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 part- ner of the Related General Partner is Related Freedom Associates Inc., a Delaware corporation. The General Partners are both affiliates of Related Capital Company. 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.
On February 9, 1990, the Partnership commenced a public offering (the "Offer- ing") of Beneficial Assignment Certificates ("BACs") representing assignments of limited partnership interests in the Partnership ("Limited Partnership In- terests"), 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.)
Investment Objectives
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 ("Hous- ing Tax Credit") enacted in the Tax Reform Act of 1986, and some of which may also be eligible for the historic rehabilitation tax credit ("Historic Tax Credit"; together with Housing Tax Credits, the "Tax Credits"). The Partner- ship's investment in each Local Partnership represents 98% to 99% of the partnership interests in the Local Partnership. As of March 31, 1999, the Partnership had acquired interests in forty-two Local Partnerships. As of March 31, 1999, approximately $58,000,000 of net proceeds had been invested in such Local Partnerships, representing all of the Partnership's net pro- ceeds available for investment. Subsequent to March 31, 1999 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 investment objectives of the Partnership are described below.
1. Entitle qualified BACs holders to Housing Tax Credits over the Credit Pe- riod (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 disposi- tion of the Properties.
4. Allocate passive losses to individual BACs holders to offset passive in- come that they may realize from rental real estate investments and other pas- sive 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 Housing Tax Credits over the period of the Partnership's entitlement to claim Tax Credits (for each Property, generally ten years from the date of invest- ment or, if later, the date the Property is leased to qualified tenants; re- ferred 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 Housing Tax Credits during the Credit Period provided that the Local Partnership satisfies the rent restric- tion, minimum set-aside and other requirements for recognition of the Housing Tax Credits at all times during such period. Once a Local Partnership has become eligible to recognize Housing Tax Credits, it may lose such eligibil- ity and suffer an event of "recapture" if its Property fails to remain in compliance with the Housing Tax Credit requirements. None of the Local Part- nerships in which the Partnership has acquired an interest has suffered an event of recapture.
The Partnership continues to meet its primary objective of generating Housing Tax Credits. However, there can be no assurance that the Partnership will continue to achieve any or all of its investment objectives.
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 partner- ships may, in the future, be formed by the General Partners and/or their af- filiates to engage in businesses which may compete with the Partnership.
Employees The Partnership does not have any direct employees. All services are per- formed for the Partnership by its General Partners and their affiliates. The General Partners receive compensation in connection with such activities as set forth in 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 Part- nership in accordance with the Partnership's Amended and Restated Agreement and Certificate of Limited Partnership (the "Partnership Agreement").
All leases are generally for periods not greater than one to two years and no tenant occupies more than 10% of the rentable square footage.
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 the U.S. Department of Housing and Urban Development ("HUD") and reflect increases, if any, in consumer price indices in various geographic areas.
Management periodically reviews the physical state of the properties and sug- gests to the respective Local General Partners budget improvements which are generally funded from cash flow from operations or release of replacement re- serve escrows.
Management 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 deter- mined by the township or city in which the property is located. Such taxes have approximated 1% of the aggregate cost of the properties as shown in Schedule III to the financial statements included herein.
The General Partners generally required that the general partners of the Lo- cal Partnerships ("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, 1999, all Operating Deficit Guarantees have ex- pired. In cases where the General Partners deemed it appropriate, the obli- gations of a Local General Partner under the Operating Deficit Guarantees were secured by letters of credit and/or cash escrow deposits.
The original amount of the Operating Deficit Guarantees aggregated approxi- mately $9,500,000 all of which had expired as of March 31, 1999. As of March 31, 1999, approximately $494,000 had been funded by the Local General Partners to meet such obligations. Amounts funded under such agreements are treated as non-interest bearing loans.
Housing Tax Credits with respect to a given Apartment Complex are available for a ten-year period that commences when the property is leased to qualified tenants. However, the annual Housing 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 Hous- ing Tax Credits not available in the first year will be available in the eleventh year. In certain cases, the Partnership acquired its interest in a Local Partnership after the Local Partnership had placed its Apartment Com- plex in service. In these cases, the Partnership may be allocated Housing Tax Credits only beginning in the month following the month in which it ac- quired its interest. Internal Revenue Code Section 42 regulates the use of the Apartment Complexes as to occupancy, eligibility, and unit gross rent, among other requirements. Each Apartment Complex must meet the provisions of these regulations during each of fifteen consecutive years in order to remain qualified to receive the credits. Certain Apartment Complexes have extended compliance periods of up to thirty years.
Item 3.
Item 3. Legal Proceedings.
None.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5.
Item 5. Market for the Registrant's Common Equity and Related Security Holder Matters.
As of March 31, 1999, the Partnership had issued and has outstanding 72,896 Limited Partnership Interests, each representing a $1,000 capital contribu- tion to the Partnership, or an aggregate capital contribution of $72,896,000. All of the issued and outstanding Limited Partnership Interests have been is- sued 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 ac- quired are not thereafter convertible into BACs. As of May 7, 1999, the Partnership has 4,088 registered holders of an aggregate of 72,896 BACs.
Neither the BACs nor the Limited Partnership Interests are traded on any es- tablished 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 re- strictions limiting the transferability of the BACs and the Limited Partner- ship 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 ag- gregate capital contribution of $2,000, are held by the two General Partners.
