AHC Limited Partnership - 18

Financial Statements For The Years Ended December 31, 2012 And 2011

Table Of Contents For The Years Ended December 31, 2012 And 2011 Independent Auditors Report... 1-2 Financial Statements Balance Sheets... 3-3A Statements Of Operations... 4 Statements Of Changes In Partners' Capital (Deficit)... 5 Statements Of Cash Flows... 6-6A Notes To Financial Statements... 7-15 Supplementary Information Independent Auditors Report On Supplementary Information... 16 Schedules Of Rental Expenses And Administrative Expenses... 17 Schedules Of Operating And Maintenance Expenses And Taxes And Insurance Expenses... 18 Schedules Of Other Income... 19

Independent Auditors Report To The Partners AHC Limited Partnership - 18 2230 North Fairfax Drive, Suite 100 Arlington, VA 22201 We have audited the accompanying financial statements of AHC Limited Partnership - 18, which comprise the balance sheet as of December 31, 2012, and the related statements of operations, changes in partners' capital (deficit), and cash flows for the year then ended, and the related notes to the financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the Baltimore 800 Red Brook Boulevard Suite 300 Owings Mills, Maryland 21117 410.363.3200 800.899.3633 410.356.0058 fax Greater Washington, D.C. 1803 Research Boulevard Suite 215 Rockville, Maryland 20850 301.315.2150 301.315.2152 fax

Independent Auditors Report Page 2 financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of AHC Limited Partnership - 18 as of December 31, 2012, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matter The financial statements of AHC Limited Partnership - 18 as of December 31, 2011, were audited by other auditors whose report dated April 26, 2012, expressed an unqualified opinion on those statements. Certified Public Accountants Baltimore, Maryland March 5, 2013

F I N A N C I A L S T A T E M E N T S

Balance Sheets December 31, 2012 2011 Assets CURRENT ASSETS Cash And Cash Equivalents $ 400,657 $ 638,850 Tenants' Security Deposits 109,916 95,068 Rents Receivable 12,617 5,528 Accounts Receivable - Other 54,285 13,114 Prepaid Expenses 16,643 12,358 Mortgage Escrow Deposits 102,966 92,224 Total Current Assets 697,084 857,142 PROPERTY AND EQUIPMENT Land 10,833,454 10,833,454 Building 37,398,934 37,398,934 Furniture And Fixtures 1,050,659 1,046,573 Land Improvements 1,093,648 1,091,390 50,376,695 50,370,351 Less: Accumulated Depreciation 4,705,154 3,465,667 Property And Equipment, Net 45,671,541 46,904,684 OTHER ASSETS Reserve For Replacements 117,631 69,530 Operating Reserve 801,398 800,212 Trustee Funds 404,930 201,649 Financing Fees (Net Of Accumulated Amortization Of $152,874-2012 And $40,607-2011) 541,305 658,572 Tax Credit Fees (Net Of Accumulated Amortization Of $18,222-2012 And $14,893-2011) 92,678 96,007 Deposits 130 430 Total Other Assets 1,958,072 1,826,400 TOTAL ASSETS $ 48,326,697 $ 49,588,226 The Accompanying Notes Are An Integral Part Of These Financial Statements 3

Balance Sheets December 31, 2012 2011 Liabilities And Partners' Capital CURRENT LIABILITIES Accounts Payable $ 47,991 $ 34,326 Accrued Expenses 48,480 19,964 Accrued Interest - First Mortgage - 51,730 Accrued Interest - Development Fee - 742 Accrued Interest - Note Payable - Affiliate 307,359 222,206 Development Fee - 307,896 Prepaid Rents 23,491 2,725 Tenants' Security Deposits 83,153 84,072 Total Current Liabilities 510,474 723,661 LONG-TERM LIABILITIES Long-Term Debt, Less Current Maturities - First Mortgage 17,150,000 17,150,000 Note Payable - Affiliate 17,767,516 17,767,516 Accrued Interest - Note Payable - Affiliate, Net Of Current Maturities 3,236,206 2,600,320 Fair Market Value Of Interest Rate Swap 3,461,981 3,297,055 Total Long-Term Liabilities 41,615,703 40,814,891 PARTNERS' CAPITAL Partners' Capital 9,662,501 11,346,729 Accumulated Other Comprehensive Loss (3,461,981) (3,297,055) Total Partners' Capital 6,200,520 8,049,674 TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 48,326,697 $ 49,588,226 The Accompanying Notes Are An Integral Part Of These Financial Statements 3A

