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, 2000


[ ] 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, 2000
<TABLE>
<CAPTION>

Assets

<S>                                                                          <C>
   Cash and cash equivalents                                                 $  584
   Receivables and deposits                                                     417
   Restricted escrows                                                           369
   Other assets                                                                 475
   Investment properties:
       Land                                                  $  3,738
       Buildings and related personal property                 43,866
                                                               47,604
       Less accumulated depreciation                          (28,558)       19,046
                                                                           $ 20,891

Liabilities and Partners' Deficit
Liabilities

   Accounts payable                                                          $  126
   Tenant security deposit liabilities                                          105
   Accrued property taxes                                                       154
   Other liabilities                                                            332
   Mortgage notes payable                                                    20,988

Partners' Deficit:
   General partner                                            $  (310)
   Limited partners (60,517 units
      issued and outstanding)                                    (504)         (814)
                                                                           $ 20,891
</TABLE>

                   See Accompanying Notes to Financial Statements

<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,
                                      2000         1999          2000         1999
Revenues:
<S>                                 <C>           <C>          <C>           <C>
  Rental income                     $ 1,712       $ 1,784      $ 3,463       $ 3,597
  Other income                          112            77          185           141
     Total revenues                   1,824         1,861        3,648         3,738

Expenses:
  Operating                             715           688        1,419         1,404
  General and administrative            160            73          251           144
  Depreciation                          489           439          973           871
  Interest                              411           412          831           821
  Property taxes                        105           106          211           216
     Total expenses                   1,880         1,718        3,685         3,456

Net (loss) income                    $  (56)        $ 143        $ (37)        $ 282

Net (loss) income allocated to
  general partner (1%)                $  (1)         $  1         $ --          $  3
Net (loss) income allocated to
  limited partners (99%)                (55)          142          (37)          279

                                     $  (56)        $ 143        $ (37)        $ 282

Net (loss) income per limited
  partnership unit                  $ (0.91)       $ 2.35       $ (0.61)      $ 4.61

Distributions per limited
  partnership unit                  $ 22.97        $   --       $ 42.93       $ 4.91

</TABLE>

                   See Accompanying Notes to Financial Statements

<PAGE>

c)

                           NATIONAL PROPERTY INVESTORS 7

                STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
                                   (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) capital at
   December 31, 1999                  60,517      $  (284)    $ 2,131      $ 1,847

Distributions to partners                 --          (26)     (2,598)      (2,624)

Net loss for the six months
   ended June 30, 2000                    --           --         (37)         (37)

Partners' deficit at
   June 30, 2000                      60,517      $  (310)     $ (504)     $  (814)
</TABLE>

                   See Accompanying Notes to Financial Statements

<PAGE>

d)

                           NATIONAL PROPERTY INVESTORS 7

                            STATEMENTS OF CASH FLOWS

                                   (Unaudited)

                                   (in thousands)

<TABLE>
<CAPTION>

                                                                  Six Months Ended
                                                                      June 30,

                                                                  2000        1999
Cash flows from operating activities:
<S>                                                              <C>           <C>
  Net income                                                     $  (37)       $ 282
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation                                                    973          871
    Amortization of loan costs                                       49           55
    Change in accounts:
      Receivables and deposits                                      (80)           3
      Other assets                                                   (2)         (30)
      Accounts payable                                              (40)          --
      Tenant security deposit liabilities                            (2)         (12)
      Accrued property taxes                                         87           (2)
      Other liabilities                                              31           12

       Net cash provided by operating activities                    979        1,179

Cash flows from investing activities:

  Property improvements and replacements                           (589)        (291)
  Net withdrawals from restricted escrows                            78           22

       Net cash used in investing activities                       (511)        (269)

Cash flows from financing activities:

  Payments on mortgage note payable                                 (37)         (20)
  Loan costs paid                                                   (16)          --
  Distributions to partners                                      (2,624)        (300)

       Net cash used in financing activities                     (2,677)        (320)

Net (decrease) increase in cash and cash equivalents             (2,209)         590

Cash and cash equivalents at beginning of period                  2,793        1,074

Cash and cash equivalents at end of period                       $  584      $ 1,664

Supplemental disclosure of cash flow information:
  Cash paid for interest                                         $  755        $ 763

</TABLE>

                   See Accompanying Notes to Financial Statements

<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"
or "NPI Equity"),  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,  2000 are not
necessarily  indicative  of the results that may be expected for the fiscal year
ending  December  31,  2000.  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, 1999.