There are no material restrictions in the Partnership Agreement on the abil- ity of the Partnership to make distributions. The Partnership has made no distributions to the BACs holders as of March 31, 1999. The Partnership does not anticipate providing cash distributions to its BACs holders other than from net refinancing or sales proceeds.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Re- sults of Operations.
Liquidity and Capital Resources
General
The Partnership's primary source of funds was the proceeds of its public of- fering. During the year ended March 31, 1999, the primary sources of liquid- ity included working capital reserves, interest earned on working capital re- serves, and distributions received from the Local Partnerships.
A working capital reserve of approximately $180,000 remains as of March 31, 1999. The reserve is used to pay operating expenses of the Partnership, in- cluding Partnership management fees payable to the General Partners and ad- vances to Local Partnerships if warranted. The Partnership is dependent upon the support of the General Partners and certain of its affiliates in order to meet its obligations at the Partnership level. The General Partners and these affiliates have agreed to continue such support for the foreseeable fu- ture.
During the fiscal year ended March 31, 1999, cash and cash equivalents of the Partnership and its forty-two Local Partnerships decreased approximately $513,000 as a result of capital improvements ($522,000) and repayments of mortgage loans ($621,000), which exceeded cash flow provided by operating ac- tivities ($122,000), an increase in the capitalization of consolidated sub- sidiaries attributable to minority interest ($441,000) and a net increase in due to local general partners and affiliates ($67,000). Included in the ad- justments to reconcile the net loss to cash flow provided by operating ac- tivities is depreciation and amortization ($5,129,000).
During the years ended March 31, 1999 ("Fiscal Year 1999"), March 31, 1998 ("Fiscal Year 1998") and March 31, 1997 ("Fiscal Year 1997") the amounts re- ceived from the Local Partnerships were $16,630, $15,709 and $116,296, re- spectively. Cash distributions from Local Partnerships are not expected to reach a level sufficient to permit cash distributions to BACs holders. These distributions, as well as the working capital reserves referred to in the paragraph above, will be used to meet the operating expenses of the Partner- ship.
The original amount of the Operating Deficit Guarantees aggregated approxi- mately $9,500,000 all of which had expired as of March 31, 1999. As of March 31, 1999, approximately $494,000, had been funded by the Local General Part- ners to meet such obligations.
Partnership management fees owed to the General Partners amounting to ap- proximately $2,828,000 and $2,202,000 were accrued and unpaid as of March 31, 1999 and 1998, respectively. Without the General Partner's continued accrual without payment, the Partnership will not be in a position to meet its obli- gations. The General Partners have continued allowing the accrual without payment of these amounts but are under no obligation to continue to do so.
In September 1997, Congress enacted the Multi-Family Assisted Housing Reform and Affordability Act of 1997 ("MAHRA") which provides for the renewal of Section 8 Housing Assistance Payments Contracts ("Section 8 Contracts") to be based upon market rentals instead of the above-market rentals which is gener- ally the case under existing Section 8 Contracts. As a result, Section 8 Contracts that are renewed in the future in projects insured by the Federal Housing Administration ("FHA") may not provide sufficient cash flow to permit owners of properties to meet the debt service requirements of these existing FHA-insured mortgages. MAHRA also provides for the restructuring of these mortgage loans so that the annual debt service on the restructured loan (or loans) can be supported by Section 8 rents established at the market rents. The restructured loans will be held by the current lender or another lender. There can be no assurance that a property owner will be permitted to restruc- ture its mortgage indebtedness pursuant to the new rules implementing MAHRA or that an owner, or the holder of the mortgage, would choose to restructure the mortgage if it were able to participate. MAHRA went into effect on Sep- tember 11, 1998 when interim regulations implementing the program were pub- lished. It should be noted that there are many uncertainties as to the eco- nomic and tax impact on a property owner because of the combination of the reduced Section 8 contract rents and the restructuring of the existing FHA- insured mortgage loan under MAHRA. Only 2 of the 42 Local Partnerships are affected by such legislation.
On October 21, 1998, President Clinton signed the fiscal year 1999 Depart- ments of Veteran Affairs, Housing and Urban Development and Independent Agen- cies Appropriation Legislation into law. The bill provides, among other things, that owners of a property that was eligible for prepayment had to give notice of such prepayment to HUD tenants and to the chief executive of the state or local government for the jurisdiction in which the housing is located. The notice must be provided not less than 150 days, but not more than 270 days, before such payment. Moreover, the owner may not increase the rent charged to tenants for a period of 60 days following such prepayment. The bill also provides for tenant-based vouchers for eligible tenants (gener- ally below 80% of area median income) at the true comparable market rents for unassisted units in order to protect current residents from substantial in- creases in rent.
Effective January 1, 1999 the State of California now requires owners of a property benefiting from 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, the owner must offer the properties for sale to those entities who agree to maintain the property as affordable housing.
