SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended March 31, 2000 Commission File No. 015940

UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,

a Michigan Limited Partnership

(Exact name of registrant as specified in its charter)

MICHIGAN

(State or other jurisdiction of

incorporation or organization)

382593067

(I.R.S. employer

identification number)

280 Daines Street, Birmingham, Michigan 48009

(Address of principal executive offices) (Zip Code)

(248) 6459261

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(g) of the Act:

$1,000 per unit, units of limited partnership interest

Yes [X] No [ ]

UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,

A MICHIGAN LIMITED PARTNERSHIP

INDEX

Page

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

ITEM 3. QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK 9

PART II OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10

-2-

UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
A MICHIGAN LIMITED PARTNERSHIP

BALANCE SHEETS    

    
ASSETS March 31, 2000   December 31, 1999
  (Unaudited)    
Properties:      
Land $5,280,000   $5,280,000
Buildings And Improvements 24,151,520   24,134,260
Furniture And Fixtures 194,427   169,741
Manufactured Homes 954,101   1,002,680
  30,580,048   30,586,681
       
Less Accumulated Depreciation 10,738,658   10,521,838
  19,841,390   20,064,843
       
Cash And Cash Equivalents 1,261,026   1,113,061
Unamortized Finance Costs 603,048   624,548
Other Assets 835,117   600,612
       
Total Assets $22,540,581   $22,403,064
       
       
LIABILITIES March 31, 2000   December 31, 1999
  (Unaudited)    
       
Line of Credit $600,000   $600,000
Accounts Payable 146,305   197,810
Mortgage Payable 32,785,269   32,879,105
Other Liabilities 1,076,491   874,936
       
Total Liabilities $34,608,065   $34,551,851
       
Partners' Equity:      
General Partner (2,140,916)   (2,254,330)
Class A Limited Partners (9,688,436)   (9,656,324)
Class B Limited Partners (238,133)   (238,133)
       
Total Partners' Equity (12,067,484)   (12,148,787)
       
Total Liabilities And      
Partners' Equity $22,540,581   $22,403,064
       
See Notes to Financial Statements    

3

UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND
A MICHIGAN LIMITED PARTNERSHIP

STATEMENTS OF INCOME THREE MONTHS ENDED
(unaudited) March 31, 2000

March 31, 1999

       
       
Income:      
Rental Income $2,112,733   $2,059,783
Other 153,653   131,199
       
Total Income $2,266,386   $2,190,982
       
       
Operating Expenses:      
Administrative Expenses      
(Including $111,883 and $107,844 in Property Management      
Fees Paid to An Affiliate for the Three Month Period      
Ended March 31, 2000 and 1999, Respectively) 461,076   452,771
Property Taxes 211,125   205,057
Utilities 132,776   124,206
Property Operations 235,861   259,509
Depreciation And Amortization 238,320   234,000
Interest 668,925   672,687
       
Total Operating Expenses $1,948,083   $1,948,230
       
Net Income $318,303   $242,752
       
Income Per Limited Partnership Unit:      
Class A $5.32   $3.38
Class B $15.04   $12.88
       
Distribution Per Limited Partnership Unit      
Class A $2.50   $2.00
Class B $2.50   $2.00
       
Weighted Average Number Of Limited      
Partnership Units Outstanding      
Class A 20,230   20,230
Class B 9,770   9,770
       
See Notes to Financial Statements    

4

UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND
A MICHIGAN LIMITED PARTNERSHIP

  
     
     
STATEMENTS OF CASH FLOWS    
(unaudited)    
  THREE MONTHS ENDED
  March 31, 2000

March 31, 1999

     
Cash Flows From Operating Activities:    
Net Income (Loss) $318,303 $242,752
     
Adjustments To Reconcile Net Income    
(Loss) To Net Cash Provided By    
Operating Activities:    
Depreciation 216,820 212,500
Amortization 21,500 21,500
(Increase) Decrease In Other Assets From Operations (234,505) 8,241
Increase (Decrease) In Accounts Payables (51,505) (65,393)
Increase (Decrease) Other Liabilities From Operations 201,555 191,995
     
