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 June 30, 2001


[ ] 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)

                                  June 30, 2001

<TABLE>
<CAPTION>


Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $  664
   Receivables and deposits                                                     310
   Restricted escrows                                                           425
   Other assets                                                                 411
   Investment properties:
       Land                                                  $ 3,738
       Buildings and related personal property                 44,467
                                                               48,205
       Less accumulated depreciation                          (30,605)       17,600
                                                                           $ 19,410
Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                          $ 72
   Tenant security deposit liabilities                                          105
   Accrued property taxes                                                       157
   Other liabilities                                                            473
   Mortgage notes payable                                                    20,896

Partners' Deficit:
   General partner                                            $ (325)
   Limited partners (60,517 units
      issued and outstanding)                                  (1,968)       (2,293)
                                                                           $ 19,410


                   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          Six Months Ended
                                           June 30,                   June 30,
                                      2001         2000          2001         2000
Revenues:
<S>                                 <C>           <C>          <C>           <C>
  Rental income                     $ 1,822       $ 1,712      $ 3,650       $ 3,463
  Other income                           95           112          180           185
     Total revenues                   1,917         1,824        3,830         3,648

Expenses:
  Operating                             674           715        1,451         1,419
  General and administrative            101           160          255           251
  Depreciation                          517           489        1,031           973
  Interest                              415           411          830           831
  Property taxes                        106           105          210           211
     Total expenses                   1,813         1,880        3,777         3,685

Net income (loss)                    $ 104         $ (56)        $ 53         $ (37)

Net income (loss) allocated to
  general partner (1%)                $ 1          $ (1)         $ 1          $ --
Net income (loss) allocated to
  limited partners (99%)                103           (55)          52           (37)

                                     $ 104         $ (56)        $ 53         $ (37)

Net income (loss) per limited
  partnership unit                   $ 1.70       $ (0.91)      $ 0.86       $ (0.61)

Distributions per limited
  partnership unit                   $ 6.74       $ 22.97      $ 18.54       $ 42.93

                   See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

c)

                           NATIONAL PROPERTY INVESTORS 7

                    STATEMENT OF CHANGES IN PARTNERS' DEFICIT
                                   (Unaudited)
                          (in thousands, except 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, 2000                  60,517      $ (315)      $ (898)     $(1,213)

Distributions to partners                 --          (11)     (1,122)      (1,133)

Net income for the six months
   ended June 30, 2001                    --            1          52           53

Partners' deficit at
   June 30, 2001                      60,517      $ (325)     $(1,968)     $(2,293)


                   See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

d)

                           NATIONAL PROPERTY INVESTORS 7

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                   (in thousands)

<TABLE>
<CAPTION>

                                                                  Six Months Ended
                                                                        June 30,
                                                                  2001        2000
Cash flows from operating activities:
<S>                                                               <C>         <C>
  Net income (loss)                                               $ 53        $ (37)
  Adjustments to reconcile net income (loss) to net cash
   provided by operating activities:
     Depreciation                                                 1,031          973
     Amortization of loan costs                                      50           49
     Change in accounts:
      Receivables and deposits                                     (113)         (80)
      Other assets                                                  (10)          (2)
      Accounts payable                                              (70)         (40)
      Tenant security deposit liabilities                             5           (2)
      Accrued property taxes                                        105           87
      Other liabilities                                             186           31

        Net cash provided by operating activities                 1,237          979

Cash flows from investing activities:
  Property improvements and replacements                           (209)        (589)
  Net (deposits to) withdrawals from restricted escrows             (48)          78

        Net cash used in investing activities                      (257)        (511)

Cash flows from financing activities:
  Payments on mortgage note payable                                 (47)         (37)
  Loan costs paid                                                    (7)         (16)
  Distributions to partners                                      (1,133)      (2,624)

        Net cash used in financing activities                    (1,187)      (2,677)

Net decrease in cash and cash equivalents                          (207)      (2,209)

Cash and cash equivalents at beginning of period                    871        2,793

Cash and cash equivalents at end of period                       $ 664        $ 584

Supplemental disclosure of cash flow information:
  Cash paid for interest                                         $ 780        $ 755

                   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 and
six month  periods  ended June 30, 2001 are not  necessarily  indicative  of the
results that may be expected for the fiscal year ending  December 31, 2001.  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, 2000.  The  Managing  General  Partner is an affiliate of Apartment
Investment  and  Management  Company  ("AIMCO"),  a publicly  traded real estate
investment trust.

