MCD Freedom Tax Credit Fund LP – ‘424B3’ on 12/10/96

As of:  Tuesday, 12/10/96   ·   Accession #:  950152-96-6528   ·   File #:  33-95448

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Prospectus   —   Rule 424(b)(3)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B3       MCD Freedom Tax 424 (B)(3)                             5     22K 

424B3
1st Page of 5
TOC
↑Top
Previous
Next
↓Bottom
Just 1st
 
                                              Filed Pursuant to Rule 424(b)(3)
                                                       Registration No. 33-95448

 NOVEMBER 25, 1996
SUPPLEMENT NO. 1 TO PROSPECTUS FOR
MCD FREEDOM TAX CREDIT FUND L.P.
JANUARY 31, 1996

 (SUPPLEMENT IDENTIFYING POTENTIAL INVESTMENT)

------------------------------------------------------------------------------- 

         This Supplement is part of, and should be read in conjunction with,
the Prospectus of MCD Freedom Tax Credit Fund L.P. (the "Fund"). Capitalized    
terms used herein but not defined have the meanings ascribed to them in the     
Prospectus.                                                                     

STATUS OF OFFERING                                                              

           As of November 1, 1996, the Fund received orders for a total of 1,034
Units ($1,034,000). Neither the General Partner nor any Affiliates of the Fund  
have been paid any fees out of the proceeds of the offering as of November 1,   
1996. Because the Fund has not received orders for the minimum of 2,000 Units,  
no proceeds from the offering have been released from escrow, no Units have been
issued and, consequently, no investors have been admitted to the Fund.          

ANTICIPATED INVESTMENT IN OPERATING PARTNERSHIP                                 

      The Fund anticipates acquiring a limited partnership interest in
Aspen Grove Limited Partnership (the "Specified Operating Partnership") in      
accordance with the "Investment Objectives and Acquisition Policies" of the Fund
as set forth in the Prospectus. A significant portion of the funds invested by  
the Fund in the Specified Operating Partnership will be used to pay fees and    
expenses of the Operating General Partners of the Specified Operating           
Partnership. (See "Terms of Investment in Specified Operating Partnership" in   
this Supplement.)                                                               

       The Fund will endeavor to invest in Operating Partnerships with a
goal of generating tax credits for allocation to investors, upon completion and 
occupancy of all Tax Credit Properties, averaging approximately $130 to $150 per
Unit annually, which would be the equivalent of an approximate 13% to 15% annual
Federal Housing Tax Credit as a percentage of capital invested, for the ten year
credit period applicable to each Tax Credit Property in which the Fund invests. 
(See "Who Should Invest" and "Investment Objectives and Acquisition Policies" in
the Prospectus.) This assumes: (a) the applicability of current tax law and     
regulations and current interpretations of such law and regulations by the      
courts; (b) each of such Tax Credit Properties is occupied with qualifying      
individuals throughout the 15-Year Compliance Period; and (c) Unit holders are  
unable to use any passive tax losses generated by the Fund. These investment    
objectives do not represent yield or return on investment.                      

424B3
2nd Page of 5
TOC
1st
Previous
Next
↓Bottom
Just 2nd

   Assuming: (a) the Specified Operating Partnership is the only
Operating Partnership in which the Fund invests, (b) the Specified Operating    
Partnership has no value at the end of the 15-Year Compliance Period applicable 
to investments of the Fund, and (c) that investors do not use for tax purposes  
the assumed loss of the investor's entire Capital Contribution, the equivalent  
tax-free internal rate of return would be approximately 7.06%, exclusive of any 
Cash Available For Distribution. Conversely, if the Specified Operating         
Partnership appreciates in value, such increased value can be recognized through
sale of the Specified Operating Partnership Interest or the sale or refinancing 
of the Tax Credit Property (even though the restrictions and compliance         
requirements of the Federal Housing Tax Credit Program will continue to apply to
such Tax Credit Property at that time), and investors receive distributions from
such sales in excess of their respective Capital Contributions, the equivalent  
tax-free internal rate of return will exceed 7.06%.                             

          The Fund's investment in the Specified Operating Partnership will be
consistent with the provisions of the Prospectus relating to investments in     
Operating Partnerships generally. (See, particularly, "Investment Objectives and
Acquisition Policies" and "Sharing Arrangements: Profits, Credits, Losses, Cash 
Available for Distribution and Residuals.")                                     

          THE FUND HAS IDENTIFIED THE OPERATING PARTNERSHIP INTEREST SPECIFIED
BELOW AS A POTENTIAL INVESTMENT BY THE FUND.                                    

           While the General Partner believes that the Fund is reasonably likely
to acquire an interest in the Specified Operating Partnership described below,  
the Fund may not be able to do so as a result of additional information or      
changes in circumstances or if the Fund does not sell a minimum of 2,000 Units  
prior to January 31, 1997. Before any acquisition is made, the General Partner  
will continue and complete its due diligence review as to the Specified         
Operating Partnership and the related Tax Credit Property. This process will    
include the review and analysis of information concerning, among other matters, 
market competition and environmental factors. If any significant adverse        
information is obtained by the General Partner in connection with such review   
and analysis, either action will be taken to mitigate the adverse factor(s), or 
the acquisition will not be made. If an interest in the Specified Operating     
Partnership is acquired, the terms may differ materially from those described   
below. Accordingly, investors should not rely on the ability of the Fund to     
invest in the Specified Operating Partnership described below or under the      
described investment terms in deciding whether to invest in the Fund.           

 -2-

424B3
3rd Page of 5
TOC
1st
Previous
Next
↓Bottom
Just 3rd

           The Specified Operating Partnership in which an Interest is currently
expected to be acquired and the Operating General Partners of the Specified     
Operating Partnership are as follows:                                           

Partnership                      General Partners             
-----------                      ----------------             

Aspen Grove Limited Partnership           Miller-Valentine Apartments II, Ltd.  
                               Associated Land Group, Inc.
                                      St. Mary's Development Corporation

   Permanent Mortgage Loan financing for the Tax Credit Property
described above is being or will be provided as described below. It is          
anticipated that all of the dwelling units in the Tax Credit Property will be   
eligible for Federal Housing Tax Credits. It is anticipated that construction of
the Tax Credit Property described in this Supplement will begin in November 1996
and be fully completed in December 1997. Delays in construction could occur with
respect to the Tax Credit Property, which could result in delay or reduction in 
achieving Federal Housing Tax Credits. (See "Risk Factors--Tax Risks Associated 
with the Investments" in the Prospectus.) The Tax Credit Property described in  
this Supplement does not currently have any tenants. The General Partner        
believes that the Tax Credit Property has or will have adequate property        
insurance.                                                                      

INFORMATION RELATING TO SPECIFIED OPERATING PARTNERSHIP                         

GENERAL                                                   

    Aspen Grove Apartments (the "Project") will, when constructed,
consist of seven frame buildings containing 84 newly constructed apartments,    
including 70 two-bedroom, 800 square foot units and 14 three-bedroom, 900 square
foot units. The Project will be developed in Middletown, Ohio, which is located 
approximately 20 miles south of Dayton, Ohio. The Project site consists of      
approximately 7 acres of land. Individual units will be air-conditioned and will
include a range, refrigerator, dishwasher, carpeting, drapes or blinds, and a   
patio or porch. Fifty percent, or 42 units, will be marketed as special need    
units for elderly households. The complex will offer a rental office, laundry   
facilities, playground area/tot lot, clubhouse, picnic area and open            
recreational areas. The proposed monthly rent for the units is $388-$398 for the
two-bedroom units and $460 for the three-bedroom units.                         

 -3-

424B3
4th Page of 5
TOC
1st
Previous
Next
↓Bottom
Just 4th

           Construction of Aspen Grove is anticipated to begin in November 1996.
The Operating General Partners anticipate that construction will be completed in
April 1997 and occupancy will occur as follows:                                 

Number of Units              Rent-Up        
---------------              -------        

 10                     April 1997
10                     May 1997 
9                      June 1997
9                      July 1997
  9                      August 1997
     9                      September 1997
   9                      October 1997
    9                      November 1997
    10                     December 1997

           The Operating General Partners of the Specified Operating Partnership
are Miller Valentine Apartments II, Ltd., Associated Land Group, Inc. and St.   
Mary's Development Corporation. Miller Valentine Apartments II, Ltd., Associated
Land Group, Inc. will unconditionally guarantee: (i) to fund all deficits until 
the Project has achieved three consecutive months of break-even and thereafter  
in an amount equal to $350,000 in the aggregate for the three-year period       
commencing on the date of the Fund's last installment of its Capital            
Contribution; (ii) to fund any operating deficits for a period of three years up
to a maximum amount of $350,000 in the aggregate for the three-year period      
commencing on the date of the Fund's last installment of its Capital            
Contribution; and (iii) to fund all construction cost overruns as a non-interest
bearing loan to be repaid from sale or refinancing proceeds.                    

It is anticipated that the Fund will acquire a 99% limited
partnership interest in the Specified Operating Partnership in exchange for     
$1,774,900. Miller-Valentine Apartments II, Ltd. and Associated Land Group, Inc.
will provide a fixed price construction contract for $3,831,668 and the         
construction completion guarantee described above. It is currently anticipated  
that the Project will be completed and placed in service no later than December 
31, 1998.                                                                       

 It is anticipated that the Fund will fund 60% of its equity
commitment when (i) the Project has received a certificate of occupancy for all 
units and (ii) the Specified Operating Partnership has received a permanent     
non-recourse mortgage loan commitment. The mortgage loan must contain a fixed   
interest rate with at least a twenty-five year amortization period, at least a  
fifteen year term, and provide a minimum debt service coverage of 1.15. The     
remaining 40% of the Fund's equity contribution will be made in phases as the   
Project is leased up.                                                           

 -4-

424B3
Last Page of 5
TOC
1st
Previous
Next
↓Bottom
Just 5th

                                                        [Enlarge/Download Table]

INFORMATION CONCERNING THE SPECIFIED OPERATING PARTNERSHIP AND THE TAX CREDIT PROPERTY

                  The following table sets forth certain information relating to      
the Specified Operating Partnership and the Tax Credit Property in which the          
Fund anticipates making an investment:                                                


                                                BASIC          GOVERNMENT             
PARTNERSHIP     LOCATION OF     NUMBER         MONTHLY(1)      ASSISTANCE             
    NAME          PROPERTY     OF UNITS         RENTS          ANTICIPATED            
-----------     -----------    --------      -------------     -----------            
                                                                                      
ASPEN GROVE     MIDDLETOWN,       84         $388-$398-2BR      FHTC ONLY             
LIMITED         OHIO                         $460-3BR                                 
PARTNERSHIP                                                                           


  PROJECTED     PROJECTED       ANNUAL                                                
  PERMANENT     MORTGAGE      REPLACEMENT                                             
  MORTGAGE      INTEREST        RESERVE       MANAGEMENT       MANAGEMENT             
   LOAN(2)        RATE           AMOUNT         AGENT             FEE                 
----------      ---------     -----------    ------------      ----------             
                                                                                      
$1,994,068        7.75%         $12,600      ASSOCIATED LAND   5% OF GROSS            
                                             MANAGEMENT, INC.  CASH RECEIPTS          

TERMS OF INVESTMENT IN THE SPECIFIED OPERATING PARTNERSHIP    

                  The following table sets forth certain information relating to
the Fund's proposed investment in the Tax Credit Property described above:      

                                                                [Download Table]

                                 (3)                                            
                              OWNERSHIP                                         
                            INTEREST (%)                                        
                              PROFITS,                                          
                              LOSSES &        OPERATING                         
                 FUND        CREDITS/NET       GENERAL      OPERATING           
PARTNERSHIP     CAPITAL         CASH          PARTNERS'      DEFICIT            
   NAME      CONTRIBUTION   FLOW/BACKEND    CONTRIBUTION    GUARANTEE           
-----------   ------------   ------------    ------------    ---------          
                                                                                
ASPEN GROVE    $1,774,900      99/99/50         $100        UNLIMITED IN        
LIMITED                                                     AMOUNT UNTIL        
PARTNERSHIP                                                 THE SPECIFIED       
                                                            OPERATING           
                                                            PARTNERSHIP HAS     
                                                            ACHIEVED BREAK-     
                                                            EVEN FOR 3          
                                                            CONSECUTIVE MONTHS, 
                                                            THEREAFTER $350,000 
                                                            IN THE AGGREGATE FOR
                                                            3 YEARS AFTER THE   
                                                            FUND'S LAST INSTALL-
                                                            MENT OF ITS CAPITAL 
                                                            CONTRIBUTION.       

                    FUND'S                                                      
                 APPROXIMATE                                       ASSET        
                   AVERAGE     DEVELOPMENT        ANNUAL         MANAGEMENT     
                    ANNUAL       FEE/OTHER      PARTNERSHIP      FEE TO MCD     
   OPERATING     ANTICIPATED  DISTRIBUTIONS     MANAGEMENT        FREEDOM       
 PARTNERSHIP'S     FEDERAL    TO OPERATING        FEE TO         ADVISORS,      
  CREDIT BASE      CREDIT          GPS        OPERATING GPS         INC.        
  -----------    ----------   ------------    --------------    -----------     
                                                                                
   $3,499,656      $288,594      $262,124     GREATER OF 1/2%   1% OF GROSS     
                                              OF 1% OF GROSS    CASH RECEIPTS   
                                              REVENUES OR       FROM OPERATIONS 
                                              $2,000 ANNUALLY                   
<FN>                                                                            
(1)   Exclusive of utilities.                                                   

(2)   The terms of the anticipated Permanent First Mortgage loan in the         
      amount of $1,994,068 are expected to include a term of 25 years, an       
      interest rate of 7.75% and payments of principal and interest on the      
      basis of a 25 year amoritization schedule.                                

(3)   Cash flow will be allocated 100% to the General Partners during the       
      construction of the project property and for the period through           
      April 30, 1999.                                                           


 -5-

Dates Referenced Herein

				Referenced-On Page
This ‘424B3’ Filing		Date		First		Last			Other Filings
		4/30/99		5					None on these Dates
		12/31/98		4
		1/31/97		2
Filed on:		12/10/96
		11/25/96		1
		11/1/96		1
		1/31/96		1
									List all Filings