FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934
                        Quarterly or Transitional Report



                   U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB

(Mark One)
[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

                For the quarterly period ended March 31, 2002


[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934


             For the transition period from _________to _________

                         Commission file number 0-13454


                        NATIONAL PROPERTY INVESTORS 7
      (Exact name of small business issuer as specified in its charter)



         California                                         13-3230613
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                         Identification No.)

                     55 Beattie Place, Post Office Box 1089
                       Greenville, South Carolina 29602
                   (Address of principal executive offices)

                                 (864) 239-1000
                           (Issuer's telephone number)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.
Yes X  No___
<PAGE>
                         PART I - FINANCIAL INFORMATION


ITEM 1.     FINANCIAL STATEMENTS

a)

                        NATIONAL PROPERTY INVESTORS 7

                                  BALANCE SHEET
                                   (Unaudited)
                     (in thousands, except per unit data)

                                 March 31, 2002

<TABLE>
<CAPTION>

Assets
<S>                                                                         <C>
   Cash and cash equivalents                                                $ 1,573
   Receivables and deposits                                                     254
   Restricted escrows                                                           539
   Other assets                                                                 753
   Investment properties:
       Land                                                  $ 3,738
       Buildings and related personal property                 45,284
                                                               49,022
       Less accumulated depreciation                          (32,088)       16,934
                                                                           $ 20,053
Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                          $ 142
   Tenant security deposit liabilities                                          113
   Accrued property taxes                                                        91
   Other liabilities                                                            442
   Mortgage notes payable                                                    23,939

Partners' Deficit:
   General partner                                            $ (349)
   Limited partners (60,517 units
      issued and outstanding)                                  (4,325)       (4,674)
                                                                           $ 20,053


                See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
b)

                        NATIONAL PROPERTY INVESTORS 7

                            STATEMENTS OF OPERATIONS
                                   (Unaudited)
                     (in thousands, except per unit data)

<TABLE>
<CAPTION>

                                                              Three Months Ended
                                                                    March 31,
                                                               2002          2001
Revenues:
<S>                                                           <C>           <C>
   Rental income                                              $1,782        $1,828
   Other income                                                  128            85
       Total revenues                                          1,910         1,913

Expenses:
   Operating                                                     735           777
   General and administrative                                     86           154
   Depreciation                                                  515           514
   Interest                                                      456           415
   Property taxes                                                112           104
       Total expenses                                          1,904         1,964

Net income (loss)                                              $ 6           $ (51)

Net income (loss) allocated to general partner (1%)            $ --          $ (1)

Net income (loss) allocated to limited partners (99%)              6           (50)

                                                               $ 6           $ (51)

Net income (loss) per limited partnership unit                $ 0.10        $(0.83)

Distributions per limited partnership unit                     $ --         $11.80

                See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>
c)

                        NATIONAL PROPERTY INVESTORS 7

                  STATEMENT OF CHANGES IN PARTNERS' DEFICIT
                                   (Unaudited)
                     (in thousands, except per unit data)
<TABLE>
<CAPTION>


                                     Limited
                                    Partnership    General      Limited
                                       Units       Partner      Partners       Total

<S>                                   <C>            <C>        <C>           <C>
Original capital contributions        60,517         $ 1        $30,259       $30,260

Partners' deficit at
   December 31, 2001                  60,517        $ (349)     $(4,331)      $(4,680)

Net income for the three months
   ended March 31, 2002                   --            --            6             6

Partners' deficit at
   March 31, 2002                     60,517        $ (349)     $(4,325)      $(4,674)

                See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>
d)

                        NATIONAL PROPERTY INVESTORS 7

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                (in thousands)
<TABLE>
<CAPTION>

                                                                 Three Months Ended
                                                                       March 31,
                                                                  2002        2001
Cash flows from operating activities:
<S>                                                               <C>         <C>
  Net income (loss)                                               $ 6         $ (51)
  Adjustments to reconcile net income (loss) to net cash
   provided by operating activities:
     Depreciation                                                   515          514
     Amortization of loan costs                                      19           25
     Change in accounts:
      Receivables and deposits                                      175          (22)
      Other assets                                                  (81)         (47)
      Accounts payable                                               33            7
      Tenant security deposit liabilities                             5            2
      Accrued property taxes                                         91           48
      Other liabilities                                             178          (10)
        Net cash provided by operating activities                   941          466