Segment Reporting: Statement of Financial Accounting Standards ("SFAS") No. 131,
"Disclosure about Segments of an Enterprise and Related Information" established
standards for the way that public business  enterprises report information about
operating  segments  in annual  financial  statements  and  requires  that those
enterprises  report selected  information  about  operating  segments in interim
financial reports.  It also established  standards for related disclosures about
products and services, geographic areas, and major customers. As defined in SFAS
No. 131, the Partnership has only one reportable  segment.  The Managing General
Partner  believes  that  segment-based  disclosures  will not  result  in a more
meaningful presentation than the financial statements as currently presented.

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.

The  following  payments  were  made to the  Managing  General  Partner  and its
affiliates during the six month periods ended June 30, 2001 and 2000:

                                                                  2001      2000
                                                                  (in thousands)

 Property management fees (included in operating expenses)        $189      $180
 Reimbursement for services of affiliates (included in
   investment properties and general and administrative
   expenses)                                                       124        84
 Non-accountable reimbursement (included in general and
   administrative expenses)                                         91        91
 Partnership management fee (included in general and
   administrative expenses)                                         --        35


During the six months ended June 30, 2001 and 2000,  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  $189,000 and
$180,000 for the six months ended June 30, 2001 and 2000, respectively.

An  affiliate  of  the  Managing  General  Partner  received   reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $124,000 and
$84,000 for the six months ended June 30, 2001 and 2000, respectively.

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
approximately  $91,000 in reimbursements for both of the six month periods ended
June 30, 2001 and 2000.

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 paid  approximately  $35,000
during the six months ended June 30, 2000 for such fees.  The  Managing  General
Partner  was not  entitled  to  receive a similar  reimbursement  during the six
months ended June 30, 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.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,   AIMCO  and  its  affiliates   currently  own  40,211.67   limited
partnership  units in the  Partnership  representing  66.45% 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 without
limitation, voting on certain amendments to the Partnership Agreement and voting
to remove the Managing General  Partner.  As a result of its ownership of 66.45%
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  (41.97% of the units),  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.

Note C - Distributions

During the six months ended June 30,  2001,  the  Partnership  declared and paid
distributions  from  operations  of  approximately   $1,133,000   (approximately
$1,122,000  to the limited  partners or $18.54 per  limited  partnership  unit).
During the six months ended June 30,  2000,  the  Partnership  declared and paid
distributions  of  approximately  $2,624,000  (approximately  $2,598,000  to the
limited  partners  or  $42.93  per  limited   partnership  unit)  consisting  of
approximately  $1,739,000  (approximately  $1,722,000 to the limited partners or
$28.45 per limited  partnership  unit) of cash from operations and approximately
$885,000  (approximately  $876,000 to the limited partners or $14.48 per limited
partnership  unit) of cash from the refinance  proceeds of The Pines  Apartments
and from refinancing proceeds in prior years.

Note D - Refinancing of Mortgage Note Payable

On December 13, 1999, the  Partnership  refinanced the mortgage  encumbering The
Pines  Apartments.   The  refinancing  replaced  indebtedness  of  approximately
$3,406,000 with a new mortgage in the amount of $4,225,000. The interest rate on
the new  mortgage is 7.97% as compared to 8.56% on the  previous  debt.  The new
loan which  matures on January 1, 2020 requires  monthly  principal and interest
payments and is scheduled to be fully amortized at maturity.  Total  capitalized
loan costs were  approximately  $88,000 during the year ended December 31, 1999.
Additional  loan costs of  approximately  $16,000  and $7,000  were  capitalized
during the six months ended June 30, 2000 and 2001, respectively.

Note E - 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. 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 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.  Plaintiffs have until
August 16, 2001 to file a fourth amended complaint. The Managing General Partner
does  not  anticipate  that  any  costs,  whether  legal  or  settlement  costs,
associated  with  this  case  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 six month periods ended June 30, 2001 and 2000:

                                                   Average Occupancy
                                                    2001       2000

      Fairway View II Apartments                    91%        93%
         Baton Rouge, Louisiana
      The Pines Apartments                          96%        97%
         Roanoke, Virginia
      Patchen Place Apartments                      90%        92%
         Lexington, Kentucky
      Northwoods I and II Apartments                93%        90%
         Pensacola, Florida
      South Point Apartments                        94%        88%
         Durham, North Carolina

The Managing General Partner  attributes the increase in occupancy at Northwoods
I and II  Apartments  to the  completion of a road  expansion  project.  Traffic
issues and road  barriers  were  eliminated,  thereby  increasing  new  prospect
traffic as well as the  property's  curb appeal.  The Managing  General  Partner
attributes  the  increase in occupancy  at South Point  Apartments  to increased
marketing efforts and decreased home purchases.