Statements Of Operations For The Years Ended December 31, 2012 2011 INCOME Rental Income At 100% Occupancy $ 2,242,227 $ 2,199,197 Less: Vacancies And Concessions 51,110 57,915 Gross Rental Income 2,191,117 2,141,282 Other Income 101,247 105,227 Total Income 2,292,364 2,246,509 GENERAL EXPENSES Rental 53,977 98,572 Administrative 182,902 154,867 Operating And Maintenance 252,985 293,947 Taxes And Insurance 260,516 242,232 Total General Expenses 750,380 789,618 INCOME BEFORE OTHER EXPENSES 1,541,984 1,456,891 OTHER EXPENSES Amortization 115,596 55,500 Asset Management Fee 5,464 9,205 Depreciation 1,239,487 1,231,391 Interest - Development Fee 10,258 227,125 Interest - First Mortgage 870,979 908,484 Interest - Note Payable - Affiliate 943,245 899,287 Other Financial Expenses 41,183 21,545 Total Other Expenses 3,226,212 3,352,537 NET LOSS FOR THE YEAR $ (1,684,228) $ (1,895,646) The Accompanying Notes Are An Integral Part Of These Financial Statements 4

Statements Of Changes In Partners' Capital (Deficit) For The Years Ended December 31, 2012 And 2011 SPECIAL GENERAL LIMITED LIMITED PARTNER PARTNER PARTNERS TOTAL 0.009% 0.001% 99.990% 100.00% PARTNERS' CAPITAL (DEFICIT) - JANUARY 1, 2011 $ 32,388 $ (40) $ 851,628 $ 883,976 CONTRIBUTIONS - - 12,358,399 12,358,399 NET LOSS FOR THE YEAR ENDED DECEMBER 31, 2011 (171) (19) (1,895,456) (1,895,646) PARTNERS' CAPITAL (DEFICIT) - DECEMBER 31, 2011 32,217 (59) 11,314,571 11,346,729 NET LOSS FOR THE YEAR ENDED DECEMBER 31, 2012 (151) (17) (1,684,060) (1,684,228) PARTNERS' CAPITAL (DEFICIT) - DECEMBER 31, 2012 $ 32,066 $ (76) $ 9,630,511 $ 9,662,501 ACCUMULATED OTHER COMPREHENSIVE LOSS - JANUARY 1, 2011 $ (106) $ (12) $ (1,178,926) $ (1,179,044) UNREALIZED LOSS ON DERIVATIVE (191) (21) (2,117,799) (2,118,011) ACCUMULATED OTHER COMPREHENSIVE LOSS - DECEMBER 31, 2011 (297) (33) (3,296,725) (3,297,055) UNREALIZED LOSS ON DERIVATIVE (14) (2) (164,910) (164,926) ACCUMULATED OTHER COMPREHENSIVE LOSS - DECEMBER 31, 2012 $ (311) $ (35) $ (3,461,635) $ (3,461,981) The Accompanying Notes Are An Integral Part Of These Financial Statements 5

Statements Of Cash Flows For The Years Ended December 31, 2012 2011 CASH FLOWS FROM OPERATING ACTIVITIES: Net Loss $ (1,684,228) $ (1,895,646) Adjustments To Reconcile Net Loss To Net Cash Provided By Operating Activities: Depreciation And Amortization 1,355,083 1,286,891 Financing Fees Write Off 5,000 - (Increase) Decrease In Operating Assets: Tenants' Security Deposits (14,848) (13,661) Rents Receivable (7,089) 7,496 Accounts Receivable - Other (41,171) (13,114) Prepaid Expenses (4,285) 7,354 Mortgage Escrow Deposits (10,742) (32,317) Increase (Decrease) In Operating Liabilities: Accounts Payable 13,665 (18,944) Accrued Expenses 28,516 (3,826) Accrued Interest - First Mortgage (51,730) (56,602) Accrued Interest - Note Payable - Affiliate 721,039 899,286 Accrued Interest - Development Fee Payable (742) 742 Prepaid Rents 20,766 (2,140) Tenants' Security Deposits (919) 6,360 Net Cash Provided By Operating Activities 328,315 171,879 CASH FLOWS FROM INVESTING ACTIVITIES: Increase In Reserve For Replacements (48,101) (69,530) Increase In Operating Reserve (1,186) (800,212) (Increase) Decrease In Trustee Funds (203,281) 587,156 Decrease In Deposits 300 - Repayment Of Advance To Affiliate - 5,267 Acquisition Of Property And Equipment (6,344) (3,462,611) Development Fee Paid (307,896) - Construction Costs Paid - (78,153) Tax Credit Fees Paid - (2,900) Financing Fees Paid - (148,403) Net Cash Used In Investing Activities (566,508) (3,969,386) CASH FLOWS FROM FINANCING ACTIVITIES: Mortgage Principal Payments - (8,520,000) Capital Contributions - 12,358,399 Net Cash Provided By Financing Activities - 3,838,399 NET INCREASE (DECREASE) IN CASH (238,193) 40,892 CASH - BEGINNING OF YEAR 638,850 597,958 CASH - END OF YEAR $ 400,657 $ 638,850 The Accompanying Notes Are An Integral Part Of These Financial Statements 6