Cash flows from investing activities:
  Property improvements and replacements                           (182)         (94)
  Net withdrawals from restricted escrows                            --            1
        Net cash used in investing activities                      (182)         (93)

Cash flows from financing activities:
  Payments on mortgage notes payable                                (98)         (23)
  Loan costs paid                                                    --           (7)
  Distributions to partners                                          --         (721)
        Net cash used in financing activities                       (98)        (751)

Net increase (decrease) in cash and cash equivalents                661         (378)

Cash and cash equivalents at beginning of period                    912          871

Cash and cash equivalents at end of period                      $ 1,573       $ 493

Supplemental disclosure of cash flow information:
  Cash paid for interest                                         $ 438        $ 390

                See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>
e)

                          NATIONAL PROPERTY INVESTORS 7

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


Note A - Basis of Presentation

The accompanying unaudited financial statements of National Property Investors 7
(the  "Partnership"  or  "Registrant")  have been  prepared in  accordance  with
generally accepted accounting  principles for interim financial  information and
with  the  instructions  to Form  10-QSB  and Item  310(b)  of  Regulation  S-B.
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 NPI Equity Investments,  Inc. (the "Managing General Partner")
all adjustments  (consisting of normal recurring accruals)  considered necessary
for a fair  presentation  have been  included.  Operating  results for the three
month period ended March 31, 2002 are not necessarily  indicative of the results
that may be expected for the fiscal year ending  December 31, 2002.  For further
information, refer to the financial statements and footnotes thereto included in
the  Partnership's  Annual Report on Form 10-KSB for the year ended December 31,
2001. The Managing  General Partner is an affiliate of Apartment  Investment and
Management Company ("AIMCO"), a publicly traded real estate investment trust.

Note B - Transactions with Affiliated Parties

The  Partnership  has no employees  and is  dependent  on the  Managing  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
Partnership  activities.  The  Partnership  Agreement  provides  for payments to
affiliates for services and as  reimbursement  of certain  expenses  incurred by
affiliates on behalf of the Partnership.

During  the three  months  ended  March 31,  2002 and  2001,  affiliates  of the
Managing  General Partner were entitled to receive 5% of gross receipts from all
of  the  Partnership's   properties  as  compensation  for  providing   property
management  services.  The  Registrant  paid  to such  affiliates  approximately
$94,000  and  $93,000  for the  three  months  ended  March  31,  2002 and 2001,
respectively, which is included in operating expenses.

An  affiliate  of  the  Managing  General  Partner  received   reimbursement  of
accountable  administrative  expenses  amounting  to  approximately  $80,000 and
$63,000 for the three months ended March 31, 2002 and 2001, respectively,  which
is included in general and  administrative  expenses and investment  properties.
Included  in  the  total  is  approximately   $12,000  in  construction  service
reimbursements  for the three months  ended March 31,  2002.  There were no such
reimbursements  for the three  months  ended March 31,  2001.  The  construction
management  service fees are  calculated  based on a percentage  of additions to
investment properties.

For services relating to the  administration of the Partnership and operation of
Partnership  properties,  the  Managing  General  Partner is entitled to receive
payment for  non-accountable  expenses up to a maximum of $150,000 per year from
distributions from operations,  based upon the number of Partnership units sold,
subject to  certain  limitations.  The  Managing  General  Partner  received  no
reimbursements   for  the  three  months  ended  March  31,  2002  and  received
approximately  $71,000 in  reimbursements  for the three  months ended March 31,
2001.

For managing the affairs of the Partnership, the Managing General Partner of the
Partnership  is entitled to receive a  partnership  management  fee.  The fee is
equal to 4% of the  Partnership's  adjusted cash from operations,  as defined in
the Partnership  Agreement,  in any year, provided that 50% of the fee shall not
be paid until the Partnership has distributed to the limited  partners  adjusted
cash from operations in such year which is equal to 5% of the limited  partners'
adjusted invested capital, as defined,  on a non-cumulative  basis. In addition,
50% of the fee shall not be paid until the  Partnership  has  distributed to the
limited partners adjusted cash from operations in such year which is equal to 8%
of the limited partners'  adjusted  invested capital on a non-cumulative  basis.
The fee shall be paid when adjusted cash from  operations is  distributed to the
limited partners.  The Managing General Partner was not entitled to receive this
fee during the three months ended March 31, 2002 or 2001.