Results of Operations

The  Registrant's  net  income  for the six  months  ended  June  30,  2001  was
approximately  $53,000 compared to a net loss of  approximately  $37,000 for the
six months ended June 30, 2000. The Registrant's net income for the three months
ended June 30,  2001 was  approximately  $104,000  as  compared to a net loss of
approximately  $56,000 for the three months ended June 30, 2000. The increase in
net income for the six months  ended  June 30,  2001 was due to an  increase  in
total revenues which was partially offset by an increase in total expenses.  The
increase  in net income for the three  months  ended June 30, 2001 was due to an
increase in total  revenues  and a decrease in total  expenses.  Total  revenues
increased for the three and six months ended June 30, 2001 due to an increase in
rental income which was partially  offset by a decrease in other income.  Rental
income increased  primarily due to increased  average rental rates at all of the
Partnership's  investment properties and increased occupancy at Northwoods I and
II and South Point  Apartments,  which more than offset  decreased  occupancy at
Fairway  View  II,  The  Pines,  and  Patchen  Place  Apartments.  In  addition,
concessions  decreased at Patchen  Place,  South Point,  and Northwoods I and II
Apartments  which more than  offset  increased  concessions  at Fairway  View II
Apartments.  The  decrease in other  income was  primarily  due to a decrease in
interest  income as a result of lower average cash balances in interest  bearing
accounts held by the Partnership during 2001.

Total expenses increased for the six months ended June 30, 2001 due to increases
in depreciation and operating  expenses.  Total expenses decreased for the three
months  ended June 30,  2001 due to  decreases  in  operating  and  general  and
administrative   expenses  which  were  partially   offset  by  an  increase  in
depreciation  expense.  Depreciation  expense  increased  for the  three and six
months  ended  June  30,  2001 due to  property  improvements  and  replacements
completed during the last twelve months.  Operating  expenses  increased for the
six months ended June 30, 2001  primarily  due to increased gas bills at Patchen
Place and The Pines Apartments and increased property  management fees at all of
the Partnership's properties.  Operating expenses decreased for the three months
ended June 30, 2001 primarily due to decreased  maintenance  expenses at Fairway
View II, Patchen Place, South Point, and Northwoods I and II Apartments. General
and  administrative  expenses decreased for the three months ended June 30, 2001
primarily  due to  decreased  fees  paid  to the  Managing  General  Partner  in
connection with the  distributions  from operations made during the three months
ended June 30, 2001 and reduced legal and  professional  fees required to manage
the  Partnership.  These  decreases were partially  offset by an increase in the
costs of services  included in the  management  reimbursements  to the  Managing
General  Partner as allowed under the  Partnership  Agreement.  Also included in
general  and  administrative  expenses  at both June 30, 2001 and 2000 are costs
associated  with the  quarterly  and annual  communications  with  investors and
regulatory agencies and the annual audit required by the Partnership Agreement.

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 June 30, 2001, the Partnership had cash and cash equivalents of approximately
$664,000 as compared to  approximately  $584,000 at June 30, 2000. Cash and cash
equivalents  decreased by  approximately  $207,000 from the  Partnership's  year
ended  December  31,  2000  due to  approximately  $1,187,000  of  cash  used in
financing  activities  and  approximately  $257,000  of cash  used in  investing
activities,  which more than offset approximately $1,237,000 of cash provided by
operating   activities.   Cash  used  in  financing   activities   consisted  of
distributions to partners and, to a lesser extent, the payment of loan costs and
payments of principal  made on the mortgage  encumbering  The Pines  Apartments.
Cash  used in  investing  activities  consisted  of  property  improvements  and
replacements and deposits to escrow accounts  maintained by the mortgage lender.
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  six  months  ended  June  30,  2001,  the   Partnership   completed
approximately  $35,000 of capital  improvements  at Fairway View II,  consisting
primarily of carpet and vinyl replacements,  plumbing fixtures, air conditioning
unit  replacement,   major  landscaping,  and  structural  improvements.   These
improvements were funded from Partnership  reserves and operating cash flow. The
Partnership has evaluated the capital  improvement needs of the property for the
current  year  and,  as a result  budgeted  approximately  $56,000  for  capital
improvements,   consisting  primarily  of  air  conditioning  unit  replacement,
appliances,   carpet  replacements,   and  swimming  pool  upgrades.  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 Pines