For a discussion of contingencies affecting a certain Local Partnership, see "Results of Operations of a Certain Local Partnership" below. Since the maximum loss the Partnership would be liable for is its net investment in the Local Partnership, the resolution of the existing contingencies is not an- ticipated to impact future results of operations, liquidity or financial con- dition in a material way. However, the Partnership's loss of its investment in a Local Partnership will eliminate the ability to generate future Housing Tax Credits from such Local Partnership and may also result in recapture of Housing Tax Credits if the investment is lost before the expiration of the Credit 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 be- lieves 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. The Partnership has fully invested the proceeds of its offering in 42 Local Partnerships, all of which have their Housing Tax Credits in place. The Housing Tax Credits are attached to the project for a period of ten years and are transferable with the property during the remainder of the ten year period. If trends in the real estate market warranted the sale of a property, the remaining Housing Tax Credits would transfer to the new owner, thereby adding significant value to the property on the market.
Results of Operations
In accordance with Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", the Partnership is required to review long-lived assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the book value of an asset may not be recoverable. The Partnership periodically compares the carrying value of its properties to its estimate of the sum of undiscounted future cash flows and the fair value of remaining tax credits, to determine if the carrying value of the property is impaired. If the property is considered impaired based on this analysis, an impairment loss is recorded in order to write down the property to its fair value. The determination of fair value is based, not only upon future cash flows, which rely upon estimates and assumptions in- cluding expense growth, occupancy and rental rates, but also upon market capitalization and discount rates as well as other market indicators. The General Partners believe that the estimates and assumptions used are appro- priate in evaluating the carrying amount of the Partnership's properties. However, changes in market conditions and circumstances may occur in the near term which would cause these estimates and assumptions to change, which, in turn, could cause the amounts ultimately realized upon the sale or other dis- position of the properties to differ materially from their estimated fair value. Such changes may also require write-downs in future years. During the year ended March 31, 1999, there was no loss on impairment of assets. Through March 31, 1999, the Partnership has recorded $1,100,000 as a loss on impairment of assets.
The following is a summary of the results of operations of the Partnership for the fiscal years ended March 31, 1999, 1998 and 1997.
The Partnership's primary source of income continues to be rental income with the corresponding expenses being divided among operations, depreciation, and mortgage interest.
Rental income is recognized as rent becomes due. Rental payments received in advance are deferred until earned. The Partnership received rental subsidies which amounted to approximately $2,621,000, $2,336,000 and $2,406,000 for the years ended March 31, 1999, 1998 and 1997, respectively. The related rental subsidy programs have expiration dates that either expire subsequent to the year 2000 or terminate upon total disbursement of the assistance obligation.
The Partnership has negotiated Operating Deficit Guaranty Agreements with all Local Partnerships, by which the Local General Partners have agreed to fund operating deficits for a specified period of time commencing at break-even. Amounts received under Operating Deficit Guarantees from the Local General Partners are treated as operating loans which will not bear interest and will be repaid only out of 50% of available cash flow or out of available net sale or refinancing proceeds. As of March 31, 1999, $494,000 had been funded and all Operating Deficit Guarantees have expired.
1999 vs. 1998 Rental income increased approximately 3% for the year ended March 31, 1999 as compared to 1998 primarily due to rental rate increases.
No major expense categories, excluding the loss on impairment of assets, changed more than 7% for the year ended March 31, 1999 as compared to 1998.
1998 vs. 1997
Rental income increased approximately 3% for the year ended March 31, 1998 as compared to 1997 primarily due to rental rate increases.
No major expense categories, excluding the loss on impairment of assets, changed more than 8% for the year ended March 31, 1998 as compared to 1997.
A loss on impairment of assets amounting to $1,100,000 was recorded in the 1998 Fiscal Year (see comments above).
Results of Operations of a Certain Local Partnership
Eagle Ridge Limited Partnership
In fiscal 1998, Eagle Ridge Limited Partnership ("Eagle Ridge") entered into a Forbearance Agreement with the Wisconsin Housing and Economic Development Authority ("WHEDA") as a result of Eagle Ridge's failure to pay all the re- quired installment payments under its mortgage note. Under the terms of the agreement, WHEDA has agreed to temporarily forego the enforcement of its rights and remedies against Eagle Ridge through December 31, 1998 and to con- tinue to extend Eagle Ridge financing provided that Eagle Ridge complies with certain conditions. The Forbearance Agreement was extended through March 31, 1999, and Eagle Ridge is currently negotiating with WHEDA to permanently re- structure the loan. The conditions of the agreement consist of, but are not limited to: (1) monthly payments of escrow and reserve deposits; (2) monthly payments of principal and interest limited to the lower of 100% of net oper- ating income ("NOI") or 5% of the regularly scheduled monthly note payment (base payment); (3) 75% of the monthly NOI in excess of the base payment for principal and interest; and (4) the remaining 25% of NOI in excess of the base payment is to be paid as an incentive management fee to the management agent.
As of January 1, 1999, Gorman and Company, Inc., a Madison, Wisconsin based developer/manager, was admitted as the General Partner of Eagle Ridge, and Freedom SLP, L.P. withdrew as General Partner. Gorman and Company, Inc. also will continue as managing agent of Eagle Ridge.
Other
The Partnership continues to meet its primary objective of generating Housing Tax Credits. Housing Tax Credits are generated by a Property over a ten-year period commencing as each Property is leased to qualified tenants. During the years ended March 31, 1999, 1998 and 1997, the Housing Tax Credits re- ceived by the Partnership totaled $11,200,999, $11,208,964 and $11,208,966, respectively.
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 regu- lations concerning tenant eligibility, which may make it more difficult to rent apartments in the complexes; difficulties in obtaining government ap- proval 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 pay- ments it has contracted to make; and that when the rental assistance con- tracts expire there may not be market demand for apartments at full market rents in a Local Partnership's Apartment Complex.
The Local Partnerships are impacted by inflation in several ways. Inflation 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 infla- tion may result in appreciated values of the Local Partnerships' Apartment Complexes over a period of time as rental revenues and replacement costs con- tinue to increase.
The Partnership does not anticipate that it will be in a position to make cash distributions at any time prior to the disposition of the Properties. If distributions of operating cash flow are made, it is expected that they will be limited. As of March 31, 1999, no such distributions have been made.
Recent Accounting Pronouncements
Accounting Standards Issued but not yet Adopted In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133 ("SFAS 133") "Accounting for Deriva- tive Instruments and Hedging Activities". The Statement establishes account- ing and reporting standards for derivative instruments and hedging activi- ties. This Statement is effective for all fiscal quarters of fiscal years beginning after June 15, 1999 (subject to an exposure draft to delay the ef- fective date one year). The adoption of SFAS 133 is not expected to have any impact on the financial position or results of operations of the Partnership.
Year 2000 Compliance The Partnership utilizes the computer services of an affiliate of the General Partners. The affiliate of the General Partners have upgraded their computer information systems to be year 2000 compliant and beyond. The year 2000 com- pliance issue concerns the inability of a computerized system to accurately record dates after December 31, 1999. The affiliate of the General Partners converted their financial systems applications and upgraded all of their non- compliant in-house software and hardware inventory. The work stations that experienced problems from the testing process were corrected with an upgrade patch. The costs incurred by the affiliates of the General Partners are not being charged to the Partnership. The most likely worst case scenario that the General Partners face is that computer operations will be suspended for a few days to a week commencing on January 1, 2000. The Partnership contingency plan is to have (i) a complete backup done on December 31, 1999 and (ii) both electronic and printed reports generated for all critical data up to and in- cluding December 31, 1999.
In regard to third parties, the General Partners are in the process of evalu- ating the potential adverse impact that could result from the failure of mate- rial service providers to be year 2000 compliant. A detailed survey and as- sessment was sent to material third parties in the fourth quarter of 1998. The Partnership has received assurances from a majority of the material serv- ice providers with which it interacts that they have addressed the year 2000 issues and is evaluating these assurances for their adequacy and accuracy. In cases where the Partnership has not received assurances from third parties, it is initiating further mail and/or phone correspondence. The Partnership re- lies heavily on third parties and is vulnerable to the failures of third par- ties to address their year 2000 issues. There can be no assurance given that the third parties will adequately address their year 2000 issues.
Item 7a.
Item 7a.	Quantitative and Qualitative Disclosures about Market Risk.
The Partnership is not exposed to market risk since its mortgage indebtedness bears fixed rates of interest.
Item 8.
Item 8.	Financial Statements and Supplementary Data. 		 Sequential 		 Page (a) 1.	Financial Statements
	Independent Auditors' Reports 	16
	Consolidated Balance Sheets as of March 31, 1999 and 1998 	87
	Consolidated Statements of Operations for the years ended March 31, 1999, 1998 and 1997 	88
	Consolidated Statements of Changes in Partners' Capital for the years ended March 31, 1999, 1998 and 1997	 89
	Consolidated Statements of Cash Flows for the years ended 	March 31, 1999, 1998 and 1997	 90
	Notes to Consolidated Financial Statements	 92
INDEPENDENT AUDITORS' REPORT
The Partners Freedom Tax Credit Plus L.P.:
We have audited the accompanying consolidated balance sheets of Freedom Tax Credit Plus L.P. and consolidated partnerships as of March 31, 1999 and 1998, and the related consolidated statements of operations, changes in partners' capital, and cash flows for each of the years in the three-year period ended March 31, 1999. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedules. These consolidated financial statements and the financial statement schedules are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated financial statements and the finan- cial statement schedules based on our audits. We did not audit the financial statements of 27 and 25 of the consolidated partnerships, which statements reflect combined assets constituting 44% and 49% as of March 31, 1999 and 1998, and combined revenues constituting 42%, 43% and 49% of the related con- solidated totals for 1999, 1998 and 1997, respectively. 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 those partner- ships, is based solely on the reports of the other auditors.
We conducted our audits in accordance with generally accepted auditing stan- dards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of mate- rial 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 esti- mates made by management, as well as evaluating the overall financial state- ment 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 consolidated partnerships as of March 31, 1999 and 1998, and the results of their operations and their cash flows for each of the years in the three- year period ended March 31, 1999, in conformity with generally accepted ac- counting principles. Also in our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.
/s/ KPMG LLP KPMG LLP
New York, New York May 13, 1999
FREEDOM TAX CREDIT PLUS L.P. AND CONSOLIDATED PARTNERSHIPS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1999, 1998 and 1997
NOTE 1 - General
Freedom Tax Credit Plus L.P., a Delaware limited partnership (the "Partner- ship"), was organized on August 28, 1989 and commenced the public offering on February 9, 1990. The general partners of the Partnership are Related Free- dom Associates L.P. (the "Related General Partner"), a Delaware limited part- nership, and Freedom GP Inc. (the "Freedom General Partner"), a Delaware cor- poration, together (the "General Partners"). The Partnership will terminate on December 31, 2030, unless terminated sooner under the provision's of the partnership agreement.
The Partnership's business is to invest in other partnerships ("Local Part- nerships," "subsidiaries" or "subsidiary partnerships") owning leveraged apartment complexes that are eligible for the low-income housing tax credit ("Housing Tax Credit") enacted in the Tax Reform Act of 1986. Some of the complexes may also be eligible for the historic rehabilitation tax credit ("Historic Tax Credits"). During Fiscal Years 1999, 1998 and 1997, the Part- nership generated $11,200,999, $11,208,964 and $11,208,966, respectively, in Housing Tax Credits. There were no Historic Tax Credits generated in 1998, 1997 and 1996.
The Partnership was authorized to issue a total of 200,000 Beneficial Assign- ment 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 Limited 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.
The Partnership is dependent upon the support of the General Partners and certain of its affiliates in order to meet its obligations at the Partnership level. The General Partners and these affiliates have agreed to continue such support for the foreseeable future.
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 calen- dar year ends. Accounts of the subsidiaries have been adjusted for intercom- pany transactions from January 1 through March 31. The Partnership's fiscal year ends March 31, in order to allow adequate time for the subsidiaries fi- nancial statements to be prepared and consolidated. The books and records of the Partnership are maintained on the accrual basis of accounting in accor- dance with generally accepted accounting principles.
b) Basis of Consolidation
The consolidated financial statements include the accounts of the Partnership and 42 subsidiary partnerships, in which the Partnership is a limited part- ner, 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 contrac- tual 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 at- tributable to minority interest arises from cash contributions and cash dis- tributions 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 maturities of three months or less).
d) Investment in Marketable Securities
The Partnership applies the provisions of the Financial Accounting Standards Board's Statement of Financial Accounting Standards ("SFAS") No. 115 "Ac- counting for Certain Investments in Debt and Equity Securities." At March 31, 1999 and 1998 the Partnership has classified its securities as available- for-sale.
Available-for-sale securities are carried at fair value with net unrealized gain (loss) reported as a separate component of other comprehensive income until realized. A decline in the market value of any available-for-sale se- curity below cost that is deemed other than temporary is charged to earnings resulting in the establishment of a new cost basis for the security.
e) Cash held in Escrow
Cash held in escrow includes cash held in escrow, replacement reserves and tenant security deposits.
f) Property and Equipment
In accordance with Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", the Partnership is required to review long-lived assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the book value of an asset may not be recoverable. Impairment of properties to be held and used is determined to exist when estimated amounts recoverable through future operations on an un- discounted basis are below the properties' carrying value. If a property is determined to be impaired, it is written down to its estimated fair value.
The determination of fair value is based, not only upon future cash flows, which rely upon estimates and assumptions including expense growth, occupancy and rental rates, but also upon market capitalization and discount rates as well as other market indicators. The General Partners believe that the esti- mates and assumptions used are appropriate in evaluating the carrying amount of the Partnership's properties. However, changes in market conditions and circumstances may occur in the near term which would cause these estimates and assumptions to change, which, in turn, could cause the amounts ultimately realized upon the sale or other disposition of the properties to differ mate- rially from their estimated fair value. Such changes may also require write- downs in future years. During the year ended March 31, 1999, there was no loss on impairment of assets. Through March 31, 1999 the Partnership has re- corded $1,100,000 as a loss on impairment of assets.
Property and equipment are depreciated over their estimated useful lives, which range from 20 to 40 years for properties. Equipment lives range from 5 to 7 years and are depreciated on a straight-line basis. The property is de- preciated using an accelerated or straight-line method.
g) Acquisition Fees and Costs
At investor closings, the General Partners were paid a property acquisition fee (equal to 6% of the gross proceeds) for evaluating and screening real property to be acquired. Acquisition fees and other acquisition expenses in- curred by the Partnership are charged to the property accounts based on the costs of properties acquired.
h) Rental income
Rental income is recognized as rent becomes due. Rental payments received in advance are deferred until earned. The partnership receives rental subsidies which amounted to approximately $2,519,000, $2,336,000 and $2,406,000 for the years ended March 31, 1999, 1998 and 1997, respectively. The related rental subsidy programs have expiration that either expire subsequent to the year 2000 or terminate upon total disbursement of the assistance obligation.
i) 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).
j) Operating Deficit Guarantees
Amounts received under Operating Deficit Guarantees from the local general partners are treated as operating loans which will not bear interest and will be repaid only out of 50% of available cash flow or out of available net sale or refinancing proceeds. As of March 31, 1999, all Operating Deficit Guaran- tees have expired.
k) Loss Contingencies
The Partnership records loss contingencies as a charge to income when infor- mation becomes available which indicates that it is probable that an asset has been impaired or a liability has been incurred as of the date of the fi- nancial statements and the amount of loss can be reasonably estimated.
l) Other Comprehensive Income
The Partnership adopted SFAS No. 130, Reporting Comprehensive Income on April 1, 1998. SFAS No. 130 establishes standards for reporting and displaying comprehensive income and its components in a financial statement that is dis- played with the same prominence as other financial statements. The financial statements for earlier periods, provided for comparative purposes, have been reclassified as required. The accumulated balance of other comprehensive in- come is displayed as a separate component of Partners' Capital on the balance sheet.
m) Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and as- sumptions relating to reporting of assets, liabilities, revenues and expenses disclosed in the consolidated financial statements. Accordingly, actual re- sults could differ from those estimates.
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, ac- counts payable and other liabilities approximates fair value. Due to Local General Partners and Affiliates and Due to General Partners and Affiliates would be paid from the future operations or sale of the properties which is not readily determinable.
Mortgage Notes Payable The fair value of mortgage notes payable is estimated, where practicable, based on the borrowing rate currently available for similar loans.
(a) The mortgage notes payable are insured by HUD primarily in accordance with Section 236 of the National Housing Act. New loans are no longer being insured in accordance with Section 236 and presently existing loans are sub- ject to restrictions regarding prepayment. Management believes the estima- tion of fair value to be impracticable.
Depreciation expense for the years ended March 31, 1999, 1998 and 1997 amounted to $4,959,745, $5,058,549 and $5,136,324, respectively.
The Partnership periodically compares the carrying value of its properties to its estimate of the sum of undiscounted future cash flows and the fair value of remaining tax credits, to determine if the carrying value of the property is impaired. If the property is considered impaired based on this analysis, an impairment loss is recorded in order to write down the property to its fair value. In 1997, management of Wilshire Park ("Wilshire") completed a recoverability review of the carrying value of the property based on an esti- mate of undiscounted future cash flows expected to result from its use and eventual disposition. As of December 31, 1997, management concluded that the sum of the undiscounted future cash flows estimated to be generated by the apartment project is less than the carrying value and, as a result, the Part- nership recorded a loss on impairment of $1,100,000, which reduced the carry- ing value to its estimated fair value. The estimated fair value was deter- mined by using a discounted cash flow analysis and an estimate of the fair value of the remaining tax credits.
(a) Over the life of the related mortgages, ranging from 15 to 50 years, us- ing a method approximating the interest method.
Amortization of deferred costs for the years ended March 31, 1999, 1998 and 1997 amounted to $169,171, $169,660 and $199,204, respectively.
Each subsidiary partnership's mortgage note payable is collateralized by the land and buildings of the respective subsidiary partnership, the assignment of certain subsidiary partnership's rents, leases and replacement reserves, and is without further recourse.
Annual principal payments required for each of the next five years are as follows:
Fiscal Year Ending March 31,	 Amount
2000	 $735,527 2001	 800,671 2002	 870,790 2003	 929,436 2004	 1,020,039
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 perform services for the Partner- ship. The costs incurred are as follows:
a) Guarantees
The Partnership has negotiated Operating Deficit Guaranty Agreements with all Local Partnerships whereby the Local General Partners have agreed to fund op- erating deficits for a specified period of time commencing at break-even point.
The original amount of the Operating Deficit Guarantees aggregated approxi- mately $9,500,000 all of which had expired as of March 31, 1999. As of March 31, 1999, approximately $494,000 had been funded by the local general part- ners to meet such obligations. Amounts funded under such agreements are treated as non-interest bearing loans. (See Note 7(b) below for repayment terms).
b) Due to Local General Partners and Affiliates
At March 31, 1999 and 1998, a majority of these fees were incurred in connec- tion with the development of the property and have been included in the basis of the building.
(a) The General Partners are entitled to receive a partnership management fee, after payment of all Partnership expenses, which together with the an- nual 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 invest- ment. Unpaid partnership management fees for any year will be accrued with- out interest and will be payable from working capital reserves or to the ex- tent 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 $2,828,000 and $2,202,000 were accrued and unpaid as of March 31, 1999 and 1998, respec- tively. 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 Agree- ment. 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 $968,246, $937,552 and $902,087 for the 1999, 1998 and 1997 Fiscal Years, re- spectively. Of these fees $655,117, $622,137 and $630,074 were incurred to affiliates of the subsidiary partnerships.
(d) Freedom SLP L.P., a special limited partner of the subsidiary partner- ships, is entitled to receive an annual local administrative fee of up to $2,500 from each subsidiary partnership.
NOTE 9 - Extraordinary Item - Forgiveness of Indebtedness Income
In the event an operating deficit existed for Eagle Ridge Limited Partnership ("Eagle Ridge") at any time before May 31, 1995, the General Partners, jointly and severally, were to provide such funds up to $260,000 to Eagle Ridge as was necessary to pay such operating deficits. The loan was subordi- nate and bore no interest. The loan balance was $152,987 as of December 31, 1995. Effective July 26, 1996, the General Partners withdrew from Eagle Ridge and assigned to Freedom SLP L.P., the special limited partner, their partnership interests. In conjunction with the withdrawal of the General Partners, the loan was canceled. Of the $152,987 balance payable at July 26, 1996, $87,262 was forgiven and $65,725 was converted to equity.
NOTE 10 - Commitments and Contingencies
(a) Event of Default
Eagle Ridge Limited Partnership In fiscal 1998, Eagle Ridge entered into a Forbearance Agreement with Wiscon- sin Housing and Economic Development Authority ("WHEDA") as a result of Eagle Ridge's failure to pay all the required installment payments under the mort- gage note. Under the terms of the agreement, WHEDA has agreed to temporarily forego the enforcement of its rights and remedies against Eagle Ridge through December 31, 1998 and to continue to extend Eagle Ridge financing provided that Eagle Ridge complies with certain conditions. The Forbearance Agreement was extended through March 31, 1999, and Eagle Ridge is currently negotiating with WHEDA to permanently restructure the loan. The conditions of the agree- ment consist of, but are not limited to: (1) monthly payments of escrow and reserve deposits, (2) monthly payments of principal and interest limited to the lower of 100% of net operating income ("NOI") or 5% of the regularly scheduled monthly note payment (base payment), (3) 75% of the monthly NOI in excess of the base payment for principal and interest and (4) the remaining 35% of NOI in excess of the base payment is to be paid as an incentive man- agement fee to the management agent.
(b) 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 24% of the properties are located in any single state. There are also sub- stantial risks associated with owning properties receiving government assis- tance, for example the possibility that Congress may not appropriate funds to enable HUD to make rental assistance payments. HUD also restricts annual cash distributions to partners based on operating results and a percentage of the owners equity contribution. The Partnership cannot sell or substantially liquidate its investments in subsidiary partnerships during the period that the subsidy agreements are in existence, without HUD's approval. Furthermore there may not be market demand for apartments at full market rents when the rental assistance contract expire.
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 be- lieves 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.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Fi- nancial Disclosure.
None
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant.
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.
Certain information concerning the directors and executive officers of each of the General Partners is set forth below.
Related Freedom Associates Inc., ("RFAI") is the sole general partner of Re- lated Freedom Associates L.P.
Name	 Position
Stephen M. Ross	 Director
J. Michael Fried	 President and Director
Alan P. Hirmes	 Senior Vice President
Stuart J. Boesky	 Senior Vice President
Marc D. Schnitzer	 Vice President
Glenn F. Hopps	 Treasurer
Teresa Wicelinski	 Secretary
STEPHEN M. ROSS, 59, is President and a Director and shareholder of The Re- lated Realty Group, Inc., the general partner of The Related Companies, L.P. He graduated from the University of Michigan School of Business Administra- tion with a Bachelor of Science degree and from Wayne State University School of Law with a Juris Doctor degree. Mr. Ross then received a Master of Laws degree in taxation from New York University School of Law. He joined the ac- counting firm of Coopers & Lybrand in Detroit as a tax specialist and later moved to New York, where he worked for two large Wall Street investment bank- ing firms in their real estate and corporate finance departments. Mr. Ross formed the predecessor of The Related Companies, L.P. in 1972 to develop, manage, finance and acquire subsidized and conventional apartment develop- ments.
J. MICHAEL FRIED, 56, is the sole shareholder of one of the general partners of Related Capital Company ("Capital"), a real estate finance and acquisition affiliate of the Related General Partner. In that capacity, he is responsi- ble for all of Capital's syndication, finance, acquisition and investor re- porting activities. Mr. Fried practiced corporate law in New York City with the law firm of Proskauer Rose Goetz & Mendelsohn from 1974 until he joined Capital in 1979. Mr. Fried graduated from Brooklyn Law School with a Juris Doctor degree, magna cum laude; from Long Island University Graduate School with a Master of Science degree in Psychology; and from Michigan State Uni- versity with a Bachelor of Arts degree in History.
ALAN P. HIRMES, 44, has been a certified public accountant in New York since 1978. Prior to joining Capital in October 1983, Mr. Hirmes was employed by Weiner & Co., Certified Public Accountants. Mr. Hirmes is also a Vice Presi- dent of Capital. Mr. Hirmes graduated from Hofstra University with a Bache- lor of Arts degree.
STUART J. BOESKY, 43, practiced real estate and tax law in New York City with the law firm of Shipley & Rothstein from 1984 until February 1986 when he joined Capital. From 1983 to 1984, Mr. Boesky practiced law with the Boston law firm of Kaye, Fialkow, Richard & Rothstein (which subsequently merged with Strook & Strook & Lavan) and from 1978 to 1980 was a consultant special- izing in real estate at the accounting firm of Laventhol & Horwath. Mr. Boe- sky graduated from Michigan State University with a Bachelor of Arts degree and from Wayne State School of Law with a Juris Doctor degree. He then re- ceived a Master of Laws degree in Taxation from Boston University School of Law.
MARC D. SCHNITZER, 38, is responsible both for financial restructurings of real estate properties and directing Related's acquisition of properties gen- erating Housing Tax Credits. Mr. Schnitzer received a Masters of Business Administration from The Wharton School of the University of Pennsylvania in December 1987 before joining Related 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.
GLENN F. HOPPS, 36, joined Related 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 Uni- versity at Albany with a Bachelor of Science Degree in Accounting.
TERESA WICELINSKI, 33, joined Related in June 1992, and prior to that date was employed by Friedman, Alpren & Green, certified public accountants. Ms. Wicelinski graduated from Pace University with a Bachelor of Arts Degree in Accounting.
The Freedom General Partner
Name	 Position
J. Michael Fried	 President and Director
Alan P. Hirmes	 Executive Vice President
Stuart J. Boesky	 Executive Vice President
Marc D. Schnitzer	 Vice President
Denise L. Kiley	 Vice President
Glenn F. Hopps	 Treasurer
DENISE L. KILEY, 39, is responsible for overseeing the due diligence and as- set management of all multifamily residential properties invested in RCC sponsored corporate, public and private equity and debt funds. Prior to joining Related in 1990, Ms. Kiley had experience acquiring, financing and asset managing multifamily residential properties. From 1981 through 1985 she was an auditor with PricewaterhouseCoopers. Ms. Kiley holds a Bachelor of Science in Accounting from Boston College.
Biographical information with respect to Messrs. Fried, Hirmes, Boesky, Schnitzer and Hopps is set forth above.
Item 11.
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 affili- ates are entitled to receive compensation from the Partnership in considera- tion of certain services rendered to the Partnership by such parties. In ad- dition, 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. See Note 7 to the Financial Statements in Item 8 above, which information is incorporated herein by reference thereto. 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.
Tabular information concerning salaries, bonuses and other types of compensa- tion payable to executive officers has not been included in this annual re- port. 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.
Freedom SLP L.P., a limited partnership whose general partners are the Gen- eral Partners of the Partnership and which acts as the special limited part- ner of each Local Partnership, holds a 1% limited partnership interest in each Local Partnership.
Except as set forth below, no person (other than the Assignor Limited Part- ner) was known by the Partnership to be the beneficial owner of more than five percent of the Limited Partnership Interests and/or BACs except as listed in the table below; and neither the General Partners nor any director or officer of the General Partners owns any Limited Partnership Interests or BACs.
(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 "Commis- sion") and pursuant to a letter agreement dated August 26, 1997 among the Partnership, Lehigh and Related Freedom Associates L.P. ("RFA") (the "Stand- still Agreement"), Lehigh agreed that, prior to August 26, 2007 (the "Stand- still Expiration Date"), it will not and it will cause certain affiliates (including Lehigh Tax Credit Partners II, LLC ("Lehigh II")), not to (i) ac- quire, attempt to acquire or make a proposal to acquire, directly or indi- rectly, more than 45% (including BACs acquired through all other means) of the outstanding BACs, (ii) seek to propose to enter into, directly or indi- rectly, 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 indi- rectly, in any "solicitation" of "proxies" or "consents" (as such terms are used in the proxy rules of the Securities and Exchange Commission (the "Com- mission")) 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 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 inten- tion, 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 (3%) percent 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 Partner- ship or (ii) concerning the reduction of any fees, profits, distributions or allocations for the benefit of RFA or its affiliates. The discussion herein of the Standstill Agreement is subject to and qualified in its entirety by reference to such agreement, a copy of which is attached hereto as an exhibit and incorporated herein by reference.
(3) As of June 23, 1999, 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 Manag- ing Member and owns an equity interest therein.
Item 13.
Item 13. Certain Relationships and Related Transactions.
The Partnership has and will continue to have certain relationships with the General Partners and their affiliates, as discussed in Item 11 and also Note 7 to the Financial Statements in Item 8 above, 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 Part- ners.
PART IV
Item 14.
Item 14.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K. 	 	Sequential 		 Page
(a) 1.	Financial Statements
	Independent Auditors' Reports 	16
	Consolidated Balance Sheets as of March 31, 1999 and 1998 	87
	Consolidated Statements of Operations for the years ended March 31, 1999, 1998 and 1997 	88
	Consolidated Statements of Changes in Partners' Capital for the years ended March 31, 1999, 1998 and 1997 	89
	Consolidated Statements of Cash Flows for the years ended March 31, 1999, 1998 and 1997 	90
	Notes to Consolidated Financial Statements 	92
(a) 2.	Financial Statement Schedules
	Schedule I - Condensed Financial Information of Registrant 	113
	Schedule III - Real Estate and Accumulated Depreciation 	116
	All other schedules have been omitted because they are not re- quired 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 sup- plemented, the "Prospectus"), filed with the Securities and Ex- change 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 ex- hibit 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 Partner- ship's acquisition of Local Partnership Interests, incorporated herein as an exhibit by reference to Exhibit (10C) to the Ini- tial 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	110
(27)	Financial Data Schedule (filed herewith) 	120
(b)	Reports on Form 8-K
	No reports on Form 8-K were filed during the quarter.
Item 14.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K. (continued)
Jurisdiction (c) Subsidiaries of the Registrant (Exhibit 21) of Organization
Parkside Townhomes Associates PA 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 of Georgia 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 The Oaks Village Limited Partnership NC Greenfield Village Limited Partnership NC 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 AL 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
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Ex- change 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 18, 1999
		By:	/s/ J. Michael Fried 			J. Michael Fried, 			President and Director
	By:	FREEDOM GP INC. 		a general partner
Date: June 18, 1999
		By:	/s/ J. Michael Fried 			J. Michael Fried, 			President and Director
Pursuant to the requirements of Section 13 or 15(d) of the Securities Ex- change 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
	President and Director 	(Principal Executive Officer) of /s/ J. Michael Fried	 Related Freedom Associates Inc. J. Michael Fried	 and Freedom GP Inc. 	June 18, 1999
	Senior Vice President 	(Principal Financial Officer) of /s/ Alan P. Hirmes 	Related Freedom Associates, Inc. Alan P. Hirmes 	and Freedom GP Inc. 	June 18, 1999
	Treasurer (Principal Accounting Officer) /s/ Glenn F. Hopps 	of Related Freedom Associates, Inc. Glenn F. Hopps 	and Freedom GP Inc. 	June 18, 1999
	Director of Related /s/ Stephen M. Ross 	Freedom Associates, Inc. Stephen M. Ross	 	June 18, 1999