The Managing General Partner has extended to the Partnership a line of credit of
up to $500,000. Loans under the line of credit will have a term of 365 days, are
unsecured  and bear  interest at the rate of 2% per annum in excess of the prime
rate announced from time to time by Chase Manhattan Bank, N.A. The maturity date
of such  borrowing  will be  accelerated in the event of: (i) the removal of the
Managing  General  Partner  (whether  or  not  For  Cause);  (ii)  the  sale  or
refinancing of a property by the  Partnership;  or (iii) the  liquidation of the
Partnership. At the present time, the Partnership has no outstanding amounts due
under this line of credit.

Beginning in 2001, the  Partnership  began insuring its properties up to certain
limits through coverage provided by AIMCO which is generally  self-insured for a
portion of losses and  liabilities  related  to workers  compensation,  property
casualty and vehicle liability. The Partnership insures its properties above the
AIMCO  limits  through  insurance  policies  obtained  by  AIMCO  from  insurers
unaffiliated  with the Managing General  Partner.  During the three months ended
March 31, 2002 and 2001, the Partnership was charged by AIMCO and its affiliates
approximately $78,000 and $70,000, respectively, for insurance coverage and fees
associated with policy claims administration.

Note C - Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the  Partnership,  its Managing  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purports  to  assert  claims  on  behalf  of a class  of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  which are named as nominal  defendants,  challenging,  among other
things,  the  acquisition  of  interests  in certain  Managing  General  Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities which were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged  into AIMCO.  The  plaintiffs  seek  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
On June 25, 1998, the Managing General Partner filed a motion seeking  dismissal
of the action.  In lieu of responding  to the motion,  the  plaintiffs  filed an
amended  complaint.  The Managing General Partner filed demurrers to the amended
complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December 14, 1999, the Managing  General  Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001,  the  Managing  General  Partner  and its  affiliates  filed a
demurrer to the third amended  complaint.  On May 14, 2001,  the Court heard the
demurrer to the third amended  complaint.  On July 10, 2001, the Court issued an
order  sustaining  defendants'  demurrer on certain  grounds.  On July 20, 2001,
Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
Plaintiffs  filed a fourth amended class and  derivative  action  complaint.  On
September 12, 2001, the Court denied Plaintiffs' motion for reconsideration.  On
October 5, 2001, the Managing General Partner and affiliated  defendants filed a
demurrer to the fourth amended complaint,  which was heard on December 11, 2001.
On February 2, 2002,  the Court served its order  granting in part the demurrer.
The  Court has  dismissed  without  leave to amend  certain  of the  plaintiffs'
claims.  On February 11, 2002,  plaintiffs  filed a motion  seeking to certify a
putative  class  comprised of all  non-affiliated  persons who own or have owned
units  in  the  partnerships.   The  Managing  General  Partner  and  affiliated
defendants oppose the motion. On April 29, 2002, the Court heard argument on the
motion and ordered  further  briefing  after which time the matter will be taken
under submission. The Court has set the matter for trial in January 2003.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended  complaint.  The first amended complaint in the Heller action is
brought as a purported  derivative  action,  and asserts  claims for among other
things  breach  of  fiduciary  duty;  unfair  competition;   conversion,  unjust
enrichment;  and judicial  dissolution.  Plaintiffs in the Nuanes action filed a
motion to  consolidate  the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed  without  leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the Managing  General  Partner and affiliated
defendants  moved to strike the first  amended  complaint  in its  entirety  for
violating  the Court's July 10, 2001 order  granting in part and denying in part
defendants'  demurrer in the Nuanes action, or alternatively,  to strike certain
portions of the complaint based on the statute of limitations.  Other defendants
in the action  demurred to the fourth  amended  complaint,  and,  alternatively,
moved to strike the complaint. On December 11, 2001, the court heard argument on
the motions  and took the matters  under  submission.  On February 4, 2002,  the
Court  served  notice of its order  granting  defendants'  motion to strike  the
Heller complaint as a violation of its July 10, 2001 order in the Nuanes action.
On March 27, 2002,  the plaintiffs  filed a notice  appealing the order striking
the complaint.