Note B - Transfer of Control

Pursuant  to a series  of  transactions  which  closed  on  October  1, 1998 and
February 26, 1999,  Insignia Financial Group, Inc. and Insignia Properties Trust
merged into Apartment  Investment and Management Company  ("AIMCO"),  a publicly
traded real estate investment trust, with AIMCO being the surviving  corporation
(the "Insignia Merger").  As a result, AIMCO acquired 100% ownership interest in
the Managing General Partner. The Managing General Partner does not believe that
this  transaction  has had or will have a  material  effect on the  affairs  and
operations of the Partnership.

Note C - 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, 2000 and 1999:

                                                                  2000      1999
                                                                  (in thousands)

 Property management fees (included in operating expenses)        $180      $191
 Reimbursement for services of affiliates (included in
   investment properties and general and administrative
   expenses)                                                        84        94
 Non-accountable reimbursement (included in general and
   administrative expenses)                                        126        --

During the six months ended June 30, 2000 and 1999,  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  $180,000 and
$191,000 for the six months ended June 30, 2000 and 1999, respectively.

<PAGE>

An  affiliate  of  the  Managing  General  Partner  received   reimbursement  of
accountable  administrative  expenses  amounting  to  approximately  $84,000 and
$94,000 for the six months ended June 30, 2000 and 1999, 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 $126,000 in reimbursements for the six months ended June 30, 2000.
The Managing General Partner was not entitled to receive a similar reimbursement
during the six months  ended June 30, 1999 because  there were no  distributions
from operations.

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, be
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.

AIMCO and its affiliates  currently own 38,554 limited  partnership units in the
Partnership  representing  63.71% 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.  As a result of its  ownership of 63.71% 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, 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
non-tendering units holders.  Except for the foregoing, no other limitations are
imposed on Insignia Properties, L.P.'s right to vote each Unit acquired.

Note D - Distributions

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. A distribution of  approximately
$300,000  (approximately  $297,000 to the limited  partners or $4.91 per limited
partnership  unit) from refinancing  proceeds in prior years was paid during the
six months ended June 30, 1999.

<PAGE>

Note E - 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 being amortized over 20 years. Total capitalized loan costs were
approximately  $88,000 during the year ended December 31, 1999.  Additional loan
costs of approximately $16,000 were capitalized during the six months ended June
30, 2000.

Note F - Segment Reporting

Description  of the types of products  and  services  from which the  reportable
segment  derives its  revenues:  The  Partnership  has one  reportable  segment:
residential properties.  The Partnership's residential property segment consists
of five apartment  complexes  located in the Southeast.  The  Partnership  rents
apartment units to tenants for terms that are typically twelve months or less.

Measurement  of segment profit or loss: The  Partnership  evaluates  performance
based on segment profit (loss) before  depreciation.  The accounting policies of
the reportable  segment are the same as those of the Partnership as described in
the  Partnership's  Annual  Report on Form  10-KSB  for the  fiscal  year  ended
December 31, 1999.

Factors management used to identify the enterprise's  reportable  segments:  The
Partnership's  reportable  segment is investment  properties  that offer similar
products and  services.  Although each of the  investment  properties is managed
separately,  they have been aggregated into one segment as they provide services
with similar types of products and customers.

Segment  information for the three and six month periods ended June 30, 2000 and
1999, is shown in the tables below (in  thousands).  The "Other" column includes
partnership administration related items and income and expense not allocated to
the reportable segment.

<TABLE>
<CAPTION>

      Three Months Ended June 30, 2000         Residential       Other        Totals

<S>                                              <C>             <C>        <C>
Rental income                                    $ 1,712         $  --      $ 1,712
Other income                                         103             9          112
Interest expense                                     411            --          411
Depreciation                                         489            --          489
General and administrative expense                    --           160          160
Segment profit (loss)                                 95          (151)         (56)
</TABLE>

<TABLE>
<CAPTION>

       Six Months Ended June 30, 2000          Residential       Other        Totals

<S>                                              <C>             <C>         <C>
Rental income                                    $ 3,463         $  --       $ 3,463
Other income                                         168            17          185
Interest expense                                     831            --          831
Depreciation                                         973            --          973
General and administrative expense                    --           251          251
Segment profit (loss)                                197          (234)         (37)
Total assets                                      20,678           213       20,891
Capital expenditures for investment
  properties                                         589            --          589
</TABLE>