Total Adjustments 153,865 368,843
     
Net Cash Provided By (Used In)  
Operating Activities 472,168 611,595
     
Cash Flows From Investing Activities:    
Capital Expenditures 6,633 (234,973)
Funds From Line of Credit 0 0
     
Net Cash Provided By (Used In)    
Investing Activities 6,633 (234,973)
     
Cash Flows From Financing Activities:    
Distributions To Partners (237,000) (214,500)
Principal Payments on Mortgage (93,836) (75,375)
     
Net Cash Provided By (Used In)    
Financing Activities (330,836) (289,875)
     
Increase (Decrease) In Cash 147,965 86,747
     
Cash, Beginning 1,113,061 537,777
     
Cash, Ending $1,261,026 $624,524
     
See Notes to Financial Statements  

5

UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,

A MICHIGAN LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS

March 31, 2000 (Unaudited)

1. Basis of Presentation:

The accompanying unaudited 2000 financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The balance sheet at December 31, 1999 has been derived from the audited financial statements at that date. Operating results for the three months ended March 31, 2000 are not necessarily indicative of the results that may be expected for the year ending December 31, 2000, or for any other interim period. For further information, refer to the consolidated financial statements and footnotes thereto included in the Partnership's Form 10-K for the year ending December 31, 1999.

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Capital Resources

The Partnership's capital resources consist primarily of its four manufactured housing communities. On March 25, 1997 the Partnership borrowed $33,500,000 from Nomura Asset Capital Corporation (the "Financing"). It secured the Financing by placing liens on its four communities. As a result of the Financing, the Partnership distributed $30,000,000 to the Limited Partners, which represented a full return of the original capital contributions of $1,000 per unit.

Liquidity

As a result of the Financing, the Partnership's four properties are mortgaged. At the time of the Financing, the aggregate principal amount due under the four mortgage notes was $33,500,000 and the aggregate fair market value of the Partnership's mortgaged properties was $53,200,000. The Partnership expects to meet its short-term liquidity needs generally through its working capital provided by operating activities.

The Partnership's long-term liquidity is based, in part, upon its investment strategy. The properties owned by the Partnership were anticipated to be held for seven to ten years after their acquisition. All of the properties have been owned by the Partnership more than ten years. The General Partner may elect to have the Partnership own the properties for as long as, in the opinion of the General Partner, it is in the best interest of the Partnership to do so.

The Partnership has a renewable $600,000 line of credit with National City Bank of Michigan/Illinois (formerly First of America Bank). The interest rate, on such line of credit, floats 180 basis points above 1 month LIBOR, which on March 31, 2000 was 6.13%. The sole purpose of the line of credit is to purchase new and used homes to be used as model homes and offered for sale within the Partnership's communities. Over the past three years, sales of the new and used model homes has been growing and the General Partner believes that continuing the model home program is in the best interest of the Partnership. As of March 31, 2000, the outstanding balance on the line of credit was $600,000. Because the Partnership's cash reserves have remained stable over the past several quarters, the General Partner has elected to begin paying down the line of credit. On or about March 31, 2000, the Partnership, in agreement with the Partnership's consultant, made a $75,000 payment on the line and expects to be able to pay for homes being used for the model home program as they are delivered.

Net Cash from Operations available for aggregate distributions to all Partners in UMHCIF during the quarter ended March 31, 2000 amounted to $556,623. The amount available during the same period in 1999 was $476,752. Management considers Net Cash from Operations to be a supplemental measure of the Partnership's operating performance. Net Cash from Operations is defined as net income computed in accordance with generally accepted accounting principles ("GAAP"), plus real estate related depreciation and amortization. Net Cash from Operations does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs. Net Cash from Operations should not be considered as an alternative to net income as the primary indicator of the Partnership's operating performance nor as an alternative to cash flow as a measure of liquidity.

The quarterly Partnership Management Distribution due and paid to the General Partner for the first quarter was $146,687.50, or one-fourth of 1.0% of the most recent appraised value of the properties held by the Partnership. ($58,675,000 x .01 = $586,750 / 4 = $146,687.50).

The cash available after payment of the Partnership Management Distribution amounted to $409,936. From this amount, the General Partner elected to make a total distribution of $103,125 for the first quarter of 2000, 80.0% or $82,500 was paid to the Limited Partners and 20.0% or $20,625 was paid to the General Partner.

While the Partnership is not required to maintain a working capital reserve, the Partnership has not distributed all the cash generated from operations in order to build cash reserves. For the quarter ended March 31, 2000, the Partnership added $306,811 to reserves. During the same quarter in 1999, the Partnership added $249,152 to cash reserves. The amount placed in reserves is at the discretion of the General Partner.

Results of Operations

Overall, as illustrated in the tables below, the four properties enjoyed a combined average occupancy of 96.4% (1,759/1,824 sites) at the end of March 2000, versus 97.6% a year ago. The average monthly rent in March 2000 was approximately $421, or 4.0% more than the $405 average monthly rent in March 1999.

Total Occupied Occupancy Average
Capacity Sites Rate Rent
Aztec Estates 645 608 94.3% $472
Kings Manor 314 300 95.5 451
Old Dutch Farms 293 279 95.2 403
Park of the Four Seasons 572 572 100.0 364
Total on 3/31/00 1,824 1,759 96.4% $421
Total on 3/31/99 1,824 1,780 97.6% $405

Gross Revenues Net Operating Income
3/31/00 3/31/99 3/31/00 3/31/99
Aztec Estates $ 870,088 $ 829,540 $ 477,425 $ 413,646
Kings Manor 386,497 378,743 246,764 240,621
Old Dutch Farms 356,915 351,861 211,696 236,104
Park of the Four Seasons 636,749 621,590 420,166 391,092
2,250,249 2,181,734 1,356,051 $ 1,281,463
Partnership Management: 16,137 9,248 (75,817) (59,036)
Other Non Recurring expenses: ----- ---- (54,686) (72,988)
Debt Service (668,925) (672,687)
Depreciation and Amortization ----- ---- (238,320) (234,000)
$ 2,266,386 $ 2,190,982 $ 318,303 $ 242,752

Comparison of Quarter Ended March 31, 2000 to Quarter Ended March 31, 1999

Gross revenues increased $75,404, or 3.4%, to $2,266,386 in 2000, as compared to $2,190,982 in 1999. The increase was the result of the increase in average monthly rents.

(See table on previous page.)

As described in the Statements of Income total operating expenses remained stable at $1,948,083 in 2000, as compared to $1,948,230 in 1999.

As a result of the foregoing factors, net operating income increased to $318,303 as of March 31, 2000 from $242,752 as of March 31, 1999.

ITEM 3.

QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

The Partnership is exposed to interest rate rise primarily through its borrowing activities. There is inherent roll over risk for borrowings as they mature and are renewed at current market rates. The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and the Partnership's future financing requirements.

Note Payable: At March 31, 2000 the Partnership had a note payable outstanding in the amount of $32,785,269. Interest on this note is at a fixed annual rate of 8.24% through June 2007.

Line-of-Credit: At March 31, 2000 the Partnership owed $600,000 pursuant to its line-of-credit agreement, whereby interest is charged at a variable rate of 1.80% in excess of LIBOR.

A 10% adverse change in interest rates of the portion of the Partnership's debt bearing interest at variable rates would result in an increase in interest expense of less than $10,000 annually.

The Partnership does not enter into financial instruments transactions for trading or other speculative purposes or to manage its interest rate exposure.

PART II - OTHER INFORMATION

ITEM 6. Exhibits and Reports of Form 8-K

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: May 15, 2000

EXHIBIT INDEX

Exhibit Number Description Page

27 Financial Data Schedule