The Managing  General Partner does not anticipate that any costs,  whether legal
or  settlement  costs,  associated  with  these  cases will be  material  to the
Partnership's overall operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.
<PAGE>
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The  matters  discussed  in this Form  10-QSB  contain  certain  forward-looking
statements  and  involve  risks and  uncertainties  (including  changing  market
conditions,   competitive  and  regulatory   matters,   etc.)  detailed  in  the
disclosures  contained  in this  Form  10-QSB  and the  other  filings  with the
Securities and Exchange Commission made by the Registrant from time to time. The
discussion of the  Registrant's  business and results of  operations,  including
forward-looking  statements  pertaining  to such  matters,  does not  take  into
account the effects of any changes to the  Registrant's  business and results of
operation.  Accordingly,  actual  results  could  differ  materially  from those
projected in the forward-looking  statements as a result of a number of factors,
including those identified herein.

The Partnership's investment properties consist of five apartment complexes. The
following  table sets forth the average  occupancy of the properties for each of
the three month periods ended March 31, 2002 and 2001:

                                                   Average Occupancy
                                                    2002       2001

      Fairway View II Apartments                    90%        91%
         Baton Rouge, Louisiana
      The Pines Aparments                           92%        96%
         Roanoke, Virginia
      Patchen Place Apartments                      80%        91%
         Lexington, Kentucky
      Northwoods I and II Apartments                95%        95%
         Pensacola, Florida
      South Point Apartments                        94%        93%
         Durham, North Carolina

The Managing  General Partner  attributes the decrease in occupancy at The Pines
Apartments to a decrease in employment transfers to the area by local employers,
and an increase in home  purchases  due to lower  interest  rates.  The Managing
General Partner attributes the decrease in occupancy at Patchen Place Apartments
to an  increase  in new  apartment  communities  recently  built  in  the  area.
Management is implementing  new marketing  strategies to make Patchen Place more
competitive within its market.

Results of Operations

The  Registrant's  net  income for the three  months  ended  March 31,  2002 was
approximately  $6,000  compared to a net loss of  approximately  $51,000 for the
three  months  ended  March 31,  2001.  The  increase in net income was due to a
decrease  in total  expenses  which was  slightly  offset by a decrease in total
revenues.

Total  expenses  decreased  for the three  months  ended  March 31,  2002 due to
decreases  in  operating  and general  and  administrative  expenses  which were
partially  offset  by  an  increase  in  interest  expense.  Operating  expenses
decreased  primarily  due to decreased  gas bills at The Pines and Patchen Place
Apartments and decreased maintenance expenses at Patchen Place, Northwoods I and
II,  and South  Point  Apartments.  These  decreases  were  partially  offset by
increased  hazard  insurance  expense  at all of the  Partnership's  properties.
General and  administrative  expenses  decreased due to reduced fees paid to the
Managing General Partner in connection with  distributions made from operations.
Also included in general and administrative  expenses at both March 31, 2002 and
2001 are management  reimbursements  to the Managing  General Partner as allowed
under the  Partnership  Agreement  and the costs  associated  with the quarterly
communications  with  investors  and  regulatory  agencies  and the annual audit
required by the Partnership  Agreement.  Interest  expense  increased due to the
refinancings  of  Northwoods I and II Apartments in August 2001 and Fairway View
II Apartments in November 2001 which increased the average debt balance at these
two properties.

Total revenues  decreased slightly for the three months ended March 31, 2002 due
to a decrease in rental  income  largely  offset by an increase in other income.
Rental  income  decreased  primarily due to decreases in occupancy at The Pines,
Fairway View II and Patchen Place  Apartments,  decreases in subsidized  rent at
Fairway View II which more than offset increased average rental rates at Fairway
View II and decreased concessions at Fairway View II and South Point Apartments.
The  increase  in  other  income  was   primarily   due  to  increased   utility
reimbursements  at The Pines and  Northwoods I and II  Apartments  and increased
cable TV revenue at all of the  Partnership's  properties  except  Patchen Place
Apartments.  These increases were partially offset by reduced interest income as
a result of lower interest rates on interest bearing accounts.

As part of the ongoing  business plan of the  Partnership,  the Managing General
Partner  monitors  the  rental  market  environment  of each  of its  investment
properties  to assess  the  feasibility  of  increasing  rents,  maintaining  or
increasing  occupancy  levels and protecting the  Partnership  from increases in
expense.  As part of this plan, the Managing General Partner attempts to protect
the  Registrant  from the burden of  inflation-related  increases in expenses by
increasing rents and maintaining a high overall occupancy level. However, due to
changing market  conditions,  which can result in the use of rental  concessions
and  rental  reductions  to  offset  softening  market  conditions,  there is no
guarantee that the Managing General Partner will be able to sustain such a plan.

Liquidity and Capital Resources

At  March  31,  2002,  the  Partnership   had  cash  and  cash   equivalents  of
approximately  $1,573,000  as  compared to  approximately  $493,000 at March 31,
2001. Cash and cash  equivalents  increased by  approximately  $661,000 from the
Partnership's year ended December 31, 2001 due to approximately $941,000 of cash
provided by operating  activities,  which more than offset approximately $98,000
of cash used in financing activities and approximately  $182,000 of cash used in
investing activities. Cash used in financing activities consisted of payments of
principal  made on the  mortgages  encumbering  Fairway  View II,  The Pines and
Northwoods I and II Apartments.  Cash used in investing  activities consisted of
property  improvements  and  replacements.  The Partnership  invests its working
capital reserves in interest bearing accounts.

The Managing  General Partner has extended to the Partnership a $500,000 line of
credit.  The  Partnership  has no  outstanding  amounts  due under  this line of
credit. Based on present plans, the Managing General Partner does not anticipate
the need to borrow  against  the line of credit in the near  future.  Other than
cash and cash equivalents,  the line of credit is the Partnership's  only unused
source of liquidity.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the various  properties  to  adequately  maintain  the
physical  assets and other  operating needs of the Registrant and to comply with
Federal, state and local legal and regulatory requirements. Capital improvements
for each of the Registrant's properties are detailed below.

Fairway View II

During  the  three  months  ended  March 31,  2002,  the  Partnership  completed
approximately  $25,000 of capital  improvements  at Fairway View II  Apartments,
consisting  primarily of building  improvements.  These improvements were funded
from operating cash flow. For 2002, the amount budgeted for capital improvements
is  approximately   $69,000  consisting   primarily  of  air  conditioning  unit
replacement,  appliances,  floor covering  replacements,  and window treatments.
Additional  improvements  may be  considered  and will  depend  on the  physical
condition  of the  property as well as  anticipated  cash flow  generated by the
property.

The Pines

During  the  three  months  ended  March 31,  2002,  the  Partnership  completed
approximately   $28,000  of  capital   improvements  at  The  Pines  Apartments,
consisting  primarily of floor  covering  replacements,  office  equipment,  and
cabinetry upgrades. These improvements were funded from operating cash flow. For
2002, the amount  budgeted for capital  improvements  is  approximately  $78,000
consisting primarily of floor covering replacements. Additional improvements may
be considered and will depend on the physical  condition of the property as well
as anticipated cash flow generated by the property.

Patchen Place

During  the  three  months  ended  March 31,  2002,  the  Partnership  completed
approximately  $28,000 of capital  improvements  at  Patchen  Place  Apartments,
consisting primarily of office equipment, floor covering replacements,  plumbing
upgrades,  water  heater  replacements,  fitness  equipment  and  wall  covering
improvements.  These  improvements  were  funded  from  operating  cash flow and
replacement reserves.  For 2002, the amount budgeted for capital improvements is
approximately $137,000 consisting primarily of plumbing upgrades, floor covering
replacements,  air conditioning  unit  replacements  and appliances.  Additional
improvements may be considered and will depend on the physical  condition of the
property as well as replacement  reserves and anticipated cash flow generated by
the property.

Northwoods I and II

During  the  three  months  ended  March 31,  2002,  the  Partnership  completed
approximately  $41,000 of capital  improvements at Northwoods I & II Apartments,
consisting primarily of floor covering replacements,  appliances, and structural
improvements. These improvements were funded from operating cash flow. For 2002,
the  amount  budgeted  for  capital   improvements  is  approximately   $135,000
consisting  primarily  of  fitness  equipment,   floor  covering   replacements,
structural  improvements,  swimming  pool  improvements,   appliances,  plumbing
upgrades, and air conditioning unit replacements. Additional improvements may be
considered and will depend on the physical  condition of the property as well as
anticipated cash flow generated by the property.

