment of mortgages, other liabilities, closing costs and distributions to minority interests of approximately $7,200,000. The Partnership received an additional distribution of $365,356 relating to the forgiveness of the Florida Housing Finance Corporation promissory note, which was contingent at March 31, 2006. Because Cutler Canal II was sold to a related party of the Local Partnership, the sale resulted in a non-cash contribution to the Local Partnership from the Local General Partner of approximately $1,948,000, which was recognized during the year ended March 31, 2006. Adjustments to the non-cash contribution of approximately $756,000 were recognized during the year ended March 31, 2007, resulting in an overall non-cash contribution of approximately $2,704,000. Such contributions flow through minority interest as a result of the write-off of the deficit basis in the property of approximately $2,704,000. The sale resulted in the liquidation of Cutler Canal II. On January 18, 2006, the property and the related assets and liabilities of RMB Limited Partnership ("Hubbard's Ridge") were sold to an unaffiliated third party purchaser for a sales price of $4,950,000. The Partnership received $73,948 as a distribution from this sale after the repayment of mortgages, other liabilities and closing costs of approximately $4,876,000. The sale resulted in a gain of approximately $2,101,000 resulting from the write-off of the deficit basis in the property at the date of the sale, which was recognized during the year ended March 31, 2006. An additional loss of approximately $6,000 resulting from the write-off of additional basis in the property was recognized during the year ended March 31, 2007, resulting in an overall gain of approximately $2,095,000. The sale resulted in the liquidation of Hubbard's Ridge. On July 14, 2005, the property and the related assets and liabilities of Summer Creek Villas were sold to an unrelated third party purchaser for a sales price of $45,500,000. The entire sales price was used to repay the mortgage, other 28 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007 liabilities, closing costs and certain advances (including accrued interest) made to Summer Creek Villas by the General Partner and its affiliates, as required by the limited partnership agreement of Summer Creek Villas. The sale resulted in a gain of approximately $12,784,000 resulting from the write-off of the deficit basis in the property at the date of the sale and a non-cash contribution by the Local General Partner due to the write-off of related party debt of approximately $3,719,000 and a non-cash contribution by the General Partner of $3,601,000 which were recognized during the year ended March 31, 2006. During the year ended March 31, 2007, an adjustment to the gain of approximately $2,643,000 was recognized which included the forgiveness of due to the Local General Partner and affiliates of Local Partnerships and due to the General Partner and its affiliates of approximately $1,088,000 and $386,000, respectively. Such adjustments resulted in an overall gain of approximately $15,427,000. NOTE 12 - Asset Held for Sale On February 6, 2007, Hill Top entered into a purchase and sale agreement to sell its property and the related assets and liabilities to an unaffiliated third party purchaser for a sales price of $6,125,000. Hill Top was being held as an asset held for sale as of March 31, 2007. As of December 31, 2006, Hill Top had property and equipment, at cost, of approximately $8,105,000, accumulated depreciation of approximately $3,128,000 and mortgage debt of approximately $2,755,000. Subsequently, on April 27, 2007, the property and related assets and liabilities of Hill Top were sold (see Note 14). NOTE 13 - Discontinued Operations The following table summarizes the financial position of the Local Partnership that is classified as discontinued operations because the respective Local Partnership was classified as an asset held for sale. For the year ended March 31, 2007, Hill Top was classified as discontinued operations on the consolidated balance sheet. Consolidated Balance Sheet of Discontinued Operations:

~~Jurisdiction~~March ~~Subsidiaries~~31, ofMarch ~~the~~31, ~~Registrant~~2007 2006 ----------- ----------- Assets Investment in property: Land $ 553,841 $ 0 Building and improvements 7,550,819 0 Accumulated depreciation (~~Exhibit~~3,127,998) 21(0) of----------- ~~Organization~~ ----------- Net investment in property 4,976,662 0 ----------- ----------- Cash and cash equivalents held in escrow 53,757 0 Deferred financing costs, net of accumulated amortization of $140,073 and $0, respectively 113,041 0 Other assets 39,793 0 ----------- ----------- ~~Diamond~~Total ~~Street~~assets ~~Venture~~$ PA5,183,253 ~~Papillion~~$ ~~Heights~~0 ~~Apartments~~=========== ~~L.P.~~=========== MOLiabilities ~~Hill~~Mortgage ~~Top~~notes ~~Homes~~payable ~~Apartments~~$ ~~Limited~~2,754,913 ~~Partnership~~$ TX0 ~~Brookland~~Accrued ~~Park~~interest ~~Plaza~~payable ~~Limited~~85,686 ~~Partnership~~0 MDOther ~~Compton~~accrued ~~Townhouses~~expenses ~~Limited~~and ~~Partnership~~liabilities OH206,798 0 ----------- ----------- Total liabilities $ 3,047,397 $ 0 =========== ===========

The following table summarizes the results of operations of the Local Partnerships that are classified as discontinued operations. For the year ended March 31, 2007, Hill Top, which was classified as an asset held for sale, Brookland and Papillion which were sold during the year and Summer Creek Villas, Hubbard's Ridge and Cutler Canal II, which were sold in the year end March 31, 2006 but had activity during 2007 were all classified as discontinued operations on the Consolidated Statements of Operations. For the year ended March 31, 2006, Summer Creek Villas, Hubbard's Ridge and Cutler Canal II which were sold during the year and Brookland, Papillion and Hill Top, in order to present comparable results to the year ended March 31, 2007 were all classified as discontinued operations on the consolidated statements of operations. For the year ended March 31, 2005, in order to present comparable results to the year ended March 31, 2007, Summer Creek Villas, Hubbard's Ridge, Cutler Canal II, Brookland, Papillion and Hill Top were classified as discontinued operations on the consolidated statements of operations. 29 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007 Consolidated Statements of Discontinued Operations:

~~Signature~~Years ~~Title~~Ended ~~Date~~March 31, -------------------------------------------- 2007 2006* 2005* ------------ ------------ ------------ Revenues Rental income $ 2,076,496 $ 7,317,285 $ 9,532,520 Other 249,622 427,409 783,400 Interest 518 2,884 6,806 ------------ ------------ ------------ Total revenue 2,326,636 7,747,578 10,322,726 ------------ ~~/s/~~------------ ~~Alan~~------------ P.Expenses ~~Hirmes~~Interest ~~Member~~611,082 ~~and~~2,607,786 ~~President~~3,853,877 Interest-related parties (~~Chief~~Note ~~Executive~~6) ~~Officer~~38,612 696,939 849,765 Depreciation and ~~Chief~~amortization 317,742 1,650,497 2,178,048 Operating and other 307,612 747,591 931,396 Taxes and insurance 391,810 1,150,950 1,449,715 Repairs and maintenance 379,853 1,560,118 2,538,683 General and administrative 455,917 1,744,232 2,724,753 General and administrative - related parties (Note 6) 509,823 284,884 354,100 ------------ ------------ ~~Financial~~------------ ~~Officer)~~Total ofexpenses ~~RCC~~3,012,451 ~~Partners 96~~10,442,997 ~~L.L.C. June 27~~14,880,337 ~~2006~~------------ ~~Alan P. Hirmes~~ ------------ ------------ ~~/s/~~(Loss) ~~Glenn~~income F.before ~~Hopps~~minority ~~Treasurer~~interest and gain on sale of property (~~Principal~~685,815) ~~Accounting~~(2,695,419) ~~Officer~~(4,557,611) Gain on sale of ~~RCC~~property ~~Partners~~2,429,104 14,824,690 0 Minority interest in income (loss) of subsidiaries from discontinued operations 1,117,765 (2,127,539) 1,095,315 ------------ ------------ 96------------ Total income (loss) from discontinued operations $ 2,861,054 L$ 10,001,732 $ (3,462,296) ============ ============ ============ Income (loss) - limited partners from discontinued operations $ 2,846,749 $ 9,951,723 $ (3,444,984) ============ ============ ============ Number of BUC$ units outstanding 38,125 38,125 38,125 ============ ============ ============ Income (loss) discontinued operations per BUC$ $ 74.L67 $ 261.C03 $ (90.36) ~~June~~============ 27============ ============ Cash flows from Discontinued Operations: Years Ended March 31, ~~2006~~-------------------------------------------- ~~Glenn~~2007 F.2006 ~~Hopps~~2005 ------------ ------------ ------------ Net cash provided by (used in) operating activities $ 3,405,442 $(11,564,712) $ 403,738 Net cash provided by(used in) investing activities $ 2,508,870 $(57,990,310) $ (4,118,279) Net cash (used in) provided by financing activities $ (5,483,945) $(31,866,786) $ 2,411,425

NOTE 14 - Subsequent Event On April 27, 2007, the property and the related assets and liabilities of Hill Top were sold to an unaffiliated third party purchaser for a sales price of $6,125,000. The Partnership received $603,430 as a distribution from this sale after the repayment of mortgages, other liabilities, closing costs and distributions to minority interests of approximately $5,522,000. The sale resulted in a gain of approximately $730,000 resulting from the write-off of the basis in the property, which will be recognized on the Partnership's Quarterly Report on Form 10-Q for the quarter ended June 30, 2007. The sale resulted in the liquidation of Hill Top. 30 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None Item 9A. Controls and Procedures (a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Chief Executive Officer and Chief Financial Officer of RCC Partners 96, L.L.C., the General Partner of the Registrant, have evaluated the effectiveness of the Registrant's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended ("Exchange Act") as of the end of the period covered by this report. Based on such evaluation, such officers have concluded that, as of the end of such period, the Registrant's disclosure controls and procedures are effective. (b) INTERNAL CONTROL OVER FINANCIAL REPORTING. There have not been any changes in Registrant's internal control over financial reporting during the fiscal year to which this report relates that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting. Item 9B. Other Information None. 31 PART III Item 10. Directors, Executive Officers and Corporate Governance There are no directors or executive officers of the Registrant. The Registrant is managed by the General Partner. The Registrant, the Registrant's General Partner and its members and executive officers, and any persons holding more than ten percent of the Registrant's BUC$ 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. The general partner of the Registrant is RCC Partners 96 L.L.C. (the "General Partner"). However, the ultimate parent of the General Partner, Centerline Holding Company ("Centerline") (which had been known as CharterMac until April 2007), has adopted a code of ethics (see http://www.centerline.com). On March 15, 2007, Centerline announced the retirement of Alan P. Hirmes as Chief Financial Officer of Centerline. Upon his retirement, he also resigned from his position as Member, President, Chief Executive Officer and Chief Financial Officer of the General Partner. Centerline has named Robert L. Levy as Chief Financial Officer and Andrew J. Weil as Chief Executive Officer to replace Mr. Hirmes. The members and executive officers of the General Partner and their positions with regard to managing the Registrant are as follows: Name Position -------------- ------------------------------------ Robert L. Levy Chief Financial Officer Andrew J. Weil President and Chief Executive Officer Marc Schnitzer Executive Vice President and Chief Operating Officer Glenn F. Hopps Treasurer ROBERT L. LEVY, 41, is the Chief Financial Officer of Centerline. Mr. Levy is also the Chief Financial Officer of American Mortgage Acceptance Company ("AMAC"), a publicly traded real estate investment trust managed by an affiliate of Centerline. Mr. Levy is responsible for overseeing the Corporate Finance, Capital Markets, Accounting, Budgeting, Tax and Treasury departments. Mr. Levy joined Centerline's predecessor in November of 2001 as the Director of Capital Markets. From 1998 through 2001, Mr. Levy was a Vice President in the Real Estate Equity Research and Investment Banking Departments at Robertson Stephens, an investment banking firm in San Francisco. Prior to 1998, Mr. Levy was employed by Prudential Securities in the Real Estate Equity Research Group and at Prudential Realty Group, the real estate investment arm of the Prudential Insurance Company. He received his Masters in Business Administration from the Leonard N. Stern School of Business at New York University and his Bachelor of Arts from Northwestern University. ANDREW J. WEIL, 36, is an Executive Managing Director of Centerline, and is the Head of the Affordable Housing Group. Mr. Weil is responsible for overseeing the day to day operations of the Affordable Housing Group, including the acquisition of properties with Low-Income Housing Tax Credits and the origination and structuring of institutional funds. Prior to joining Centerline's predecessor in January 1994, Mr. Weil was a Financial Analyst for the Heights Management Company, where he specialized in the analysis of potential investments and property management. Mr. Weil received a Bachelor of Science degree in Economics with a concentration in Finance form the Wharton School of the University of Pennsylvania. MARC D. SCHNITZER, 46, is responsible both for financial restructurings of real estate properties and directing Centerline's acquisitions of properties generating Housing Tax Credits. Mr. Schnitzer received a Masters of Business Administration from The Wharton School of the University of Pennsylvania in December 1987 before joining Centerline in January 1988. From 1983 to January 1986, he was a financial analyst for the First Boston Corporation in New York. Mr. Schnitzer graduated summa cum laude with a Bachelor of Science in Business Administration from the School of Management at Boston University in May 1983. In March 2006, Mr. Schnitzer was appointed Chief Executive Officer and President of Centerline. Mr. Schnitzer also serves on the Board of Trustees of Centerline and AMAC. GLENN F. HOPPS, 44, joined Centerline 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. 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. 32 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, 2007, the General Partner is 100% owned by Centerline Manager LLC, which is wholly owned by Centerline. As of June 2, 2007, 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, 2007, 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 Accounting Fees and Services Audit Fees ---------- The aggregate fees billed by Reznick Group, P.C. and its affiliates (collectively, "Reznick") for professional services rendered for the audit of the Registrant's annual financial statements for the years ended December 31, 2006 and 2005 and for the reviews of the financial statements included in the Registrant's Quarterly Reports on Form 10-Q for those years were $44,000 and $47,000, respectively. Audit Related Fees ------------------ None Tax Fees -------- The aggregate fees billed by Weiser LLP and its affiliates for professional services rendered for the preparation of the Registrant's annual tax returns for the years ended December 31, 2006 and 2005 were $25,000 and $27,000. All Other Fees -------------- None. The Registrant is not required to have, and does not have, a stand alone audit committee. 33 PART IV Item 15. Exhibits, Financial Statement Schedules Sequential Page ---------- (a) 1. Financial Statements -------------------- Report of Independent Registered Public Accounting Firm 13 Consolidated Balance Sheets at March 31, 2007 and 2006 17 Consolidated Statements of Income for the Years Ended March 31, 2007, 2006 and 2005 18 Consolidated Statements of Changes in Partners' Capital (Deficit) for the Years Ended March 31, 2007, 2006 and 2005 19 Consolidated Statements of Cash Flows for the Years Ended March 31, 2007, 2006 and 2005 20 Notes to Consolidated Financial Statements 21 (a) 2. Financial Statement Schedules and Report of Independent ------------------------------------------------------- Registered Public Accounting Firm on Schedules ---------------------------------------------- Schedule III - Real Estate and Accumulated Depreciation 40 All other schedules have been omitted because they are not required or because the required information is contained in the financial statements 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 34 (31.1) Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) 37 (31.2) Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) 38 (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) 39 (99.1) Balance Sheet and Report of Independent Registered Public Accounting Firm, RCC Partners 96, LLC, March 31, 2007 42 Jurisdiction of Subsidiaries of the Registrant (Exhibit 21) Organization ------------------------------ ------------ Diamond Street Venture PA Hill Top Homes Apartments Limited Partnership TX Compton Townhouses Limited Partnership OH 34 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 22, 2007 By: /s/ Robert L. Levy ------------- ------------------ Robert L. Levy Chief Financial Officer Date: June 22, 2007 By: /s/ Andrew J. Weil ------------- ------------------ Andrew J. Weil President and Chief Executive Officer 35 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/ Robert L. Levy ------------------ Chief Financial Officer of June 22, 2007 Robert L. Levy RCC Partners 96, L.L.C. ------------- /s/ Andrew J. Weil ------------------ President and Chief Executive Officer of June 22, 2007 Andrew J. Weil RCC Partners 96, L.L.C. ------------- /s/ Glenn F. Hopps ------------------ Treasurer (Principal Accounting Officer) June 22, 2007 Glenn F. Hopps of RCC Partners 96, L.L.C. ------------- 36 Exhibit 31.1 CERTIFICATION PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a) I, Robert L. Levy, hereby certify that: 1. I have reviewed this report on Form 10-K for the period ending March 31, 2007 of the registrant; 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 registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are 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 registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us 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 our 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 registrant'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 registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and to the audit committee of the registrant's board of directors (or persons performing the equivalent functions): 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 registrant'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 registrant's internal control over financial reporting. Date: June 22, 2007 By: /s/ Robert L. Levy ------------- ------------------ Robert L. Levy Chief Financial Officer 37 Exhibit 31.2 CERTIFICATION PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a) I, Andrew J. Weil, hereby certify that: 1. I have reviewed this report on Form 10-K for the period ending March 31, 2007 of the registrant; 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 registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are 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 registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us 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 our 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 registrant'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 registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and to the audit committee of the registrant's board of directors (or persons performing the equivalent functions): 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 registrant'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 registrant's internal control over financial reporting. Date: June 22, 2007 By: /s/ Andrew J. Weil ------------- ------------------ Andrew J. Weil Chief Executive Officer 38 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. on Form 10-K for the period ended March 31, 2007 as filed with the Securities and Exchange Commission ("SEC') on the date hereof (the "Report"), I, Robert L. Levy, and I, Andrew J. Weil, 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 registrant. A signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to the SEC or its staff upon request. By: /s/ Robert L. Levy By: /s/ Andrew J. Weil ------------------ ------------------ Robert L. Levy Andrew J. Weil Chief Financial Officer Chief Executive Officer June 22, 2007 June 22, 2007 39 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION MARCH 31, 2007

Cost Capitalized Initial Cost to Partnership Subsequent to Acquisition (7) ------------------------------ -------------------------------- Buildings and Description (4)(6) Encumbrances Land Improvements Improvements Carrying Costs ---------------------------------------- ------------ ------------ ------------- ------------- -------------- Apartment Complexes: RMB Limited Partnership (Hubbard's Ridge) (1)(8) Garland, TX $ 0 $ 107,237 $ 965,136 $ (1,257,553) $ 185,180 Cutler Canal II Associates, Ltd. (2)(8) Miami, FL 0 807,071 1,388,350 (2,263,149) 67,728 Diamond Street Venture (3) Philadelphia, PA 2,~~841~~812,~~492~~727 9,729 234,465 2,~~412~~338,~~690~~639 273,218 Papillion Heights Apartments L.P. (1)(9) Papillion, NE ~~1,137,316~~0 63,329 1,816,598 ~~276~~(1,~~371~~946,479) 66,552 Hill Top Homes Apartments L.P. (1)(11) Arlington, TX 2,~~883~~754,~~887~~913 553,841 3,690,150 3,544,302 316,368 Palm Beach Apartments Ltd, (1)(8) (Summer Creek Villas) West Palm Beach, FL 0 2,396,876 10,578,563 (14,852,234) 1,876,795 Brookland Park Plaza L.P. (1)(10) Richmond, VA ~~2,249,935~~0 50,000 109,850 5(536,~~913,667~~015) 376,165 Compton Townhouses L.P. (1) Cincinnati, OH 1,~~131~~089,~~335~~927 17,550 476,708 1,924,498 28,203 Less: Discontinued ~~Operations:~~operations 0(2,754,913) (3,~~311~~978,~~184~~354) (1218,~~932~~548,~~049~~647) 1817,~~372~~311,~~936~~129 (2,~~129~~888,~~703~~788) ------------ ------------ ------------- ------------- -------------- $ 103,~~243~~902,~~965~~654 $ ~~694~~27,~~449~~279 $ 6711,~~327,771~~173 $ 144,~~071~~263,~~528~~138 $ 1301,~~060,506~~421 ============ ============ ============= ============= ============== Gross Amounts at which Carried at Close of Period (5) ---------------------------------------------~~---~~ Buildings and Accumulated Description (4)(6) Land Improvements Total Depreciation ---------------------------------------- ------------ ------------- ------------ ------------ Apartment Complexes: RMB Limited Partnership (Hubbard's Ridge) (1)(8) Garland, TX $ 0 $ 0 $ 0 $ 0 Cutler Canal II Associates, Ltd. (2)(8) Miami, FL 0 0 0 0 Diamond Street Venture (3) Philadelphia, PA 9,729 2,~~920~~846,~~373~~322 2,~~930~~856,~~102~~051 1,736,719 Papillion Heights Apartments L.P. (1)(9) Papillion, NE ~~63,329~~0 ~~2,159,521~~0 ~~2,222,850~~0 0 Hill Top Homes Apartments L.P. (1)(11) Arlington, TX 553,841 7,550,820 8,104,661 3,127,998 Palm Beach Apartments Ltd, (1)(8) (Summer Creek Villas) West Palm Beach, FL 0 0 0 0 Brookland Park Plaza L.P. (1)(10) Richmond, VA ~~50,000~~0 ~~6,399,682~~0 ~~6,449,682~~0 0 Compton Townhouses L.P. (1) Cincinnati, OH 17,550 2,429,409 2,446,959 1,630,582 Less: Discontinued ~~Operations:~~operations 0(553,841) 0(7,550,819) 0(8,104,660) (3,127,998) ------------ ------------- ------------ ------------ $ ~~694~~27,~~449~~279 $ 215,~~459~~275,~~805~~732 $ 225,~~154~~303,~~254~~011 $ 3,367,301 ============ ============= ============ ============ 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)(8) Garland, TX ~~$ 0~~ 5/90 12/89 30 Cutler Canal II Associates, Ltd. (2)(8) Miami, FL 0 1/91 1/90 40 Diamond Street Venture (3) Philadelphia, PA ~~1,665,761~~ 12/90 1/90 40 Papillion Heights Apartments L.P. (1)(9) Papillion, NE ~~875,995~~ 12/90 4/90 40 Hill Top Homes Apartments L.P. (1)(11) Arlington, TX ~~2,943,016~~ 12/90 6/90 40 Palm Beach Apartments Ltd, (1)(8) (Summer Creek Villas) West Palm Beach, FL 0 8/91 6/90 40 Brookland Park Plaza L.P. (1)(10) Richmond, VA ~~3,557,208~~ 12/90 7/90 27.5 Compton Townhouses L.P. (1) Cincinnati, OH ~~1,537,047~~ 6/92 1/92 40 ~~Less Discontinued Operations: 0 ------------ $ 10,579,027 ============~~

(1) First mortgage (2) Includes first and second mortgages (3) Includes first, second and third mortgages (4) At March 31, 2007, the Partnership holds a 98% interest in Hill Top Homes and Compton Townhouses and a 98.99% interest in Diamond Street. (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. (8) The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2006. (9) The limited partnership interest was sold during the fiscal year ended March 31, 2007. (10) The property and related assets and liabilities were sold during the fiscal year ended March 31, 2007. (11) The property executed a purchase and sale agreement on February 6, 2007. Subsequently, on April 27, 2007, the property and related assets and liabilities of one Local Partnership were sold. 40 PATRIOT TAX CREDIT PROPERTIES L.P. (a limited partnership) AND SUBSIDIARIES SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION MARCH 31, 2007 (continued)

Cost of Property and Equipment Accumulated Depreciation --------------------------------------------- ------------------------------------------~~---~~ Years Ended March 31, ---------------------------------------------------------------------------------------~~-------~~ Note A - Reconciliation 2007 2006 2005 ~~2004~~2007 2006 2005 ~~2004~~ ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------ Balance at beginning of year $ 22,154,254 $ 79,820,046 $ 79,804,215 $ 7910,~~751~~579,~~979~~027 $ 30,492,001 $ 28,372,375 ~~$ 26,237,792~~ Additions during year: Improvements 25,012 18,162 15,831 ~~52,236~~ Discontinued operations and dispositions (16,876,255) (57,683,954) 0 0(7,680,839) (21,608,740) 0 0 ------------ ------------ ------------ Depreciation expense (1) 469,113 1,695,766 2,119,626 ~~2,134,583~~ ------------ ------------ ------------ Balance at close of year $ 5,303,011 $ 22,154,254 $ 79,820,046 $ 793,~~804~~367,~~215~~301 $ 10,579,027 $ 30,492,001 ~~$ 28,372,375~~ ============= ============ ============ ============ ============ ============

(1) Refer to Notes 2 and 4 to the consolidated financial statements for additional information. 41 Exhibit 99.1 BALANCE SHEET AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM RCC PARTNERS 96, L.L.C. MARCH 31, 2007 42 RCC Partners 96, L.L.C. TABLE OF CONTENTS PAGE ---- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 44 FINANCIAL STATEMENTS BALANCE SHEET 45 NOTES TO BALANCE SHEET 46 43 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, 2007. 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 Company 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 Company'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 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, 2007, in conformity with accounting principles generally accepted in the United States of America. /s/ Reznick Group, P.C. Bethesda, Maryland June 21, 2007 44 RCC Partners 96, L.L.C. BALANCE SHEET March 31, 2007

~~INVESTMENT IN PROPERTY $ 11,575,227 OTHER~~ ASSETS ~~Cash~~Due ~~and~~from ~~cash~~limited ~~equivalents~~partnership ~~2,214,692~~$ ~~Cash and cash equivalents~~479,019 ~~held in escrow 300,903 Deferred financing costs, net 191,129 Other assets 1,243,915~~ ------------ ~~Total assets~~ $ 15479,~~525,866~~019 ============ LIABILITIES AND ~~PARTNERS~~MEMBERS' ~~CAPITAL~~EQUITY ~~(DEFICIT) LIABILITIES Mortgage notes payable $ 10,243,965 Accrued interest payable 77,583 Other accrued expenses and liabilities 1,084,916~~ Due to ~~general~~affiliate partners and affiliates of local partnerships 2,776,738 Development fees payable 1,151,510 Real estate taxes payable 88,711 Due to general partners and its affiliates 3,314,677 ------------ Total liabilities 18,738,100 ------------ Minority interest in local partnerships 183,027 ------------ Partners' capital (deficit) Limited partners (38,125 BUC$ ~~issued and outstanding) (4~~479,~~127,006)~~019 ~~General partner (1 BUC$ issued and outstanding) 731,745 ------------ Total partners~~Members' ~~capital~~equity ~~(deficit)~~0 ~~(3,395,261)~~ ------------ ~~Total liabilities and partners' capital (deficit)~~ $ 15479,~~525,866~~019 ============

The accompanying notes are an integral part of this balance sheet 45 RCC Partners 96, L.L.C. NOTES TO BALANCE SHEET March 31, 2007 NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Centerline Partners 96, L.L.C. (the "Company") (which had been known as RCC Partners 96, L.L.C. until April 2007) 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. (the "Partnership"). 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 Centerline Holding Company ("Centerline") (which had been known as CharterMac until April 2007) pursuant to a purchase agreement dated as of December 19, 1996 among PBP and its affiliates and Centerline Capital. On March 15, 2007, Centerline announced the retirement of Alan P. Hirmes as Chief Financial Officer of Centerline. Upon his retirement, he also resigned from his position as Member, President, Chief Executive Officer and Chief Financial Officer of the General Partner. Centerline has named Robert L. Levy as Chief Financial Officer and Andrew J. Weil as Chief Executive Officer to replace Mr. Hirmes. Affiliates of the Company and Centerline have had significant involvement with the Partnership and the Local Partnerships, of which one is owned by Centerline Capital affiliates. Centerline 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 the Partnership using the equity method, whereby the Company adjusts the investment cost for its share of the Partnership's results of operations and for any distributions received or accrued. The Company regularly assesses the carrying value of its investment in the Partnership. 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 the Partnership. 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. 46 RCC Partners 96, L.L.C. NOTES TO BALANCE SHEET - CONTINUED March 31, 2007 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, 2007, Patriot owes the Company $479,019 for partnership management fees pursuant to the Limited Partnership Agreement. The Company owes $479,019 to their affiliates as of March 31, 2007. 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:

~~Revenues~~General ~~Rental~~Partner ~~income~~capital $at ~~2,316,289~~March ~~Other income 32~~31,~~501~~ ~~Interest~~2007 ~~income~~$ 51,~~046 ----------- 2~~544,~~353,836~~025 ~~-----------~~Less: ~~Expenses~~Adjustment ~~Interest~~to ~~638,884~~estimated ~~Depreciation~~realizable ~~and~~value ~~amortization 711~~(1,~~019 Operating and other 353~~544,~~502~~025) ~~Taxes and insurance 389,960 Repairs and maintenance 500,246 General and administrative 706,521 Property management fees 130,615 Partnership management fees 153,911~~ ----------- ~~Total~~Balance ~~expenses 3,584,658~~ -~~----------~~ ~~Loss~~March ~~from operations before minority interest (1~~31,~~230,822)~~ ~~Minority~~2007 ~~interest in loss of local partnership from operations 1,662 Income from discontinued operations (net of minority interest and gain on sale of~~ $~~14,824,690)~~ ~~10,553,528~~0 ~~----------- Net income $ 9,324,368~~ ===========

47 RCC Partners 96, L.L.C. NOTES TO BALANCE SHEET - CONTINUED March 31, 2007 NOTE C - INVESTMENT IN LIMITED PARTNERSHIP (continued) The summarized consolidated balance sheet at March 31, 2007 and the summarized consolidated statement of operations for the year then ended for Patriot Tax Credit Properties, L.P. are as follows:

48 RCC Partners 96, L.L.C. NOTES TO BALANCE SHEET - CONTINUED March 31, 2007 NOTE C - INVESTMENT IN LIMITED PARTNERSHIP (continued)

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. 49

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