Statements Of Cash Flows (Continued) For The Years Ended December 31, 2012 2011 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash Paid During The Year For: Interest $ 1,241,068 $ 6,234,073 SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Acquisition Of Property And Equipment $ - $ 3,390,324 Development Fee Payable - (3,390,324) Unrealized Derivative Liability 164,926 2,118,011 Accumulated Other Comprehensive Income (164,926) (2,118,011) $ - $ - The Accompanying Notes Are An Integral Part Of These Financial Statements 6A

Notes To Financial Statements December 31, 2012 And 2011 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF BUSINESS AHC Limited Partnership - 18 (the Partnership) is a limited partnership formed in the Commonwealth of Virginia on August 28, 2007 to develop, own and operate a multifamily apartment complex, for rental to low-income individuals and families. The Project consists of 153 units located in Arlington, Virginia and operates under the name of Westover Apartments (the Project). The Partnership received an annual allocation of low-income housing tax credits from the state of Virginia. To qualify for the tax credits, the Partnership must meet certain requirements, including attaining a qualified eligible basis sufficient to support the allocation. Each building of the Project has qualified for and been allocated low-income housing tax credits pursuant to Internal Revenue Code Section 42 (Section 42), which regulates the use of the Project as to occupant eligibility and unit gross rent, among other requirements. Each building of the Project must meet the provisions of these regulations during each of fifteen consecutive years in order to remain qualified to receive the credits. In addition, the Partnership entered into an Extended Use Housing Agreement with the Virginia Housing Development Authority (VHDA), which requires the utilization of the Project pursuant to Section 42 for a minimum of 30 years after the compliance period, even if the Partnership disposes of the Project METHOD OF ACCOUNTING The Partnership s financial statements are prepared on the accrual method of accounting which recognizes income when it is earned and expenses when they are incurred. CASH AND CASH EQUIVALENTS The Partnership considers all highly liquid investments with a maturity of three months or less at the date of acquisition to be cash equivalents. There were no cash equivalents as of December 31, 2012 and 2011. RENTS RECEIVABLE AND BAD DEBTS Tenant receivables are charged to bad debt expense when they are determined to be uncollectible based upon a periodic review of the accounts by management. Accounting principles generally accepted in the United States of America require that the allowance method be used to recognize bad debts; however, the effect of using the direct write-off method is not materially different from the results that would have been obtained under the allowance method. PROPERTY AND EQUIPMENT Property and equipment are stated at cost. The cost of repairs and maintenance is charged to operations as incurred. Major renewals, betterments and additions are capitalized. When assets are sold or otherwise disposed of, the cost of the asset and related accumulated depreciation are removed from the accounts and the resulting gain or loss is credited or charged to income. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. During 2011, the Partnership changed its estimate of the useful lives of buildings and certain assets based on their evaluation of the assets useful lives. IMPAIRMENT OF LONG-LIVED ASSETS The Partnership reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the fair value is less than the carrying amount of the asset, an impairment loss is recognized for the difference. There were no asset impairments during the years ended December 31, 2012 and 2011. AMORTIZATION Financing fees are being amortized to operations over the lives of the loans using the straightline method. The estimated amortization expense for each of the next five years is $38,566. 7

Notes To Financial Statements (Continued) December 31, 2012 And 2011 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) AMORTIZATION (CONTINUED) Costs relating to obtaining low-income housing tax credits will be amortized over the mandatory 15 year compliance period. The estimated amortization expense for each of the next five years is $7,200. Costs relating to historic tax credit fees are amortizing over a five year life. The estimated amortization expense is as follows: 2013 $ 450 2014 450 2015 450 2016 150 As of January 1, 2012, the Partnership changed its method of amortization from the effective yield method to the straight-line method in order to simplify the calculation based on a cost - benefit analysis. It was determined that the effective yield method resulted in an annual amortization expense amount that did not differ materially from amortization expense under the straight line method. In addition, the estimated lives of the fees were evaluated for reasonableness and adjusted. The cumulative difference of the changes resulted in a negative adjustment to net loss of $69,356 which is reflected in the Statement of Operations for the year ending December 31, 2012. INCOME TAXES The Partnership files a partnership tax return and the net income or loss is reported by the partners on their respective income tax returns. The Partnership has adopted FASB ASC 740, Income Taxes, which clarifies the accounting for uncertainty in income taxes. Based on its evaluation, the Partnership has concluded that there are no significant uncertain tax positions requiring recognition in the financial statements. No interest or penalties have been recorded as a result of tax uncertainties. The tax years ended December 31, 2009 through December 31, 2012 remain open to examination by tax jurisdictions to which the Partnership is subject. ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. DERIVATIVES The interest rate swap was designated as a cash flow hedge and is being used to offset the risk of changes in cash flows associated with benchmark interest payments on its variable rate loan. Management reassesses the hedge on an on-going basis to determine if it continues to be effective. The effective portion of the changes in the fair value of the hedge is recorded in other comprehensive income (OCI) and the amounts in OCI will be reclassified into earnings over the term of the loan as interest payments are made. The ineffective portion of the hedges is recorded directly into earnings. As of December 31, 2012 and 2011, the hedges were deemed to be effective. As of December 31, 2012 and 2011, the swap was reported at fair value on the balance sheets as a derivative liability in the amounts of $3,461,981 and $3,297,055, respectively. RENTAL REVENUE Rental income is recognized as rentals become due from residential tenants. Rental payments received in advance are deferred until earned. All leases between the Partnership and tenants of the property are operating leases. ADVERTISING The Partnership s policy is to expense advertising costs when incurred. RECLASSIFICATIONS Reclassifications have been made to the prior year balances to conform to the current year presentation.. 8

Notes To Financial Statements (Continued) December 31, 2012 And 2011 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) FAIR VALUE OF FINANCIAL INSTRUMENTS The Partnership has adopted ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value, establishes a consistent framework for measuring fair value, and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. ASC 820 clarifies that fair value is an exit price, representing the amount expected to be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 sets forth a three-tier hierarchy for the inputs used to measure fair value based on the degree to which such inputs are observable in the marketplace, as follows: (i) Level 1 - observable inputs such as quoted prices in active markets; (ii) Level 2 - inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (iii) Level 3 - unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions The unrealized loss on the interest rate swap of $3,461,981 and $3,297,055, respectively, as of December 31, 2012 and 2011, is classified within Level 2 of the fair value hierarchy. No other assets or liabilities are measured at fair value as of December 31, 2012 and 2011. On a recurring basis, the Partnership measures its interest rate swap at its estimated fair value. In determining the fair value of the Partnership s interest rate swap derivative, we use the present value of expected cash flows based on market observable interest rate yield curve commensurate with the term of the instrument. The Partnership incorporates credit valuation adjustments to appropriately reflect both our own nonperformance risk and that of the respective counterparty in the fair value measurement. The credit valuation adjustments utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by either the respective counterparty or us. However, the Partnership determined that as of December 31, 2012 and 2011, the impact of the credit valuation adjustments were not significant to the overall valuation of the swap. As a result, the fair value of the swap is considered to be based primarily on Level 2 inputs. 2. CONCENTRATION OF RISK The Partnership maintains cash accounts at various financial institutions. All of the Partnership s non-interest bearing cash balances were fully insured at December 31, 2012 and 2011 due to a temporary federal program in effect from December 31, 2010 through December 31, 2012. Under the program, there is no limit to the amount of insurance for eligible accounts. As of December 31, 2012 and 2011, there were no interest-bearing amounts on deposit that exceeded insured limits. 3. ESCROW DEPOSITS AND RESTRICTED RESERVES MORTGAGE ESCROW DEPOSITS The Partnership is required to make monthly deposits to a real estate tax and insurance escrow for use in funding annual real estate tax and insurance premiums. 9

Notes To Financial Statements (Continued) December 31, 2012 And 2011 3. ESCROW DEPOSITS AND RESTRICTED RESERVES (CONTINUED). MORTGAGE ESCROW DEPOSITS (CONTINUED) - Real estate tax and insurance escrow activity for 2012 and 2011 is as follows: Balance - January 1, 2011 $ 59,907 Monthly Deposits 305,253 Withdrawals (272,936) Balance - December 31, 2011 92,224 Monthly Deposits 243,050 Withdrawals (232,308) Balance - December 31, 2012 $ 102,966 RESERVE FOR REPLACEMENTS In accordance with the Partnership Agreement, the Partnership is required to establish and maintain a replacement reserve to provide for working capital needs, improvements, replacements and any other contingencies of the Partnership. Monthly payments are required based on annual amounts of $300 per unit beginning upon the earlier of Substantial Completion or August 1, 2010. The amount will increase 3% each year. As of December 31, 2012 and 2011, the balances in the replacement reserve account were $117,631 and $69,530, respectively. Replacement reserve activity for 2012 and 2011 is as follows: Balance - January 1, 2011 $ - Deposits 69,520 Interest Earned 10 Balance - December 31, 2011 69,530 Deposits 48,067 Interest Earned 34 Balance - December 31, 2012 $ 117,631 OPERATING RESERVE In accordance with the Partnership Agreement, the Partnership is required to establish and maintain an operating reserve, no later than the receipt of the Third Capital Contribution, in the amount of $800,000. Subsequent to the initial compliance period, the Partnership is required to maintain a balance of $800,000 until the Partnership has maintained a Debt Service Coverage of 1:15:1 on the Project loans. As of December 31, 2012 and 2011, the balance in the operating reserve account is $801,398 and $800,212, respectively. Operating reserve activity for 2012 and 2011 is as follows: Balance - January 1, 2011 $ - Deposits 800,000 Interest Earned 212 Balance - December 31, 2011 800,212 Interest Earned 1,186 Balance - December 31, 2012 $ 801,398 10

Notes To Financial Statements (Continued) December 31, 2012 And 2011 3. ESCROW DEPOSITS AND RESTRICTED RESERVES (CONTINUED) TRUSTEE FUNDS In accordance with the trust indenture and financing agreement, the Partnership is required to maintain capitalized interest, cost of issuance and mortgage loan fund escrows. Reserves held by the trustee consisted of a Guaranteed Investment Contract (contract) with an initial deposit of $17,797,475. The contract had a termination date of September 1, 2010 or upon the final withdrawal of invested funds, whichever is earlier. The investment earned interest at 3.001% per annum. The contract was carried at the cost of the investment. The balance in these funds was transferred upon the conversion to permanent financing in February of 2011. Upon the conversion of the construction loan to permanent financing, the Partnership is required to maintain certain principal reserve funds and administration funds as required by the loan agreement. As of December 31, 2012 and 2011, the balance in the principal reserve fund and administration fund is $344,809 and $60,121, respectively, for 2012, and $167,627 and $34,022, respectively, for 2011. Deposits to the principal reserve fund over each of the next five years are as follows: 4. LONG-TERM DEBT 2013 $ 186,068 2014 196,484 2015 207,479 2016 219,091 2017 231,523 FIRST MORTGAGE In August of 2008, the Partnership entered into a loan agreement with U.S. Bank National Association (the Trustee) and the Industrial Development Authority of Arlington County, Virginia (the Issuer). This loan was funded from the issuance of tax-exempt Multi-Family Housing Revenue Bonds in the amount of $25,670,000. The Interest rate was based on SIFMA Municipal Swap Index plus 240 basis points not to exceed the maximum rate (3.77% at December 31, 2010). The loan was secured by a deed of trust and the proceeds from the mortgage loan were used to provide for the acquisition, construction and permanent financing of the Project. The loan had a Construction Phase of 24 months with an additional six month extension option and a Permanent Phase of 360 months. In August of 2010, the Partnership had exercised the six month extension option for conversion to the Permanent Phase extending the maturity to March 1, 2011. Beginning October 2, 2007, interestonly payments were payable weekly based on the variable rate. The outstanding principal and accrued interest balances as of December 31, 2010 were $25,670,000 and $108,332, respectively. In February of 2011, the construction loan was paid in full. In February of 2011, the Partnership obtained permanent financing from U.S. Bank National Association (the Trustee) and the Industrial Development Authority of Arlington County, Virginia (the Issuer). This loan was funded from the issuance of tax-exempt Multi-Family Housing Revenue Bonds in the amount of $17,150,000. The interest rate was based on the variable rate, as defined, not to exceed the maximum rate (.12% at December 31, 2011). The loan was secured by a deed of trust and the proceeds from the mortgage loan were used to provide for permanent financing of the Project. The loan has a maturity date of August 1, 2047 and monthly payments are required to be made to the principal reserve fund until February 1, 2029. The Partnership is required to pay monthly interest on the loan and the entire principal of the loan is due at maturity. The outstanding principal and accrued interest balances as of December 31, 2012 and 2011 were $17,150,000 and $0, respectively, for 2012 and $17,150,000 and $51,730, respectively, for 2011. The liability of the Partnership under the mortgage note is limited to the underlying value of the real estate collateral plus other amounts deposited with the lender. The loan is secured by a deed of trust, assignment of rents and security agreement. 11

Notes To Financial Statements (Continued) December 31, 2012 And 2011 4. LONG-TERM DEBT (CONTINUED) INTEREST RATE SWAP On August 27, 2008, the Partnership entered into a swap agreement in the face amount of $17,150,000, and a rate cap agreement in the notional amount of $8,520,000. The agreement provides for the Partnership to receive interest at a floating rate based on the USD-SIFMA Municipal Swap Index, as defined, on a notional amount of $17,150,000 and to pay interest at 3.768% through September 1, 2025. The rate cap agreement provides for a 4.0% rate cap. The Partnership entered into this swap agreement to manage its exposure to interest rate changes. The variable rate debt obligations expose the Partnership to variability in the cash payment stream due to changes in interest rates. INTEREST RATE SWAP (CONTINUED) By using derivative financial instruments to hedge exposures to changes in interest rates, the Partnership exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Partnership, which creates credit risk for the Partnership. When the fair value of a derivative contract is negative, the Partnership owes the counterparty and, therefore, it does not possess credit risk. The Partnership minimizes the credit risk in the derivative instruments by entering into transactions with high-quality counterparties. Valued separately, the Swap Agreement represents a liability as of December 31, 2012 and 2011, in the amount of $3,461,981 and $3,297,055, respectively. This amount represents the fair value of the current difference in interest paid and received under the Swap Agreement over the remaining term of the Swap Agreement. Because the swap is considered to be a cash flow hedge, the value of the Swap Agreement is recorded in partners equity as a component of other comprehensive income. Changes in the Swap Agreement fair value are reported currently in other comprehensive income. Payments are recognized in current operating results as settlements occur under the agreement as a component of interest expense. 5. PARTNERS' CAPITAL CONTRIBUTIONS The Partnership has one general partner, New Westover Corporation, which has a 0.009% interest and has made capital contributions of $32,750. The Partnership has one special limited partner, RBC Tax Credit Manager II, Inc., which has a 0.001% interest and is responsible for capital contributions of $10. The Partnership has two investor limited partners, RBC Tax Credit Equity Fund 66 LP, which has a 1.000% interest and is responsible for capital contributions of $10 and RBC Tax Credit Equity National Fund-10 LP, which has a 98.99% interest and is responsible for capital contributions of $16,477,866, due when certain milestones are achieved as defined in the Partnership Agreement, subject to any low-income housing tax credit adjustments (credit adjuster). As of December 31, 2012 and 2011, the limited partner has funded cumulative capital contributions of $17,301,759.. 12

Notes To Financial Statements (Continued) December 31, 2012 And 2011 6. DISTRIBUTIONS Net Cash flow, as defined in the Partnership Agreement, is to be distributed as follows: 1. To the investor limited partners, until the investor limited partner has received distributions, in the aggregate, equal to the cumulative Assumed Limited Partner Tax Liability; 2. To the investor limited partners, an amount equal to any Unpaid Tax Credit Shortfall, Unpaid Rehabilitation Credit Shortfall or Limited Partner Advances; 3. To the general partner, until the general partner has received distributions, in the aggregate, equal to the cumulative Assumed General Partner Tax Liability; 4. To the Developer, until all amounts due under the Development Agreement have been paid in full; 5. To the Seller Financing Loan, until it is paid in full; 6. To the pro rata payment of any outstanding Operating Deficit Loans and General Partner Loans based upon the respective outstanding balances of each; and 7. Thereafter, in accordance with each partner s respective interests 7. TENANT VOUCHERS Residents of the property receive tenant-based housing assistance payments from VHDA. During the years ended December 31, 2012 and 2011, the Partnership received $292,784 and $291,377 of tenant assistance payments, respectively, which is included in rental income on the accompanying statements of operations. 8. RELATED PARTY TRANSACTIONS NOTE PAYABLE AFFILIATE On September 17, 2008, the Partnership entered into a Seller Financing Loan with Westover Housing Associates, Inc. an affiliate of the general partner, in the original amount of $17,767,516. The note bears interest at 4.58%, compounded annually. Payments on principal and accrued interest, from net cash flow, as defined in the Partnership Agreement, are required at maturity on August 26, 2048. The mortgage is secured by a deed of trust on the rental property and is subordinated to the first mortgage payable, letter of credit and credit enhancement. The outstanding principal balance as of December 31, 2012 and 2011 was $17,767,516. The accrued interest balances as of December 31, 2012 and 2011 were $3,543,565 and $2,822,526, respectively. During 2012, the note to Westover Housing Associates, Inc. was assigned to AHC, Inc. under the same terms as previously existed. DUE FROM AFFILIATE As of December 31, 2010, the Partnership overpaid construction management fees of $5,267 to an affiliate of the general partner. This advance did not bear interest and was collectible on demand. During 2011, the amount was repaid to the Partnership. DEVELOPMENT FEE The Partnership is obligated under the terms of a Development Agreement to pay an affiliate of the general partner a development fee of $4,798,220 for services performed during the rehabilitation of the Project. The fees are payable from capital contributions and net cash flow and are capitalized to the rental property. Any developer fees not paid when due will be deferred and will bear interest at 8%, compounded annually, beginning as of the date of Final Closing and paid from the next available net cash flow. Development fees are recognized as being incurred ratably upon the achievement of certain milestones, as defined in the agreement. Any unpaid balance will be due and payable in all events at the end of the tax credit compliance period. As of December 31, 2012 and 2011, the entire development fee has been incurred in the amount of $4,798,220. As of December 31, 2011, development fees of $307,896 and accrued interest of $742 were payable. The outstanding development fees and related accrued interest were paid in full in 2012. 13

Notes To Financial Statements (Continued) December 31, 2012 And 2011 8. RELATED PARTY TRANSACTIONS (CONTINUED) PROPERTY MANAGEMENT FEE The Partnership is obligated under the terms of a Property Management Agreement with AHC Management, LLC, an affiliate of the general partner. Under the terms of the agreement, the management fee will be 5% of the Project s annual gross revenues. For the years ended December 31, 2012 and 2011, management fees of $113,716 and $112,163, respectively, were incurred. As of December 31, 2012 and 2011, $9,420 and $9,388, respectively, remains payable and is included in accounts payable on the accompanying balance sheets. ASSET MANAGEMENT FEE The Partnership is obligated under the terms of an Asset Management Fee Agreement to pay the special limited partner a $5,000 annual, cumulative Asset Management Fee. The fee is payable quarterly beginning at the time the apartment complex has been placed-in-service. The fee is increased annually by 3%. The fee is payable out of net cash flow, as defined in the Partnership Agreement. During the years ended December 31, 2012 and 2011, $5,464 and $9,205, respectively, was incurred and as of December 31, 2012 and 2011, no fees are payable. OPERATING DEFICIT GUARANTY The general partner and affiliates of the general partner will provide funds to the Partnership necessary to fund any operating deficits in the form of loans to the Partnership. Any operating deficit loans will bear interest at a rate of 8% and will be repaid solely as provided for in the Partnership Agreement. The maximum amount of operating deficit loans that the general partner will be required to have outstanding at any one time is $1,000,000. The operating deficit obligation begins after Breakeven Operations, as defined in the Partnership Agreement, and ends on the third anniversary of such date. As of December 31, 2012 and 2011, no amounts were required under this guaranty. 9. COMMITMENTS AND CONTINGENCIES DEVELOPMENT DEFICITS/CONSTRUCTION COMPLETION GUARANTY The general partner has guaranteed completion of the renovations. This guarantee obligates the general partner to pay any excess development costs. Any excess development costs funded under the guarantee will not be repaid by the Partnership and they will not be considered capital contributions of the general partner to the Partnership. As of December 31, 2012 and 2011, no excess development costs were funded in connection with the rehabilitation of the Project. RECAPTURE GUARANTY The general partner and affiliates of the general partner guarantee that they will reimburse the investor limited partner for certain amounts if there is a Tax Credit Recapture Event, as set forth in the Partnership Agreement. LOW-INCOME HOUSING TAX CREDITS The Partnership's low-income housing tax credits are contingent on its ability to maintain compliance with applicable sections of Section 42. Failure to maintain compliance with occupant eligibility and/or unit gross rent, among other requirements, or to correct noncompliance within a specified time period, could result in recapture of previously taken tax credits plus interest. In addition, such potential noncompliance may require an adjustment to the contributed capital by the limited partner. 14

Notes To Financial Statements (Continued) December 31, 2012 And 2011 10. OTHER PARTNERSHIP MATTERS Loss Per Statement Of Operations - December 31, 2012 $ (1,684,228) Add: Prepaid Rents - December 31, 2012 23,491 Less: Prepaid Rents - December 31, 2011 (2,725) Add: Miscellaneous Book/Tax Difference - December 31, 2012 8 Add: Difference In Tax Amortization - December 31, 2012 69,550 Less: Difference In Tax Depreciation - December 31, 2012 (157,286) Loss Per Tax Return - December 31, 2012 $ (1,751,190) 11. SUBSEQUENT EVENTS Management has evaluated events and transactions subsequent to the balance sheet date for potential recognition or disclosure through the auditors report date, the date the financial statements were available to be issued. There were no events that required recognition or disclosure in the financial statements. 15

S U P P L E M E N T A R Y I N F O R M A T I O N

Independent Auditors Report On Supplementary Information We have audited the financial statements of AHC Limited Partnership - 18 as of and for the year ended December 31, 2012, and our report thereon dated March 5, 2013, expressed an unqualified opinion on those financial statements, which appears on pages one and two. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of AHC Limited Partnership - 18 as of December 31, 2011, were audited by other auditors whose report dated April 26, 2012, expressed an unqualified opinion on those statements. Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The supplemental schedules are presented for the purpose of additional analysis and are not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The 2012 information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly presented in all material respects in relation to the financial statements as a whole. Certified Public Accountants Baltimore, Maryland March 5, 2013 Baltimore 800 Red Brook Boulevard Suite 300 Owings Mills, Maryland 21117 410.363.3200 800.899.3633 410.356.0058 fax Greater Washington, D.C. 1803 Research Boulevard Suite 215 Rockville, Maryland 20850 301.315.2150 301.315.2152 fax

Schedules Of Rental Expenses And Administrative Expenses For The Years Ended December 31, 2012 2011 RENTAL EXPENSES Bad Debts $ 4,648 $ 13,542 Resident Manager Salary 49,329 85,030 TOTAL RENTAL EXPENSES $ 53,977 $ 98,572 ADMINISTRATIVE EXPENSES Advertising And Marketing $ 36 $ 2,424 Management Fee 113,716 112,163 Miscellaneous 5,849 - Office Salaries 34,960 10,855 Office Supplies And Expense 11,697 12,678 Professional Fees 14,064 13,824 Telephone 2,580 2,923 TOTAL ADMINISTRATIVE EXPENSES $ 182,902 $ 154,867 See Auditors' Report On Supplementary Information 17

Schedules Of Operating And Maintenance Expenses And Taxes And Insurance Expenses For The Years Ended December 31, 2012 2011 OPERATING AND MAINTENANCE EXPENSES Contracts $ 26,725 $ 24,900 Exterminating 6,480 9,651 Gas And Electric 27,326 40,286 Grounds Maintenance 33,636 35,505 HVAC Repairs And Maintenance 3,055 1,659 Janitorial 16,489 13,655 Salaries 45,819 70,732 Security 860 1,283 Snow Removal - 5,421 Supplies And Repairs 22,426 25,201 Trash Removal 19,165 16,158 Water And Sewer 51,004 49,496 TOTAL OPERATING AND MAINTENANCE EXPENSES $ 252,985 $ 293,947 TAXES AND INSURANCE EXPENSES Taxes - Miscellaneous $ 9,385 $ 8,496 Taxes - Payroll 8,996 13,467 Taxes - Real Estate 172,579 157,096 Insurance - Group 10,920 15,067 Insurance - Property 55,876 43,894 Insurance - Workers' Compensation 2,760 4,212 TOTAL TAXES AND INSURANCE EXPENSES $ 260,516 $ 242,232 See Auditors' Report On Supplementary Information 18

Schedules Of Other Income For The Years Ended December 31, 2012 2011 OTHER INCOME Interest $ 1,766 $ 234 Laundry 12,940 16,068 Miscellaneous 13,757 9,106 Tenant Charges 72,784 79,819 TOTAL OTHER INCOME $ 101,247 $ 105,227 See Auditors' Report On Supplementary Information 19