South Point

During  the  three  months  ended  March 31,  2002,  the  Partnership  completed
approximately  $60,000  of  capital  improvements  at  South  Point  Apartments,
consisting  primarily  of  floor  covering  replacements,   appliances,   office
equipment,  air  conditioning  unit  replacements and water  submetering.  These
improvements were funded from Partnership  reserves and operating cash flow. For
2002, the amount  budgeted for capital  improvements is  approximately  $105,000
consisting  primarily  of  fitness  equipment,   floor  covering   replacements,
appliances,   air  conditioning  unit   replacements,   and  water  submetering.
Additional  improvements  may be  considered  and will  depend  on the  physical
condition of the property as well as replacement  reserves and anticipated  cash
flow generated by the property.

The additional  capital  improvements will be incurred only if cash is available
from operations or from Partnership  reserves.  To the extent that such budgeted
capital improvements are completed,  the Partnership's  distributable cash flow,
if any, may be adversely affected at least in the short term.

The  Registrant's  current assets are thought to be sufficient for any near-term
needs  (exclusive  of capital  improvements)  of the  Registrant.  The  mortgage
indebtedness  of  approximately  $23,939,000  has  maturity  dates  ranging from
November 1, 2003 to December 1, 2021. The mortgage indebtedness of approximately
$16,339,000  that was refinanced  during 2000 and 2001 requires monthly payments
until the loans mature between  January 2020 and December 2021 at which time the
loans are scheduled to be fully  amortized.  The  Partnership's  other  mortgage
indebtedness of $7,600,000 requires interest only payments with balloon payments
due  November 1, 2003.  The Managing  General  Partner will attempt to refinance
such  indebtedness  and/or sell the properties  prior to such maturity dates. If
the  properties  cannot  be  refinanced  or sold for a  sufficient  amount,  the
Registrant may risk losing such properties through foreclosure.

Pursuant to the Partnership Agreement,  the term of the Partnership is scheduled
to expire on December 31, 2008. Accordingly,  prior to such date the Partnership
will need to either  sell its  investment  properties  or extend the term of the
Partnership.

The Partnership  distributed the following amounts during the three months ended
March 31, 2002 and 2001 (in thousands, except per unit data):

                  Three Months     Per Limited      Three Months     Per Limited
                     Ended         Partnership         Ended         Partnership
                 March 31, 2002        Unit        March 31, 2001        Unit

Operations            $ --             $ --            $ 721            $11.80

Future cash  distributions  will depend on the levels of net cash generated from
operations, the availability of cash reserves and the timing of debt maturities,
refinancings  and/or  property  sales.  The  Partnership's  cash  available  for
distribution is reviewed on a monthly basis. There can be no assurance, however,
that the  Partnership  will  generate  sufficient  funds from  operations  after
required capital  expenditures,  to permit  distributions to its partners during
the remainder of 2002 or subsequent periods.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,   AIMCO  and  its  affiliates   currently  own  40,365.67   limited
partnership  units in the  Partnership  representing  66.70% of the  outstanding
units.  A number of these units were acquired  pursuant to tender offers made by
affiliates of the Managing  General  Partner,  AIMCO, or its  affiliates.  It is
possible that AIMCO or its affiliates will make one or more additional offers to
acquire additional limited partnership  interests in the Partnership for cash or
in  exchange  for  units  in the  operating  partnership  of  AIMCO.  Under  the
Partnership Agreement,  unitholders holding a majority of the units are entitled
to take action with respect to a variety of matters,  which would include voting
on certain  amendments  to the  Partnership  Agreement  and voting to remove the
Managing  General  Partner.  As a  result  of its  ownership  of  66.70%  of the
outstanding units, AIMCO is in a position to influence all voting decisions with
respect to the Registrant. When voting on matters, AIMCO would in all likelihood
vote the units it acquired in a manner favorable to the interest of the Managing
General Partner because of their  affiliation with the Managing General Partner.
However,  DeForest  Ventures II L.P.,  from whom AIMCO,  through its merger with
Insignia,  acquired  25,399  units  (approximately  41.97%),  had agreed for the
benefit of non-tendering unit holders, that it would vote its units: (i) against
any  increase in  compensation  payable to the  Managing  General  Partner or to
affiliates;  and (ii) on all other matters submitted by it or its affiliates, in
proportion  to the  votes  cast  by all  other  unit  holders.  Except  for  the
foregoing,  no other  limitations are imposed on AIMCO's or its affiliates right
to vote each unit acquired.
<PAGE>
                           PART II - OTHER INFORMATION


