SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB
       (Mark One)
[X]   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

                 For the fiscal year ended December 31, 2003

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

               For the transition period _________to _________

                         Commission file number 0-11767

                       ANGELES INCOME PROPERTIES, LTD. II
                 (Name of small business issuer in its charter)

         California                                              95-3793526
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

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

                                 (864) 239-1000
                            Issuer's telephone number

        Securities registered under Section 12(b) of the Exchange Act:

                                      None

        Securities registered under Section 12(g) of the Exchange Act:

                      Units of Limited Partnership Interest
                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act of 1934 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___

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of the  registrant's  knowledge  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year.   $5,205,000

State the aggregate  market value of the voting  partnership  interests  held by
non-affiliates  computed  by  reference  to the price at which  the  partnership
interests  were sold,  or the average bid and asked  prices of such  partnership
interests as of December 31, 2003. No market exists for the limited  partnership
interests of the Registrant,  and,  therefore,  no aggregate market value can be
determined.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None


The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government  regulations.  Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including,  without limitation:  national and local
economic  conditions;  the terms of  governmental  regulations  that  affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates;  financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest;  real estate risks, including variations of real estate values and
the general  economic  climate in local markets and  competition  for tenants in
such markets;  litigation,  including  costs  associated  with  prosecuting  and
defending  claims  and  any  adverse   outcomes,   and  possible   environmental
liabilities.   Readers  should  carefully  review  the  Registrant's   financial
statements and the notes thereto,  as well as the risk factors  described in the
documents  the  Registrant  files  from  time to time  with the  Securities  and
Exchange Commission.

                                     PART I

Item 1.     Description of Business

Angeles Income  Properties,  Ltd. II (the  "Partnership"  or  "Registrant") is a
publicly held limited partnership organized under the California Uniform Limited
Partnership Act on October 12, 1982. The Partnership's  managing general partner
is Angeles  Realty  Corporation  II, a  California  corporation  (the  "Managing
General  Partner" or "ARC II").  ARC II was  wholly-owned  by MAE GP Corporation
("MAE  GP").  Effective  February  25,  1998,  MAE GP was merged  into  Insignia
Properties  Trust  ("IPT").  Effective  February 26,  1999,  IPT was merged into
Apartment  Investment and Management Company  ("AIMCO"),  a publicly traded real
estate investment trust.  Thus, the Managing General Partner is now wholly-owned
by AIMCO. The Elliott  Accommodation  Trust and the Elliott Family  Partnership,
Ltd., California limited  partnerships,  were the non-managing general partners.
Effective  December 31, 1997 the Elliott Family  Partnership,  Ltd. acquired the
Elliott  Accommodation  Trust's general partner  interest in the Partnership and
effective July 18, 2000, AIMCO Properties, L.P. (an affiliate of AIMCO) acquired
the  Elliott  Family  Partnership,   Ltd.'s  general  partner  interest  in  the
Partnership.  The Managing General Partner and the non-managing  general partner
are herein collectively  referred to as the "General Partners".  The Partnership
Agreement  provides  that the  Partnership  is to terminate on December 31, 2037
unless terminated prior to such date.

The Partnership,  through its public offering of Limited Partnership Units, sold
100,000 units aggregating $50,000,000.  The General Partners contributed capital
in the amount of $1,000 for a 1% interest in the  Partnership.  The  Partnership
was formed for the purpose of acquiring fee and other forms of equity  interests
in various types of real estate  property.  The  Partnership  presently owns and
operates three  apartment  properties at December 31, 2003. On March 2, 2004 the
Partnership sold Georgetown Apartments to an unrelated third party (See "Item 2.
Description of Properties"). Since its initial offering, the Partnership has not
received,  nor  are  limited  partners  required  to  make,  additional  capital
contributions.

The Partnership  has no employees.  Management and  administrative  services are
provided by the Managing  General Partner and by agents retained by the Managing
General  Partner.  An affiliate of the Managing  General  Partner  provided such
property management services for the residential  properties for the years ended
December 31, 2003 and 2002.


<PAGE>



Risk Factors

The  real  estate  business  in which  the  Partnership  is  engaged  is  highly
competitive.  There are other  residential  properties within the market area of
the Partnership's properties.  The number and quality of competitive properties,
including  those which may be managed by an affiliate  of the  Managing  General
Partner in such market area,  could have a material  effect on the rental market
for  apartment  properties  owned by the  Partnership  and the rents that may be
charged  for  such  apartments.  While  the  Managing  General  Partner  and its
affiliates  own and/or  control a significant  number of apartment  units in the
United  States,  such  units  represent  an  insignificant  percentage  of total
apartment  units in the United  States and  competition  for the  apartments  is
local.

Laws benefiting  disabled persons may result in the Partnership's  incurrence of
unanticipated  expenses.  Under the Americans with  Disabilities Act of 1990, or
ADA,  all places  intended to be used by the public are required to meet certain
Federal  requirements  related to access and use by disabled persons.  Likewise,
the Fair Housing Amendments Act of 1988, or FHAA, requires apartment  properties
first occupied after March 13, 1990 to be accessible to the  handicapped.  These
and other  Federal,  state  and  local  laws may  require  modifications  to the
Partnership's   properties,   or  restrict   renovations   of  the   properties.
Noncompliance  with  these laws could  result in the  imposition  of fines or an
award of  damages  to private  litigants  and also  could  result in an order to
correct any  non-complying  feature,  which could result in substantial  capital
expenditures.   Although  the  Managing   General  Partner   believes  that  the
Partnership's   properties  are   substantially   in  compliance   with  present
requirements,  the Partnership may incur  unanticipated  expenses to comply with
the ADA and the FHAA.

Both  the  income  and  expenses  of  operating  the  properties  owned  by  the
Partnership are subject to factors outside of the Partnership's control, such as
changes in the supply and demand for similar  properties  resulting from various
market  conditions,  increases/decreases  in unemployment or population  shifts,
changes in the availability of permanent mortgage  financing,  changes in zoning
laws,  or changes in patterns or needs of users.  In  addition,  there are risks
inherent in owning and operating residential  properties because such properties
are  susceptible to the impact of economic and other  conditions  outside of the
control of the Partnership.

There have been, and it is possible there may be other, Federal, state and local
legislation  and  regulations   enacted   relating  to  the  protection  of  the
environment.  The Partnership is unable to predict the extent,  if any, to which
such new  legislation  or  regulations  might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.

The Partnership  monitors its properties for evidence of pollutants,  toxins and
other dangerous substances, including the presence of asbestos. In certain cases
environmental  testing has been performed which resulted in no material  adverse
conditions or liabilities.  In no case has the Partnership  received notice that
it is a potentially  responsible party with respect to an environmental clean up
site.

A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operation"  included in "Item 6" of this Form
10-KSB.


<PAGE>



Item 2.     Description of Properties

The following table sets forth the Partnership's investment in properties:

                                Date of
Property                        Purchase       Type of Ownership            Use

Deer Creek Apartments           09/28/83   Fee ownership subject to   Apartments
  Plainsboro, NJ                           a first mortgage           288 units

Georgetown Apartments (2)       11/21/83   Fee ownership subject to   Apartments
  South Bend, IN                           a first mortgage (1)       200 units

Landmark Apartments             12/16/83   Fee ownership subject to   Apartments
  Raleigh, NC                              a first mortgage           292 units

(1)   Property is held by a limited partnership in which the Partnership holds a
      99% interest.

(2)   This  property was sold in March 2004.  In  accordance  with  Statement of
      Financial  Accounting Standards No. 144, the assets and liabilities of the
      property  have been  classified  as held for sale at December 31, 2003 and
      the operations of the property have been shown as income from discontinued
      operations for the years ended December 31, 2003 and 2002.

On March 2, 2004, the  Partnership  sold  Georgetown  Apartments to an unrelated
third  party  for a gross  sale  price  of  approximately  $10,950,000.  The net
proceeds  realized  by the  Partnership  were  approximately  $10,769,000  after
payment of closing costs and a prepayment  penalty owed by the  Partnership  and
paid by the buyer.  The  Partnership  used  approximately  $6,062,000 of the net
proceeds to repay the mortgage  encumbering the property.  The Partnership  will
realize a gain of  approximately  $9,556,000  as a result of the sale during the
first quarter of 2004. In addition,  the  Partnership  will record a loss on the
early extinguishment of debt of approximately  $159,000 during the first quarter
of 2004 as a result of the write-off of unamortized  loan costs and a prepayment
penalty.

Schedule of Properties

Set forth below for each of the  Partnership's  properties is the gross carrying
value,  accumulated  depreciation,  depreciable life, method of depreciation and
Federal tax basis.

<TABLE>
<CAPTION>

                           Gross
                         Carrying   Accumulated    Depreciable               Federal
Property                   Value    Depreciation       Life       Method    Tax Basis
                              (in thousands)                               (in thousands)

<S>                       <C>         <C>            <C>                     <C>
Deer Creek Apartments     $14,084     $10,367        5-30 yrs       S/L      $ 4,757

Landmark Apartments        13,199      11,693        5-30 yrs       S/L        2,186
                          $27,283     $22,060                                $ 6,943
</TABLE>

See "Note A - Organization  and Summary of Significant  Accounting  Policies" to
the consolidated financial statements included in "Item 7. Financial Statements"
for a description of the Partnership's capitalization and depreciation policies.

The gross  carrying  value,  accumulated  depreciation  and Federal tax basis of
Georgetown  Apartments,   which  is  included  in  assets  held  for  sale,  was
approximately  $8,433,000,  $7,313,000 and $1,428,000,  respectively at December
31, 2003.

Schedule of Property Indebtedness

The  following  table  sets  forth  certain  information  relating  to the loans
encumbering the Partnership's properties.

<TABLE>
<CAPTION>


                           Principal                                       Principal
                           Balance At                                       Balance
                          December 31,   Interest    Period    Maturity     Due At
        Property              2003         Rate    Amortized     Date    Maturity (2)
                         (in thousands)                                 (in thousands)
Deer Creek Apartments
<S>                         <C>           <C>        <C>       <C>           <C>
  1st mortgage              $12,957       7.43%      20 yrs    07/2021       $ --

Landmark Apartments
  1st mortgage (1)            6,038       7.33%      30 yrs    11/2004        5,950
                            $18,995                                         $ 5,950
</TABLE>

(1)   The mortgage  encumbering  Landmark  Apartments  matured November 1, 2003.
      However, the Managing General Partner has negotiated a one year extension,
      which  extends  the  maturity  of the loan to  November  1,  2004,  with a
      one-time right to extend to February 1, 2005.  The extension  requires the
      Partnership to continue making monthly  payments of principal and interest
      under the terms of the original mortgage.

(2)   See  "Note B -  Mortgage  Notes  Payable"  to the  consolidated  financial
      statements included in "Item 7. Financial Statements" for information with
      respect  to the  Partnership's  ability  to prepay  these  loans and other
      specific details about the loans.

The loan encumbering Georgetown Apartments of approximately $6,100,000, which is
included in liabilities  related to assets held for sale, was repaid  subsequent
to December 31, 2003 (as discussed above).

Rental Rates and Occupancy

Average  annual  rental rates and  occupancy for 2003 and 2002 for each property
were as follows:

                                     Average Annual               Average Annual
                                      Rental Rates                   Occupancy
                                       (per unit)
 Property                         2003            2002           2003       2002

 Deer Creek Apartments           $11,427         $11,460         95%        96%
 Landmark Apartments               7,407           7,963         88%        89%

The Managing General Partner  attributes the decrease in the average rental rate
at Landmark Apartments to an effort to increase occupancy at the property.

As noted under "Item 1.  Description of Business",  the real estate  industry is
highly  competitive.  Both  of  the  Partnership's  properties  are  subject  to
competition from other residential apartment complexes in the area. The Managing
General  Partner  believes  that the  Partnership's  properties  are  adequately
insured.  Each  residential  property is an apartment  complex  which leases its
units for lease terms of one year or less. No  residential  tenant leases 10% or
more  of the  available  rental  space.  The  properties  are in  good  physical
condition,  subject to normal  depreciation and  deterioration as is typical for
assets of this type and age.

Real Estate Taxes and Rates

Real estate taxes and rates in 2003 for each property were:

                                    2003             2003
                                  Billing            Rate
                                 (in thousands)

Deer Creek Apartments              $ 410             2.88%
Landmark Apartments                  142             1.03%

Capital Improvements

Deer Creek Apartments

The Partnership completed  approximately $228,000 in capital improvements at the
property  for  the  year  ended  December  31,  2003,  consisting  primarily  of
structural  improvements,  water heater upgrades, floor covering replacement and
construction  related to the winter storm damage which  occurred at the property
(as  discussed  in "Item 6.  Management's  Discussion  and  Analysis  or Plan or
Operation  - Results  of  Operations").  These  improvements  were  funded  from
operating  cash  flow and  insurance  proceeds.  The  Partnership  is  currently
evaluating the capital  improvement  needs of the property for the upcoming year
and currently expects to budget approximately $158,000.  Additional improvements
may be considered  during 2004 and will depend on the physical  condition of the
property as well as anticipated cash flow generated by the property.

Georgetown Apartments

The Partnership  completed  approximately $32,000 in capital improvements at the
property for the year ended December 31, 2003,  consisting primarily of plumbing
upgrades and window and floor covering  replacements.  These  improvements  were
funded from replacement  reserves and operating cash flow. On March 2, 2004, the
Partnership sold Georgetown Apartments to an unrelated third party.

Landmark Apartments

The Partnership completed  approximately $116,000 in capital improvements at the
property for the year ended  December 31,  2003,  consisting  primarily of water
heater upgrades, interior building improvements, and floor covering replacement.
These  improvements  were funded from  replacement  reserves and operating  cash
flow. The Partnership is currently  evaluating the capital  improvement needs of
the property for the upcoming year and currently expects to budget approximately
$161,000.  Additional improvements may be considered during 2004 and will depend
on the physical  condition of the property as well as  replacement  reserves and
anticipated cash flow generated by the property.


<PAGE>



The capital  improvements  planned at the Partnership's  properties for the year
ended 2004 will be made only to the extent of cash available from operations and
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.

Item 3.     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
purported  to  assert  claims  on  behalf  of a class of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  that 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 that 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  sought  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
In addition, 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 Heller action was brought as a
purported derivative action, and asserted claims for, among other things, breach
of fiduciary  duty,  unfair  competition,  conversion,  unjust  enrichment,  and
judicial dissolution.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent  appraisals of the  Partnerships'  properties  by a Court  appointed
appraiser.  An affiliate of the Managing General Partner has also agreed to make
at least one round of tender offers to purchase all of the partnership interests
in the Partnerships within one year of final approval,  if it is granted, and to
provide  partners with the independent  appraisals at the time of these tenders.
The proposed  settlement also provided for the limitation of the allowable costs
which  the  Managing   General   Partner  or  its  affiliates  will  charge  the
Partnerships  in connection with this litigation and imposes limits on the class
counsel  fees and  costs in this  litigation.  On April  11,  2003,  notice  was
distributed  to  limited   partners   providing  the  details  of  the  proposed
settlement.

On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.  On August 12, 2003, an objector
("Objector")  filed an  appeal  seeking  to  vacate  and/or  reverse  the  order
approving the settlement and entering  judgment  thereto.  On November 24, 2003,
the Objector filed an  application  requesting the Court order AIMCO to withdraw
settlement  tender offers it had  commenced,  refrain from making further offers
pending the appeal and auction any units tendered to third  parties,  contending
that the offers did not conform  with the terms of the  Settlement.  Counsel for
the Objector (on behalf of another  investor)  had  alternatively  requested the
Court take certain  action  purportedly  to enforce the terms of the  settlement
agreement.  On December 18, 2003,  the Court heard oral  argument on the motions
and denied them both in their entirety.  On January 28, 2004, Objector filed his
opening brief in his pending appeal.  The Managing  General Partner is currently
scheduled  to file a brief in  support  of the order  approving  settlement  and
entering judgment thereto by April 23, 2004.

On August 8, 2003 AIMCO  Properties  L.P., an affiliate of the Managing  General
Partner,  was served  with a  Complaint  in the United  States  District  Court,
District of Columbia alleging that AIMCO Properties L.P.  willfully violated the
Fair Labor Standards Act (FLSA) by failing to pay maintenance  workers  overtime
for all hours worked in excess of forty per week.  The  Complaint is styled as a
Collective  Action  under  the FLSA and seeks to  certify  state  subclasses  in
California, Maryland, and the District of Columbia. Specifically, the plaintiffs
contend that AIMCO Properties L.P. failed to compensate  maintenance workers for
time  that they were  required  to be  "on-call".  Additionally,  the  Complaint
alleges AIMCO  Properties  L.P.  failed to comply with the FLSA in  compensating
maintenance  workers  for time that they  worked in  responding  to a call while
"on-call".  The  Complaint  also  attempts  to certify a subclass  for  salaried
service  directors who are challenging  their  classification as exempt from the
overtime  provisions of the FLSA.  AIMCO  Properties L.P. has filed an answer to
the  Complaint  denying the  substantive  allegations.  Discovery  is  currently
underway.

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

Item 4.     Submission of Matters to a Vote of Security Holders

The unitholders of the Partnership did not vote on any matter during the quarter
ended December 31, 2003.


<PAGE>


                                     PART II

Item 5.     Market for the Partnership's Equity and Related Security Holder
            Matters

The Partnership,  a publicly-held limited partnership,  offered and sold 100,000
limited partnership units (the "Units") aggregating $50,000,000. At December 31,
2003, the  Partnership had 1,511 holders of record owning an aggregate of 99,804
Units. During the year ended December 31, 2003, the Partnership  discovered that
20 Units that had  previously  been  reported as  abandoned  were  actually  not
abandoned.   The  Units  were   reinstated  as  of  January  1,  2003  and  back
distributions  of  approximately  $4,000 were paid to the unitholder  during the
year ended December 31, 2003.  Affiliates of the Managing  General Partner owned
64,235  Units or 64.36% at  December  31,  2003.  No public  trading  market has
developed  for the  Units,  and it is not  anticipated  that such a market  will
develop in the future.