During  the  six  months  ended  June  30,  2001,  the   Partnership   completed
approximately $43,000 of capital improvements at The Pines, consisting primarily
of  carpet  and vinyl  replacements,  water  heater  replacements,  and  cabinet
upgrades. These improvements were funded from Partnership reserves and operating
cash flow. The  Partnership has evaluated the capital  improvement  needs of the
property for the current year and, as a result budgeted  approximately  $191,000
for  capital  improvements,   consisting  primarily  of  cabinet  upgrades,  air
conditioning unit replacement,  interior decoration,  appliances, and carpet and
vinyl replacement.  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.

Patchen Place

During  the  six  months  ended  June  30,  2001,  the   Partnership   completed
approximately  $38,000 of capital  improvements  at  Patchen  Place,  consisting
primarily  of carpet  replacements,  office  computers,  air  conditioning  unit
replacement,  and structural  improvements.  These improvements were funded from
operating cash flow. The Partnership has evaluated the capital improvement needs
of the  property for the current  year and, as a result  budgeted  approximately
$153,000  for capital  improvements,  consisting  primarily  of carpet and vinyl
replacements,   appliances  and  water  conservation  improvements.   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  six  months  ended  June  30,  2001,  the   Partnership   completed
approximately  $74,000 of capital  improvements at Northwoods I & II, consisting
primarily of carpet and vinyl  replacements,  air conditioning unit replacement,
interior decoration,  appliances and structural improvements. These improvements
were funded from  Partnership  reserves and operating cash flow. The Partnership
has evaluated the capital improvement needs of the property for the current year
and, as a result  budgeted  approximately  $183,000  for  capital  improvements,
consisting   primarily  of  air  conditioning   unit   replacement,   countertop
replacements,  carpet  replacements,  swimming  pool  improvements,  parking lot
improvements,   exterior  painting,  appliances,  structural  improvements,  and
recreational  facility upgrades.  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.

South Point

During  the  six  months  ended  June  30,  2001,  the   Partnership   completed
approximately  $19,000  of  capital  improvements  at  South  Point,  consisting
primarily of carpet  replacements and air conditioning unit replacements.  These
improvements were funded from Partnership  reserves and operating cash flow. The
Partnership has evaluated the capital  improvement needs of the property for the
current  year  and,  as  a  result  budgeted  approximately  $50,000  consisting
primarily of cabinet upgrades and carpet replacements.  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   $4,096,000  encumbering  The  Pines  is  fully
amortized over 20 years.  The mortgage  indebtedness of $16,800,000  encumbering
the remaining  properties  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.

During the six months ended June 30,  2001,  the  Partnership  declared and paid
distributions  from  operations  of  approximately   $1,133,000   (approximately
$1,122,000  to the limited  partners or $18.54 per  limited  partnership  unit).
During the six months ended June 30,  2000,  the  Partnership  declared and paid
distributions  of  approximately  $2,624,000  (approximately  $2,598,000  to the
limited  partners  or  $42.93  per  limited   partnership  unit)  consisting  of
approximately  $1,739,000  (approximately  $1,722,000 to the limited partners or
$28.45 per limited  partnership  unit) of cash from operations and approximately
$885,000  (approximately  $876,000 to the limited partners or $14.48 per limited
partnership  unit) of cash from the refinance  proceeds of The Pines  Apartments
and from refinancing  proceeds in prior years.  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  distribution  policy is reviewed on a quarterly basis.
There  can  be  no  assurance,  however,  that  the  Partnership  will  generate
sufficient funds from operations after required capital expenditures,  to permit
any  additional  distributions  to its partners  during the remainder of 2001 or
subsequent periods.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,   AIMCO  and  its  affiliates   currently  own  40,211.67   limited
partnership  units in the  Partnership  representing  66.45% 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 without
limitation, voting on certain amendments to the Partnership Agreement and voting
to remove the Managing General  Partner.  As a result of its ownership of 66.45%
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  (41.97% of the units),  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. 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 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.  Plaintiffs have until
August 16, 2001 to file a fourth amended complaint. The Managing General Partner
does  not  anticipate  that  any  costs,  whether  legal  or  settlement  costs,
associated  with  this  case  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 quarter ended June 30, 2001:

               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: