/ O ^ ^ ' i

EAGLE POINTE DEVELOPMENT I LIMITED PARTNERSHIP

AUDITED FINANCLa STATEMENTS

December 31,2009 and 2008

Under provisions of state law, this report is a public document. Acopy of the report has been submitted to the entity and other appropriate public officials. The report is available for public inspection at the Baton Rouge office ofthe Legislative Auditor and, where-appropriate, at the office of the parish cleric of court.

Release Date 7 / / ^ / |o

EAGLE POINTE DEVELOPMENT I LIMITED PARTNERSHIP

AUDITED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

TABLE OF CONTENTS

PAGE

INDEPENDENT AUDITORS' REPORT 1-2

BALANCE SHEETS 3-4

STATEMENTS OF OPERATIONS 5

STATEMENTS OF PARTNERS' EQUITY (DEFICIT) 6

STATEMENTS OF CASH FLOWS 7-8

NOTES TO FINANCIAL STATEMENTS 9-16

SUPPLEMENTAL INFORMATION

SCHEDULES OF EXPENSES 17

INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT A UDITING STANDARDS 18-19

LITTLE & ASSOCIATES LLC CERTIFIED PUBLIC ACCOUNTANTS

Wm. TODD UTTLE. CPA CHARLES R. MARCHBANKS, JR., CPA

INDEPENDENT AUDITORS' REPORT

To the Partners Eagle PoJnte Development I Limited Partnership Bossier City, LA

We have audited the accompanying balance sheets of Eagle Pointe Development I Limited Partnership (the Partnership) as of December 31, 2009 and 2008 and the related statements of operations, partners' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility ofthe Partnership's management. Our responsibility is to express an opinion on these fmancial statements based on our audits.

We conducted our audits in accordance with U.S. generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are iree 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 ass«sing 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 flnancial statements referred to above present fairly, in all material respects, the financial position of Eagle Pointe Development I Limited Partnership as of December 31, 2009 and 2008 and the results of its operations, changes in partners' equity (deficit), and cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

In accordance with Govemment Auditing Standards, we have also issued our report dated March 8, 2010, on our consideration of Eagle Points Development I Limited Partnership's intemal control over flnancial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and odier matters. The purpose of that report is to describe the scope of our testing of intemal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the intemal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Govemment Auditing Standards and should be considered in assessing the results of our audit.

PHONE (316) 361-9600 • FAX (316) 361-9620 • 806 NORTH 3 1 " STREET • MONROE. LA 71201

Our audits were conducted for the purpose of forming an opinion on the basic fmancial statements taken as a whole. The supplemental information presented in the Schedule of Expenses is presented for purposes of additional analysis and is not a required part ofthe basic fmancial statements. The supplemental information in the Schedule of Expenses for the years ending December 31, 2009 and 2008 have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole.

xiM^/^hi^A>(<L Monroe, Louisiana March 8.2010

EAGLE POINTE DEVELOPMENT I LIMITED PARTNERSHIP BALANCE SHEETS

DECEMBER 31,

ASSETS

2009 2008

CURRENT ASSETS Cash and Cash Equivalents Accounts Receivable - Tenants Due From Related Parties Prepaid Expenses

Total Current Assets

RESTRICTED DEPOSITS AND FUNDED RESERVES Operating Reserves Replacement Reserves Real Estate Tax and Insurance Escrow Tenants' Security Deposits

Total Restricted Deposits and Funded Reserves

PROPERTY AND EQUIPMENT Buildings Site Improvements Fumiture and Equipment

Total Less: Acciunulated Depreciation

Net Depreciable Assets Land

Total Property and Equipment

OTHER ASSETS Permanent Loan Fees Syndication Costs Less: Accumulated Amortization

Total Other Assets

Total Assets

$ 4,705

2,385

70

10,253

17,413

103,715

69,519

3,052

11,258

187,544

3,208.649

85,595

153,334

3,447.578

(540,589)

2,906,989

10,000

2,916,989

42,271

133,279

(11,059)

164,491

$ 3,286,437

$ 3,552

8,830

12,382

103,454

55,615

3,821

11,372

174,262

3.208,649

85,595

153.334

3,447,578

(440,760)

3,006,818

3,006,818

42,271

133,279

(9,017)

166.533

$ 3.359.995

The accompanying notes are an integral part of these financial statements.

3

EAGLE POINTE DEVELOPMEhfT I LIMITED PARTNERSHIP BALANCE SHEETS

DECEMBER 31,

LIABILITIES AND PARTNERS' EQUITY

2009 2008 CURRENT LIABILITIES

Accounts Payable Book Overdraft Deferred Rent Management Fees Payable Due To Related Parties Accrued Interest Payable - Home Federal Savings & Loan Note Payable - Home Federal Savings & Loan

Total Current Liabilities

DEPOSITS Tenants* Security Deposits

Total Deposits

LONG-TERM LL\BILI 1 IBS Note Payable - Home Federal Savings & Loan Note Payable - LHFA Note Payable - Bossier City Housing Authority Accmed Interest Payable - LHFA Accrued Interest Payable - Bossier City Housing Authority Development Costs Payable Developer Fee Payable

Total Long-Term Liabilities

$ 1,965 _

395 -

19,381 4,879

11,697 38,317

11,187 11.187

782,158 399,916 175,000 95,744 52,363

108.584 8,515

1,622,280

$ 440 3,322 1,433 3,619

15,629 4,884

10,868 40,195

11.000 11,000

793.855 399,916 175,000 74,092 43,613

U0,084 9,115

1,605,675

Total Liabilities 1,671,784 1,656,870

PARTNERS' EQUITY Partners' Equity 1,614,653 1,703,125

The accompanying notes are an integral part of these fmancial statements.

4

Total Partners' Equity 1^14,653 1.703,125

Total Liabilities and Partners' Equity $ 3,286,437 $ 3,359.995

EAGLE POINTE DEVELOPMENT I LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31,

2009 2008

REVENUE Rent Income Late Fees, Forfeited Deposits, etc. Other Income

Total Revenue

EXPENSES Maintenance and Repairs Utilities Administrative Management Fees Insurance Interest

Depreciation and Amortization Total Expenses

Net Income (Loss) from Operations

MORTGAGOR ENTITY EXPENSES Asset Management Fees

Total Mortgagor Entity Expenses

$ 274,300 4,105

10,907

$ 269,887 8.398 4,751

289,312

371.931

(82,619)

(5.853)

283,036

64,838 36,486 53,629 13.419 12.306 89,382

101,871

70.845 28.631 58,712 14,297 13,982 90,036

101,849 378,352

(95,316)

(5.637) (5,853) (5,637)

Net Income (Loss) $ (88,472) $ (100,953)

The accompanying notes are an integral part of these financial statements.

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EAGLE POINTE DEVELOPMENT I LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31,

2009 2008 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (Loss) Adjustments to Reconcile Net Loss to Cash

Provided by Operating Activities: Depreciation and Amortization (Increase)Decrease in Accounts Receivable (Increase)Decrease in Prepaid Insurance (Increase)Decrease in Tax & Insurance Escrow Increase(Decrease) in Accounts Payable Increa5e(Decrease) in Deferred Rent Increase(Decrease) in Management Fees Payable Increase(Decrease) in Accmed Interest Payable Net Change in Security Deposits, Received (Paid)

Total Adjustments Net Cash Provided by Operating Activities

CASH FLOWS FROM INVESTING ACTIVHTES: Deposits to Operating Reserve Deposits to Replacement Reserve Purchase of Property and Equipment Advance to Related Party

Net Cash Used in Investing Activities

CASH FLOWS FROM FINANCING ACTIVITIES Change in Book Overdraft Payment of Debt Advance fix>m Related Party Payment of Development Cost Payable Payment of Developer Fees Payable

Net Cash Used in Financing Activities

Net Decrease in Cash and Cash Equivalents

Cash and Cash Equivalents at Beginning of Year

CASH AND CASH EQUIVALENTS AT END OF YEAR

$ (88,472)

101,871 1,167

(1.423) 769

1,520 (1.038) (3.619) 30,397

301 129.945 41,473

(261) (13,904) (10.000)

(70) (24,235)

(3.317) (10,868)

3,752 (1.500)

(600) (12.533)

4.705

.

$ 4,705

$ (100,953)

101.849 (686) 933

(697) (11,863)

678 1.324

30.280 1.681

123.499 22.546

(270) (21.547)

(384) -

(22,201)

3,322 (10.097)

1,488 -

(4.000) (9,287)

(8.942)

8,942

$

The accompanying notes are an integral part of these financial statements.

7

EAGLE POINTE DEVELOPMENT I LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31,

2009 2008 Supplemental Disclosures of Cash Flow Information:

Cash Paid During the Year for Interest: $ 58.985 $ 59,757

The accompanying notes are an integral part of these financial statements.

8

EAGLE POINTE DEVELOPMENT I LIMITED PARTNERSHIP NOTES TO FINANCUa STATEMENTS

DECEMBER 31, 2009 AND 2008

NOTE A - ORGANIZATION

Eagle Pointe Development I Limited Partnership (the Partnership) was organized in 2001 as a limited partnership to develop, constmct. own. maintain, and operate a 44-unit rental housing apartment complex for persons of low and moderate income. The apartment complex is located in Bossier City, Louisiana, and is currently known as Village of Ea^e Pointe I Apartments. Each building of the apartment complex has qualified and been allocated low income housing tax credits pursuant to Intemal Revenue Code Section 42 (Section 42) which regulates the use ofthe apartment complex as to occupant eligibility and unit gross rent, among other requirements. The major activities of the Partnership are govemed by the Amended and Restated Partnership agreement, as amended (the Partnership Agreement) and are subject to the administrative dh'ectives, rules, and regulations of federal and state regulatory agencies, including but not lunited to, the state housing finance agency. Such administrative directives, mles. and regulations are subject to change by federal and state agencies.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summaiy of the significant accounting policies consistently applied in the preparation of the accompanying financial statements follows.

Basis of Accounting

The flnancial statements ofthe Partnership are prepared on the accrual basis of accounting and in accordance with U.S. generally accepted accounting principles.

Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

For purposes ofthe statement of cash flows, cash and cash equivalents represent unrestricted cash and all highly liquid and unrestricted debt instmments purchased with a maturity of three months or less.

Cash and Other Deposits

The Partnership maintains various checking, escrow, and other deposits at various financial institutions. Accounts at the financial institutions are insured by the Federal Deposit tosurance Corporation up to $250,000. At December 31, 2009, the Partnership had no uninsured cash balances.

EAGLE POINTE DEVELOPMENT I LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS

DECEMBER 31,2009 AND 2008

NOTE B-SUMMARY OF SIGNMCANT ACCOUNTING POLICIES (CONTINUED)

Operating Reserve

In accordance with the Partnership Agreement, the Managing General Partner established an Operating Reserve Account at Citizens National Bank. As of December 31, 2009 and 2008, the account had a balance of $103,715 and $103,454.

Credit Risk Collateralization Policy

The Partnership does not require collateral to support financial instmments subject to credit risk.

Property. Equipment and Depreciation

Land, buildings, improvements, and equipment are recorded at cost. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives using the straight-lme method. Improvements are capitalized, while expenditures for maintenance and repairs are charged to expense as incurred. Upon disposal of depreciable property, the appropriate property accounts are reduced by the related costs and accumulated depreciation. The resulting gains and losses are reflected in the statement of operations.

Amortization

Mortgage costs are amortized over the term ofthe mortgage loan using the straight-line method.

Tenants' Security

Tenants' security deposits are to be held in a separate bank account in the name ofthe apartment complex. At December 31. 2009, this account was funded in an amount greater than the security deposit liability.

Rental Income and Accounts Receivable

Rental income is recognize as rentals become due. Rental payments received in advance are deferred until eamed. All leases between the Partnership and the tenants of the property are operating leases.

Tenant rent charges for the current month are due on the first of the month. Tenants who are evicted or move out are charged with dam^es and cleaning fees, if applicable. Tenant receivable consists of amounts due for rental income, other tenant charges and charges for damages and cleaning fees in excess of forfeited security deposits. The Partnership does not accme interest on the tenant receivable balances.

The Partnership uses the direct write-off metihod to provide for uncollectible accounts. Use of this method does not result in a material difference from the valuation method required by accounting principles generally accepted in the United States of America.

10

EAGLE POINTE DEVELOPMENT I LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS

DECEMBER 31.2009 AND 2008

NOTE B-SUMMARY OF SIGNIHCANT ACCOUNTING POLICIES (CONTINUED)

Income Taxes

No provision or benefit for income taxes has been included in these fmancial statements since taxable income or loss passes through to, and is reportable by, the partners individually,

NOTE C - PARTNERS AND CAPITAL CONTRIBUTIONS

During 2004, Provident Tax Credit Fund IX, LLC, withdrew as an Investor Limited Partner in the Partnership, and Nationwide Affordable Housing Fund XVI: A Red Capital Tax Credit Fund. LLC was admitted as an Investor Limited Partner. The Partnership has a General Partner -Bossier Housing Corporation, Inc., and a Special Limited Partner - SCDC, LLC. The Partnership records capital contributions as received. Capital contributions from the Investor Limited Partner for the year ended December 31, 2006, were $2,194,266. Of this amount, $95,353 was received during 2006. As of December 31, 2006, the Partnership has received all capital contributions according to the partnership agreement except for $12,586, which was retained by the Investor Limited Partner during 2006 to pay for a 2004 tax credit timing adjuster.

NOTE D - LONG-TERM DEBT

First Mortgage

Constmction financing was acquired through Home Federal Savings and Loan Association of Shreveport at an aimual interest rate of 7.375%. The construction loan matured on July 1.2004. At such time Home Federal Savings and Loan Association of Shreveport loaned $842,818 to the Partnership for the purpose of paying the balance due on the constmction loan. Under tiie terms ofthe loan, the Partnership will make monthly principal and interest payments of $5,821 (7.375% per annum) until December 31, 2023 at which time the note matures and all unpaid balances on the note are due and payable. The balance due as of December 31,2009 was $793,855.

The Home Federal Savings and Loan Association of Shreveport loan is nonrecourse debt and is collateralized primarily by a first mortgage on the Partnership's land and buildings and an assignment of all rents and leases ofthe Partnership.

Second Mortgage

The Louisiana Housing Finance Agency (LHFA) has committed loan proceeds of $510,000 to the Partnership, of which the Partnership has only received $399,916. The loan bears interest at a rate of 5.34%, which accmes on the outstanding principal. Amortization ofthe note and payment of accmed interest will not begin until the earlier of, the first mortgage with Home Federal Savings and Loan Association of Shreveport is paid in full or April 1,2023, (commencement of amortization) at which time, the note will be payable in monthly principal and interest installments. In addition to the monthly installment, the accmed interest from inception of the note through commencement of amortization will be payable in equal monthly installments through August 15, 2019, which is the date all unpaid sums under the note are due and payable.

11

EAGLE POINTE DEVELOPMENT I LIMITED PARTNERSHIP • NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

NOTE D - LONG-TERM DEBT (CONTINUED)

Second Mortgage (Continued)

The loan also details that payments shall be made only out of and to the extent ofthe cash flow of the Partnership after payment of all operating expenses approved by the LHFA. As a condition to obteining this financing, the Partnership has entered into a regulatory agreement with LHFA. Rentals to tenants of low income and restrictions of rents charged are two major conditions ofthe regulatory agreement. Should the LHFA issue a written notice to the Partnership of an instance of noncompliance with tiie regulatory agreement, the Partnership has thirty days fh}m the issuance of such notice to correct the noncompliance.

Should the noncompliance not be corrected within the thirty days. LHFA has the authority to declare the entire amount of mortgage inunediately due and payable.

Third Mortgage

Eagle Pointe Development I Limited Partnership entered into a loan agreement with the Housing Authority of tiie City of Bossier City on November 5,2003 in tiie amount of $175,000. The loan bears interest at a rate of 5.00%. which accmes on the outstanding principal. Amortization ofthe note and payment of accmed interest shall be m ^ e only after payment of all Borrower's operating expenses the funding of adequate reserves, and the payment of any payments due or outstanding under any Constmction or Permanent Financing firom an institutional lender and as set forth in the Partnership Agreement. The entire balance of principal and all accmed and unpaid interest shall be due and payable on December 31, 2043. As of December 31, 2009 and 2008. the balance ofthe loan was $175,000 each year and accmed interest amounted to $52,363 in 2009 and $43,613 in 2008.

Maturities of Long-Term Debt

Aggregate maturities of long-term debt for the next five years and thereafter are as follows:

Year Ending December 31,

2010 2011 2012 2013 2014

Thereafter

$

$

$

$

$

$

Amount 11,697 12,589 13,550 14,584 15,696

1,300.655

12

EAGLE POINTE DEVELOPMENT I LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS

DECEMBER 31,2009 AND 2008

NOTE E - TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES

Management Fees

The General Parmer (Bossier Housing Corporation, Inc.) is under common control with the Housing Authority of the City of Bossier City, a Louisiana Public Housing Authority, the managing agent for the apartment complex. The Partnership incurred management fees of $13,419 and $14,297 during 2009 and 2008, respectively, for services rendered in connection with the leasing, management and operation of the apartment complex. The Base Management Fee is computed on 5% of Operating Revenues and the Subordinate Management Fee in an amount equal to 5% of Operating Revenues provided that the Subordinate Man£^ement Fee shall be payable only to the extent of funds available pursuant to Section 5.2.A. of the Management Agreement. As of December 31, 2009 and 2008, accmed management fees totaled $0 and $3,619, respectively. Management fees are charged monthly at a rate of 5.00% of total montiily income.

Asset Management Fee

The Partnership shall pay an asset management fee to Special Limited Partner (or to an affiliate thereof). The Asset Management Fee is $5,000 increased each year by the applicable CPI adjustment fiom and after tiie Admission Date. The Asset Management Fee is due and payable within fifteen days after the end of each calendar quarter to the extent cash is available as provided m the Partnership agreement. The Partnership incurred Asset Management fees of $5,853 and $5,637 during 2009 and 2008, respectively.

Transactions With Related Parties

During 2009. the Partnership paid operating expenses, in the amount of $65, on behalf of Eagle Pointe Development III Limited Partnership. As of December 31, 2009, accmed receivable totaled $65.

During 2009, the Partnership paid operating expenses, in the amount of $5. on behalf of Bossier City Housing Authority. As of December 31,2009, accmed receivable totaled $ 5.

Developer Fee

The Partnership entered into a development agreement with Bossier Housing Corporation, Inc., the General Partner. The agreement provides for a development fee of $440,000 for services to be perfonned in connection with the development of the Project. The total fee was eamed and capitalized into the cost ofthe building. The fee is non-interest bearing and paid out of available cash flows, as defined by the Partnership Agreement. During 2008, the Partnership paid $4,000 in developer fees leaving a balance of $9,115 to be paid as of December 31,2008. During 2009, the Partnership paid $600 in developer fees leaving a balance of $8,515 to be paid as of December 31,2009.

13

EAGLE POINTE DEVELOPMENT I LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

NOTE E - TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED)

Development Cost Payable

As of December 31. 2009 and 2008, tiie Partnership owed the Housing Authority of tiie City of Bossier City, an affiliated entity, $108,584 and $110,084 for development costs paid by the Housing Authority on behalf of the Partnership.

Amounts Due To Related Parties

Amounts due to related parties at December 31,2009 and 2008. consist ofthe following:

2009 2008

Bossier Housing Corporation, Inc., for Developer Fee $ 8,515 $ 9,115

Bossier Housing Corporalion, Inc., for Management Fees - 3,619

Bossier City Housing Authority, for Development Costs paid on behalf of tiie Partnership 108,584 110,084

Bossier City Housing Authority, an affiliate of Bossier Housing Corporation. Inc., for costs paid on behalf of the Partnership 19,381 15,629

Bossier City Housing Authority, note payable of

$175,000 including accmed interest 227,363 218,613

$ 363.843 $ 357,060

NOTE F - PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS All profits and losses, other tiian firom certain transactions detailed in the Partnei^ip Agreement, are allocated .01% to the General Partner, 99.989% to tiie Investor Limited Partner and .001% to the Special Limited Partner. Distributable cash fiow is defined'in The Partnership Agreement as the excess of operating revenues over the sum of operating expenses and debt service.

Distributable cash flow is payable annually as follows:

(1) to the payment of any unpaid Adjustment Amount detennined in accordance witii Section 4.2;

(2) to the payment of any unpaid Base Management Fee;

14

EAGLE POINTE DEVELOPMENT I LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS

DECEMBER 31.2009 AND 2008

NOTE F - PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS (CONTINUED)

(3) to the payment of any unpaid Asset Management Fees;

(4) to the repayment of any outstanding Limited Partner Loans;

(5) to replenishment of the Operating Reserve to the extent required pursuant to Section 6.14.B;

(6) to payment ofthe Deferred Development Cost Payment until paid in full;

(7) to the payment of any unpaid Subordinate Management Fee;

(8) to the additional payment of principal on the Permanent Mortgage;

(9) to the payment ofthe Secondary Loans;

(10) to the repayment of any outstanding General Partner Loans;

(11) to the repayment of outstanding Operating Deficit Loans; and

(12) all remaining Cash Flow shall be distributed 0.01% to the General Partners and 99.99% to the Limited Partners.

NOTE G - TAXABLE INCOME (LOSS)

A reconciliation of financial statement net loss of the Partnership for the years ended December 31.2009 and 2008 are as follows:

2009 2008

Financial Statement Net Loss

Adjustments: Excess of depreciation for income tax purposes over financial reporting Purposes

Other Book/Tax Timing Differences

Taxable loss as shown on tax retum

$ (88.472)

(0)

0

$(0)

$(100,953)

(30.906)

3,462

$ (128.397)

15

EAGLE POINTE DEVELOPMENT I LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS

DECEMBER 31. 2009 AND 2008

NOTE H - SUBSEQUENT EVENTS

The Partnership has evaluated subsequent events through March 8, 2010, the date which the flnancial statements were available for issue.

16

SUPPLEMENTAL INFORMATION

EAGLE POINTE DEVELOPMENT I LIMITED PARTNERSHIP SCHEDULE OF EXPENSES

FOR THE YEARS ENDED DECEMBER 31,

2009 2008 MAINTENANCE AND REPAIRS

Grounds Maintenance Maintenance and Repairs - Contract Maintenance and Repairs - Supplies Pest Control

Total Maintenance and Repairs

UTILITIES Electricity Water Sewer Gas Garbage and Trash Removal Other Utility Expense

Total Utilities

ADMINISTRATIVE Payroll Bookkeeping and Auditing Advertismg Legal Fees Computer Support Services Office Expense Telephone LHFA Finance Fee Miscellaneous Administrative Fees

Total Administrative

INSURANCE Property and Liability Insurance

Total Insurance

INTEREST EXPENSE Bossier City Housing Authority Loan Interest Expense Home Loan Interest Expense Mortgage Interest Expense

Total Interest Expense

$

$

$

$

$

$

$ $

$

$

11,261 52.107

-

1,470 64.838

4,308 10.441 8,179

125 7,193 6,240

36,486

35,439 5,869

-

311 3,239

697 530

5.894 1,650

53,629

12,306 12.306

8,750 21,652 58,980 89,382

$

$

$

$

$

$

$ $

$

$

14,102 54,443

953 1,347

70,845

3,660 8,049 6,173

128 5,671 4,950

28,631

36,921 5,500

703 1,322 3,403 1,304

540 8,622

397 58,712

13,982 13,982

8.752 21,711 59,573 90,036

17

LITTLE & ASSOCL^TES LLC CERTIFIED PUBLIC ACCOUNTANTS

Wm. TODD UTTLE. CPA CHARLES R. MARCHBANKS. JR., C f *

Independent Auditors* Report on Internal Control Over Financial Reporting and on Compliance and Other Matters

Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards

To the Partners Eagle Pointe Development I Limited Partnership Bossier City, Louisiana

We have audited the financial statements of Eagle Pointe Development I Limited Partnership as of and for tiie year ended December 31,2009, and have issued our report thereon dated March 8, 2010. We conducted our audit in accordance with U.S. generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States.

Intemal Control Over Financial Reporting

In planning and performing our audit, we considered Eagle Pointe Development I Limited Partnership's uitemal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Eagle Pomte Development I Limited Partnership's intemal control over financial reporting. Accorduigly, we do not express an opinion on the effectiveness of Eagle Pointe Development I Limited Partnership's intemal control over financial reporting.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies in intemal control, such that there is reasonable possibility that a material misstatement ofthe entity's financial statements will not be prevented, or detected and corrected on a timely basis.

Our consideration of intemal control over financial reporting was for the limited purpose described in tiie first paragraph of this section and was not designed to identify all deficiencies in intemal control over financial reporting that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in intemal control over financial reporting that we consider to be material wealmesses, as defined above.

18

PHONE <3ie) 361-9600 • FAX (318) 361-9620 • 805 NORTH 3 1 " STREET • MONROE, LA 71201

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Eagle Pointe Development I Limited Partnership's financial statements are fi:ee of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Govemment Auditing Starulards.

This report is intended solely for the information and use ofthe Partners and the management of Eagle Pointe Development I Limited Partnership, and the Louisiana Legislative Auditor, and is not intended to be and should not be used by anyone other than these specified parties. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document

Monroe, Louisiana March 8.2010

19

LITTLE & ASSOCIATES LLC CERTIFIED PUBUC ACCOUNTANTS

Wm. TODD UTTIE, CPA CHARLES R. MARCHBANKS, JR., CPA

April 19,2010

Novogradac & Company LLP 303 West Third Street Dover, OH 44622

Dear Ms. Stewart,

We have audited the financial statements of Eagle Pointe Development I, LP for the year ended December 31,2009, and have been requested to furnish the information in the following paragraph in connection wifli the report you are to give on the fmancial statements oiNationwide Affordable Bousing Fund XVI: A Red Capital Tax Credit Fund, LLC

As far as Nationwide Affordable Housing Fund XVI: A Red Capital Tax Credit Fund, LLC and Eagle Pointe Development I, LP are concenied, our firm has been for the period covered by the financial statements reported upon and tiiereafter to date, in fact, independent within the meaning of Rule 101 ofthe Code of Professional Ethics ofthe American Institute of Certified Public Accountants.

That we are aware that the financial statements of Eagle Pointe Development I, LP, on which Novogradac & Conipany LLP will report, are to be included in the financial statements of Nationwide Affordable Housing Fund XVI: A Red Capital Tax Credit Fund, LLC on which Novogradac & Company LLP will report and that our report will be relied on and referred to by Novogradac & Con:q)any LLP in their report

That we will make a review of and inform you of matters affecting tiie elimination of inter-company transactions and accounts based upon related party information that will be fumished to you.

We are in compliance with AICPA requirements for peer review, and have provided a copy of our latest peer review report.

Should you have any questions, please contact Littie & Associates at 318-36 J -9600.

Very truly yours,

Little & Associates, LLC

PHONeOIS) 361-9600 FAX(318)3ei<9620 MAILING ADDRESS: P. 0. BOX 4058

BOS NORTH 3 1 " STREET •

• MONROE, LA 71211-4058 MONROE. U 71201

Kenneth D. Folden & Co. Kenneth D. Folden. CPA Cert i f ied Publ ic A c c o u n t a n t s Ted w.Sanderijn CPA

Members 302 Eighth Street Members Society of Louisiana Jonesboro, LA 71251 American Institute of

Certified Public Accountants (318) 259.7316 Certified Public Accounumts EMAIL: Kfoldenfa^foldencpa.com FAX (318) 259-7315 EMAJL: tsanderlirifg^ iH,.nrpa,t . ^p

September 30,2008

To the Ovraers Little & Associates, LLC

Wc have reviewed the system of quality control for the accounting and auditing practice of Little &, Associates LLC (the firm) in effect for the year ended December 31. 2007. A system of quality control encompasses the firm's organizational structure, the policies adopted and procedures established to provide it with reasonable assurance of confonning with professional standards. The elements of quality control are described in the Statements on (Juality Control Standards issued by the American Institute of Certified Public Accountants (AICPA). The firm is responsible for designing a system of quality control and complying with it to provide the firm with reasonable assurance of conforming with professional standards in all material respects. Our responsibility is to express an opinion on the design ofthe system and the firm's compliance with the system based on our review.

Our review was conducted in accordance with standards established by the Peer Review Board of the AICPA During our review, we read requu-ed representations, interviewed firm personnel and obtained an understanding of the namre of the firm's accounting and auditing practice, and the design of the finn's system of quality control sufficient to assess the risks implicit in its practice. Based on our assessments, we selected engagements and administrative files to test for conformity with professional standards and compliance with the firm's system of quality control. The engagements selected represented a reasonable cross-section of the firm's accounting and auditing practice with emphasis on higher-risk engagements. The engagements selected included a m o n g ^ e r s engagements performed under Government Auditing Standards. Prior to concludhig the review, we reassessed the adequacy of tiie scope of ihe peer leview procedures and met with finn management to discuss the results of our review. We believe that the procedures we perfonned provide a reasonable basis for our opinion.

In perfoiming our review, we obtained an understanding ofthe system of quality control for the firm's accountinE and auditing practice. In addition, we tested compliance with the fmm's quality control policies and procedures to the extent we considered appropriate. These tests covered the application of the firm's policies and procedures on selected engagements. Our review was based on selective tests, therefore, it would not necessarily detect all weaknesses in the system of quality control or all instances of noncompliance witii ii. There are inherent limitations m die effectiveness of any system of quality control and therefore, noncompliance with the system of quality control may occur and not be detected. Projection of any evaluation of a system of qAiality control to future periods is subject to tiie risk tiiat the system of quality control may become inadequate because of changes in conditions or because tiie degree of compliance with the policies or procedures may deteriorate. '

In our opinion, the system of quality control for the accounting and auditing practice of Little & Associates LLC in effect for the year ended December 31, 2007, has been designed to meet tiie requirements of tiie quality control standards for an accounting and auditing pructice established by the AICPA and was being complied witii durme tii year then ended to provide the firm with reasonable assurance of confonning with professional standards ^

Kennetii D. Folden & Co., CPAs ^