The  Partnership  distributed  the  following  amounts  during  the years  ended
December 31, 2003 and 2002 (in thousands, except per unit data):

<TABLE>
<CAPTION>

                         Year Ended       Per Limited        Year Ended       Per Limited
                        December 31,      Partnership       December 31,      Partnership
                            2003              Unit              2002             Unit

<S>                        <C>               <C>               <C>              <C>
Operations                 $ 797             $ 7.91            $ 517            $ 5.13
Refinancing (1)             1,032             10.24                --               --
                           $1,829            $18.15            $ 517            $ 5.13
</TABLE>

(1)   From proceeds from the refinancing of the mortgages encumbering Georgetown
      Apartments in May 2003.

Subsequent  to December  31, 2003,  the  Partnership  distributed  approximately
$3,927,000 to the partners (approximately  $3,888,000 to the limited partners or
$38.96 per limited  partnership  unit) from proceeds from the sale of Georgetown
Apartments.

Future  cash  distributions  will  depend on the levels of 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 any  distributions  to its partners in
2004 or subsequent  periods.  See "Item 2.  Description  of Properties - Capital
Improvements" for information  relating to anticipated  capital  expenditures at
the properties.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its  affiliates  owned 64,235  Units in the  Partnership
representing  64.36% of the outstanding  Units at December 31, 2003. A number of
these  Units  were  acquired  pursuant  to  tender  offers  made by AIMCO or its
affiliates.  It is possible that AIMCO or its affiliates will acquire additional
Units  in  exchange  for  cash or a  combination  of cash  and  units  in  AIMCO
Properties,  L.P., the operating  partnership of AIMCO,  either through  private
purchases or tender offers.  Pursuant to the Partnership Agreement,  unitholders
holding a majority of the Units are  entitled  to take action with  respect to a
variety of matters  that  include,  but are not  limited  to,  voting on certain
amendments  to the  Partnership  Agreement  and  voting to remove  the  Managing
General  Partner.  As a result of its  ownership  of  64.36% of the  outstanding
Units,  AIMCO  and its  affiliates  are in a  position  to  control  all  voting
decisions with respect to the Partnership. Although the Managing General Partner
owes fiduciary duties to the limited  partners of the Partnership,  the Managing
General Partner also owes fiduciary duties to AIMCO as its sole stockholder.  As
a result,  the duties of the  Managing  General  Partner,  as  managing  general
partner, to the Partnership and its limited partners may come into conflict with
the duties of the Managing General Partner to AIMCO, as its sole stockholder.

Item 6.     Management's Discussion and Analysis or Plan of Operation

This  item  should  be read  in  conjunction  with  the  consolidated  financial
statements and other items contained elsewhere in this report.

Results of Operations

The  Partnership's  net  income  for  the  year  ended  December  31,  2003  was
approximately $140,000,  compared to net income of approximately $58,000 for the
year ended December 31, 2002. On March 2, 2004, the Partnership  sold Georgetown
Apartments to an unrelated  third party for a gross sale price of  approximately
$10,950,000.  The net proceeds  realized by the Partnership  were  approximately
$10,769,000 after payment of closing costs and a prepayment  penalty owed by the
Partnership and paid by the buyer. The Partnership used approximately $6,062,000
of the net  proceeds  to  repay  the  mortgage  encumbering  the  property.  The
Partnership will realize a gain of  approximately  $9,556,000 as a result of the
sale during the first quarter of 2004. In addition,  the Partnership will record
a loss on the early extinguishment of debt of approximately  $159,000 during the
first quarter of 2004 as a result of the write-off of unamortized loan costs and
a  prepayment  penalty.  Effective  January 1,  2002,  the  Partnership  adopted
Statement  of  Financial  Accounting  Standards  No.  144,  "Accounting  for the
Impairment or Disposal of Long-Lived  Assets",  which established  standards for
the way that public business  enterprises  report  information  about long-lived
assets that are either being held for sale or have  already been  disposed of by
sale or other means.  The standard  requires that the results of operations  for
long lived assets that are being held for sale or have already been  disposed of
be  reported  as  discontinued   operations  on  the  statement  of  operations.
Georgetown  Apartments is considered held for sale as of December 31, 2003. As a
result, the consolidated  statement of operations included in "Item 7. Financial
Statements" has been restated as of January 1, 2002 to reflect the operations of
Georgetown  Apartments,  which was sold to an unrelated  third party on March 2,
2004, as income from discontinued operations. The property's operations,  income
of approximately $311,000 and $120,000 for the years ended December 31, 2003 and
2002,   respectively,   including  revenues  of  approximately   $1,562,000  and
$1,633,000 are included in income from discontinued operations. The consolidated
balance sheet reflects the assets and  liabilities  of Georgetown  Apartments as
assets  held  for  sale  and  liabilities  related  to  assets  held  for  sale,
respectively.

The  Partnership's  loss from continuing  operations for the year ended December
31, 2003 was approximately $171,000, compared to loss from continuing operations
of  approximately  $62,000 for the year ended December 31, 2002. The increase in
loss  from  continuing  operations  is  due to a  decrease  in  total  revenues,
partially offset by a decrease in total expenses. The decrease in total revenues
is due to decreases  in both rental and other  income,  partially  offset by the
recognition  of a casualty  gain during 2003.  The decrease in rental  income is
primarily due to decreases in the average  rental rate and increases in bad debt
expense  and  concessions  at both  of the  Partnership's  remaining  investment
properties and reduced occupancy at Landmark  Apartments.  The decrease in other
income  is  primarily  due  to  a  decrease  in  cable  television  revenue  and
administrative fees at both properties.

The  casualty  gain  recognized  in 2003 is the result of a winter  storm  which
occurred at Deer Creek  Apartments in February 2003,  causing minor damage to 37
units.  The  property  suffered  approximately  $54,000  in  damages.  Insurance
proceeds of  approximately  $52,000 were received during the year ended December
31, 2003 to cover the damages.  After writing off the cost of the  undepreciated
damaged assets of approximately  $1,000,  the Partnership  recognized a casualty
gain of approximately $51,000 for the year ended December 31, 2003.

The decrease in total expenses is due to decreases in depreciation, interest and
general and  administrative  expenses,  partially  offset by  increases  in both
operating and property tax expense.  The decrease in depreciation expense is due
to buildings and property  improvements and replacements  placed into service in
prior years  becoming  fully  depreciated  during 2003. The decrease in interest
expense is due to payments of principal  made on the mortgages  encumbering  the
Partnership's  properties,  which reduced the carrying balance of the loans. The
increase in  operating  expenses is  primarily  due to  increases in utility and
advertising  expenses at Landmark  Apartments,  and increased snow removal costs
and contract  service expenses at Deer Creek  Apartments,  partially offset by a
decrease in property management fees at both of the Partnership's properties and
reduced  contract  service  expenses at  Landmark  Apartments.  The  increase in
property  tax expense is due to an increase in the tax rate at both  properties.
General and administrative expenses decreased primarily due to a decrease in the
management fee due to the Managing General Partner based on cash flow as allowed
under the Partnership Agreement,  partially offset by an increase in the cost 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 for the years ended December 31, 2003 and 2002 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 Partnership  from the burden of  inflation-related  increases in expenses by
increasing rents and maintaining a high overall  occupancy level.  However,  the
Managing  General Partner may use rental  concessions and rental rate reductions
to offset softening market conditions,  accordingly,  there is no guarantee that
the Managing General Partner will be able to sustain such a plan.

Liquidity and Capital Resources

At  December  31,  2003,  the  Partnership  had  cash and  cash  equivalents  of
approximately  $793,000 compared to approximately $669,000 at December 31, 2002.
The increase in cash and cash  equivalents of  approximately  $124,000 is due to
approximately  $1,769,000  of cash provided by operating  activities,  partially
offset by  approximately  $1,436,000  of cash used in financing  activities  and
approximately  $209,000  of cash  used in  investing  activities.  Cash  used in
financing  activities  consisted of distributions  to the partners,  payments of
principal  made  on the  mortgages  encumbering  the  Partnership's  properties,
repayment of the mortgage notes payable due to the  refinancing of the mortgages
encumbering  Georgetown  Apartments and the loan costs and prepayment  penalties
paid,  partially  offset  by  proceeds  received  from  the  refinancing  of the
mortgages encumbering Georgetown  Apartments.  Cash used in investing activities
consisted of property  improvements  and  replacements,  partially offset by net
receipts from escrow  accounts  maintained by the mortgage  lenders and proceeds
received  related to the  casualty  at Deer Creek  Apartments.  The  Partnership
invests its working capital reserves in interest bearing accounts.

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 Partnership and to comply with
Federal,  state,  and local  legal and  regulatory  requirements.  The  Managing
General  Partner  monitors  developments  in the  area of legal  and  regulatory
compliance and is studying new federal laws, including the Sarbanes-Oxley Act of
2002. The Sarbanes-Oxley Act of 2002 mandates or suggests additional  compliance
measures with regard to governance,  disclosure, audit and other areas. In light
of these changes,  the  Partnership  expects that it will incur higher  expenses
related to compliance, including increased legal and audit fees. The Partnership
is currently  evaluating the capital improvement needs of the properties for the
upcoming year and currently expects to budget approximately $319,000. Additional
improvements  may be  considered  during  2004 and will  depend on the  physical
condition of the properties as well as replacement reserves and anticipated cash
flow generated by the properties. The capital expenditures 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  Partnership's  assets are thought to be sufficient for any near-term  needs
(exclusive  of  capital   improvements)   of  the   Partnership.   The  mortgage
indebtedness  encumbering Deer Creek Apartments of approximately  $12,957,000 is
amortized  over  20  years  and  matures  on July 1,  2021 at  which  time it is
scheduled to be fully amortized.  The mortgage indebtedness encumbering Landmark
Apartments  of  approximately  $6,038,000,  is  amortized  over 30 years  with a
balloon payment of  approximately  $5,950,000 due November 1, 2004. The mortgage
encumbering  Landmark Apartments matured November 1, 2003. However, the Managing
General Partner has negotiated a one year extension,  which extends the maturity
of the loan to November 1, 2004,  with a one-time right to extend to February 1,
2005. The extension requires the Partnership to continue making monthly payments
of principal and interest under the terms of the original mortgage. The Managing
General  Partner  will attempt to refinance  the mortgage  encumbering  Landmark
Apartments and/or sell the property prior to such maturity date. If the property
cannot be refinanced or sold for a sufficient  amount, the Partnership will risk
losing such property through foreclosure.

On May 21, 2003, the Partnership refinanced the mortgages encumbering Georgetown
Apartments.  The refinancing  replaced the existing  mortgages of  approximately
$5,017,000  with a new mortgage in the amount of $6,175,000.  Total  capitalized
loan costs were approximately  $174,000 during the year ended December 31, 2003.
These  costs  included  approximately  $62,000 in fees  payable to the  Managing
General Partner.  The Partnership  recognized a loss on the early extinguishment
of debt of approximately $58,000 during the year ended December 31, 2003, due to
the write off of unamortized  loan costs and debt discounts and the payment of a
prepayment penalty.

These loans were initially refinanced under an interim credit facility ("Interim
Credit  Facility") that also provided for the refinancing of properties in other
Partnerships  that are affiliated  with the  Partnership.  However,  the Interim
Credit Facility created separate loans for each property refinanced  thereunder,
which loans were not  cross-collateralized  or cross-defaulted  with each other.
During  the term of the  Interim  Credit  Facility,  Georgetown  Apartments  was
required to make monthly interest-only payments. The first month's interest rate
for Georgetown Apartments was 2.78%.

As of June 1, 2003, the loan on Georgetown Apartments was assumed by a different
lender.  The credit facility  ("Permanent  Credit Facility") with the new lender
has a maturity  of five years  with an option for the  Partnership  to elect one
five-year  extension.  This Permanent Credit Facility creates separate loans for
each property refinanced thereunder, which loans are not cross-collateralized or
cross-defaulted  with each other. Each note under this Permanent Credit Facility
begins as a variable rate loan, and provides the option,  after three years,  of
converting to a fixed rate loan. The interest rate on the variable rate loans is
the Fannie Mae  discounted  mortgage-backed  security index plus 85 basis points
(1.92% at December 31, 2003), and resets monthly. Each loan automatically renews
at the end of each month. In addition,  monthly principal  payments are required
based on a 30-year  amortization  schedule,  using the  interest  rate in effect
during the first month that the  property is  financed by the  Permanent  Credit
Facility.  This loan was repaid subsequent to December 31, 2003 (as discussed in
"Results of Operations").

The  Partnership  distributed  the  following  amounts  during  the years  ended
December 31, 2003 and 2002 (in thousands, except per unit data):

<TABLE>
<CAPTION>

                         Year Ended       Per Limited        Year Ended       Per Limited
                        December 31,      Partnership       December 31,      Partnership
                            2003              Unit              2002             Unit

<S>                        <C>               <C>               <C>              <C>
Operations                 $ 797             $ 7.91            $ 517            $ 5.13
Refinancing (1)             1,032             10.24                --               --
                           $1,829            $18.15            $ 517            $ 5.13
</TABLE>

(1)   From proceeds from the refinancing of the mortgages encumbering Georgetown
      Apartments in May 2003.

Subsequent  to December  31, 2003,  the  Partnership  distributed  approximately
$3,927,000 to the partners (approximately  $3,888,000 to the limited partners or
$38.96 per limited  partnership  unit) from proceeds from the sale of Georgetown
Apartments.

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 any  distributions to its partners in
2004 or subsequent periods.

Other

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 64,235 limited  partnership  units
(the "Units") in the Partnership representing 64.36% of the outstanding Units at
December  31,  2003.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove the Managing General  Partner.  As a result of its ownership of 64.36% of
the outstanding Units, AIMCO and its affiliates are in a position to control all
voting decisions with respect to the Partnership.  Although the Managing General
Partner owes fiduciary duties to the limited  partners of the  Partnership,  the
Managing  General  Partner  also  owes  fiduciary  duties  to  AIMCO as its sole
stockholder.  As a  result,  the  duties of the  Managing  General  Partner,  as
managing general  partner,  to the Partnership and its limited partners may come
into conflict with the duties of the Managing  General  Partner to AIMCO, as its
sole stockholder.

Critical Accounting Policies and Estimates

A summary of the Partnership's  significant  accounting  policies is included in
"Note A - Organization and Summary of Significant  Accounting Policies" which is
included  in  the  consolidated  financial  statements  in  "Item  7.  Financial
Statements".   The  Managing   General  Partner  believes  that  the  consistent
application of these policies  enables the Partnership to provide readers of the
financial   statements   with  useful  and   reliable   information   about  the
Partnership's  operating  results and financial  condition.  The  preparation of
consolidated  financial  statements in  conformity  with  accounting  principles
generally  accepted  in the  United  States  requires  the  Partnership  to make
estimates and assumptions.  These estimates and assumptions  affect the reported
amounts of assets and  liabilities  at the date of the  financial  statements as
well as reported  amounts of revenues and expenses during the reporting  period.
Actual results could differ from these  estimates.  Judgments and assessments of
uncertainties are required in applying the Partnership's  accounting policies in
many  areas.  The  Partnership  believes  that  of  its  significant  accounting
policies, the following may involve a higher degree of judgment and complexity.

Impairment of Long-Lived Assets

The Partnership's  investment  properties are recorded at cost, less accumulated
depreciation,  unless considered impaired.  If events or circumstances  indicate
that the carrying  amount of a property may be impaired,  the  Partnership  will
make an assessment of its  recoverability by estimating the undiscounted  future
cash flows,  excluding interest charges, of the property. If the carrying amount
exceeds the aggregate  future cash flows,  the  Partnership  would  recognize an
impairment  loss to the extent the carrying amount exceeds the fair value of the
property.

Real  property  investments  are  subject  to varying  degrees of risk.  Several
factors  may  adversely  affect  the  economic  performance  and  value  of  the
Partnership's investment properties.  These factors include, but are not limited
to,  changes  in the  national,  regional  and  local  economic  climate;  local
conditions,  such as an oversupply of multifamily  properties;  competition from
other available  multifamily property owners and changes in market rental rates.
Any adverse changes in these factors could cause impairment of the Partnership's
assets.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less.
Rental income  attributable to leases is recognized monthly as it is earned. The
Partnership  evaluates all accounts receivable from residents and establishes an
allowance, after the application of security deposits, for accounts greater than
30 days past due on current tenants and all receivables due from former tenants.
The Partnership will offer rental concessions during particularly slow months or
in response to heavy  competition from other similar  complexes in the area. Any
concessions  given at the inception of the lease are amortized  over the life of
the lease.


<PAGE>


Item 7.     Financial Statements

ANGELES INCOME PROPERTIES, LTD. II

LIST OF FINANCIAL STATEMENTS

      Report of Ernst & Young LLP, Independent Auditors

      Consolidated Balance Sheet - December 31, 2003

      Consolidated  Statements of  Operations - Years ended  December 31, 2003
      and 2002

      Consolidated  Statements  of Changes in Partners'  Deficit - Years ended
      December 31, 2003 and 2002

      Consolidated Statements of Cash Flows - Years ended December 31, 2003
      and 2002

      Notes to Consolidated Financial Statements


<PAGE>


              Report of Ernst & Young LLP, Independent Auditors



The Partners
Angeles Income Properties, Ltd. II


We have audited the  accompanying  consolidated  balance sheet of Angeles Income
Properties,  Ltd.  II as of December  31,  2003,  and the  related  consolidated
statements of operations,  changes in partners' deficit, and cash flows for each
of the two  years  in the  period  ended  December  31,  2003.  These  financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made  by the  Partnership's  management,  as  well  as  evaluating  the  overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the consolidated  financial  position of Angeles Income
Properties,  Ltd. II at December 31, 2003, and the  consolidated  results of its
operations  and its cash  flows  for each of the two years in the  period  ended
December 31, 2003, in conformity with accounting  principles  generally accepted
in the United States.

                                                          /s/ERNST & YOUNG LLP


Greenville, South Carolina
March 24, 2004


<PAGE>




                      ANGELES INCOME PROPERTIES, LTD. II

                           CONSOLIDATED BALANCE SHEET
                        (in thousands, except unit data)

                                December 31, 2003
<TABLE>
<CAPTION>


Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $ 793
   Receivables and deposits                                                      359
   Restricted escrow                                                              33
   Other assets                                                                  465
   Investment properties (Notes B and E):
      Land                                                    $ 1,691
      Buildings and related personal property                   25,592
                                                               27,283
      Less accumulated depreciation                            (22,060)        5,223
   Assets held for sale (Note I)                                               1,344
                                                                            $ 8,217
Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                           $ 69
   Tenant security deposit liabilities                                           215
   Other liabilities                                                             386
   Due to affiliates (Note D)                                                    222
   Mortgage notes payable (Note B)                                            18,995
   Liabilities related to assets held for sale (Note I)                        6,303

Partners' Deficit
   General partners                                            $ (618)
   Limited partners (99,804 units issued and
      outstanding)                                             (17,355)      (17,973)
                                                                            $ 8,217


         See Accompanying Notes to Consolidated Financial Statements
</TABLE>



<PAGE>


                      ANGELES INCOME PROPERTIES, LTD. II

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

<TABLE>
<CAPTION>

                                                                           Years Ended
                                                                           December 31,
                                                                       2003           2002
                                                                                   (Restated)
Revenues:
<S>                                                                  <C>             <C>
  Rental income                                                      $ 4,744         $ 5,136
  Other income                                                           410             436
  Casualty gain (Note F)                                                  51              --
        Total revenues                                                 5,205           5,572

Expenses:
  Operating                                                            1,825           1,701
  General and administrative                                             452             461
  Depreciation                                                         1,077           1,447
  Interest                                                             1,470           1,494
  Property taxes                                                         552             531
        Total expenses                                                 5,376           5,634

Loss from continuing operations                                         (171)            (62)
Income from discontinued operations (Note I)                             311             120
Net income (Note C)                                                   $ 140           $ 58

Net income allocated to general partners (1%)                          $ 1             $ 1
Net income allocated to limited partners (99%)                           139              57

                                                                      $ 140           $ 58
Per limited partnership unit:
Loss from continuing operations                                        (1.69)          (0.62)
Income from discontinued operations                                     3.08            1.19
Net income                                                            $ 1.39         $ 0.57

Distributions per limited partnership unit                           $ 18.15         $ 5.13

         See Accompanying Notes to Consolidated Financial Statements
</TABLE>



<PAGE>


                      ANGELES INCOME PROPERTIES, LTD. II

           CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
                        (in thousands, except unit data)

<TABLE>
<CAPTION>


                                         Limited
                                       Partnership    General     Limited
                                          Units       Partners   Partners      Total

<S>                                      <C>            <C>      <C>          <C>
Original capital contributions           100,000        $ 1      $ 50,000     $ 50,001

Partners' deficit at
  December 31, 2001                       99,784       $ (597)   $(15,228)    $(15,825)

Distributions to partners                     --           (5)       (512)        (517)

Net income for the year ended
  December 31, 2002                           --            1          57           58

Partners' deficit at
  December 31, 2002                       99,784         (601)    (15,683)     (16,284)

Distributions to partners                     --          (18)     (1,811)      (1,829)

Units recorded as abandoned
  in error (Note G)                           20           --          --           --

Net income for the year ended
  December 31, 2003                           --            1         139          140

Partners' deficit at
  December 31, 2003                       99,804       $ (618)   $(17,355)    $(17,973)

         See Accompanying Notes to Consolidated Financial Statements
</TABLE>



<PAGE>


                      ANGELES INCOME PROPERTIES, LTD. II

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

                                                                       Years Ended
                                                                      December 31,
                                                                    2003         2002
Cash flows from operating activities:
<S>                                                                 <C>           <C>
  Net income                                                        $ 140         $ 58
  Adjustments to reconcile net income to net cash
   provided by operating activities:
      Depreciation                                                   1,377        1,908
      Amortization of mortgage discounts and loan costs                 80           81
      Loss on early extinguishment of debt                              58           --
      Casualty gain                                                    (51)          --
      Change in accounts:
        Receivables and deposits                                      (123)          84
        Other assets                                                    (6)         (39)
        Accounts payable                                                16          (39)
        Tenant security deposit liabilities                              9          (22)
        Accrued property taxes                                          30           10
        Due to affiliates                                              117          103
        Other liabilities                                              122           40
          Net cash provided by operating activities                  1,769        2,184

Cash flows from investing activities:
  Property improvements and replacements                              (376)        (560)
  Net withdrawals from (deposits to) restricted escrows                115          (26)
  Insurance proceeds received                                           52           --
          Net cash used in investing activities                       (209)        (586)

Cash flows from financing activities:
  Payments on mortgage notes payable                                  (563)        (515)
  Proceeds from mortgage note payable                                6,175           --
  Repayment of mortgage notes payable                               (5,017)          --
  Advances from affiliate                                               --           65
  Repayment of advances from affiliate                                  --         (112)
  Loan costs paid                                                     (174)          --
  Prepayment penalty paid                                              (28)          --
  Distributions to partners                                         (1,829)        (517)
          Net cash used in financing activities                     (1,436)      (1,079)

Net increase in cash and cash equivalents                              124          519
Cash and cash equivalents at beginning of year                         669          150
Cash and cash equivalents at end of year                            $ 793        $ 669
Supplemental disclosure of cash flow information:
  Cash paid for interest                                           $ 1,587      $ 1,939

At  December  31,  2001,  approximately  $59,000 of  property  improvements  and
replacements  were  included in accounts  payable which are included in property
improvements and replacements for the year ended December 31, 2002.

         See Accompanying Notes to Consolidated Financial Statements
</TABLE>



<PAGE>



                      ANGELES INCOME PROPERTIES, LTD. II

                  Notes to Consolidated Financial Statements

                                December 31, 2003


Note A - Organization and Summary of Significant Accounting Policies

Organization:   Angeles  Income  Properties,   Ltd.  II  (the  "Partnership"  or
"Registrant") is a California limited partnership  organized on October 12, 1982
to acquire and operate  residential and commercial real estate  properties.  The
Partnership's  managing  general  partner  responsible  for  management  of  the
Partnership's  business,  is  Angeles  Realty  Corporation  II ("ARC  II" or the
"Managing General Partner"). ARC II was wholly-owned by MAE GP Corporation ("MAE
GP").  Effective  February 25, 1998, MAE GP was merged into Insignia  Properties
Trust  ("IPT").  Effective  February  26,  1999,  IPT was merged into  Apartment
Investment  and  Management  Company  ("AIMCO"),  a publicly  traded real estate
investment  trust.  Thus, the Managing  General  Partner is now  wholly-owned by
AIMCO. The non-managing general partner is AIMCO Properties,  L.P. (an affiliate
of AIMCO). The Managing General Partner and the non-managing general partner are
herein  collectively  referred to as the  "General  Partners".  The  Partnership
Agreement  provides  that the  Partnership  is to terminate on December 31, 2037
unless  terminated  prior to such date. As of December 31, 2003, the Partnership
operated three residential  properties  located one each in New Jersey,  Indiana
and North  Carolina.  Subsequent  to December 31,  2003,  the  Partnership  sold
Georgetown Apartments to an unrelated third party (as discussed in Note I).

Principles  of  Consolidation:  The  consolidated  financial  statements  of the
Partnership  include all accounts of the  Partnership,  Georgetown AIP II, LP in
which the Partnership holds a 99% limited  partnership  interest and AIPL II GP,
LLC in which the Partnership is the sole member. Although legal ownership of the
respective  asset  remains  with these  entities,  the  Partnership  retains all
economic  benefits  from  the  properties.   The  Partnership  consolidates  its
interests  in these two  entities,  whereby  all  accounts  are  included in the
consolidated  financial  statements  of the  Partnership  with all  inter-entity
accounts being eliminated.

Allocations and  Distributions  to Partners:  In accordance with the Partnership
Agreement,  any gain from the sale or other  disposition of  Partnership  assets
will be  allocated  first to the Managing  General  Partner to the extent of the
amount  of any  brokerage  compensation  and  incentive  interest  to which  the
Managing  General Partner is entitled.  Any gain remaining after said allocation
will be allocated to the General  Partners and limited partners in proportion to
their interests in the Partnership.

The  Partnership  will  allocate  other  profits  and  losses 1% to the  General
Partners and 99% to the limited partners.

Except as discussed below, the Partnership will allocate distributions 1% to the
General Partners and 99% to the limited partners.

Upon  the  sale or  other  disposition,  or  refinancing,  of any  asset  of the
Partnership,  the  distributable  net proceeds  shall be distributed as follows:
First,  to the  partners  in  proportion  to their  interests  until the limited
partners have  received  proceeds  equal to their  original  capital  investment
applicable to the property.  Second,  to the partners until the limited partners
have  received  distributions  from all  sources  equal  to their 6%  cumulative
distribution;  Third, to the Managing General Partners until it has received its
brokerage compensation; Fourth, to the partners in proportion to their interests
until the limited partners have received distributions from all sources equal to
their additional 2% cumulative distribution;  and thereafter, 85% to the limited
partners and non-managing  general partners in proportion to their interests and
15% ("Incentive Interest") to the Managing General Partner.

Depreciation:  Depreciation  is  provided by the  straight-line  method over the
estimated lives of the apartment  properties and related personal property.  For
Federal income tax purposes,  the  accelerated  cost recovery method is used for
real property over 18 years for additions after March 15, 1984 and before May 9,
1985, and 19 years for additions  after May 8, 1985, and before January 1, 1987.
As a result of the Tax Reform Act of 1986,  for  additions  after  December  31,
1986, the modified  accelerated cost recovery method is used for depreciation of
(1) real property over 27 1/2 years and (2) personal  property  additions over 5
years.

Cash and Cash Equivalents: Cash and cash equivalents include cash on hand and in
banks.  At certain times,  the amount of cash deposited at a bank may exceed the
limit on insured  deposits.  Cash  balances  include  approximately  $655,000 at
December 31, 2003 that are  maintained  by an affiliated  management  company on
behalf of affiliated entities in cash concentration accounts.

Tenant Security  Deposits:  The Partnership  requires security deposits from all
apartment  lessees for the duration of the lease and such  deposits are included
in receivables and deposits.  The security deposits are refunded when the tenant
vacates  the  apartment  provided  the tenant has not  damaged  the space and is
current on rental payments.

Investment   Properties:   Investment  properties  consist  of  three  apartment
complexes and are stated at cost.  Acquisition fees are capitalized as a cost of
real  estate.  Expenditures  in excess of $250 that  maintain an existing  asset
which  has a  useful  life of more  than one year  are  capitalized  as  capital
replacement  expenditures  and depreciated over the estimated useful life of the
asset.  Expenditures for ordinary  repairs,  maintenance and apartment  turnover
costs are  expensed as  incurred.  In  accordance  with  Statement  of Financial
Accounting  Standards  ("SFAS")  No.  144,  "Accounting  for the  Impairment  or
Disposal of Long-Lived  Assets",  the Partnership  records  impairment losses on
long-lived assets used in operations when events and circumstances  indicate the
assets  might be  impaired  and the  undiscounted  cash  flows  estimated  to be
generated by those assets are less than the  carrying  amounts of those  assets.
Costs of investment  properties  that have been  permanently  impaired have been
written down to appraised  value.  No  adjustments  for impairment of value were
necessary for the years ending December 31, 2003 or 2002.

Loan Costs:  At December 31, 2003,  loan costs of  approximately  $554,000  less
accumulated  amortization of approximately $213,000 are included in other assets
on  the   consolidated   balance  sheet  and  are  being   amortized  using  the
straight-line  method for Landmark  Apartments and the effective interest method
for Deer Creek  Apartments  over the lives of the  related  loans.  Amortization
expense  from  continuing  operations  of  approximately  $49,000 and $41,000 is
included in interest  expense in the  accompanying  consolidated  statements  of
operations  for the  years  ended  December  31,  2003 and  2002,  respectively.
Amortization  expense is expected to be approximately  $30,000 for 2004, $29,000
for 2005, $28,000 for 2006, $27,000 for 2007 and $26,000 for 2008.

Leases: The Partnership  generally leases apartment units for twelve-month terms
or less.  The  Partnership  recognizes  income  as  earned  on its  leases.  The
Partnership  evaluates all accounts receivable from residents and establishes an
allowance, after the application of security deposits, for accounts greater than
30 days past due on current tenants and all receivables due from former tenants.
In  addition,   the  Managing  General  Partner's  policy  is  to  offer  rental
concessions  during  periods of  declining  occupancy  or in  response  to heavy
competition from other similar  complexes in the area. Any concessions  given at
the inception of the lease are amortized over the life of the lease.

Use of Estimates:  The  preparation of financial  statements in conformity  with
accounting   principles   generally  accepted  in  the  United  States  requires
management to make estimates and assumptions that affect the amounts reported in
the financial  statements and  accompanying  notes.  Actual results could differ
from those estimates.

Fair  Value:  SFAS  No.  107,   "Disclosures   about  Fair  Value  of  Financial
Instruments",  as  amended  by  SFAS  No.  119,  "Disclosures  about  Derivative
Financial  Instruments  and  Fair  Value  of  Financial  Instruments",  requires
disclosure of fair value information about financial instruments, whether or not
recognized in the balance  sheet,  for which it is  practicable to estimate fair
value.  Fair value is defined in the SFAS as the amount at which the instruments
could be exchanged in a current transaction between willing parties,  other than
in a forced or  liquidation  sale.  The  Partnership  believes that the carrying
amounts of its  financial  instruments  (except for long term debt)  approximate
their fair values due to the short term maturity of these instruments.  The fair
value  of  the  Partnership's  long  term  debt  of  approximately   $12,957,000
encumbering  Deer Creek  Apartments  at  December  31,  2003,  is  approximately
$14,239,000  after  discounting  the scheduled  loan payments to maturity at the
Partnership's incremental borrowing rate. Due to its November 2004 maturity, the
carrying amount of the mortgage encumbering Landmark Apartments of approximately
$6,038,000 approximates its fair value.

Restricted Escrow:

      Replacement  Reserve - A replacement  reserve  account is  maintained  for
      Landmark Apartments.  The property has a required monthly payment into its
      account to cover the costs of capital  improvements and replacements.  The
      balance of this  account at December 31, 2003,  is  approximately  $33,000
      which includes interest.

Segment Reporting: 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.  SFAS No. 131 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.

Advertising:  The  Partnership  expenses  the cost of  advertising  as incurred.
Advertising  costs from  continuing  operations  of  approximately  $70,000  and
$57,000  for the years ended  December  31,  2003 and 2002,  respectively,  were
charged to operating expense.

Recent Accounting Pronouncements:

Effective January 1, 2002, the Partnership adopted SFAS No. 144, "Accounting for
the Impairment or Disposal of Long-Lived  Assets",  which established  standards
for the way that business enterprises report information about long-lived assets
that are either being held for sale or have already been  disposed of by sale or
other means.  The standard  requires that results of operations for a long-lived
asset that is being held for sale or has already been disposed of be reported as
discontinued  operations  on the  statement  of  operations.  As a  result,  the
accompanying  consolidated  statement of operations  for the year ended December
31, 2002 has been  restated as of January 1, 2002 to reflect the  operations  of
Georgetown Apartments, which was sold March 2, 2004, as income from discontinued
operations.  The consolidated  balance sheet reflects the assets and liabilities
of  Georgetown  Apartments  as assets held for sale and  liabilities  related to
assets held for sale, respectively.

Note B - Mortgage Notes Payable

<TABLE>
<CAPTION>

                           Principal     Monthly                            Principal
                          Balance At     Payment     Stated                  Balance
                         December 31,   Including   Interest   Maturity      Due At
Property                     2003       Interest      Rate       Date       Maturity
                              (in thousands)                             (in thousands)
Deer Creek Apartments
<S>                         <C>           <C>        <C>       <C>            <C>
  1st mortgage              $12,957       $ 110      7.43%     07/2021        $ --

Landmark Apartments
  1st mortgage                6,038          45      7.33%     11/2004         5,950
                            $18,995       $ 155                              $ 5,950
</TABLE>

(1)   The mortgage  encumbering  Landmark  Apartments  matured November 1, 2003.
      However, the Managing General Partner has negotiated a one year extension,
      which  extends  the  maturity  of the loan to  November  1,  2004,  with a
      one-time right to extend to February 1, 2005.  The extension  requires the
      Partnership to continue making monthly  payments of principal and interest
      under the terms of the original mortgage.

On May 21, 2003, the Partnership refinanced the mortgages encumbering Georgetown
Apartments.  The refinancing  replaced the existing  mortgages of  approximately
$5,017,000  with a new mortgage in the amount of $6,175,000.  Total  capitalized
loan costs were approximately  $174,000 during the year ended December 31, 2003.
These  costs  included  approximately  $62,000 in fees  payable to the  Managing
General Partner.  The Partnership  recognized a loss on the early extinguishment
of debt of approximately $58,000 during the year ended December 31, 2003, due to
the write off of unamortized  loan costs and debt discounts and the payment of a
prepayment penalty, which is included in income from discontinued  operations on
the accompanying consolidated statements of operations.

These loans were initially refinanced under an interim credit facility ("Interim
Credit  Facility") that also provided for the refinancing of properties in other
Partnerships  that are affiliated  with the  Partnership.  However,  the Interim
Credit Facility created separate loans for each property refinanced  thereunder,
which loans were not  cross-collateralized  or cross-defaulted  with each other.
During  the term of the  Interim  Credit  Facility,  Georgetown  Apartments  was
required to make monthly interest-only payments. The first month's interest rate
for Georgetown Apartments was 2.78%.

As of June 1, 2003, the loan on Georgetown Apartments was assumed by a different
lender.  The credit facility  ("Permanent  Credit Facility") with the new lender
has a maturity  of five years  with an option for the  Partnership  to elect one
five-year  extension.  This Permanent Credit Facility creates separate loans for
each property refinanced thereunder, which loans are not cross-collateralized or
cross-defaulted  with each other. Each note under this Permanent Credit Facility
begins as a variable rate loan, and provides the option,  after three years,  of
converting to a fixed rate loan. The interest rate on the variable rate loans is
the Fannie Mae  discounted  mortgage-backed  security index plus 85 basis points
(1.92% at December 31, 2003), and resets monthly. Each loan automatically renews
at the end of each month. In addition,  monthly principal  payments are required
based on a 30-year  amortization  schedule,  using the  interest  rate in effect
during the first month that the  property is  financed by the  Permanent  Credit
Facility. This loan, which is included in liabilities related to assets held for
sale at December  31,  2003,  was repaid  subsequent  to  December  31, 2003 (as
discussed in "Note I").

The mortgage notes payable are  nonrecourse and are secured by pledge of certain
of the  Partnership's  rental  properties  and by  pledge of  revenues  from the
respective rental properties.  Certain of the notes require prepayment penalties
if repaid prior to maturity.

Scheduled  principal  payments of mortgage notes payable  subsequent to December
31, 2003, are as follows (in thousands):

                                   2004        $ 6,409
                                   2005            401
                                   2006            431
                                   2007            465
                                   2008            500
                                Thereafter      10,789
                                               $18,995


<PAGE>

Note C - Income Taxes

The Partnership has received a ruling from the Internal  Revenue Service that it
will  be  classified  as  a  partnership   for  Federal   income  tax  purposes.
Accordingly, no provision for income taxes is made in the consolidated financial
statements of the  Partnership.  Taxable  income or loss of the  Partnership  is
reported in the income tax returns of its partners.

The  following is a  reconciliation  of reported net income and Federal  taxable
income (in thousands, except per unit data):

                                          2003          2002

Net income as reported                    $ 140         $ 58
Add (deduct):
  Depreciation differences                   603        1,098
  Unearned income                            (30)         100
  Accrued audit                               (4)         (10)
  Casualty gain                              (51)          --
  Other                                      382         (279)

Federal taxable income                   $ 1,040       $ 967

Federal taxable income per limited
  partnership unit                       $ 10.32       $ 9.59

The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net liabilities (in thousands):

Net liabilities as reported                  $ (17,973)
Land and buildings                               2,454
Accumulated depreciation                          (426)
Syndication and distribution costs               6,148
Unearned income                                     41
Other                                              226
Net liabilities - Federal tax basis           $ (9,530)

Note D - 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 certain payments
to affiliates for services and  reimbursement  of certain  expenses  incurred by
affiliates on behalf of the Partnership.

Affiliates of the Managing  General  Partner are entitled to receive 5% of gross
receipts  from  all of  the  Partnership's  properties  for  providing  property
management  services.  The  Partnership  paid to such  affiliates  approximately
$331,000  and  $364,000  for  the  years  ended   December  31,  2003  and  2002
respectively,   which  is  included  in  operating   expenses  and  income  from
discontinued operations.

Affiliates   of  the  Managing   General   Partner  were   eligible  to  receive
reimbursement of accountable  administrative expenses amounting to approximately
$202,000  and  $196,000  for  the  years  ended  December  31,  2003  and  2002,
respectively,  which are  included in general and  administrative  expenses  and
investment   properties.   Included  in  these   amounts  are  fees  related  to
construction  management  services  provided  by an  affiliate  of the  Managing
General  Partner  of  approximately  $11,000  and  $28,000  for the years  ended
December 31, 2003 and 2002,  respectively.  The construction  management service
fees are calculated based on a percentage of additions to investment properties.
Included in  reimbursement  of accountable  administrative  expense for the year
ended  December  31, 2003 is  approximately  $40,000 owed to  affiliates  of the
Managing General Partner at December 31, 2003. This amount is included in due to
affiliates.

The  Partnership  Agreement  provides  for a fee  equal to 10% of "Net cash from
operations," as defined in the Partnership  Agreement to be paid to the Managing
General Partner for executive and administrative management services. During the
years ended December 31, 2003 and 2002, the Managing General Partner earned fees
of approximately $77,000 and $105,000,  respectively,  which are accrued and are
included in general and administrative expenses and due to affiliates.

In accordance  with the  Partnership  Agreement,  the Managing  General  Partner
loaned the Partnership funds for operating expenses at Deer Creek Apartments and
Landmark  Apartments.  During  the  year  ended  December  31,  2002,  loans  of
approximately  $112,000  were repaid in full by the  Partnership.  Interest  was
charged at the prime rate plus 2%. Interest expense was approximately $1,000 for
the year ended December 31, 2002.

Pursuant to the Partnership Agreement,  the Managing General Partner is entitled
to receive a distribution equal to 3% of the aggregate disposition price of sold
properties.  The Partnership paid a distribution of approximately $86,000 to the
Managing General Partner related to the sale of Atlanta Crossing Shopping Center
in March 2000.  The right to receive  payment for this amount is  subordinate to
the  right  of  the  limited   partners  to  receive  their   original   capital
contributions  plus a  cumulative  preferred  return  of 6% per  annum  of their
adjusted capital  investment,  as defined in the Partnership  Agreement.  If the
limited   partners  have  not  received  these  returns  when  the   Partnership
terminates,  the Managing General Partner will be required to return this amount
to the Partnership.

The Partnership paid an affiliate of the Managing General Partner  approximately
$62,000  for loan costs  related to the  refinancing  of  Georgetown  Apartments
during the year ended December 31, 2003.  These costs were  capitalized  and are
included in assets held for sale.

The  Partnership  insures 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 years ended December 31, 2003 and 2002, the
Partnership  was charged by AIMCO and its affiliates  approximately  $86,000 and
$104,000,  respectively,  for insurance coverage and fees associated with policy
claims administration.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 64,235 limited  partnership  units
(the "Units") in the Partnership representing 64.36% of the outstanding Units at
December  31,  2003.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove the Managing General  Partner.  As a result of its ownership of 64.36% of
the outstanding Units, AIMCO and its affiliates are in a position to control all
voting decisions with respect to the Partnership.  Although the Managing General
Partner owes fiduciary duties to the limited  partners of the  Partnership,  the
Managing  General  Partner  also  owes  fiduciary  duties  to  AIMCO as its sole
stockholder.  As a  result,  the  duties of the  Managing  General  Partner,  as
managing general  partner,  to the Partnership and its limited partners may come
into conflict with the duties of the Managing  General  Partner to AIMCO, as its
sole stockholder.

Note E - Investment Properties and Accumulated Depreciation

<TABLE>
<CAPTION>

                                                   Initial Cost
                                                  To Partnership
                                                  (in thousands)
                                                          Buildings         Cost
                                                         and Related     Capitalized
                                                           Personal     Subsequent to
Description                 Encumbrances       Land        Property      Acquisition
                           (in thousands)                              (in thousands)

<S>                            <C>             <C>         <C>             <C>
Deer Creek Apartments          $12,957         $ 953       $ 8,863         $ 4,268
Landmark Apartments              6,038            738        9,885           2,576
Totals                         $18,995        $ 1,691      $18,748         $ 6,844
</TABLE>

<TABLE>
<CAPTION>

                          Gross Amount At Which Carried
                              At December 31, 2003
                                 (in thousands)

                                    Buildings
                                   And Related
                                   Personal               Accumulated     Date    Depreciable
      Description         Land     Property     Total     Depreciation  Acquired     Life
                                                         (in thousands)
<S>                      <C>       <C>         <C>          <C>         <C>   <C>  <C>
Deer Creek Apartments    $ 953     $13,131     $14,084      $10,367     09/28/83   5-30 yrs
Landmark Apartments         738     12,461      13,199       11,693     12/16/83   5-30 yrs
Totals                   $1,691    $25,592     $27,283      $22,060
</TABLE>

Reconciliation of "investment properties and accumulated depreciation":

                                                Years Ended December 31,
                                                  2003            2002
                                                     (in thousands)
Investment Properties
Balance at beginning of year                    $35,370          $34,869
   Property improvements                            376              501
   Assets held for sale                          (8,433)              --
   Disposal of property                             (30)              --
Balance at end of year                          $27,283          $35,370

Accumulated Depreciation
Balance at beginning of year                    $28,025          $26,117
   Additions charged to expense                   1,377            1,908
   Assets held for sale                          (7,313)              --
   Disposal of property                             (29)              --
Balance at end of year                          $22,060          $28,025

The  aggregate  cost of the real  estate  for  Federal  income tax  purposes  at
December  31,  2003  and  2002 is  approximately  $29,639,000  and  $37,778,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December 31, 2003 and 2002, is  approximately  $22,696,000  and  $29,026,000,
respectively.

Georgetown  Apartments  which  sold on  March 2,  2004 is  excluded  from  these
schedules and is  classified  as assets held for sale at December 31, 2003.  The
gross carrying value and accumulated  depreciation of Georgetown  Apartments was
approximately $8,433,000 and $7,313,000, respectively.

Note F - Casualty Event

In February 2003, Deer Creek Apartments  experienced minor damage to 37 units as
a result of a winter  storm.  The  property  suffered  approximately  $54,000 in
damages.  Insurance  proceeds of approximately  $52,000 were received during the
year ended December 31, 2003 to cover the damages. After writing off the cost of
the  undepreciated  damaged  assets of  approximately  $1,000,  the  Partnership
recognized a casualty gain of approximately  $51,000 for the year ended December
31, 2003.

Note G - Units Abandoned in Error

During the year ended  December 31, 2003,  the  Partnership  discovered  that 20
limited  partnership  Units that had previously  been reported as abandoned were
actually not abandoned. The Units were reinstated as of January 1, 2003 and back
distributions  of  approximately  $4,000 were paid to the unitholder  during the
year ended December 31, 2003.

<PAGE>

Note H - 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
purported  to  assert  claims  on  behalf  of a class of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  that 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 that 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  sought  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
In addition, 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 Heller action was brought as a
purported derivative action, and asserted claims for, among other things, breach
of fiduciary  duty,  unfair  competition,  conversion,  unjust  enrichment,  and
judicial dissolution.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent  appraisals of the  Partnerships'  properties  by a Court  appointed
appraiser.  An affiliate of the Managing General Partner has also agreed to make
at least one round of tender offers to purchase all of the partnership interests
in the Partnerships within one year of final approval,  if it is granted, and to
provide  partners with the independent  appraisals at the time of these tenders.
The proposed  settlement also provided for the limitation of the allowable costs
which  the  Managing   General   Partner  or  its  affiliates  will  charge  the
Partnerships  in connection with this litigation and imposes limits on the class
counsel  fees and  costs in this  litigation.  On April  11,  2003,  notice  was
distributed  to  limited   partners   providing  the  details  of  the  proposed
settlement.

On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.  On August 12, 2003, an objector
("Objector")  filed an  appeal  seeking  to  vacate  and/or  reverse  the  order
approving the settlement and entering  judgment  thereto.  On November 24, 2003,
the Objector filed an  application  requesting the Court order AIMCO to withdraw
settlement  tender offers it had  commenced,  refrain from making further offers
pending the appeal and auction any units tendered to third  parties,  contending
that the offers did not conform  with the terms of the  Settlement.  Counsel for
the Objector (on behalf of another  investor)  had  alternatively  requested the
Court take certain  action  purportedly  to enforce the terms of the  settlement
agreement.  On December 18, 2003,  the Court heard oral  argument on the motions
and denied them both in their entirety.  On January 28, 2004, Objector filed his
opening brief in his pending appeal.  The Managing  General Partner is currently
scheduled  to file a brief in  support  of the order  approving  settlement  and
entering judgment thereto by April 23, 2004.

On August 8, 2003 AIMCO  Properties  L.P., an affiliate of the Managing  General
Partner,  was served  with a  Complaint  in the United  States  District  Court,
District of Columbia alleging that AIMCO Properties L.P.  willfully violated the
Fair Labor Standards Act (FLSA) by failing to pay maintenance  workers  overtime
for all hours worked in excess of forty per week.  The  Complaint is styled as a
Collective  Action  under  the FLSA and seeks to  certify  state  subclasses  in
California, Maryland, and the District of Columbia. Specifically, the plaintiffs
contend that AIMCO Properties L.P. failed to compensate  maintenance workers for
time  that they were  required  to be  "on-call".  Additionally,  the  Complaint
alleges AIMCO  Properties  L.P.  failed to comply with the FLSA in  compensating
maintenance  workers  for time that they  worked in  responding  to a call while
"on-call".  The  Complaint  also  attempts  to certify a subclass  for  salaried
service  directors who are challenging  their  classification as exempt from the
overtime  provisions of the FLSA.  AIMCO  Properties L.P. has filed an answer to
the  Complaint  denying the  substantive  allegations.  Discovery  is  currently
underway.

The  Managing  General  Partner  does  not  anticipate  that  any  costs  to the
Partnership, 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
matters  involving  it or its  investment  properties  that are not of a routine
nature arising in the ordinary course of business.

Note I - Subsequent Event

On March 2, 2004, the  Partnership  sold  Georgetown  Apartments to an unrelated
third  party  for a gross  sale  price  of  approximately  $10,950,000.  The net
proceeds  realized  by the  Partnership  were  approximately  $10,769,000  after
payment of closing costs and a prepayment  penalty owed by the  Partnership  and
paid by the buyer.  The  Partnership  used  approximately  $6,062,000 of the net
proceeds to repay the mortgage  encumbering the property.  The Partnership  will
realize a gain of  approximately  $9,556,000  as a result of the sale during the
first quarter of 2004. In addition,  the  Partnership  will record a loss on the
early extinguishment of debt of approximately  $159,000 during the first quarter
of 2004 as a result of the write-off of unamortized  loan costs and a prepayment
penalty.  The  property's  operations,  income  of  approximately  $311,000  and
$120,000 for the years ended December 31, 2003 and 2002, respectively, including
revenues of approximately  $1,562,000 and $1,633,000 are included in income from
discontinued operations. The Partnership distributed approximately $3,927,000 of
the net proceeds to the partners subsequent to December 31, 2003.


<PAGE>



Item 8.     Changes in and  Disagreements  with  Accountants on Accounting and
            Financial Disclosures

            None.

Item 8A.    Controls and Procedures

(a) Disclosure Controls and Procedures.  The Partnership's management,  with the
participation of the principal executive officer and principal financial officer
of the Managing  General  Partner,  who are the equivalent of the  Partnership's
principal executive officer and principal financial officer,  respectively,  has
evaluated  the  effectiveness  of  the  Partnership's  disclosure  controls  and
procedures (as such term is defined in Rules  13a-15(e) and 15d-15(e)  under the
Securities  Exchange Act of 1934, as amended (the "Exchange Act")) as of the end
of the period covered by this report.  Based on such  evaluation,  the principal
executive  officer  and  principal  financial  officer of the  Managing  General
Partner, who are the equivalent of the Partnership's principal executive officer
and principal  financial officer,  respectively,  have concluded that, as of the
end of such period,  the  Partnership's  disclosure  controls and procedures are
effective.

(b) Internal Control Over Financial  Reporting.  There have not been any changes
in the Partnership's  internal control over financial reporting (as such term is
defined in Rules  13a-15(f)  and  15d-15(f)  under the Exchange  Act) during the
fourth quarter of 2003 that have materially  affected,  or are reasonably likely
to  materially  affect,  the  Partnership's   internal  control  over  financial
reporting.


<PAGE>


                                    PART III

Item 9.     Directors,  Executive  Officers,  Promoters  and Control  Persons;
            Compliance with Section 16(a) of the Exchange Act

The names of the directors and officers of Angeles  Realty  Corporation II ("ARC
II" or "Managing  General  Partner"),  the Managing  General  Partner of Angeles
Income  Properties,  Ltd. II (the  "Partnership" or "Registrant") as of December
31, 2003,  their ages and the nature of all positions with ARC II presently held
by them are as follows:

Peter K. Kompaniez               59   Director
Martha L. Long                   44   Director and Senior Vice President
Harry G. Alcock                  41   Executive Vice President
Miles Cortez                     60   Executive Vice President, General Counsel
                                      and Secretary
Patti K. Fielding                40   Executive Vice President
Paul J. McAuliffe                47   Executive Vice President and Chief
                                      Financial Officer
Thomas M. Herzog                 41   Senior Vice President and Chief Accounting
                                       Officer

Peter K.  Kompaniez  has been Director of the Managing  General  Partner since
February  2004.  Mr.  Kompaniez  has  been  Vice  Chairman  of  the  Board  of
Directors of AIMCO since July 1994 and was  appointed  President in July 1997.
Mr.  Kompaniez has also served as Chief Operating  Officer of NHP Incorporated
after it was  acquired by AIMCO in  December  1997.  Effective  April 1, 2004,
Mr.  Kompaniez  resigned as President of AIMCO. Mr. Kompaniez will continue in
his role as  Director of the  Managing  General  Partner and Vice  Chairman of
AIMCO's  Board  and will  serve  AIMCO on a variety  of  special  and  ongoing
projects in an operating role.

Martha L. Long has been a Director  and Senior Vice  President of the Managing
General  Partner  since  February  2004.  Ms.  Long has been with AIMCO  since
October  1998 and has served in  various  capacities.  From 1998 to 2001,  Ms.
Long served as Senior Vice  President and Controller of AIMCO and the Managing
General  Partner.  During  2002 and 2003,  Ms.  Long  served  as  Senior  Vice
President of Continuous Improvement for AIMCO.

Harry G. Alcock was appointed  Executive Vice President of the Managing  General
Partner  in  February  2004 and has been  Executive  Vice  President  and  Chief
Investment Officer of AIMCO since October 1999. Prior to October 1999 Mr. Alcock
served as a Vice President of AIMCO from July 1996 to October 1997,  when he was
promoted to Senior Vice  President-Acquisitions  where he served  until  October
1999. Mr. Alcock has had responsibility for acquisition and financing activities
of AIMCO since July 1994.

Miles  Cortez was  appointed  Executive  Vice  President,  General  Counsel  and
Secretary  of the  Managing  General  Partner in  February  2004 and of AIMCO in
August 2001. Prior to joining AIMCO, Mr. Cortez was the senior partner of Cortez
Macaulay Bernhardt & Schuetze LLC, a Denver law firm, from December 1997 through
September 2001.

Patti K. Fielding was appointed  Executive  Vice President - Securities and Debt
of the Managing  General Partner in February 2004 and of AIMCO in February 2003.
Ms. Fielding previously served as Senior Vice President - Securities and Debt of
AIMCO from  January  2000 to February  2003.  Ms.  Fielding is  responsible  for
securities and debt financing and the treasury  department.  Ms. Fielding joined
AIMCO in February 1997 and served as Vice  President - Tenders,  Securities  and
Debt until January 2000.

Paul J. McAuliffe has been Executive Vice President and Chief Financial  Officer
of the Managing  General  Partner since April 2002. Mr.  McAuliffe has served as
Executive Vice  President of AIMCO since  February 1999 and was appointed  Chief
Financial Officer of AIMCO in October 1999. From May 1996 until he joined AIMCO,
Mr. McAuliffe was Senior Managing Director of Secured Capital Corp.

Thomas M.  Herzog was  appointed  Senior  Vice  President  and Chief  Accounting
Officer of the Managing General Partner in February 2004 and of AIMCO in January
2004.  Prior to joining AIMCO in January 2004, Mr. Herzog was at GE Real Estate,
serving  as Chief  Accounting  Officer & Global  Controller  from  April 2002 to
January 2004 and as Chief Technical Advisor from March 2000 to April 2002. Prior
to joining GE Real  Estate,  Mr.  Herzog was at  Deloitte & Touche LLP from 1990
until 2000, including a two-year assignment in the real estate national office.

One or more of the above persons are also directors and/or officers of a general
partner (or general partner of a general partner) of limited  partnerships which
either have a class of  securities  registered  pursuant to Section 12(g) of the
Securities Exchange Act of 1934, or are subject to the reporting requirements of
Section  15(d) of such Act.  Further,  one or more of the above persons are also
directors and/or officers of Apartment Investment and Management Company and the
general  partner  of  AIMCO  Properties,  L.P.,  entities  that  have a class of
securities  registered  pursuant to Section 12(g) of the Securities Exchange Act
of 1934, or are subject to the reporting  requirements of Section 15 (d) of such
Act.

The board of directors of the Managing  General Partner does not have a separate
audit committee. As such, the board of directors of the Managing General Partner
fulfills  the  functions  of an audit  committee.  The  board of  directors  has
determined  that  Martha L. Long meets the  requirement  of an "audit  committee
financial expert".

The directors and officers of the Managing  General  Partner with authority over
the Partnership are all employees of subsidiaries of AIMCO.  AIMCO has adopted a
code of ethics that applies to such  directors  and  officers  that is posted on
AIMCO's  website  (www.AIMCO.com).   AIMCO's  website  is  not  incorporated  by
reference to this filing.

Item 10.    Executive Compensation

No  remuneration  was paid by the  Partnership to any director or officer of the
Managing General Partner during the year ended December 31, 2003.

Item 11.    Security Ownership of Certain Beneficial Owners and Management

Except as noted below, no person or entity was known by the Registrant to be the
beneficial owner of more than 5% of the Limited  Partnership Units (the "Units")
of the Registrant as of December 31, 2003.


<PAGE>



         Entity                               Number of Units   Percentage

         Cooper River Properties, LLC
          (an affiliate of AIMCO)                   5,864          5.88%
         AIMCO IPLP, L.P. (formerly known
           as Insignia Properties, L.P.)
          (an affiliate of AIMCO)                   3,990          4.00%
         Broad River Properties, LLC
          (an affiliate of AIMCO)                   8,908          8.92%
         AIMCO Properties, L.P.
          (an affiliate of AIMCO)                  45,473         45.56%

Cooper River  Properties,  LLC, AIMCO IPLP, L.P., and Broad River  Properties,
LLC are indirectly  ultimately  owned by AIMCO.  Their business  address is 55
Beattie Place, Greenville, South Carolina 29602.

AIMCO  Properties,  L.P. is indirectly  ultimately  controlled  by AIMCO.  Its
business address is 4582 S. Ulster St. Parkway,  Suite 1100, Denver,  Colorado
80237.

The Partnership knows of no contractual arrangements, the operation of the terms
of,  which  may at a  subsequent  date  result  in a change  in  control  of the
Partnership,  except for: Article 12.1 of the Agreement, which provide that upon
a vote of the limited  partners  holding  more than 50% of the then  outstanding
limited  partnership  units  the  general  partners  may be  expelled  from  the
Partnership  upon 90 days written  notice.  In the event that successor  general
partners have been elected by limited partners holding more than 50% of the then
outstanding  limited  partnership  Units and if said limited  partners  elect to
continue the business of the Partnership,  the Partnership is required to pay in
cash to the expelled  general partners an amount equal to the accrued and unpaid
management  fee  described  in Article 10 of the  Agreement  and to purchase the
general  partners'  interest in the  Partnership  on the  effective  date of the
expulsion,  which shall be an amount equal to the difference between the balance
of the general  partners' capital account and the fair market value of the share
of  distributable  net proceeds to which the general partners would be entitled.
Such  determination of the fair market value of the share of  distributable  net
proceeds is defined in Article 12.2(b) of the Agreement.

Item 12.    Certain Relationships and Related Transactions

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 certain payments
to affiliates for services and  reimbursement  of certain  expenses  incurred by
affiliates on behalf of the Partnership.

Affiliates of the Managing  General  Partner are entitled to receive 5% of gross
receipts  from  all of  the  Partnership's  properties  for  providing  property
management  services.  The  Partnership  paid to such  affiliates  approximately
$331,000  and  $364,000  for  the  years  ended   December  31,  2003  and  2002
respectively,   which  is  included  in  operating   expenses  and  income  from
discontinued operations.

Affiliates   of  the  Managing   General   Partner  were   eligible  to  receive
reimbursement of accountable  administrative expenses amounting to approximately
$202,000  and  $196,000  for  the  years  ended  December  31,  2003  and  2002,
respectively,  which are  included in general and  administrative  expenses  and
investment   properties.   Included  in  these   amounts  are  fees  related  to
construction  management  services  provided  by an  affiliate  of the  Managing
General  Partner  of  approximately  $11,000  and  $28,000  for the years  ended
December 31, 2003 and 2002,  respectively.  The construction  management service
fees are calculated based on a percentage of additions to investment properties.
Included in  reimbursement  of accountable  administrative  expense for the year
ended  December  31, 2003 is  approximately  $40,000 owed to  affiliates  of the
Managing General Partner at December 31, 2003. This amount is included in due to
affiliates.

The  Partnership  Agreement  provides  for a fee  equal to 10% of "Net cash from
operations," as defined in the Partnership  Agreement to be paid to the Managing
General Partner for executive and administrative management services. During the
years ended December 31, 2003 and 2002, the Managing General Partner earned fees
of approximately $77,000 and $105,000,  respectively,  which are accrued and are
included in general and administrative expenses and due to affiliates.

In accordance  with the  Partnership  Agreement,  the Managing  General  Partner
loaned the Partnership funds for operating expenses at Deer Creek Apartments and
Landmark  Apartments.  During  the  year  ended  December  31,  2002,  loans  of
approximately  $112,000  were repaid in full by the  Partnership.  Interest  was
charged at the prime rate plus 2%. Interest expense was approximately $1,000 for
the year ended December 31, 2002.

Pursuant to the Partnership Agreement,  the Managing General Partner is entitled
to receive a distribution equal to 3% of the aggregate disposition price of sold
properties.  The Partnership paid a distribution of approximately $86,000 to the
Managing General Partner related to the sale of Atlanta Crossing Shopping Center
in March 2000.  The right to receive  payment for this amount is  subordinate to
the  right  of  the  limited   partners  to  receive  their   original   capital
contributions  plus a  cumulative  preferred  return  of 6% per  annum  of their
adjusted capital  investment,  as defined in the Partnership  Agreement.  If the
limited   partners  have  not  received  these  returns  when  the   Partnership
terminates,  the Managing General Partner will be required to return this amount
to the Partnership.

The Partnership paid an affiliate of the Managing General Partner  approximately
$62,000  for loan costs  related to the  refinancing  of  Georgetown  Apartments
during the year ended December 31, 2003.  These costs were  capitalized  and are
included in assets held for sale.

The  Partnership  insures 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 years ended December 31, 2003 and 2002, the
Partnership  was charged by AIMCO and its affiliates  approximately  $86,000 and
$104,000,  respectively,  for insurance coverage and fees associated with policy
claims administration.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 64,235 limited  partnership  units
(the "Units") in the Partnership representing 64.36% of the outstanding Units at
December  31,  2003.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove the Managing General  Partner.  As a result of its ownership of 64.36% of
the outstanding Units, AIMCO and its affiliates are in a position to control all
voting decisions with respect to the Partnership.  Although the Managing General
Partner owes fiduciary duties to the limited  partners of the  Partnership,  the
Managing  General  Partner  also  owes  fiduciary  duties  to  AIMCO as its sole
stockholder.  As a  result,  the  duties of the  Managing  General  Partner,  as
managing general  partner,  to the Partnership and its limited partners may come
into conflict with the duties of the Managing  General  Partner to AIMCO, as its
sole stockholder.

Item 13.    Exhibits and Reports on Form 8-K

      (a)   Exhibits:

            See Exhibit Index attached.

      (b) Reports on Form 8-K:

            None filed during the quarter ended December 31, 2003.

Item 14.    Principal Accounting Fees and Services

The Managing  General Partner has  reappointed  Ernst & Young LLP as independent
auditors to audit the financial statements of the Partnership for 2004.

Audit  Fees.  The  Partnership   paid  to  Ernst  &  Young  LLP  audit  fees  of
approximately $45,000 and $44,000 for 2003 and 2002, respectively.

Tax Fees.  The  Partnership  paid to Ernst & Young LLP fees for tax services for
2003 and 2002 of approximately $14,000 and $19,000, respectively.


<PAGE>



                                   SIGNATURES



In accordance  with Section 13 or 15(d) of the Exchange Act, the  Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                    ANGELES INCOME PROPERTIES, LTD. II


                                    By:   Angeles Realty Corporation II
                                          Managing General Partner


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


                                    By:   /s/Thomas M. Herzog
                                          Thomas M. Herzog
                                          Senior Vice President
                                          and Chief Accounting Officer


                                    Date: March 29, 2004


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

/s/Peter K. Kompaniez         Director                      Date: March 29, 2004
Peter K. Kompaniez


/s/Martha L. Long             Director and Senior Vice      Date: March 29, 2004
Martha L. Long                President


/s/Thomas M. Herzog           Senior Vice President         Date: March 29, 2004
Thomas M. Herzog              and Chief Accounting Officer


<PAGE>



                       ANGELES INCOME PROPERTIES, LTD. II

                                  EXHIBIT INDEX



Exhibit Number    Description of Exhibit

       3.1        Amendment  Agreement of Limited Partnership of the Partnership
                  dated  October 12, 1982 filed in Form 10K dated  November  30,
                  1983, incorporated herein by reference

       3.2        Amended  Agreement of Limited  Partnership of the  Partnership
                  dated  March  31,  1983  filed  in  the  Prospectus,   of  the
                  Partnership,  as Exhibit A, dated March 31, 1983  incorporated
                  herein by reference

      10.3        Agreement of Purchase and Sale of Real  Property with Exhibits
                  - Deer Creek  Apartments  filed in Form 8K dated September 28,
                  1983, incorporated herein by reference

      10.4        Agreement of Purchase and Sale of Real  Property with Exhibits
                  - Georgetown  Apartments  filed in Form 8K dated  November 21,
                  1983, incorporated herein by reference

      10.5        Agreement of Purchase and Sale of Real  Property with Exhibits
                  -  Landmark  Apartments  filed in Form 8K dated  December  16,
                  1983, incorporated herein by reference

      10.15       Multifamily  Note  -  Landmark  Apartments  between  Angeles
                  Income  Properties,  Ltd. II and Lehman  Brothers  Holdings,
                  Inc.  d/b/a  Lehman  Capital,  a division  of Lehman  Brothers
                  Holdings, Inc. dated November 1, 1996

      10.19       Multifamily  Note dated June 27, 2001, by and between  Angeles
                  Income Properties,  Ltd. II, a California Limited Partnership,
                  and  GMAC  Commercial  Mortgage  Corporation  for  Deer  Creek
                  Apartments,  is  incorporated  by reference  to the  Quarterly
                  Report on Form 10-QSB for the quarter ended June 30, 2001.

      10.20       a) Multifamily Note dated May 16, 2003 between  Georgetown AIP
                  II,   L.P.   and   GMAC   Commercial   Mortgage   Corporation,
                  incorporated  by reference  to the Current  Report on Form 8-K
                  dated May 22, 2003 and Filed on June 6, 2003.

      10.20       b) Guaranty dated May 16, 2003 by AIMCO  Properties,  L.P. for
                  the   benefit  of  GMAC   Commercial   Mortgage   Corporation,
                  incorporated  by reference  to the Current  Report on Form 8-K
                  dated May 22, 2003 and Filed on June 6, 2003.

      10.20       c) Completion/Repair and Security Agreement dated May 16, 2003
                  between  Georgetown AIP II, L.P. and GMAC Commercial  Mortgage
                  Corporation,  incorporated  by reference to the Current Report
                  on Form 8-K dated May 22, 2003 and Filed on June 6, 2003.

      10.20       d) Replacement  Reserve and Security  Agreement  dated May 16,
                  2003  between  Georgetown  AIP II,  L.P.  and GMAC  Commercial
                  Mortgage Corporation, incorporated by reference to the Current
                  Report  on Form 8-K  dated  May 22,  2003 and Filed on June 6,
                  2003.

      10.20(e)    Sixth  Reaffirmation  and Joinder Agreement dated May 16, 2003
                  between  Georgetown  AIP II, L.P.,  GMAC  Commercial  Mortgage
                  Corporate,   and  Fannie  Mae,  a  federally   chartered   and
                  stockholder  owned  corporation,  incorporated by reference to
                  the Quarterly Report on Form 10-QSB for the quarter ended June
                  30, 2003.

      10.21       Purchase and Sale Contract between Georgetown AIP II, L.P. and
                  Freestone  Realty  Advisors,  LLC,  dated  November  25, 2003,
                  incorporated  by reference  to the Current  Report on Form 8-K
                  dated March 2, 2004.

      10.22       First   Amendment  to  Purchase  and  Sale  Contract   between
                  Georgetown AIP II, L.P. and Freestone  Realty  Advisors,  LLC,
                  dated  January  9,  2004,  incorporated  by  reference  to the
                  Current Report on Form 8-K dated March 2, 2004.

      10.23       Second   Amendment  to  Purchase  and  Sale  Contract  between
                  Georgetown AIP II, L.P. and Freestone  Realty  Advisors,  LLC,
                  dated  January 12,  2004,  incorporated  by  reference  to the
                  Current Report on Form 8-K dated March 2, 2004.

      10.24       Third   Amendment  to  Purchase  and  Sale  Contract   between
                  Georgetown AIP II, L.P. and Freestone  Realty  Advisors,  LLC,
                  dated  January 13,  2004,  incorporated  by  reference  to the
                  Current Report on Form 8-K dated March 2, 2004.

      10.25       Reinstatement  and  Fourth  Amendment  to  Purchase  and  Sale
                  Contract between  Georgetown AIP II, L.P. and Freestone Realty
                  Advisors,   LLC,  dated  January  24,  2004,  incorporated  by
                  reference  to the  Current  Report on Form 8-K dated  March 2,
                  2004.

      10.26       Assignment and Assumption of Contract between Freestone Realty
                  Advisors,   LLC,  as   Assignor   and   Georgetown   Apartment
                  Homes-FRIP,  L.L.C.,  as  Assignee,  dated  February 11, 2004,
                  incorporated  by reference  to the Current  Report on Form 8-K
                  dated March 2, 2004.

      10.27       Form of Modification and Extension Agreement by and among
                  Federal Home Loan Mortgage Corporation, Angeles Income
                  Properties, Ltd. II, and Commonwealth  Land Title  Company of
                  North Carolina for Landmark Apartments is incorporated
                  herein.*

      31.1        Certification  of  equivalent  of  Chief  Executive  Officer
                  pursuant     to     Securities     Exchange     Act    Rules
                  13a-14(a)/15d-14(a),  as Adopted  Pursuant to Section 302 of
                  the Sarbanes-Oxley Act of 2002.

      31.2        Certification  of  equivalent  of  Chief  Financial  Officer
                  pursuant     to     Securities     Exchange     Act    Rules
                  13a-14(a)/15d-14(a),  as Adopted  Pursuant to Section 302 of
                  the Sarbanes-Oxley Act of 2002.

      32.1        Certification   Pursuant  to  18  U.S.C.  Section  1350,  as
                  Adopted  Pursuant to Section 906 of the  Sarbanes-Oxley  Act
                  of 2002.

     * Schedules and supplemental materials to the exhibit have been omitted but
       will be provided to the Securities and Exchange Commission upon request.
<PAGE>


Exhibit 31.1
                                  CERTIFICATION
I, Martha L. Long, certify that:

1.    I have  reviewed  this  annual  report on Form  10-KSB of  Angeles  Income
      Properties Ltd. II;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the registrant as of, and for, the periods presented in this report;

4.    The  registrant's  other  certifying  officer(s) and I are responsible for
      establishing  and  maintaining  disclosure  controls  and  procedures  (as
      defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for the registrant
      and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            registrant,  including its consolidated subsidiaries,  is made known
            to us by others  within  those  entities,  particularly  during  the
            period in which this report is being prepared;

      (b)   Evaluated the effectiveness of the registrant's  disclosure controls
            and  procedures and presented in this report our  conclusions  about
            the effectiveness of the disclosure  controls and procedures,  as of
            the  end  of the  period  covered  by  this  report  based  on  such
            evaluation; and

      (c)   Disclosed  in this  report any change in the  registrant's  internal
            control  over   financial   reporting   that  occurred   during  the
            registrant's  most recent fiscal  quarter (the  registrant's  fourth
            fiscal  quarter in the case of an annual report) that has materially
            affected,   or  is  reasonably  likely  to  materially  affect,  the
            registrant's internal control over financial reporting; and

5.    The registrant's other certifying  officer(s) and I have disclosed,  based
      on  our  most  recent   evaluation  of  internal  control  over  financial
      reporting,  to the  registrant's  auditors and the audit  committee of the
      registrant's  board of directors  (or persons  performing  the  equivalent
      functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely affect the  registrant's  ability to
            record, process, summarize and report financial information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees  who have a  significant  role in the  registrant's
            internal control over financial reporting.


Date:  March 29, 2004

                                    /s/Martha L. Long
                                    Martha L. Long
                                    Senior  Vice  President  of  Angeles  Realty
                                    Corporation  II,  equivalent  of  the  chief
                                    executive officer of the Partnership


<PAGE>


Exhibit 31.2
                                  CERTIFICATION
I, Thomas M. Herzog certify that:

1.    I have  reviewed  this  annual  report on Form  10-KSB of  Angeles  Income
      Properties Ltd. II;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the registrant as of, and for, the periods presented in this report;

4.    The  registrant's  other  certifying  officer(s) and I are responsible for
      establishing  and  maintaining  disclosure  controls  and  procedures  (as
      defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for the registrant
      and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            registrant,  including its consolidated subsidiaries,  is made known
            to us by others  within  those  entities,  particularly  during  the
            period in which this report is being prepared;

      (b)   Evaluated the effectiveness of the registrant's  disclosure controls
            and  procedures and presented in this report our  conclusions  about
            the effectiveness of the disclosure  controls and procedures,  as of
            the  end  of the  period  covered  by  this  report  based  on  such
            evaluation; and

      (c)   Disclosed  in this  report any change in the  registrant's  internal
            control  over   financial   reporting   that  occurred   during  the
            registrant's  most recent fiscal  quarter (the  registrant's  fourth
            fiscal  quarter in the case of an annual report) that has materially
            affected,   or  is  reasonably  likely  to  materially  affect,  the
            registrant's internal control over financial reporting; and

5.    The registrant's other certifying  officer(s) and I have disclosed,  based
      on  our  most  recent   evaluation  of  internal  control  over  financial
      reporting,  to the  registrant's  auditors and the audit  committee of the
      registrant's  board of directors  (or persons  performing  the  equivalent
      functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely affect the  registrant's  ability to
            record, process, summarize and report financial information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees  who have a  significant  role in the  registrant's
            internal control over financial reporting.

Date:  March 29, 2004
                                    /s/Thomas M. Herzog
                                    Thomas M. Herzog
                                    Senior Vice President and Chief
                                    Accounting Officer of Angeles Realty
                                    Corporation II, equivalent of the chief
                                    financial officer of the Partnership


<PAGE>


Exhibit 32.1


                          Certification of CEO and CFO
                       Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                Section 906 of the Sarbanes-Oxley Act of 2002



In  connection  with  the  Annual  Report  on  Form  10-KSB  of  Angeles  Income
Properties, Ltd. II (the "Partnership"), for the year ended December 31, 2003 as
filed with the  Securities  and  Exchange  Commission  on the date  hereof  (the
"Report"),  Martha L. Long, as the equivalent of the chief executive  officer of
the Partnership,  and Thomas M. Herzog, as the equivalent of the chief financial
officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350,  as adopted  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of 2002,
that, to the best of his knowledge:

      (1)   The Report fully complies with the  requirements of Section 13(a) or
            15(d) of the Securities Exchange Act of 1934; and

      (2)   The  information  contained in the Report  fairly  presents,  in all
            material respects, the financial condition and results of operations
            of the Partnership.


                                           /s/Martha L. Long
                                    Name:  Martha L. Long
                                    Date:  March 29, 2004


                                           /s/Thomas M. Herzog
                                    Name:  Thomas M. Herzog
                                    Date:  March 29, 2004


This  certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley  Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.


<PAGE>

Exhibit 10.27

================================================================================

================================================================================


                      MODIFICATION AND EXTENSION AGREEMENT

                                  by and among

                     FEDERAL HOME LOAN MORTGAGE CORPORATION,

                       ANGELES INCOME PROPERTIES, LTD. II,

                                       and

                         COMMONWEALTH LAND TITLE COMPANY
                                OF NORTH CAROLINA



                               Landmark Apartments
                               2515 Landmark Drive
                                Raleigh, NC 27607


================================================================================







                         THIS DOCUMENT WAS PREPARED BY,
                         AND AFTER RECORDING, RETURN TO:

                                 George Kielman
                           Freddie Mac Legal Division
                      8200 Jones Branch Drive, Mailstop 202
                             McLean, Virginia 22102



<PAGE>




                                              Freddie Mac Loan Number: 734079818
                                                             Landmark Apartments


                      MODIFICATION AND EXTENSION AGREEMENT
                    (2515 Landmark Drive, Raleigh, NC 27607)

      THIS EXTENSION AND MODIFICATION AGREEMENT (this "Agreement") is made as of
the  date  hereinafter  stated,  but  effective  as of  November  1,  2003  (the
"Effective  Date"), by and among the FEDERAL HOME LOAN MORTGAGE  CORPORATION,  a
corporate instrumentality of the United States of America, (hereinafter referred
to as "Freddie  Mac" or "Lender")  having an office at 8200 Jones Branch  Drive,
McLean, Virginia 22102, ANGELES INCOME PROPERTIES, LTD. II, a California limited
partnership,  (the "Borrower"),  having an address at c/o AIMCO,  Attn: Patti K.
Fielding,  Executive  Vice  President,  4582 South  Ulster  Street,  Suite 1100,
Denver,  CO 80237,  and  COMMONWEALTH  LAND TITLE COMPANY OF NORTH CAROLINA,  as
Trustee (the "Trustee");

                                W I T N E S S E T H:

A.          On or about July 1, 1996,  Lehman  Brothers  Holdings,  Inc.,  d/b/a
            Lehman Capital,  a division of Lehman Brothers  Holdings,  Inc. (the
            "Original  Lender")  made a loan (the  "Loan")  in the amount of SIX
            MILLION SIX HUNDRED THOUSAND and No/100ths  Dollars  ($6,600,000.00)
            to Borrower.  The Loan is evidenced by that certain Multifamily Note
            in the original principal amount of SIX MILLION SIX HUNDRED THOUSAND
            and No/100ths  Dollars  ($6,600,000.00)  made by Borrower payable to
            the order of the Original Lender,  dated July 1, 1996 (the "Original
            Note").

B.          As security for the  performance  and observance of its  obligations
            under the Note, the Borrower  executed and delivered to the Original
            Lender that certain  Multifamily Deed of Trust,  Assignment of Rents
            and Security  Agreement,  of even date with the Original  Note,  and
            recorded on July 5, 1996,  in the  Register of Deeds,  Wake  County,
            North  Carolina,  in Book  7061,  Page 162 (the  "Original  Security
            Instrument").

C.          The conditions and terms of the Original Note were modified, amended
            and restated by that certain Amended and Restated  Multifamily  Note
            dated  November 1, 1996, in the principal  amount of $6,600,000  (as
            amended,  the  "Note")  and  secured  by that  certain  Amended  and
            Restated Multifamily Deed of Trust, Assignment of Rents and Security
            Agreement (as amended, the "Security Instrument") dated of even date
            with the Note and recorded in the  aforementioned  Register of Deeds
            on  November  18,  1996,  in Book  7228 at Page 57,  which  Security
            Instrument  encumbers the real property and related improvements and
            personalty commonly known as 2515 Landmark Drive, Raleigh, NC 27607,
            and which is legally  described on Exhibit "A"  attached  hereto and
            more  particularly  described  in  the  Security  Instrument  as the
            "Mortgaged Property" (the "Property").

D.          As  further  security  for the  performance  and  observance  of its
            obligations  under the Note, and to further evidence and perfect the
            liens and  security  interests  of  Original  Lender,  the  Borrower
            executed  and   delivered  to  the  Original   Lender  that  certain
            Replacement  Reserve  Agreement dated November 1, 1996 (the "Reserve
            Agreement").

E.          As  further  security  for the  performance  and  observance  of its
            obligations  under the Note and to further  evidence and perfect the
            liens  and  security  interest  of  Original  Lender,  the  Borrower
            executed and  delivered to the Original  Lender that certain  Repair
            Escrow   Agreement  dated  November  1,  1996  (the  "Repair  Escrow
            Agreement").

F.          As  further  security  for the  performance  and  observance  of its
            obligations  under the Note and to further  evidence and perfect the
            liens and  security  interests  of  Original  Lender,  the  Borrower
            executed  and  delivered  to  the  Original  Lender  or  Lender  the
            following  UCC filings  and  certain  other  related  documents  and
            instruments:

(i)         UCC-1 Financing  Statement recorded in the Office of the Register of
            Deeds  of  Wake  County,  North  Carolina  on  July  5  1996  as No.
            96-005098,  amended  pursuant  to  that  UCC-3  Financing  Statement
            recorded on November  18,  1996,  and  assigned to Federal Home Loan
            Mortgage  Corporation  pursuant that UCC-3 Financing Statement filed
            on November 18, 1996;

(ii)        UCC-1 Financing  Statement filed with the Office of the Secretary of
            State of North  Carolina  on July 5,  1996 as No.  1356994,  amended
            pursuant to that UCC-3  Financing  Statement filed November 18, 1996
            as  No.  1398727,   and  assigned  to  Federal  Home  Loan  Mortgage
            Corporation   pursuant  that  UCC-3  Financing  Statement  filed  on
            November 18, 1996 as No. 1398728;

(iii)       UCC-1  Financing  Statement  naming Freddie Mac as the secured party
            and  filed  with  the  Office  of the  Secretary  of  State of North
            Carolina  on  September  19, 2003 as No.  20030094475F,  and amended
            pursuant to that UCC-3  Financing  Statement filed November 18, 2003
            as No. 20030117139J; and

(iv)        UCC-1  Financing  Statement  naming Freddie Mac as the secured party
            and filed with the Office of the Secretary of State of California on
            November 10, 2003 as No.  0331860561,  and amended  pursuant to that
            UCC-3 Financing Statement filed December 4, 2003 as No. 03344C0797;

The items referenced in recitals F(i) through F(iv) above are collectively,  the
"Financing Statements".

G.          On or about  November 1, 1996,  the  Original  Lender  endorsed  and
            delivered  the Note to the Lender and  assigned  the Loan and all of
            the Loan  Documents  to the  Lender by that  certain  Assignment  of
            Security  Instrument  (the  "Assignment"),  dated as of  November 1,
            1996, and recorded in the  aforementioned  Register's Office in Book
            7228,  Page  0085.  (The  Note,  Security  Instrument,   Replacement
            Reserve, Repair Escrow Agreement, Financing Statements,  Assignment,
            and any and all such other  documents  and  instruments  executed in
            connection   therewith   or   relating   thereto   are   hereinafter
            collectively referred to as the "Loan Documents".)

H.          Column Guaranteed LLC is the current "Servicer" of the Loan.

I.          The  unpaid  principal  balance  of the Note on the day  immediately
            prior to the Effective Date is $6,054,363.35 (the "UPB").

J.          The Borrower  acknowledges  that,  absent this  Agreement,  the Loan
            would have matured and consequently would be in monetary default.

K.          In connection with the preparation and negotiation of this Agreement
            (which  negotiations were initiated at the request of the Borrower),
            Lender has incurred the following expenses (the "Lender Expenses"):

a.    An extension fee in the amount of $ 0     ;

b.          Title search,  lien  searches,  recording,  title  endorsements  and
            related costs in the amount of $ $2,003.75 ; and

c.          Outside counsel and in-house counsel fees and expenses in the amount
            of $ $3,500.00 .

Freddie Mac acknowledges receiving a $ 0 deposit against the Lender Expenses.

      NOW,  THEREFORE,  in consideration of the foregoing  recitals,  the mutual
covenants  and  agreements  hereinafter  set forth,  the  payment of the amounts
required  to  be  paid  by  Borrower  hereunder  and  other  good  and  valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
to  induce  the  Lender  to  extend  the term of the Loan  and  modify  the Loan
Documents, Borrower and Lender hereby agree as follows:

1. Recitals and Exhibits. The recitals set forth above and the exhibits attached
hereto are true and correct and are  incorporated  into this  Agreement  by this
reference as if they were fully set forth herein.

2.  Scope  of  Agreement.  This  Agreement  relates  only to the  Loan  and Loan
Documents  and does not  affect or alter the terms and  conditions  of any other
loan documents or any other loan or other relationship to which the Borrower and
the Lender may be parties.

      3. Modifications. The Loan is hereby amended as follows:

a.  Term:  The term of the Loan  shall be  extended  from  November  1,  2003 to
November 1, 2004 ("Extended Maturity Date").

b. Right to Extend Maturity Date. Provided that the Loan is then current and not
otherwise  in  default,  Borrower  shall  have a  one-time  right to extend  the
Extended  Maturity  Date of the Note from  November 1, 2004 to February 1, 2005,
upon the following terms and  conditions:  (i) the delivery of written notice to
the Lender of Borrower's intent to exercise this one-time right to extend, to be
received  by the Lender no later than  September  1, 2004,  and (ii)  payment to
Lender on or before  November  1,  2004,  of an  extension  fee in the amount of
$14,875.26 , or such other amount determined by Servicer,  representing 25 basis
points  (.0025) of the then unpaid  principal  balance of the Note to the Lender
(the "Extension  Fee").  Upon Lender's timely receipt of both written notice and
the Extension Fee, the term of the Note shall be automatically  extended through
and until February 1, 2005, and the entire unpaid principal balance on the Note,
together with accrued and unpaid interest thereon,  and all other obligations of
Borrower under the Loan Documents,  if not sooner paid, shall be due and payable
in full on February 1, 2005.  If Borrower  fails to fully  comply with the terms
and conditions  contained in this  subparagraph b, the maturity date of the Loan
shall remain  November 1, 2004.  Written  notice shall be deemed  sufficient  if
provided to Freddie Mac's  Multifamily  Asset Resolution  Section,  c/o Kathleen
Sullivan,  Freddie Mac, 8100 Jones Branch Drive, Mailstop B4G, McLean, VA 22102,
or such other person as directed by Lender.

            c. Interest Rate: The Note rate of interest shall remain  unchanged,
in the amount stated in the Note ("Note Rate").

            d. Debt  Service  Payments:  Commencing  on  November  1, 2003,  and
continuing on the first day of each month thereafter through the maturity of the
Note,  Borrower shall make  consecutive  monthly  installments  of principal and
interest  in the amount  stated in the Note,  until the entire  indebtedness  is
fully paid, except that any remaining indebtedness, if not sooner paid, shall be
due and payable as stated above.

d. Prepayment:  Notwithstanding  anything to the contrary in the Loan Documents,
upon giving thirty (30) days written  notice to the Lender,  Borrower may prepay
all of the principal  balance of the Note on a scheduled  monthly  payment date,
along with interest accrued through such scheduled monthly payment date, without
premium or penalty.

e.  Default  Interest:  Notwithstanding  anything  to the  contrary  in the Loan
Documents,  Borrower  shall not be  required to pay any  Default  Interest  that
accrued or may have  accrued  pursuant to the Loan  Documents  during the period
November 1, 2003,  through the date of  execution  of the  Agreement  by all the
parties.

      4.  Instrument  Amendments.  The Security  Instrument is hereby amended to
secure the Note,  as amended in Paragraph 3 above,  and to otherwise  conform to
the  amendments to the Note and other Loan  Documents set forth herein,  and any
and  all  references  in  the  Security   Instrument  to  the  terms  "Note"  or
"Instrument"  respectively mean the Note or the Security Instrument,  as each is
amended  hereby.  The  description  of the Note in the  Security  Instrument  is
modified to conform with the  modifications to the Note described in Paragraph 3
hereof.  This Agreement,  any UCCs, and any and all other documents  executed in
connection   therewith  are   hereinafter   collectively   referred  to  as  the
"Modification Documents."

            The  Security  Instrument  and the other Loan  Documents  are hereby
amended  to  provide  that any  default  under or  breach  of any of the  terms,
covenants,  provisions,  conditions or representations  and warranties of any of
the Modification Documents or any other Loan Document shall constitute a default
under each of the Modification Documents and Loan Documents.

5.          Funds for Taxes,  Insurance  and Other  Charges.  In addition to the
            payments of  principal,  interest  and other  payments due under the
            Loan  Documents as modified by this  Agreement,  on the first day of
            each  month  thereafter,  Borrower  hereby  agrees to  deposit  with
            Servicer  the  Funds  as  provided  in  Uniform  Covenant  2 of  the
            Instrument.  The Funds shall include escrows for taxes,  assessments
            and  insurance   premiums,   calculated  by  Servicer  in  its  sole
            discretion,  in  accordance  with the  Security  Instrument  and the
            amount  of the  monthly  payment  of Funds is  subject  to change in
            accordance  with changes in the amount  required to be paid for such
            charges for the Property on an annual basis.

6.          INTENTIONALLY OMITTED.

7.          INTENTIONALLY OMITTED.

8.          Reserve  Agreement.  As an additional  inducement to Lender to enter
            into this Agreement,  Borrower  acknowledges and re-affirms that the
            Reserve  Agreement  remains  in full force and  effect  through  the
            Extended  Maturity  Date.  Any  references  to  the  Note,  Security
            Instrument  or any other Loan  Documents  in the  Reserve  Agreement
            shall be  deemed  to refer to such  documents  as  modified  by this
            Agreement.

9.          Closing.  It shall be a condition  precedent to the effectiveness of
            this  Agreement  running for the benefit of the Lender,  that all of
            the  following  shall be  satisfied  on or  before  the date of this
            Agreement,  any of  which  may  be  waived  by  Lender  in its  sole
            discretion in writing:

a.          Borrower shall pay to Lender the Lender's  Expenses in cash or other
            readily available funds.

b.          INTENTIONALLY OMITTED.

c.          Lender shall have received a Uniform  Commercial  Code search report
            issued by the Secretary of State of the State of North Carolina, the
            state where the  Borrower is located,  the state of formation of the
            Borrower,  the state where the Borrower transacts business,  and any
            other  location  that the Lender deems  necessary  and  appropriate,
            showing no liens, security interests or encumbrances on the personal
            property, which comprises a part of the Mortgaged Property under the
            Security  Instrument  other than the liens,  security  interests and
            encumbrances in favor of Lender.

d.          Lender shall have received (i) an  abstractor's  certificate,  title
            search or title commitment  showing no further liens or encumbrances
            on the  Property,  except  those  liens  and  encumbrances  shown on
            Schedule  "B" of that  certain  Loan Policy of Title  Insurance  No.
            554-862741, having a File No. G028184, dated July 5, 1996, issued by
            Commonwealth   Land  Title  Insurance   company,   with  Endorsement
            effective  November  18,  1996,  ("Title  Policy"),  and  (ii) a tax
            certificate  showing  that all ad  valorem  taxes due and owing with
            respect to the Property  have been paid  through the  calendar  year
            2003.

e.          Lender shall have received an  endorsement  to the Title Policy,  in
            form  acceptable to Lender,  which shall (i) down date the effective
            date of the Title Policy to the date of recording of this Agreement,
            (ii) reflect the  recordation  of this  Agreement,  (iii) insure the
            lien of the Security Instrument,  as affected by the modification as
            a first  priority  lien upon the  Property,  (iv) show  title to the
            Property to be subject to no exceptions  other than those exceptions
            approved in writing by Freddie Mac, in its sole discretion,  and (v)
            provide that the insurer will not claim that its liability under the
            Title Policy is waived,  surrendered  or reduced by the execution or
            recordation of this Agreement. Such endorsement is to be paid for by
            the Borrower.

f.          In connection with Subparagraphs D and E above, Borrower must obtain
            and file a release,  satisfaction,  or discharge  for each lien in a
            form  acceptable  to Freddie  Mac,  the title  insurer  and the Wake
            County  Register of Deeds.  The required  releases are applicable to
            the following liens recorded in the Register of Deeds Office of Wake
            County:

(i)         Deed of Trust in favor of  Collateral  Mortgage,  Ltd,  securing the
            amount of $7,700,000 recorded in Book 5239, Page 337;

(ii)        Assignment of Leases, Rents & Profits to Collateral Mortgage,  Ltd.,
            recorded in Book 5239, Page 378.

g.          Lender shall have  received an opinion of counsel  from  Borrower in
            form and substance acceptable to Lender.

h.          Borrower  shall have  executed and  delivered  to Lender,  a Uniform
            Commercial Code Financing  Statement ("UCC") covering the collateral
            granted to Lender under the Loan.

i.          In connection  with  subparagraph  10(e) above,  Borrower shall have
            executed and delivered an Affidavit and Agreement that is acceptable
            to Commonwealth Land Title Company of North Carolina.

10.         INTENTIONALLY OMITTED.

11.         Acknowledgments  of the  Borrower.  In order to induce the Lender to
            approve  the  modifications  set forth in this  Agreement,  Borrower
            hereby acknowledges, confirms and agrees that:

a.          Lender is under no obligation to make any additional advances to, or
            for  the  benefit  of,  Borrower  under  and  pursuant  to the  Loan
            Documents, as modified by this Agreement;

b.          Any and all prior  obligations  to be  performed  or observed by the
            Lender with respect to the Loan Documents have been and remain fully
            and faithfully satisfied by the Lender;

c.          Except as  expressly  set forth herein to the  contrary,  all of the
            respective  representations,  warranties and agreements  made by the
            Borrower  in the Loan  Documents  remain in full  force  and  effect
            without any defense or right of setoff  available  thereunder for or
            on behalf of the  Borrower,  and  Borrower  hereby  republishes  and
            confirms each of the  representations,  warranties,  and  agreements
            contained therein;

d.          The lien, security interests and assignment created and evidenced by
            the Security Instrument or other Loan Documents,  as amended hereby,
            are, respectively, a valid, perfected, and subsisting lien, security
            interest  and  assignment  of the  respective  dignity and  priority
            recited in the Security Instrument and the other Loan Documents,  as
            amended by this Agreement;

e.          The Lender holds a perfected first lien and security interest in all
            rents and profits arising out of the Property; and

f.          In the event of a default  under this  Agreement or under any of the
            Loan  Documents,  as modified  by this  Agreement,  Borrower  hereby
            waives,  to the fullest extent permitted by law, any defenses to any
            action  taken  by  Lender  to  enforce  its  rights  under  the Loan
            Documents, as modified by this Agreement, including, but not limited
            to,  the  appointment  of  a  receiver  for  the  Property  and  the
            foreclosure of the Security Instrument.

      12.   Representations   and  Warranties.   Borrower  makes  the  following
representations,  warranties,  and covenants to Lender,  which  representations,
warranties and covenants are each a material inducement to Lender to execute and
deliver this  Agreement,  and which  representations,  warranties  and covenants
shall be deemed to have been duly made as of the date  hereof and as of the date
of each  payment  to  Lender  and/or  Servicer  as  contemplated  under the Loan
Documents and this Agreement:

a. That the Borrower does not have any present  intention of filing any petition
under,  initiating  any  proceeding  under,  or  otherwise  further  seeking the
protection  of,  the  Bankruptcy  Code or any state law  concerning  bankruptcy,
reorganization,  insolvency,  moratorium,  receivership or creditor's  rights or
debtor's  obligations  generally,  or making an  assignment  for the  benefit of
creditors, or entering into a composition or similar agreement;

b. That  Borrower is a  California  limited  partnership  duly  formed,  validly
existing and in effect under the laws of the state of  California,  and has full
power and authority to enter into this Agreement,  thereby  binding  Borrower to
the terms and conditions of the Loan Documents, as modified by this Agreement;

c. That Borrower is authorized to transact  business under the laws of the state
of  North  Carolina,  and has full  power  and  authority  to  enter  into  this
Agreement,  thereby  binding  Borrower to the terms and  conditions  of the Loan
Documents, as modified by this Agreement;

d. To the best of  Borrower's  knowledge  and belief,  neither the execution and
delivery of this Agreement,  the consummation of the  transactions  contemplated
hereby,  nor the  performance or observance of the terms and conditions  hereof,
will conflict with or result in the breach of any laws or regulations applicable
to  Borrower or the  Property or the terms,  conditions,  or  provisions  of any
agreement or  instrument  to which the Borrower is now a party or by which it is
bound;

e.  The  Borrower  shall  keep  and  maintain  the  Property  as  a  multifamily
residential  rental property in accordance with the terms of the Loan Documents,
as modified by this Agreement;

f. There is no action,  suit or proceeding pending or, to the best knowledge and
belief of Borrower,  threatened  against the Borrower or the Property before any
court or  administrative  agency which might adversely affect the ability of the
Borrower to perform and observe the  obligations  and  covenants to be performed
and observed by the Borrower hereunder or under the Loan Documents,  as modified
by this Agreement, or any related documents. To the best of Borrower's knowledge
and belief, no authorizations,  consents or approvals of governmental  bodies or
agencies are required in connection  with the execution and delivery by Borrower
of this  Agreement or in connection  with the  performance  or observance of the
covenants and  agreements  to be performed or observed by Borrower  hereunder or
under the Loan Documents, as modified by this Agreement;

g. To the  best of  Borrower's  knowledge  and  belief,  there  are no  liens or
encumbrances  affecting the Property,  except for the liens or  encumbrances  in
favor of Lender,  the items listed on Schedule B to the Title Policy, and a lien
for general real estate taxes for the year 2004 and  subsequent  years,  not yet
due and payable.  Borrower has not executed or delivered to any person or entity
any instrument,  nor has Borrower taken any other action,  or failed to take any
action that would in any way affect title to the Property;

h. The  Borrower  certifies  to Lender and  Commonwealth  Land  Title  Insurance
Company  that there  have been no  on-site  activities  or  off-site  activities
adjacent to the Property (such as  construction,  demolition or  modification of
the  improvements,  road work, or eminent domain  proceeds) not disclosed on the
prior existing survey, prepared by John A. Edwards & Company dated June 4, 1996
 (the "Prior Existing Survey"),  there have been no improvements to buildings on
the Property or any new  buildings,  and the  Borrower  does not know of any new
encroachments, since the date of the Prior Existing Survey;

i. There are no actions,  suits,  proceedings,  or investigations pending or, to
the best of Borrower's  knowledge and belief,  threatened at law or in equity by
any party  that  would  adversely  affect or could  adversely  affect the title,
operation,  management or  administration  of any portion of the Property or the
improvements thereon or Borrower's operations;

j. There are no unpaid bills or invoices for labor,  services, or work performed
on the Property or improvements  thereon or for materials or supplies  furnished
or delivered  to or in  connection  with the  Property or with any  improvements
thereon  which  could  result in the  filing of  mechanic's,  materialmen's,  or
laborer's  liens  against  the  Property.  In  addition,  Borrower  has paid all
expenses for the operation and maintenance of the Property and the  improvements
thereon;  including,  without  limitation,  expenses for all goods  supplied and
services  provided  and has paid all  sales,  use,  personal  property,  income,
workman's  compensation,  employee  withholding,  and real property and personal
property  taxes that have  accrued or become due and  payable  through  the date
hereof;

k. To the best of Borrower's  knowledge and belief, all government approvals and
permits necessary for the ownership,  construction and operation of the Property
as a multifamily  dwelling have been obtained and are currently in force for the
improvements located upon the Property and any businesses carried on therein;

l. There are no outstanding notices of violation or deficiency from any federal,
state or local  governmental  authority  or  agency,  and  Borrower  knows of no
material  violations  of  any  rule  or  law  of any  federal,  state  or  local
governmental authority, agency or unit applicable to the operation, ownership or
maintenance of the Property;

m.  There is no  action or  proceeding  pending  or,  to the best of  Borrower's
knowledge and belief,  threatened  by which the Property or any portion  thereof
might be taken or the use or value thereof impaired  pursuant to the exercise of
eminent domain;

n. Tenant security deposits are being held in accordance with applicable law and
tenant lease agreements;

o. To the best of Borrower's  knowledge and belief, all provisions of applicable
law  regarding  the  environmental  condition of the Property and the storage of
materials  thereon and thereat have been  complied  with in full. To the best of
Borrower's    knowledge   and   belief,    the   Property   does   not   contain
asbestos-containing  material or any  chemical  material or  substance  or other
hazardous material exposure to which is prohibited,  limited or regulated by any
federal, state, county or local authority;

p. INTENTIONALLY OMITTED.

q. This  Agreement (i) does not and will not constitute or result in a violation
or breach of any agreement or instrument to which Borrower is bound,  (i) to the
best of Borrower's  knowledge and belief, does not and will not contravene,  and
will not result in the  contravention  of, any law or  regulation,  and (iii) is
valid and fully binding and enforceable  against Borrower in accordance with the
terms of this Agreement;

r.  Borrower  has full power,  good right and lawful  authority  to encumber the
Property in the manner and form set forth in this  Agreement and to execute this
Agreement;

s. All  obligations of Borrower to Lender are secured by a fully perfected first
priority  lien and  security  interest  in the  Property,  pursuant to the Title
Policy;

t. Based upon its good faith  estimate  of the  present  fair  salable  value of
Borrower's assets, Borrower is not insolvent as of the date of execution of this
Agreement and the entering  into of this  Agreement and the entering into of any
other transaction contemplated hereby will not render Borrower insolvent;

u. Any and all  financial  information  provided  (and to be  provided) by or on
behalf  of the  Borrower  or any  other  party  liable  on the  Loan is true and
accurate  and  does not and will not  contain  any  statement  which is false or
misleading  with  respect to any material  fact,  or omits to state any material
fact  necessary in order to make any statement  contained  therein not knowingly
false or misleading in any respect;

v. All of the documents evidencing the Loan remain in full force and effect, and
there are no oral agreements or understandings  that modify,  alter or waive the
terms and  conditions  of those  documents  and no other  written  agreements or
understandings  with respect  thereto,  other than this  Agreement and any other
documents executed in connection therewith;

w. The  Note  represents  an  unconditional,  absolute,  valid  and  enforceable
obligation against Borrower and all other parties, if any, liable on the Note;

x. Borrower has no defenses,  claims of set off, counterclaims,  rights or other
interests including claims arising in tort against Lender or any other person or
entity which would or might affect the  enforceability  of any provisions of the
Loan Documents, the collectability of the Loan or otherwise, and Borrower has no
claims or  offsets  against,  or  defenses  or  counterclaims  to,  the terms or
provisions  of and the  other  obligations  created  or  evidenced  by the  Loan
Documents.  Any  claims  of any kind  that  Borrower  may have as of the date of
execution of this Agreement by all the parties shall be and hereby are released;
and

y.  The  modifications  to  the  Loan  Documents  set  forth  herein  constitute
substantial consideration to the Borrower from Lender, and Borrower has received
fair and adequate consideration for the covenants,  agreements,  representations
and warranties made and entered into by it hereunder.

All of the  representations and warranties made by Borrower herein shall survive
closing of the  transactions  contemplated in this Agreement and shall be deemed
warranties  and  representations  made under the Loan  Documents,  the breach of
which shall constitute a default under the Note and the Security  Instrument and
entitle Lender to terminate this Agreement without notice and otherwise exercise
each and every right and remedy to which it is entitled under the Loan Documents
or at law or in equity as a consequence of such breach.

13. Other  Documents.  From time to time,  Borrower  shall take such  further or
 additional  action and  execute or procure and deliver to Lender such other and
 further  documents and  instruments  evidencing,  securing or pertaining to the
 Loan, or the Borrower's other obligations under the Loan Documents, as shall be
 reasonably  requested  by Lender  so as to  evidence  or  effect  the terms and
 provisions hereof.

14. Conditions to the  Effectiveness of this Agreement.  It shall be a condition
 precedent to the effectiveness of this Agreement running for the benefit of the
 Lender,  that all of the following  shall be satisfied on or before the date of
 Borrower's  execution  of this  Agreement,  any of which  may be  waived by the
 Lender in writing in its sole discretion:

a. The Loan shall be current in all respects  and no default or condition  which
 with the  passage  of time,  delivery  of notice or both,  if  incurred,  would
 constitute a default under the Loan Documents,  shall be in existence under any
 of the Loan  Documents or under this  Agreement,  provided  that, the Loan will
 have matured prior to, and but for the execution of, this Agreement;

b. All  representations  and  warranties  of  Borrower  herein  or in any  other
 document executed by or on behalf of Borrower in connection with this Agreement
 or the assumption shall be true, correct and complete;

c. Borrower shall have delivered to Lender a true,  correct and complete copy of
 the Borrower's organizational  documents,  together with any amendments thereto
 and a certificate of good standing or other instrument evidencing the existence
 and/or  validity  of  organization  of  Borrower  under  laws of the  states of
 California and North Carolina;

d. Borrower  shall have paid Lender an  extension  fee in the amount of ZERO AND
 NO/100 DOLLARS ($ 0 );

e. Borrower  shall have paid to Lender a document  fee in the amount of ZERO AND
 NO/100 DOLLARS ($ 0 );

f. The Borrower  shall have paid Lender the total amount of THREE  THOUSAND FIVE
 HUNDRED NO/100 DOLLARS ($3,500.00)  representing Lender's charges and attorneys
 fees for outside and in-house  counsel in connection with the  documentation of
 this Agreement;

g. Borrower shall have paid Lender the amount of ONE THOUSAND NINE HUNDRED FIFTY
 THREE AND 75/100  DOLLARS  ($2,003.75)  representing  Lender's  lien  searches,
 recording  costs,  title  costs  including  but not  limited to the cost of the
 endorsements  to the Loan Policy  insuring that the Lender retains a first lien
 against  the  Property  and that  nothing in this  Agreement  shall  affect the
 priority of Lender's first lien;

h.  Borrower  shall have paid  Lender  for any other  costs,  fees and  expenses
 incurred by Lender in  connection  with the  consummation  of the  transactions
 contemplated herein;

i. The Lender  shall have  completed a search of the title to the Property and a
 search of the Article 9 UCC liens and other  matters  relating to the  Property
 and the Borrower,  and found no defects,  liens or  encumbrances  affecting the
 Property other than the exceptions to title contained in the Loan Policy;

j. INTENTIONALLY OMITTED.

k. The Borrower  shall have  delivered to the Lender such evidence as the Lender
 may require to satisfy  itself that the fire and hazard  insurance  required by
 the  Security  Instrument  is in place,  has been fully paid for, and names the
 Borrower and the Lender as insured thereunder;

l. The Lender shall have received from the Title  Insurer,  such  endorsement or
 endorsements  to the title  insurance  policy which insures the priority of the
 liens of the Loan Documents,  as amended hereby,  as may be necessary to insure
 the Lender that the Instrument, and its lien, constitute a first and prior lien
 upon the Property and that the Security  Instrument  and its lien have the same
 validity and  enforceability as the Title Insurer  originally  insured to exist
 upon the issuance of the Loan Policy; and

m. The  satisfaction  of such  additional  conditions  as Lender may  reasonably
 impose.

15. Lender's Consent.  Lender's consent to the extension of the term of the Loan
 is subject to the terms and  conditions  set forth in Paragraph 14 hereof,  and
 Borrower's full compliance with all of the terms, conditions,  representations,
 covenants, and warranties set forth in this Agreement.

16. INTENTIONALLY OMITTED.

17. INTENTIONALLY OMITTED.

18.  Recordation.  The  Lender,  through  the Title  Insurer,  may  record  this
 Agreement.

19. Relief under Bankruptcy Stay.

a. In  consideration  of the covenants and agreements of Lender contained herein
 and as a material  inducement to Lender to execute and deliver this  Agreement,
 Borrower  hereby  waives on his own behalf  and on behalf of his  heirs,  legal
 representatives,  successors and assigns,  to the fullest  extent  permitted by
 law,  the  provisions  of  Sections  580a,  580b,  580c,  580d  and  726 of the
 California  Code of Civil  Procedure  ("C.C.P.") with respect to any current or
 future  enforcement  of any right or remedy of Lender  and its  successors  and
 assigns,  under,  or  with  respect  to the  Loan  Documents.  Borrower  hereby
 acknowledges  and  agrees  that the  defenses  waived by  Borrower  under  this
 Agreement include without limitation, any defenses based upon or arising out of
 (1) C.C.P.  Sections  580a or 726,  which might  otherwise  limit the amount of
 Borrower's  liability  after a foreclosure  sale, (2) C.C.P.  Sections 580b and
 580d,  which  might  otherwise  limit or  prohibit  Lender  from  recovering  a
 deficiency  judgment  with respect to purchase  money  obligations  and after a
 non-judicial foreclosure sale, respectively, and (3) C.C.P. Section 726, which,
 among  other  things,  might  otherwise  require  Lender to exhaust  all of its
 security before a personal judgment may be obtained against Borrower.  Borrower
 acknowledges  that Lender  would not have agreed to enter into this  Agreement,
 but for the  foregoing  waivers and that this waiver is a material  part of the
 consideration that Lender is receiving for agreeing to the terms and conditions
 of this Agreement.

b. In the event Borrower  shall (i) file with any bankruptcy  court of competent
 jurisdiction  or be the  subject of any  petition  under 11 U.S.C.  ss.101,  et
 seq.(as  may  be  from  time  to  time  hereafter  amended  and  modified,  the
 "Bankruptcy  Code"),  (ii) be the subject of any order for relief  issued under
 the Bankruptcy  Code,  (iii) file or be the subject of any petition seeking any
 reorganization,    arrangement,   composition,    readjustment,    liquidation,
 dissolution, or similar relief under any present or future federal or state act
 or law relating to  bankruptcy,  insolvency,  or other relief for debtor,  (iv)
 have sought or consented to or  acquiesced in the  appointment  of any trustee,
 receiver,  conservator,  or  liquidator,  or (v) be the  subject  of any order,
 judgment, or decree entered by any court of competent  jurisdiction approving a
 petition  filed  against  such  party  for  any  reorganization,   arrangement,
 composition,  readjustment,  liquidation,  dissolution, or similar relief under
 any  present or future  federal  or state act or law  relating  to  bankruptcy,
 insolvency,  or relief for debtors,  then (a) Lender shall hereupon be entitled
 and Borrower  irrevocably consents to relief from any automatic stay imposed by
 Section 362 of the Bankruptcy Code, or otherwise, on or against the exercise of
 the rights and  remedies  otherwise  available  to plaintiff as provided in the
 Note and/or Security Instrument, and as otherwise provided by law, and Borrower
 hereby  irrevocably  waives his right to object to such relief and acknowledges
 that no  reorganization  in  bankruptcy  is feasible;  (b) Borrower  waives his
 exclusive  right pursuant to Section  1121(b) of the Bankruptcy  Code to file a
 plan of  reorganization  and  irrevocably  consents that Lender may file a plan
 immediately  upon the entry of an order for relief if any involuntary  petition
 is filed by  Borrower;  (c) in the event that  Lender  shall move  pursuant  to
 Section  1121(d)  of the  Bankruptcy  Code  for an order  reducing  the 120 day
 exclusive  period,  Borrower  shall  not  object  to any such  motion;  and (d)
 Borrower irrevocably waives his right to demand a turnover of the Property from
 a receiver appointed at the request of the Lender, and agrees that it is in the
 best interest of the  creditors  pursuant to Section  543(d) of the  Bankruptcy
 Code for the  receiver to continue  in  possession,  custody and control of the
 Property.

20. Construction. The language in all parts of this Agreement in all cases shall
 be  construed  simply  according  to its fair  meaning and not  strictly for or
 against any party. All words used herein in the singular number shall extend to
 and include the plural number. All words used herein in the plural number shall
 extend to and include the singular number. All words used in any gender,  male,
 female,  or neuter shall extend to and include all genders as may be applicable
 to any particular  context.  Captions and headings  contained in this Agreement
 are  inserted  only as a matter of  convenience  and in no way  define,  limit,
 extend,  or describe the scope of this Agreement or the intent of any provision
 of this  Agreement.  This Agreement has been negotiated at arms' length between
 persons  knowledgeable  in the matters  dealt with herein.  Accordingly,  among
 other things,  any rule of law or any statute,  legal  decision,  or common law
 principle  that  would  require  interpretation  of  any  ambiguities  in  this
 Agreement  against  the  party  that  has  drafted  this  Agreement  are  of no
 application and are hereby expressly waived by all parties hereto.

21. Cross Default. Failure of Borrower to comply with or perform any warranties,
 covenants or obligations  contained herein shall constitute a default under the
 Note,  the  Security  Instrument,  the  Reserve  Agreement,  and the other Loan
 Documents.  It is understood  that Lender  specifically  reserves its rights to
 seek all legal remedies available to it to collect the unpaid principal balance
 of the Note and all other sums due under the Note, this Agreement, the Security
 Instrument or any other Loan Document,  as amended hereby (the "Indebtedness"),
 including,  without limitation,  acceleration,  foreclosure or appointment of a
 receiver,  if at any time during the term of this  Agreement  Borrower does not
 fulfill the  conditions  imposed  upon it as set forth  herein  within the time
 frame provided.

22. Miscellaneous. Time is of the essence of this Agreement with respect to each
 and every  provision  hereof.  All amounts  tendered at the  execution  of this
 Agreement must be in immediately available funds.

23.  Governing  Law.  This  Agreement  shall  be  governed  by  the  law  of the
 jurisdiction in which the Property is located.

24. No Other  Amendments to Loan Documents.  The terms of this Agreement are not
 intended,  nor shall they be deemed, as a substitution or novation of Borrowers
 indebtedness  to Lender or of the Security  Instrument,  nor shall the terms of
 this Agreement  alter the priority of the liens on the Property  created by the
 Security  Instrument or any of the other Loan Documents,  and modifications and
 amendments to the Loan Documents  expressly set forth in this  Agreement  shall
 (unless  otherwise  provided  herein)  relate back to the date of the  Security
 Instrument and other Loan Documents,  respectively,  with the same effect as if
 set forth therein when originally executed. Except as otherwise amended herein,
 the terms and  provisions of this Agreement  shall in no manner impair,  limit,
 restrict  or  otherwise  affect the  obligations  of the  Borrower to Lender as
 reflected in the Loan Documents and the Note,  the Security  Instrument and all
 other Loan Documents remain unmodified,  unamended and in full force and effect
 and are hereby  republished  and  reconfirmed.  As amended and modified by this
 Agreement, the Security Instrument,  the Note, and the other Loan Documents are
 hereby  ratified and confirmed  and shall  continue in full force and effect in
 accordance with the provisions thereof.

25. Validity of Terms. If from any  circumstance  whatsoever  fulfillment of any
 provisions of this  Agreement,  at the time of  performance  of such  provision
 shall be due,  shall  involve  transcending  the  limit of  validity  presently
 prescribed  by, or shall be prohibited or invalid  under any  applicable  usury
 statute  or any  other  applicable  law,  with  regard to  obligations  of like
 character and amount then ipso facto the  obligation  to be fulfilled  shall be
 reduced to the limit of such  validity  without  invalidating  the remainder of
 such provision or the remaining provisions of this Agreement. The provisions of
 this paragraph shall control every other provision of this Agreement.

26.  Binding  Effect.  This  Agreement  shall be  binding  upon and inure to the
 benefit  of  the  parties  hereto  and  their  respective   heirs,   executors,
 administrators, successors, assigns, and legal representatives.

27. Notices. Any and all notices,  consents,  waivers,  directions,  requests or
 other instruments or  communications  provided for under this Agreement and the
 Loan  Documents,  as amended hereby,  shall be in writing,  signed by the party
 giving  the same,  and shall be deemed  properly  given  only if  delivered  in
 person,  if sent by facsimile with a copy sent by regular U.S. mail, or if sent
 by registered or certified  U.S.  Mail,  postage  prepaid,  or express  courier
 within the United States, freight charges prepaid, and addressed as follows:

      If to Lender:        Federal Home Loan Mortgage Corporation
                           8100 Jones Branch Drive, MS B4G
                           McLean, Virginia 22102
                           Attention:  Kathleen Sullivan
                           Phone:  (703) 714-2933
                           Fax:  (703) 714-3386

      with a copy to:      Federal Home Loan Mortgage Corporation
                           8200 Jones Branch Drive, MS 202
                           McLean, Virginia 22102
                           Attention:  George Kielman
                           Phone:  (703) 903-2640
                           Fax:  (703) 903-3691

      If to Borrower:      Angeles Income Properties, Ltd. II
                           c/o AIMCO
                           4582 South Ulster Street, Suite 1100
                           Denver, CO  80237
                           Attn:  Patti K. Fielding
                           Phone:      (303) 691-4349
                           Fax:  (303) 300-3241

      With a copy to:      Ballard Spahr Andrews & Ingersoll LLP
                          1225 17th Street, Suite 2300
                           Denver, CO 80202
                           Gwendolyn C. Allen, Esquire
                              Phone: (303) 299-7350
                           Fax:  (303) 299-7356

Any notice so given shall be deemed to have been  received as of the third (3rd)
business  day  after it was  mailed  or sent.  Any  such  communication  sent by
facsimile  shall be deemed properly given when received by the person to whom it
was sent.  Any party,  by written  notice to the other,  may  specify  any other
address  within  the  United  States for the  receipt  of such  instructions  or
communications.

28. Fax Transmissions. For the purposes of negotiating,  executing, amending and
giving notices and other communications under the Loan Documents, as modified by
this  Agreement,  any signed  document  transmitted by fax machine or telecopier
shall be treated in all  manners  and  respects  as an  original  document.  The
signature of any party  thereon shall be  considered  for these  purposes as the
original  signature and the faxed or telecopied  document shall be considered to
have the same binding legal effect as the original  document.  At the request of
either party, any fax or telecopy  document shall be re-executed by both parties
in  original  form.  No party  hereto  may  raise  the use of a fax  machine  or
telecopier  or  the  fact  that  any  signature,   document,   notice  or  other
communication was transmitted  through the use of a fax or telecopier machine as
a defense to the enforcement of this Agreement or any document, rider, notice or
other communication executed or given in connection with this Agreement.

29. INTENTIONALLY OMITTED.

30. INTENTIONALLY OMITTED.

31. Counterparts.  This Agreement may be executed in any number of counterparts,
each of which when so executed  and  delivered  shall be an  original,  but such
counterparts shall together constitute but one and the same instrument.

32.  Captions.  The captions  used in  connection  with the  paragraphs  of this
Agreement  are for  convenience  only and shall not be deemed to  construe or to
limit the meaning of the language of this Agreement.

33.  Interpretation.  The  parties  agree that each party and its  counsel  have
reviewed and revised this Agreement and that the normal rule of  construction to
the effect that any  ambiguities  are to be resolved  against the drafting party
shall not be employed in the  interpretation of this Agreement or any amendments
or exhibits hereto.

a. The Borrower and the individuals and/or entities comprising the Borrower each
are sophisticated and experienced real estate investors, each of whom has a full
understanding  of the  terms  and  conditions  of this  Agreement  and the risks
involved in entering into this Agreement. The Borrower understands the risks and
obligations that Lender has assumed in entering into this Agreement, and further
recognizes and  acknowledges  that this Agreement has been fully  negotiated and
that  numerous  compromises  on the part of Lender  and the  Borrower  were made
before agreement was reached on the final terms hereof.

b. The Borrower has at all times been  represented  by its own  attorneys in the
negotiation of the terms and the  preparation  and execution of, this Agreement,
and has relied solely upon the advice and  instructions of its own attorneys who
have had the  opportunity  to review and analyze this Agreement for a reasonable
period of time prior to execution by the Borrower.

c. The Borrower is entering into this Agreement with the conviction that it is a
fair  agreement and that it represents an equitable  compromise of the competing
interests  of the parties  hereto.  In this  connection,  the  Borrower  and the
individuals  and/or  entities  comprising  the Borrower,  jointly and severally,
acknowledge that this Agreement was prepared and executed without fraud, duress,
undue  influence,  or coercion of any kind  exerted by any party upon any of the
others.

34. INTENTIONALLY OMITTED.

35.  ENTIRE  AGREEMENT;   JOINT  PREPARATION.   THIS  AGREEMENT  AND  THE  OTHER
MODIFICATION  DOCUMENTS  REPRESENT THE FINAL  AGREEMENT AMONG THE PARTIES HERETO
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.  THIS AGREEMENT SUPERSEDES ALL PRIOR AGREEMENTS AND UNDERSTANDINGS,  IF
ANY, RELATING TO THE SUBJECT MATTER HEREOF (INCLUDING,  WITHOUT LIMITATION,  ALL
CORRESPONDENCE BETWEEN BORROWER, SERVICER AND LENDER REGARDING PROPOSALS FOR THE
MODIFICATION OF THE OBLIGATIONS OF THE BORROWER),  AND MAY BE AMENDED ONLY BY AN
INSTRUMENT IN WRITING, EXECUTED JOINTLY BY BORROWER AND AN AUTHORIZED OFFICER OF
LENDER AND MAY BE SUPPLEMENTED ONLY BY DOCUMENTS DELIVERED OR TO BE DELIVERED IN
ACCORDANCE WITH THE EXPRESS TERMS HEREOF.

36. Release of Claims.  Borrower (the "Obligor") for and on behalf of itself and
its  respective  representatives,   principals,   agents,  employees,  officers,
directors,  shareholders,  successors and assigns, hereby expressly releases and
forever  discharges  Lender  and  its   representatives,   principals,   agents,
employees,  officers, directors,  shareholders,  successors and assigns (jointly
and severally, the "Released Parties"),  from every claim, demand, action and/or
cause of action of any kind or character,  known or unknown,  whether arising in
contract,  tort or otherwise,  which the Obligor could assert against any of the
Released Parties as of the date of this Agreement.  The Obligor  recognizes that
it consequently  hereby releases claims of which it does not yet have knowledge,
but Obligor nevertheless  acknowledges that this provision has been specifically
bargained  for by Lender  as a  material  inducement  to the  execution  of this
Agreement by Lender and that this provision is required by Lender as a condition
to the modification of the Loan set forth in this Agreement.

37. WAIVER OF JURY TRIAL. BORROWER AND LENDER EACH (A) COVENANT AND AGREE NOT TO
ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS AGREEMENT OR
THE  RELATIONSHIP  BETWEEN THE PARTIES AS BORROWER AND LENDER THAT IS TRIABLE OF
RIGHT BY A JURY,  AND (B) WAIVE ANY RIGHT TO TRIAL BY JURY WITH  RESPECT TO SUCH
ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER
OF RIGHT  TO TRIAL BY JURY IS  SEPARATELY  GIVEN BY EACH  PARTY,  KNOWINGLY  AND
VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

38.  Trustee joins in this Agreement for the sole purpose of  acknowledging  its
consent as Trustee in the Security  Instrument to the  modifications  thereof as
provided hereinabove in this Agreement.

      IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
last date set forth  below,  but  effective  as of the day and year first  above
written.

                              LENDER:

ATTEST:                       FEDERAL HOME LOAN MORTGAGE CORPORATION,
                              a corporate  instrumentality  of the United
                              States of America

/s/Claudia Bixley                   By:/s/Gregory S. Stuart
Claudia Bizley                      Name: Gregory S. Stuart
Title: Assistant Secretary          Title: Director, MFAM

                                    Date: March 26, 2004


<PAGE>



                              BORROWER:

                              ANGELES INCOME PROPERTIES, LTD. II,
                              a California limited partnership

ATTEST:                       By:  ANGELES REALTY CORPORATION II
                                   a California corporation, its general partner


/s/Leslie Green               By:  /s/Patti K. Fielding
Leslie Green                  Name: Patti K. Fielding
Title: Assistant Secretary    Title: Executive Vice President

                              Date: March 24, 2004



                              By:   AIMCO ANGELES GP, LLC, a Delaware  limited
                                    liability company, its general partner

                              By:   AIMCO PROPERTIES L.P., a Delaware limited
                                    partnership, its sole member

ATTEST:                       By:   AIMCO-GP, Inc., a Delaware
                                    corporation, its general partner


/s/Leslie Green               By:    /s/Patti K. Fielding
Leslie Green                  Name:  Patti K. Fielding
Title: Assistant Secretary    Title: Executive Vice President

                              Date:   March 24, 2004



                              TRUSTEE:

ATTEST:                       COMMONWEALTH LAND TITLE COMPANY OF NORTH CAROLINA,
                              a North Carolina corporation


                              By:
                              Name:
Title:                        Title:

                              Date:


<PAGE>


COMMONWEALTH OF VIRGINIA      )
                              )     ss.
COUNTY OF FAIRFAX             )

      On the  26th  day of  March  2004,  personally  appeared  before  me,  the
undersigned  notary public,  Gregory S. Stuart and acknowledged that s/he is the
Director,  MFAM of the  FEDERAL  HOME LOAN  MORTGAGE  CORPORATION,  a  corporate
instrumentality  of the United  States of America,  and that s/he,  as Direcotr,
being  authorized  to do so,  executed  the above  instrument  on behalf of said
corporation.

                        /s/Rickita Ford
                        Notary Public: Rickita Ford
(Seal)                  My Commission Expires: October 31, 2007







STATE OF  Colorado)
                  )     ss.
COUNTY OF   Denver)

      On the 24th day of March,  2004,  personally  appeared before me, a notary
public for the above  referenced  jurisdiction,  Patti K.  Fielding,  personally
known to me (or proved to me on the basis of  satisfactory  evidence)  to be the
person whose name is subscribed to the within instrument and acknowledged before
me that he/she is the Executive Vice President of ANGELES REALTY CORPORATION II,
a California corporation, and that by authority duly given and as the act of the
corporation  in its  capacity  as a general  partner in and on behalf of ANGELES
INCOME PROPERTIES,  LTD. II, a California limited  partnership,  he/she executed
the same in his/her  authorized  capacity  and that by his/her  signature on the
instrument,  the  person,  or entity  upon  behalf of which  the  person  acted,
executed the same.


                        /s/Joyce S. Slaughter
                        Notary Public Joyce S. Slaughter
(Seal)                  My Commission Expires: February 26, 2006





<PAGE>



STATE OF  Colorado)
                  )     ss.
COUNTY OF   Denver)

      On the 24h day of March,  2004,  personally  appeared  before me, a notary
public for the above  referenced  jurisdiction,  Patti K.  Fielding,  personally
known to me (or proved to me on the basis of  satisfactory  evidence)  to be the
person whose name is subscribed to the within instrument and acknowledged before
me that he/she is the Executive  Vice  President of AIMCO-GP,  INC., the general
partner of AIMCO  PROPERTIES  L.P.,  the sole member of AIMCO ANGELES GP, LLC, a
Delaware limited liability company,  and that by authority duly given and as the
act of the  corporation in its capacity as a general partner in and on behalf of
ANGELES INCOME  PROPERTIES,  LTD. II, a California limited  partnership,  he/she
executed the same in his/her  authorized  capacity and that by his/her signature
on the instrument,  the person, or entity upon behalf of which the person acted,
executed the same.


                        /s/Joyce S. Slaughter
                        Notary Public Joyce S. Slaughter
(Seal)                        My Commission Expires: February 26, 2006




STATE OF                            )
                                    )     ss.
COUNTY OF                           )

      I, the undersigned  notary public,  do hereby certify that personally came
 before me this day and  acknowledged  that s/he is of  COMMONWEALTH  LAND TITLE
 COMPANY OF NORTH CAROLINA, a North Carolina
corporation, and that s/he, as                  , being authorized to do so,
executed the foregoing on behalf of the corporation.

      Witness my hand and official seal, this the ___ day of ________, 2004.


                        _____________________________________
                        Notary Public
(Seal)                        My Commission Expires:__________________________