<TABLE>
<CAPTION>

      Three Months Ended June 30, 1999         Residential       Other        Totals

<S>                                              <C>             <C>         <C>
Rental income                                    $ 1,784         $  --       $ 1,784
Other income                                          74             3           77
Interest expense                                     412            --          412
Depreciation                                         439            --          439
General and administrative expense                    --            73           73
Segment profit (loss)                                213           (70)         143
</TABLE>

<TABLE>
<CAPTION>

      Six Months Ended June 30, 1999           Residential       Other       Totals

<S>                                             <C>             <C>         <C>
Rental income                                   $ 3,597         $   --      $ 3,597
Other income                                        134              7          141
Interest expense                                    821             --          821
Depreciation                                        871             --          871
General and administrative expense                   --            144          144
Segment profit (loss)                               419           (137)         282
Total assets                                     22,217            240       22,457
Capital expenditures for investment
  properties                                         291            --          291
</TABLE>

Note G - 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 the acquisition of interests in certain general partner
entities by Insignia Financial Group, Inc. and entities which were, at one time,
affiliates of Insignia; past tender offers by the Insignia affiliates to acquire
limited  partnership  units;  the  management  of  partnerships  by the Insignia
affiliates;  and the Insignia  Merger.  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  have 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 final 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. The Court will entertain applications for lead
counsel which must be filed by August 4, 2000. The Court has scheduled a hearing
on August 21, 2000 to address the issue of appointing lead counsel. The Managing
General Partner does not anticipate that 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, 2000 and 1999:

                                                  Average Occupancy
                                                   2000       1999

      Fairway View II Apartments                    93%        96%
         Baton Rouge, Louisiana
      The Pines Apartments                          97%        95%
         Roanoke, Virginia
      Patchen Place Apartments                      92%        93%
         Lexington, Kentucky
      Northwoods I and II Apartments                90%        95%
         Pensacola, Florida
      South Point Apartments                        88%        95%
         Durham, North Carolina

The Managing  General  Partner  attributes  the decrease in occupancy at Fairway
View II Apartments to tenants  temporarily moving in during the first six months
of 1999  because  of a fire at a  neighboring  complex  owned  by an  affiliated
Partnership,  which  inflated  occupancy  for the period.  The Managing  General
Partner  attributes  the decrease in occupancy at Northwoods I and II Apartments
to a current road  expansion  project.  Traffic  issues and road  barriers  have
impacted  new  prospect  traffic  as well as the  property's  curb  appeal.  The
Managing  General  Partner  attributes  the decrease in occupancy at South Point
Apartments to increased competition in the Durham, North Carolina area.

Results of Operations

The  Registrant's  net  loss  for  the  six  months  ended  June  30,  2000  was
approximately  $37,000 compared to net income of approximately  $282,000 for the
six months ended June 30, 1999. The  Registrant's  net loss for the three months
ended  June 30,  2000 was  approximately  $56,000 as  compared  to net income of
approximately $143,000 for the three months ended June 30, 1999. The decrease in
net income for the three and six months  ended June 30,  2000 as compared to the
comparable  periods  in 1999  was due to a  decrease  in total  revenues  and an
increase in total expenses. Total revenues decreased due to a decrease in rental
income which was partially offset by an increase in other income.  Rental income
decreased  primarily due to decreased occupancy at Fairway View II, Northwoods I
and II, Patchen Place, and South Point Apartments,  as well as decreased average
rental rates at Fairway View II Apartments.  In addition,  concessions increased
at  Fairway  View II,  Patchen  Place,  South  Point,  and  Northwoods  I and II
Apartments and bad debt expense increased at Fairway View II, Patchen Place, and
Northwoods I and II  Apartments.  The increase in other income was primarily due
to an increase in interest income as a result of higher average cash balances in
interest bearing accounts held by the Partnership during 2000.

Total  expenses  increased  for the three and six months  ended June 30, 2000 as
compared to the  comparable  periods in 1999 due to  increases  in  depreciation
expense,   general  and  administrative   expenses,   and  operating   expenses.
Depreciation  expense  increased due to property  improvements  and replacements
completed during the last twelve months which are now being depreciated. General
and administrative expenses increased primarily due to fees paid to the Managing
General Partner in connection with the distributions from operations made during
the six months ended June 30, 2000.  For the six months ended June 30, 1999,  no
similar  fees were paid  because  the  distribution  paid during this period was
entirely  from  refinancing  proceeds.  Included in general  and  administrative
expenses at both June 30, 2000 and 1999,  are management  reimbursements  to the
Managing  General  Partner  allowed  under  the  Partnership  Agreement.   Costs
associated  with the  quarterly  and annual  communications  with  investors and
regulatory  agencies and the annual audit required by the Partnership  Agreement
are also  included.  Operating  expenses  increased  primarily  due to increased
advertising expenses at all the properties.

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, 2000, the Partnership had cash and cash equivalents of approximately
$584,000 as compared to approximately $1,664,000 at June 30, 1999. Cash and cash
equivalents  decreased by approximately  $2,209,000 from the Partnership's  year
ended  December  31,  1999  due to  approximately  $2,677,000  of  cash  used in
financing  activities  and  approximately  $511,000  of cash  used in  investing
activities,  which more than offset  approximately  $979,000 of cash provided by
operating  activities.  Cash used in financing  activities  consisted of partner
distributions 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 which
was  partially  offset by  withdrawals  from escrow  accounts  maintained by the
mortgage lender.

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,  2000,  the   Partnership   completed
approximately  $72,000 of capital  improvements  at Fairway View II,  consisting
primarily  of  carpet  and vinyl  replacements,  structural  and other  building
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
$79,000 for capital improvements,  consisting primarily of air conditioning unit
replacement,   appliances,   carpet  and  vinyl  replacements,   and  structural
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.

The Pines

During  the  six  months  ended  June  30,  2000,  the   Partnership   completed
approximately $86,000 of capital improvements at The Pines, consisting primarily
of carpet replacement, parking area improvements, roof replacement, and swimming
pool  upgrades.  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  $98,000  for  capital
improvements,  consisting primarily of parking area improvements,  swimming pool
repairs, air conditioning unit replacement,  window treatments,  appliances, and
carpet 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,  2000,  the   Partnership   completed
approximately  $136,000 of capital  improvements  at Patchen  Place,  consisting
primarily of carpet and vinyl replacement,  electrical upgrades, appliances, and
submetering  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  $224,000
for  capital  improvements,   consisting  primarily  of  air  conditioning  unit
replacement,  appliances, carpet and vinyl replacement, structural improvements,
and plumbing 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.

Northwoods I and II

During  the  six  months  ended  June  30,  2000,  the   Partnership   completed
approximately  $268,000 of capital improvements at Northwoods I & II, consisting
primarily  of  carpet  and  vinyl  replacements,   exterior  painting,  plumbing
upgrades, 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  $330,000 for capital  improvements,  consisting
primarily of air conditioning unit replacement,  carpet and vinyl  replacements,
electrical upgrades,  major landscaping,  parking lot improvements,  appliances,
sprinkler  systems,  and  plumbing  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,  2000,  the   Partnership   completed
approximately  $27,000  of  capital  improvements  at  South  Point,  consisting
primarily of carpet and vinyl  replacement,  golf carts,  and appliances.  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  $59,000  for capital  improvements,  consisting
primarily  of   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.

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.

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 being amortized over 20 years. Total capitalized loan costs were
approximately  $88,000 during the year ended December 31, 1999.  Additional loan
costs of approximately $16,000 were capitalized during the six months ended June
30, 2000.

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 $4,188,000 encumbering The Pines is amortized over
20 years.  The mortgage  indebtedness  of $16,800,000  encumbering the remaining
properties is interest only with required 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,  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. A distribution of  approximately
$300,000  (approximately  $297,000 to the limited  partners or $4.91 per limited
partnership  unit) from refinancing  proceeds in prior years was paid during the
six months ended June 30,  1999.  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
Registrant's  distribution  policy is reviewed on a semi-annual 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 2000  or  subsequent
periods.

<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 the acquisition of interests in certain general partner
entities by Insignia Financial Group, Inc. and entities which were, at one time,
affiliates of Insignia; past tender offers by the Insignia affiliates to acquire
limited  partnership  units;  the  management  of  partnerships  by the Insignia
affiliates;  and the Insignia  Merger.  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  have 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 final 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. The Court will entertain applications for lead
counsel which must be filed by August 4, 2000. The Court has scheduled a hearing
on August 21, 2000 to address the issue of appointing lead counsel. The Managing
General Partner does not anticipate that 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:

                  Exhibit 27, Financial Data Schedule, is filed as an exhibit to
                  this report.

            b)    Reports on Form 8-K filed during the second quarter of 2000:

                  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: