10-K 1 f10k_free-2007.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 0-24652 FREEDOM TAX CREDIT PLUS L.P. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 13-3533987 ------------------------------------------------- ------------------- (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: Title of Class Beneficial Assignment Certificates and Limited Partnership Interests 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 $(1,368,000) based on Limited Partner equity (deficit) as of such date. Registrant's voting and non-voting common equity is not publicly traded. DOCUMENTS INCORPORATED BY REFERENCE None PART I Item 1. Business General ------- Freedom Tax Credit Plus L.P. (the "Partnership") is a limited partnership which was formed under the laws of the State of Delaware on August 28, 1989. The General Partners of the Partnership are Related Freedom Associates L.P., a Delaware limited partnership (the "Related General Partner"), and Freedom GP Inc., a Delaware corporation (the "Freedom General Partner" and together with the Related General Partner, the "General Partners"). The general partner of the Related General Partner is Related Freedom Associates Inc., a Delaware corporation. The ultimate parent of the General Partners 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 Director, President, Chief Executive Officer and Chief Financial Officer of the general partner of the Related General Partner. Centerline has named Robert L. Levy as Chief Financial Officer and Andrew J. Weil as Chief Executive Officer to replace Mr. Hirmes. On February 9, 1990, the Partnership commenced a public offering (the "Offering") of Beneficial Assignment Certificates ("BACs") representing assignments of limited partnership interests in the Partnership ("Limited Partnership Interests"), pursuant to a prospectus dated February 9, 1990, as supplemented by supplements thereto, dated December 7, 1990, May 10, 1991, July 10, 1991 and July 23, 1991 (as so supplemented, the "Prospectus"). The Partnership received $72,896,000 of the gross proceeds of the Offering from 4,780 investors, and the Offering was terminated on August 8, 1991. (See Item 8, "Financial Statements and Supplementary Data," Note 1 of Notes to Consolidated Financial Statements.) The Partnership was formed to invest as a limited partner in other limited partnerships ("Local Partnerships"), each of which owns one or more leveraged low-income multi-family residential complexes ("Apartment Complexes" or "Properties") that are eligible for the low-income housing tax credit ("Tax Credit") enacted in the Tax Reform Act of 1986, and some of which may also be eligible for the historic rehabilitation tax credit. The Partnership's investment in each Local Partnership represents 98% to 99% of the partnership interests in the Local Partnership. The Partnership had originally acquired interests in forty-two Local Partnerships, and as of March 31, 2007, approximately $58,000,000 of the net proceeds of the Offering has been invested in such Local Partnerships, representing all of the Partnership's net proceeds available for investment. Subsequent to March 31, 2007 and as of the date of this filing, there have been no additional investments, nor are any other investments expected. See Item 2, "Properties," below. The Partnership is currently in the process of disposing of its investments. During the fiscal year ended March 31, 2007, the properties and the related assets and liabilities of thirteen Local Partnerships and the Partnership's limited partnership interest in two Local Partnerships were sold. Through the year ended March 31, 2007 the Partnership has disposed of twenty-two of its forty-two original investments. Subsequently, the Partnership sold its limited partnership interest in one Local Partnership and six Local Partnerships entered into agreements to sell their properties and the related assets and liabilities. No assurance can be given as to whether or when these sales will actually occur. All gains and losses on sales are included in discontinued operations. The investment objectives of the Partnership are described below. 1. Entitle qualified BACs holders to Tax Credits over the Credit Period (as defined below) with respect to each Apartment Complex. 2. Preserve and protect the Partnership's capital. 3. Participate in any capital appreciation in the value of the Properties and provide distributions of sale or refinancing proceeds upon the disposition of the Properties. 4. Allocate passive losses to individual BACs holders to offset passive income that they may realize from rental real estate investments and other passive activities, and allocate passive losses to corporate BACs holders to offset business income. One of the Partnership's objectives is to entitle qualified BACs holders to Tax Credits over the period of the Partnership's entitlement to claim Tax Credits (for each Property, generally ten years from the date of investment or, if later, the date the Property is leased to qualified tenants; referred to herein as the "Credit Period"). Each of the Local Partnerships in which the Partnership has an interest has been allocated by the relevant state credit agency the authority to recognize Tax Credits during the Credit Period, provided that the Local Partnership satisfies the rent restriction, minimum set-aside and other requirements for recognition of the Tax Credits at all times during the 15-year compliance period (the "Compliance Period"). Once a Local Partnership has become eligible to recognize Tax Credits, it may lose such eligibility and suffer an event of "recapture" if its Property fails to remain in compliance with the Tax Credit requirements. None of the Local Partnerships in which the Partnership has acquired an interest has suffered an event of recapture. Tax Credits with respect to a given Apartment Complex are available for the Credit Period. However, the annual Tax Credits available in the year in which the Apartment Complex is leased to qualified tenants must be prorated based upon the months remaining in the year. The amount of the annual Tax Credits not available in the first year will be available in the eleventh year. Internal Revenue Code Section 42 regulates the use of the Apartment Complexes as to occupancy, eligibility, and unit gross rent, among other requirements. Each Apartment Complex must meet the provisions of these regulations during the Compliance Period in order to remain qualified to receive the credits. Certain Apartment Complexes have extended compliance periods of up to fifty years. A loss on impairment of assets is recorded when management estimates amounts recoverable through future operations and sale of the Property on an 2 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 Partnership has recorded approximately $5,726,000 as a loss on impairment of assets or reduction to estimated fair value. As of December 31, 2002, all the Local Partnerships have completed their Credit Periods and the Partnership has met its primary objective of generating Tax Credits for qualified BACs holders. However, each Local Partnership must continue to comply with the Tax Credit requirements until the end of the Compliance Period in order to avoid recapture of the Tax Credits. The Compliance Periods will continue through December 31, 2007 with respect to the Properties depending upon when the Credit Period commenced. The Partnership continues to meet its objective of allocating passive losses to individual BACs holders to offset passive income that they may realize from rental real estate investments and other passive activities, and allocating passive losses to corporate BACs holders to offset business income. As of March 31, 2007, the Partnership has not met its investment objective of providing cash distributions from the operations of the Properties. The Partnership does not anticipate providing cash distributions to BACs holders other than distributions of sale or refinancing proceeds upon the disposition of Properties. Furthermore, as noted below, at this time there can be no assurance that the Partnership will achieve its objective. During and through the fiscal year ended March 31, 2007, distributions from sales proceeds were made to the BACs holders of approximately $6,925,000 and to the General Partners of approximately $70,000. Sale of Properties ------------------ The Partnership is currently in the process of disposing of its investments. As of March 31, 2007, the Partnership's limited partnership interest in nine Local Partnerships and the property and the related assets and liabilities of thirteen Local Partnerships have been sold. There can be no assurance as to when the Partnership will dispose of its remaining investments or the amount of proceeds which may be received. However, based on the historical operating results of the Local Partnerships and the current economic conditions, including changes in tax laws, it is unlikely that the proceeds from such sales received by the Partnership will be sufficient to return to the limited partners their original investments. All gains and losses on sales are included in discontinued operations. Subsequently, on April 30, 2007, six Local Partnerships entered into agreements to sell their property and the related assets and liabilities, and on May 3, 2007, the Partnership's limited partnership interest in one Local Partnership was sold (see Item 8, Note 13). On January 31, 2007, the property and the related assets and liabilities of Eagle Ridge Limited Partnership ("Eagle Ridge") were sold to an unaffiliated third party purchaser for a sales price of $2,000,000. The Partnership received $412,730 as a distribution from this sale after the repayment of mortgages, other liabilities, closing costs and distributions to minority interests of approximately $1,587,000. The sale resulted in a gain of approximately $600,000 resulting from the write-off of the partners' deficit basis in the property of approximately $600,000 at the date of the sale. The sale resulted in the liquidation of Eagle Ridge. On January 10, 2007, the property and the related assets and liabilities of Lauderdale Lakes Associates, Ltd. ("Lauderdale Lakes") were sold to an affiliate of the Local General Partner for a sales price of $5,900,000. The Partnership received $790,773 as a distribution from this sale after the repayment of mortgages, other liabilities and closing costs of approximately $5,109,000. During the quarter ended December 31, 2006, in accordance with Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS No. 144"), the Partnership deemed the building impaired and wrote it down to its fair value which resulted in a loss on impairment of approximately $1,106,000. Because Lauderdale Lakes was sold to a related party of the Local Partnership, the sale resulted in a non-cash distribution from the Local Partnership to the Local General Partner of approximately $329,000. Such distribution flows through minority interest as a result of the write-off of the partners' basis in the property of approximately $329,000. The sale resulted in the liquidation of Lauderdale Lakes. On January 1, 2007, the Partnership's limited partnership interest in Harmony Associates, L.P. ("Harmony Gate") was sold to the Local General Partner for a sales price of $1,409,990. The Partnership received proceeds of $1,409,990 from the sale. Because Harmony Gate 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 $1,211,000. Such contribution flows through minority interest as a result of the write-off of the partners' basis in the property of approximately $199,000 and the $1,409,990 cash received from the sale. On January 1, 2007, the Partnership's limited partnership interest in Conifer Irondequoit Associates ("Abraham Lincoln") was sold to the Local General Partner for a sales price of $1. Because Abraham Lincoln 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 $127,000. Such contribution flows through minority interest as a result of the write-off of the partners' deficit basis in the property of approximately $127,000 at the date of the sale. The sale also resulted in a non-cash contribution to the Local Partnership from an affiliate of the Local General Partner of approximately $20,000 as a result of the write-off of payables owed by the Local Partnership. The sale resulted in the liquidation of Abraham Lincoln. On October 25, 2006, the property and the related assets and liabilities of C-H Development Group Associates, L.P. ("Manhattan B") were sold to an unaffiliated third party purchaser for a sales price of $2,100,000. The Partnership received $850,980 as a distribution from this sale after the repayment of mortgages, other liabilities and closing costs of approximately $1,249,000. The sale resulted in a gain of approximately $842,000 resulting from the write-off of the partners' deficit basis in the property of approximately $842,000 at the date of the sale. The sale resulted in the liquidation of Manhattan B. On September 29, 2006, the property and the related assets and liabilities of Oxford Trace Apartments ("Oxford Trace") were sold to an unaffiliated third party purchaser for a sales price of $725,000. The Partnership received $49,279 as a distribution from this sale after the repayment of mortgages, other liabilities and closing costs of approximately $676,000. The sale resulted in a gain of approximately $373,000 resulting from the write-off of the partners' deficit basis in the property of approximately $373,000 at the date of the sale. The sale also resulted in a non-cash contribution to the Local Partnership from the Local General Partner of approximately $494,000 as a result of the write-off of payables owed by the Local Partnership. The sale resulted in the liquidation of Oxford Trace. On September 29, 2006, the property and the related assets and liabilities of Tivoli Place Apartments ("Tivoli Place") were sold to an unaffiliated third 3 party purchaser for a sales price of $3,050,000. The Partnership received $1,331,631 as a distribution from this sale after the repayment of mortgages, other liabilities, closing costs and distributions to minority interests of approximately $1,711,000. The sale resulted in a gain of approximately $905,000 resulting from the write-off of the partners' deficit basis in the property of approximately $905,000 at the date of the sale. The sale also resulted in a non-cash distribution from the Local Partnership to the Local General Partner of approximately $62,000 as a result of the write-off of receivables owed to the Local Partnership. The sale resulted in the liquidation of Tivoli Place. On September 20, 2006, the property and the related assets and liabilities of Bennion Park Apartments ("Mulberry") were sold to an unaffiliated third party purchaser for a sales price of $4,900,000. The Partnership received $2,321,740 as a distribution from this sale after the repayment of mortgages, other liabilities, closing costs and distributions to minority interests of approximately $2,578,000. The sale resulted in a gain of approximately $2,183,000 resulting from the write-off of the partners' deficit basis in the property of approximately $2,183,000 at the date of the sale. The sale also resulted in a non-cash distribution from the Local Partnership to the Local General Partner of approximately $980,000 as a result of the write-off of receivables owed to the Local Partnership. The sale resulted in the liquidation of Mulberry. On September 20, 2006, the property and the related assets and liabilities of Twin Trees Apartments ("Twin Trees") were sold to an unaffiliated third party purchaser for a sales price of $2,300,000. The Partnership received $927,148 as a distribution from this sale after the repayment of mortgages, other liabilities, closing costs and distributions to minority interests of approximately $1,373,000. The sale resulted in a gain of approximately $904,000 resulting from the write-off of the partners' deficit basis in the property of approximately $904,000 at the date of the sale. The sale also resulted in a non-cash distribution from the Local Partnership to the Local General Partner of approximately $582,000 as a result of the write-off of receivables owed to the Local Partnership. The sale resulted in the liquidation of Twin Trees. On July 26, 2006, the property and the related assets and liabilities of Washington Brooklyn Limited Partnership ("Washington") were sold to an unaffiliated third party purchaser for a sales price of approximately $160,000 and the assumption of the related mortgage liabilities and the litigation discussed in Note 10. After the repayment of other liabilities and closing costs of approximately $60,000, the Partnership will receive an additional payment estimated to be approximately $100,000 to be paid at a later date upon the settlement of a foreclosure dispute (see Note 10). During the quarter ended June 30, 2006, in accordance with SFAS No. 144, the Partnership deemed the building impaired and wrote it down to its fair value which resulted in a loss on impairment of $400,000. The sale resulted in a loss of approximately $384,000 resulting from the write-off of the partners' basis in the property of approximately $384,000 at the date of the sale. The sale also resulted in a non-cash contribution to the Local Partnership from an affiliate of the Local General Partner of approximately $30,000 as a result of the write-off of payables owed by Local Partnership. The sale resulted in the liquidation of Washington. On June 26, 2006, the property and the related assets and liabilities of Hunters Chase Apartments ("Hunters Chase") were sold to an unaffiliated third party purchaser for a sales price of $2,730,000. The Partnership received $334,243 as a distribution from this sale after the repayment of mortgages, other liabilities and closing costs of approximately $2,396,000. The sale resulted in a gain of approximately $1,192,000 resulting from the write-off of the partners' deficit basis in the property of approximately $1,192,000 at the date of the sale, which was recorded during the quarter ended September 30, 2006. An adjustment to the gain of approximately $72,000 was recorded during the quarter ended December 31, 2006, resulting in overall gain of approximately $1,264,000. The sale also resulted in a non-cash contribution to the Local Partnership from the Local General Partner of approximately $1,245,000 as a result of the write-off of payables owed by the Local Partnership. The sale resulted in the liquidation of Hunters Chase. On June 26, 2006, the property and the related assets and liabilities of Wilshire Apartments ("Wilshire") were sold to an unaffiliated third party purchaser for a sales price of $1,700,000. The Partnership received $31,986 as a distribution from this sale after the repayment of mortgages, other liabilities and closing costs of approximately $1,668,000. The sale resulted in a gain of approximately $680,000 resulting from the write-off of the partners' deficit basis in the property of approximately $680,000 at the date of the sale, which was recorded during the quarter ended September 30, 2006. A downward adjustment to the gain of approximately $161,000 was recorded during the quarter ended December 31, 2006, resulting in overall gain of approximately $519,000. The sale also resulted in a non-cash contribution to the Local Partnership from the Local General Partner of approximately $1,179,000 as a result of the write-off of payables owed by the Local Partnership. The sale resulted in the liquidation of Wilshire. On June 20, 2006, the property and the related assets and liabilities of Bethel Park Apartments ("Bethel Park") were sold to an unaffiliated third party purchaser for a sales price of $2,500,000. The Partnership received $620,674 as a distribution from this sale after the repayment of mortgages, other liabilities and closing costs of approximately $1,879,000. The sale resulted in a gain of approximately $319,000 resulting from the write-off of the partners' deficit basis in the property of approximately $319,000 at the date of the sale, which was recorded during the quarter ended September 30, 2006. An adjustment to the gain of approximately $11,000 was recorded during the quarter ended March 31, 2007, resulting in overall gain of approximately $330,000. The sale also resulted in a non-cash contribution to the Local Partnership from the Local General Partner of approximately $298,000 as a result of the write-off of payables owed by the Local Partnership. The sale resulted in the liquidation of Bethel Park. On June 20, 2006, the property and the related assets and liabilities of Zebulon Park Apartments ("Zebulon") were sold to an unaffiliated third party purchaser for a sales price of $2,000,000. The Partnership received $420,305 as a distribution from this sale after the repayment of mortgages, other liabilities and closing costs of approximately $1,580,000. The sale resulted in a gain of approximately $115,000 resulting from the write-off of the partners' deficit basis in the property of approximately $115,000 at the date of the sale, which was recorded during the quarter ended September 30, 2006. A downward adjustment to the gain of approximately $3,000 was recorded during the quarter ended December 31, 2006, resulting in overall gain of approximately $112,000. The sale also resulted in a non-cash contribution to the Local Partnership from the Local General Partner of approximately $264,000 as a result of the write-off of payables owed by the Local Partnership. The sale resulted in the liquidation of Zebulon. On June 5, 2006, the property and the related assets and liabilities of Northwood Apartments of Georgia ("Northwood") were sold to an unaffiliated third party purchaser for a sales price of $6,050,000. The Partnership received $3,197,019 as a distribution from this sale after the repayment of mortgages, other liabilities, closing costs and distributions to minority interests of approximately $2,853,000. The sale resulted in a gain of approximately $2,367,000 resulting from the write-off of the partners' basis in the property of approximately $2,367,000 at the date of the sale, which was recorded during 4 the quarter ended September 30, 2006. An adjustment to the gain of approximately $81,000 was recorded during the quarter ended March 31, 2007, resulting in overall gain of approximately $2,448,000. The sale also resulted in a non-cash distribution from the Local Partnership to the Local General Partner of approximately $868,000 as a result of the write-off of receivables owed to the Local Partnership. The sale resulted in the liquidation of Northwood. On March 31, 2006, the Partnership's limited partnership interest in Davidson Court Limited Partnership ("Davidson Court") was sold to an affiliate of the general partner of the Local Partnership (the "Local General Partner") for a sales price of $1,100,000. The Partnership received proceeds of $1,066,715 from this sale after the payment of closing costs of approximately $33,000 from the sales price. Because Davidson Court 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 $68,000. Such contribution flows through minority interest as a result of the write-off of the partners' basis in the property of approximately $999,000 and the $1,066,715 cash received from the sale. On March 31, 2006, the Partnership's limited partnership interest in CLM Equities Limited Partnership ("Morris Avenue") was sold to the Local General Partner and its affiliate for a sales price of $265,000. The Partnership received proceeds of $264,990 from this sale. Because Morris Avenue was sold to a related party of the Local Partnership, the sale resulted in a non-cash distribution from the Local Partnership to the Local General Partner of approximately $424,000, which was recorded during the quarter ended June 30, 2006. A downward adjustment of approximately $9,000 was recorded during the quarter ended December 31, 2006, resulting in overall non-cash distribution of approximately $415,000. Such distribution flows through minority interest as a result of the write-off of the partners' basis in the property of approximately $680,000 and the $264,990 cash received from the sale. On February 1, 2006, the Partnership's limited partnership interest in Ivanhoe Apartments Limited Partnership ("Ivanhoe") was sold to the Local General Partner for a sales price of $150,000. The Partnership received proceeds of $150,000 from this sale. Because Ivanhoe was sold to a related party of the Local Partnership, the sale resulted in a non-cash distribution from the Local Partnership to the Local General Partner of approximately $50,000, which was recorded during the quarter ended June 30, 2006. An adjustment to the non-cash distribution of approximately $35,000 was recorded during the quarter ended March 31, 2007, resulting in overall non-cash distribution of approximately $85,000. Such distribution flows through minority interest as a result of the write-off of the partners' basis in the property of approximately $235,000 and the $150,000 cash received from the sale. The sale also resulted in a non-cash contribution to the Local Partnership from an affiliate of the General Partner of approximately $35,000 as a result of the write-off of payables owed by Local Partnership. On January 19, 2006, the Partnership's limited partnership interest in Nelson Anderson Affordable Housing Limited Partners ("Nelson Anderson") was sold to the Local General Partner for a sales price of $490,000. The Partnership received proceeds of $489,990 from this sale. Because Nelson Anderson was sold to a related party of the Local Partnership, the sale resulted in a non-cash distribution from the Local Partnership to the Local General Partner of approximately $196,000, which was recorded during the quarter ended June 30, 2006. A downward adjustment to the non-cash distribution of approximately $1,000 was recorded during the quarter ended March 31, 2007, resulting in overall non-cash distribution of approximately $197,000. Such distribution flows through minority interest as a result of the write-off of the partners' basis in the property of approximately $687,000 and the $489,990 cash received from the sale. The sale also resulted in a non-cash contribution to the Local Partnership from an affiliate of the General Partner of approximately $28,000 as a result of the write-off of payables owed by Local Partnership. On January 1, 2006, the Partnership's limited partnership interest in Greenfield Village Limited Partnership ("Greenfield Village") was sold to the Local General Partner for a sales price of $75,000. The Partnership received proceeds of $74,990 from the sale. Because Greenfield Village 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 $461,000, which was recorded during the quarter ended March 31, 2006. Such contribution flows through minority interest as a result of the write-off of the partners' deficit basis in the property of approximately $386,000 and the $74,990 cash received from the sale. On January 1, 2006, the Partnership's limited partnership interest in The Oaks Village Limited Partnership ("Oaks Village") was sold to the Local General Partner for a sales price of $75,000. The Partnership received proceeds of $74,990 from this sale. Because Oaks Village 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 $407,000, which was recorded during the quarter ended March 31, 2006. Such contribution flows through minority interest as a result of the write-off of the partners' deficit basis in the property of approximately $332,000 and the $74,990 cash received from the sale. On June 20, 2005, the Partnership's limited partnership interest in Parkside Townhomes Associates ("Parkside") was sold to the Local General Partner for a sales price of $650,000. The Partnership received $611,140, after the payment of closing costs of approximately $39,000, which included $161,140 paid in cash at closing and $450,000 pursuant to a promissory note payable to the Partnership (which was paid off in full as of December 31, 2006). During the quarter ended June 30, 2005, in accordance with SFAS No. 144, the Partnership deemed the building impaired and wrote it down to its fair value which resulted in a loss on impairment of $555,000. Because Parkside was sold to a related party of the Local Partnership, the sale resulted in a non-cash distribution from the Local Partnership to the Local General Partner of approximately $32,000. Such distribution flows through minority interest as a result of the write-off of the partners' basis in the property of approximately $643,000 and the $611,140 cash received from the sale. Segments -------- The Partnership operates in one segment, which is the investment in multi-family residential property. Financial information about this segment is set forth in Item 8 hereto. Competition ----------- The real estate business is highly competitive and substantially all of the properties acquired are subject to active competition from similar properties in their respective vicinities. In addition, various other limited partnerships may, in the future, be formed by the General Partners and/or their affiliates to engage in businesses which may compete with the Partnership. Employees --------- The Partnership does not have any direct employees. All services are performed for the Partnership by its General Partners and their affiliates. The General Partners receive compensation in connection with such activities as set forth in 5 Items 11 and 13. In addition, the Partnership reimburses the General Partners and certain of their affiliates for expenses incurred in connection with the performance by their employees of services for the Partnership in accordance with the Partnership's Amended and Restated Agreement and Certificate of Limited Partnership (the "Partnership Agreement"). Item 1A. Risk Factors The Partnership is subject to risks incident to potential losses arising from the management and ownership of improved real estate. The Partnership can also be affected by poor economic conditions generally, however no more than 30% of the Properties are located in any single state. There are also substantial risks associated with owning properties receiving government assistance; for example the possibility that Congress may not appropriate funds to enable the U.S. Department of Housing and Urban Development ("HUD") to make rental assistance payments. HUD also restricts annual cash distributions to partners based on operating results and a percentage of the owners' equity contribution. As of March 31, 2007, there were three Local Partnerships subsidized by HUD. The Partnership cannot sell or substantially liquidate its investments in subsidiary partnerships during the period that the subsidy agreements are in existence without HUD's approval. Furthermore there may not be market demand for apartments at full market rents when the rental assistance contract expires. Item 1B. Unresolved Staff Comments None 6 Item 2. Properties The Partnership holds a 99%, 98.99% and 98% limited partnership interest in seven, ten and twenty-two Local Partnerships, respectively. Set forth below is a schedule of these Local Partnerships including certain information concerning the Apartment Complexes (the "Local Partnership Schedule"). Further information concerning these Local Partnerships and their Properties, including any encumbrances affecting the Properties, may be found in Item 15 (a) 2; Schedule III.

Local Partnership Schedule -------------------------- % of Units Occupied at May 1, Name of Location -----------------------------------------------~~----------------~~ (Number of Units) Date Acquired 2007 2006 2005 2004 2003 ~~2002~~ ---------------------------------- --------------- -------~~-----~~ -------~~---~~ -------~~---~~ -------~~----~~ -------~~----~~ Parkside Townhomes York, PA (53) September 1990 (ba) (a) 92% 98% 89% ~~87%~~ Twin Trees Layton, UT (43) October 1990 (c) 98% 93% 95% 95% ~~98%~~ Bennion (Mulberry) Taylorsville, UT (80) October 1990 (c) 95% 95% 93% 88% ~~96%~~ Hunters Chase Madison, AL (91) October 1990 (c) 90% 80% 80% 95% ~~93%~~ Wilshire Park Huntsville, AL (65) October 1990 (c) 95% 85% 91% 88% ~~94%~~ Bethel Park Bethel, OH (84) October 1990 (c) 94% 83% 96% 89% ~~80%~~ Zebulon Park Owensville, OH (66) October 1990 (c) 84% 86% 94% 94% ~~95%~~ Tivoli Place Murphreesboro, TN (61) October 1990 (c) 90% 95% 90% 92% ~~89%~~ Northwood (Hartwood) Jacksonville, FL (110) October 1990 (c) 91% 93% 97% 92% ~~100%~~ Oxford Trace Aiken, SC (29) October 1990 (c) 93% 90% 96% 97% ~~79%~~ Ivanhoe Apts. Salt Lake City, UT (19) January 1991 (ba) (a) 95% 100% 79% ~~95%~~ Washington Brooklyn Brooklyn, NY (24) January 1991 ~~100%~~(c) 100% 100% 100% 100% Manhattan B (C.H. Development) New York, NY (35) January 1991 (c) 100% 100% 97% 100% ~~100%~~ Davidson Court Staten Island, NY (38) March 1991 (ba) (a) 100% 97% 100% ~~100%~~ Magnolia Mews Philadelphia, PA (63) March 1991 90% 95% 97% 95% 98% ~~100%~~ Oaks Village Whiteville, NC (40) March 1991 (ba) (a) 100% 100% 98% ~~100%~~ Greenfield Village Dunn, NC (40) March 1991 (ba) (a) 98% 98% 98% ~~100%~~ Morris Avenue (CLM Equities) Bronx, NY (58) April 1991 (ba) ~~100%~~(a) 100% 100% 100% Victoria Manor Riverside, CA (112) April 1991 98% 99% 98% 100% 100% ~~100%~~ Ogontz Hall Philadelphia, PA (35) April 1991 97% 96% 97% 90% 100% 657 Local Partnership Schedule -------------------------- % of Units Occupied at May 1, Name of Location ----------------------------------------------- (Number of Units) Date Acquired 2007 2006 2005 2004 2003 ---------------------------------- -------------- ------- ------- ------- ------- ------- Eagle Ridge Stoughton, WI (54) May 1991 (c) 83% 83% 87% 89% Nelson Anderson Bronx, NY (81) June 1991 (a) (a) 93% 98% 98% Abraham Lincoln Apts. Irondequoit, NY (69) September 1991 (b) 93% 88% 86% 83% Wilson Street Apts. (Middletown) Middletown, PA (44) September 1991 86% 93% 89% 98% 98% Lauderdale Lakes Lauderdale Lakes, FL (172) October 1991 (c) 99% 100% 99% 97% Flipper Temple Atlanta, GA (163) October 1991 100% 99% 100% 100% 97% 220 Cooper Street Camden, NJ (29) December 1991 83% 93% 90% 100% 100% Pecan Creek Tulsa, OK (47) December 1991 88% 92% 85% 96% 92% Vendome Brooklyn, NY (24) December 1991 100% 100% 100% 100% 100% Rainer Villas New Augusta, MS (20) December 1991 90% 75% 90% 100% 85% Pine Shadow Apts. Waveland, MS (48) December 1991 (d) (d) 100% 100% 98% Windsor Place Wedowee, AL (24) December 1991 100% 100% 100% 100% 100% Brookwood Apts. Foley, AL (38) December 1991 89% 92% 95% 84% 95% Heflin Hills Apts. Heflin, AL (24) December 1991 100% 100% 100% 100% 100% Shadowood Apts. Stevenson, AL (24) December 1991 96% 100% 96% 100% 100% Brittany Apts. DeKalb, MS (25) December 1991 100% 100% 96% 100% 100% Hidden Valley Apts. Brewton, AL (40) December 1991 100% 100% 100% 100% 100% Westbrook Square Carthage, MS (32) December 1991 88% 78% 94% 97% 97% Royal Pines Apts. (Warsaw Elderly) Warsaw, KY (36) December 1991 100% 100% 97% 100% 100% West Hill Square Gordo, AL (24) December 1991 100% 100% 96% 100% 100% Elmwood Manor Picayune, MS (24) December 1991 100% 96% 100% 100% 100% Harmony Gate Apts. Los Angeles, CA (70) January 1992 (b) 100% 93% 97% 99%

8 (a) The Partnership's limited partnership interest was sold during the fiscal year ended March 31, 2006 (see Note 9 in Item 8) (b) The Partnership's limited partnership interest was sold during the fiscal year ended March 31, 2007 (see Note 9 in Item 8). (c) The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2007 (see Note 9 in Item 8). (d) This property suffered damages from Hurricane Katrina (see Note 10 in Item 8). One Local Partnership's assets balances are greater than 10% of the Partnership's total assets balances, and excluding gain on sale of properties, none of the Local Partnerships' revenue balance is greater than 10% of the Partnership's total revenue balances. All leases are generally for periods not greater than one to two years and no tenant occupies more than 10% of the total rentable square footage in any single Apartment Complex. Commercial tenants (to which average rental per square foot applies) comprise less than 5% of the rental revenues of the Local Partnerships. Rents for the residential units are determined annually by HUD and reflect increases, if any, in consumer price indices in various geographic areas. Management of the General Partners periodically reviews the physical state of the Properties and suggests to the respective Local General Partners budget improvements which are generally funded from cash flow from operations or release of replacement reserve escrows. Management of the General Partners periodically reviews the insurance coverage of the Properties and believes such coverage is adequate. See Item 1, Business, above for the general competitive conditions to which the Properties described above are subject. Real estate taxes are calculated using rates and assessed valuations determined by the township or city in which the Property is located. The General Partners generally required that the Local General Partners undertake an obligation to fund operating deficits of the Local Partnership (up to a stated maximum amount) during a limited period of time (typically three to five years) following the achievement of break-even operations ("Operating Deficit Guarantees"). Under the terms of the Operating Deficit Guarantees, amounts funded are treated as operating loans, which do not bear interest and which will be repaid only out of 50% of available cash flow or out of available net sale or refinancing proceeds. As of March 31, 2007, all Operating Deficit Guarantees have expired. Item 3. Legal Proceedings Washington ---------- On July 26, 2006, the sale of Washington was completed (see Item 8, Note 9) pursuant to the purchase and sale agreement. Upon closing, the purchaser assumed all of Washington's rights and liabilities with respect to the Litigation described below. In or about September 2003, a putative mortgagee commenced a mortgage foreclosure action in the Supreme Court of the State of New York, Kings County (the "Court"), entitled 150 Beach 120th Street Inc. v. Washington Brooklyn Limited Partnership, Index No. 35255/2003, seeking to foreclose on an alleged $100,000 loan and mortgage against the real property (the "Apartment Complex") owned by Washington. Apparently, the former general partner of Washington, BUFNY Houses of Brooklyn, Inc. ("BUFNY"), allegedly granted two mortgages in the amounts of $225,000 and $100,000 secured by the Apartment Complex. Each of the foregoing mortgages was granted without the knowledge of Freedom SLP, L.P. (the "Special Limited Partner") or the Partnership (collectively the "Freedom LPs") or the consent of the Special Limited Partner, as required by Washington's Amended and Restated Agreement of Limited Partnership (the "Washington Partnership Agreement"). The Freedom LPs believe that BUFNY did not use the alleged loan proceeds for the benefit of Washington or the Apartment Complex. For these and other reasons, the Freedom LPs contend that the alleged mortgages are invalid. In addition, BUFNY allegedly failed to comply with the terms of either mortgage, which resulted in the holders of the alleged $100,000 mortgage commencing the foreclosure proceedings. BUFNY did not appear in or otherwise respond to the foreclosure proceedings. The holders of the alleged $225,000 mortgage have not yet, to the knowledge of the Freedom LPs, commenced any foreclosure proceedings. Due to BUFNY's breach of fiduciary duties and breaches of the Washington Partnership Agreement, the Special Limited Partner exercised its rights under the Washington Partnership Agreement to remove BUFNY as Washington's general partner and to substitute itself as the new replacement general partner, effective April 26, 2004. Shortly after the Freedom LPs became aware of these foreclosure proceedings, their counsel contacted counsel for the plaintiffs and mortgagees in an effort to learn more about the alleged mortgages and to resolve the disputes relating to the mortgages. When those efforts failed, the Freedom LPs filed a motion to intervene in the foreclosure action and to file a late answer on behalf of themselves and Washington. The Freedom LPs contend that the mortgages are invalid and that Washington is not liable for them or the underlying indebtedness. In an order dated September 7, 2004, the Court granted the Freedom LPs' motion to intervene and to file a late answer on behalf of Washington. On or about September 21, 2004, the Freedom LPs, on behalf of themselves and Washington, served an answer, counterclaims and crossclaims in defending against the action. The answer denied the material allegations of the complaint and asserted certain affirmative defenses, counterclaims and crossclaims. Among other things, the Freedom LPs, on behalf of themselves and Washington, added The Levites Organization, one of the two co-holders of the $225,000 mortgage for which the plaintiffs' complaint did not seek foreclosure, as an additional counterclaim defendant, and the Freedom LPs asserted that both the $100,000 and $225,000 mortgages are invalid and void ab initio. After obtaining discovery from the putative mortgagees, Washington and the Freedom LPs on July 12, 2005 made a motion for summary judgment dismissing the complaint and declaring the mortgages invalid and void ab initio. The putative mortgagees cross-moved for summary judgment declaring the mortgages valid and enforceable. Subsequently, by decision dated January 3, 2006, the Court denied both motions, finding that questions of fact exist for trial as to the reasonableness of the putative mortgagees' reliance on BUFNY. 9 On February 14, 2006, the Freedom LPs filed a notice of appeal from the January 3, 2006 decision. On July 18, 2006, the Freedom LPs perfected their appeal from the Court's January 3, 2006 decision. Item 4. Submission of Matters to a Vote of Stockholders None 10 PART II Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities As of March 31, 2007, the Partnership had issued and has outstanding 72,896 Limited Partnership Interests, each representing a $1,000 capital contribution to the Partnership, or an aggregate capital contribution of $72,896,000. All of the issued and outstanding Limited Partnership Interests have been issued to Freedom Assignor Inc. (the "Assignor Limited Partner"), which has in turn issued 72,896 BACs to the purchasers thereof for an aggregate purchase price of $72,896,000. Each BAC represents all of the economic and virtually all of the ownership rights attributable to a Limited Partnership Interest held by the Assignor Limited Partner. BACs may be converted into Limited Partnership Interests at no cost to the holder (other than the payment of transfer costs not to exceed $100), but Limited Partnership Interests so acquired are not thereafter convertible into BACs. As of May 25, 2007, the Partnership has 4,022 registered holders of an aggregate of 72,896 BACs. Neither the BACs nor the Limited Partnership Interests are traded on any established trading market. The Partnership does not intend to include the BACs for quotation on NASDAQ or for listing on any national or regional stock exchange or any other established securities market. The Revenue Act of 1987 contained provisions which have an adverse impact on investors in "publicly traded partnerships." Accordingly, the General Partners have imposed restrictions limiting the transferability of the BACs and the Limited Partnership Interests in secondary market transactions. These restrictions should prevent a public trading market from developing that would adversely affect the ability of an investor to liquidate his or her investment quickly. It is expected that such procedures will remain in effect until such time, if ever, as further revision of the Revenue Act of 1987 may permit the Partnership to lessen the scope of the restrictions. All of the Partnership's general partnership interests, representing an aggregate capital contribution of $2,000, are held by the two General Partners. There are no material restrictions in the Partnership Agreement on the ability of the Partnership to make distributions. The Partnership does not anticipate providing cash distributions to its BACs holders other than from net refinancing or sales proceeds. There can be no assurance as to when the Partnership will dispose of its remaining investments or the amount of proceeds which may be received. However, based on the historical operating results of the Local Partnerships and the current economic conditions, including changes in tax laws, it is unlikely that the proceeds from such sales received by the Partnership will be sufficient to return to the limited partners their original investments. During the fiscal year ended March 31, 2007, distributions from sales of approximately $6,925,000 were made to the BACs holders and of approximately $70,000 to the General Partners. Transfer Procedures ------------------- The Partnership from time to time receives requests by unit holders and others to transfer BACs and/or Limited Partnership Interests. Such requests may occur in connection with tender offers for the Partnership's units. Such requests implicate the Partnership's policies and procedures concerning transfers generally and tender offers in particular, which were adopted by the Partnership pursuant to the terms of its Partnership Agreement, to ensure compliance with applicable law, avoid adverse tax consequences for the Partnership and its investors, and preserve the Partnership's advantageous tax status. In prior years, the Partnership relied on the 5% safe harbor established by Internal Revenue Service ("IRS") regulations to avoid being characterized as a "publicly-traded partnership" that is taxed as a corporation. The 5% safe harbor, however, expired and is no longer available as of December 31, 2005. Accordingly, the Partnership now relies on a 2% safe harbor established by another IRS regulation to avoid being characterized as a "publicly-traded partnership" that is taxed as a corporation. A brief summary of certain of the Partnership's key policies, practices and requirements with respect to transfers and tender offers is as follows: o No transfer (whether for substitution, assignment or otherwise) is effective or binding on the Partnership unless and until it is approved by the General Partners. o No transfer will be approved unless the transferor and transferee submit complete and properly executed forms of the Partnership's own transfer documentation. The Partnership does not accept forms of transfer documentation other than its own and does not accept signatures made by power of attorney in lieu of original signatures by each of the transferors and transferees. o The Partnership will not approve transfers that in the cumulative aggregate for any tax year exceed the IRS 2% safe harbor, unless a financially responsible person provides the Partnership and its partners with (i) an indemnity (in form and substance in all ways acceptable to the General Partners) 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 Partners) that there will be no adverse tax consequences to the Partnership 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 Partnership's remaining investors with no liquidity opportunity for the rest of that tax year, the Partnership restricts the cumulative aggregate total of transfers made pursuant to all tender offers to 1.5% of its outstanding units in each tax year, unless a financially responsible person conducting such tender offer provides the Partnership with an acceptable indemnity and legal opinion of the type described above. At the end of each tax year, the General Partners, 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 Partnership requires that all tender offers for its units be conducted in accordance with all applicable law including, without limitation, the federal securities laws. The foregoing is solely a summary of the Partnership's policies, requirements and practices with respect to transfers and tender offers. More complete information, including a copy of the Partnership's transfer documentation package, may be obtained from the Partnership. 11 Item 6. Selected Financial Data. The information set forth below presents selected financial data of the Partnership. Additional financial information is set forth in the audited consolidated financial statements in Item 8 hereof.

~~Local~~Years ~~Partnership~~Ended ~~Schedule~~March 31, -------------------------- ~~% of Units Occupied at May 1, Name of Location~~ -------------------------------------------------~~--------------~~ ~~(Number~~OPERATIONS of2007 ~~Units) Date Acquired~~ 2006* 2005* 2004* 2003* ~~2002~~ --------------------------------- ------------~~---~~ ------------ ---------- --- ------- ------ ----- --------~~---~~ ~~Eagle~~Revenues ~~Ridge~~$ ~~Stoughton~~6,526,768 WI$ ~~(54)~~6,433,900 ~~May~~$ ~~1991~~6,241,975 ~~83%~~$ ~~83%~~6,077,701 ~~87%~~$ ~~89%~~5,725,218 ~~93%~~Operating ~~Nelson~~expenses ~~Anderson Bronx~~(8,191,697) NY (818,523,399) ~~June 1991~~ (b7,935,337) ~~93% 98% 98% 96% Abraham Lincoln Apts. Irondequoit~~(7,967,565) NY (697,556,969) ~~September~~------------ ~~1991~~------------ ~~93%~~------------- ~~88%~~------------- ~~86%~~------------- ~~83%~~Loss ~~94%~~from ~~Wilson~~operations ~~Stree~~before minority interest (~~Middletown~~1,664,929)t ~~Apts.~~(2,089,499) ~~Middletown~~(1,693,362) PA(1,889,864) (441,831,751) ~~September~~Minority ~~1991~~interest ~~93%~~in ~~89%~~loss ~~98%~~of ~~98%~~subsidiaries ~~95%~~from ~~Lauderdale~~operations ~~Lakes~~12,796 ~~Lauderdale~~13,180 ~~Lakes~~7,176 FL10,827 ~~(172)~~11,442 ~~October~~------------ ~~1991~~------------ ~~99%~~------------- ~~100%~~------------- ~~99%~~------------- ~~97%~~Loss ~~96%~~from ~~Flipper~~operations ~~Temple~~(1,652,133) ~~Atlanta~~(2,076,319) GA(1,686,186) (~~163~~1,879,037) ~~October~~(1,820,309) ~~1991~~Income ~~99%~~(loss) ~~100%~~from ~~100%~~discontinued ~~97%~~operations ~~100%~~including ~~220~~minority ~~Cooper~~interest)(Note ~~Street~~11) ~~Camden~~13,484,294 NJ(1,715,725) (292,533,452) ~~December~~(1,875,927) ~~1991~~(1,933,438) ~~93%~~------------ ~~90%~~------------ ~~100%~~------------- ~~100%~~------------- ~~93%~~------------- ~~Pecan~~Net ~~Creek~~income ~~Tulsa, OK~~ (47loss) ~~December~~$ ~~1991~~11,832,161 ~~92%~~$ ~~85%~~(3,792,044) ~~96%~~$ ~~92%~~(4,219,638) ~~94%~~$ ~~Vendome Brooklyn~~(3,754,964) NY$ (243,753,747) ~~December~~============ ~~1991~~============ ~~100%~~============= ~~100%~~============= ~~100%~~============= ~~100%~~Loss ~~100%~~from ~~Rainer~~operations ~~Villas~~per ~~New~~BAC ~~Augusta,~~$ MS(22.43) $ (28.20) ~~December~~$ ~~1991 75%~~ (22.90%) ~~100%~~$ ~~85%~~(25.52) ~~100%~~$ ~~Pine Shadow Apts~~(24.72) ~~Waveland,~~Income MS (48loss) ~~December~~from ~~1991~~discontinued 0%operations ~~100%~~per ~~100%~~BAC ~~98%~~183.13 ~~100%~~(23.30) ~~Windsor~~(34.41) ~~Place~~(25.48) ~~Wedowee, AL~~ (2426.26) ~~December~~------------ ~~1991~~------------ ~~100%~~------------- ~~100%~~------------- ~~100%~~------------- ~~100%~~Net ~~100%~~income ~~Brookwood Apts. Foley, AL~~ (38loss)per ~~December~~BAC ~~1991~~$ ~~92%~~160.70 ~~95%~~$ ~~84%~~(51.50) ~~95%~~$ ~~98%~~(57.31) ~~Heflin~~$ ~~Hills Apts~~(51.00) ~~Heflin,~~$ AL (2450.98) ~~December~~============ ~~1991~~============ ~~100%~~============= ~~100%~~============= ~~100%~~============= ~~100%~~March ~~100% Shadowood Apts. Stevenson~~31, AL--------------------------------------------------------------------------- ~~(24)~~FINANCIAL ~~December~~POSITION ~~1991~~2007 ~~100%~~2006 ~~96%~~2005 ~~100%~~2004 ~~100%~~2003 ~~100%~~--------------------------------- ~~Brittany~~------------ ~~Apts.~~------------ ~~DeKalb,~~------------- MS------------- ~~(25)~~------------- ~~December~~Total ~~1991~~assets ~~100%~~$ ~~96%~~34,744,362 ~~100%~~$ ~~100%~~79,514,396 ~~100%~~$ ~~Hidden~~85,974,318 ~~Valley~~$ ~~Apts. Brewton~~89,939,866 AL$ ~~(40)~~93,667,833 ~~December~~============ ~~1991~~============ ~~100%~~============= ~~100%~~============= ~~100%~~============= ~~100%~~Mortgage ~~99%~~notes ~~Westbrook~~payable ~~Square Carthage, MS~~ (~~32)~~including ~~December~~assets ~~1991~~held ~~78%~~for ~~94%~~sale) ~~97%~~$ ~~97%~~25,276,141 ~~88%~~$ ~~Royal~~59,865,761 ~~Pines~~$ ~~Apts.(Warsaw~~65,119,347 ~~Elderly)~~$ ~~Warsaw~~66,285,158 KY$ ~~(36)~~67,366,819 ~~December~~============ ~~1991~~============ ~~100%~~============= ~~97%~~============= ~~100%~~============= ~~100%~~Total ~~100%~~liabilities ~~West~~$ ~~Hill~~30,941,275 ~~Square~~$ ~~Gordo~~82,460,679 AL$ ~~(24)~~80,056,413 ~~December~~$ ~~1991~~79,841,161 ~~100%~~$ ~~96%~~79,736,876 ~~100%~~============ ~~100%~~============ ~~100%~~============= ~~Elmwood~~============= ~~Manor~~============= ~~Picayune,~~Total MSpartners' capital (24deficit) ~~December~~$ ~~1991~~3,130,714 ~~96%~~$ ~~100% 100% 100% 100% Harmony Gate Apts. Los Angeles~~(5,914,946) CA$ (702,122,902) ~~January~~$ ~~1992~~2,096,736 ~~100%~~$ ~~93%~~5,851,700 ~~97%~~============ ~~99%~~============ ~~97%~~============= ============= =============

* Reclassified for comparative purposes. During the years ended March 31, 2003, 2004 and 2005 total assets decreased primarily due to depreciation, partially offset by net additions to property and equipment. During the years ended March 31, 2006 and 2007, total assets and liabilities decreased primarily due to the sale of Local Partnerships. 12 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources ------------------------------- General ------- The Partnership's capital was originally invested in forty-two Local Partnerships. As of March 31, 2007, the limited partnership interest in nine Local Partnerships and the property and the related assets and liabilities of thirteen Local Partnerships have been sold. For a discussion of these sales of the Local Partnerships, see Note 9 in Item 8. Subsequently, on April 30, 2007, six Local Partnerships entered into agreements to sell their property and the related assets and liabilities, and on May 3, 2007, the Partnership's limited partnership interest in one Local Partnership was sold (see Item 8, Note 13). During the year ended March 31, 2007, the primary sources of liquidity included working capital, interest earned on working capital, and distributions received from the Local Partnerships. Short-Term ---------- The Partnership's primary sources of funds included: (i) working capital reserves; (ii) interest earned on the working capital reserves; (iii) cash distributions from operations of the Local Partnerships; and (iv) sales proceeds and distributions. Such funds, although minimal (other than sales proceeds and sales distributions), are available to meet the obligations of the Partnership. The Partnership does not anticipate providing cash distributions to BACs holders in circumstances other than refinancing or sales. During the years ended March 31, 2007, 2006 and 2005, distributions from the Local Partnerships amounted to approximately $54,000, $24,000 and $138,000, respectively. Additionally, during the years ended March 31, 2007, 2006 and 2005, the Partnership received approximately $13,059,000, $2,379,000 and $0, respectively, of proceeds from the sale of investments. Certain fees and expense reimbursements owed to the General Partners amounting to approximately $2,983,000 and $9,051,000 were accrued and unpaid as of March 31, 2007 and 2006, respectively. In particular, partnership management fees owed to the General Partners amounting to approximately $2,948,000 and $7,555,000 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 sold properties uncollectible and, as a result, wrote them off in the amount of approximately $4,096,000, resulting in a non-cash General Partner contribution of the same amount. Furthermore, expense reimbursements and asset monitoring fees owed to the General Partners amounting to approximately $35,000 and $1,496,000 were accrued and unpaid as of March 31, 2007 and 2006, respectively. Without the General Partners' continued accrual without payment of the partnership management fees, the Partnership will not be in the position to meet its obligations. The General Partners and certain of its affiliates have allowed for the accrual without payment of the partnership management fees but are under no obligation to continue to do so. During the year ended March 31, 2007, cash and cash equivalents of the Partnership and its thirty-nine Local Partnerships increased approximately $1,229,000 due to proceeds from sale of investments of approximately $39,497,000 and an increase due to Local general partners and affiliates relating to financing activities of approximately $54,000, which exceeded net cash used in operating activities of approximately $3,967,000, capital improvements of approximately $949,000, costs paid relating to the sale of properties of approximately $1,788,000, a decrease in due to local general partners and affiliates relating to financing activities of approximately $576,000, repayments of mortgage loans of approximately $22,872,000, distributions of approximately $6,995,000 and a decrease in capitalization of consolidated subsidiaries attributable to minority interest of approximately $1,174,000. Included in the adjustments to reconcile the net income to cash used in operating activities is depreciation and amortization of approximately $2,567,000, income on sale of investments of approximately $10,091,000 and loss on impairment of fixed assets of approximately $1,506,000. Total expenses for the years ended March 31, 2007, 2006 and 2005, excluding depreciation and amortization, interest and general and administrative - related parties, totaled $3,998,020, $3,940,297 and $3,475,403, respectively. Accounts payable and other liabilities totaled $1,350,713 and $5,291,827, which is comprised of the following amounts:

~~Year Ended~~ March 31, -----------------------------~~---------------------------------------------------~~ ~~OPERATIONS~~2007 2006 2005* 2004* 2003* 2002* ------------~~---------------------~~ ------------- ~~-------------~~Deferred ~~--------------~~revenue ~~--------------~~from ~~------------~~sale ~~Revenues~~of $properties ~~7,939,756~~ $ ~~7,807,858~~0 $ 71,~~661~~888,~~964~~040 $Accounts ~~7,246,296~~payable ~~$ 7~~534,~~191,373~~287 ~~Operating expenses (11~~1,~~221~~488,083) (10,401,751) (10,143,216) (9,691,558) (9,675,155) ------------- ------------- -------------- -------------- ------------ Loss from operations before minority interest (3,281,327) (2,593,893) (2,481,252) ~~(2,445,262)~~Accrued ~~(2,483,782) Minority~~ interest inpayable ~~loss of subsidiaries from operations 34~~579,~~827~~535 22,781 21,358 21,892 23,547 ------------- ------------- -------------- -------------- ------------ Loss from operations (3,246,500) (2,571,112) (2,459,894) (2,423,370) (2,460,235) Loss from discontinued operations (including minority interest) (Note 12) (545,544) (1,~~648~~555,~~526)~~015 ~~(1,295,070)~~Security ~~(1,330,377)~~deposits ~~(1,290,935)~~payable ~~------------- ------------- -------------- -------------- ------------ Net loss $ (3~~236,~~792,044)~~891 ~~$ (4~~360,~~219,638)~~520 $ (3,754,964) $ (3,753,747) $ (3,751,170) ============= ============= ============== ============== ============ Loss from operations per BAC $ (44.09) $ (34.92) $ (33.41) $ (32.91) $ (33.41) Loss from discontinued operations per BAC (7.41) (22.39) (17.59) (18.07) (17.53) ------------- ------------- -------------- -------------- ------------ Net loss per BAC $ (51.50) $ (57.31) $ (51.00) $ (50.98) $ (50.94) ============= ============= ============== ============== ============ Year Ended March 31, -------------------------------------------------------------------------------- FINANCIAL POSITION 2006 2005 2004 2003 2002* --------------------------------- ------------- ------------- -------------- -------------- ------------ Total ~~assets~~accounts ~~$ 79,514,396 $ 85,974,318 $ 89,939,866 $ 93,667,833 $ 97,175,105 ============= ============= ============== ============== ============ Mortgage notes~~ payable ~~(including~~and ~~assets~~other ~~held for sale) $ 59,865,761 $ 65,119,347 $ 66,285,158 $ 67,366,819 $ 68,063,227 ============= ============= ============== ============== ============ Total~~ liabilities $ 821,~~460~~350,~~679~~713 $ ~~80,056,413 $ 79,841,161 $ 79,736,876 $ 79,553,880 ============= ============= ============== ============== ============ Total partners' (deficit) capital $ (~~5,~~914~~291,~~946)~~827 ~~$ (2,122,902) $ 2,096,736 $ 5,851,700 $ 9,605,982~~ ============= ============~~= ============== ============== ============~~

Accounts payable are short term liabilities which are expected to be paid from operating cash flows, working capital balances at the Local Partnership level, Local General Partner advances and in certain circumstances advances from the Partnership. Because the provisions of the secondary loans defer the payment of accrued interest of the respective Local Partnerships, the Partnership believes it (and the applicable Local Partnerships) has sufficient liquidity and ability to generate cash and to meet existing and known or reasonably likely future cash requirements over both the short and long term. Included in accounts payable and other liabilities as of March 31, 2007 and 2006 are $0 and $1,888,040 of deferred revenue from sales, respectively. As indicated in the above table, accrued interest payable comprised approximately 43% and 46% of the total accounts payable and other liabilities amount, excluding deferred revenue from sales, at March 31, 2007 and 2006, respectively. Such amount represents the accrued interest on all mortgage loans, which include primary and secondary loans. Certain secondary loans have provisions such that interest is accrued but not payable until a future date. 13 The Partnership anticipates the payment of accrued interest on the secondary loans (which make up the majority of the accrued interest payable amount indicated in the above table and which have been accumulating since the Partnership's investment in the respective Local Partnerships) will be made from future refinancings or sales proceeds of the respective Local Partnerships. In addition, each Local Partnership's mortgage notes are collateralized by the land and buildings of the respective Local Partnership, and are without further recourse to the Partnership. Security deposits payable are offset by cash held in security deposits, which are included in "Cash held in escrow" on the consolidated financial statements. Working capital of approximately $4,998,000, exclusive of Local Partnerships' working capital, remains as of March 31, 2007. It is used to pay operating expenses of the Partnership, including Partnership management fees payable to the General Partners and advances to Local Partnerships if warranted. Long-Term ---------- Effective January 1, 1999 the State of California requires owners of a property benefiting from the Federal Housing Administration ("FHA") insured mortgages under Section 236 or 221(a)(3) to provide a nine month notice of contract termination or prepayment of the FHA insured loan. In addition, with respect to the Partnership's California investments, the owner must offer the Properties for sale to those entities who agree to maintain the Property as affordable housing. On October 20, 1999 President Clinton signed the Fiscal Year 2000 Department of Veteran Affairs, HUD and Independent Agencies Appropriations Act (the "Appropriations Act"). The Appropriations Act contains revisions to HUD Mark-to-Market Program and other HUD programs concerning the preservation of HUD housing stock. On December 29, 1999 HUD issued Notice H99-36 addressing "Project Based Section 8 Contracts Expiring in Fiscal Year 2000," reflecting the changes in the Appropriations Act and superceding earlier HUD Notices 98-34, 99-08, 99-15, 99-21 and 99-32. Notice 99-36 clarifies many of the earlier uncertainties with respect to the earlier HUD Section 8 Mark-to-Market Programs and continued the Mark-to-Market Program which allows owners with Section 8 contracts to increase the rents to market levels where contract rents are currently below market. As of March 31, 2007, none of the Local Partnerships has opted to enter the Mark-to-Market Program and therefore this has no impact on the Partnership. For a discussion of contingencies affecting certain Local Partnerships, see Note 10 in Item 8. Since the maximum loss the Partnership would be liable for is its net investment in the respective Local Partnerships, the resolution of the existing contingencies is not anticipated to impact future results of operations, liquidity or financial condition in a material way. However, the Partnership's loss of its investment in a Local Partnership may result in recapture of Tax Credits if the investment is lost before the expiration of the applicable Compliance Period. Except as described above, management is not aware of any trends or events, commitments or uncertainties, which have not otherwise been disclosed, that will or are likely to impact liquidity in a material way. Management believes the only impact would be from laws that have not yet been adopted. The portfolio is diversified by the location of the Properties around the United States so that if one area of the country is experiencing downturns in the economy, the remaining Properties in the portfolio may not be affected. However, the geographic diversification of the portfolio may not protect against a general downturn in the national economy. Sale of Underlying Properties/Local Partnership Interests --------------------------------------------------------- For a discussion of the sale of properties in which the Partnership owns direct and indirect interests, see Note 9 in Item 8. Discontinued Operations ----------------------- The Partnership is currently in the process of disposing of its investments. The disposals meet the criteria established for recognition as a discontinued operation under SFAS No. 144. SFAS No. 144 specifically requires that such amounts must differentiate a component of a business comprised of operations and cash flows that can be clearly distinguished operationally and for financial reporting purposes, from the rest of the entity. See Note 9 in Item 8 for a discussion of the sale of properties. As of March 31, 2007, there were no assets held for sale. Tabular Disclosure of Contractual Obligations --------------------------------------------- The following table summarizes the Partnership's commitments from operations as of March 31, 2007 to make future payments under its debt agreements and other contractual obligations.

~~March~~Less ~~31,~~than 1 - 3 3 -5 More than Total 1 Year Years Years 5 Years -----------~~-----------------~~ ~~2006 2005~~ ------------ ------------ ~~$ 1,888,040 $ 0 Deferred revenue from sale of properties Accounts payable 1,488,252 234,182 Accrued interest payable 1,555,015 1,484,260 Security deposits payable 360,520 736,944~~ ------------ ------------ ~~Total~~Mortgage ~~accounts~~notes payable ~~and~~(a) ~~other liabilities~~ $ 525,~~291~~276,~~827~~141 $ 2,~~455~~107,~~386~~086 ~~============~~$ ~~============~~538,682 $ 618,170 $22,012,203

(a) The mortgage notes are payable in aggregate monthly installments of approximately $167,000 including principal and interest with rates varying from 1% to 13.50% per annum and have maturity dates ranging from 2007 through 2042. The loans are collateralized by the land and buildings of the subsidiary partnerships, the assignment of certain subsidiary partnerships' rents, leases, and replacement reserves, and are without further recourse. Off Balance Sheet Arrangements ------------------------------ The Partnership has no off-balance sheet arrangements. 14 Critical Accounting Estimates ----------------------------- In preparing the consolidated financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Set forth below is a summary of the accounting policies that management believes are critical to the preparation of the consolidated financial statements. Property and Equipment/Valuation of Long-Lived Assets ----------------------------------------------------- Property and equipment to be held and used are carried at cost which includes the purchase price, acquisition fees and expenses, and any other costs incurred in acquiring the Properties. The cost of property and equipment is depreciated over their estimated useful lives using accelerated and straight-line methods. Expenditures for repairs and maintenance are charged to expense as incurred; major renewals and betterments are capitalized. At the time property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are eliminated from the assets and accumulated depreciation accounts and the profit or loss on such disposition is reflected in earnings. The Partnership complies with SFAS No. 144. 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. In accordance with SFAS No. 144, the results of discontinued operations are reported as a separate component of income before extraordinary items on the consolidated statements of operations. Discontinued operations include the results of operations and any gain or loss recognized for Local Partnerships that have been disposed of or are held for sale. A gain or loss recognized on the disposal is disclosed in the notes to the consolidated financial statements. Adjustments to amounts previously reported in operations that are directly related to the disposal of a Local Partnership are reclassified in the current period as discontinued operations for comparability purposes. Assets and liabilities of a Local Partnership that are classified as held for sale are presented separately in the asset and liability sections, respectively, of the consolidated balance sheets. Through March 31, 2007, the Partnership has recorded approximately $5,726,000 as a loss on impairment of assets or reductions to estimated fair value. 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 as rents become due 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. The Partnership received rental subsidies which amounted to $2,976,343, $3,430,948 and $3,488,027 for the years ended March 31, 2007, 2006 and 2005, respectively. The related rental subsidy programs have expiration dates that terminate upon total disbursement of the assistance obligation. Other revenues are recorded when earned and consist of the following items: Interest income earned on cash and cash equivalent balances and cash held in escrow balances, income from forfeited security deposits, late charges, laundry and vending income and other rental related items. Other revenues from operations include the following amounts at both the Partnership and Local Partnership level:

~~Less~~March ~~than~~31, 1 - ~~3 3~~ -~~5 More than Total 1 Year Years Years 5 Years~~ ----------- ----------- ----------- ------- 2007 2006* 2005* ---------- ---------- ---------- ~~Mortgage~~Interest ~~notes~~$ ~~payable~~373,757 ~~(a)~~ $33 51,~~397,400~~045 $ ~~487~~19,~~836~~832 $Other 2916,~~542~~833 1,~~470~~060,399 $925,821 ---------- ---------- ---------- Total other revenue $1,~~097~~290,~~180~~590 $291,~~269~~111,~~914~~444 $ 945,653 ========== ========== ==========

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

~~Less~~March ~~than~~31, 1 - ~~3 3~~ -~~5 More than Total 1 Year Years Years 5 Years~~ ----------- ----------- ----------- ------- 2007 2006* 2005* ---------- ---------- ---------- ~~Mortgage~~Interest ~~notes~~$ ~~payable~~38,940 ~~(a)~~ $26 54,~~468,361~~056 $ 1127,~~471~~023 Other 274,~~795~~656 ~~$18~~558,~~728~~339 475,~~172~~248 ---------- ---------- ---------- Total other revenue $ ~~576~~313,~~592~~596 $ 5612,~~691~~395 $ 602,~~802~~271 ========== ========== ==========

* Reclassified for comparative purposes. 15 Related Parties --------------- Under the terms of the Partnership Agreement, the General Partners and their affiliates are entitled to receive compensation from the Partnership in consideration of certain services rendered to the Partnership by such parties. In addition, the General Partners collectively hold a 1% interest in all profits, losses and distributions attributable to operations and a subordinated 15% interest in such items attributable to sales and refinancings. Certain directors and officers of the General Partners receive compensation from the General Partners and their affiliates for services performed for various affiliated entities which may include services performed for the Partnership. The maximum annual partnership management fee paid to the General Partners is 0.5% of invested assets. See Note 7 in Item 8, which is incorporated herein by reference. Results of Operations --------------------- Property and equipment to be held and used are carried at cost which includes the purchase price, acquisition fees and expenses, construction period interest and any other costs incurred in acquiring the Properties. The cost of property and equipment is depreciated over their estimated useful lives using accelerated and straight-line methods. Expenditures for repairs and maintenance are charged to expense as incurred; major renewals and betterments are capitalized. At the time property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are eliminated from the assets and accumulated depreciation accounts and the profit or loss on such disposition is reflected in earnings. 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 estimated future cash flows) when the Property is considered to be impaired and the carrying value exceeds estimated fair value. During the years ended March 31, 2007, 2006 and 2005, the Partnership has recorded approximately $1,506,000, $555,000 and $0, respectively, as a loss on impairment of assets. Through March 31, 2007, the Partnership has recorded an aggregate of approximately $5,726,000 of losses on impairment of assets. The Partnership's primary source of income continues to be rental income with the corresponding expenses being divided among operations, depreciation and mortgage interest. 2007 vs. 2006 ------------- Rental income decreased approximately 2% for the year ended March 31, 2007 as compared to 2006, primarily due to a decrease in rental income at one Local Partnership affected by Hurricane Katrina partially offset by an increase in rental rates at the remaining Local Partnerships. Other income increased approximately $179,000 for the year ended March 31, 2007 as compared to 2006, primarily due to an increase in interest income earned at the Partnership level due to higher cash balances resulting from the sale of properties partially offset by a management fee received at the Partnership level from the sale of one Local Partnership in the prior year. Total expenses, excluding repairs and maintenance, general and administrative and general and administrative-related parties, remained fairly consistent with a slight increase of less than 1% for the year ended March 31, 2007 as compared to 2006. Repairs and maintenance expenses decreased approximately $276,000 for the year ended March 31, 2007 as compared to 2006, primarily due to a decrease in contract and maintenance expenses at three Local Partnerships, a decrease in repairs due to fire damage in 2006 at one Local Partnership and a decrease in maintenance expenses due to temporarily ceased operations at one Local Partnership affected by Hurricane Katrina, partially offset by an increase in grounds maintenance, plumbing and interior repair expenses at two Local Partnerships. General and administrative expenses increased approximately $329,000 for the year ended March 31, 2007 as compared to 2006, primarily due to an increase in legal fees relating to sales activity and the Washington litigation (see Item 8, Note 10) and an increase in accounting fees due to the Public Company Accounting Oversight Board requirements at the Partnership level, an increase in legal and partnership expenses at one Local Partnership, an increase in office expenses, administrative salaries and payroll taxes at a second and third Local Partnership and an increase in consulting fees due to a tax credit renewal process at a fourth Local Partnership. General and administrative - related parties expenses decreased approximately $408,000 for the year ended March 31, 2007 as compared to 2006, primarily due to a decrease in partnership management fees and expense reimbursement charges at the Partnership level resulting from the sale of properties and a decrease due to temporarily ceased operations at one Local Partnership. 2006 vs. 2005 ------------- Rental income increased less than 1% for the year ended March 31, 2006 as compared to 2005, primarily due to an annual increase in rental rates at the Local Partnerships partially offset by an increase in vacancies due to damage from Hurricane Katrina at one Local Partnership. Other income increased approximately $166,000 for the year ended March 31, 2006 as compared to 2005, primarily due to a management fee received at the Partnership level from the sale of one Local Partnership. Total expenses, excluding repairs and maintenance, operating and other, general and administrative, remained fairly consistent with an increase of approximately 3% for the year ended March 31, 2006 as compared to 2005. Repairs and maintenance expenses increased approximately $150,000 for the year ended March 31, 2006 as compared to 2005, primarily due to property and building improvements at one Local Partnership, fire damage repairs at a second Local Partnership and increases in repair contracts and maintenance salaries at a third Local Partnership partially offset by a decrease in maintenance expenses at two Local Partnerships. Operating and other expenses increased approximately $147,000 for the year ended March 31, 2006 as compared to 2005, primarily due to an increase in gas expense at one Local Partnership and an increase in water expense at a second Local Partnership. 16 General and administrative increased approximately $166,000 for the year ended March 31, 2006 as compared to 2005, primarily due to an increase in legal fees relating to the Washington Brooklyn legal proceedings and an increase in sales activity at the Partnership level (see Item 8, Note 10) and an increase in management salaries and renting expenses at one Local Partnership. Other ----- As of December 31, 2002, the Credit Period for all of the Properties had expired, although each Local Partnership must continue to comply with the Tax Credit requirements until the end of the Compliance Period in order to avoid recapture of the Tax Credits. The Compliance Periods will continue through December 31, 2007 with respect to the Properties depending upon when the Credit Period commenced. The Partnership's investments as limited partners in the Local Partnerships are subject to the risks incident to the management and ownership of improved real estate. The Partnership's investments also could be adversely affected by poor economic conditions generally, which could increase vacancy levels, rental payment defaults and operating expenses, any or all of which could threaten the financial viability of one or more of the Local Partnerships. There are also substantial risks associated with the operation 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 HUD to make the rental assistance payments it has contracted to make; and that when the rental assistance contracts expire there may not be market demand for apartments at full market rents in a Local Partnership's Apartment Complex. As of March 31, 2007, there were three Local Partnerships subsidized by HUD. The Local Partnerships are impacted by inflation in several ways. Inflation generally allows for increases in rental rates to reflect the impact of higher operating and replacement costs. Inflation also affects the Local Partnerships adversely by increasing operating costs as a result of higher costs of such items as fuel, utilities and labor. However, continued inflation may result in appreciated values of the Local Partnerships' Apartment Complexes over a period of time as rental revenues and replacement costs continue to increase. The Partnership does not anticipate that it will be in a position to make cash distributions other than from refinancing and the disposition of the Properties. There can be no assurance as to when the Partnership will dispose of its remaining investments or the amount of proceeds which may be received. However, based on the historical operating results of the Local Partnerships and the current economic conditions, including changes in tax laws, it is unlikely that the proceeds from such sales received by the Partnership will be sufficient to return to the limited partners their original investments. During the fiscal year ended March 31, 2007, distributions from sales of approximately $6,925,000 were made to the BACs holders and of approximately $70,000 to the General Partners. Item 7a. Quantitative and Qualitative Disclosures about Market Risk The Partnership has mortgage notes that are payable in aggregate monthly installments including principal and interest at rates varying from 1% to 13.50% per annum. The Partnership does not believe there is a material risk associated with the various interest rates associated with the mortgage notes as the majority of the Local Partnership mortgage notes have fixed rates. The Partnership currently discloses in Item 8, Note 3 of the Notes to Consolidated Financial Statements, the fair value of the mortgage notes payable. The Partnership does not have any other market sensitive instruments. 17 Item 8. Financial Statements and Supplementary Data Sequential Page ---------- Consolidated Financial Statements Report of Independent Registered Public Accounting Firm 19 Consolidated Balance Sheets as of March 31, 2007 and 2006 47 Consolidated Statements of Operations for the years ended March 31, 2007, 2006 and 2005 48 Consolidated Statements of Changes in Partners' Capital (Deficit) for the years ended March 31, 2007, 2006 and 2005 49 Consolidated Statements of Cash Flows for the years ended March 31, 2007, 2006 and 2005 50 Notes to Consolidated Financial Statements 51 18 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM TO THE PARTNERS OF FREEDOM TAX CREDIT PLUS L.P. We have audited the accompanying consolidated balance sheets of FREEDOM TAX CREDIT PLUS 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 each of the years in the three-year period ended March 31, 2007. These consolidated financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the consolidated financial statements of twenty-eight subsidiary partnerships, whose losses aggregated $3,322,175 for the year ended March 31, 2007, and whose assets constituted 80% of consolidated assets at March 31, 2007. Those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for these subsidiary 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the reports of the other auditors provide a reasonable basis for our opinion. In our opinion, based on our audits and the reports of the other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of FREEDOM TAX CREDIT PLUS L.P. AND SUBSIDIRAIES as of March 31, 2007 and 2006, and the results of their operations and their cash flows for each of the years in the three-year period ended March 31, 2007, in conformity with accounting principles generally accepted in the United States of America. /s/ Friedman LLP New York, New York June 18, 2007 19 INDEPENDENT ACCOUNTANTS' REPORT To the Partners of Ivanhoe Apartments Limited Partnership We have audited the accompanying balance sheet of Ivanhoe Apartments Limited Partnership (a Limited Partnership) as of January 31, 2006 and December 31, 2005 and the related statements of operations, changes in partners' capital and cash flows for the month ended January 31, 2006 and the year ended December 31, 2005. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our 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 Ivanhoe Apartments Limited Partnership at January 31, 2006 and December 31, 2005, and the results of its operations and cash flows for the month ended January 31, 2006 and the year ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America. /s/ Lake, Hill & Myers Salt Lake City, Utah February 6, 2007 20 [Letterhead of KOCH GROUP & COMPANY, LLP] INDEPENDENT AUDITOR'S REPORT To the Partners Washington Brooklyn Limited Partnership We have audited the accompanying balance sheets of Washington Brooklyn Limited Partnership (A Limited Partnership) as of December 31, 2006 and 2005 and the related statements of operations, changes in partners' equity and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our 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 we were engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly in all material respects, the financial position of Washington Brooklyn Limited Partnership (A Limited Partnership) as of December 31, 2006 and 2005 and the results of its operations, changes in its partners' equity and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ KOCH GROUP & COMPANY, LLP New York, New York February 23, 2007 21 [Letterhead of KOCH GROUP & COMPANY, LLP] INDEPENDENT AUDITOR'S REPORT To the Partners C-H Development Group Associates We have audited the statements of operations, changes in partners' equity and cash flows of C-H Development Group Associates for the period January 1 to October 25, 2006. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor we were engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of C-H Development Group Associates operations, changes in partners' equity and cash flows for the period January 1 to October 25, 2006 in conformity with accounting principles generally accepted in the United States of America. /s/ Koch Group & Company, LLP New York, New York January 23, 2007 22 [Letterhead of Haefele Flanagan] INDEPENDENT AUDITORS' REPORT To the Partners Magnolia Mews Limited Partnership Philadelphia, Pennsylvania We have audited the accompanying balance sheet of MAGNOLIA MEWS LIMITED PARTNERSHIP (a Pennsylvania Limited Partnership) as of December 31, 2006, and the related statements of operations, partners' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 MAGNOLIA MEWS LIMITED PARTNERSHIP as of December 31, 2006, and the results of its operations, changes in partners' equity and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. /s/ Haefele Flanagan L.C., p.c. Moorestown, New Jersey February 24, 2007 23 [Letterhead of KOCH GROUP & COMPANY, LLP] INDEPENDENT AUDITOR'S REPORT To the Partners CLM Equities We have audited the accompanying balance sheet of CLM Equities (A Limited Partnership) as of March 31, 2006 and the related statements of operations, changes in partners' equity and cash flows for the three months then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor we were engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our 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 CLM Equities (A Limited Partnership) as of March 31, 2006 and the results of its operations, changes in its partners' equity and its cash flows for the three months then ended in conformity with accounting principles generally accepted in the United States of America. /s/ Koch Group & Company, LLP Certified Public Accountants New York, New York October 24, 2006 24 [Letterhead of Larson, Allen, Weishair & Co., LLP] INDEPENDENT AUDITOR'S REPORT To The Partners Ogontz Hall Investors Philadelphia, Pennsylvania We have audited the accompanying balance sheets of Ogontz Hall Investors (A Limited Partnership) as of December 31, 2006 and 2005, and the related statements of profit and loss, partners' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States) and the standards applicable to financial audits contained in GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor 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 Ogontz Hall Investors as of December 31, 2006 and 2005, and the results of its operations and its cash flows for each of the years then ended in conformity with U.S. generally accepted accounting principles. In accordance with GOVERNMENT AUDITING STANDARDS, we have issued our report dated March 29, 2007, on our consideration of Ogontz Hall Investors' internal control over financial reporting and our test of its compliance with certain provisions of laws, regulations, contracts and grant agreements. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with GOVERNMENT AUDITING STANDARDS and should be considered in assessing the results of our audit. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplementary information on pages 16 to 29 is presented for the purposes of additional analysis, including supplementary information required by PHFA, and is not a required part of the financial statements of Ogontz Hall Investors. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Larson, Allen, Weishair & Co., LLP Blue Bell, Pennsylvania March 29, 2007 25 [Letterhead of Regen, Benz & MacKenzie, C.P.A.'s, P.C.] INDEPENDENT AUDITORS' REPORT To the Partners Nelson Anderson Affordable Housing Limited Partnership We have audited the accompanying balance sheet of Nelson Anderson Affordable Housing Limited Partnership from January 1, 2006, to January 19, 2006 (date of sale), and the related statements of operations, changes in partners' capital (deficit) and cash flows for the period then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor we were engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Nelson Anderson Affordable Housing Limited Partnership as of January 19, 2006, and the results of its operations, the changes in partners' capital (deficit) and cash flows for the period then ended, in conformity with generally accepted accounting principles used in the United States of America. /s/ Regen, Benz & MacKenzie, C.P.A.'s, P.C. New York, New York December 8, 2006 26 [Letterhead of Salmin, Celona, Wehrle & Flaherty, LLP] INDEPENDENT AUDITOR'S REPORT ---------------------------- To the Partners Conifer Irondequoit Associates We have audited the accompanying balance sheet of Conifer Irondequoit Associates (a limited partnership) as of December 31, 2006 and 2005, and the related statements of operations and partners' capital (deficit) and cash flows for the years then ended. These 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 Conifer Irondequoit Associates as of December 31, 2006 and 2005, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. As discussed in Note 9 to the financial statements, the Partnership has lost a major tenant. This condition raises substantial doubt about its ability to continue as a going concern. Management's plans regarding this matter are described in Note 10. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Salmin, Celona, Wehrle & Flaherty, LLP Rochester, New York March 7, 2007 27 [Letterhead of REZNICK GROUP, P.C.] REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Partners Middletown Associates We have audited the accompanying balance sheet of Middletown Associates as of December 31, 2006, and the related statements of operations, changes in partners' equity (deficit) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Middletown Associates as of December 31, 2006 and the results of its operations, changes in partners' equity (deficit) and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ REZNICK GROUP Baltimore, Maryland March 29, 2007 28 [Letterhead of REZNICK GROUP, P.C.] REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Partners Lauderdale Lakes Associates, Ltd. We have audited the accompanying balance sheets of Lauderdale Lakes Associates, Ltd. as of December 31, 2006 and 2005, and the related statements of operations, changes in partners' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Lauderdale Lakes Associates, Ltd. as of December 31, 2006 and 2005, and the results of its operations, the changes in partners' equity (deficit) and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on page 19 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material aspects in relation to the basic financial statements taken as a whole. /s/ Reznick Group, P.C. Atlanta, Georgia May 1, 2007 29 [Letterhead of REZNICK GROUP, P.C.] INDEPENDENT AUDITORS' REPORT To the Partners Flipper Temple Associates, L.P. We have audited the accompanying balance sheet of Flipper Temple Associates, L.P., as of December 31, 2006, and the related statements of operations, partners' equity (deficit) and cash flows for the year then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor we were engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our 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 Flipper Temple Associates, L.P. as of December 31, 2006, and the results of its operations, the changes in partners' equity (deficit) and cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report dated February 27, 2007, on our consideration of Flipper Temple Associates, L.P.'s internal control over financial reporting. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and the results of that testing and not to provide an opinion on the internal control over financial reporting. In accordance with Government Auditing Standards, we have also issued an opinion dated February 27, 2007, on Flipper Temple Associates, L.P.'s compliance with certain provisions of laws, regulations, contracts, and grant agreements, and other matters that could have a direct and material effect on a major HUD-assisted program. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental information on pages 24 through 36 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the partnership. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. /s/ Reznick Group, P.C. Taxpayer Identification Number: 52-1088612 Bethesda, Maryland February 27, 2007 Lead Auditor: Nelson D. Gomez 30 [Letterhead of Heffler, Radetich & Saitta L.L.P] INDEPENDENT AUDITORS' REPORT To the Partners of 220 Cooper Street, L.P. We have audited the accompanying balance sheets of 220 Cooper Street, L.P. as of December 31, 2006 and 2005, and the related statements of operations, partners' equity and cash flows for the years then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards as established by the Auditing Standards Board (United States) and in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our 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 220 Cooper Street, L.P. as of December 31, 2006 and 2005, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ Heffler, Radetich & Saitta L.L.P. Mount Laurel, NJ January 18, 2007 31 [ARCHAMBO & MUEGGENBORG, PC LETTERHEAD] INDEPENDENT AUDITOR'S REPORT ---------------------------- To the Partners Pecan Creek Limited Partnership Bartlesville, Oklahoma We have audited the accompanying balance sheets of PECAN CREEK LIMITED PARTNERSHIP as of December 31, 2006 and 2005, 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 Project'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 PECAN CREEK LIMITED PARTNERSHIP as of December 31, 2006 and 2005, and the results of its operations, changes in its 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/ Archambo & Mueggenborg, PC Deborah E. Mueggenborg, Engagement Partner ARCHAMBO & MUEGGENBORG, PC Certified Public Accountants 302 SE Osage Ave. Bartsville, OK 74003 73-1439902 February 9, 2007 32 [Letterhead of AGBIMSON & CO., PLLC] INDEPENDENT AUDITOR'S REPORT To the Partners 363 Grand Vendome Associates, Limited Partnership We have audited the accompanying balance sheet of 363 Grand Vendome Associates, Limited Partnership, as of December 31, 2006, and the related statements of operations, partners' equity (deficit) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor we were engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of 363 Grand Vendome Associates, Limited Partnership, as of December 31, 2006, and the results of its operations, changes in partners' equity (deficit) and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ Agbimson & Co., PLLC Rockville Centre, New York January 30, 2007 33 [Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.] INDEPENDENT AUDITORS' REPORT To the Partners New Augusta Associates, Ltd. New Augusta, Mississippi We have audited the accompanying balance sheets of New Augusta Associates, Ltd., a limited partnership, as of December 31, 2006 and 2005, and the related statements of operations, partners' capital and cash flows for the years then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the auditing standards generally accepted in the United States of America and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of New Augusta Associates, Ltd., as of December 31, 2006 and 2005, and the results of its operations, changes in partners' capital and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 10 through 11 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Donald W. Causey & Associates, P.C. Gadsden, Alabama March 07, 2007 34 [Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.] INDEPENDENT AUDITORS' REPORT To the Partners Pine Shadow, Ltd. Waveland, Mississippi We have audited the accompanying balance sheets of Pine Shadow, Ltd. a limited partnership, as of December 31, 2006 and 2005, and the related statements of operations, partners' deficit and cash flows for the years then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the auditing standards generally accepted in the United States of America and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Pine Shadow, Ltd., as of December 31, 2006 and 2005, and the results of its operations, changes in partners' equity and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on page 11 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Donald W. Causey & Associates, P.C. Gadsden, Alabama March 8, 2007 35 [Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.] INDEPENDENT AUDITORS' REPORT To the Partners Windsor Place, L.P. Wedowee, Alabama We have audited the accompanying balance sheets of Windsor Place, L.P., a limited partnership, as of December 31, 2006 and 2005, and the related statements of operations, partners' deficit and cash flows for the years then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the auditing standards generally accepted in the United States of America and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Windsor Place, L.P., as of December 31, 2006 and 2005, and the results of its operations, changes in partners' deficit and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 11 through 12 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements, and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Donald W. Causey & Associates, P.C. Gadsden, Alabama March 8, 2007 36 [Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.] INDEPENDENT AUDITORS' REPORT To the Partners Brookwood Associates, Ltd. Foley, Alabama We have audited the accompanying balance sheets of Brookwood Associates, Ltd., a limited partnership, as of December 31, 2006 and 2005, and the related statements of operations, partners' deficit and cash flows for the years then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the auditing standards generally accepted in the United States of America and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Brookwood Associates, Ltd., as of December 31, 2006 and 2005, and the results of its operations, changes in partners' deficit and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 10 through 11 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements, and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Donald W. Causey & Associates, P.C. Gadsden, Alabama February 27, 2007 37 [Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.] INDEPENDENT AUDITORS' REPORT To the Partners Heflin Hills Apartments, Ltd. Heflin, Alabama We have audited the accompanying balance sheets of Heflin Hills Apartments, Ltd., a limited partnership, as of December 31, 2006 and 2005, and the related statements of operations, partners' deficit and cash flows for the years then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the auditing standards generally accepted in the United States of America and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Heflin Hills Apartments, Ltd., as of December 31, 2006 and 2005, and the results of its operations, changes in partners' deficit and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 10 through 11 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements, and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Donald W. Causey & Associates, P.C. Gadsden, Alabama March 8, 2007 38 [Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.] INDEPENDENT AUDITORS' REPORT To the Partners Shadowood Apartments, Ltd. Stevenson, Alabama We have audited the accompanying balance sheets of Shadowood Apartments, Ltd., a limited partnership, as of December 31, 2006 and 2005, and the related statements of operations, partners' deficit and cash flows for the years then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the auditing standards generally accepted in the United States of America and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor 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 Shadowood Apartments, Ltd., as of December 31, 2006 and 2005, and the results of its operations, changes in partners' deficit and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 10 through 11 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements, and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Donald W. Causey & Associates, P.C. Gadsden, Alabama February 28, 2007 39 [Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.] INDEPENDENT AUDITORS' REPORT To the Partners Brittany Associates, L.P. Dekalb, Mississippi. We have audited the accompanying balance sheets of Brittany Associates, L.P., a limited partnership, as of December 31, 2006 and 2005, and the related statements of operations, partners' capital and cash flows for the years then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the auditing standards generally accepted in the United States of America and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor 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 Brittany Associates, L.P., as of December 31, 2006 and 2005, and the results of its operations, changes in partners' capital and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 10 through 11 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements, and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Donald W. Causey & Associates, P.C. Gadsden, Alabama February 27, 2007 40 [Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.] INDEPENDENT AUDITORS' REPORT To the Partners Hidden Valley Apartments, Ltd. Brewton, Alabama We have audited the accompanying balance sheets of Hidden Valley Apartments, Ltd., a limited partnership, as of December 31, 2006 and 2005, and the related statements of operations, partners' capital and cash flows for the years then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the auditing standards generally accepted in the United States of America and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor 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 Hidden Valley Apartments, Ltd., as of December 31, 2006 and 2005, and the results of its operations, changes in partners' capital and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 10 through 11 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements, and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Donald W. Causey & Associates, P.C. Gadsden, Alabama February 27, 2007 41 [Letterhead of DONALD W. CAUSEY, CPA, P.C.] INDEPENDENT AUDITOR'S REPORT To the Partners Warsaw Elderly Housing, Ltd. Warsaw, Kentucky We have audited the accompanying balance sheets of Warsaw Elderly Housing, Ltd., a limited partnership, as of December 31, 2006 and 2005, and the related statements of operations, partners' capital and cash flows for the years then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the auditing standards generally accepted in the United States of America and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Warsaw Elderly Housing, Ltd., as of December 31, 2006 and 2005, and the results of its operations, changes in partners' capital and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 10 through 11 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements, and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Donald W. Causey & Associates, P.C. Gadsden, Alabama February 25, 2006 42 [Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.] INDEPENDENT AUDITORS' REPORT To the Partners West Hill Square, Ltd. Gordo, Alabama We have audited the accompanying balance sheets of West Hill Square, Ltd., a limited partnership, as of December 31, 2006 and 2005, and the related statements of operations, partners' capital and cash flows for the years then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the auditing standards generally accepted in the United States of America and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of West Hill Square, Ltd., as of December 31, 2006 and 2005, and the results of its operations, changes in partners' capital and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 10 through 11 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements, and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Donald W. Causey & Associates, P.C. Gadsden, Alabama February 7, 2007 43 [Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.] INDEPENDENT AUDITORS' REPORT To the Partners Elmwood Associates, L.P. Picayune, Mississippi We have audited the accompanying balance sheets of Elmwood Associates, L.P., a limited partnership, as of December 31, 2006 and 2005, and the related statements of operations, partners' capital and cash flows for the years then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the auditing standards generally accepted in the United States of America and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor 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 Elmwood Associates, L.P., as of December 31, 2006 and 2005, and the results of its operations, changes in partners' capital and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 10 through 11 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements, and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Donald W. Causey & Associates, P.C. Gadsden, Alabama February 26, 2007 44 [Letterhead of Holthouse Carlin & VanTrigt LLP] REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To the Partners Harmony Associates, L.P. We have audited the accompanying balance sheet of Harmony Associates, L.P. as of December 31, 2006, and the related statements of income, changes in partners' capital (deficit) and cash flows for the year then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our 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 we were engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Harmony Associates, L.P., as of December 31, 2006, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The information included in the accompanying Schedule I is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Holthouse Carlin & VanTrigt LLP Santa Monica, California February 23, 2007 45 [Letterhead of Matthews, Cutrer & Lindsay, P.A.] To the Partners of Westbrook Square, LP INDEPENDENT AUDITOR'S REPORT We have audited the accompanying balance sheets of Westbrook Square, LP (a Mississippi limited partnership), RHS Project No. 28-040-640770978 as of December 31, 2006 and 2005, and the related statements of operations, partners' capital (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with 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 Westbrook Square, LP as of December 31, 2006 and 2005, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental information is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the audit procedures applied in the audit of the basic financial statements, and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Matthews, Cutrer & Lindsay, P.A. Ridgeland, Mississippi February 9, 2007 46 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS CONSOLIDATED BALANCE SHEETS

March 31, ---------------------------- 2007 2006 ------------ ~~2006~~------------ 2005*ASSETS 2004*Operating assets: Property and equipment, at cost, less accumulated depreciation (Note 4) $ 24,877,432 $ 36,462,734 Cash and cash equivalents 5,899,857 3,404,395 Cash held in escrow 2,869,341 3,734,746 Deferred costs - net of accumulated amortization (Note 5) 243,958 259,582 Other assets 852,070 851,970 ------------ ------------ Total operating assets 34,742,658 44,713,427 ------------ ~~Interest~~------------ Assets held for sale (Note 11): Property and equipment held for sale, net of accumulated depreciation (Note 4) 0 31,269,354 Other assets held for sale 1,704 3,531,615 ------------ ------------ Total assets held for sale 1,704 34,800,969 ------------ ------------ Total assets $ 7434,~~161~~744,362 $ 2979,~~802~~514,396 ============ ============ LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) Operating liabilities: Mortgage notes payable (Note 6) $ 1925,~~975~~276,141 ~~Other~~$ 33,397,400 Accounts payable and other liabilities 1,~~093~~350,~~650~~713 ~~948~~5,~~744~~291,827 Due to local general partners and affiliates (Note 7) 1,~~045~~078,~~073~~112 1,181,186 Due to general partners and affiliates 3,229,196 9,666,054 ------------ ------------ Total operating liabilities 30,934,162 49,536,467 ------------ ------------ Liabilities related to assets held for sale (Note 11): Mortgage notes payable of assets held for sale (Note 6) 0 26,468,361 Other liabilities held for sale including minority interest 7,113 6,455,851 ------------ ------------ Total ~~other~~liabilities ~~revenue~~related $to assets held for sale 7,113 32,924,212 ------------ ------------ Total liabilities 30,941,275 82,460,679 ------------ ------------ Minority interests (Note 2) 672,373 2,968,663 ------------ ------------ Commitments and contingencies (Notes 7 and 10) Partners' capital (deficit): Limited partners (72,896 BACs issued and outstanding)(Note 1) (386,~~167~~432) (5,~~811~~175,151) General partners 3,517,146 (739,795) ------------ ------------ Total partners' capital (deficit) 3,130,714 (5,914,946) ------------ ------------ Total liabilities and partners' capital (deficit) $ ~~978~~34,~~546~~744,362 $1 79,~~065~~514,~~048~~396 ========== == ======== ====~~======~~

See accompanying notes to consolidated financial statements. 47 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS CONSOLIDATED STATEMENTS OF OPERATIONS

Years ended March 31, -------------------------------------------- 2007 2006* 2005* ~~2004~~ ------------ ------------ ------------ ~~Interest~~Operations: Revenues Rental income $ 305,~~940~~236,178 $ ~~117~~5,~~053~~322,456 $ ~~122~~5,~~248~~296,322 Other ~~525~~(Note 2) 1,~~088~~290,590 ~~452~~1,~~325~~111,444 ~~389~~945,~~147~~653 ------------ ------------ ------------ Total revenues 6,526,768 6,433,900 6,241,975 ------------ ------------ ------------ Expenses: Repairs and maintenance 1,129,054 1,405,055 1,255,202 Operating and other ~~revenue~~1,000,730 999,872 853,319 Real estate taxes 341,052 337,324 334,509 Interest 1,587,518 1,558,064 1,578,962 Depreciation and amortization (Notes 4 and 5) 1,547,165 1,557,875 1,534,118 General and administrative 1,527,184 1,198,046 1,032,373 General and administrative-related parties (Note 7) 1,058,994 1,467,163 1,346,854 ------------ ------------ ------------ Total expenses 8,191,697 8,523,399 7,935,337 ------------ ------------ ------------ Loss from continuing operations before minority interest (1,664,929) (2,089,499) (1,693,362) Minority interest in loss of subsidiaries from operations 12,796 13,180 7,176 ------------ ------------ ------------ Loss from continuing operations (1,652,133) (2,076,319) (1,686,186) Discontinued operations: Income (loss) from discontinued operations (including gain (loss) and minority interest) (Note 11) 13,484,294 (1,715,725) (2,533,452) ------------ ------------ ------------ Net income (loss) $ 11,832,161 $ (3,792,044) $ (4,219,638) ============ ============ ============ Loss from operations - limited partners $ (1,635,612) $ (2,055,556) $ (1,~~028~~669,324) Income (loss) from discontinued operations (including gain (loss) and minority interest) - limited partners 13,349,451 (1,698,568) (2,508,118) ------------ ------------ ------------ Net income (loss) - limited partners $ ~~569~~11,~~378~~713,839 $ ~~511~~(3,~~395~~754,124) $ (4,177,442) ============ ============ ============ Number of BACs outstanding 72,896 72,896 72,896 ============ ============ ============ Loss from operations per BAC $ (22.43) $ (28.20) $ (22.90) Income (loss) from discontinued operations per BAC 183.13 (23.30) (34.41) ------------ ------------ ------------ Net income (loss) per BAC $ 160.70 $ (51.50) $ (57.31) ============ ============ ============

* Reclassified for comparative purposes. See accompanying notes to consolidated financial statements. 48 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) YEARS ENDED MARCH 31, 2007, 2006 and 2005

~~Item~~Limited ~~8.Financial~~General ~~Statements~~Total ~~and~~Partners ~~Supplementary~~Partners ~~Data~~------------ ~~Sequential~~------------ ~~Page~~ ------------ ~~Consolidated~~Partners' ~~Financial~~capital ~~Statements~~(deficit) ~~Report~~- ofApril ~~Independent~~1, ~~Registered~~2004 ~~Public~~$ ~~Accounting~~2,096,736 ~~Firm~~$ 172,756,415 ~~Consolidated~~$ ~~Balance~~(659,679) ~~Sheets~~Net asloss of(4,219,638) (4,177,442) (42,196) ------------ ------------ ------------ Partners' deficit - March 31, ~~2006~~2005 ~~and~~(2,122,902) ~~2005~~(1,421,027) 60(701,875) ~~Consolidated~~Net ~~Statements~~loss of(3,792,044) ~~Operations~~(3,754,124) ~~for~~(37,920) ~~the~~------------ ~~years~~------------ ~~ended~~------------ Partner's deficit - March 31, 2006 (5,914,946) ~~2005~~(5,175,151) ~~and~~(739,795) ~~2004~~Net 61income ~~Consolidated~~11,832,161 ~~Statements~~11,713,839 118,322 Contribution - write-off of ~~Changes~~partnership inmanagement ~~Partners'~~fees ~~Capital~~related to sold properties (~~Deficit~~Note 7) ~~for~~4,095,540 ~~the~~0 ~~years~~4,095,540 ~~ended~~Contribution ~~March~~- ~~31,~~write-off ~~2006~~of related party debt 113,030 ~~2005~~0 ~~and~~113,030 ~~2004~~Distributions 62(6,995,071) ~~Consolidated~~(6,925,120) ~~Statements~~(69,951) of------------ ~~Cash~~------------ ~~Flows~~------------ ~~for~~Partners' ~~the~~capital ~~years~~(deficit) ~~ended~~- March 31, ~~2006,~~2007 ~~2005~~$ ~~and~~3,130,714 ~~2004~~$ 63(386,432) ~~Notes~~$ to3,517,146 ~~Consolidated~~============ ~~Financial~~============ ~~Statements 64~~============

See accompanying notes to consolidated financial statements. 49 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED MARCH 31, 2007, 2006 and 2005

~~March~~2007 ~~31,~~2006 2005 ------------~~----------------~~ ~~2006 2005~~ ------------ ------------ ~~ASSETS~~Cash ~~Operating~~flows ~~assets~~from operating activities: ~~Property~~Net ~~and~~income ~~equipment~~(loss) $ 11,832,161 at$ ~~cost~~(3,792,044) ~~less~~$ ~~accumulated~~(4,219,638) ~~depreciation~~Adjustments to reconcile net income (~~Note~~loss) 4to net cash (used in) $provided 36by operating activities: (Gain) loss on sale of investments (10,~~462~~090,~~734~~931) $81,351 760 Capital contributions - General Partner 4,~~216~~208,~~658~~570 ~~Cash~~0 ~~and~~0 ~~cash~~Loss ~~equivalents~~on 3impairment of property and equipment 1,~~404~~505,~~395~~824 2555,~~150,450~~000 ~~Cash~~0 ~~held~~Depreciation inand ~~escrow~~amortization 32,~~734~~567,~~746~~306 4,902,705 5,~~549~~074,~~963~~408 ~~Deferred~~Minority ~~costs~~interest -in ~~net~~loss of ~~accumulated~~subsidiaries ~~amortization~~ (~~Note~~ 5,905,310) ~~259~~(1,~~582~~580,663) ~~727~~(43,~~764~~525) ~~Other~~(Increase) decrease in other assets ~~851~~(43,~~970~~810) 131,~~329~~691 (81,~~483~~783) ~~------------~~Increase ~~------------~~in ~~Total~~deferred ~~operating~~revenue ~~assets~~from 44sale of properties 0 1,~~713~~888,~~427~~040 850 (Decrease) increase in accounts payable and other liabilities (2,~~974~~432,~~318~~564) ~~------------~~344,774 ~~------------~~683,812 ~~Assets~~Decrease ~~related~~(increase) toin cash held ~~for~~in ~~sale~~escrow 322,704 (~~Note~~38,852) 12(806,472): ~~Property~~(Decrease) increase in due to general partners and ~~equipment~~affiliates ~~held~~(6,632,207) ~~for~~1,122,812 ~~sale~~991,218 ~~net~~Increase ofin ~~accumulated~~due ~~depreciation~~to ~~(Note~~local 4)general 31partners and affiliates 851,~~269~~543 69,~~354~~352 0119,303 ~~Assets~~Decrease ~~held~~in ~~for~~due ~~sale~~to 3local general partners and affiliates (150,~~531~~579) (235,~~615~~137) 0(91,390) ------------ ------------ ~~Total~~------------ ~~assets~~Net -cash ~~held~~(used ~~for~~in) ~~sale~~provided 34by operating activities (3,~~800~~967,~~969~~293) 03,349,029 1,625,933 ------------ ------------ ~~Total~~------------ ~~assets~~Cash $flows ~~79,514,396~~from $investing ~~85,974,318~~activities: ~~============~~Additions ~~============~~to ~~LIABILITIES~~property ~~AND~~and ~~PARTNERS'~~equipment ~~DEFICIT Operating Liabilities: Mortgage notes payable~~ (~~Note 6~~949,279) ~~$ 33~~(627,~~397,400~~560) ~~$ 65~~(567,~~119,347~~870) ~~Accounts~~Proceeds ~~payable~~from ~~and~~sale ~~other~~of ~~liabilities~~investments 539,~~291~~496,~~827~~685 2,~~455~~378,~~386~~602 ~~Due~~0 toCost ~~local~~paid ~~general~~relating ~~partners~~to ~~and~~sale ~~affiliates~~of ~~(Note~~properties 7) (1,~~181~~788,~~186~~468) ~~3,628,588~~0 ~~Due~~0 Decrease in due to local general partners and affiliates ~~(Note~~0 7)0 9(662,~~666,054~~425) ~~8,853,092~~------------ ------------ ------------ ~~Total~~Net ~~operating~~cash ~~liabilities~~provided 49by (used in) investing activities 36,~~536~~758,~~467~~938 801,~~056~~751,~~413~~042 (1,230,295) ------------ ------------ ~~Liabilities~~------------ ~~related~~Cash toflows ~~held~~from ~~for~~financing ~~sale~~activities: ~~(Note~~Decrease ~~12):~~in ~~Mortgage~~deferred ~~notes~~costs ~~payable~~0 of0 ~~assets~~5,079 ~~held~~Repayments ~~for~~of ~~sale~~mortgage loans (~~Note~~22,871,898) 6(904,942) 26(1,~~468~~165,~~361~~811) 0Increase ~~Liabilities~~in ~~held~~due ~~for~~to ~~sale~~local ~~including~~general ~~minority~~partners ~~interest~~and 6affiliates 53,~~455~~875 405,~~851~~955 0418,782 ~~------------~~Decrease ~~------------~~in ~~Total~~due ~~liabilities~~to -local ~~related~~general partners and affiliates (575,717) (1,940,801) (78,237) (Decrease) increase in capitalization of consolidated subsidiaries attributable to ~~assets~~minority ~~held~~interest ~~for~~(1,173,539) ~~sale~~(138,467) 3282,~~924~~363 Distributions (6,~~212~~995,071) 0 0 ------------ ------------ ~~Total liabilities 82,460,679 80,056,413~~ ------------ Net cash used in financing activities (31,562,350) (2,578,255) (737,824) ------------ ~~Minority interests (Note 2) 2,968,663 8,040,807~~ ------------ ------------ ~~Commitments~~Net ~~and~~increase ~~contingencies~~ (~~Notes~~decrease) 7in cash and ~~11)~~cash ~~Partners'~~equivalents ~~deficit:~~1,229,295 ~~Limited~~2,521,816 ~~partners~~ (72342,~~896~~186) ~~BACs~~Cash ~~issued~~ and ~~outstanding)~~cash ~~(Note~~equivalents 1)at (5beginning of year 4,~~175~~672,~~151)~~266 (12,~~421~~150,~~027)~~450 ~~General partners (739~~2,~~795) (701~~492,~~875)~~636 ------------ ------------ ~~Total partners' deficit (5,914,946) (2,122,902)~~ ------------ ~~------------~~Cash ~~Total~~and ~~liabilities~~cash ~~and~~equivalents ~~partners'~~at ~~deficit~~end of year* $ 795,~~514~~901,~~396~~561 $ 854,~~974~~672,~~318~~266 $ 2,150,450 ============ ============ ============ Supplemental disclosure of cash flow information: Cash paid during the year for interest $ 2,762,307 $ 2,701,196 $ 2,879,716 ============ ============ ============ * Cash and cash equivalents, end of year, includes cash and cash equivalents from discontinued operations of $1,704, $1,267,871 and $0, respectively. Summarized below are the components of the gain (loss) on sale of investments: Proceeds from sale of investments - net $(37,708,217) $ (2,378,602) $ 0 Decrease in property and equipment, net of accumulated depreciation 39,841,367 3,833,788 0 Decrease in cash held in escrow 1,762,291 634,479 0 Decrease (increase) in other assets 799,045 (309,513) 0 Decrease in mortgage notes payable (11,717,722) (4,348,645) 0 (Decrease) increase in accounts payable and other liabilities (2,841,170) 1,943,361 0 Decrease in due to general partners and affiliates (74,651) (39,850) 0 Decrease in due to local general partners and affiliate (938,739) (90,228) 0 Decrease in deferred costs 193,881 0 0 Increase in capitalization of consolidated subsidiaries attributable to minority interest 592,984 836,561 0

See accompanying notes to consolidated financial statements. 50 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007, 2006 and 2005 NOTE 1 - General Freedom Tax Credit Plus L.P., a Delaware limited partnership (the "Partnership"), was organized on August 28, 1989 and commenced its public offering on February 9, 1990 (the "Offering"). The general partners of the Partnership are Related Freedom Associates L.P. (the "Related General Partner"), a Delaware limited partnership, and its affiliate, Freedom GP Inc. (the "Freedom General Partner"), a Delaware corporation (and together with the Related General Partner, the "General Partners"). The ultimate partner of the General Partners is Centerline Holding Company ("Centerline") (which had been known as CharterMac until April 2007). The Partnership will terminate on December 31, 2030, unless terminated sooner under the provisions of the limited partnership agreement of the Partnership (the "Partnership Agreement"). 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 Director, President, Chief Executive Officer and Chief Financial Officer of the general partner of the Related 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 Partnership's business is to invest in other partnerships ("Local Partnerships," "subsidiaries" or "subsidiary partnerships") owning leveraged apartment complexes that are eligible for the low-income housing tax credit ("Tax Credit") enacted in the Tax Reform Act of 1986 and to entitle qualified BACs holders to Tax Credits over the period of the Partnership's entitlement to claim Tax Credits (for each property, generally ten years from the date of investment or, if later, the date the property is leased to qualified tenants; referred to herein as the "Credit Period"). Each of the Local Partnerships in which the Partnership has an interest has been allocated by the relevant state credit agency the authority to recognize Tax Credits during the Credit Period, provided that the Local Partnership satisfies the rent restriction, minimum set-aside and other requirements for recognition of the Tax Credits at all times during the 15-year compliance period (the "Compliance Period"). As of December 31, 2002, the Credit Periods for all of the apartment complexes have expired, although each Local Partnership must continue to comply with the Tax Credit requirements until the end of the Compliance Period in order to avoid recapture of the Tax Credits. The Compliance Periods will continue through December 31, 2007 with respect to the Properties depending upon when the Credit Period commenced. The Partnership was authorized to issue a total of 200,000 Beneficial Assignment Certificates ("BACs"), which had been registered with the Securities and Exchange Commission for sale to the public. As of August 8, 1991 (the date on which the Partnership held the final closing of the sale of BACs and on which the Offering was terminated), the Partnership had received $72,896,000 of gross proceeds of the Offering from 4,780 investors. The terms of the Partnership Agreement provide, among other things, that net profits or losses and distributions of cash flow are, in general, allocated 99% to the limited partners and BACs holders and 1% to the General Partners. NOTE 2 - Summary of Significant Accounting Policies a) Basis of Accounting and Presentation The Partnership's fiscal year ends on March 31. All subsidiaries have calendar year ends. Accounts of the subsidiaries have been adjusted for intercompany transactions from January 1 through March 31. The Partnership's fiscal year ends March 31 in order to allow adequate time for the subsidiaries' financial statements to be prepared and consolidated. The books and records of the Partnership are maintained on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States. b) Basis of Consolidation The consolidated financial statements include the accounts of the Partnership and its subsidiary partnerships, in which the Partnership is a limited partner, with an ownership interest ranging from approximately 98% to 99%. All intercompany accounts and transactions with the subsidiary partnerships have been eliminated in consolidation. Through the rights of the Partnership and/or an affiliate of the General Partners, which affiliate has a contractual obligation to act on behalf of the Partnership, to remove the general partner of the subsidiary partnerships and to approve certain major operating and financial decisions, the Partnership has a controlling financial interest in the subsidiary partnerships. Increases (decreases) in the capitalization of consolidated subsidiaries attributable to minority interest arise from cash contributions and cash distributions to the minority interest partners. The Partnership's investment in each subsidiary is equal to the respective subsidiary's partners' equity less minority interest capital, if any. c) Cash and Cash Equivalents For purposes of the consolidated statements of cash flows, cash and cash equivalents include cash on hand, cash in banks, and investments in short-term money market accounts (which were purchased with original maturities of three months or less). d) Cash Held in Escrow Cash held in escrow includes replacement reserves and tenant security deposits. 51 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007, 2006 and 2005 e) Property and Equipment Property and equipment to be held and used are carried at cost which includes the purchase price, acquisition fees and expenses, construction period interest and any other costs incurred in acquiring the properties. The cost of property and equipment is depreciated over their estimated useful lives using accelerated and straight-line methods. Expenditures for repairs and maintenance are charged to expense as incurred; major renewals and betterments are capitalized. At the time property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are eliminated from the assets and accumulated depreciation accounts and the profit or loss on such disposition is reflected in earnings. The Partnership complies with Statement of Financial Accounting Standards No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS No. 144"). 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 estimated future discounted net cash flows) when the property is considered to be impaired and the depreciated cost exceeds estimated fair value. Through March 31, 2007, the Partnership has recorded approximately $5,726,000 as a loss on impairment of assets or reductions to estimated fair value. In accordance with SFAS No. 144, the results of discontinued operations are reported as a separate component of income before extraordinary items on the consolidated statements of operations. Discontinued operations include the results of operations and any gain or loss recognized for Local Partnership that have been disposed of or are held for sale. A gain or loss recognized on the disposal is disclosed in the notes to the consolidated financial statements. Adjustments to amounts previously reported in operations that are directly related to the disposal of a Local Partnership are reclassified in the current period as discontinued operations for comparability purposes. Assets and liabilities of a Local Partnership that are classified as held for sale are presented separately in the asset and liability sections, respectively, of the consolidated balance sheets. At the time management commits to a plan to dispose of assets, said assets are adjusted to the lower of carrying amount or fair value less costs to sell. Such assets would be classified as property and equipment-held for sale and are not depreciated. There were no assets classified as property and equipment-held for sale at March 31, 2007. f) Revenue Recognition Rental income is earned 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. The Partnership received rental subsidies which amounted to $2,976,343, $3,430,948 and $3,488,027 for the years ended March 31, 2007, 2006 and 2005, respectively. The related rental subsidy programs have expiration dates that terminate upon total disbursement of the assistance obligation. Other revenues are recorded when earned and consist of the following items: Interest income earned on cash and cash equivalent balances and cash held in escrow balances, income from forfeited security deposits, late charges, laundry and vending income and other rental related items. Other revenues from operations include the following amounts at both the Partnership and Local Partnership level:

Years ~~ended~~Ended March 31, ------------------------------------~~--------~~ 2007 2006* 2005* 2004* ------------ ------------ ------------ ~~Operations:~~Interest ~~Revenues Rental income~~ $ 6373,~~771,945~~757 $ 651,~~829,312~~045 $ 619,~~596,916~~832 Other ~~(Note~~916,833 2) 1,~~167~~060,~~811~~399 ~~978~~925,~~546~~821 ~~1,065,048~~ ------------ ------------ ------------ Total ~~Revenues 7,939,756 7,807,858 7,661,964 ------------ ------------ ------------ Expenses: Repairs and maintenance 1,710,325 1,504,753 1,585,124 Operating and~~ other ~~1,302,744~~revenue $1,~~120~~290,~~527~~590 1,084,692 Real estate taxes 426,185 468,040 421,184 Interest 1,874,838 1,927,520 1,964,700 Depreciation and amortization (Notes 4 and 5) 2,328,467 2,398,099 2,307,470 General and administrative 2,041,568 1,566,781 1,393,984 General and administrative-related parties (Note 7) 1,536,956 1,416,031 1,386,062 ------------ ------------ ------------ Total Expenses 11,221,083 10,401,751 10,143,216 ------------ ------------ ------------ Loss from continuing operations before minority interest (3,281,327) (2,593,893) (2,481,252) Minority interest in loss of subsidiaries from operations 34,827 22,781 21,358 ------------ ------------ ------------ Loss from continuing operations (3,246,500) (2,571,112) (2,459,894) Discontinued operations: Loss from discontinued operations (including minority interest)(Note 12) (545,544) (1,648,526) (1,295,070) ------------ ------------ ------------ Net loss $ (3,792,044) $ (4,219,638) $ (3,754,964) ============ ============ ============ Loss from operations - limited partners $ (3,214,035) $ (2,545,401) $ (2,435,295) Loss from discontinued operations (including minority interest) - limited partners (540,089) (1,~~632~~111,~~041)~~444 ~~(1,282,119) ------------ ------------ ------------ Net loss - limited partners~~ $ (3945,~~754,124)~~653 ~~$ (4,177,442) $ (3,717,414)~~ ============ ============ ============ Number of BACs outstanding 72,896 72,896 72,896 ============ ============ ============ Loss from operations per BAC $ (44.09) $ (34.92) $ (33.41) Loss from discontinued operations per BAC (7.41) (22.39) (17.59) ------------ ------------ ------------ Net loss per BAC $ (51.50) $ (57.31) $ (51.00) ============ ============ ============

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

~~Accumulated~~Years ~~Other~~Ended ~~Limited~~March ~~General~~31, ~~Comprehensive Comprehensive Total Partners Partners Income (Loss) Loss~~ ------------- ------------- ----------~~---~~ ~~-------------~~2007 ~~-------------~~2006* ~~Partners'~~2005* ~~capital (deficit)~~ - April 1, 2003 $ 5,851,700 $ 6,470,255 $ (622,165) $ 3,610 Comprehensive Loss: Net Loss (3,754,964) (3,717,414) (37,550) 0 (3,751,426) Other Comprehensive Loss: Net unrealized loss on marketable securities 0 3,574 36 (3,610) 3,610 ---------~~----~~ ----------~~---~~ ----------~~---~~ ~~-------------~~Interest ~~------------- Total Comprehensive Loss~~ $ (338,~~747,816)~~940 ~~=============~~$ ~~Partners' capital (deficit) - March 31~~54,056 2004 2,096,736 2,756,415 (659,679) 0 Comprehensive Loss: Net Loss (4,219,638) (4,177,442) (42,196) 0 (4,219,638) ------------- ------------- ------------- ------------- ------------- Total Comprehensive Loss $ (4127,~~219,638)~~023 ~~=============~~Other ~~Partners' deficit - March 31~~274,656 ~~2005 (2~~558,~~122,902)~~339 (1475,~~421,027)~~248 ~~(701,875) 0 Comprehensive Loss: Net Loss (3,792,044) (3,754,124) (37,920) 0 (3,792,044)~~ ----------~~---~~ ----------~~---~~ ----------~~---~~ ~~------------- -------------~~ Total ~~Comprehensive~~other ~~Loss~~revenue $ (3313,~~792,044)~~596 ~~============= Partner's deficit - March 31, 2006~~ $ (5612,~~914,946)~~395 $ (5602,~~175,151)~~271 ~~$ (739,795) $ 0~~ ==========~~===~~ ==========~~===~~ ==========~~=== =============~~

* Reclassified for comparative purposes 52 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007, 2006 and 2005 g) Income Taxes The Partnership is not required to provide for, or pay, any federal income taxes. Net income or loss generated by the Partnership is passed through to the partners and is required to be reported by them. The Partnership may be subject to state and local taxes in jurisdictions in which it operates. For income tax purposes, the Partnership has a fiscal year ending December 31 (see Note 8). In prior years, the Partnership relied on the 5% safe harbor established by Internal Revenue Service ("IRS") regulations to avoid being characterized as a "publicly-traded partnership" that is taxed as a corporation. The 5% safe harbor, however, expired and is no longer available as of December 31, 2005. Accordingly, the Partnership now relies on a 2% safe harbor established by another IRS regulation to avoid being characterized as a "publicly-traded partnership" that is taxed as a corporation. h) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions relating to reporting of assets, liabilities, revenues and expenses disclosed in the consolidated financial statements. Accordingly, actual results could differ from those estimates. i) Net Income (Loss) per BAC Net income (loss) per BAC is computed based on the net income (loss) for the period attributed to BACs holders, divided by the number of BACs outstanding for the period. NOTE 3 - Fair Value of Financial Instruments In accordance with SFAS No. 107 "Disclosures about Fair Value of Financial Instruments," the following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: Cash and Cash Equivalents, Cash Held in Escrow, Accounts Payable and Other -------------------------------------------------------------------------------- Liabilities, Due to Local General Partners and Affiliates, and Due to General -------------------------------------------------------------------------------- Partners and Affiliates ----------------------- The carrying amount of cash and cash equivalents, cash held in escrow, accounts payable and other liabilities approximates fair value. The fair values of Due to Local General Partners and Affiliates and Due to General Partners and Affiliates are not readily determinable because no market exists for these instruments. Mortgage Notes Payable ---------------------- The fair value of mortgage notes payable is estimated, where practicable, based on the borrowing rate currently available for similar loans. The estimated fair values of the Partnership's mortgage notes payable from operations are as follows:

~~2006~~March ~~2005 2004 ----------- ----------- ----------- Cash flows from operating activities: Net loss $(3~~31,~~792,044)~~ ~~$(4,219,638)~~2007 ~~$(3,754,964)~~March Adjustments to reconcile net loss to net cash provided by operating activities: Loss on sale of investments 81,351 0 0 Loss on impairment of fixed assets 555,000 0 0 Depreciation and amortization 4,902,705 5,074,408 4,978,566 Minority interest in loss of subsidiaries (1,580,663) (43,525) (36,960) Increase in other assets 31,~~691~~ ~~(81,783)~~2006 (7,012) Increase in deferred revenue from sale of properties 1,888,040 0 0 Increase in accounts payable and other liabilities 344,774 683,812 360,497 Increase in cash held in escrow (38,852) (806,472) (88,879) Increase in due to general partners and affiliates 1,122,812 991,218 928,343 Increase in due to local general partners and affiliates 69,352 119,303 247,420 Decrease in due to local general partners and affiliates (235,137) (91,390) (26,314) ----------- ----------- ---~~--------~~ ~~Net cash provided by operating activities 3,349,029 1,625,933 2,600,697~~ ----------- ----------- ---~~--------~~ ~~Cash~~Carrying ~~flows~~Carrying ~~from~~Amount ~~investing~~Fair ~~activities:~~Value ~~Additions~~Amount toFair ~~property~~Value and equipment (627,560) (567,870) (1,013,627) Proceeds from sale of investments 2,378,602 0 0 Decrease in marketable securities 0 0 109,498 Decrease in due to local general partners and affiliates 0 (662,425) (213,462) ----------- ----------- ----------- ~~Net cash provided by (used in) investing activities 1,751,042 (1,230,295) (1,117,591)~~ ----------- ~~-----------~~Mortgage ~~-----------~~Notes ~~Cash~~Payable ~~flows~~for ~~from~~which ~~financing~~it ~~activities~~is: ~~Decrease~~Practicable ~~(increase) in deferred costs 0 5,079 (5,071) Repayments of mortgage loans (904,942) (1,165,811) (1,081,661) Increase in due~~ to ~~local~~estimate ~~general~~fair ~~partners~~value and affiliates 405,955 418,782 140,400 Decrease in due to local general partners and affiliates (1,940,801) (78,237) (250,938) (Decrease) increase in capitalization of consolidated subsidiaries attributable to minority interest (138,467) 82,363 (40,328) ----------- ----------- ----------- Net cash used in financing activities (2,578,255) (737,824) (1,237,598) ----------- ----------- ----------- Net increase (decrease) in cash and cash equivalents 2,521,816 (342,186) 245,508 Cash and cash equivalents at beginning of year 2,150,450 2,492,636 2,247,128 ----------- ----------- ----------- Cash and cash equivalents at end of year $ 420,~~672~~145,~~266~~469 $ 220,~~150~~145,~~450~~469 $ 225,~~492~~259,~~636~~584 ~~=========== =========== =========== Supplemental disclosure of cash flow information: Cash paid during the year for interest~~ $ 225,~~701~~259,~~196~~584 $Not ~~2,879,716~~Practicable $ 25,~~992~~130,~~620~~672 =========== =========== =========== Summarized below are the components of the gain on sale of investments: Decrease in property and equipment, net of accumulated depreciation $ 3,833,788 $ 0 $ 0 Decrease in cash held in escrow 634,479 0 0 Increase in other assets (~~260,828~~*) 0$ ~~0 Decrease in mortgage notes payable (4~~8,~~348~~137,~~645)~~816 ~~0 0 Increase in accounts payable and other liabilities 1,943,361 0 0 Decrease in due to general partners and affiliates~~ (~~39,850~~*) ~~0 0 Decrease in due to local general partners and affiliate (90,228) 0 0~~

The estimated fair values of the Partnership's mortgage notes payable from discontinued operations are as follows:

March 31, 2007 March 31, 2006 ------------------------- ----------- 2006 2005* 2004* ---------- ----~~------~~ Carrying Carrying Amount Fair Value Amount Fair Value ----------- ~~Interest $ 74,161 $ 29,802 $ 19,975 Other 1,093,650 948,744 1,045,073~~ ----------- ----------- ----------- ~~Total~~Mortgage ~~other~~notes ~~revenue~~payable for which it is: Practicable to estimate fair value $~~1,167,811~~ 0 $ ~~978~~0 $22,~~546~~675,897 $122,~~065~~707,~~048~~650 ~~==========~~Not ~~==========~~practicable ~~==========~~$ 0 $ 3,792,464 (*)

(*) Management believes it is not practicable to estimate the fair value of the mortgage notes payable because mortgage programs with similar characteristics are not currently available to the Local Partnerships. 53 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007, 2006 and 2005 NOTE 4 - Property and Equipment The components of property and equipment from operating assets are as follows:

March 31, Estimated ---------------------------- Useful Lives 2007 2006 (Years) -------- ~~2006 2005 2004~~ ---- ------ ------ ---- ---------- ~~Interest~~Land $ 301,~~940~~684,185 $ ~~117~~1,~~053~~751,865 $- ~~122~~Buildings and improvements 45,~~248~~157,303 66,026,433 15 to 40 Other ~~525~~1,~~088 452~~856,~~325~~263 ~~389~~2,~~147~~068,795 5 to 15 ------------ ------------ 48,697,751 69,847,093 Less: Accumulated depreciation (23,820,319) (33,384,359) ------------ ~~Total~~------------ ~~other revenue~~ $ ~~556~~24,~~028 $ 569~~877,~~378~~432 $ ~~511~~36,~~395~~462,734 ========== == ======== ====~~======~~

Depreciation expense for the years ended March 31, 2007, 2006 and 2005 amounted to $1,531,541, $1,542,433 and $1,518,676, respectively. During the years ended March 31, 2007 and 2006, there were write-offs of accumulated depreciation in the amounts of $47,195,095 and $4,617,863, respectively, and $47,144,833 and $4,614,956 of these write-offs were related to discontinued assets. The components of property and equipment held for sale are as follows:

March 31, ~~2006~~Estimated ~~March 31, 2005~~ ---------------------------- Useful Lives 2007 2006 (Years) -- ---------- ------------ ------------- ~~Carrying~~Land ~~Carrying~~$ ~~Amount~~0 ~~Fair~~$ ~~Value~~3,550,953 ~~Amount~~- ~~Fair~~Buildings ~~Value~~and improvements 0 56,704,419 15 to 40 Other 0 6,188,293 5 to 15 ------------- ------------- 0 66,443,665 Less: Accumulated depreciation 0 (35,174,311) -------------- ------------- ~~Mortgage Notes Payable for which it is: Practicable to estimate fair value~~ $ ~~25,259,584~~0 $ 2531,~~259~~269,~~584~~354 $============ ~~48,409,326 $ 49,519,246 Not Practicable $ 8,137,816 (*) $ 16,710,021 (*)~~============

Depreciation expense for the discontinued assets for the years ended March 31, 2007, 2006 and 2005 amounted to $925,203, $3,180,909 and $3,309,187, respectively. NOTE 5 - Deferred Costs The components of deferred costs and their periods of amortization from operating assets are as follows:

March 31, ~~2006 March 31, 2005~~ ------------------------------ 2007 2006 ------------ ------------~~-------~~ ~~Carrying~~Financing ~~Carrying~~expenses ~~Amount~~$ ~~Fair~~448,927 ~~Value~~$ ~~Amount~~448,927 ~~Fair~~Less: ~~Value~~Accumulated ~~-------------~~amortization ~~-------------~~(204,969) (189,345) -------------- ------------- ~~Mortgage notes payable for which it is: Practicable to estimate fair value~~ $ 22243,~~675,897~~958 $ 22259,~~707,650~~582 $============ ~~0 $ 0 Not practicable $ 3,792,464 (*) $ 0 (*)~~============

Amortization of deferred costs for the years ended March 31, 2007, 2006 and 2005 amounted to $15,624, $15,442 and $15,442, respectively. During the years ended March 31, 2007 and 2006, there were decreases in deferred costs of $2,377,498 and $0 and net decreases in accumulated amortization of $2,183,617 and $0, respectively, due to write-offs and reclassifications into discontinued operations. 54 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007, 2006 and 2005 The components of deferred costs and their periods of amortization from discontinued assets are as follows:

March 31, --------------------------~~----~~ 2007 2006 ~~2005~~ ------------- ------------- ~~Land~~Financing expenses $ ~~1,751,865~~0 $ ~~5,720,520 Buildings and improvements 66,026,433 130,972,585 Other~~ 2,~~068~~377,~~795~~498 ~~8,084,226 ------------- ------------- 69,847,093 144,777,331~~ Less: Accumulated ~~depreciation~~amortization ~~(33,384,359)~~0 (682,~~560~~088,~~673~~679) ------------- ------------- $ ~~36,462,734~~0 $ 76288,~~216,658~~819 ============= =============

Amortization expense from discontinued operations for the years ended March 31, 2007, 2006 and 2005 amounted to $94,938, $163,921 and $231,103, respectively. Financing expenses are being amortized over the life of the related mortgages, ranging from 15 to 50 years, using a method approximating the interest method. NOTE 6 - Mortgage Notes Payable The mortgage notes are payable in aggregate monthly installments of approximately $167,000 including principal and interest with rates varying from 1% to 13.50% per annum and have maturity dates ranging from 2007 through 2042. The loans are collateralized by the land and buildings of the subsidiary partnerships, the assignment of certain subsidiary partnerships' rents, leases, and replacement reserves, and are without further recourse. Annual principal payments on the permanent debt requirements for mortgage notes payable for each of the next five fiscal years and thereafter for the operating liabilities are as follows:

Year Ending March 31, Amount ---------------------~~---------~~ ~~2006 2005~~ ------------- ~~-------------~~2007 ~~Land~~ $ 32,~~550~~107,~~953~~086 $2008 0260,153 ~~Buildings~~2009 ~~and improvements 56~~278,~~704,419~~529 02010 ~~Other 6~~298,~~188,293~~357 02011 ~~------------- ------------- 66~~319,~~443,665~~813 0Thereafter ~~(35~~22,~~174~~012,~~311)~~203 0 ----------~~---~~ ~~-------------~~Total $ 3125,~~269~~276,~~354~~141 ~~$ 0~~ ===========~~== =============~~

Accrued interest payable as of March 31, 2007 and 2006 was approximately $579,535 and $1,555,000, respectively. Interest accrues on all mortgage loans, which include primary and secondary loans. Certain secondary loans have provisions such that interest is accrued but not payable until a future date. The Partnership anticipates the payment of accrued interest on the secondary loans (which make up the majority of the accrued interest payable amount and which have been accumulating since the Partnership's investment in the respective Local Partnership) will be made from future refinancings or sales proceeds of the respective Local Partnerships. As of March 31, 2007, there were no annual principal payments on the permanent debt requirements for mortgage notes payable for each of the next five fiscal years and thereafter relating to the discontinued liabilities. Accrued interest payable for the discontinued liabilities at March 31, 2007 and 2006 was approximately $0 and $338,000, respectively. Interest accrues on all mortgage loans, which include primary and secondary loans. Certain secondary loans have provisions such that interest is accrued but not payable until a future date. The Partnership anticipates the payment of accrued interest on the secondary loans (which make up the majority of the accrued interest payable amount and which have been accumulating since the Partnership's investment in the respective Local Partnership) will be made from future refinancings or sales proceeds of the respective Local Partnerships. NOTE 7 - Related Party Transactions and Transactions with General Partners and Affiliates Freedom SLP L.P., an affiliate of the General Partners, has either a .01% or 1% interest, as a special limited partner, in each of the Local Partnerships. The General Partners and their affiliates and the general partners of the Local Partnerships ("Local General Partners") and their affiliates perform services for the Partnership and the Local Partnerships, respectively. The costs incurred are as follows: 55 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007, 2006 and 2005 a) Due to Local General Partners and Affiliates Due to Local General Partners and affiliates at March 31, 2007 and 2006 consists of the following:

March 31, -----------------------~~---~~ 2007 2006 ~~2005~~ ----------- ----------- ~~Financing~~Operating ~~expenses~~advances $ ~~448~~255,~~927~~094 $ 2323,~~826~~357 Development fees (i) 610,~~425~~024 ~~Less:~~610,024 ~~Accumulated~~Operating ~~amortization~~deficit loan (~~189,345~~ii) (20 6,~~098~~490 Long-term note payable 47,~~661)~~498 49,884 Management and other fees 165,496 191,431 ----------- ----------- $ ~~259~~1,~~582~~078,112 $ ~~727~~1,~~764~~181,186 =========== ===========

(i) Development fees were incurred in connection with the development of the property and have been included in the basis of the property. (ii) Operating deficit loan consists of the following:

March 31, -----------------------~~---~~ 2007 2006 ~~2005~~ ----------- ----------- ~~Financing~~Ogontz ~~expenses~~Hall $ ~~2,377,498 $~~ 0 ~~Less: Accumulated amortization (2,088,679) 0 ----------- -----------~~ $ ~~288~~6,~~819 $ 0 =========== ===========~~490

This loan to fund operating deficits was unsecured, non-interest bearing and was subordinate to the second mortgage and was paid out of available surplus cash of the respective subsidiary partnership. Due to Local General Partners and affiliates at March 31, 2007 and 2006 included in the discontinued liabilities consists of the following:

~~Year Ending~~ March 31, ~~Amount~~ ----------------------- 2007 2006 --- ------- ---------- ~~2006~~Operating advances $ ~~487,836~~0 ~~2007~~$ 1252,~~820,723~~928 ~~2008~~Operating ~~721,747~~deficit ~~2009~~loan ~~533,299~~(i) ~~2010~~0 ~~563~~191,~~881~~775 ~~Thereafter~~Management 29and other fees 0 211,~~269,914~~840 ---------- ---------- ~~Total~~$ 0 $33 656,~~397,400~~543 ========== ==========

(i) Operating deficit loan consists of the following:

~~Year Ending~~ March 31, ~~Amount~~ -----------------------~~---~~ 2007 2006 ----------- ~~2006 $ 1,471,795 2007 18,454,981 2008 273,191 2009 282,991 2010 293,601 Thereafter 5,691,802~~ ----------- Wilshire Apartments ("Wilshire") $~~26,468,361~~ ~~===========~~0 $ 191,775

This loan to fund operating deficits was unsecured, non-interest bearing and was paid at the time of sale. Wilshire was sold on June 26, 2006. 56 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007, 2006 and 2005 b) Other Expenses The costs from operations incurred to related parties for the years ended March 31, 2007, 2006 and 2005 were as follows:

Years ended March 31, ------------------------------------ 2007 2006* 2005* ---------- ---------- ~~Operating~~---------- ~~advances~~Partnership management fees (a) $ ~~323~~475,~~357~~025 $1 670,~~963~~875 $ 676,~~493~~000 ~~Development~~Expense ~~fees~~reimbursement (ib) ~~610~~166,~~024~~350 ~~610~~353,~~024~~440 ~~Operating~~223,042 ~~deficit~~Local ~~loans~~administrative fee (iid) 623,~~490~~500 ~~297~~21,~~172~~000 ~~Long~~20,500 -~~term~~--------- ~~note~~---------- ~~payable~~---------- 49Total general and administrative - General Partners 664,~~884~~875 981,~~615~~045,315 ~~Management~~919,542 ~~and~~---------- ~~other~~---------- ---------- Property management fees ~~191~~incurred to affiliates of the subsidiary partnerships' general partners (c) 394,~~431~~119 ~~659~~421,~~284~~848 427,312 ---------- ---------- ---------- Total general and administrative - related parties $1,~~181~~058,~~186~~994 $31,~~628~~467,~~588~~163 $1,346,854 ========== ========== ==========

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

Years ended March 31, ------------------------------------ 2007 2006* 2005* ---------- --- ------- ---------- ~~Parkside~~Local ~~Townhomes~~administrative fee (d) $ 017,686 $ 8728,~~035~~850 ~~Ogontz~~$ ~~Hall~~30,693 ---------- ---------- ---------- Total general and administrative-General Partners 17,686 28,850 30,693 ---------- ---------- ---------- Property management fees incurred to affiliates of the Local General Partners (c) 258,642 432,631 469,770 ---------- ---------- ---------- Total general and administrative-related parties $ 6276,~~490~~328 $ 18461,~~362~~481 $ 500,463 ========== ========== ==========

* Reclassified for comparative purposes. (a) The General Partners are entitled to receive a partnership management fee, after payment of all Partnership expenses, which together with the annual local administrative fees will not exceed a maximum of 0.5% per annum of Invested Assets (as defined in the Partnership Agreement), for administering the affairs of the Partnership. Subject to the foregoing limitation, the partnership management fee will be determined by the General Partners in their sole discretion based upon their review of the Partnership's investments. Unpaid partnership management fees for any year will be accrued without interest and will be payable from working capital reserves or to the extent of available funds after the Partnership has made distributions to the limited partners and BACs holders of sale or refinancing proceeds equal to their original capital contributions plus a 10% priority return thereon (to the extent not theretofore paid out of cash flow). Partnership management fees owed to General Partners amounting to approximately $2,948,000 and $7,555,000 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 sold properties uncollectible and, as a result, wrote them off in the amount of approximately $4,096,000, resulting in a non-cash General Partner contribution of the same amount. Without the General Partners' continued accrual without payment, the Partnership will not be in a position to meet its obligations. The General Partners have continued allowing the accrual without payment of these amounts, but are under no obligation to continue to do so. (b) The Partnership reimburses the General Partners and their affiliates for actual Partnership operating expenses incurred by the General Partners and their 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 Partners performs asset monitoring for the Partnership. These services include site visits and evaluations of the subsidiary partnerships' performance. (c) Property management fees incurred by subsidiary partnerships amounted to $775,439, $1,063,422 and $1,076,574 for the years ended March 31, 2007, 2006 and 2005, respectively. Of these fees, $652,761, $854,479 and $897,082 were incurred to affiliates of the subsidiary partnerships, which include $258,642, $432,631 and $469,770, respectively, of fees relating to discontinued operations. (d) Freedom SLP L.P., a special limited partner of the subsidiary partnerships, is entitled to receive an annual local administrative fee of up to $2,500 from each Local Partnership. 57 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007, 2006 and 2005 NOTE 8 - Income Taxes A reconciliation of the financial statement net loss to the income tax loss for the Partnership and its consolidated subsidiaries follows:

~~March~~2006 ~~31,~~2005 2004 ------------ ------------ ------------ ~~2006~~Financial ~~2005~~statement Net income (loss) $ 11,832,161 $ (3,792,044) $ (4,219,638) Difference resulting from parent company having a different fiscal year for income tax and financial reporting purposes (173,228) (369,620) 376,180 Tax-exempt interest income (207,839) (1,326) (40) Difference between depreciation and amortization expense recorded for financial statement and income tax reporting purposes (1,825,966) (554,379) 468,213 Provisions for loss on impairment 1,505,824 555,000 0 Difference between gain on sale of properties for financial reporting purposes and income tax purposes (4,650,754) 0 0 Difference between gains and losses allocated to minority interest for financial reporting purposes and tax purposes (2,312,762) 0 0 Difference resulting from forgiveness of related party debt considered a General Partner contribution for financial reporting purposes and income for tax purposes 4,095,540 0 0 Other (324,552) 496,704 (154,830) ------------ ------------ ------------ ~~Wilshire~~Net loss as shown on the Partnership's income tax returns $ 07,938,424 $ ~~191~~(3,~~775~~665,665) $ (3,530,115) ============ ============ ============

NOTE 9 - Sale of Properties The Partnership is currently in the process of disposing of its investments. As of March 31, 2007, the Partnership's limited partnership interest in nine Local Partnerships and the property and the related assets and liabilities of thirteen Local Partnerships have been sold. There can be no assurance as to when the Partnership will dispose of its remaining investments or the amount of proceeds which may be received. However, based on the historical operating results of the Local Partnerships and the current economic conditions, including changes in tax laws, it is unlikely that the proceeds from such sales received by the Partnership will be sufficient to return to the limited partners their original investments. All gains and losses on sales are included in discontinued operations. Subsequently, on April 30, 2007, six Local Partnerships entered into agreements to sell their property and the related assets and liabilities, and on May 3, 2007, the Partnership's limited partnership interest in one Local Partnership was sold (see Item 8, Note 13). On January 31, 2007, the property and the related assets and liabilities of Eagle Ridge Limited Partnership ("Eagle Ridge") were sold to an unaffiliated third party purchaser for a sales price of $2,000,000. The Partnership received $412,730 as a distribution from this sale after the repayment of mortgages, other liabilities, closing costs and distributions to minority interests of approximately $1,587,000. The sale resulted in a gain of approximately $600,000 resulting from the write-off of the partners' deficit basis in the property of approximately $600,000 at the date of the sale. The sale resulted in the liquidation of Eagle Ridge. On January 10, 2007, the property and the related assets and liabilities of Lauderdale Lakes Associates, Ltd. ("Lauderdale Lakes") were sold to an affiliate of the Local General Partner for a sales price of $5,900,000. The Partnership received $790,773 as a distribution from this sale after the repayment of mortgages, other liabilities and closing costs of approximately $5,109,000. During the quarter ended December 31, 2006, in accordance with Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS No. 144"), the Partnership deemed the building impaired and wrote it down to its fair value which resulted in a loss on impairment of approximately $1,106,000. Because Lauderdale Lakes was sold to a related party of the Local Partnership, the sale resulted in a non-cash distribution from the Local Partnership to the Local General Partner of approximately $329,000. Such distribution flows through minority interest as a result of the write-off of the partners' basis in the property of approximately $329,000. The sale resulted in the liquidation of Lauderdale Lakes. 58 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007, 2006 and 2005 On January 1, 2007, the Partnership's limited partnership interest in Harmony Associates, L.P. ("Harmony Gate") was sold to the Local General Partner for a sales price of $1,409,990. The Partnership received proceeds of $1,409,990 from the sale. Because Harmony Gate 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 $1,211,000. Such contribution flows through minority interest as a result of the write-off of the partners' basis in the property of approximately $199,000 and the $1,409,990 cash received from the sale. On January 1, 2007, the Partnership's limited partnership interest in Conifer Irondequoit Associates ("Abraham Lincoln") was sold to the Local General Partner for a sales price of $1. Because Abraham Lincoln 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 $127,000. Such contribution flows through minority interest as a result of the write-off of the partners' deficit basis in the property of approximately $127,000 at the date of the sale. The sale also resulted in a non-cash contribution to the Local Partnership from an affiliate of the Local General Partner of approximately $20,000 as a result of the write-off of payables owed by the Local Partnership. The sale resulted in the liquidation of Abraham Lincoln. On October 25, 2006, the property and the related assets and liabilities of C-H Development Group Associates, L.P. ("Manhattan B") were sold to an unaffiliated third party purchaser for a sales price of $2,100,000. The Partnership received $850,980 as a distribution from this sale after the repayment of mortgages, other liabilities and closing costs of approximately $1,249,000. The sale resulted in a gain of approximately $842,000 resulting from the write-off of the partners' deficit basis in the property of approximately $842,000 at the date of the sale. The sale resulted in the liquidation of Manhattan B. On September 29, 2006, the property and the related assets and liabilities of Oxford Trace Apartments ("Oxford Trace") were sold to an unaffiliated third party purchaser for a sales price of $725,000. The Partnership received $49,279 as a distribution from this sale after the repayment of mortgages, other liabilities and closing costs of approximately $676,000. The sale resulted in a gain of approximately $373,000 resulting from the write-off of the partners' deficit basis in the property of approximately $373,000 at the date of the sale. The sale also resulted in a non-cash contribution to the Local Partnership from the Local General Partner of approximately $494,000 as a result of the write-off of payables owed by the Local Partnership. The sale resulted in the liquidation of Oxford Trace. On September 29, 2006, the property and the related assets and liabilities of Tivoli Place Apartments ("Tivoli Place") were sold to an unaffiliated third party purchaser for a sales price of $3,050,000. The Partnership received $1,331,631 as a distribution from this sale after the repayment of mortgages, other liabilities, closing costs and distributions to minority interests of approximately $1,711,000. The sale resulted in a gain of approximately $905,000 resulting from the write-off of the partners' deficit basis in the property of approximately $905,000 at the date of the sale. The sale also resulted in a non-cash distribution from the Local Partnership to the Local General Partner of approximately $62,000 as a result of the write-off of receivables owed to the Local Partnership. The sale resulted in the liquidation of Tivoli Place. On September 20, 2006, the property and the related assets and liabilities of Bennion Park Apartments ("Mulberry") were sold to an unaffiliated third party purchaser for a sales price of $4,900,000. The Partnership received $2,321,740 as a distribution from this sale after the repayment of mortgages, other liabilities, closing costs and distributions to minority interests of approximately $2,578,000. The sale resulted in a gain of approximately $2,183,000 resulting from the write-off of the partners' deficit basis in the property of approximately $2,183,000 at the date of the sale. The sale also resulted in a non-cash distribution from the Local Partnership to the Local General Partner of approximately $980,000 as a result of the write-off of receivables owed to the Local Partnership. The sale resulted in the liquidation of Mulberry. On September 20, 2006, the property and the related assets and liabilities of Twin Trees Apartments ("Twin Trees") were sold to an unaffiliated third party purchaser for a sales price of $2,300,000. The Partnership received $927,148 as a distribution from this sale after the repayment of mortgages, other liabilities, closing costs and distributions to minority interests of approximately $1,373,000. The sale resulted in a gain of approximately $904,000 resulting from the write-off of the partners' deficit basis in the property of approximately $904,000 at the date of the sale. The sale also resulted in a non-cash distribution from the Local Partnership to the Local General Partner of approximately $582,000 as a result of the write-off of receivables owed to the Local Partnership. The sale resulted in the liquidation of Twin Trees. On July 26, 2006, the property and the related assets and liabilities of Washington Brooklyn Limited Partnership ("Washington") were sold to an unaffiliated third party purchaser for a sales price of approximately $160,000 and the assumption of the related mortgage liabilities and the litigation discussed in Note 10. After the repayment of other liabilities and closing costs of approximately $60,000, the Partnership will receive an additional payment estimated to be approximately $100,000 to be paid at a later date upon the settlement of a foreclosure dispute (see Note 10). During the quarter ended June 30, 2006, in accordance with SFAS No. 144, the Partnership deemed the building impaired and wrote it down to its fair value which resulted in a loss on impairment of $400,000. The sale resulted in a loss of approximately $384,000 resulting from the write-off of the partners' basis in the property of approximately $384,000 at the date of the sale. The sale also resulted in a non-cash contribution to the Local Partnership from an affiliate of the Local General Partner of approximately $30,000 as a result of the write-off of payables owed by Local Partnership. The sale resulted in the liquidation of Washington. On June 26, 2006, the property and the related assets and liabilities of Hunters Chase Apartments ("Hunters Chase") were sold to an unaffiliated third party purchaser for a sales price of $2,730,000. The Partnership received $334,243 as a distribution from this sale after the repayment of mortgages, other liabilities and closing costs of approximately $2,396,000. The sale resulted in a gain of approximately $1,192,000 resulting from the write-off of the partners' deficit basis in the property of approximately $1,192,000 at the date of the sale, which was recorded during the quarter ended September 30, 2006. An adjustment to the gain of approximately $72,000 was recorded during the quarter ended December 31, 2006, resulting in overall gain of approximately $1,264,000. The sale also resulted in a non-cash contribution to the Local Partnership from the Local General Partner of approximately $1,245,000 as a result of the write-off of payables owed by the Local Partnership. The sale resulted in the liquidation of Hunters Chase. 59 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007, 2006 and 2005 On June 26, 2006, the property and the related assets and liabilities of Wilshire Apartments ("Wilshire") were sold to an unaffiliated third party purchaser for a sales price of $1,700,000. The Partnership received $31,986 as a distribution from this sale after the repayment of mortgages, other liabilities and closing costs of approximately $1,668,000. The sale resulted in a gain of approximately $680,000 resulting from the write-off of the partners' deficit basis in the property of approximately $680,000 at the date of the sale, which was recorded during the quarter ended September 30, 2006. A downward adjustment to the gain of approximately $161,000 was recorded during the quarter ended December 31, 2006, resulting in overall gain of approximately $519,000. The sale also resulted in a non-cash contribution to the Local Partnership from the Local General Partner of approximately $1,179,000 as a result of the write-off of payables owed by the Local Partnership. The sale resulted in the liquidation of Wilshire. On June 20, 2006, the property and the related assets and liabilities of Bethel Park Apartments ("Bethel Park") were sold to an unaffiliated third party purchaser for a sales price of $2,500,000. The Partnership received $620,674 as a distribution from this sale after the repayment of mortgages, other liabilities and closing costs of approximately $1,879,000. The sale resulted in a gain of approximately $319,000 resulting from the write-off of the partners' deficit basis in the property of approximately $319,000 at the date of the sale, which was recorded during the quarter ended September 30, 2006. An adjustment to the gain of approximately $11,000 was recorded during the quarter ended March 31, 2007, resulting in overall gain of approximately $330,000. The sale also resulted in a non-cash contribution to the Local Partnership from the Local General Partner of approximately $298,000 as a result of the write-off of payables owed by the Local Partnership. The sale resulted in the liquidation of Bethel Park. On June 20, 2006, the property and the related assets and liabilities of Zebulon Park Apartments ("Zebulon") were sold to an unaffiliated third party purchaser for a sales price of $2,000,000. The Partnership received $420,305 as a distribution from this sale after the repayment of mortgages, other liabilities and closing costs of approximately $1,580,000. The sale resulted in a gain of approximately $115,000 resulting from the write-off of the partners' deficit basis in the property of approximately $115,000 at the date of the sale, which was recorded during the quarter ended September 30, 2006. A downward adjustment to the gain of approximately $3,000 was recorded during the quarter ended December 31, 2006, resulting in overall gain of approximately $112,000. The sale also resulted in a non-cash contribution to the Local Partnership from the Local General Partner of approximately $264,000 as a result of the write-off of payables owed by the Local Partnership. The sale resulted in the liquidation of Zebulon. On June 5, 2006, the property and the related assets and liabilities of Northwood Apartments of Georgia ("Northwood") were sold to an unaffiliated third party purchaser for a sales price of $6,050,000. The Partnership received $3,197,019 as a distribution from this sale after the repayment of mortgages, other liabilities, closing costs and distributions to minority interests of approximately $2,853,000. The sale resulted in a gain of approximately $2,367,000 resulting from the write-off of the partners' basis in the property of approximately $2,367,000 at the date of the sale, which was recorded during the quarter ended September 30, 2006. An adjustment to the gain of approximately $81,000 was recorded during the quarter ended March 31, 2007, resulting in overall gain of approximately $2,448,000. The sale also resulted in a non-cash distribution from the Local Partnership to the Local General Partner of approximately $868,000 as a result of the write-off of receivables owed to the Local Partnership. The sale resulted in the liquidation of Northwood. On March 31, 2006, the Partnership's limited partnership interest in Davidson Court Limited Partnership ("Davidson Court") was sold to an affiliate of the general partner of the Local Partnership (the "Local General Partner") for a sales price of $1,100,000. The Partnership received proceeds of $1,066,715 from this sale after the payment of closing costs of approximately $33,000 from the sales price. Because Davidson Court 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 $68,000. Such contribution flows through minority interest as a result of the write-off of the partners' basis in the property of approximately $999,000 and the $1,066,715 cash received from the sale. On March 31, 2006, the Partnership's limited partnership interest in CLM Equities Limited Partnership ("Morris Avenue") was sold to the Local General Partner and its affiliate for a sales price of $265,000. The Partnership received proceeds of $264,990 from this sale. Because Morris Avenue was sold to a related party of the Local Partnership, the sale resulted in a non-cash distribution from the Local Partnership to the Local General Partner of approximately $424,000, which was recorded during the quarter ended June 30, 2006. A downward adjustment of approximately $9,000 was recorded during the quarter ended December 31, 2006, resulting in overall non-cash distribution of approximately $415,000. Such distribution flows through minority interest as a result of the write-off of the partners' basis in the property of approximately $680,000 and the $264,990 cash received from the sale. On February 1, 2006, the Partnership's limited partnership interest in Ivanhoe Apartments Limited Partnership ("Ivanhoe") was sold to the Local General Partner for a sales price of $150,000. The Partnership received proceeds of $150,000 from this sale. Because Ivanhoe was sold to a related party of the Local Partnership, the sale resulted in a non-cash distribution from the Local Partnership to the Local General Partner of approximately $50,000, which was recorded during the quarter ended June 30, 2006. An adjustment to the non-cash distribution of approximately $35,000 was recorded during the quarter ended March 31, 2007, resulting in overall non-cash distribution of approximately $85,000. Such distribution flows through minority interest as a result of the write-off of the partners' basis in the property of approximately $235,000 and the $150,000 cash received from the sale. The sale also resulted in a non-cash contribution to the Local Partnership from an affiliate of the General Partner of approximately $35,000 as a result of the write-off of payables owed by Local Partnership. On January 19, 2006, the Partnership's limited partnership interest in Nelson Anderson Affordable Housing Limited Partners ("Nelson Anderson") was sold to the Local General Partner for a sales price of $490,000. The Partnership received proceeds of $489,990 from this sale. Because Nelson Anderson was sold to a related party of the Local Partnership, the sale resulted in a non-cash 60 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007, 2006 and 2005 distribution from the Local Partnership to the Local General Partner of approximately $196,000, which was recorded during the quarter ended June 30, 2006. A downward adjustment to the non-cash distribution of approximately $1,000 was recorded during the quarter ended March 31, 2007, resulting in overall non-cash distribution of approximately $197,000. Such distribution flows through minority interest as a result of the write-off of the partners' basis in the property of approximately $687,000 and the $489,990 cash received from the sale. The sale also resulted in a non-cash contribution to the Local Partnership from an affiliate of the General Partner of approximately $28,000 as a result of the write-off of payables owed by Local Partnership. On January 1, 2006, the Partnership's limited partnership interest in Greenfield Village Limited Partnership ("Greenfield Village") was sold to the Local General Partner for a sales price of $75,000. The Partnership received proceeds of $74,990 from the sale. Because Greenfield Village 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 $461,000, which was recorded during the quarter ended March 31, 2006. Such contribution flows through minority interest as a result of the write-off of the partners' deficit basis in the property of approximately $386,000 and the $74,990 cash received from the sale. On January 1, 2006, the Partnership's limited partnership interest in The Oaks Village Limited Partnership ("Oaks Village") was sold to the Local General Partner for a sales price of $75,000. The Partnership received proceeds of $74,990 from this sale. Because Oaks Village 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 $407,000, which was recorded during the quarter ended March 31, 2006. Such contribution flows through minority interest as a result of the write-off of the partners' deficit basis in the property of approximately $332,000 and the $74,990 cash received from the sale. On June 20, 2005, the Partnership's limited partnership interest in Parkside Townhomes Associates ("Parkside") was sold to the Local General Partner for a sales price of $650,000. The Partnership received $611,140, after the payment of closing costs of approximately $39,000, which included $161,140 paid in cash at closing and $450,000 pursuant to a promissory note payable to the Partnership (which was paid off in full as of December 31, 2006). During the quarter ended June 30, 2005, in accordance with SFAS No. 144, the Partnership deemed the building impaired and wrote it down to its fair value which resulted in a loss on impairment of $555,000. Because Parkside was sold to a related party of the Local Partnership, the sale resulted in a non-cash distribution from the Local Partnership to the Local General Partner of approximately $32,000. Such distribution flows through minority interest as a result of the write-off of the partners' basis in the property of approximately $643,000 and the $611,140 cash received from the sale. NOTE 10 - Commitments and Contingencies Washington ---------- On July 26, 2006, the sale of Washington was completed (see Note 9) pursuant to the purchase and sale agreement. Upon closing, the purchaser assumed all of Washington's rights and liabilities with respect to the litigation described below. In or about September 2003, a putative mortgagee commenced a mortgage foreclosure action in the Supreme Court of the State of New York, Kings County (the "Court"), entitled 150 Beach 120th Street Inc. v. Washington Brooklyn Limited Partnership, Index No. 35255/2003, seeking to foreclose on an alleged $100,000 loan and mortgage against the real property (the "Apartment Complex") owned by Washington. Apparently, the former general partner of Washington, BUFNY Houses of Brooklyn, Inc. ("BUFNY"), allegedly granted two mortgages in the amounts of $225,000 and $100,000 secured by the Apartment Complex. Each of the foregoing mortgages was granted without the knowledge of Freedom SLP, L.P. (the "Special Limited Partner") or the Partnership (collectively the "Freedom LPs") or the consent of the Special Limited Partner, as required by Washington's Amended and Restated Agreement of Limited Partnership (the "Washington Partnership Agreement"). The Freedom LPs believe that BUFNY did not use the alleged loan proceeds for the benefit of Washington or the Apartment Complex. For these and other reasons, the Freedom LPs contend that the alleged mortgages are invalid. In addition, BUFNY allegedly failed to comply with the terms of either mortgage, which resulted in the holders of the alleged $100,000 mortgage commencing the foreclosure proceedings. BUFNY did not appear in or otherwise respond to the foreclosure proceedings. The holders of the alleged $225,000 mortgage have not yet, to the knowledge of the Freedom LPs, commenced any foreclosure proceedings. Due to BUFNY's breach of fiduciary duties and breaches of the Washington Partnership Agreement, the Special Limited Partner exercised its rights under the Washington Partnership Agreement to remove BUFNY as Washington's general partner and to substitute itself as the new replacement general partner, effective April 26, 2004. Shortly after the Freedom LPs became aware of these foreclosure proceedings, their counsel contacted counsel for the plaintiffs and mortgagees in an effort to learn more about the alleged mortgages and to resolve the disputes relating to the mortgages. When those efforts failed, the Freedom LPs filed a motion to intervene in the foreclosure action and to file a late answer on behalf of themselves and Washington. The Freedom LPs contend that the mortgages are invalid and that Washington is not liable for them or the underlying indebtedness. In an order dated September 7, 2004, the Court granted the Freedom LPs' motion to intervene and to file a late answer on behalf of Washington. On or about September 21, 2004, the Freedom LPs, on behalf of themselves and Washington, served an answer, counterclaims and crossclaims in defending against the action. The answer denied the material allegations of the complaint and asserted certain affirmative defenses, counterclaims and crossclaims. Among other things, the Freedom LPs, on behalf of themselves and Washington, added The Levites Organization, one of the two co-holders of the $225,000 mortgage for which the plaintiffs' complaint did not seek foreclosure, as an additional counterclaim defendant, and the Freedom LPs asserted that both the $100,000 and $225,000 mortgages are invalid and void ab initio. After obtaining discovery from the putative mortgagees, Washington and the Freedom LPs on July 12, 2005 made a motion for summary judgment dismissing the complaint and declaring the mortgages invalid and void ab initio. The putative mortgagees cross-moved for summary judgment declaring the mortgages valid and enforceable. Subsequently, by decision dated January 3, 2006, the Court denied both motions, finding that questions of fact exist for trial as to the reasonableness of the putative mortgagees' reliance on BUFNY. 61 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007, 2006 and 2005 On February 14, 2006, the Freedom LPs filed a notice of appeal from the January 3, 2006 decision. On July 18, 2006, the Freedom LPs perfected their appeal from the Court's January 3, 2006 decision. Abraham Lincoln --------------- Beginning in October 2005, Abraham Lincoln ceased to make its monthly loan and escrow payments to New York State Housing Finance Agency ("NYSHFA"). The mortgage insurer made the payments for Abraham Lincoln. During 2006 Abraham Lincoln remitted payments to the mortgage insurer to reimburse it for its payments. At December 31, 2006, the un-reimbursed amounts owed the mortgage insurer amounted to $12,716. In January 2007, Abraham Lincoln reimbursed the mortgage insurer for this balance. In addition, the NYSHFA has applied the two month deposit of mortgage payments to the delinquent loan and escrow payments. These items technically represent an event of default under the various loan agreements, which could result in both of the lenders demanding immediate full payment of the respective loans (the mortgages are called). Abraham Lincoln has not solicited a "covenant waiver" letter from the lenders; however, based on history, management does not believe any of the loans will be called. Accordingly, the loans are classified as non-current in the balance sheet. In the event that any or all of the mortgages are called, there is no assurance that a refinancing on comparable terms could be accomplished. The Partnership's investment in Abraham Lincoln was reduced to zero as a result of prior years' losses. On January 1, 2007, the Partnership's limited partnership interest in Abraham Lincoln was sold (see Note 9). Pine Shadow, Ltd. ("Pine Shadow") --------------------------------- During 2005, Pine Shadow suffered damages from flooding due to Hurricane Katrina. However, in 2006, Pine Shadow entered into an agreement with Rural Housing Services ("RHS") in which Pine Shadow is to receive funding to replace all damages to the property. The funds to be received will be a Second Soft Loan in the amount of $4,384,000 with an annual interest rate of 1%. Payments on the loan will be deferred for a 20 year period. In accordance with SFAS No. 144, the Partnership has determined that there is no impairment and the carrying amounts of the assets are recoverable, therefore, no adjustments are required. As of the filing date of this report, the funds have not yet been received. Other ----- The Partnership is subject to risks incident to potential losses arising from the management and ownership of improved real estate. The Partnership can also be affected by poor economic conditions generally, however no more than 30% of the properties are located in any single state. There are also substantial risks associated with owning properties receiving government assistance, for example the possibility that Congress may not appropriate funds to enable the U.S. Department of Housing and Urban Development ("HUD") to make rental assistance payments. HUD also restricts annual cash distributions to partners based on operating results and a percentage of the owners' equity contribution. As of March 31, 2007, there were three Local Partnerships subsidized by HUD. The Partnership cannot sell or substantially liquidate its investments in subsidiary partnerships during the period that the subsidy agreements are in existence without HUD's approval. Furthermore there may not be market demand for apartments at full market rents when the rental assistance contract expires. Except as described above, management is not aware of any trends or events, commitments or uncertainties, which have not otherwise been disclosed, that will or are likely to impact liquidity in a material way. Management believes the only impact would be from laws that have not yet been adopted. The portfolio is diversified by the location of the properties around the United States so that if one area of the country is experiencing downturns in the economy, the remaining properties in the portfolio may not be affected. However, the geographic diversification of the portfolio may not protect against a general downturn in the national economy. NOTE 11 - Discontinued Operations The following table summarizes the financial position of the Local Partnerships that are classified as discontinued operations because the respective Local Partnerships were classified as assets held for sale. As of March 31, 2007, there were no Local Partnerships classified as discontinued operations in the consolidated balance sheets. The amounts shown below, as of March 31, 2007, represent residual cash and accounts payable balances as of the balance sheet date from the sale of Washington, which subsequently got paid. As of March 31, 2006, Parkside, Oaks Village, Greenfield Village, Nelson Anderson, Ivanhoe, Davidson Court, Morris Avenue, Bethel Park, Northwood, Hunters Chase, Mulberry Park, Oxford Trace, Tivoli Place, Twin Trees, Wilshire, Zebulon, Lauderdale Lakes and Eagle Ridge were classified as discontinued operations in the consolidated financial statements. 62 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007, 2006 and 2005 Consolidated Balance Sheets:

March 31, March 31, 2007 2006 ----------- ----------- Assets Property and equipment -~~---------~~ ~~2006~~less ~~2005~~accumulated depreciation of $0 and $35,174,311 and, respectively $ 0 $31,269,354 Cash and cash equivalents 1,704 1,267,871 Cash held in escrow 0 1,219,590 Deferred costs, net of accumulated amortization of $0 and $2,088,679, respectively 0 288,819 Other assets 0 755,335 ------------- -----------~~---~~ ~~Operating~~Total ~~advances~~assets $ ~~252~~1,~~928~~704 $34,800,969 =========== =========== Liabilities Mortgage notes payable $ 0 ~~Operating~~$26,468,361 ~~deficit~~Accounts ~~loan~~payable ~~(i)~~and ~~191~~other liabilities 7,~~775~~113 1,339,733 Due to local general partners and affiliates 0 ~~Management~~656,543 Due to general partners and ~~other~~affiliates ~~fees~~0 ~~211~~270,~~840~~000 Minority interest 0 4,189,575 ------------- -----------~~---~~ Total liabilities $ ~~656~~7,~~543~~113 $32,924,212 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, Bethel Park, Northwood, Hunters Chase, Mulberry Park, Oxford Trace, Tivoli Place, Twin Trees, Wilshire, Zebulon, Lauderdale Lakes, Eagle Ridge, Washington, Manhattan B, Abraham Lincoln and Harmony Gates, which were sold during the year, and Nelson Anderson, Ivanhoe, Davidson Court and Morris Avenue were all classified as discontinued operations on the consolidated financial statements. For the year ended March 31, 2006, Parkside, Oaks Village, Greenfield Village, Nelson Anderson, Ivanhoe, Davidson Court and Morris Avenue, which were sold during the year, and in order to present comparable results to the year ended March 31, 2007, Bethel Park, Northwood, Hunters Chase, Mulberry Park, Oxford Trace, Tivoli Place, Twin Trees, Wilshire, Zebulon, Lauderdale Lakes, Eagle Ridge, Washington, Manhattan B, Abraham Lincoln and Harmony Gates were all classified as discontinued operations on the consolidated financial statements. For the year ended March 31, 2005 in order to present comparable results to the year ended March 31, 2007, Parkside, Oaks Village, Greenfield Village, Nelson Anderson, Ivanhoe, Davidson Court, Morris Avenue, Bethel Park, Northwood, Hunters Chase, Mulberry Park, Oxford Trace, Tivoli Place, Twin Trees, Wilshire, Zebulon, Lauderdale Lakes, Eagle Ridge, Washington, Manhattan B, Abraham Lincoln and Harmony Gates were all classified as discontinued operations on the consolidated financial statements. 63 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007, 2006 and 2005 Consolidated Statements of Discontinued Operations:

Years Ended March 31, -------------------------------------------- 2007 2006* 2005* ------------- ------------ ------------ ~~Wilshire~~Revenues Rental income $ ~~191~~5,~~775~~941,721 $ 9,547,440 $ 9,735,435 Other (Note 2) 313,596 612,395 602,271 Gain (loss) on sale of properties (Note 9) 10,090,931 (81,351) 0 ------------ ------------ ------------ Total revenue 16,346,248 10,078,484 10,337,706 ------------ ------------ ------------ Expenses Repairs and maintenance 1,181,161 1,758,938 1,626,368 Operating and other 972,844 1,623,134 1,496,246 Real estate taxes 314,716 662,789 733,701 Interest 2,035,317 2,547,474 2,665,214 Depreciation and amortization 1,020,141 3,344,830 3,540,290 General and administrative 1,448,137 2,408,046 2,345,225 General and administrative-related parties (Note 8) 276,328 461,481 500,463 Loss on impairment of fixed assets 1,505,824 555,000 0 ------------ ------------ ------------ Total expenses 8,754,468 13,361,692 12,907,507 ------------ ------------ ------------ Income (loss) from discontinued operations before minority interest 7,591,780 (3,283,208) (2,569,801) Minority interest in income (loss) of subsidiaries from discontinued operations 5,892,514 1,567,483 36,349 ------------ ------------ ------------ Income (loss) from discontinued operations (including gain (loss) on sale of properties) $ 13,484,294 $ (1,715,725) $ (2,533,452) ============ ============ ============ Income (loss) - limited partners from discontinued operations (including gain (loss) on sale of properties) $ 13,349,451 $ (1,698,568) $ (2,508,118) ============ ============ ============ Number of BACs outstanding 72,896 72,896 72,896 ============ ============ ============ Income (loss) discontinued operations (including gain (loss) on sale of properties) per BAC $ 183.13 $ (23.30) $ (34.41) ============ ============ ============ * Reclassified for comparative purposes Years Ended March 31, -------------------------------------------- 2007 2006* 2005* ------------ ------------ ------------ Cash flows from discontinued operations: Net cash (used in) provided by operating activities $ (1,812,549) $ (2,819,099) $ 658,572 Net cash provided by (used in) investing activities $ 38,611,008 $ 8,225,569 $ (417,127) Net cash used in financing activities $(23,405,875) $ (4,999,403) $ (899,072)

* Reclassified for comparative purposes. 64 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007, 2006 and 2005 NOTE 12 - Selected Quarterly Financial Data (Unaudited) The following table summarizes the Partnership's quarterly results of operations for the years ended March 31, 2007 and 2006. The fluctuations between the quarters are primarily due to the sales and classification as discontinued operations of Local Partnerships (see Notes 9 and 11).

~~Year~~Quarter Ended -------------------------------------------------------- June 30, September 30, December 31, March 31, OPERATIONS 2006* 2006* 2006* 2007 ----------------------------------------------------- ~~2006~~----------- 2005*----------- 2004*----------- ----------- Revenues $ 1,537,669 $ 1,487,237 $ 1,596,172 $ 1,905,690 Total expenses (2,031,361) (2,123,867) (1,972,088) (2,064,381) ----------- ----------- ~~Partnership~~----------- ~~management~~----------- ~~fees~~Loss from continuing operations before minority interest (a493,692) (636,630) (375,916) (158,691) Minority interest in loss of subsidiaries from operations 3,067 5,767 2,951 1,011 ----------- ----------- ----------- ----------- Loss from continuing operations (490,625) (630,863) (372,965) (157,680) (Loss) income from discontinued operations (including minority interest) (1,404,567) 6,371,877 5,908,649 2,608,335 ----------- ----------- ----------- ----------- Net (loss) income $(1,895,192) ~~670~~$ 5,~~875~~741,014 $ ~~676~~5,~~000~~535,684 $ ~~676~~2,~~000~~450,655 ~~Expense~~=========== ~~reimbursement~~=========== =========== =========== Net (bloss) ~~353~~income - limited partnership $(1,~~440~~876,240) ~~223~~$ 5,~~042~~683,604 ~~178~~$ 5,~~723~~480,327 ~~Local~~$ ~~administrative~~2,426,148 ~~fee~~=========== =========== =========== =========== Loss per weighted average BAC from operations $ (d6.66) ~~32,500~~$ (8.57) $ (5.07) $ (2.13) (Loss) income per weighted average BAC from discontinued operations (19.08) 86.54 80.25 35.42 ----------- ----------- ----------- ----------- Net (loss) income per weighted average BAC $ (25.74) $ 77.97 $ 75.18 $ 33.29 =========== =========== =========== =========== Quarter Ended -------------------------------------------------------- June 30,~~500~~ 34September 30,~~500~~ December 31, March 31, OPERATIONS 2005* 2005* 2005* 2006* ----------------------------------------------------- ----------- ----------- ~~Total~~----------- ~~general~~----------- ~~and~~Revenues ~~administrative~~$ -1,592,216 ~~General~~$ ~~Partners~~1,515,981 $ 1,~~056~~524,~~815~~271 ~~928~~$ 1,~~542~~801,432 ~~889~~Total expenses (2,~~223~~101,823) (2,265,635) (2,109,960) (2,045,981) ----------- ----------- ----------- ~~Property~~----------- ~~management~~Loss ~~fees~~from ~~incurred~~continuing tooperations ~~affiliates~~before minority interest (509,607) (749,654) (585,689) (244,549) Minority interest in loss of ~~the~~subsidiaries ~~subsidiary~~from ~~partnerships'~~operations ~~general~~3,446 ~~partners~~6,164 2,939 631 ----------- ----------- ----------- ----------- Loss from continuing operations (c506,161) ~~480~~(743,~~141~~490) ~~487~~(582,~~489~~750) ~~496~~(243,~~839~~918) (Loss) income from discontinued operations (including minority interest) (1,112,811) (357,129) (408,571) 162,786 ----------- ----------- ----------- ~~Total~~----------- ~~general~~Net ~~and~~loss ~~administrative~~$(1,618,972) $(1,100,619) $ (991,321) $ (81,132) =========== =========== =========== =========== Net loss - ~~related~~limited ~~parties~~partnership $(1,~~536~~602,~~956~~782) $(1,~~416~~089,~~031~~613) $1 (981,~~386~~408) $ (80,~~062~~321) =========== =========== =========== =========== Loss per weighted average BAC from operations $ (6.88) $ (10.10) $ (7.91) $ (3.31) (Loss) income per weighted average BAC from discontinued operations (15.11) (4.85) (5.55) 2.21 ----------- ----------- ----------- ----------- Net loss per weighted average BAC $ (21.99) $ (14.95) $ (13.46) $ (1.10) =========== =========== =========== ===========

* Reclassified for comparative purposes. 65 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2007, 2006 and 2005 NOTE 13 - Subsequent Events On May 3, 2007, the Partnership's limited partnership interest in 220 Cooper Street L.P. ("Cooper Street") was sold to the Local General Partner for a sales price of $50,000. The Partnership received proceeds of $50,000 from the sale. Because Cooper Street 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 $266,000. Such contribution flows through minority interest as a result of the write-off of the basis in the property of approximately $216,000 and the $50,000 cash received from the sale, 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 Cooper Street. On April 30, 2007, Brookwood Associates, Ltd ("Brookwood") 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 purchase price of $1,475,000. The sales documents have been executed and the initial deposit funds are being held in escrow. The closing is expected to occur in June 2007. No assurance can be given that the sale will actually occur. As of December 31, 2006, Brookwood had property and equipment, at cost, of approximately $1,689,000, accumulated depreciation of approximately $666,000 and mortgage debt of approximately $1,234,000. On April 30, 2007, Shadowood Apartments, Ltd. ("Shadowood") 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 purchase price of $809,918. The sales documents have been executed and the initial deposit funds are being held in escrow. The closing is expected to occur in June 2007. No assurance can be given that the sale will actually occur. As of December 31, 2006, Shadowood had property and equipment, at cost, of approximately $955,000, accumulated depreciation of approximately $373,000 and mortgage debt of approximately $726,000. On April 30, 2007, Heflin Hills Apartments L.P. ("Heflin Hills") 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 purchase price of $865,000. The sales documents have been executed and the initial deposit funds are being held in escrow. The closing is expected to occur in June 2007. No assurance can be given that the sale will actually occur. As of December 31, 2006, Heflin Hills had property and equipment, at cost, of approximately $974,000, accumulated depreciation of approximately $384,000 and mortgage debt of approximately $725,000. On April 30, 2007, Hidden Valley Apartments, Ltd. ("Hidden Valley") 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 purchase price of $1,400,000. The sales documents have been executed and the initial deposit funds are being held in escrow. The closing is expected to occur in June 2007. No assurance can be given that the sale will actually occur. As of December 31, 2006, Hidden Valley had property and equipment, at cost, of approximately $1,862,000, accumulated depreciation of approximately $722,000 and mortgage debt of approximately $1,176,000. On April 30, 2007, West Hill Apartments, L.P. ("West Hill") 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 purchase price of $861,688. The sales documents have been executed and the initial deposit funds are being held in escrow. The closing is expected to occur in June 2007. No assurance can be given that the sale will actually occur. As of December 31, 2006, West Hill had property and equipment, at cost, of approximately $1,060,000, accumulated depreciation of approximately $400,000 and mortgage debt of approximately $749,000. On April 30, 2007, Windsor Place, L.P. ("Windsor") 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 purchase price of $896,688. The sales documents have been executed and the initial deposit funds are being held in escrow. The closing is expected to occur in June 2007. No assurance can be given that the sale will actually occur. As of December 31, 2006, Windsor had property and equipment, at cost, of approximately $1,016,000, accumulated depreciation of approximately $395,000 and mortgage debt of approximately $747,000. 66 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 Freedom Associates L.P. and Freedom G.P. Inc., the general partners of the Partnership, have evaluated the effectiveness of the Partnership'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. In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and our management necessarily applied its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer of Freedom Associates L.P. and Freedom G.P. Inc., the general partners of the Partnership, concluded that, as of the period covered by this report, our disclosure controls and procedures were (1) designed to ensure that material information relating to us, including our consolidated subsidiaries, is made known to the Chief Executive Officer and Chief Financial Officer of Freedom Associates L.P. and Freedom G.P. Inc., the general partners of the Partnership, by others within those entities, particularly during the period in which this report was being prepared and (2) effective, in that they provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. (b) CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING. There have not been any changes in the Partnership'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 Partnership's internal control over financial reporting. Item 9B. Other Information None. 67 PART III Item 10. Directors and Executive Officers and Corporate Governance The Partnership has no directors or executive officers. The Partnership's affairs are managed and controlled by the General Partners. On November 25, 1997, an affiliate of the Related General Partner purchased 100% of the stock of the Freedom General Partner. Prior to such purchase the Freedom General Partner was an affiliate of Lehman Brothers. The Partnership has not adopted a separate code of ethics because the Partnership has no directors or executive officers. However, the ultimate parent of the General Partners, 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 Director, President, Chief Executive Officer and Chief Financial Officer of the general partner of the Related General Partner. Centerline has named Robert L. Levy as Chief Financial Officer and Andrew J. Weil as Chief Executive Officer to replace Mr. Hirmes. Certain information concerning the directors and executive officers of each of the General Partners is set forth below. The Related General Partner --------------------------- Related Freedom Associates Inc., ("RFAI") is the sole general partner of Related Freedom Associates L.P. Name Position ----------------- ---------------------------------- Robert L. Levy Chief Financial Officer Andrew J. Weil President, Chief Executive Officer Marc D. Schnitzer Senior Vice President 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 acquisition of properties generating 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 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. 68 The Freedom General Partner --------------------------- The officers and directors of the Freedom General Partner are as follows: Name Position ----------------- ---------------------------------- Robert L. Levy Chief Financial Officer Andrew J. Weil President, Chief Executive Officer Marc D. Schnitzer Executive Vice President Glenn F. Hopps Treasurer Biographical information with respect to Messrs. Levy, Weil, Schnitzer and Hopps is set forth above. Item 11. Executive Compensation The Partnership has no officers or directors. The Partnership does not pay or accrue any fees, salaries or other forms of compensation to directors or officers of the General Partners for their services. However, under the terms of the Partnership Agreement, the General Partners and their affiliates are entitled to receive compensation from the Partnership in consideration of certain services rendered to the Partnership by such parties. In addition, the General Partners collectively hold a 1% interest in all profits, losses and distributions attributable to operations and a subordinated 15% interest in such items attributable to sales and refinancings. Certain directors and officers of the General Partners receive compensation from the General Partner and their affiliates for services performed for various affiliated entities which may include services performed for the Partnership. The maximum annual partnership management fee paid to the General Partner is 0.5% of invested assets. See Note 7 to the Financial Statements in Item 8 above, which is incorporated herein by reference. 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 Partnership 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 Stockholder Matters

~~Years~~Name ~~Ended~~and ~~March~~Address ~~31,~~of Amount and Nature of Title of Class Beneficial Ownership Beneficial Ownership Percentage of Class -------------------------- ---- ~~2006 2005 2004~~ -------- --------- -------- ~~Local administrative fee (d) $ 17,350 $ 21,693 $ 18,500~~ ------------ -------- ------------ ~~Total~~General ~~general~~Partnership ~~and~~Related ~~administrative-General~~Freedom ~~Partners 17~~$1,~~350~~000 ~~21,693~~capital ~~18,500s~~50% ~~--------~~Interest ~~--------~~in the Partnership Associates L.P. contribution -~~-------~~ ~~Property~~625 ~~management~~Madison ~~fees~~Avenue ~~incurred~~directly toowned ~~affiliates~~New ofYork, ~~the~~NY ~~Local~~10022 General ~~Partners~~Partnership ~~(c)~~Freedom ~~374,338~~GP ~~409,593~~Inc. ~~412~~$1,~~504~~000 ~~--------~~capital ~~--------~~50% ~~--------~~Interest ~~Total~~in ~~general~~the ~~and~~Partnership ~~administrative-related~~625 ~~parties~~Madison ~~$391,688~~Avenue ~~$431,286~~contribution ~~$431~~- New York,~~004~~ ~~========~~NY ~~========~~10022 ~~========~~directly owned

Freedom SLP L.P., a limited partnership whose general partners are the General Partners of the Partnership and which acts as the special limited partner of each Local Partnership, has either a .01% or 1% interest in each Local Partnership. Except as set forth below, no person (other than the Assignor Limited Partner) was known by the Partnership to be the beneficial owner of more than five percent of the limited partnership interests in the Partnership and/or BACs and neither the General Partners nor any director or officer of the General Partners owns any Limited Partnership Interests or BACs.

~~2005~~Amount ~~2004~~and ~~2003~~Nature of Percentage Name of Beneficial Owner (1) Beneficial Ownership of Class ----------------------------------------- -------------------- ----------- ~~Financial~~Lehigh ~~statement~~Tax ~~Net~~Credit ~~loss $(3~~Partners,~~792,044)~~ ~~$(4~~Inc. 8,~~219,638~~375.66(2) $(3~~,754,964~~) ~~Difference~~11.5% ~~resulting~~J. ~~from~~Michael ~~parent~~Fried ~~company~~8,375.66(2) ~~having~~(3) a(4) ~~different~~11.5% ~~fiscal~~Alan ~~year~~P. ~~for~~Hirmes ~~income~~8,375.66(2) ~~tax and financial reporting purposes~~ (~~369,620~~3) ~~376,180~~ (~~17,957~~4) ~~Difference~~11.5% ~~between~~Stuart ~~depreciation~~J. ~~and~~Boesky ~~amortization~~8,375.66(2) ~~expense~~(3) ~~recorded~~(4) ~~for~~11.5% ~~financial~~Marc ~~statement~~D. ~~and~~Schnitzer ~~income~~- ~~tax~~- ~~reporting~~Robert ~~purposes~~L. ~~(554,379)~~Levy ~~468,213~~- ~~386,864~~- ~~Provisions~~Andrew ~~for~~J. ~~loss~~Weil on- ~~impairment~~- ~~555,000~~Glenn 0F. 0Hopps ~~Tax~~-~~exempt~~ ~~interest~~- ~~income~~All ~~(1,326)~~directors ~~(40)~~and ~~(25)~~executive ~~Other~~officers ~~496,704~~of ~~(154,830)~~RFAI ~~48,724~~and ~~-----------~~The ~~-----------~~Freedom ~~-----------~~General ~~Net~~Partner ~~loss~~ as ~~shown~~a ongroup ~~the~~(six ~~Partnership's~~persons) ~~income tax returns $(3~~8,~~665,665~~375.66(2) $(3~~,530,115~~) $(~~3,337,358~~4) ~~=========== =========== ===========~~11.5%

(1) The address for each of the persons in the table is 625 Madison Avenue, New York, New York 10022. (2) As set forth in schedule 13D filed by the Partnership, Lehigh Tax Credit L.L.C. ("Lehigh") and Lehigh Tax Credit Partners, Inc. (the "Managing Member") on October 24, 1997 with the Securities and Exchange Commission (the 69 "Commission") and pursuant to a letter agreement dated August 26, 1997 among the Partnership, Lehigh and Related Freedom Associates L.P. ("RFA") (the "Standstill Agreement"), Lehigh agreed that, prior to August 26, 2007 (the "Standstill Expiration Date"), it will not and it will cause certain affiliates (including Lehigh Tax Credit Partners II, LLC ("Lehigh II")) not to (i) acquire, attempt to acquire or make a proposal to acquire, directly or indirectly, more than 45% (including BACs acquired through all other means) of the outstanding BACs, (ii) seek to propose to enter into, directly or indirectly, any merger, consolidation, business combination, sale or acquisition of assets, liquidation, dissolution or other similar transaction involving the Partnership, (iii) make, or in any way participate, directly or indirectly, in any "solicitation" of "proxies" or "consents" (as such terms are used in the proxy rules of the Commission) to vote any voting securities of the Partnership, (iv) form, join or otherwise participate in a "group" (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any voting securities of the Partnership, except that those affiliates bound by the Standstill Agreement will not be deemed to have violated it and formed a "group" solely by acting in accordance with the Standstill Agreement, (v) disclose in writing to any third party any intention, plan or arrangement inconsistent with the terms of the Standstill Agreement, or (vi) loan money to, advise, assist or encourage any person in connection with any action inconsistent with the terms of the Standstill Agreement. In addition, Lehigh agreed that until the Standstill Expiration Date it will not sell any BACs acquired by it unless the buyer of such BACs agrees to be bound by the Standstill Agreement; provided, however, Lehigh may make transfers in the secondary market to any purchaser which represents that following such sale it will not own three percent (3%) or more of the BACs outstanding. By the terms of the Standstill Agreement, Lehigh also agreed to vote its BACs in the same manner as a majority of all voting BACs holders; provided, however, Lehigh is entitled to vote its BACs as it determines with regard to any proposal (i) to remove RFA as a general partner of the Partnership or (ii) concerning the reduction of any fees, profits, distributions or allocations for the benefit of RFA or its affiliates. (3) As of May 8, 2007, Lehigh held 4,192.83 BACs and Lehigh II held 4,182.83 BACs which constitutes approximately 11.5% of the outstanding BACs owned. (4) Each such party serves as a director and executive officer of the Managing Member and owns an equity interest therein, except J. Michael Fried, Stuart J. Boesky and Alan P. Hirmes, who own only an economic interest. Item 13. Certain Relationships and Related Transactions; Director Independence The Partnership has and will continue to have certain relationships with the General Partners and their affiliates, as discussed in Item 11 which is incorporated herein by reference thereto. However, there have been no direct financial transactions between the Partnership and the directors and officers of the General Partners. Item 14. Principal Accountant Fees and Services Audit Fees ---------- The aggregate fees by Friedman LLP and its affiliates for professional services rendered for the audit of the Partnership's annual consolidated financial statements for the years ended March 31, 2007 and 2006 and for the reviews of the consolidated financial statements included in the Partnership's Quarterly Reports on Form 10-Q for those years were $70,000 and $163,500, respectively. Audit Related Fees ------------------ None Tax Fees -------- The aggregate fees by Weiser LLP and its affiliates for professional services rendered for the preparation of the Partnership's annual tax returns for the years ended December 31, 2006 and 2005 were $8,900 and $8,700, respectively. All Other Fees -------------- None The Partnership is not required to have, and does not have, a stand-alone audit committee. 70 PART IV Item 15. Exhibits and Consolidated Financial Statement Schedules Sequential Page ---------- (a) 1. Consolidated Financial Statements --------------------------------- Report of Independent Registered Public Accounting Firm 19 Consolidated Balance Sheets as of March 31, 2007 and 2006 47 Consolidated Statements of Operations for the years ended March 31, 2007, 2006 and 2005 48 Consolidated Statements of Changes in Partners' Capital (Deficit) for the years ended March 31, 2007, 2006 and 2005 49 Consolidated Statements of Cash Flows for the years ended March 31, 2007, 2006 and 2005 50 Notes to Consolidated Financial Statements 51 (a) 2. Consolidated Financial Statement Schedules ------------------------------------------ Report of Independent Registered Public Accounting Firm 78 Schedule I - Condensed Financial Information of Registrant 79 Schedule III - Real Estate and Accumulated Depreciation 82 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 -------- (3A) The Partnership's Amended and Restated Agreement of Limited Partnership, incorporated herein as an exhibit by reference to Exhibit A to the Partnership's Prospectus, dated February 9, 1990, as supplemented by supplements thereto dated December 7, 1990, May 10, 1991, July 10, 1991 and July 23, 1991 (as so supplemented, the "Prospectus"), filed with the Securities and Exchange Commission on July 30, 1992, as part of Post-Effective Amendment No. 6 to the Partnership's registration statement on Form S-11, File No. 33-30859 ("Post-Effective Amendment No. 6") (3B) The Partnership's Certificate of Limited Partnership, as filed with Secretary of State of the State of Delaware on August 28, 1989, incorporated herein as an exhibit by reference to Exhibit (3C) to the Partnership's registration statement on Form S-11, File No. 33-30859, as filed with the Securities and Exchange Commission on September 1, 1989 (the "Initial S-11") (10A) Form of Subscription Agreement, incorporated herein as an exhibit by reference to Exhibit B to the Prospectus as filed as part of Post-Effective Amendment No. 6 (10B) Form of Purchase and Sale Agreement pertaining to the Partnership's acquisition of Local Partnership Interests, incorporated herein as an exhibit by reference to Exhibit (10C) to the Initial S-11 (10C) Form of Amended and Restated Agreement of Limited Partnership of Local Partnerships, incorporated herein as an exhibit by reference to Exhibit (10D) to Pre-Effective Amendment No. 1 to the Partnership's registration statement on Form S-11, File No. 33-30859, as filed with the Securities and Exchange Commission on December 21, 1989 (21) Subsidiaries of the Registrant 72 (31.1) Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) 75 (31.2) Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) 76 (32.1) Certification Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Title 18 of the United States Coded (18 U.S.C. 1350) 77 71 Item 15. Exhibits and Consolidated Financial Statement Schedules (continued) Jurisdiction of Organization ------------ (c) Subsidiaries of the Registrant (Exhibit 21) ------------------------------------------- Twin Trees Apartments UT Bennion Park Apartments (Mulberry) UT Hunters Chase Apartments AL Wilshire Park Apartments AL Bethel Park Apartments OH Zebulon Park Apartments OH Tivoli Place Apartments TN Northwood Apartments FL Oxford Trace Apartments SC Ivanhoe Apartments Limited Partnership UT Washington Brooklyn Limited Partnership NY C.H. Development Group Associates (Manhattan B) NY Davidson Court Limited Partnership NY Magnolia Mews Limited Partnership PA CLM Equities Limited Partnership (Morris Avenue) NY Victoria Manor Associates CA Ogontz Hall Investors PA Eagle Ridge Limited Partnership WI Nelson Anderson Affordable Housing Limited Partnership NY Conifer Irondequoit Associates (Abraham Lincoln) NY Middletown Associates (Wilson Street) PA Lauderdale Lakes Associates, Ltd. FL Flipper Temple Associates Limited Partnership GA 220 Cooper Street Associates Limited Partnership NJ Pecan Creek OK 363 Grand Vendome Associates Limited Partnership NY New Augusta Ltd. (Rainer Villas) AL Pine Shadow Apartments MS Windsor Place Apartments AL Brookwood Apartments, Ltd. AL Heflin Hills Apartments, Ltd. AL Shadowood Apts., Ltd. AL Brittany Associates, Ltd. MS Hidden Valley Apartments AL Westbrook Square Limited Partnership MS Warsaw Elderly Housing Ltd. (Royal Pines Apts.) KY West Hill Square Apts., Ltd. AL Elmwood Associates MS Harmony Gate Associates CA 72 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. FREEDOM TAX CREDIT PLUS L.P. By: RELATED FREEDOM ASSOCIATES L.P. a general partner By: RELATED FREEDOM ASSOCIATES INC., a general partner Date: June 25, 2007 ------------- By: /s/ Robert L. Levy ------------------ Robert L. Levy Chief Financial Officer Date: June 25, 2007 ------------- By: /s/ Andrew J. Weil ------------------ Andrew J. Weil President, Chief Executive Officer By: FREEDOM GP INC. a general partner Date: June 25, 2007 ------------- By: /s/ Robert L. Levy ------------------ Robert L. Levy Chief Financial Officer Date: June 25, 2007 ------------- By: /s/ Andrew J. Weil ------------------ Andrew J. Weil President, Chief Executive Officer 73 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the report has been signed below by the following persons on behalf by the registrant and in the capacities and on the dates indicated: Signature Title Date ------------------ ---------------------------------------- --------------- /s/ Robert L. Levy Chief Financial Officer (Principal ------------------ Financial Officer) of Related Freedom June 25, 2007 Robert L. Levy Associates, Inc. and Freedom GP Inc. ------------- President and Chief Executive Officer /s/ Andrew J. Weil (Principal Executive Officer) of June 25, 2007 ------------------ Related Freedom Associates, Inc. and ------------- Andrew J. Weil Freedom GP Inc. /s/ Glenn F. Hopps Treasurer (Principal Accounting Officer) June 25, 2007 ------------------ of Related Freedom Associates, Inc. ------------- Glenn F. Hopps 74 Exhibit 31.1 CERTIFICATION PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a) I, Robert L. Levy, certify that: 1. I have reviewed this annual report on Form 10-K for the period ended March 31, 2007 of Freedom Tax Credit Plus L.P.; 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 annual report; 3. Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the consolidated 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 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 25, 2007 ------------- By: /s/ Robert L. Levy ------------------ Robert L Levy Chief Financial Officer 75 Exhibit 31.2 CERTIFICATION PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a) I, Andrew J Weil, certify that: 1. I have reviewed this annual report on Form 10-K for the period ended March 31, 2007 of Freedom Tax Credit Plus L.P.; 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 annual report; 3. Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the consolidated 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 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 25, 2007 ------------- By: /s/ Andrew J. Weil ------------------ Andrew J. Weil Chief Executive Officer 76 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 Freedom 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 25, 2007 June 25, 2007 77 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON FINANCIAL STATEMENT SCHEDULES To the Partners Freedom Tax Credit Plus L.P. and Subsidiaries Under date of June 18, 2007, we reported on the consolidated balance sheets of Freedom Tax Credit Plus 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 each of the years in the three-year period ended March 31, 2007. In connection with our audits of the aforementioned consolidated financial statements, we have also audited supporting Schedule I as of March 31, 2007 and 2006 and for the years ended March 31, 2007, 2006 and 2005, and Schedule III as of March 31, 2007 and for the years ended March 31, 2007, 2006 and 2005. These supporting schedules are the responsibility of the Partnerships' management. Our responsibility is to express an opinion on these schedules based on our audits. In our opinion, these schedules present fairly, when read in conjunction with the related consolidated financial statements, the financial data required to be set forth therein. /s/ Friedman LLP New York, New York June 18, 2007 78 FREEDOM TAX CREDIT PLUS L.P. SCHEDULE I CONDENSED SCHEDULE OF FINANCIAL INFORMATION OF REGISTRANT Summarized condensed financial information of registrant (not including consolidated subsidiary partnerships) CONDENSED BALANCE SHEETS

ASSETS March 31, ~~March~~--------------------------- ~~31,~~2007 2006 ~~2005~~ ------------ ------------ ~~Assets~~Cash ~~Property~~ and ~~equipment~~cash -equivalents ~~less accumulated depreciation of~~ $~~35,174,311~~ ~~and $0 and~~4, ~~respectively $31~~998,~~269,354~~494 $ ~~0 Cash and cash equivalents 1~~2,~~267~~281,~~871~~735 0Investment ~~Cash held~~ in ~~escrow~~subsidiary 1partnerships,~~219,590~~ 0carried ~~Deferred~~on ~~costs,~~an ~~net~~equity ofbasis ~~accumulated amortization of $2~~4,~~088~~084,~~679~~185 ~~and $0~~3, ~~respectively 288~~090,~~819~~682 ~~0 Other assets 755,335 0~~ ------------ ------------ Total assets $34 9,~~800~~082,~~969~~679 $ 05,372,417 ============ ============ ~~Liabilities~~LIABILITIES ~~Mortgage~~AND ~~notes~~PARTNERS' ~~payable~~CAPITAL (DEFICIT) Due to general partner and affiliates $26 3,~~468~~016,~~361~~292 $ 09,314,244 Accounts payable and other liabilities 145,099 1,~~339~~969,~~733~~046 0------------ ~~Due~~------------ toTotal ~~local~~liabilities ~~general~~3,161,391 ~~partners and affiliates 656~~11,~~543~~283,290 0------------ ~~Due~~------------ toPartners' ~~general~~capital ~~partners~~(deficit) ~~and affiliates 270~~5,~~000~~921,288 ~~0 Minority interest 4~~(5,~~189~~910,~~575~~873) 0 ------------ ------------ Total liabilities and partners' capital (deficit) $32 9,~~924~~082,~~212~~679 $ 05,372,417 ============ ============

Investments in subsidiary partnerships are recorded in accordance with the equity method of accounting, wherein the investments are not reduced below zero. Accordingly, partners' equity on the consolidated balance sheet will differ from partners' equity shown above. 79 FREEDOM TAX CREDIT PLUS L.P. SCHEDULE I CONDENSED SCHEDULE OF FINANCIAL INFORMATION OF REGISTRANT CONDENSED STATEMENTS OF OPERATIONS

Years Ended March 31, -------------------------------------------- 2007 2006 2005 ~~2004~~ ------------ ------------ ------------ ~~Revenues~~Income ~~Rental~~Other income $ 8350,~~097,951~~007 $ 8171,~~202,445~~862 $ 810,~~200,242~~404 ~~Other (Note 2) 556,028 569,378 511,395~~ Loss on sale of properties (~~Note 10) (81~~545,~~351~~346) 0 0 ------------ ------------ ------------ Total ~~revenue~~(loss) 8income (195,~~572,628~~339) 8171,~~771,823~~862 810,~~711,637~~404 ------------ ------------ ------------ Expenses ~~Repairs~~Equity ~~and~~in ~~maintenance~~losses ~~1,453,668~~of ~~1,499,037~~subsidiary ~~1,247,773~~partnerships ~~Operating and other 1~~(13,~~320~~126,~~262~~658) ~~1,306,877 1,182,711 Real estate taxes 573,928 600,170 538,619 Interest~~ 2,~~230~~651,~~700~~688 23,~~316~~163,~~656~~835 ~~2,371,279 Depreciation and amortization 2,574,238 2,676,309 2,671,096~~ General and administrative 1416,~~564,524~~597 1238,~~610,758~~053 1115,~~579,827~~972 General and administrative-related parties ~~(Note 8) 391~~682,~~688~~561 ~~431~~1,~~286 431~~074,~~004~~165 ~~Loss on impairment of fixed assets 555~~950,~~000~~235 ~~0 0~~ ------------ ------------ ------------ Total expenses ~~10,664,008 10,441,093 10,022,309 ------------ ------------ ------------ Loss from discontinued operations before minority interest~~ (212,~~091~~027,~~380~~500) (13,~~669~~963,~~270)~~906 (14,~~310~~230,~~672)~~042 ~~Minority interest in loss of subsidiaries from discontinued operations 1,545,836 20,744 15,602~~ ------------ ------------ ------------ ~~Loss~~Net ~~from~~income ~~discontinued operations~~ (~~including~~ loss ~~on sale of properties~~) $ ~~(545~~11,~~544) $ (1~~832,~~648,526)~~161 $ (13,~~295~~792,~~070~~044) ~~============ ============ ============ Loss - limited partners from discontinued operations (including loss on sale of properties)~~ $ (~~540~~4,~~089) $ (1~~219,~~632,041~~638) ~~$ (1,282,119)~~ ============ ============ ============ Number of BACs outstanding 72,896 72,896 72,896 ============ ============ ============ Loss discontinued operations (including loss on sale of properties) per BAC $ (7.41) $ (22.39) $ (17.59) ============ ============ ============ Years Ended March 31, -------------------------------------------- 2006 2005 2004 ------------ ------------ ------------ Cash flows from discontinued operations Net cash provided by operating activities $ 1,863,756 $ 2,356,869 $ 2,990,676 Net cash provided by (used in) investing activities $ 1,388,096 $ (413,619) $ (688,417) Net cash used in financing activities $ (1,599,712) $ (705,722) $ (635,646)

80 FREEDOM TAX CREDIT PLUS L.P. SCHEDULE I CONDENSED SCHEDULE OF FINANCIAL INFORMATION OF REGISTRANT CONDENSED STATEMENTS OF CASH FLOWS

~~Quarter~~Years Ended March 31, --------------------------------------------~~------------~~ ~~June~~2007 ~~30,~~2006 ~~September 30, December 31, March 31, OPERATIONS~~ 2005* ~~2005* 2005* 2006~~ ------------~~-----------------------------------~~ ----------- -~~----------~~ ----------- -~~----------~~ ~~Revenues~~Net $income ~~1,964,158~~(loss) $ 111,~~884~~832,~~799~~161 $ ~~1,894,565 $ 2,196,234 Total expenses~~ (23,~~639~~792,~~359~~044) ~~(2,805,650)~~$ (24,~~645~~219,~~491~~638) ~~(3,130,583)~~ ----------- -~~----------~~ ------------ ------------ ~~Loss~~Adjustments ~~from~~to ~~continuing~~reconcile ~~operations~~net ~~before~~loss ~~minority~~to ~~interest~~net ~~(675,201)~~cash ~~(920,851)~~provided ~~(750,926)~~by (~~934,349~~used in) ~~Minority~~operating ~~interest~~activities: Equity in ~~loss~~(income) losses of ~~subsidiaries~~subsidiary ~~from~~partnerships ~~operations 10~~(13,~~381 4~~126,~~313~~658) 52,~~586~~651,688 143,~~547~~163,835 ~~----------- ----------- ----------- -----------~~ Loss ~~from~~on ~~continuing~~sale ~~operations (664~~545,~~820)~~346 ~~(916~~81,~~538)~~351 ~~(745,340)~~0 ~~(919,802)~~Increase (~~Loss~~decrease) ~~income~~in ~~from~~liabilities: ~~discontinued~~Due ~~operations~~to ~~(including~~general ~~minority~~partner ~~interest)~~and ~~(954,152)~~affiliates (~~184~~6,~~081~~297,952) ~~(245~~913,~~981)~~706 ~~838~~969,~~670~~889 ~~-----------~~Deferred ~~-----------~~revenue ~~-----------~~from ~~-----------~~sale ~~Net~~of ~~loss~~properties ~~$(1,618,972)~~0 $(1,~~100~~888,~~619)~~040 $0 ~~(991,321)~~Accounts $payable ~~(81,132)~~and ~~===========~~other ~~===========~~liabilities ~~=========== =========== Net loss - limited partnership $~~(1,~~602~~921,~~782~~958) ~~$(1~~26,~~089,613)~~756 ~~$ (981~~9,~~408)~~958 $ (80,321) =========== =========== =========== =========== Loss per weighted average BAC from operations $ (9.03) $ (12.45) $ (10.12) $ (12.49) (Loss) income per weighted average BAC from discontinued operations (12.96) (2.50) (3.34) 11.39 ----------- -~~----------~~ ------------ ------------ ~~Net~~Total ~~loss~~adjustments ~~per weighted average BAC $~~ (~~21.99~~20,801,222) $5,561,541 ~~(14.95)~~4,143,682 ~~$ (13.46) $ (1.10) =========== =========== =========== =========== Quarter Ended~~ ------------ ------------ ------------~~--------------------~~ ~~June~~Net ~~30,~~cash ~~September~~(used ~~30,~~in) ~~December~~provided ~~31,~~by ~~March~~operating 31activities (8,969,061) ~~OPERATIONS~~1,769,497 2004*(75,956) 2004* 2004* 2005* ------------~~-----------------------------------~~ ----------- -~~----------~~ ----------- -~~----------~~ ~~Revenues~~Cash $flows ~~1,910,731~~from $investing ~~1,933,616~~activities: $Distributions ~~1,927,076~~from $subsidiaries 211,~~036~~349,~~435~~453 ~~Total expenses (2~~24,~~469,356)~~060 (2138,~~567,181)~~247 ~~(2,385,873)~~Distributions (26,~~979~~995,~~341~~071) ~~-----------~~0 ~~-----------~~0 Contributions -~~----------~~ write-~~----------~~off ~~Loss~~of ~~from~~partnership ~~continuing~~management ~~operations~~fees ~~before~~related ~~minority~~to ~~interest~~sold ~~(558,625)~~properties ~~(633~~4,~~565) (458~~095,~~797)~~540 ~~(942,906)~~0 ~~Minority~~0 ~~interest~~Contributions infrom ~~loss~~related ofparty ~~subsidiaries~~sales ~~from operations 4~~3,~~453 5~~235,~~144~~898 2406,~~294~~907 ~~10,890~~0 ----------- -~~----------~~ ------------ ------------ ~~Loss~~Net ~~from~~cash ~~continuing~~provided ~~operations~~by ~~(554,172)~~investing ~~(628,421)~~activities ~~(456~~11,~~503) (932~~685,~~016)~~820 ~~(Loss) income from discontinued operations (including minority interest) (504~~430,~~082)~~967 ~~(300~~138,~~301)~~247 ~~(464,268) (379,875)~~ ----------- -~~----------~~ ------------ ------------ Net ~~loss~~increase ~~$(1,058,254)~~in $cash ~~(928,722)~~and $cash ~~(920~~equivalents 2,~~771)~~716,759 ~~$(1~~2,~~311~~200,~~891)~~464 ~~===========~~62,291 ~~===========~~Cash ~~===========~~and ~~===========~~cash ~~Net~~equivalents, ~~loss~~beginning -of ~~limited~~year ~~partnership $(1~~2,~~047~~281,~~671)~~735 ~~$ (919~~81,~~435)~~271 ~~$ (911~~18,~~563)~~980 $(1,298,773) =========== =========== =========== =========== Loss per weighted average BAC from operations $ (7.52) $ (8.53) $ (6.20) $ (12.67) (Loss) income per weighted average BAC from discontinued operations (6.85) (4.08) (6.31) (5.15) ----------- -~~----------~~ ------------ ------------ ~~Net~~Cash ~~loss~~and ~~per~~cash ~~weighted~~equivalents, ~~average~~end ~~BAC~~of $year ~~(14.37)~~ $ ~~(12.61)~~4,998,494 $ ~~(12.51)~~2,281,735 $ ~~(17.82)~~81,271 =========== =~~==========~~ ============ ============

81 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS SCHEDULE III SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION MARCH 31, 2007

~~Name~~Initial ~~and~~Cost ~~address~~to ofPartnership ~~Amount~~----------------------------- Cost Capitalized Reduced Buildings and ~~Nature~~Subsequent ofto ~~Title~~Description ofEncumbrances ~~Class~~Land ~~Beneficial~~Improvements ~~Ownership~~Acquisition ~~Beneficial~~-------------------------- ~~Ownership~~------------ ~~Percentage~~------------ ------------- ------------- Parkside Townhouses York, PA (E) $ 0 $ 263,231 $ 4,439,564 $ (4,702,795) Twin Trees Layton, UT (F) 0 112,401 2,668,179 (2,569,089) Bennion (Mulberry) Taylorsville, UT (F) 0 258,000 4,934,447 (4,860,317) Hunters Chase Madison, AL (F) 0 411,100 5,616,330 (4,852,013) Bethel Park Bethel, OH (F) 0 141,320 5,365,882 (4,468,364) Zebulon Park Owensville, OH (F) 0 165,000 4,187,880 (3,593,655) Tivoli Place Murphreesboro, TN (F) 0 267,500 4,146,759 (3,887,845) Northwood Jacksonville, FL (F) 0 494,900 6,630,321 (6,284,146) Oxford Trace Aiken, SC (F) 0 162,000 1,725,512 (1,513,174) Wilshire Huntsville, AL (F) 0 178,497 4,014,281 (3,530,587) Ivanhoe Salt Lake City, UT (E) 0 41,000 1,136,915 (1,103,361) Washington Avenue Brooklyn, NY (F) 0 42,485 2,843,351 (2,809,797) C.H. Development (Manhattan B) New York, NY (F) 0 3 3,294,688 (3,261,134) Davidson Court Staten Island, NY (E) 0 96,892 773,052 (739,498) Magnolia Mews Philadelphia, PA 1,477,243 200,000 668,007 2,433,150 Oaks Village Whiteville, NC (E) 0 63,548 1,799,849 (63,548) Greenfield Village Dunn, NC (E) 0 78,296 1,806,126 (78,296) Morris Avenue (CLM Equities) Bronx, NY (E) 0 2 4,767,049 (4,733,495) Victoria Manor Riverside, CA 1,956,753 615,000 5,340,962 (153,198) Ogontz Hallz Philadelphia, PA 2,165,494 0 328,846 3,462,022 Eagle Ridge Stoughton, WI (F) 0 321,594 2,627,385 (2,593,831) Nelson Anderson Bronx, NY (E) 0 2 6,524,096 (6,490,542) Conifer Irondequoit (Abraham Lincoln) (G) Irondequoit, NY 0 20,000 5,407,108 (5,373,555) Wilson Street Apts. (Middletown) Middletown, PA 1,673,496 38,449 0 3,463,723 Lauderdale Lakes Lauderdale Lakes, FL (F) 0 873,973 3,976,744 (3,943,152) Flipper Temple Atlanta, GA 2,434,094 70,519 4,907,110 905,192 220 Cooper Street Camden, NJ 912,867 41,000 0 3,689,099 Gross Amount at which Carried at Close of ~~Class~~Period ------------------------------------------------ Purchase Price Adjustments (B) Buildings and Buildings and Description Improvements Land Improvements Total (A) -------------------------- -------------- ------------- ------------- -------------- ~~General~~Parkside ~~Partnership~~Townhouses ~~Related~~York, ~~Freedom~~PA (E) $ 0 $ 0 $ 0 $ 0 Twin Trees Layton, UT (F) (47,642) 0 0 0 Bennion (Mulberry) Taylorsville, UT (F) (22,842) 0 0 0 Hunters Chase Madison, AL (F) (713,028) 0 0 0 Bethel Park Bethel, OH (F) (846,229) 0 0 0 Zebulon Park Owensville, OH (F) (542,936) 0 0 0 Tivoli Place Murphreesboro, TN (F) (207,625) 0 0 0 Northwood Jacksonville, FL (F) (294,886) 0 0 0 Oxford Trace Aiken, SC (F) (161,049) 0 0 0 Wilshire Huntsville, AL (F) (432,405) 0 0 0 Ivanhoe Salt Lake City, UT (E) 0 0 0 0 Washington Avenue Brooklyn, NY (F) 0 0 0 0 C.H. Development (Manhattan B) New York, NY (F) 0 0 0 0 Davidson Court Staten Island, NY (E) 0 0 0 0 Magnolia Mews Philadelphia, PA 0 201,677 3,099,480 3,301,157 Oaks Village Whiteville, NC (E) 0 0 0 0 Greenfield Village Dunn, NC (E) 0 0 0 0 Morris Avenue (CLM Equities) Bronx, NY (E) 0 0 0 0 Victoria Manor Riverside, CA 0 616,677 5,186,101 5,802,778 Ogontz Hallz Philadelphia, PA 0 1,~~000~~677 ~~capital~~3,789,191 ~~50%~~3,790,868 ~~Interest~~Eagle Ridge Stoughton, WI (F) 0 0 0 0 Nelson Anderson Bronx, NY (E) 0 0 0 0 Conifer Irondequoit (Abraham Lincoln) (G) Irondequoit, NY 0 0 0 0 Wilson Street Apts. (Middletown) Middletown, PA 0 40,126 3,462,046 3,502,172 Lauderdale Lakes Lauderdale Lakes, FL (F) 0 0 0 0 Flipper Temple Atlanta, GA 0 72,196 5,810,625 5,882,821 220 Cooper Street Camden, NJ 0 42,677 3,687,422 3,730,099 Life on which Depreciation in ~~the~~Year ~~Partnership~~of ~~Associates~~Latest LIncome Accumulated Construction Date Statements are Description Depreciation Renovation Acquired Computed (C)(D) -------------------------- ------------- ------------- ------------- --------------- Parkside Townhouses York, PA (E) $ 0 1989 Sept.P 1990 27.5 ~~contribution~~Twin -Trees ~~625~~Layton, UT (F) 0 1989 Oct. 1990 27.5 Bennion (Mulberry) Taylorsville, UT (F) 0 1989 Oct. 1990 27.5 Hunters Chase Madison, AL (F) 0 1989 Oct. 1990 27.5 Bethel Park Bethel, OH (F) 0 1989 Oct. 1990 27.5 Zebulon Park Owensville, OH (F) 0 1989 Oct. 1990 27.5 Tivoli Place Murphreesboro, TN (F) 0 1989 Oct. 1990 27.5 Northwood Jacksonville, FL (F) 0 1989 Oct. 1990 27.5 Oxford Trace Aiken, SC (F) 0 1989 Oct. 1990 27.5 Wilshire Huntsville, AL (F) 0 1989 Oct. 1990 27.5 Ivanhoe Salt Lake City, UT (E) 0 1991 Jan. 1991 27.5 Washington Avenue ~~directly~~Brooklyn, ~~owned~~NY (F) 0 1991 Jan. 1991 27.5 C.H. Development (Manhattan B) New York, NY ~~10022~~(F) ~~General~~0 ~~Partnership~~1991 ~~Freedom~~Jan. GP1991 ~~Inc~~27.5 $Davidson Court Staten Island, NY (E) 0 1991 Mar. 1991 27.5 Magnolia Mews Philadelphia, PA 1,~~000~~670,089 ~~capital~~1991 ~~50%~~Mar. ~~Interest~~1991 in27.5 ~~the~~Oaks ~~Partnership~~Village ~~625~~Whiteville, ~~Madison~~NC (E) 0 1991 Mar. 1991 27.5 Greenfield Village Dunn, NC (E) 0 1991 Mar. 1991 27.5 Morris Avenue ~~contribution~~(CLM -Equities) ~~New~~Bronx, ~~York~~NY (E) 0 1991 Apr. 1991 27.5 Victoria Manor Riverside, CA 2,881,427 1991 Apr. 1991 27.5 Ogontz Hallz Philadelphia, PA 2,077,218 1990 Apr. 1991 27.5 Eagle Ridge Stoughton, WI (F) 0 1991 May 1991 27.5 Nelson Anderson Bronx, NY ~~10022~~(E) ~~directly~~0 ~~owned~~1991 June 1991 27.5 Conifer Irondequoit (Abraham Lincoln) (G) Irondequoit, NY 0 1991 Sept. 1991 27.5 Wilson Street Apts. (Middletown) Middletown, PA 1,636,581 1991 Sept. 1991 27.5 Lauderdale Lakes Lauderdale Lakes, FL (F) 0 1991 Oct. 1991 40 Flipper Temple Atlanta, GA 2,611,192 1991 Oct. 1991 27.5 220 Cooper Street Camden, NJ 2,025,766 1991 Dec. 1991 27.5

82 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS SCHEDULE III SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION MARCH 31, 2007 (continued)

~~Amount~~Initial Cost to Partnership ----------------------------- Cost Capitalized Reduced Buildings and ~~Nature~~Subsequent ofto ~~Percentage~~Description ~~Name~~Encumbrances ofLand ~~Beneficial~~Improvements ~~Owner~~Acquisition -------------------------- ------------ ------------ ------------- ------------- Vendome Brooklyn, NY 2,544,309 12,000 4,867,584 220,536 Pecan Creek Tulsa, OK 970,781 50,000 1,484,923 233,586 New Augusta Ltd. (Rainer Villas) New Augusta, AL 695,604 15,000 939,681 141,079 Pine Shadow Apts. Waveland, MS 1,610,199 74,550 2,117,989 208,141 Windsor Place Apts. Wedowee, AL 747,105 40,000 904,888 74,792 Brookwood Apts. Foley, AL 1,234,498 68,675 1,517,190 105,886 Heflin Hills Apts. Heflin, AL 724,688 50,000 841,300 86,159 Shadowood Apts. Stevenson, AL 726,458 27,000 898,800 31,951 Brittany Apartments DeKalb, MS 672,820 20,000 843,592 81,334 Hidden Valley Apts. Brewton, AL 1,176,289 68,000 1,637,840 159,016 Westbrook Square L.P. Carthage, MS 1,002,123 40,000 1,254,957 76,079 Warsaw Elderly Housing Ltd. Warsaw, KY 1,109,878 98,819 1,333,606 21,772 West Hill Square Apts.Ltd. Gordo, AL 749,499 60,000 954,020 49,459 Elmwood Assoc. Picayune, MS 691,943 81,500 829,183 70,376 Harmony Gate Assoc. Los Angeles, CA (G) ~~Beneficial~~0 ~~Ownership~~0 9,757,807 (9,754,580) Less discontinued operations 0 (3,991,744) (88,443,325) 81,203,381 ------------ ------------ ------------- ------------- $ 25,276,141 $ 1,670,512 $ 31,670,478 $ 15,356,761 ============ ============ ============= ============= Gross Amount at which Carried at Close of ~~Class~~Period ------------------------------------------------ Purchase Price Adjustments (B) Buildings and Buildings and Description Improvements Land Improvements Total (A) -------------------------- -------------- ------------- ------------- -------------- ~~Lehigh~~Vendome ~~Tax~~Brooklyn, ~~Credit~~NY ~~Partners~~0 13,677 ~~Inc.~~5,086,443 85,~~375~~100,120 Pecan Creek Tulsa, OK 0 50,161 1,718,348 1,768,509 New Augusta Ltd.66 (2Rainer Villas)~~(3)~~ 11New Augusta, AL 0 15,161 1,080,599 1,095,760 Pine Shadow Apts.5% JWaveland, MS 0 74,711 2,325,969 2,400,680 Windsor Place Apts. ~~Michael~~Wedowee, ~~Fried~~AL 80 40,~~375~~161 979,519 1,019,680 Brookwood Apts.~~66(2)(3)(4)~~ 11Foley, AL 0 68,836 1,622,915 1,691,751 Heflin Hills Apts.5% ~~Alan~~Heflin, AL 0 50,161 927,298 977,459 Shadowood Apts. Stevenson, AL 0 27,161 930,590 957,751 Brittany Apartments DeKalb, MS 0 20,161 924,765 944,926 Hidden Valley Apts. Brewton, AL 0 68,161 1,796,695 1,864,856 Westbrook Square L.P. ~~Hirmes~~Carthage, 8MS 0 40,~~375~~161 1,330,875 1,371,036 Warsaw Elderly Housing Ltd.66 Warsaw, KY 0 98,980 1,355,217 1,454,197 West Hill Square Apts.Ltd. Gordo, AL 0 60,161 1,003,318 1,063,479 Elmwood Assoc. Picayune, MS 0 81,502 896,150 977,652 Harmony Gate Assoc. Los Angeles, CA (2G)( 0 0 0 0 Less discontinued operations 3,268,642 0 0 0 -------------- ------------- ------------- -------------- $ 0 $ 1,684,185 $ 47,013,566 $ 48,697,751 ============== ============= ============= ============== Life on which Depreciation in Year of Latest Income Accumulated Construction Date Statements are Description Depreciation Renovation Acquired Computed (C)(4D) ~~11.5%~~-------------------------- ~~Stuart~~------------- J------------- ------------- --------------- Vendome Brooklyn, NY 3,678,073 1991 Dec. ~~Boesky~~1991 820 Pecan Creek Tulsa,~~375~~ OK 806,847 1991 Dec.66 1991 27.5 New Augusta Ltd. (2Rainer Villas)~~(3)(4)~~ 11New Augusta, AL 435,496 1991 Dec. 1991 27.5% ~~Marc~~Pine DShadow Apts. ~~Schnitzer~~Waveland, -MS -1,142,749 ~~Glenn~~1991 FDec. ~~Hopps~~1991 -27.5 -Windsor ~~All~~Place ~~directors~~Apts. ~~and~~Wedowee, ~~executive~~AL ~~officers~~408,586 of1991 ~~RFAI~~Dec. ~~and~~1991 ~~The~~27.5 ~~Freedom~~Brookwood ~~General~~Apts. ~~Partner~~Foley, asAL a679,947 ~~group~~1991 ~~(six~~Dec. ~~persons)~~1991 827.5 Heflin Hills Apts. Heflin,~~375~~ AL 398,009 1991 Dec.66 1991 27.5 Shadowood Apts. Stevenson, AL 386,727 1991 Dec. 1991 27.5 Brittany Apartments DeKalb, MS 376,545 1990 Dec. 1991 27.5 Hidden Valley Apts. Brewton, AL 735,574 1991 Dec. 1991 27.5 Westbrook Square L.P. Carthage, MS 561,595 1990 Dec. 1991 27.5 Warsaw Elderly Housing Ltd. Warsaw, KY 540,132 1991 Dec. 1991 27.5 West Hill Square Apts.Ltd. Gordo, AL 413,660 1991 Dec. 1991 27.5 Elmwood Assoc. Picayune, MS 354,106 1991 Dec. 1991 27.5 Harmony Gate Assoc. Los Angeles, CA (2G)~~(3)(4)~~ 110 1992 Jan. 1992 27.5% Less discontinued operations 0 ------------- $ 23,820,319 =============

(A) Aggregate cost for federal income tax purposes, $146,576,191. (B) Rental guarantees and development deficit guarantees for GAAP purposes are treated as a reduction of the asset. (C) Furniture and fixtures, included with buildings and improvements, are depreciated primarily by the straight line method over the estimated useful lives ranging from 5 to 7 years. (D) Since all properties were acquired as operating properties, depreciation is computed using primarily the straight line method over the estimated useful lives determined by the Partnership from date of acquisition. (E) The Partnership's limited partnership interest was sold during the fiscal year ended March 31, 2006. (F) The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2007. (G) The Partnership's limited partnership interest was sold during the fiscal year ended March 31, 2007. (F) The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2007. (G) The Partnership's limited partnership interest was sold during the fiscal year ended March 31, 2007. 83 FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS SCHEDULE III SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION MARCH 31, 2007 (continued) Reconciliation of Real Estate owned:

~~Sequential~~Cost ~~Page~~of Property and Equipment Accumulated Depreciation --------------------------------------------- ~~(a) 1. Financial Statements~~ --------------------------------------------- ~~Report~~Years ofEnded ~~Independent Registered Public Accounting Firm 17 Consolidated Balance Sheets as of~~ March 31, ~~2006~~--------------------------------------------------------------------------------------------- ~~and~~2007 ~~2005 60 Consolidated Statements of Operations for the years ended March 31,~~ 2006, 2005 ~~and~~2007 ~~61 2004 Consolidated Statements of Changes in Partners' Capital (Deficit) for the years ended March 31,~~ 2006, 2005 ~~and 2004 62 Consolidated Statements of Cash Flows for the years ended March 31, 2006, 2005 and 63 2004 Notes to Consolidated Financial Statements 64 (a) 2. Financial Statement Schedules~~ ------------- ------------- ------------- ~~Report of Independent Registered Public Accounting Firm 89 Schedule I~~ ------------- ~~Condensed Financial Information of Registrant 90 Schedule III~~ ------------- Real Estate and Accumulated Depreciation 93 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 ------------- ~~(3A)~~Balance ~~The~~at ~~Partnership's~~beginning ~~Amended and Restated Agreement~~ of ~~Limited~~year ~~Partnership,~~$ ~~incorporated herein as an exhibit by reference to Exhibit A to the Partnership's Prospectus~~69,847,093 ~~dated~~$ ~~February 9~~144, ~~1990~~777,331 as$ ~~supplemented by supplements thereto dated December 7~~144, ~~1990~~210,167 ~~May~~$ 1033, ~~1991~~384,359 ~~July~~$ 1068, ~~1991 and July 23~~560,673 ~~1991~~$ ~~(as so supplemented~~63, ~~the "Prospectus")~~733,516 ~~filed~~Additions ~~with~~during ~~the~~year: ~~Securities~~Improvements ~~and~~949,279 ~~Exchange Commission on July 30~~741,465 ~~1992~~749,123 asDiscontinued ~~part~~operations ofand ~~Post-Effective~~dispositions ~~Amendment No. 6 to the Partnership's registration statement on Form S-11~~(22,098,621) ~~File No. 33-30859~~ (~~"Post-Effective Amendment No. 6"~~75,671,703) (3B181,959) ~~The Partnership's Certificate of Limited Partnership~~(12, ~~as filed with Secretary of State of the State of Delaware on August 28~~020,784) ~~1989~~(39,899,656) ~~incorporated herein as an exhibit by reference to Exhibit~~ (3C706) toDepreciation ~~the~~expense ~~Partnership's registration statement on Form S-11~~2,456,744 ~~File No. 33-30859~~4,723,342 ~~as filed with the Securities and Exchange Commission on September 1~~4,827,863 ~~1989~~------------- ~~(the~~------------- ~~"Initial~~------------- S-~~11")~~------------ ~~(10A)~~------------- ~~Form of Subscription Agreement, incorporated herein as an exhibit by reference to Exhibit B to the Prospectus as filed as part of Post~~-~~Effective~~------------ ~~Amendment~~Balance ~~No.~~at 6close ~~(10B) Form~~ of ~~Purchase~~year ~~and~~$ ~~Sale~~48,697,751 ~~Agreement~~$ ~~pertaining to the Partnership's acquisition of Local Partnership Interests~~69,847,093 ~~incorporated~~$ ~~herein as an exhibit by reference to Exhibit (10C) to the Initial S-11 (10C) Form of Amended and Restated Agreement of Limited Partnership of Local Partnerships~~144,777,331 ~~incorporated~~$ ~~herein as an exhibit by reference to Exhibit (10D) to Pre-Effective Amendment No. 1 to the Partnership's registration statement on Form S-11~~23,820,319 ~~File~~$ ~~No.~~ 33~~-30859~~,384,359 as$ ~~filed with the Securities and Exchange Commission on December 21~~68,560,673 ~~1989~~============= ~~(21)~~============= ~~Subsidiaries~~============= of============= ~~the~~============= Registrant 84 (31.1) Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) 87 (32.1) Certification Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Title 88 18 of the United States Coded (18 U.S.C. 1350)=============

At the time the local partnerships were acquired by Freedom Tax Credit Plus L.P., the entire purchase price paid by Freedom Tax Credit Plus L.P. was pushed down to the local partnerships as property and equipment with an offsetting credit to capital. Since the projects were in the construction phase at the time of acquisition, the capital accounts were insignificant at the time of purchase. Therefore, there are no material differences between the original cost basis for tax and GAAP. 84

Signature Title Date ------------------ --------------------------------------------------- ------------- /s/ Alan P. Hirmes Director and President (Principal Executive and ------------------ Principal Financial Officer) of Related Freedom June 27, 2006 Alan P. Hirmes Associates,Inc. and Freedom GP Inc. ------------- /s/ Glenn F. Hopps ------------------ Treasurer (Principal Accounting Officer) of Related June 27, 2006 Glenn F. Hopps Freedom Associates, Inc. -------------

ASSETS March 31, ------------------------------ 2006 2005 ------------ ------------ Cash and cash equivalents $ 2,281,735 $ 81,271 Investment in subsidiary partnerships, carried on an equity basis 3,090,682 6,255,312 ------------ ------------ Total assets $ 5,372,417 $ 6,336,583 ============ ============ LIABILITIES AND PARTNER'S DEFICIT Due to general partner and affiliates $ 9,314,244 $ 8,400,538 Accounts payable and other liabilities 1,969,046 54,874 ------------ ------------ Total liabilities 11,283,290 8,455,412 ------------ ------------ Partners' deficit (5,910,873) (2,118,829) ------------ ------------ Total liabilities and partners' deficit $ 5,372,417 $ 6,336,583 ============ ============

Year Ended March 31, ----------------------------------------- 2006 2005 2004 ----------- ----------- ----------- Income Other income $ 171,862 $ 10,404 $ 35,374 ----------- ----------- ----------- Expenses Equity in losses of subsidiary partnerships 2,651,688 3,163,835 2,813,143 General and administrative 238,053 115,972 69,472 General and administrative-related parties 1,074,165 950,235 907,723 ----------- ----------- ----------- Total Expenses 3,963,906 4,230,042 3,790,338 ----------- ----------- ----------- Net loss $(3,792,044) $(4,219,638) $(3,754,964) =========== =========== ===========

Year Ended March 31, ----------------------------------------- 2006 2005 2004 ----------- ----------- ----------- Net loss $(3,792,044) $(4,219,638) $(3,751,426) ----------- ----------- ----------- Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Equity in losses of subsidiary partnerships 2,651,688 3,163,835 2,809,605 Loss on sale 81,351 0 0 Increase (decrease) in liabilities: Due to general partner and affiliates 913,706 969,889 900,629 Deferred revenue from sale of properties 1,888,040 0 0 Accounts payable and other liabilities 26,756 9,958 (391) ----------- ----------- ----------- Total adjustments 5,561,541 4,143,682 3,709,843 ----------- ----------- ----------- Net cash provided by (used in) operating activities 1,769,497 (75,956) (41,583) ----------- ----------- ----------- Cash flows from investing activities: Distributions from subsidiaries 24,060 138,247 15,544 Contributions from related party sales 406,907 0 0 ----------- ----------- ----------- Net cash provided by investing activities 430,967 138,247 15,544 ----------- ----------- ----------- Net increase (decrease) in cash and cash equivalents 2,200,464 62,291 (26,039) Cash and cash equivalents, beginning of year 81,271 18,980 45,019 ----------- ----------- ----------- Cash and cash equivalents, end of year $ 2,281,735 $ 81,271 $ 18,980 =========== =========== ===========

Initial Cost to Partnership --------------------------- Cost Purchase Price Capitalized Adjustments (B) Buildings and Subsequent to Buildings and Description Encumbrances Land Improvements Acquisition Improvements ------------------------------------- ------------ ----------- ------------- ------------- --------------- Parkside Townhouses York, PA (E) $ 0 $ 263,231 $ 4,439,564 $(4,702,795) $ 0 Twin Trees Layton, UT (F) 1,047,306 112,401 2,668,179 243,080 (47,642) Bennion (Mulberry) Taylorsville, UT (F) 1,994,354 258,000 4,934,447 835,758 (22,842) Hunters Chase Madison, AL (F) 2,296,266 411,100 5,616,330 (1,350,349) (713,028) Bethel Park Bethel, OH (F) 1,758,335 141,320 5,365,882 489,449 (846,229) Zebulon Park Owensville, OH (F) 1,478,441 165,000 4,187,880 434,527 (542,936) Tivoli Place Murphreesboro, TN (F) 1,409,208 267,500 4,146,759 410,466 (207,625) Northwood Jacksonville, FL (F) 2,545,103 494,900 6,630,321 619,169 (294,886) Oxford Trace Aiken, SC (F) 658,170 162,000 1,725,512 (576,103) (161,049) Wilshire Huntsville, AL (F) 1,574,484 178,497 4,014,281 (794,635) (432,405) Ivanhoe Salt Lake City, UT (E) 322,986 41,000 1,136,915 33,554 0 Washington Avenue Brooklyn, NY 325,000 42,485 2,843,351 73,904 0 C.H. Development (Manhattan B) New York, NY 1,258,929 3 3,294,688 (164,887) 0 Davidson Court Staten Island, NY (E) 0 96,892 773,052 37,064 0 Magnolia Mews Philadelphia, PA 1,520,971 200,000 668,007 2,419,836 0 Oaks Village Whiteville, NC (E) 0 63,548 1,799,849 (1,863,397) 0 Greenfield Village Dunn, NC (E) 0 78,296 1,806,126 (1,884,422) 0 Morris Avenue (CLM Equities) Bronx, NY (E) 2,079,467 2 4,767,049 598,304 0 Victoria Manor Riverside, CA 2,036,689 615,000 5,340,962 (153,198) 0 Ogontz Hallz Philadelphia, PA 2,175,375 0 328,846 3,454,664 0 Eagle Ridge Stoughton, WI (F) 1,496,198 321,594 2,627,385 184,877 0 Nelson Anderson Bronx, NY (E) 3,162,790 2 6,524,096 241,687 0 Conifer Irondequoit (Abraham Lincoln) Irondequoit, NY 2,657,591 20,000 5,407,108 96,415 0 Wilson Street Apts. (Middletown) Middletown, PA 1,673,496 38,449 0 3,461,004 0 Lauderdale Lakes Lauderdale Lakes, FL (F) 4,645,253 873,973 3,976,744 5,817,148 0 Flipper Temple Atlanta, GA 2,461,135 70,519 4,907,110 699,720 0 220 Cooper Street Camden, NJ 922,071 41,000 0 3,686,468 0 Gross Amount at which Carried at Close of Period ------------------------------------------------ Buildings and Description Land Improvements Total(A) ------------------------------------- ----------- ------------- ------------ Parkside Townhouses York, PA (E) $ 0 $ 0 $ 0 Twin Trees Layton, UT (F) 115,125 2,860,882 2,976,007 Bennion (Mulberry) Taylorsville, UT (F) 260,565 5,744,798 6,005,363 Hunters Chase Madison, AL (F) 413,665 3,550,388 3,964,053 Bethel Park Bethel, OH (F) 143,885 5,006,537 5,150,422 Zebulon Park Owensville, OH (F) 167,565 4,076,906 4,244,471 Tivoli Place Murphreesboro, TN (F) 270,065 4,347,035 4,617,100 Northwood Jacksonville, FL (F) 497,465 6,952,039 7,449,504 Oxford Trace Aiken, SC (F) 164,564 985,796 1,150,360 Wilshire Huntsville, AL (F) 181,060 2,784,678 2,965,738 Ivanhoe Salt Lake City, UT (E) 41,000 1,136,929 1,177,929 Washington Avenue Brooklyn, NY 44,162 2,915,578 2,959,740 C.H. Development (Manhattan B) New York, NY 1,680 3,128,124 3,129,804 Davidson Court Staten Island, NY (E) 96,892 776,576 873,468 Magnolia Mews Philadelphia, PA 201,677 3,086,166 3,287,843 Oaks Village Whiteville, NC (E) 0 0 0 Greenfield Village Dunn, NC (E) 0 0 0 Morris Avenue (CLM Equities) Bronx, NY (E) 2 5,331,827 5,331,829 Victoria Manor Riverside, CA 616,677 5,186,101 5,802,778 Ogontz Hallz Philadelphia, PA 1,677 3,781,833 3,783,510 Eagle Ridge Stoughton, WI (F) 323,271 2,810,585 3,133,856 Nelson Anderson Bronx, NY (E) 2 6,732,243 6,732,245 Conifer Irondequoit (Abraham Lincoln) Irondequoit, NY 21,677 5,501,846 5,523,523 Wilson Street Apts. (Middletown) Middletown, PA 40,126 3,459,327 3,499,453 Lauderdale Lakes Lauderdale Lakes, FL (F) 875,668 9,792,197 10,667,865 Flipper Temple Atlanta, GA 72,196 5,605,153 5,677,349 220 Cooper Street Camden, NJ 42,677 3,684,791 3,727,468 Life on which Depreciation in Year of Latest Income Accumulated Construction/ Date Statements are Description Depreciation Renovation Acquired Computed (C)(D) ------------------------------------- ------------ ------------- ---------- --------------- Parkside Townhouses York, PA (E) $ 0 1989 Sept. 1990 27.5 Twin Trees Layton, UT (F) 1,670,018 1989 Oct. 1990 27.5 Bennion (Mulberry) Taylorsville, UT (F) 3,429,931 1989 Oct. 1990 27.5 Hunters Chase Madison, AL (F) 2,630,451 1989 Oct. 1990 27.5 Bethel Park Bethel, OH (F) 3,096,268 1989 Oct. 1990 27.5 Zebulon Park Owensville, OH (F) 2,472,462 1989 Oct. 1990 27.5 Tivoli Place Murphreesboro, TN (F) 2,602,979 1989 Oct. 1990 27.5 Northwood Jacksonville, FL (F) 4,128,107 1989 Oct. 1990 27.5 Oxford Trace Aiken, SC (F) 845,584 1989 Oct. 1990 27.5 Wilshire Huntsville, AL (F) 1,858,592 1989 Oct. 1990 27.5 Ivanhoe Salt Lake City, UT (E) 587,149 1991 Jan. 1991 27.5 Washington Avenue Brooklyn, NY 1,430,328 1991 Jan. 1991 27.5 C.H. Development (Manhattan B) New York, NY 1,903,691 1991 Jan. 1991 27.5 Davidson Court Staten Island, NY (E) 350,026 1991 Mar. 1991 27.5 Magnolia Mews Philadelphia, PA 1,548,578 1991 Mar. 1991 27.5 Oaks Village Whiteville, NC (E) 0 1991 Mar. 1991 27.5 Greenfield Village Dunn, NC (E) 0 1991 Mar. 1991 27.5 Morris Avenue (CLM Equities) Bronx, NY (E) 2,646,157 1991 Apr. 1991 27.5 Victoria Manor Riverside, CA 2,708,585 1991 Apr. 1991 27.5 Ogontz Hallz Philadelphia, PA 1,921,846 1990 Apr. 1991 27.5 Eagle Ridge Stoughton, WI (F) 1,849,562 1991 May 1991 27.5 Nelson Anderson Bronx, NY (E) 3,410,644 1991 June 1991 27.5 Conifer Irondequoit (Abraham Lincoln) Irondequoit, NY 2,921,631 1991 Sept. 1991 27.5 Wilson Street Apts. (Middletown) Middletown, PA 1,547,388 1991 Sept. 1991 27.5 Lauderdale Lakes Lauderdale Lakes, FL (F) 3,596,435 1991 Oct. 1991 40 Flipper Temple Atlanta, GA 2,456,397 1991 Oct. 1991 27.5 220 Cooper Street Camden, NJ 1,890,441 1991 Dec. 1991 27.5

Cost of Property and Equipment Accumulated Depreciation ----------------------------------------------- ----------------------------------------------- Years Ended March 31, -------------------------------------------------------------------------------------------------- 2006 2005 2004 2006 2005 2004 ------------- ------------- ------------- ------------- ------------- ------------- Balance at beginning of year $ 144,777,331 $ 144,210,167 $ 143,202,053 $ 68,560,673 $ 63,733,516 $ 58,927,642 Additions during year: Improvements 741,465 749,123 1,017,659 Discontinued operations and dispositions (75,671,703) (181,959) (9,545) (39,899,656) (706) (5,513) Depreciation expense 4,723,342 4,827,863 4,811,387 ------------- ------------- ------------- ------------- ------------- ------------- Balance at close of year $ 69,847,093 $ 144,777,331 $ 144,210,167 $ 33,384,359 $ 68,560,673 $ 63,733,516 ============= ============= ============= ============= ============= =============

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