ITEM 1.     LEGAL PROCEEDINGS

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the  Partnership,  its Managing  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purports  to  assert  claims  on  behalf  of a class  of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  which are named as nominal  defendants,  challenging,  among other
things,  the  acquisition  of  interests  in certain  Managing  General  Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities which were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged  into AIMCO.  The  plaintiffs  seek  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
On June 25, 1998, the Managing General Partner filed a motion seeking  dismissal
of the action.  In lieu of responding  to the motion,  the  plaintiffs  filed an
amended  complaint.  The Managing General Partner filed demurrers to the amended
complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December 14, 1999, the Managing  General  Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001,  the  Managing  General  Partner  and its  affiliates  filed a
demurrer to the third amended  complaint.  On May 14, 2001,  the Court heard the
demurrer to the third amended  complaint.  On July 10, 2001, the Court issued an
order  sustaining  defendants'  demurrer on certain  grounds.  On July 20, 2001,
Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
Plaintiffs  filed a fourth amended class and  derivative  action  complaint.  On
September 12, 2001, the Court denied Plaintiffs' motion for reconsideration.  On
October 5, 2001, the Managing General Partner and affiliated  defendants filed a
demurrer to the fourth amended complaint,  which was heard on December 11, 2001.
On February 2, 2002,  the Court served its order  granting in part the demurrer.
The  Court has  dismissed  without  leave to amend  certain  of the  plaintiffs'
claims.  On February 11, 2002,  plaintiffs  filed a motion  seeking to certify a
putative  class  comprised of all  non-affiliated  persons who own or have owned
units  in  the  partnerships.   The  Managing  General  Partner  and  affiliated
defendants oppose the motion. On April 29, 2002, the Court heard argument on the
motion and ordered  further  briefing  after which time the matter will be taken
under submission. The Court has set the matter for trial in January 2003.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended  complaint.  The first amended complaint in the Heller action is
brought as a purported  derivative  action,  and asserts  claims for among other
things  breach  of  fiduciary  duty;  unfair  competition;   conversion,  unjust
enrichment;  and judicial  dissolution.  Plaintiffs in the Nuanes action filed a
motion to  consolidate  the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed  without  leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the Managing  General  Partner and affiliated
defendants  moved to strike the first  amended  complaint  in its  entirety  for
violating  the Court's July 10, 2001 order  granting in part and denying in part
defendants'  demurrer in the Nuanes action, or alternatively,  to strike certain
portions of the complaint based on the statute of limitations.  Other defendants
in the action  demurred to the fourth  amended  complaint,  and,  alternatively,
moved to strike the complaint. On December 11, 2001, the court heard argument on
the motions  and took the matters  under  submission.  On February 4, 2002,  the
Court  served  notice of its order  granting  defendants'  motion to strike  the
Heller complaint as a violation of its July 10, 2001 order in the Nuanes action.
On March 27, 2002,  the plaintiffs  filed a notice  appealing the order striking
the complaint.

The Managing  General Partner does not anticipate that any costs,  whether legal
or  settlement  costs,  associated  with  these  cases will be  material  to the
Partnership's overall operations.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

      a) Exhibits:

         None.

      b) Reports on Form 8-K filed during the three months ended March 31, 2002:

         None.
<PAGE>
                                   SIGNATURES



In accordance with the  requirements of the Exchange Act, the Registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                    NATIONAL PROPERTY INVESTORS 7


                                    By:   NPI EQUITY INVESTMENTS, INC.
                                          Its Managing General Partner


                                    By:   /s/Patrick J. Foye
                                          Patrick J. Foye
                                          Executive Vice President


                                    By:   /s/Martha L. Long
                                          Martha L. Long
                                          Senior Vice President
                                          and Controller


                                    Date: