<PAGE> 1
=================================================================
                          UNITED STATES
                SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

                            FORM 10-K
                                
(Mark One)

 /X/      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

           For the fiscal year ended December 31, 1998
                               OR
                                
          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
          THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
    
          For the transition period from ________ to _______
                  --------------------------------
                  Commission file number:  0-25600
                  --------------------------------    
            OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP
        -----------------------------------------------------
        (Exact name of Registrant as specified in its charter)

         Maryland                              52-1394232
-------------------------------            -------------------
(State or other jurisdiction of            (I.R.S. Employer
incorporation or organization)             Identification No.)

   7200 Wisconsin Avenue, 11th floor, Bethesda, Maryland 20814
   -----------------------------------------------------------
   (Address of principal executive offices)         (Zip Code)

Registrant's telephone number, including area code:  301-654-3100

Securities registered pursuant to Section 12(b) of the Act:  NONE
Securities registered pursuant to Section 12(g) of the Act:
Beneficial Assignee Interests

Indicate  by check mark whether the Registrant (1) has filed  all
reports  required  to be filed by Section  13  or  15(d)  of  the
Securities  Exchange Act of 1934 during the preceding  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  / /

Indicate  by  check  mark  if  disclosure  of  delinquent  filers
pursuant to Item 405 of Regulation S-K (Section 229.405)  is  not
contained  herein,  and will not be contained,  to  the  best  of
Registrant's  knowledge,  in  definitive  proxy  or   information
statements incorporated  by reference  in  Part  III of this Form 
10-K or any amendment to this Form 10-K. [X]

At  December  31,  1998,  the  following  classes  of  beneficial
assignee   interests  of  Oxford  Tax  Exempt  Fund  II   Limited
Partnership  were outstanding; (i) 7,183,200 Beneficial  Assignee
Interests   ("BACs")   with   an  aggregate   market   value   of
$168,805,200, and (ii) 6,946 Status Quo BACs ("SQBs").

             DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents of the Registrant are
incorporated herein by reference as indicated:

Form 10-K Parts     Document
-----------------------------------------------------------------
Parts I, II and III       Portions  of the 1998 Annual Report are
                          incorporated by reference into Parts I,
                          II and III.

Exhibit Index is on page 11.

Total number of pages is 48.


<PAGE> 2

          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP
                                
                            FORM 10-K
                                
                             PART I

Item 1.  Business.

    Information  responsive to this Item is contained  under  the
headings "Notes to Financial Statements" at pages 26 through  45,
respectively,  of  the  1998  Annual  Report  of  the  Registrant
attached  hereto  as Exhibit 13 which is incorporated  herein  by
reference.

Item 2.  Properties.

    Information  responsive to this Item is contained  under  the
heading "Investment in Tax-Exempt and Taxable Securities" in Note
7  to the Financial Statements at pages 37 through 42 in the 1998
Annual  Report of the Registrant which is incorporated herein  by
reference.

Item 3.  Legal Proceedings.

    Information  responsive to this Item is contained  under  the
headings  "Report  of Management" at pages  15  through  20,  and
"Notes  to  Financial Statements" at pages 26 through 45  of  the
1998 Annual Report which is incorporated herein by reference.

Item 4.  Submission of Matters to a Vote of Security Holders.
         None.

                             PART II

Item 5. Market the Registrant's Partnership Interests and Related
        Partnership Matters.
  
   (a)  Market Information.
        Information  responsive to this item is  contained  under
        Note 8  "Quarterly  Information"  included  at  pages  43
        through   44   of  the  1998  Annual  Report   which   is 
        incorporated herein by reference.

   (b)  Number of Security Holders.

        The  number  of BAC  Holders  at   December  31, 1998 was 
        15,075. The number of SQB holders at December 31, 1998 
        was 229.

   (c)  Dividend History and Restrictions.

        The information  regarding the frequency  and  amount  of
     cash  distributions is included under the headings "Selected
     Financial  Data"  at  page  14 of the  1998  Annual  Report,
     "Report  of  Management" at pages 15 through 20,  "Notes  to
     Financial   Statements"  at  pages  26   through   45,   and
     "Distribution  Information" at page 46 of  the  1998  Annual
     Report.   The  information contained under such headings  is
     incorporated herein by reference.
   
      The   Partnership  expects  to  continue   making   cash
     distributions to Partners pursuant to the provisions of  its
     limited partnership agreement.
   
Item 6.  Selected Financial Data.

    Information  responsive to this Item is contained  under  the
heading  "Selected Financial Data," included at page  14  of  the
1998 Annual Report which is incorporated herein by reference.

Item 7.  Management's Discussion and Analysis of Financial 
         Condition and Results of Operations.
   
    Information  responsive to this Item is contained  under  the
heading "Report of Management" at pages 15 through 20 of the 1998
Annual Report which is incorporated herein by reference.

<PAGE> 3

          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP
                                
                            FORM 10-K
                                
                       PART II (continued)

Item 8.  Financial Statements and Supplementary Data.

   The financial statements of the Partnership, together with the
report   thereon   of  PricewaterhouseCoopers  LLP,   independent
accountants, appearing at pages 21 through 45 of the 1998  Annual
Report, are incorporated herein by reference.

Item 9.  Changes in and Disagreements with Accountants on 
         Accounting and Financial Disclosure.  None.
                                
                            PART III

Item 10. Directors and Executive Officers of the Registrant.
         Directors and Executive Officers
         (a), (b), (c) and (e).
     
     The  Partnership has no directors or officers.  The Managing
   General  Partner  of  the Partnership  is  Oxford  Tax  Exempt
   Fund   II   Corporation.  The  sole  directors  and  executive
   officers of the Managing General Partner are as follows:

Name                  Age Position and Business Experience
-----------------------------------------------------------------
Leo E. Zickler         62 Chairman of the Board of Directors  and
                          Chief Executive Officer since inception
                          and was  Chairman and  Chief  Executive
                          Officer of the managing general partner
                          of  Oxford  Tax  Exempt  Fund   Limited
                          Partnership,  OTEF   II's   predecessor
                          ("OTEF"). Since March 1982, he has been
                          Chairman of the Board of Directors  and
                          Chief  Executive  Officer   of   Oxford
                          Development Corporation ("Oxford"),  an
                          affiliate of  the  Partnership  and   a
                          national real estate firm that owns and
                          operates  apartment  and  senior living
                          communities.  Mr.  Zickler  served   as
                          President of Oxford until February  28,
                          1994. Mr. Zickler continues to serve as
                          a director  and officer of  Oxford  and
                          certain affiliated entities.
                          
Francis P. Lavin       47 President since inception and President
                          of  OTEF's  managing   general  partner 
                          since March 1, 1994. From October  1989
                          through January 1994, he was a Director
                          and  President  of  ML  Oxford  Finance
                          Corporation, an  affiliate  of  Merrill
                          Lynch  & Company, Inc.   From  1979  to
                          October 1989,  Mr. Lavin  held  various
                          positions at  subsidiaries  of  Merrill
                          Lynch & Company, including Director  of
                          Merrill Lynch Capital Markets and  Vice
                          President  of  Merrill  Lynch,  Hubbard 
                          Inc. Since March  1,  1994,  Mr.  Lavin 
                          has served as President  of  Oxford, as 
                          well  as  a  director  and  officer  of 
                          certain affiliated entities.
                          
Robert B. Downing      44 Executive Vice President  and  Director
                          of the Managing General Partner   since
                          inception. Mr.  Downing is  responsible
                          for  the   day-to-day  investment   and
                          financing activities of OTEF II.  Since
                          1993,  Mr.   Downing  has   served   as
                          Executive Vice President  and  Director
                          of  various  Oxford   affiliates.   Mr.
                          Downing joined Oxford in 1984.
                               
<PAGE> 4

           OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP
                                
                            FORM 10-K
                                
                      PART III (continued)
                                
Name                   Age Position and Business Experience
-----------------------------------------------------------------
Stephen P. Gavula, Jr. 48 Director since May 1997. From June 1988
                          to  September  1995,  Mr.  Gavula   was
                          Chairman and Chief Executive Officer of
                          the   JHM    Group,   which    provided
                          specialized   investment     management
                          services    to    various     financial
                          institutional and individual investors.
                          The JHM  Group specialized in mortgage-
                          backed securities and was an  affiliate
                          of  The   John   Hancock  Mutual   Life
                          Insurance Company.  In September  1995,
                          after accumulating over $2  billion  in
                          assets  under   management,  Mr. Gavula 
                          sold his  interest   in JHM to The John 
                          Hancock Mutual Life Insurance  Company. 
                          Presently, Mr. Gavula acts as  Chairman  
                          and Chief Executive   Officer  of   JDS   
                          Capital    Corporation,   a     private 
                          investment firm in McLean, Virginia.
                              
Scot B. Barker         50 Director since May 1997. Mr. Barker  is
                          the President and Director of Newman  &
                          Associates,   Inc.,   a    Denver-based
                          financial services firm  that  arranges
                          debt financing for both commercial  and
                          multifamily properties since 1984.  Mr.
                          Barker   has  extensive  experience  in
                          financing HUD-insured and  HUD-assisted
                          properties throughout the U.S.  He  has
                          been  instrumental   in   designing   a 
                          variety of new  financing  programs for 
                          the real estate sector.
                            
Mark E. Schifrin       45 Executive  Vice   President   of    the
                          Managing  General  Partner  since 1993. 
                          Mr. Schifrin   is  responsible  for the 
                          asset management activities relating to
                          Oxford's  property  portfolio.    Since
                          1993,  Mr.   Schifrin  has  served   as
                          Executive  Vice  President and Director 
                          of    various   Oxford affiliates.  Mr. 
                          Schifrin joined Oxford in 1984.
                            
Richard R. Singleton   51 Senior Vice  President since  inception
                          and Chief Financial Officer since 1995.
                          Mr. Singleton  serves  as  Senior  Vice
                          President of various Oxford affiliates.
                          Mr. Singleton joined Oxford in 1979.
                           
Marc B. Abrams         44 Senior Vice  President,  Secretary  and
                          General Counsel  since  inception.  Mr.
                          Abrams serves as Senior Vice President,
                          Secretary   and   General  Counsel   of
                          various Oxford affiliates.  Mr.  Abrams 
                          joined Oxford in 1985.

                                
<PAGE> 5

          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP
                                
                            FORM 10-K
                                
                      PART III (continued)


   (d)  Family Relationships.  None.

   (f)  Involvement in Certain Legal Proceedings.  None.

   (g)  Promoters and Controlling Persons.  Not applicable.

     Section 16(a) Beneficial Ownership Reporting Compliance

     Section  16(a) of the Securities Exchange Act  of  1934,  as
amended  (the  "Exchange  Act"),  requires  that  the  directors,
executive  officers,  and persons who own  more  than  10%  of  a
registered class of the equity securities of OTEF II or  OTEF  II
Corporation  ("reporting persons") file with the  Securities  and
Exchange Commission initial reports of ownership, and reports  of
changes  in  ownership, of OTEF II BACs, and options to  purchase
OTEF  II BACs.  Reporting persons are required by Securities  and
Exchange Commission rules to furnish OTEF II with copies  of  all
Section 16(a) reports they file.
     
     Based   solely  upon  a  review  of  Section  16(a)  reports
furnished to OTEF II for the fiscal year ended December 31,  1998
(the "1998 fiscal year"), or representations by reporting persons
that  no  other reports were required for the 1998  fiscal  year,
OTEF  II  believes  that all reporting persons timely  filed  all
reports required by Section 16(a) of the Exchange Act.

Item 11.  Executive Compensation.
          (a), (b), (c), and (d)
     
     None  of  the  executive officers of  the  Managing  General
Partner,  Oxford Tax Exempt Fund II Corporation, receives  direct
compensation for services rendered to the Partnership.   However,
certain  directors  and officers receive a portion  of  the  cash
distributions  made by OTEF II to its general  partners.   During
1998,  the two independent directors received a total of  $40,000
in directors' fees.
   
     On  May 21, 1997, OTEF II  adopted an incentive option  plan
(the  "Incentive Option Plan") in order for the Managing  General
Partner  to  attract and retain key employees and advisers.   The
Incentive  Option Plan authorizes the granting to the  directors,
officers  and  employees  of  the Managing  General  Partner  and
certain affiliates of options to purchase 652,125 options  (on  a
post-split  basis).  Such options are exercisable for  10  years.
The  Managing  General Partner has awarded  all  of  the  options
authorized under the terms of the Incentive Option Plan.  Of  the
652,125  options,  613,000 were fully vested  upon  issuance  and
39,125  vest  in  equal annual amounts over  3  years  commencing
January 1, 1998.

     
<PAGE> 6
                                
          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP
                                
                            FORM 10-K
                                
                      PART III (continued)
                                
   
Option Grants In Fiscal 1998

   Shown  below  is information concerning option grants  to  the
executive  officers  of  the Managing General  Partner  who  were
granted  options to purchase OTEF II BACs during OTEF  II's  1998
fiscal year.

<TABLE>
                        Individual Grants                                                   
--------------------------------------------------------------------------------------------
<CAPTION>
                                     % of                                                    
                                    Total                         Potential Realizable Value
                     Number of      Options                       at Assumed Annual Rates of
                       BACs       Granted to   Exercise              BAC Price Appreciation 
                   Underlying      Employees   or Base                 For Option Term      
                     Options       in Fiscal    Price   Expiration     Compounded Annually  
Name                 Granted <F1>    1997      ($/BAC)     Date         5%          10%     
--------------------------------------------------------------------------------------------
<S>                  <C>           <C>          <C>       <C>       <C>          <C>        
Leo E. Zickler       163,031       25.000%      $23.88    5/21/07   $2,448,400   $6,204,727 
Francis P. Lavin     163,031       25.000%      $23.88    5/21/07   $2,448,400   $6,204,727 
Robert B. Downing     82,150       12.597%      $23.88    5/21/07   $1,233,729   $3,126,512 
Mark E. Schifrin      75,620       11.596%      $23.88    5/21/07   $1,135,661   $2,877,989 
Marc B. Abrams        61,606        9.447%      $23.88    5/21/07   $  925,199   $2,344,636 
Richard R. Singleton  47,997        7.360%      $23.88    5/21/07   $  720,819   $1,826,697 
--------------------------------------------------------------------------------------------
<FN>                                                                                        
<F1> All options held by executive officers were granted prior to the  effective  
    date of listing of the  OTEF  II  BACs  for trading on the American Stock 
    Exchange. The exercise price  of each  option grant was set at the average 
    of the American Stock Exchange closing bid prices of the OTEF II BACs for 
    the first 20 days of trading following the listing of the OTEF II BACs.
</FN>   
</TABLE>
     
      Aggregate Option Exercises in Last Fiscal Year and 
                     Fiscal Year-End Values

   Shown below is information with respect to certain unexercised
options  to purchase OTEF II BACs held by the executive  officers
of  OTEF  II  Corporation as of the end of OTEF II's 1998  fiscal
year.  None  of  the  executive officers of OTEF  II  Corporation
exercised any options during OTEF II's 1998 fiscal year.

<TABLE>
-----------------------------------------------------------------------------
<CAPTION>
                             Number of BACs                                  
                         Underlying Options at      Value of Options at       
                          End of Fiscal Year         End of Fiscal 1998 <F1>  
Name                  Exercisable  Unexercisable   Exercisable  Unexercisable
-----------------------------------------------------------------------------
<S>                     <C>              <C>         <C>              <C>
Leo E. Zickler          163,031          0           160,437          0      
Francis P. Lavin        163,031          0           160,437          0      
Robert B. Downing        82,150          0            80,843          0      
Mark E. Schifrin         75,620          0            74,417          0      
Marc B. Abrams           61,606          0            60,625          0      
Richard R. Singleton     47,997          0            47,233          0      
-----------------------------------------------------------------------------
   TOTAL                593,435          0           583,992          0      
=============================================================================
<FN>
<F1> Based  on the market value of the OTEF II BACs on the  last
     trading  day  of  1998  (as  measured  by  the  American  Stock
     Exchange  closing  bid  price of $23.50),  minus  the  exercise
     price.
<FN>
</TABLE>

   (e) Termination of Employment and Change of Control Arrangements.  None.

Item 12.  Security Ownership of Certain Beneficial Owners and Management.
-------------------------------------------------------------------------
   (a)  Security Ownership of Certain Beneficial Owners.
   
     No  person  is  known by the Partnership to own beneficially
     more than 5% of the outstanding OTEF II BACs.

   (b)  Security Ownership of Management.


<PAGE> 7
                                
          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP
                                
                            FORM 10-K
                                
                      PART III (continued)
   
   The  following  table sets forth, as of 12/31/98,  the  number
and percentage of outstanding BACs beneficially owned by (i) each
director  of OTEF II Corporation, (ii) each executive officer  of
OTEF  II  Corporation,  and  (iii)  all  executive  officers  and
directors  of OTEF II Corporation as a group.  Each person  named
in  the  table  has  sole voting and sole investment  power  with
respect  to each of the OTEF II BACs beneficially owned  by  such
person.

<TABLE>
-----------------------------------------------------------------------------
<CAPTION>
Name and Address of             Beneficial Ownership       Percentage of     
  Beneficial Owner                 No.  BACs <F1>       Outstanding BACs <F2>  
-----------------------------------------------------------------------------
<S>                                    <C>                     <C>
Leo E. Zickler <F3> <F4>                                                       
7200 Wisconsin Avenue, Suite 1100                                            
Bethesda, MD 20814                     163,031                 2.08%         
                                                                             
Francis P. Lavin <F3> <F4>                                                     
7200 Wisconsin Avenue, Suite 1100                                            
Bethesda, MD 20814                     169,131                 2.16%         
                                                                             
Robert B. Downing <F3> <F4>                                                    
7200 Wisconsin Avenue, Suite 1100                                            
Bethesda, MD 20814                      91,150                 1.16%         
                                                                             
Stephen P. Gavula, Jr. <F3>                                                   
8300 Greensboro Drive, Suite 970                                             
McLean, VA 22102                        23,151                 0.30%         
                                                                             
Scot B. Barker <F3>                                                           
1801 California Street                                                       
Denver, CO 80202                        13,261                 0.17%         
                                                                             
Mark E. Schifrin <F4>                                                         
7200 Wisconsin Avenue, Suite 100                                             
Bethesda, MD 20814                      78,920                 1.01%         
                                                                             
Marc B. Abrams <F4>                                                           
7200 Wisconsin Avenue, Suite 1100                                            
Bethesda, MD 20814                      63,606                 0.81%         
                                                                             
Richard R. Singleton <F4>                                                     
7200 Wisconsin Avenue, Suite 1100                                            
Bethesda, MD 20814                      49,997                 0.64%         
-----------------------------------------------------------------------------
All executive officers and                                                   
directors as a group (8 persons)       652,247                 8.32%         
-----------------------------------------------------------------------------
<FN>
<F1> Amount  of  beneficial  ownership  includes  options  to purchase  OTEF  
     II  BACs  granted to  directors  and  executive officers  of  OTEF  II 
     Corporation which have  vested  and  are exercisable  as of May 21, 1997.  
     Accordingly, Mr. Zickler  has 163,031  options vested and exercisable; 
     Mr. Lavin has  163,031 options  vested and exercisable; Mr. Downing has 
     82,150 options vested  and  exercisable; Mr. Gavula has 3,261  options  
     vested and  exercisable;  Mr.  Barker has  3,261  options  vested  and
     exercisable; Mr. Schifrin has 75,620 options vested and exercisable;   
     Mr. Abrams has 61,606 options vested and exercisable; and Mr. Singleton 
     has 47,997 options  vested  and exercisable.
<F2> All  percentages of OTEF II BACs were calculated to include options  to  
     purchase OTEF II BACs vested and  exercisable  for  those  individual 
     directors and executive officers of OTEF II Corporation who had such 
     options.
<F3> Indicates a director of OTEF II Corporation.
<F4> Indicates an executive officer of OTEF II Corporation.
</FN>
</TABLE>


<PAGE> 8

          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP
                                
                            FORM 10-K
                                
                      PART III (continued)
                                
   (c)  Changes in Control.  None.

Item 13.  Certain Relationships and Related Transactions.

   (a) and (b) Transactions with Management and Others and
Certain Business Relationships.
   
     Information responsive to this Item is contained  under  the
     heading  "Notes to Financial Statements" at pages 31  to  33
     of  the  1998  Annual  Report of  the  Registrant  which  is
     incorporated herein by reference.

   (c)  Indebtedness of Management.  None.

   (d)  Transactions with Promoters.  Not applicable.
                                
                             PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on
          Form 8-K.

   (a)  The following documents are filed as part of this Report.

               1.   Financial Statements.
                                                                             
        The  following financial statements and notes thereto are            
        contained  in the 1998 Annual Report and are incorporated            
        by reference into Part II, Item 8.                                   
                                                                             
                                                   Sequentially              
                                                     Numbered                
                                                      Page(s)                
                                                   -------------             
        Report of Independent Accountants.              21                   
                                                                             
                                                                             
        Balance Sheets as of December  31,                                   
        1998 and 1997.                                  22                   
                                                                             
        Statements  of  Income   for   the                                   
        years  ended  December  31,  1998,                                   
        1997 and 1996.                                  23                   
                                                                             
        Statement  of  Partners'   Capital                                   
        for  the years ended December  31,                                   
        1998, 1997 and 1996 for OTEF II.                24                   
                                                                             
        Statements of Cash Flows  for  the                                   
        years  ended  December  31,  1998,                                   
        1997 and 1996.                                  25                   
                                                                             
        Notes   to  Financial  Statements,                                   
        which   include  the   information                                   
        required   to   be   included   in                                   
        Schedule  IV - Mortgage  Loans  on                                   
        Real Estate.                                    26-45                
                                
                                                                             

<PAGE> 9

          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP
                                
                            FORM 10-K
                                
                      PART III (continued)


        2.   Financial Statement Schedules.

        All  other  financial  statement  schedules  are  omitted
        because  they  are inapplicable or because  the  required
        information  is included in the financial  statements  or
        notes thereto.

         3.   Exhibits  (listed according to  the  number
           assigned in the table in Item 601 of Regulation S-K).

        Exhibit No. 3 - Articles of Incorporation and Bylaws.

        a.Articles  of  Incorporation  for  OTEF  II  Corporation
          (incorporated  by reference from Exhibit  3(a)  to  the
          Registrant's  Registration Statement on Form  10  dated
          February 22, 1995).
          
        b.Bylaws     for   OTEF  II  Corporation (incorporated by 
          reference   from  Exhibit  3(b)  to  the   Registrant's 
          Registration   Statement  on Form 10 dated February 22, 
          1995).

        c.Articles   of   Incorporation   of   OTEF II   Assignor 
          Corporation (incorporated by  reference  from   Exhibit
          3(c)   to   the   Registrant's   Registration Statement 
          on Form 10 dated February 22, 1995).

        d.Bylaws of OTEF II Assignor Corporation (incorporated by 
          reference   from   Exhibit  3(d)  to  the  Registrant's  
          Registration Statement on Form  10  dated  February 22, 
          1995).

        Exhibit  No.  4 -  Instruments  defining  the   rights of 
        security holders, including indentures.

        a.Third   Amended  and  Restated  Agreement  of   Limited
          Partnership  of  Oxford  Tax  Exempt  Fund  II  Limited
          Partnership  (incorporated by reference  from  (Exhibit
          4(a)  to the registrant's quarterly report on form  10-
          Q/A for the quarter ended March 31, 1997.

        Exhibit No. 10 - Material contracts.

        a.BAC Holder Rights Agreement.

        b.Trust Indenture and Loan Agreement for Southridge-Oxford 
          Limited Partnership.
 
        c.Stipulation of Settlement filed with the U.S. District 
          Court for the District of Maryland on November 18, 1996.

        Exhibit No. 13  -  Annual report to security holders, etc.

        a.Annual  Report  for  the  year  ended December  31, 1998 
          ("filed"  only  to  the  extent  material  there from is 
          specifically incorporated by reference).

          (b)  Reports on Form 8-K.

                No  reports  on  Form 8-K were filed  during  the
                fourth quarter of 1998.

          (c)   The  list  of Exhibits required by  Item  601  of
                regulation S-K is included in Item 14(a)(3) above.

          (d)  Financial Statement Schedules.

          See Item 14(a)(2) above.


<PAGE> 10
                                
          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP
                                
                            FORM 10-K
                                
                      CROSS REFERENCE SHEET

    The  item  numbers and captions in Parts I, II, III,  and  IV
hereof  and  the  page  and/or pages in the referenced  materials
where the corresponding information appears are as follows:

                                                   Sequentially
                                                     Numbered
          Item                Reference Materials      Page(s)
-----------------------------------------------------------------
                                                           
1.  Business                  1998 Annual Report   pps 26-45

3.  Legal Proceedings         1998 Annual Report   pps 15-20 
                                                   and 26-45
5.  Market for Registrant's                         
    Partnership Interest and                       pps 14, 15-20,
    Related Matters           1998 Annual Report   and 26-47

6.  Selected Financial Data   1998 Annual Report   pp 14

7.  Management's Discussion                              
    and Analysis of Financial  
    Condition and Results  of  
    Operations                1998 Annual Report   pps 15-20 
                                                      
8.  Financial Statements and                         
    Supplementary Data        1998 Annual Report   pps 21-45 
   
11. Executive Compensation    1998 Annual Report   pp 33
                                                           
14. Exhibits, Financial                              
    Schedules and Reports on                        
    Form 8-K                  1998 Annual Report   pps 21-45 

                                





<PAGE> 11

          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP
                                
                            FORM 10-K
                                
                          EXHIBIT INDEX

(Listed according to the number assigned in the Exhibit Table in
Item 601 of Regulation S-K).

(13) 1998 Annual Report to Security Holders.

   Oxford Tax Exempt Fund II Limited Partnership's Report dated
December 31, 1998, follows on sequentially numbered pages 13
through 48 of this report.

(27) Financial Data Schedule.


<PAGE> 12


          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP
                                
                            FORM 10-K
                                
                           SIGNATURES

    Pursuant  to the requirements of Section 13 or 15(d)  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.

                               Oxford Tax Exempt Fund II Limited
                               Partnership

                       By:  Oxford Tax Exempt Fund II Corporation
                            Managing General Partner of the
                              Registrant
                                                                 
Date: 3/31/99          By:/S/ Richard R. Singleton
      -------             ---------------------------------------
                          Richard R. Singleton                   
                          Senior Vice President and              
                            Chief Financial Officer              
                                                                  
                                                                 
   Pursuant to the requirements of the Securities Exchange Act of
1934,  this report has been signed below by the following persons
on  behalf  of the Registrant and in the capacities  and  on  the
dates indicated.                                                 
                                                                 
                                                                  
                                                                 
Date: 3/31/99         By:/S/ Leo E. Zickler
      -------            ----------------------------------------            
                         Leo E. Zickler                                      
                         Chairman of the Board of Directors and              
                           Chief Executive Officer                           
                                                                             
                                                                             
                                                                             
Date: 3/31/99         By:/S/Francis P. Lavin                                 
      -------            ----------------------------------------
                         Francis P. Lavin                                    
                         Director and President                              
                                                                             
                                                                             
                                                                             
Date: 3/31/99         By:/S/Robert B. Downing                                
      -------            ----------------------------------------             
                         Robert B. Downing                                   
                         Director and Executive Vice President               
                                                                             
                                                                             
                                                                             
Date: 3/31/99         By:/S/Stephen P. Gavula, Jr.                           
      -------            ----------------------------------------            
                         Stephen P. Gavula, Jr.                              
                         Director                                            
                                                                             
                                                                             
                                                                             
Date: 3/31/99         By:/S/Scot B. Barker                                    
      -------            ----------------------------------------            
                         Scot B. Barker                                      
                         Director                                            

    No proxy material has been sent to the Registrant's security
holders.  The Partnership's 1998 Annual Report is expected to be
mailed to OTEF II BAC Holders before May 15, 1999.


                                
<PAGE> 13

          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP

                       1998 Annual Report





















          CONTENTS

          Selected Financial Data
          Report of Management
          Report of Independent Accountants
          Balance Sheets
          Statements of Income
          Statement of Partners' Capital
          Statements of Cash Flows
          Notes to Financial Statements
          Distribution Information
          General Partnership Information
          Instructions for Investors who wish to reregister or
            transfer OTEF II BACs


<PAGE> 14  

<TABLE>
--------------------------------------------------------------------------------------------------------------------------------
Selected Financial Data (in thousands, except per BAC)  (Restated for the 25-for-1 stock split which occurred on July 1, 1997)  
--------------------------------------------------------------------------------------------------------------------------------
<CAPTION>                                                                                                                       
                                                       OTEF II<F3>                                   ||          OTEF<F1>       
                                ---------------------------------------------------------------------||-------------------------
                                             For the years ended December 31,           |Seven months||Five months|For the year
                                --------------------------------------------------------|   ended    ||   ended   |    ended    
                                                                               Pro Forma|December 31,||  May 31,  | December 31,
FINANCIAL HIGHLIGHTS              1998              1997               1996     1995<F5>|  1995<F3>  ||   1995    |    1994     
----------------------------------------------------------------------------------------|------------||-----------|-------------
<S>                             <C>               <C>               <C>        <C>      |  <C>       ||  <C>      |   <C>       
Total Assets                    $309,086          $270,663          $228,733   $174,034 |  $174,034  ||  $163,856 |   $168,568  
Investment in Tax-Exempt                                                                |            ||           |             
  Securities                    $213,900          $217,159          $215,529   $164,000 |  $164,000  ||  $153,032 |   $158,599  
Investment in Tax-Exempt                                                                |            ||           |             
  Securities Held in Trust      $ 62,565          $ 38,820          $      0   $      0 |  $      0  ||  $      0 |   $      0  
Total Revenue                   $ 23,151          $ 19,130          $ 19,762   $ 16,626 |  $  9,610  ||  $  2,452 |   $  4,137  
Net Income                      $ 19,283          $ 16,642          $ 14,912   $ 15,210 |  $  8,369  ||  $  2,277 |   $  3,727  
Net Income Allocated to                                                                 |            ||           |             
BAC Holders                     $ 18,509<F7>      $ 15,893<F7>      $ 14,614   $ 14,906 |  $  8,202  ||  $  2,232 |   $  3,652  
Net Income per BAC              $  2.576<F7>      $  2.188<F7>      $  1.948   $  1.988 |  $  1.094  ||  $  0.298 |   $  0.487  
Net Income per BAC -                                                                    |            ||           |           
  assuming dilution             $  2.556<F8>      $  2.180<F8>      $      0   $      0 |  $      0  ||  $      0 |   $      0
Municipal Income (Tax Basis)    $ 18,168          $ 16,983          $ 14,644   $ 16,210 |  $  8,369  ||  $  7,841 |   $ 16,911
Municipal Income Allocated                                                              |            ||           |           
  to BAC Holders (Tax Basis)    $ 17,422<F6>      $ 16,041<F6>      $ 14,351   $ 15,886 |  $  8,202  ||  $  7,687 |   $ 16,573
Municipal Income per BAC                                                                |            ||           |           
  (Tax Basis)                   $  2.425<F6><F7>  $  2.233<F6><F7>  $  1.914   $  2.118 |  $  1.094  ||  $  1.025 |   $  2.209
Cash Distributions per BAC<F2>  $  2.025<F7>      $  1.942<F7>      $  1.904   $  1.904 |  $  1.428  ||  $  0.476 |   $  1.800
Weighted  Average OTEF II                                                               |            ||           |           
  BACs Outstanding<F9>             7,185<F7>         7,264<F7>         7,500      7,500 |     7,500  ||     7,500 |      7,500
Number of BAC Holders             15,075            16,009            15,678     15,061 |    15,061  ||    15,249 |     15,359
=====================================================================================================||=========================
<CAPTION>                                                                                            ||                         
                                                       OTEF II<F3>                                   ||          OTEF<F1>       
                                ---------------------------------------------------------------------||-------------------------
                                             For the years ended December 31,           |Seven months||Five months|For the year 
                                --------------------------------------------------------|   ended    ||   ended   |    ended    
RECONCILIATION OF NET                                                          Pro Forma|December 31,||  May 31,  | December 31,
INCOME TO MUNICIPAL INCOME        1998              1997               1996     1995<F4>|    1995    ||   1995    |    1994     
----------------------------------------------------------------------------------------|------------||-----------|-------------
<S>                             <C>               <C>               <C>        <C>      |  <C>       ||  <C>      |   <C>       
Net Income per financial                                                                |            ||           |             
  statements (GAAP)             $ 19,283          $ 16,642          $ 14,912   $ 16,210 |  $  8,369  ||  $  2,277 |   $  3,726  
Add:                                                                                    |            ||           |             
  Equity method adjustments:                                                            |            ||           |             
  -- Equity Income <F3>         $      0          $      0          $      0   $      0 |  $      0  ||  $ (2,305)|   $ (3,949) 
  -- Interest received <F3>     $      0          $      0          $      0   $      0 |  $      0  ||  $  7,869 |   $ 18,591  
  Taxable interest income           (837)<F10>    $      0          $      0   $      0 |  $      0  ||  $      0 |   $      0  
  Accrued base interest/                                                                |            ||           |             
   (reduction)/other            $   (278)<F5>     $    341<F5>      $ (268)<F5>$      0 |  $      0  ||  $      0 |   $ (1,457) 
----------------------------------------------------------------------------------------|------------||-----------|-------------
Municipal income,                                                                       |            ||           |             
 net for tax reporting purposes $ 18,168          $ 16,983          $ 14,644   $ 16,210 |  $  8,369  ||  $  7,841 |   $ 16,911  
================================================================================================================================
<FN>                                                                                                                            
<F1>   Prior to June 1, 1995, OTEF accounted for its investment in the Operating Partnerships under the equity method, which    
       treated interest paid by the Operating Partnerships as a reduction in its investment, and also recorded as an increase or
       reduction in its investment its equity interest in the aggregate income or losses of the Operating Partnerships.         
<F2>   See page 46 for analysis of historical quarterly distributions.                                                          
<F3>   Effective June 1, 1995, with the transfer of all units of OTEF to OTEF II, OTEF II began accounting for its investments   
       in Existing MRBs in accordance with Statement of Financial Accounting Standards No. 115- Accounting for Certain          
       Investments in Debt and Equity Securities ("SFAS No. 115"), as more fully described in the Notes to Financial Statements.
       For federal income tax purposes, OTEF II is considered a continued entity.                                               
<F4>   The unaudited Pro Forma financial information reflects the adoption of SFAS No. 115 as of January 1, 1995.  Pro forma    
       total revenue and net income does not reflect $1 million in nonrecurring Oxford advances made to the Operating           
       Partnerships which used these funds to pay OTEF in January 1995, which is reflected in the Net Income per financial      
       statements (GAAP).                                                                                                       
<F5>   For 1996 represents (i) payment of legal fees in connection with the settlement of  class  action  litigation   totaling    
       $2.5 million expensed in 1996, but capitalized for income tax purposes in 1997; (ii) a portion of the Partnership's      
       1996 expenses,  totaling approximately $1 million that was not expensed in 1996 for income tax purposes; and (iii)       
       write-off of prior years' tax accrual totaling $3.8 million.  For 1997 this amount represents the tax capitalization of 
       class action litigation costs in conjunction with the appeal.  For 1998 represents the reimbursement of 1996 and 1997     
       bond refunding costs which had been expensed for financial statement purposes and deferred  for income tax purposes.    
<F6>   Municipal income does not reflect capital losses of $3.6 million and $3.8 million in 1998 and 1997, respectively, from 
       Financing Transactions (see page 16).
<F7>   On April 1, 1997, 314,675 BACs were converted to 12,587 SQBs.  Amounts presented for 1998 and 1997 are for BACs only.   
<F8>   Options granted but not exercised in 1997 are dilutive.  The weighted average BACs outstanding assuming dilution is 
       7,241,414 in 1998 and 7,283,795 in 1997.                                                                              
<F9>   Restated to reflect the 25-for-1 stock split effective July 1, 1997.                                                  
<F10>  Taxable interest income earned in 1998 on OTEF II new acquisitions from taxable interest on loans in the amount of 
       approximately $0.8 million is not included in municipal income.                                                         
</FN>

</TABLE>

<PAGE> 15

----------------------------------------------------------------------------
Report of Management
----------------------------------------------------------------------------

     The   following  report  provides  additional  information  about   the
financial    condition   of   Oxford   Tax   Exempt    Fund    II    Limited
Partnership,   a   Maryland   limited  partnership   ("Oxford   Tax   Exempt
Fund   II,"   "OTEF  II,"  or  the  "Partnership"),  as  of   December   31,
1998,  and  its  results  of  operations  and  cash  flows  for  the  period
then   ended.    This   report  and  analysis  should   be   read   together
with   the   financial  statements  and  related  notes  thereto   and   the
selected    financial   data   appearing   elsewhere    in    this    Annual
Report.

General Business

     OTEF   II   is   a   publicly-traded  partnership  (AMEX:   OTF)   that
invests    in   tax-exempt   bonds   issued   to   finance   high    quality
apartment   and   senior   living/health   care   communities,   with    the
objective     of     producing    increasing    income     and     quarterly
distributions    for    its   shareholders.    These    distributions    are
primarily exempt from federal income taxation.
     While   OTEF  II  acquires  principally  tax-exempt  bonds  and   other
debt   secured   by   these  investment  properties,  its   investment   and
operational   focus   is  similar  to  that  of  an   equity   real   estate
investment   trust   ("REIT").   Like  an  equity  REIT,   OTEF   II   seeks
equity-like    returns   since   its   debt   investments   are    generally
structured   to  capture  most  of  a  property's  projected  increases   in
cash   flow   and   appreciation  in  the  form   of   increasing   interest
payments.    Also,  like  a  REIT,  OTEF  II  does  not  pay  income   taxes
at the company level.

     OTEF  II's  investments  are  generally  structured  to  give  OTEF  II
or    its    affiliates   significant   rights   regarding   property    and
financing    decisions.     Typically,    affiliated    entities     acquire
title  to  the  properties  or  act  as  a  joint  venture  partner  with  a
developer.    With   intensive   asset  management,   OTEF   II   seeks   to
maximize the economic growth achieved by these properties.

     Unlike  equity  REITs,  however,  investments  made  by  OTEF  II   are
structured   in   a   manner   designed  to   produce   tax-exempt   income,
which    can    increase    substantially   from   the    economic    growth
achieved   by  the  investment  properties.  To  obtain  income   from   its
investments   that   is  primarily  tax-exempt,  OTEF  II   generally   will
acquire   tax-exempt  bonds  or  other  debt  secured  by  such   properties
and,   because  the  federal  tax  laws  prevent  a  property   owner   from
receiving   tax-exempt   interest  income  on   bonds   that   finance   its
property,   an   affiliated  but  unrelated  entity   will   acquire   title
to,   or   obtain   control   over,  the  real   estate.    The   tax-exempt
bonds   or   other  debt  acquired  by  OTEF  II  will  be   structured   or
restructured   in  a  manner  such  that  bonds  or  other  debt   will   be
classified   as   indebtedness  of  the  owner  of  the  real   estate   for
federal    income   tax   purposes,   and   most   of   any   increase    in
operating    income   and   appreciation   realized   by   the    investment
property   will   be  captured  by  OTEF  II  as  interest   on   the   debt
secured by such property.

     Similar   to   many   equity  REITs,  OTEF  II   distributes   to   its
shareholders  most  but  not  all  of its  cash  flow,  so  as  to  maintain
cash    reserves    for    future   quarterly   distributions    or    other
purposes.    OTEF   II's  payout  ratio,  or  percentage   of   net   income
per   BAC,  that  is  distributed,  varies  from  time  to  time.    It   is
currently   approximately  80%  of  net  income  per  BAC.   Further,   OTEF
II    may   employ   moderate   leverage   to   enhance   its   return    on
investment.    OTEF   II's   leverage  level  is   currently   approximately
15.4%  of OTEF  II's  total  assets,  or  22.4% of OTEF  II's  total  assets
if   entities   in   which   OTEF   II  has   made   a   subordinated   debt
investment are consolidated.

Recent Developments

     Distribution   for   the   Quarter  ended  December   31,   1998.    On
December    16,   1998,   the   Managing   General   Partner   declared    a
distribution   for   the   quarter  ended   December   31,   1998   in   the
amount   of  $0.51  per  BAC,  and  $12.38  per  Status  Quo  BAC   ("SQB").
Distributions   for   the  fourth  quarter  were  paid   on   February   12,
1999   to   BAC   Holders  and  SQB  Holders  of  record  on  December   31,
1998.    For   BAC  Holders,  this  distribution  is  in  the  same   amount
as   the   second   and  third  quarters  of  1998  and  represents   a   3%
increase   in   the  amount  of  the  distribution  paid   for   the   first
quarter of 1998.

     Investments   made  under  the  Liquidity  &  Growth  Plan   in   1998.
During    1998,    OTEF   II   closed   several   investment    transactions
totaling      approximately     $40.1     million.       Two      investment
transactions    (Jacaranda    and    Summerwalk)    involved,     in     the
aggregate,   the   acquisition  of  $4.2  million   of   subordinated   tax-
exempt   bonds   and   $10.2   million   of   grantor   trust   certificates
representing   taxable   securities.    OTEF   II   is   working   on   bond
refunding   and   refinancing  transactions  for   the   senior   tax-exempt
bonds    associated    with   these   properties    ($11.8    million    for


<PAGE> 16

Jacaranda   and   $10   million  for  Summerwalk),   which   are   currently
held   by   third  parties.   The  letters  of  credit  that  secure   these
bonds   expire   on  August  15,  1999  for  Jacaranda  and   December   15,
2000   for  Summerwalk.  For  OTEF  II  to  protect  its  investment,  these
letters   of   credit   must   be  replaced  or,  alternatively,   OTEF   II
must    purchase    the   senior   bonds.    Based   on   its    preliminary
discussions,      the      Managing     General     Partner      anticipates
consummating    refunding    or   refinancing   transactions    for    these
properties  where  the  requirement  to  maintain  letters  of   credit   is
eliminated   and   the   bonds  are  refinanced   or,   in   the   case   of
Summerwalk,    possibly   acquired   by   OTEF   II    as    part    of    a
refinancing,   although   no   assurances   can   be   given   that    these
transactions can be consummated in a timely manner.

     OTEF   II   also  completed  tax-exempt  bond  refunding   transactions
for    Carpenter   and   Dallas.    In   these   transactions,    OTEF    II
acquired   an   aggregate   of  $24.4  million   of   tax-exempt   refunding
bonds,   and   advanced   a   total  of  $1.6  million   of   taxable   loan
proceeds   to  the  owners  of  the  properties  that  secure   this   debt.
See Note 7 to Financial Statements.

     BAC   Repurchase   Program.   On  October  30,   1998,   the   Managing
General   Partner  authorized  the  repurchase,  from  time  to   time,   of
up   to  250,000  shares  of  BACs.   OTEF  II  may  purchase  BACs  in  the
open   market   or   through   privately   negotiated   transactions.    The
timing   and   amount   of  BACs  purchased  will  be   dependent   on   the
availability   of   BACs   and  other  market   factors.    OTEF   II   will
purchase   BACs  only  to  the  extent  that  they  may  be   purchased   at
favorable   prices.    Under   this  program,   OTEF   II   acquired   2,000
BACs   in   December   1998   for   approximately   $0.05   million.    Such
assets are reflected in other assets on the Balance Sheet.

Liquidity and Capital Resources

      To    pursue    additional   investment   opportunities,    OTEF    II
requires   additional   capital  from  time  to  time.    In   addition   to
proceeds    from    financings,    OTEF    II    may    generally    acquire
additional   investments  ("New  Assets"):   (i)  from   the   proceeds   of
sales   or   other   dispositions  of  Original  Refunding  Bonds   (defined
below)   and  the  Existing  MRBs  (as  defined  below)  and  the   proceeds
from   principal   payments   with  respect  to   the   Original   Refunding
Bonds   (except   for   the   portion  of   such   proceeds   allocable   to
SQBs),   as   well   as  bonds  issued  to  refund  any   tax-exempt   bonds
acquired   by   OTEF  II  pursuant  to  the  Liquidity  and   Growth   Plan;
(ii)   from   the   proceeds  of  sales  or  other   dispositions   of   New
Assets   and   the  proceeds  from  principal  payments  with   respect   to
New   Assets;   (iii)   from  the  proceeds  of  issuances   of   additional
equity    securities,   including   additional   BACs   or   other   limited
partnership   interests   in   OTEF   II;   (iv)   by   issuing   additional
equity   securities  in  exchange  for  New  Assets;  or  (v)  by  borrowing
funds from lenders or by issuing evidences of indebtedness.

     Current   Position.    OTEF  II  uses  its  cash   receipts   primarily
for   distributions   to   BAC  Holders,  SQB  Holders   and   its   General
Partners,   to   pay   administrative   expenses,   and   to   acquire   New
Assets    and    pay   the   costs   and   expenses   relating    to    such
transactions.   As  of  December  31,  1998,  OTEF  II  held   approximately
$18    million   in   cash   and   cash   equivalents,   an   increase    of
approximately   $6.3  million,  or  approximately  54%,   from   the   $11.7
million   in   cash   and  cash  equivalents  held  as   of   December   31,
1997.    The   increase  in  OTEF  II's  cash  and  cash   equivalents   was
primarily    the    result    of    two   financing    transactions    which
generated   $20.4  million  in  cash,  and  distributions  to  BAC   Holders
of   an  amount  that  is  less  than  the  net  income  allocable  to   BAC
Holders.    Total   liabilities  of  OTEF   II   shown   on   this   balance
sheet   increased   to  approximately  $52  million  as  of   December   31,
1998   from   approximately  $34  million  at  December   31,   1997.    The
increase   in  liabilities  is  due  to  the  increase  in  financing   debt
discussed   below,   and   the  3%  increase  in   quarterly   distributions
offset   by   a  reduction  in  accounts  payable  and  operating  expenses.
During   the  second  quarter  of  1998,  OTEF  II  made  a  final   payment
in    the    amount   of   $1.5   million   to   plaintiff's   counsel    in
connection    with   the   OTEF   II   litigation   discussed    in    prior
reports.


<PAGE> 17

     Financing   Transactions.   OTEF  II  seeks  to  enhance  its   overall
return   on   investment   and   to  generate  proceeds   which   facilitate
the    acquisition    of    New   Assets.    OTEF   II    has    securitized
approximately   $62.6   million  of  its  Series  A   Bonds   by   assigning
these  Series  A  Bonds  to  a  Merrill  Lynch  affiliate  which,  in  turn,
deposited   them   into   trusts,  including   two   transactions   competed
during    1998.     The    trusts,   in   turn,   sold   to    institutional
investors   senior,   floating  rate  securities  credit   enhanced   by   a
Merrill    Lynch   affiliate.    These   senior   securities   have    first
priority   on   the  debt  service  payments  related  to   the   Series   A
Bonds.    OTEF  II  acquired  all  the  subordinated  interests   in   these
trusts,   aggregating   approximately  $15   million,   and   received   the
proceeds,   net   of  transaction  costs  from  the  sale  of   the   senior
securities.    OTEF   II   has   certain   rights   to   repurchase   and/or
refinance   the   Series   A   Bonds   and   to   repurchase   the    senior
securities   and,   therefore,  retains  a  level  of   control   over   the
Series   A   Bonds.    These   securitization  transactions   provide   low-
cost   financing   for   OTEF  II's  growth.   The  portion   of   the   net
proceeds   from   these   transactions  that  is   not   invested   in   New
Assets   is   temporarily  invested  in  liquid  tax-exempt   money   market
securities.

     In   connection  with  these  transactions,  OTEF  II   converted   the
interest   rate   mode   on   the  Series  A   Bonds   involved   in   these
transactions   from  an  annual  reset  to  weekly  floaters.    On   August
22,   1997,   and   September  21,  1998,  OTEF  II   purchased   three-year
interest   rate   caps   on   a  notional  amount   of   approximately   $27
million   and  $30  million,  respectively,  to  minimize  the  effects   of
interest    rate   volatility.    Under   these   arrangements,    if    the
average   short-term,  tax-exempt  interest  rates  during   the   term   of
the    cap    increase   above   a   specified   level   (6%    and    4.5%,
respectively),    the    counter-party   to   the    interest    rate    cap
transaction  is  required  to  pay  directly  to  OTEF  II  the  amount   by
which such rates exceed the specified level.

      For    financial   statement   purposes,   these   transactions    are
accounted   for   as   financing   transactions.    The   amount   of    the
Series    A    Bonds    financed,   approximately    $62.6    million,    is
reflected   as  Securities  held  in  Trust,  the  net  cash  proceeds   are
classified    as   Cash   and   Cash   Equivalents   and   the    difference
between   the   principal  amount  of  the  Series  A  Bonds  financed   and
the   principal   amount   of  the  subordinated   interests   acquired   by
OTEF   II   is   classified  as  financing  debt  on   OTEF   II's   balance
sheet.    The   aggregate   financing  debt  at  December   31,   1998   was
approximately   $47.6   million,   compared   to   $27.2   million   as   of
December    31,    1997.     OTEF    II's    financing    debt    represents
approximately   15.4%  of  OTEF  II's  total  assets  (or  22.4%   of   OTEF
II's   total  assets  if  the  entities  in  which  OTEF  II  has   made   a
subordinated   debt   investment   were   consolidated   with   OTEF    II).
Due    to   the   credit   enhancement   provided   by   a   Merrill   Lynch
affiliate   in   connection  with  the  securitization   transactions,   and
favorable    underwriting   characteristics   (generally,    low    loan-to-
value   and  high  debt  coverage),  this  financing  debt  bears   interest
at  the  BMA  weekly  floating  bond  index  plus  approximately  80  to  85
basis   points   (including   credit  enhancement,   trustee   and   related
fees).    This  rate  averaged  4.63%  from  the  date  of  closing  through
December   31,  1997  and  4.33%  for  the  twelve  months  of  1998.    The
credit   enhancement  associated  with  approximately   $27.2   million   of
this   financing  debt  must  be  renewed  or  refinanced  by   August   21,
1999.    The   remaining   $20.4  million  of   financial   debt   must   be
renewed   or   refinanced   by   February  19,  2000   (approximately   $9.6
million)   and   April  15,  2000  (approximately  $10.8  million).    While
OTEF   II   is   not   an  obligor  and,  therefore,  is  not   liable   for
repayment   of   this  financing  debt,  the  Series  A  Bonds   (in   which
OTEF   II   owns   approximately  $15  million  of  subordinated   interests
through   the   trusts)  are  in  effect  collateral  for   this   financing
debt.      Based    on   its   preliminary   discussions   with    financing
sources,   the  Managing  General  Partner  believes  that  OTEF   II   will
be   able   to   extend   the   credit   enhancement   or   refinance   this
financing debt, although no assurances can be given.

     Costs   associated   with  these  financing  transactions   are   being
amortized   over   ten   years  for  financial   statement   purposes,   and
costs   associated   with  the  interest  rate  cap  are   being   amortized
over  the  life  of  each  interest  rate  cap  agreement,  which  is  three
years.    For   federal   income  tax  purposes,  these   transactions   are
treated  as  sales  by  OTEF  II  of  the  applicable  Series  A  Bonds  and
a purchase of subordinated interests in the trusts.

     Original   Refunding   Bonds.    OTEF   II   has   acquired   refunding
bonds   ("Original   Refunding   Bonds")   for   twelve   of   the   fifteen
Existing   MRBs,   representing  approximately  88%  of  the   face   amount
of   the   original   bond   portfolio.   The   Original   Refunding   Bonds
currently   held   by   OTEF  II  consist  of  senior   bonds   ("Series   A
Bonds")    and    subordinated    bonds   ("Series    B    Bonds").     This
senior/subordinated   structure   has   allowed   OTEF   II   to   undertake
several    financing   transactions   involving   the   Series    A    Bonds
allocable   to   BAC  Holders  ("Liquidity  Assets").   OTEF   II   retained
the   related   Series  B  Bonds  for  the  benefit  of  the  BAC   Holders,
and  retained  both  the  Series  A  Bonds  and  the  Series  B  Bonds  that
are   designated  as  Status  Quo  Assets  and  held  for  the  benefit   of
SQB Holders.

    Series  A  Bonds.   The  term  of  each  Original  Refunding  Bond  and,
accordingly,  each  Mortgage  Loan  is  30  years  following  the  date   of
refunding.    The   Series   A   Bonds  require   interest   only   payments
during   the   first   three   years  and,  thereafter,   are   subject   to
annual    sinking    fund   redemptions   that   will   result    in    full
amortization   of   the  Series  A  Bonds  during  the   27-year   remaining
term.    This  annual  sinking  fund  redemption  begins  April   15,   2000
for   all   twelve  Series  A  Bonds.   The  Managing  General  Partner   is
considering   whether   the  elimination  of  this   annual   sinking   fund
redemption    would    facilitate    financing    transactions     involving
these assets or would otherwise be advantageous to OTEF II.


<PAGE> 18

     Series   A   Bond   Interest  and  Principal.   The  Series   A   Bonds
require   pre-determined  annual  sinking  fund  redemptions  based   on   a
27-year    amortization   schedule   beginning   in   the    fourth    year,
calculated  with  an  assumed  rate  of  interest  of  5.6%  per  year.   In
the   annual   reset  mode,  Series  A  Bond  interest  was  set   initially
at   closing  of  the  refundings  and  is  reset  annually  thereafter   at
a  market  rate  based  upon  a  percentage  of  the  then  prevailing  one-
year   U.S.   Treasury  Bill  rate,  with  a  maximum  rate  of   5.6%   per
annum.   The  initial  interest  rate  on  the  Series  A  Bonds  that  have
been  issued  to  date  was  4.9%.   The  interest  rate  on  seven  of  the
Series  A  Bonds  retained  by  OTEF  II  was  reset  on  November  1,  1998
to   3.75%;  the  interest  rate  on  three  Series  A  Bonds  retained   by
OTEF   II  was  reset  on  December  1,  1998  to  4.01%.   On  January   1,
1999,  the  interest  rate  on  one  Series  A  Bond  retained  by  OTEF  II
was   reset   to  4.03%,  and  the  interest  rate  on  another   Series   A
Bond  was  reset  on  March  1,  1999  to  4.32%.   The  interest  rate   on
the    Series    A    Bonds   involved   in   the   financing   transactions
described   above   was   converted  from   annual   reset   to   a   weekly
floating   rate  based  on  a  spread  over  the  BMA  index.    This   rate
averaged  4.63%  from  the  date  of  closing  through  December  31,   1997
and  4.33%  for  the  twelve  months  of  1998.   Upon  a  remarketing,  the
Series  A  Bonds  may  be  converted  to  a  different  interest  rate  mode
(fixed   or   floating)  and  the  interest  rates  may   be   modified   at
that   time   to   reflect  the  prevailing  market   interest   rates   for
whatever rate mode and remaining term is then applicable.

     Series   B   Bonds.    The   term  of   each   Series   B   Bond   and,
accordingly,  each  Mortgage  Loan  is  30  years  following  the  date   of
refunding.

     Series   B   Bond   Interest  and  Principal.   The  Series   B   Bonds
accrue   interest   equal  to  the  product  of  the   Combined   Rate   (as
defined   below)   multiplied  by  the  total  combined  principal   balance
of   the  Series  A  Bonds  and  the  Series  B  Bonds  for  each  Operating
Partnership,   less   the  interest  payable  on  the   related   Series   A
Bonds;   the   resulting  amount  of  interest  divided  by  the   principal
balance  of  the  Series  B  Bonds  equals  the  interest  accrual  rate  on
the   Series   B   Bonds.   Interest-only  is  payable  on  the   Series   B
Bonds   to   the   extent   of  available  cash  flow   of   the   Operating
Partnership,   with   the   entire  principal   balance   and   any   unpaid
interest due at maturity.

     Combined   Rate.   The  Combined  Rate  represents  that   portion   of
each   Property's   projected  Cash  Flow  Before  Debt  Service   ("CFBDS")
for   each   year  (projected  at  the  time  of  the  refunding   of   each
Existing   MRB)   that  may  be  applied  to  interest   on   the   combined
Series   A   Bonds   and  Series  B  Bonds.   See  Note   7   to   Financial
Statements   for  a  schedule  of  the  Combined  Rates  of   the   Original
Refunding Bonds over the next 10 years.

    Other   Sources.   In  connection  with  the  closing  of  the  Original
Refunding    Bonds,   the   applicable   Operating   Partnerships    entered
into   certain   pooling   agreements  which  may  provide   under   certain
circumstances   additional  sources  of  funds  to  enable   them   to   pay
their   respective   debt   service  on  the  Series   A   Bonds   and   the
Series  B  Bonds  and  related  fees  and  expenses.  As  of  December   31,
1998,   the  aggregate  amount  of  net  excess  cash  flow  held   in   the
Operating    Partnership   escrows   was   approximately    $2.2    million,
including   deposits   from   December's  cash   flow   compared   to   $1.1
million at the end of 1997.

    During   1998,   Oxford  advanced  to  certain  Operating   Partnerships
all    remaining    treasury   strip   proceeds    in    the    amount    of
approximately   $1.34   million.   Of  this  amount,   approximately   $0.01
million   was   advanced   to   the  Allview   operating   partnership   and
$0.45    million    to    the    Colonel    operating    partnership.     An
additional    $0.28    million   was   advanced   to    various    Operating
Partnerships   to   help  defray  their  respective  bond  refunding   costs
that   were   previously   incurred.    The   final   $0.51   million    was
advanced   to  the  San  Bruno  operating  partnership  to  enable   it   to
pay   a   portion  of  the  deferred  bond  interest  owed   to   OTEF   II,
which OTEF II reported as income in 1998.

     Prior   to   1998,  certain  of  the  original  Operating  Partnerships
made   additional   interest   payments   on   their   Existing   MRBs   and
funded   certain  costs  associated  with  the  bond  refundings  from   two
additional     sources:     advances    made    by    Oxford     Development
Corporation     ("Oxford")    pursuant    to    its    operating     deficit
guarantees,    and    obligations    of    Oxford    and    the    Operating
Partnerships     under    the    Yield    Maintenance    Reserve     ("YMR")
Agreement.    At   March   4,   1997  all  such   obligations   were   fully
satisfied.

Existing MRBs

    As  of  December  31,  1998,  OTEF II held  Existing  MRBs  for  two  of
the    Operating    Partnerships.     Although    the    Managing    General
Partner   is   continuing  its  efforts  to  refund  these  Existing   MRBs,
no   assurances   can   be  given  that  these  bonds   can   or   will   be
refunded.     As    of    December   31,    1998,    the    two    Operating
Partnerships   had  cumulative  unpaid  Base  Interest   and   interest   on
interest   at   8.25%  per  annum,  compounded  monthly,  of   approximately
$5.2   million   with   respect  to  these  Existing   MRBs.    The   unpaid
Base   Interest  is  not  accrued  in  the  financial  statements  of   OTEF
II.


<PAGE> 19

Status Quo BACs

     Following   receipt   of   an  Information  Memorandum   furnished   on
December   2,  1996  to  BAC  Holders,  approximately  4.2%   of   the   BAC
Holders   made   a  timely  election  to  convert  their   BACs   to   SQBs.
Effective   April   1,   1997,  OTEF  II  issued  the   SQBs,   representing
12,587    shares,    in   uncertificated,   book-entry   form.     Effective
July  31,  1997,  OTEF  II  redeemed 5,484  SQBs  at  $540  per  SQB  for  a
total    of   approximately   $3.0   million.    During   1998    OTEF    II
redeemed  an  additional  122  SQBs  at  the  price  of  $540  per  SQB  and
25  SQBs  at  the  price  of  $550  per  SQB.   As  of  December  31,  1998,
there were 6,946 SQBs outstanding.

     On   February   8,   1999,  OTEF  II  distributed   to   existing   SQB
Holders   an   offering   circular   describing   a   voluntary   offer   to
exchange  BACs  for  SQBs  on  a  25-for-1  basis.   The  offer  expires  on
May   30,   1999,   unless   extended.    The   Managing   General   Partner
believes   the   exchange   offer   is   advantageous   to   OTEF   II   for
several   reasons.    First,  elimination  of  SQBs  would   simplify   OTEF
II's   capital   structure  since  they  represent   a   small,   non-traded
class   of  equity.   Second,  the  inability  of  OTEF  II  to  pledge   or
otherwise   finance  a  portion  of  certain  assets  that  are   segregated
for   the  benefit  of  SQB  Holders  can  complicate  the  structuring   of
financing   transactions   undertaken   in   connection   with   OTEF   II's
Liquidity    and    Growth    Plan.    Finally,   while    SQBs    represent
approximately   a  2%  interest  in  OTEF  II's  equity,  they   require   a
substantially   greater  percentage  of  the  time  and   effort   of   OTEF
II's    accounting   and   reporting   operations,   as   well   as   senior
management.

     If   all  SQB  Holders  elected  to  exchange  their  SQBs  for   BACs,
OTEF   II   would   issue  an  additional  173,650  BACs,  or  approximately
2.4%  of  the  issued  and  outstanding  BACs.   This  would  increase   the
total   number  of  issued  and  outstanding  BACs  to  7,356,850   (without
giving   effect   to   outstanding   options).    Any   dilution   of    the
existing   BACs,   however,   would  be  immaterial   because   the   assets
currently   segregated  for  SQB  Holders,  along  with  the   income   they
generate, would be released to the benefit of BAC Holders.

     The   Information  Memorandum  states  that,  subject  to  receipt   of
a    fairness    opinion   from   OTEF   II's   independent   real    estate
consultant,   non-tendered   unexchanged   SQBs   will   be   purchased   or
redeemed  by  OTEF  II  at  such  time  as  the  Managing  General   Partner
believes  that  it  would  be  in  the  best  interests  of  OTEF   II   and
the   holders  of  the  non-tendered  SQBs,  but  in  no  event  later  than
December   31,   2006,   which   date  may   be   extended   under   certain
circumstances.   The  purchase  or  redemption  price  will  be   the   fair
market  value  of  the  Status  Quo  Assets  at  the  time  of  purchase  or
redemption,   less  the  costs  of  sale.   As  noted  above,   the   Status
Quo   Assets   includes   the   Series  A  Bonds,   Series   B   Bonds   and
Existing   MRBs   allocable  to  SQB  Holders,  not  the   underlying   real
estate.

Results of Operations

   OTEF II's Operations.

      1998   versus   1997.    Distributions   to   Partners   amounted   to
approximately   $15.2   million,  or  $2.025  per   BAC   and   $49.52   per
SQB.    For  financial  statement  purposes,  Net  Income  and  Net   Income
per   BAC   were   approximately  $19.3  million  and  $2.58,  respectively,
for    the    year    ended   December   31,   1998,    as    compared    to
approximately  $16.6  million  and  $2.19,  respectively,   for   the   year
ended   December  31,  1997.   Net  income  per  BAC  for  the  year   ended
December   31,  1998,  assuming  dilution  for  stock  options  granted   in
1997, was $2.56 and  $2.18 for 1997.

      OTEF    II's    revenues   for   1998   reflect   an    increase    of
approximately   $4  million,  or  21%,  compared  to  1997   due   primarily
to   the   Dallas,   Carpenter,  Jacaranda  and   Summerwalk   transactions,
but   also   from   the  increased  interest  payments   on   the   Original
Refunding   Bonds   and  the  Existing  MRBs.   In  1998,   OTEF   II   also
received   an  additional  $0.51  million  from  the  San  Bruno   operating
partnership   representing   payment   of   deferred   interest    and    an
expense   reimbursement  in  the  amount  of  $0.26   million   representing
bond   refunding   costs  previously  advanced  by  OTEF   II   to   certain
operating partnerships.


<PAGE> 20

     For   1998,   OTEF  II's  expenses  increased  by  approximately   $1.4
million,   or   55%,   compared  to  1997.   This   increase   in   expenses
reflects    nearly   a   $1.2   million   increase   in   finance   interest
expense   and   approximately  $0.2  million  increase  in  advisory   fees,
compared to 1997.

      1997   versus   1996.    Distributions   to   Partners   amounted   to
approximately   $14.7   million,  or  $1.942  per   BAC   and   $36.50   per
SQB.    For  financial  statement  purposes,  Net  Income  and  Net   Income
per   BAC   were   approximately  $16.6  million  and  $2.19,  respectively,
for    the    year    ended   December   31,   1997,    as    compared    to
approximately  $14.9  million  and  $1.95,  respectively,   for   the   year
ended   December  31,  1996.   Net  income  per  BAC  for  the  year   ended
December   31,  1997,  assuming  dilution  for  stock  options  granted   in
1997, was $2.18.

       OTEF    II's    revenues   for   1997   reflect   a    decrease    of
approximately   $0.6   million,   or   3%,   from   1996.    Due   to    the
refunding   of   ten   Existing  MRBs  in  1996,   OTEF   II   changed   its
accounting   method  for  these  assets  from  cash  to   accrual.    As   a
result,   OTEF   II's  revenues  for  1996  reflect  interest   income   for
13   months  with  respect  to  the  Original  Refunding  Bonds,   and   for
1997   OTEF  II's  revenues  reflect  only  12  months  of  interest  income
with respect to the Original Refunding Bonds.

     For   1997,   OTEF  II's  expenses  decreased  by  approximately   $2.4
million,   or   49%,   compared  to  1996.   This   decrease   in   expenses
reflects  nearly  a  $2.9  million  decrease  in  litigation  costs  and   a
$0.8    million   decrease   in   administrative   expenses,    offset    by
approximately   $0.8   million   of   additional   Liquidity   and    Growth
expenses.    In   addition,  commencing  in  1997,  OTEF  II   is   required
to    report    interest    expense   attributable    to    the    financing
transaction that was completed on August 22, 1997.

Year 2000 Compliance

     In   accordance   with  the  SEC's  interpretive   release   "Statement
of   the   Commission  Regarding  Disclosure  of  Year   2000   Issues   and
Consequences   by   Public Companies...,"  the  Managing   General   Partner
of  OTEF  II  has  upgraded  and  tested  the  principal  systems  on  which
OTEF  II  relies  and  believes  that  they  are  Year  2000  compliant   as
of    this    date.    The   Managing   General   Partner    is    currently
contacting   third   parties   with  whom   OTEF   II   does   business   to
evaluate   their   exposure  to  year  2000  issues.    In   addition,   the
Managing   General   Partner   is  in  the  process   of   contacting   it's
vendors    to    determine    their    compliance    and    is    developing
contingency   plans.    The   Managing   General   Partner   believes   that
such analysis will be completed in 1999.

THIS     REPORT     CONTAINS    STATEMENTS    THAT    ARE    FORWARD-LOOKING
STATEMENTS    WITHIN    THE    MEANING    OF    THE    PRIVATE    SECURITIES
LITIGATION   REFORM   ACT   OF  1995,  SECTION   21E   OF   THE   SECURITIES
EXCHANGE   ACT   OF   1934,   AS   AMENDED,   AND   SECTION   27A   OF   THE
SECURITIES   ACT  OF  1933,  AS  AMENDED,  AND  IS  SUBJECT  TO   THE   SAFE
HARBORS     CREATED    BY    THOSE    SECTIONS.     THESE    FORWARD-LOOKING
STATEMENTS   REFLECT   MANAGEMENT'S   CURRENT   VIEWS   WITH   RESPECT    TO
FUTURE    EVENTS   AND   FINANCIAL   PERFORMANCE.    ACTUAL   RESULTS    MAY
DIFFER    MATERIALLY   FROM   THOSE   DESCRIBED   IN   THE   FORWARD-LOOKING
STATEMENTS,   AND   WILL   BE  AFFECTED  BY   A   VARIETY   OF   RISKS   AND
FACTORS.    THESE   STATEMENTS  ARE  SUBJECT  TO  MANY   UNCERTAINTIES   AND
RISKS,    AND   SHOULD   NOT   BE   CONSIDERED   GUARANTEES   OF   FINANCIAL
PERFORMANCE.    READERS  SHOULD  REVIEW  CAREFULLY   OTEF   II's   FINANCIAL
STATEMENTS   AND   THE   NOTES   THERETO,   AS   WELL   AS   RISK    FACTORS
DESCRIBED   IN   THE  SEC  FILINGS.   OTEF  II  DISCLAIMS   ANY   OBLIGATION
TO  PUBLICLY  RELEASE  THE  RESULTS  OF  ANY  REVISIONS  TO  THESE  FORWARD-
LOOKING   STATEMENTS   WHICH   MAY   BE   MADE   TO   REFLECT   EVENTS    OR
CIRCUMSTANCES  OCCURRING  SUBSEQUENT  TO  THE  FILING  OF  THE  FORM  10   K
WITH  THE  SEC  OR  OTHERWISE  TO  REVISE OR  UPDATE  ANY  ORAL  OR  WRITTEN
FORWARD-LOOKING  STATEMENT  THAT  MAY  BE  MADE  FROM  TIME   TO   TIME   BY
OR ON BEHALF OF OTEF II.



<PAGE> 21

-----------------------------------------------------------------
Report of Independent Accountants
-----------------------------------------------------------------
                                                                 
To the Partners and BAC  Holders  of Oxford  Tax  Exempt  Fund II
Limited Partnership:

  In our opinion, the accompanying balance sheets   and   related
statements of income,  partners'  capital  and cash flows present
fairly, in  all  material   respects, the financial position   of
Oxford Tax  Exempt Fund II Limited Partnership as of December 31,
1998 and 1997, and the results of its operations and   its   cash
flows  for  each   of   the   three  years  in  the  period ended 
December  31,  1998, in  conformity   with   generally   accepted   
accounting  principles.   These   financial  statements  are  the   
responsibility of the Partnership's   Managing  General  Partner; 
our responsibility is to express an opinion  on  these  financial 
statements based on our audits. We conducted our audits of  these 
statements in  accordance   with   generally   accepted  auditing
standards which 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, assessing the accounting    
principles used and significant estimates  made  by   management,   
and evaluating the overall  financial   statement   presentation.    
We believe that our audits  provide  a  reasonable  basis for our 
opinion expressed above.



PricewaterhouseCoopers LLP


/S/ PricewaterhouseCoopers LLP
------------------------------
PricewaterhouseCoopers LLP
Washington, D.C.
February 12, 1999


<PAGE> 22

<TABLE>

Oxford Tax Exempt Fund II Limited Partnership
-----------------------------------------------------------------------------
Balance Sheets (in thousands, except per BAC and SQB amounts)
-----------------------------------------------------------------------------
December 31,                                       1998          1997
-----------------------------------------------------------------------------
<CAPTION>
<S>                                              <C>           <C>
Assets                                              
  Investments in tax-exempt securities           $213,900      $217,159
  Investments in tax-exempt securities                                      
    held in trust                                  62,565        38,820
  Taxable investments and loans                    11,840             0
  Cash and cash equivalents                        18,011        11,694
  Bond and other interest receivables               1,579         1,439  
  Other assets                                      1,191         1,551
-----------------------------------------------------------------------------
        Total Assets                             $309,086      $270,663
=============================================================================
Liabilities and Partners' Capital                                           
  Liabilities                                                             
    Financing debt                               $ 47,614      $ 27,174
    Distributions payable                           3,826         3,719
    Accounts payable and accrued expenses             573         2,988
-----------------------------------------------------------------------------
        Total Liabilities                          52,013        33,881
-----------------------------------------------------------------------------
Partners' Capital                                                            
  General Partners' Interests                      (2,275)       (2,356)     
  Limited Partners' Interests:                                               
    Beneficial  Assignee Interests <F1>                                      
    (7,499,875  interests issued  and                                        
    7,183,200 and 7,185,200 interests                                        
    outstanding  as of  December  31,                                        
    1998 and 1997, respectively)                  160,632       156,672    
  SQB Interests (12,587 interests                                            
    issued and 6,946 and 7,093 interests                                     
    outstanding as of December 31, 1998                                      
    and 1997, respectively)                         3,849         3,885 
  Accumulated other comprehensive income           94,867        78,581
-----------------------------------------------------------------------------
        Total Partners' Capital                   257,073       236,782
-----------------------------------------------------------------------------
        Total Liabilities and Partners'Capital   $309,086      $270,663      
=============================================================================
<FN>
<F1>  For  comparative  purposes, BAC  Interests have been restated
      to reflect the 25-for-1 split which occurred on July 1, 1997.
</FN>

     The accompanying notes are an integral part of these financial
                             statements
</TABLE>
                                

<PAGE> 23

<TABLE>
Oxford Tax Exempt Fund II Limited Partnership
-----------------------------------------------------------------------------
Statements of Income and Comprehensive Income (in thousands, except per BAC
  amounts)
-----------------------------------------------------------------------------
<CAPTION>
                                                       OTEF II
                                            For the years ended December 31,
                                          -----------------------------------
                                             1998        1997        1996
-----------------------------------------------------------------------------
<S>                                       <C>         <C>         <C>
Revenues                                                                     
  Interest on investments in                                                 
    tax-exempt securities                 $18,967<F1> $17,734<F2> $19,411<F3>
  Interest on investments in                                              
    tax-exempt securities held in trust     2,459         667           0 
  Interest on taxable investments & loans     837           0           0
  Other tax-exempt income                     888         729         351
-----------------------------------------------------------------------------
    Total Revenues                         23,151      19,130      19,762
-----------------------------------------------------------------------------
Expenses                                                                     
  Governance and administrative expenses    1,020         921       1,692
  Litigation and settlement costs               8         265       3,158<F4>
  Other liquidity & growth expenses         1,031         840           0    
  Finance interest expense                  1,809         462           0    
-----------------------------------------------------------------------------
Total Expenses                              3,868       2,488       4,850
-----------------------------------------------------------------------------
Net income                                $19,283     $16,642     $14,912
=============================================================================
Other comprehensive income:                                   
    Unrealized gains on investments       $16,286     $16,084     $51,529
=============================================================================
Comprehensive income                      $35,569     $32,726     $66,441
=============================================================================
Net income allocated to BAC holders       $18,509     $15,893     $14,614
=============================================================================
Net income per BAC <F6>                   $ 2.576     $ 2.188     $ 1.948    
=============================================================================
Weighted average BACs outstanding <F6>      7,185       7,264       7,500
=============================================================================
Net Income per BAC - assuming                                               
  dilution <F5> <F6>                      $ 2.556     $ 2.182     $  N/A 
=============================================================================
Weighted average BAC - assuming                                              
  dilution <F5> <F6>                        7,241       7,284        N/A   
=============================================================================
Distribution per BAC <F6>                 $ 2.025     $ 1.942     $ 1.904
=============================================================================
<FN> 
<F1>  Includes  approximately  $0.51  million  of deferred interest payments
      made by San Bruno-Oxford which were funded from the remaining treasury
      strip proceeds as more fully described in note 7.
<F2>  Includes  approximately  $0.24 million representing one additional
      month accrual of bond interest on the two bonds which were refunded in
      the  first  quarter  of  1997  due  to their conversion  to  "accrual"
      basis  accounting.
<F3>  Includes  approximately  $1.1 million  representing one additional 
      month accrual of  bond interest on the 10 bonds which were refunded in
      the  fourth  quarter  of  1996  due to their conversion  to  "accrual"
      basis accounting
<F4>  Includes  $2.5  million  payable by OTEF II in payment of  plaintiff's
      counsel fees and reimbursement of expenses incurred.
<F5>  Stock options were granted in 1997 but have not been exercised.
<F6>  Restated to reflect the 25-for-1 stock split effective July 1, 1997.
</FN>

 The accompanying notes are an integral part of these financial statements

</TABLE>


<PAGE> 24

<TABLE>

Oxford Tax Exempt Fund II Limited Partnership
-----------------------------------------------------------------------------
Statement of Partners' Capital (in thousands, except per BAC and SQB amounts)
-----------------------------------------------------------------------------
<CAPTION>                                                             
                                       Limited Partner   Accumulated
For the Years Ended                       Interests         Other 
December 31, 1998, 1997,    General   ----------------  Comprehensive 
and 1996                    Partners    BACs      SQBs      Income   Total
-----------------------------------------------------------------------------
<S>                         <C>       <C>      <C>         <C>      <C>
Balance, December 31, 1995  $(2,400)  $161,331 $    0      $10,968  $169,899
=============================================================================
Comprehensive income:                                                        
                                                                             
Net income                      298     14,614      0            0    14,912
Unrealized gain on                                                           
  investments                     0          0      0       51,529    51,529
                           --------------------------------------------------
    Total comprehensive                                                       
      income                    298     14,614      0       51,529    66,441
Distributions to Partners,                                                   
  including $1.904 per BAC<F1> (291)   (14,280)     0            0   (14,571)
-----------------------------------------------------------------------------
Balance, December 31, 1996   (2,393)   161,665      0       62,497   221,769
=============================================================================
Comprehensive income:                                                        
                                                                             
Net Income, including $2.188                                                 
  per BAC <F1> and $43.62                                                    
  per SQB                       333     15,893    416            0    16,642
                                                                             
Unrealized gains on                                                          
  investments                     0          0      0       16,084    16,084
                           --------------------------------------------------
    Total comprehensive                                                      
      income                    333     15,893    416       16,084    32,726
                                                                             
Allocation of SQB Capital         0     (6,809) 6,809            0         0
                                                                             
SQB Redemptions                   0         26 (2,992)           0    (2,966)
                                                                             
Distributions to Partners,                                                   
  including $1.942 per BAC<F1>                                               
  and $36.66 per SQB           (296)   (14,103)  (348)           0   (14,747)
-----------------------------------------------------------------------------
Balance, December 31, 1997   (2,356)   156,672  3,885       78,581   236,782
=============================================================================
Comprehensive income:                                                        
                                                                             
Net Income, including $2.576                                                 
  per BAC <F1> and $55.76                                                     
  per SQB                       385     18,509    389            0    19,283
                                                                            
Unrealized gains on                                                          
  investments                     0          0      0       16,286    16,286
                           --------------------------------------------------
   Total comprehensive                                                       
      income                    385     18,509    389       16,286    35,569
                                                                             
SQB Redemptions                   0          0    (80)           0       (80)
                                                                             
Distributions to Partners                                                    
  including $2.025 per BAC<F1>                                               
    and $49.52 per SQB         (304)   (14,549)  (345)           0   (15,198)
-----------------------------------------------------------------------------
Balance, December 31, 1998  $(2,275)  $160,632 $3,849      $94,867  $257,073
=============================================================================
<FN>
<F1>  BAC share amounts reflect the 25-for-1 stock split which occurred on
      July 1, 1997.
</FN>
                                     
The accompanying notes are an integral part of these financial statements.

</TABLE>


<PAGE> 25

<TABLE>
Oxford Tax Exempt Fund II Limited Partnership
-----------------------------------------------------------------------------
Statements of Cash Flows (in thousands)
-----------------------------------------------------------------------------
<CAPTION>
                                                       OTEF II
                                            For the years ended December 31,
                                           ----------------------------------
                                                  1998      1997      1996
-----------------------------------------------------------------------------
<S>                                             <C>       <C>       <C>
Operating Activities:                                                        
  Net income                                    $19,283   $16,642   $14,912
  Adjustments to reconcile net income to net                                  
    cash provided by operating activities:                                  
  Changes in assets and liabilities:                                        
    Interest receivable and other                  (140)     (307)   (1,106)
    Due from affiliates                               0         0       310 
    Accounts payable and accrued expenses          (877)     (333)    2,829
-----------------------------------------------------------------------------
Net cash provided by operating activities        18,266    16,002    16,945
-----------------------------------------------------------------------------
Investing activities:                                                      
  Investment in new assets                      (16,040)  (24,366)        0 
  Redemption of SQBs                                (80)   (2,966)        0  
  Litigation settlement payments <F1>            (1,538)     (962)        0 
  Other assets <F2>                                 360      (589)        0 
-----------------------------------------------------------------------------
Net cash (used in) provided by investing                                     
  activities                                    (17,298)  (28,883)        0  
-----------------------------------------------------------------------------
Financing activities:                                                        
  Net proceeds from debt refinancing             20,440    27,174         0  
  Distribution paid                             (15,091)  (14,671)  (14,571)
-----------------------------------------------------------------------------
Net cash (used) in financing activities           5,349    12,503   (14,571)
-----------------------------------------------------------------------------
Net increase (decrease) in cash and cash                                     
  equivalents                                     6,317      (378)    2,374
Cash and cash equivalents, beginning of period   11,694    12,072     9,698   
-----------------------------------------------------------------------------
Cash and cash equivalents, end of period        $18,011   $11,694   $12,072
=============================================================================
<FN>
<F1>   In connection with the settlement of the OTEF II litigation discussed
     in prior  reports,  OTEF II made a final payment of plaintiff's counsel
     fees and expenses  in the amount of $1.54 million in the second quarter
     of 1998 upon the  expiration of all appeal periods and dismissal of the
     state court action.
<F2>   Other  assets  represent   primarily   deferred   costs  incurred  in
     connection financing  transactions, and acquisitions of BACs by OTEF II
     under the previously  announced  repurchase program, none of which  are
     recurring operating activities.  In 1998 approximately $0.3 million  of
     deferred costs were  reclassified  into the  taxable  loans  which  are 
     included in investment in new assets.
</FN>

  The accompanying notes are an integral part of these financial statements.

</TABLE>


<PAGE> 26

-----------------------------------------------------------------------------
Notes to Financial Statements
-----------------------------------------------------------------------------

Note 1.  Financial Statements

     The  financial  statements  reflect  all  adjustments  which,  in   the
opinion   of   the   Managing  General  Partner   of   Oxford   Tax   Exempt
Fund   II   Limited   Partnership   ("Oxford   Tax   Exempt   Fund   II,   "
"OTEF   II,"  or  the  "Partnership"),  are  necessary  to  present   fairly
OTEF   II's   financial  position  as  of  December  31,  1998   and   1997,
the   Statements  of  Income  and  Comprehensive  Income   for   the   years
ended    December   31,   1998,   1997   and   1996,   the   Statement    of
Partners'   Capital  as  of  December  31,  1998,  1997,   and   1996,   and
the   Statements   of   Cash  Flows  for  the  years  ended   December   31,
1998 and 1997.

Note 2.  Business

     The  Partnership,  which  was  formed  under  the  laws  of  the  State
of    Maryland,    commenced   operations   on    March    1,    1995,    in
connection   with   a   plan  (the  "1995  OTEF  Restructuring   Plan")   to
restructure    Oxford    Tax    Exempt   Fund   Limited    Partnership,    a
Maryland     limited     partnership     ("OTEF,"     "Predecessor,"      or
"OTEF   II's   predecessor").   Oxford  Tax  Exempt  Fund  II   Corporation,
a    Maryland   corporation,   is   the   Managing   General   Partner    of
OTEF   II   (the   "Managing   General  Partner").    OTEF   II   Associates
Limited    Partnership,   a   Maryland   limited   partnership,    is    the
associate   general  partner  of  OTEF  II  (together  with   the   Managing
General Partner, the "General Partners").

     General   Business.      OTEF  II  is  a  publicly-traded   partnership
(AMEX:   OTF)   that   invests  in  tax-exempt  bonds  issued   to   finance
high   quality   apartment  and  senior  living/health   care   communities,
with   the   objective   of  producing  increasing  income   and   quarterly
distributions    for    its   shareholders.    These    distributions    are
primarily exempt from federal income taxation.

     Investments   made  under  the  Liquidity  &  Growth  Plan   in   1998.
On   October  27,  1998,  OTEF  II  acquired  $14.2  million  Collin  County
Housing   Finance   Corporation   Multifamily   Housing   Mortgage   Revenue
Bonds   (Carpenter-Oxford   Development)   Series   1998   (the   "Carpenter
Refunding   Bonds").   As  previously  reported,  on  December   30,   1997,
OTEF   II   purchased,   at   a  discount,  $16.2  million   of   tax-exempt
bonds   issued   by   the   Texas  Department  of  Housing   and   Community
Affairs.     The    bonds    are    collateralized    by    Steeple    Chase
Apartments,   a   368-unit   apartment   community   located    in    Plano,
Texas,    that    is   owned   by   a   privately-held   Maryland    limited
partnership   whose   general   partners   are   affiliates   of   OTEF   II
("Carpenter   Borrower").    In  connection  with   the   recent   refunding
transaction,   OTEF   II   exchanged  the  bonds   that   it   acquired   on
December    30,   1997   for   the   Carpenter   Refunding    Bonds.     The
Carpenter   Refunding   Bonds  bear  tax-exempt  interest   at   an   annual
fixed   rate  of  7.25%  for  an  initial  term  through  October  1,  2005,
at   which   time   the  Carpenter  Refunding  Bonds  must  be   remarketed.
The    Carpenter   Refunding   Bonds   mature   on   September   1,    2018,
subject   to   earlier   redemption  (optional  and  mandatory)   upon   the
occurrence   of   certain   events.   In  addition,   in   1998,   OTEF   II
funded   to   the   Carpenter   Borrower   two   taxable   loans   in    the
aggregate   amount   of   approximately   $0.9   million.    The   Carpenter
Borrower  will  apply  the  net  proceeds  of  this  loan  to  fund  certain
capital   improvements,   and   pay  transactional,   bond   refunding   and
certain   other   costs.    The   taxable   loan    provides   for   monthly
payments   of  interest  only  at  a  fixed  rate  of  9.3%  with  principal
due   at   maturity.   The  taxable  loan  matures  on  the  same  date   as
the   Carpenter  Refunding  Bonds  and  is  prepayable  on  the  same  terms
and conditions as the Carpenter Refunding Bonds.

     On   July   20,   1998,   OTEF   II  acquired   $10.3   million   Texas
Department   of   Housing   and  Community  Affairs   Multifamily   Mortgage
Revenue   Refunding   Bonds   (Dallas-Oxford   Development)   Series    1998
(the    "Dallas    Refunding   Bonds").    As   previously   reported,    on
December   30,   1997,   OTEF   II   purchased,   at   a   discount,   $11.7
million   of   tax-exempt   bonds  issued  by  the   Texas   Department   of
Housing   and   Community   Affairs.   The  bonds  are   collateralized   by
Springhouse   Apartments,  a  372-unit  apartment   community   located   in
Dallas,   Texas,  that  is  owned  by  a  privately-held  Maryland   limited
partnership   whose   general   partners   are   affiliates   of   OTEF   II
("Dallas    Borrower").    In   connection   with   the   recent   refunding
transaction,   OTEF   II   exchanged  the  bonds   that   it   acquired   on
December   30,   1997   for  the  Dallas  Refunding   Bonds.    The   Dallas
Refunding   Bonds  bear  tax-exempt  interest  at  an  annual   fixed   rate
of  7.25%  for  an  initial  term  through  July  1,  2005,  at  which  time
the    Dallas   Refunding   Bonds   must   be   remarketed.    The    Dallas
Refunding   Bonds   mature   on   April  1,   2018,   subject   to   earlier
redemption    (optional   and   mandatory)   upon    the    occurrence    of
certain   events.    In  addition,  in  1998,  OTEF  II   funded    to   the
Dallas   Borrower   two   taxable  loans  in   the   aggregate   amount   of
approximately   $0.7   million.   The  Dallas  Borrower   will   apply   the
net   proceeds   of   this  loan  to  fund  certain  capital   improvements,
and   pay   transactional,   bond  refunding  and   certain   other   costs.
The   taxable   loan  provides  for  monthly  payments  of   interest   only
at   a   fixed   rate  of  9.3%  with  principal  due  at   maturity.    The
taxable   loan   matures   on  the  same  date  as  the   Dallas   Refunding
Bonds   and  is  prepayable  on  the  same  terms  and  conditions  as   the
Dallas Refunding Bonds.


<PAGE> 27

     On   May  28,  1998,  Summerwalk  Properties  L.L.C.  (the  "Summerwalk
Borrower"),   an  affiliate  of  OTEF  II,  completed  its  acquisition   of
Summerwalk    at    the    Crossings   Apartments,   a    264-unit    garden
apartment   community   located   in   a   suburb   of   Atlanta,    Georgia
("Summerwalk  Transaction").   The  total  purchase  price   paid   by   the
Summerwalk    Borrower    was    approximately    $16.65    million.     The
property   is   financed   with  $10  million  of  tax-exempt   bonds   that
bear   interest  at  an  adjustable  one-year  rate,  which   is   currently
3.9%.    This   debt   was   assumed   by   the   Summerwalk   Borrower   in
connection    with    the   acquisition.    The   tax-exempt    bonds    are
secured  by  a  first  mortgage  on  the  property  and  held  by  unrelated
third  parties.   OTEF  II  expects  to  purchase  these  bonds  at  a   to-
be-determined   future  date.   At  the  closing,  OTEF   II   purchased   a
certificate   from   a   grantor  trust,  which  represents   all   of   the
economic   interest  of  the  trust  in  connection  with   the   Summerwalk
Transaction.    The   trust   made  a  taxable  loan   to   the   Summerwalk
Borrower   in   the  amount  of  approximately  $7.1  million   bearing   an
annual  fixed  accrual  rate  of  interest  of  12%,  with  the  option   of
additional  advances  to  be  made  in  the  future.   This  loan  will   be
used   by   the   Summerwalk   Borrower  to  fund   the   balance   of   the
purchase   price   for   the   property,   as   well   as   various   costs,
expenses,   capital   improvements  and   reserves.    This   taxable   loan
is   also  secured  by  a  subordinated  mortgage  on  the  property.    The
terms  of  this  loan  are  anticipated  to  result  in  substantially   all
of   the   property's  current  and  expected  future  increases   in   both
cash  flow  and  property  value  being paid  to  OTEF  II  as  interest  on
this   loan.   OTEF  II  anticipates  that  it  will  restructure  the  tax-
exempt    bonds   and   the   taxable   loan   as   soon   as    practicable
following   the   closing,   which   restructuring   may   include,    among
other    things,   a   refunding   of   the   tax-exempt   bonds    and    a
modification   of  the  interest  rate  on  the  tax-exempt   bonds   to   a
higher   rate.    OTEF   II  expects  to  purchase   the   restructured   or
refunded  bonds,  and  may  sell  or  finance  all  or  a  portion  of   the
taxable loan.

     On   April   30,   1998,   OTEF  II  and   an   affiliate   closed   an
investment    transaction    ("Jacaranda   Transaction")    involving    the
acquisition   by   OTEF   II   of   approximately   $7   million   of   debt
secured   by   real  estate  simultaneously  acquired  by   such   affiliate
from    a    third    party.    In   connection   with   this   transaction,
Jacaranda-Oxford    Limited    Partnership   ("Jacaranda    Borrower"),    a
Maryland     limited    partnership,    purchased    Harbour     Town     of
Jacaranda,    a   280-unit   garden   apartment   community    located    in
Plantation,   Broward   County,   Florida.    The   total   purchase   price
paid   by   the   Jacaranda  Borrower  was  approximately  $18.75   million.
The   property  is  financed  with  $11.8  million  of  senior,   tax-exempt
bonds   that   bear  interest  at  a  weekly  floating  rate  based   on   a
spread    over    the    applicable   short-term,   tax-exempt    securities
index.    The  senior  bonds  are  secured  by  a  first  mortgage  on   the
property   and  are  currently  held  by  third  parties.    OTEF   II   may
purchase   these  senior  bonds  at  a  future  date.   At   closing,   OTEF
II   purchased   from   an   unrelated   third   party   $4.2   million   of
subordinated,   tax-exempt   bonds,   which   currently   bear   an   annual
fixed  rate  of  interest  of  6.25%  and  are  secured  by  a  subordinated
mortgage   on  the  property.   It  is  expected  that  the  interest   rate
on   the   subordinated,  tax-exempt  bonds  held  by  OTEF   II   will   be
increased    during    1999.    At   closing,   OTEF    II    purchased    a
certificate   from   a   grantor  trust,  which  represents   all   of   the
economic  interest  of  the  trust.   The  trust  made  a  taxable  loan  to
the   Borrower  in  the  amount  of  approximately  $3.2  million,  due   on
April   1,   2006,  bearing  an  annual  fixed  accrual  rate  of   interest
of   12%,   with   the   option   to  make  additional   advances   in   the
future.   This  loan  was  used  by  the  Jacaranda  Borrower  to   fund   a
portion   of   the   purchase   price  for  the   property,   as   well   as
various   costs,   expenses,  capital  improvements  and   reserves.    This
loan   is  secured  by  a  subordinated  mortgage  on  the  property.    The
terms  of  this  loan  are  anticipated  to  result  in  substantially   all
of   the   property's  current  and  expected  future  increases   in   cash
flow,   remaining  after  payment  of  debt  service  on  the   senior   and
subordinated  bonds,  and  property  value  being  paid  to   OTEF   II   as
interest on this loan.

     As   previously   reported,  OTEF  II  has  begun   working   on   bond
refunding    and    refinancing   transactions   with   respect    to    the
Jacaranda   and   Summerwalk  properties.   The  senior   tax-exempt   bonds
secured   by  these  properties  ($11.8  million  for  Jacaranda   and   $10
million   for  Summerwalk)  are  currently  held  by  third  parties.    The
letters   of   credit  that  secure  these  bonds  expire  on   August   15,
1999   for   Jacaranda   and   December  15,  2000   for   Summerwalk.    If
substitute   credit  enhancement  is  not  provided  by  such   dates,   the
senior    bonds    must   be   refunded   or   repaid.    Based    on    its
preliminary   discussions,   the  Managing   General   Partner   anticipates
consummating    refunding    or   refinancing   transactions    for    these
properties  where  the  requirement  to  maintain  letters  of   credit   is
eliminated   and   the   bonds  are  refinanced   or,   in   the   case   of
Summerwalk,    possibly   acquired   by   OTEF   II    as    part    of    a
refinancing,   although   no   assurances   can   be   given   that    these
transactions can be consummated in a timely manner.


<PAGE> 28

    Refunding.   As  of  December  31,  1998,  OTEF  II  had  completed  the
refunding    of    12    of    the    Existing    MRBs,    which    comprise
approximately   88%  of  the  face  amount  of  OTEF  II's   original   bond
portfolio.    Although   the   Managing  General   Partner   is   continuing
its   efforts   to   cause   the  refunding  of   the   remaining   Existing
MRBs,  no  assurances  can  be  given  that  these  bonds  can  or  will  be
refunded.

     The   Original  Refunding  Bonds  consist  of  senior  bonds   ("Series
A    Bonds")   and   subordinated   bonds   ("Series   B   Bonds").     This
senior/subordinated   structure   has   allowed   OTEF   II   to   undertake
several    financing   transactions   involving   the   Series    A    Bonds
allocable  to  BAC  Holders.   OTEF  II  retained  the  related   Series   B
Bonds   for   the   benefit   of  BAC  Holders,  and   retained   both   the
Series   A  Bonds  and  Series  B  Bonds  that  are  designated  as   Status
Quo  Assets  and  held  for  the  benefit  of  SQB  Holders.   See  Note   7
to these Financial Statements.

     Financing   Transactions.   OTEF  II  seeks  to  enhance  its   overall
return   on   investment   and   to  generate  proceeds   which   facilitate
the   acquisition   of   New   Assets.  To  pursue   additional   investment
opportunities,   OTEF   II  requires  additional  capital   from   time   to
time.    In   addition   to   proceeds  from   financings,   OTEF   II   may
generally  acquire  New  Assets:   (i)  from  the  proceeds  of   sales   or
other dispositions of Original Refunding  Bonds (defined  below)   and   the
proceeds   from   principal  payments with respect to the Original Refunding
Bonds   (except   for   the   portion  of   such   proceeds   allocable   to
SQBs),   as   well   as  bonds  issued  to  refund  any   tax-exempt   bonds
acquired   by   OTEF  II  pursuant  to  the  Liquidity  and   Growth   Plan;
(ii)   from   the   proceeds  of  sales  or  other   dispositions   of   New
Assets   and   the  proceeds  from  principal  payments  with   respect   to
New   Assets;   (iii)   from  the  proceeds  of  issuances   of   additional
equity     securities,    including    additional    limited     partnership
interests   in   OTEF   II   and   additional   BACs;   (iv)   by    issuing
additional   equity  securities  in  exchange  for  New   Assets;   or   (v)
by   borrowing   funds   from   lenders   or   by   issuing   evidences   of
indebtedness.

     OTEF  II  has  securitized  a  total  of  approximately  $62.6  million
of   its   Series  A  Bonds  by  assigning  these  Series  A  Bonds   to   a
Merrill    Lynch   affiliate   which,   in   turn,   deposited  them    into
trusts.    See   "Financing   Transactions"   in   Note   3   below.     The
trusts,   in   turn,  sold  to  institutional  investors  senior,   floating
rate   securities   credit   enhanced  by   a   Merrill   Lynch   affiliate.
These   senior   securities  have  first  priority  on  the   debt   service
payments  related  to  the  Series  A  Bonds.   OTEF  II  acquired  all  the
subordinated  interests  in  these  trusts  in  the  aggregate   amount   of
approximately   $15   million,   and  received   the   proceeds   from   the
sale   of   the   senior   securities,  less  certain   transaction   costs.
OTEF   II   has   certain   rights  to  repurchase  and/or   refinance   the
Series   A   Bonds   and   to   repurchase  the   senior   securities   and,
therefore,   retains  a  level  of  control  over  the   Series   A   Bonds.
These   securitization   transactions   provide   low-cost   financing   for
OTEF   II's   growth.    The  portion  of  the  net  proceeds   from   these
transactions   that   is   not  invested  in  New  Assets   is   temporarily
invested in liquid tax-exempt money market securities.

    On  February  19,  1998,  OTEF II closed  the  second  in  a  series  of
transactions   with   Merrill   Lynch,  securitizing   approximately   $12.8
million   of  Series  A  Bonds  held  in  OTEF  II's  portfolio.   OTEF   II
also    purchased   a   subordinated   interest   in   this   securitization
transaction    for   $3.2   million.    OTEF   II's   net   proceeds    were
approximately     $9.6     million    from    this    transaction,     after
transaction   costs   and   the  purchase  of  the  subordinated   interest.
A   portion   of  these  proceeds  were  used  by  OTEF  II  in   connection
with   the  Jacaranda  Transaction.   On  May  21,  1998,  OTEF  II   closed
the    third   in   a   series   of   transactions   with   Merrill   Lynch,
securitizing   approximately  $11  million  of  Series  A  Bonds   held   in
OTEF    II's   portfolio.    OTEF   II   also   purchased   a   subordinated
interest    in   this   securitization   transaction   for   $0.1   million.
OTEF   II's  net  proceeds  were  approximately  $10.8  million  from   this
transaction,   after   transaction   costs   and   the   purchase   of   the
subordinated   interest.   A  portion  of  these  proceeds  were   used   by
OTEF   II   in   connection   with   the   Summerwalk   Transaction.     The
remaining proceeds will be used for additional transactions.

     Due   to   the   credit  enhancement  provided  by  a   Merrill   Lynch
affiliate   in   connection  with  the  securitization   transactions,   and
favorable    underwriting   characteristics   (generally,    low    loan-to-
value   and  high  debt  coverage),  this  financing  debt  bears   interest
at  the  BMA  weekly  floating  bond  index  plus  approximately  80  to  85
basis   points   (including   credit  enhancement,   trustee   and   related
fees).    This  rate  averaged  4.63%  from  the  date  of  closing  through
December   31,  1997  and  4.33%  for  the  twelve  months  of  1998.    The
credit   enhancement  associated  with  approximately   $27.2   million   of
this   financing  debt  must  be  renewed  or  refinanced  by   August   21,
1999.    The   remaining   $20.4  million  of   financial   debt   must   be
renewed   or   refinanced   by   February  19,  2000   (approximately   $9.6
million)   and   April  15,  2000  (approximately  $10.8   million).    OTEF
II   has   certain  rights  to  repurchase  the  Series  A  Bonds  and   the
senior    interests   involved   in   these   securitization   transactions.
While  OTEF  II  is  not  an  obligor and,  therefore,  is  not  liable  for
repayment   of   this  financing  debt,  the  Series  A  Bonds   (in   which
OTEF   II   owns   approximately  $15  million  of  subordinated   interests
through   the   trusts)  are  in  effect  collateral  for   this   financing
debt.      Based    on   its   preliminary   discussions   with    financing
sources,   the  Managing  General  Partner  believes  that  OTEF   II   will
be   able   to   extend   the   credit   enhancement   or   refinance   this
financing debt.


<PAGE> 29

     In   connection  with  these  transactions,  OTEF  II   converted   the
interest   rate   mode   on   the  Series  A   Bonds   involved   in   these
transactions   from  an  annual  reset  to  weekly  floaters.    On   August
22,   1997,   and   September  21,  1998,  OTEF  II   purchased   three-year
interest   rate   caps   on   a  notional  amount   of   approximately   $27
million   and  $30  million,  respectively,  to  minimize  the  effects   of
interest    rate   volatility.    Under   these   arrangements,    if    the
average    short-term,   tax-exempt   interest   rates   for    any    month
during   the  term  of  the  cap  increase  above  a  specified  level   (6%
and   4.5%,   respectively),  the  counter-party  to   the   interest   rate
cap  transaction  is  required  to  pay  directly  to  OTEF  II  the  amount
by which such rates exceed the specified level.

Note 3.  Significant Accounting Policies

     Method   of   Accounting.    OTEF   II's   financial   statements   are
prepared     in    accordance    with    generally    accepted    accounting
principles.

     Use   of  Estimates.   The  preparation  of  financial  statements   in
conformity   with   generally   accepted  accounting   principles   requires
management   to   make   estimates   and   assumptions   that   affect   the
reported   amounts   of   assets   and   liabilities   and   disclosure   of
contingent   assets  and  liabilities  at  the  dates   of   the   financial
statements   and   the   reported   amounts   of   revenues   and   expenses
during   the   reporting  periods.   Actual  results   could   differ   from
those estimates.

     Income  Taxes.   No  provision  has  been  made  for  federal,   state,
or   local   income   taxes  in  the  financial  statements   of   OTEF   II
since   the   Partners   and   OTEF   II,   formerly   OTEF,   BAC   Holders
(collectively,   "OTEF  II  BAC  Holders")  are  required   to   report   on
their   individual   tax   returns  their   allocable   share   of   taxable
income, gains, losses, deductions, and credits of OTEF II.

     Comprehensive   Income.   In  June  1997,  the   Financial   Accounting
Standards     Board    issued    Statement    of    Financial     Accounting
Standards   No.   130  "Reporting  Comprehensive  Income"   which   requires
the   reporting  of  comprehensive  income  as  part  of  a  full   set   of
financial    statements.    Comprehensive   income   includes   both    "Net
Income"   and   "Other  Comprehensive  Income".   OTEF's  only   source   of
"other   comprehensive  income"  is  related  to  the   valuation   of   its
tax-exempt    investments   to   market   which   results   in    unrealized
gains   or   losses   previously  charged  to  an   equity   account   under
SFAS   115   "Accounting  for  Certain  Investments  in  Debt   and   Equity
Securities".     SFAS    130    does    not    require    presentation    of
comprehensive     earnings    per    share.     OTEF     recorded     "Other
Comprehensive   Income"  from  unrealized  gains  on   its   investment   in
tax-exempt   securities   of   approximately   $16.3   million   and   $16.1
million 1998 and 1997, respectively.

     Investments.    As   previously  reported,  on  June   1,   1995,   the
then Existing MRBs were transferred from OTEF  to  OTEF  II  at  their  book
value    of    approximately   $153   million.    The   OTEF   II   Managing
General   Partner   estimated  at  December   31,   1998   that   the   fair
value of the Original Refunding Bonds and the Existing MRBs was approximately
$247.9 million and, accordingly, unrealized appreciation on these investments
of  $94.9 million is recorded  as  a  credit  to  partners'  capital.    The
current   fair   value  of  the  Existing  MRBs  was   determined   by   the
Managing   General   Partner   using  the   same   cash   flow   methodology
applied   by   a   major   investment  banking  firm  in   connection   with
structuring   advice   rendered  to  OTEF  II  and  its   predecessor   with
respect   to  the  1995  OTEF  Restructuring  Plan.   The  Series  A   Bonds
are   valued   at  par  based  on  comparable  municipal  bond   securities,
and   all   other  bonds  (the  Existing  MRBs  and  the  Series  B   Bonds)
are   valued   based  on  a  discounted  cash  flow  analysis.    For   this
purpose    the    applicable   cash   flows    are    based    on    certain
assumptions   concerning   the  Properties  and   the   markets   in   which
they   are   located,   including  the  timing  and  realization   of   such
cash    flows.     The    recently   acquired    Dallas,    Carpenter    and
Jacaranda   bonds   are   recorded  at  cost,   which   approximates   their
fair market values at December 31, 1998.

      Investments    are   accounted   for   using   the    provisions    of
Statement   of   Financial   Accounting  Standards   No.   115   "Accounting
for   Certain  Investments  in  Debt  and  Equity  Securities"  ("SFAS   No.
115").    Under  this  method  the  investments  are  reflected   at   their
current   estimated  fair  value,  with  cumulative  unrealized   gains   or
losses  being  credited  or  charged  as  unrealized  gains  or  losses   on
investments    directly   to   partners'   capital,    rather    than    the
Statement   of   Income.    Interest   on   all   bonds   other   than   the
Existing   MRBs  are  recorded  as  interest  income  when  due.    Interest
income   on   the   Existing  MRBs  is  recorded  when  received.    Accrued
interest  on  the  Series  A  and  Series  B  Bonds  as  of   December   31,
1998 and 1997 was $1.2 million and $1.4 million, respectively.


<PAGE> 30

     Accounting  for earnings per share.   In February 1997, the   Financial  
Accounting Standards  Board issued a  Statement   of   Financial  Accounting
Standards No.  128, "Earnings Per Share" ("SFAS No. 128").   Basic  earnings  
per share,  a measure required by the new  standard,   does   not    include
incentive    BAC    options   as   common   share   equivalents.     Diluted
earnings   per   share   reflects   the  potential   dilution   that   could
occur   if   such   options  or  other  contracts  to  issue   shares   were
exercised  or  resulted  in  the  issuance  of  an  incremental  amount   of
new   shares   based   on   the  Treasury  Method.   The   Treasury   Method
assumes   that  the  proceeds  from  exercise  of  the  options   are   used
to    purchase   shares   at   the   average   market   price   during   the
reporting   period,  which  was  $26.14  and  $25.2  for  years   ended 1998
and  1997,   respectively.    The   incremental   shares   (the   difference
between   the   number  of  shares  assumed  issued  and   the   number   of
shares   assumed   purchased)  is  included  in  the  denominator   of   the
diluted     earnings     per     share     computation.      In     dilutive
"incremental"   BAC  shares  were  7,241,000  in  1998  and   7,284,000   in
1997.   For  the  impact  of  OTEF  II's  option  plan,  see  Note  3.  "Net
Income   and   Distributions   per  Beneficial   Assignee   Interest   (BAC)
and SQB".

     Net  Income  and  Distributions  per  BAC  and  SQB.   Net  income  and
distributions   per   BAC   and  net  income  and  distributions   per   SQB
are   based   upon   the  weighted  average  number   of   BACs   and   SQBs
outstanding   during  the  applicable  year.  For  the  first   quarter   of
1997,   there   were  7,499,875  BACs  outstanding.   On  April   1,   1997,
314,675   BACs   were   converted   to  12,587   SQBs,   leaving   7,185,200
BACs  outstanding  at  December  31,  1997.   In  December  1998,  OTEF   II
purchased   2,000   BACs  on  the  open  market  in  accordance   with   the
previously    announced   BAC   repurchase   program,   leaving    7,183,200
BACs   outstanding   at   December  31,  1998.    During   1998,   OTEF   II
redeemed  an  additional  122  SQBs  at  the  price  of  $540  per  SQB  and
25   SQBs  at  the  price  of  $550  per  SQB.   As  of  December  31,  1998
there   were   6,946   SQBs   outstanding.   See   "Accounting   for   SQBs"
below.

     Statements   of  cash  flows.   The  statements  of  cash   flows   are
intended   to  reflect  only  cash  receipts  and  cash  payment   activity.
The   statements   do   not   reflect  investing  and   financing   activity
that  affect  recognized  assets  or  liabilities  and  do  not  result   in
cash   receipts   or   cash  payments.   This  non-cash  activity   consists
of   distributions  payable  to  Partners,  SQB  holders  and  OTEF  II  BAC
Holders   of   $3.8   million,   $3.7   million,   and   $3.6   million   at
December    31,    1998,    1997,   and   1996,   respectively.     Non-cash
investing   activity   includes   a   change   in   unrealized    gain    on
investments  of  approximately  $16.3,  $  16.1  and  $  51.5  million   for
years ended December 31, 1998, 1997 and 1996, respectively.

     Cash   and  cash  equivalents.   Cash  and  cash  equivalents   consist
of   all   demand  deposits  and  tax-exempt  money  market   funds   stated
at    cost,    which    approximates    market    value,    with    original
maturities of three months or less at date of purchase.

      Financing   Transactions.     For   financial   statement    purposes,
the   financing   transactions  described  in  Note  2  are  accounted   for
as   financing   transactions.   The  amount   of   the   Series   A   Bonds
financed    of    approximately    $62.6    million    is    reflected    as
Securities  Held  in  Trust,  the  net  cash  proceeds  are  classified   as
cash    and    cash   equivalents   and   the   difference    between    the
principal   amount  of  the  Series  A  Bonds  financed  and  the  principal
amount   of   the   subordinated  interests   acquired   by   OTEF   II   is
classified as financing debt on  the accompanying balance sheet.

     Costs   associated   with  these  financing  transactions   are   being
amortized   over   ten   years  for  financial   statement   purposes,   and
costs   associated   with  the  interest  rate  cap  are   being   amortized
over  the  life  of  each  interest  rate  cap  agreement,  which  is  three
years.    For   federal   income  tax  purposes,  these   transactions   are
treated  as  sales  by  OTEF  II  of  the  applicable  Series  A  Bonds  and
a purchase of subordinated interests in the trusts.

     Accounting   for  SQBs.   The  SQBs  are  designed  to  replicate,   to
the   extent  possible,  the  economic  interest  that  SQB  Holders   would
have   had   in   the  Existing  MRBs,  as  refunded,  if  the   partnership
agreement    for    Oxford    Tax    Exempt   Fund    Limited    Partnership
("OTEF"),   OTEF  II's  predecessor,  had  continued  to  govern   and   the
Liquidity and Growth Plan was not implemented.


<PAGE> 31

     Following   receipt   of   an  Information  Memorandum   furnished   on
December   2,  1996  to  BAC  Holders,  approximately  4.2%   of   the   BAC
holders   made   a  timely  election  to  convert  their   BACs   to   SQBs.
Effective   April   1,   1997,  OTEF  II  issued  the   SQBs,   representing
12,587    shares,    in   uncertificated,   book-entry   form.     Effective
August   1,   1997,   OTEF   II  redeemed  5,484  SQBs   for   approximately
$3.0   million.   The  redeemed  SQB  Holders  received  a  final   prorated
amount   of   the   distribution  that  was   declared   for   the   quarter
ended  September  30,  1997,  paid  on  November  14,  1997.   During   1998
OTEF  II  redeemed  an  additional  122  SQBs  at  the  price  of  $540  per
SQB  and  25  SQBs  at  the  price of $550 per  SQB.   As  of  December  31,
1998 there were 6,946 SQBs outstanding.

     The   Information  Memorandum  states  that,  subject  to  receipt   of
a    fairness    opinion   from   OTEF   II's   independent   real    estate
consultant,   non-tendered   unexchanged   SQBs   will   be   purchased   or
redeemed  by  OTEF  II  at  such  time  as  the  Managing  General   Partner
believes  that  it  would  be  in  the  best  interests  of  OTEF   II   and
the   holders  of  the  non-tendered  SQBs,  but  in  no  event  later  than
December   31,   2006,   which   date  may   be   extended   under   certain
circumstances.   The  purchase  or  redemption  price  will  be   the   fair
market  value  of  the  Status  Quo  Assets  at  the  time  of  purchase  or
redemption, less the costs of sale.  As noted above, the Status  Quo  Assets
includes the Series A Bonds, Series B Bonds and Existing MRBs  allocable  to
SQB Holders, not the underlying real estate.

     For   financial  statement  purposes,  the  SQBs  are  treated   as   a
separate   class   of equity   and,   accordingly,   net  income   allocated
to   SQB  holders,  net  income  per  SQB,  and  distribution  per  SQB  are
reflected   separately   from   the   OTEF   II   BAC   Holders    on    the
Statement  of  Partners'  Capital.   The  SQBs  were  not  split   as   were
the   OTEF   II   BACs   on   July  1,  1997.    The   redeemed   SQBs   are
reflected   as   a   reduction  of  Partners'  Capital   and   were   offset
against the SQB Holders' interests when redeemed.

     The  SQB  Holders  do  not  share  in  the  growth  or  other  benefits
expected   to  be  achieved  under  the  Liquidity  and  Growth  Plan.    In
addition,   the   SQBs   are   not  allocated   any   capital   losses   for
federal   income   tax  purposes  that  may  result  from  the   disposition
of   the   Refunding   Bonds  or  interests  therein  or   new   assets   in
connection   with   a  financing  undertaken  pursuant  to   the   Liquidity
and   Growth   Plan.   A  schedule  of  SQB  income  as  of   December   31,
1998 is as follows:

<TABLE>
------------------------------------------------------------------------------
STATEMENT OF STATUS QUO BAC INCOME BY QUARTER (in thousands, except per 
 interest) (Unaudited)                                                       
------------------------------------------------------------------------------
<CAPTION>
                                      For the Three Months Ended in 1998      
                                  -------------------------------------------- 
                                  March 31  June 30  September 30  December 31
                                  --------------------------------------------
<S>                                 <C>      <C>        <C>         <C>
Revenues                                                                     
  Interest on Investments in                                                 
    tax-exempt securities           $  109   $  103     $  108      $  126
  Other tax-exempt income                3        3          3           8
------------------------------------------------------------------------------
                                       112      106        111         134    
Expenses                                                                     
  Governance and Administration         22       13         16          22   
  Litigation and Settlement              1        0          0           0    
------------------------------------------------------------------------------
                                        23       13         16          22
                                                                             
Net income allocation to                                                     
  SQB holders                       $   89   $   93     $   95      $  112
==============================================================================
Other comprehensive income;
  Unrealized gains on investment    $    3   $   35     $  114      $  225
==============================================================================
Comprehensive income                $   92   $  128     $  209      $  337
==============================================================================
Net income per SQB interest         $12.63   $13.31     $13.77      $16.05
==============================================================================
Distribution per SQB interest       $12.38   $12.38     $12.38      $12.38   
==============================================================================
Weighted average SQB shares 
  outstanding                        7,025    6,961      6,946       6,946   
==============================================================================
</TABLE>


Note 4.  Related Party Transactions

    Interests  in  OTEF II and the Operating  Partnerships.   The
General  Partners own interests in OTEF II that entitle  them  to
receive  a  share  of OTEF II's cash flow and possibly  of  sale,
refinancing  and  liquidation  proceeds.   Distributions  to  the
General  Partners totaled approximately $0.3 million for December
31, 1998, 1997 and 1996.


<PAGE> 32

    Affiliates  of the Managing General Partner that are  general
and  limited  partners  of  the Operating  Partnerships  have  an
interest  in  the  Operating Partnerships that entitles  them  to
receive  a  share  of  any cash flow and  sale,  refinancing  and
liquidation  proceeds  of  the  Operating  Partnerships.    Since
inception, the original Operating Partnerships have not been able
to  make  any  distributions of cash  flow  to  their  respective
partners.   In  addition,  in  connection  with  the  1995   OTEF
Restructuring  Plan and after each Existing MRB is refunded,  all
cash   flow  from  each  such  Operating  Partnership   that   is
attributable to these interests will be pledged for  the  benefit
of  OTEF II.  At the end of 1997, OTEF II acquired the tax-exempt
bonds  that  are collateralized by the properties  owned  by  the
Carpenter  Borrower and the Dallas Borrower, both  of  which  are
affiliates   of  the  Managing  General  Partner  of   OTEF   II.
Affiliates  of  the  Managing General Partner receive  fees  from
these  partnerships  and serve as their general  partners,  which
entitles  them  to a share of any cash flow and  refinancing  and
liquidation proceeds from these partnerships.

   Compensation and Fees. During the year ended December 31, 1998
total  compensation paid to Oxford Realty Financial  Group,  Inc.
("ORFG")  and  other  Oxford affiliates by OTEF  II  amounted  to
approximately $0.6 million with no such compensation accruing  in
the years 1997 and 1996, as discussed below.

    As discussed above, ORFG provides various management services
relating  to  the  Existing Mortgaged Properties  and  OTEF  II's
investment  therein.   It  also provides additional  services  in
connection with OTEF II's investment in New Assets, as  described
below.  The fees payable to ORFG for the services it is providing
currently  (the  "Existing Fees") are operating expenses  of  the
Operating  Partnerships that are payable prior to the payment  of
interest on the Existing MRBs.

    ORFG  receives an acquisition fee from OTEF II  for  finding,
analyzing  and  acquiring  a  New Asset.   The  acquisition  fee,
which  is  payable  on  the closing of any transaction  in  which
OTEF  II  acquires  a  New Asset, is equal to  1.0%  of  (i)  the
purchase  price paid by OTEF II for the New Asset, or  (ii)  with
respect to a New Asset which is subordinated in payment to senior
indebtedness, the sum of (A) the purchase price paid by  OTEF  II
for its subordinated interest and (B) the principal amount of the
senior  interest, if any; provided, however, that no  acquisition
fee  shall  be paid with respect to the principal amount  of  any
such  senior  interest  if OTEF II has not purchased  the  senior
interest and neither the Managing General Partner nor any of  its
affiliates  had  any  material involvement  in  the  negotiation,
structuring  or  closing of the purchase of the senior  interest.
In  the  case of a New Asset which is subordinated in payment  to
senior indebtedness as of the closing of the transaction in which
OTEF  II  acquires  its  interest, the  maximum  acquisition  fee
payable  shall  be equal to 2.5% of the purchase  price  paid  by
OTEF  II  for  such  interest as of the date of  closing.  ORFG's
acquisition  fees were earned and paid by the Carpenter  Borrower
and  the  Dallas  Borrower  in 1998  upon  closing  of  the  bond
refunding transactions.  Total acquisition fees paid by  OTEF  II
to ORFG in 1998 were approximately $0.35 million.

    OTEF II also pays ORFG an advisory fee for managing OTEF II's
New  Assets after their acquisition.  The advisory fee, which  is
payable monthly, is equal to 0.5% of (i) the purchase price  paid
by  OTEF II for a New Asset, or (ii) with respect to a New  Asset
which is subordinated in payment to senior indebtedness, the  sum
of  (A)  the  purchase price paid by OTEF II for its subordinated
interest  and  (B)  the principal amount of the senior  interest;
provided,  however, that if an affiliate of the Managing  General
Partner  is  receiving  fees  for  property  management  services
pursuant to a property management agreement entered into with the
owner of an additional mortgaged property  ("Additional Mortgaged
Property") the advisory fee will be equal to 0.5% of the purchase
price paid by OTEF II for the related New Asset.  In addition, if
the Managing General Partner receives in any year compensation or
fees  from  an  unaffiliated person that serves as  the  property
manager for the Additional Mortgaged Property, the amount of  the
advisory fee payable with respect to the related New Asset  shall
be  reduced  by 50% of any such compensation or fees received  by
the  Managing General Partner.  The advisory fees associated with
the   acquisition  of  the  Dallas,  Carpenter,   Jacaranda   and
Summerwalk  investments commenced in 1998.  Total  advisory  fees
paid by OTEF II to ORFG in 1998 were approximately $0.25 million.

     For   the  year  ended  December  31,  1998,  the  Operating
Partnerships,  including the Carpenter Borrower  and  the  Dallas
Borrower,  paid ORFG total asset management fees of approximately
$0.8  million.   In  December 31, 1997  and  1996,  the  original
Operating Partnerships paid ORFG total asset management  fees  of
approximately $0.6 million, respectively.  The original Operating


<PAGE> 33

Partnerships  also paid ORFG, in the aggregate, $0.7  million  of
fees pursuant to the OTEF Restructuring Plan Administration/Asset
Management  Fee  Agreement, which amount is equal  to  0.25%  per
annum of the principal amount of the bonds collateralized by  the
properties   owned   by   the  original  Operating   Partnerships
("Existing  Mortgaged Properties").  Oxford affiliates  may  also
receive other fees and expense reimbursements from entities other
than  OTEF  II  in connection with the acquisition, financing  or
refinancing,  operation, repair, replacement and  improvement  of
Mortgaged Properties.

     Expense   Reimbursements.   OTEF  II   and   the   Operating
Partnerships also reimburse ORFG for certain expenses  it  incurs
in  providing  services with respect to the mortgaged  properties
and   the   administration   of   OTEF   II's   affairs.    Total
reimbursements  to the General Partners and their affiliates  for
the   years   ended  December  31,  1998,  1997  and  1996   were
approximately  $0.7  million, $0.6  million,  and  $0.4  million,
respectively.  The Managing General Partner anticipates that  the
amount of expense reimbursements payable by OTEF II will increase
in  accordance with the terms of OTEF II's partnership  agreement
due,  in  part,  to  the  additional  acquisition  and  financing
activities  relating  to  the Liquidity  and  Growth  Plan.   The
portion  of  the  expense reimbursement relating to  salaries  is
determined  based on the actual time the officers  and  employees
devote to OTEF II based upon their respective wage rate.

    Incentive Option Plan.  On May 21, 1997, OTEF II  adopted  an
incentive option plan (the "Incentive Option Plan") in order  for
the  Managing General Partner to attract and retain key employees
and  advisers.  The Incentive Option Plan authorizes the granting
to  the directors, officers and employees of the Managing General
Partner  and  certain affiliates of options to  purchase  652,125
OTEF II BACs (on a post-split basis),  representing approximately
8.3%  of  the outstanding OTEF II BACs on a fully diluted  basis.
Such  options are exercisable for 10 years. The Managing  General
Partner has awarded all of the OTEF II BACs authorized under  the
terms  of  the  Incentive Option Plan.  Of the  652,125  options,
613,000  were  fully vested upon issuance and 39,125  are  vested
equally  over  3 years commencing January 1, 1998.  The  exercise
price  for all options is $23.88 per BAC, which approximated  the
fair market value at the date of grant.  At December 31, 1998 the
market  price of $23.50 was less than the exercise price.   Since
the date of grant, no options have been exercised.

Note 5.  Capital, Profits, Losses, and Cash Distributions

    The following discussion summarizes certain rights of the BAC
Holders and the SQB Holders following the SQB Issuance Date.

Rights to Allocations and Distributions

   Capital Accounts.  Following the Status Quo BAC Issuance Date,
the  BAC  Holders who retained their OTEF II BACs initially   had
the same Capital Accounts as they had prior to the Status Quo BAC
Issuance  Date.  Their Capital Accounts and the Capital  Accounts
of  the other BAC Holders (the "Liquidity Capital Accounts")  are
increased by Profits relating to the Liquidity Assets and the New
Assets ("Liquidity Profits"), but not by any Profits relating  to
the Status Quo Assets ("Status Quo Profits"), and are reduced  by
the  amount of all distributions made to them by OTEF  II  (which
distributions  are made only from cash flow attributable  to  the
Liquidity  Assets and the New Assets, the "Liquidity Cash  Flow")
and  Losses  relating only to the Liquidity Assets  and  the  New
Assets  ("Liquidity Losses"), but not by any Losses  relating  to
the Status Quo Assets ("Status Quo Losses").

    SQB  Holders also initially had the same Capital Accounts  as
they had prior to the conversion of their OTEF II BACs into SQBs.
Their  Capital  Accounts (the "Status Quo Capital Accounts")  are
increased  by  the Status Quo Profits, but not by  any  Liquidity
Profits, and are reduced by the amount of all distributions  made
to  them  by OTEF II (which distributions will be made only  from
cash flow attributable to the Status Quo Assets, the "Status  Quo
Cash  Flow") and all Status Quo Losses, but not by any  Liquidity
Losses.   OTEF  II  maintains two Capital Accounts  (a  Liquidity
Capital Account and a Status Quo Capital Account) for BAC Holders
who  elected to convert only a portion of their OTEF II BACs into
SQBs.

    Distributions of Cash Flow.  Liquidity Cash Flow  and  Status
Quo Cash Flow are distributed as described below.


<PAGE> 34

    Liquidity  Cash Flow.  Liquidity Cash Flow in any  year  will
first be distributed 98% to the BAC Holders and 2% to the General
Partners  until  the  BAC  Holders as a  class  (other  than  the
holder(s)  of the Affiliated OTEF II BACs) have received,  during
such  year,  a  noncumulative 11% preferred  return  on  the  BAC
Holders'  Preference Amount (as defined below)  and,  thereafter,
during  such year, 90% to the BAC Holders as a class and  10%  to
the General Partners.  The "BAC Holders' Preference Amount" means
an  amount  equal to the total capital contributions of  the  BAC
Holders  to  OTEF  or  OTEF II, reduced by any  distributions  of
residual  proceeds previously made to them by OTEF,  and  further
reduced   by   all  distributions  of  Liquidity   Residual   and
Liquidation Proceeds (defined below) made by OTEF II to  the  BAC
Holders.

    Status  Quo BAC Cash Flow.  All Status Quo Cash Flow  in  any
year  will first be distributed 98% to the SQB Holders as a class
and  2% to the General Partners until the SQB Holders as a  class
(other  than the holder(s) of the Affiliated SQBs, if  any)  have
received a noncumulative return in such year equal to 11% of  the
SQB  Holders' Preference Amount (defined below) and,  thereafter,
during  such year, 90% to the SQB Holders as a class and  10%  to
the General Partners.  The "SQB Holders' Preference Amount" means
an  amount  equal to the total capital contributions of  the  SQB
Holders  to  OTEF,  reduced  by  any  distributions  of  residual
proceeds previously made to them by OTEF, and further reduced  by
all distributions of Status Quo Residual and Liquidation Proceeds
(defined below) made by OTEF II to the SQB Holders.

    Distributions of Residual Proceeds and Liquidation  Proceeds.
All  Residual Proceeds, which in general, means the cash OTEF  II
receives  from  the  sale of a Mortgaged Property  or  New  Asset
("Sale")  or the repayment of the principal and interest  payable
upon   maturity  or  remarketing  of  a  Mortgage  Revenue   Bond
("Repayment")  other  than  a Sale or Repayment  that  occurs  in
connection with the liquidation of OTEF II, will be designated as
"Liquidity  Residual  Proceeds"  to  the  extent  such   Residual
Proceeds  relate to the Liquidity and New Assets and  as  "Status
Quo  Residual  Proceeds" to the extent that they  relate  to  the
Status Quo Assets.  The Liquidity Residual Proceeds, but not  the
Status Quo Residual Proceeds, may be reinvested in New Assets  at
the  discretion of the Managing General Partner.   The  Liquidity
Residual Proceeds, to the extent they are not reinvested, and the
Status  Quo  Residual  Proceeds will be applied  and  distributed
generally as described below.

    Liquidity  Residual and Liquidation Proceeds.  The  Liquidity
Residual Proceeds shall be applied to the payment of the expenses
allocable  to  the  BACs  or reinvested  in  New  Assets  at  the
discretion of the Managing General Partner, and to the extent not
so applied or reinvested, shall be available for distribution, in
which   case   such  amounts  generally  shall  be  applied   and
distributed in the following amounts and order of priority:

   (a)  100% to the payment of all debts and obligations of OTEF II
     that are then due and owing related to the Liquidity and New
     Assets (other than loans from the General Partners and their
     affiliates) and to any additions to the Liquidity Working Capital
     Reserve that the Managing General Partner may determine to be
     necessary;

   (b)  100% to the BAC Holders as a class (other than the holder(s)
     of the Affiliated OTEF II BACs) until the BAC Holders (other than
     the holder(s) of the Affiliated OTEF II BACs) receive aggregate
     distributions from Liquidity Residual Proceeds equal to the BAC
     Holders' Preference Amount;

   (c)  100%  to the holder(s) of the Affiliated OTEF II BACs  in
     an  amount  equal to $1,000 times the number  of  Affiliated
     OTEF  II  BACs,  less  any prior distributions  of  Residual
     Proceeds with respect to such Affiliated OTEF II BACs;
   
   (d)  100%  to  the  General Partners and their  affiliates  to
     repay  loans,  if any, from them to OTEF II,  with  interest
     thereon,  except  to  the extent the proceeds  of  any  such
     loans  were  used to pay amounts relating to the Status  Quo
     Assets or OTEF II's ownership thereof;
   
   (e)  100%  to the General Partners until the General  Partners
     receive  aggregate  distributions  from  Liquidity  Residual
     Proceeds  and  Status  Quo Residual Proceeds  equal  to  the
     General  Partners' Preference Amount (generally,  an  amount
     equal  to  the  total capital contributions of  the  General
     Partners  to  OTEF  II  reduced  by  all  distributions   of
     Liquidity  Residual and Liquidation Proceeds and Status  Quo
     Residual and Liquidation Proceeds); and


<PAGE> 35
   
   (f)  the  remainder, if any, 98% to the BAC Holders and 2%  to
     the  General  Partners, except that the  2%  return  to  the
     General  Partners  generally  is  deferred  until  the   BAC
     Holders  receive  an amount (when combined  with  all  prior
     distributions of Liquidity Cash Flow and Liquidity  Residual
     Proceeds)  equal  to an average annual noncompounded  return
     of 10% on the BAC Holders' Preference Amount.
  
    Liquidity Liquidation Proceeds (which, in general, means  all
cash receipts of OTEF II arising from the dissolution of OTEF  II
and  liquidation of the Liquidity and New Assets) generally  will
be  distributed  in  the  same order  of  priority  as  Liquidity
Residual  Proceeds,  except the first  application  of  Liquidity
Liquidation Proceeds will be to establish certain reserves.

    If  Liquidity  Residual  Proceeds  or  Liquidity  Liquidation
Proceeds  are  insufficient to make any payment set  forth  in  a
particular  paragraphs  (b)  through (f)  above,  then  Liquidity
Residual Proceeds or Liquidity Liquidation Proceeds available  to
make  the  payment will be distributed proportionately among  the
parties entitled to the payment under such paragraph.

    Status  Quo  Residual and Liquidation Proceeds.   Status  Quo
Residual Proceeds shall be applied to the payment of the expenses
allocable to the SQBs, and to the extent not so applied, shall be
available  for distribution, in which case such amounts generally
shall  be  applied and distributed in the following  amounts  and
order of priority:
   
   (a)  100%  to  the  payment of all debts  and  obligations  of
     OTEF  II  that are then due and owing related to the  Status
     Quo  Assets (other than loans from the General Partners  and
     their  affiliates) and to any additions to  the  Status  Quo
     Working  Capital  Reserve that the Managing General  Partner
     may determine to be necessary;
   
   (b)  100%  to  the  SQB  Holders as a class  (other  than  the
     holder(s)  of  the Affiliated SQBs, if any)  until  the  SQB
     Holders  (other  than the holder(s) of the Affiliated  SQBs,
     if  any)  receive  aggregate distributions from  Status  Quo
     Residual  Proceeds  equal  to the  SQB  Holders'  Preference
     Amount;
   
   (c)  100% to the holder(s) of the Affiliated SQBs in an amount
     equal  to  $1,000 times the number of Affiliated SQBs,  less
     any  prior  distributions of Residual  Proceeds  (and  prior
     distributions of residual proceeds by OTEF) with respect  to
     such Affiliated SQBs;
   
   (d)  100%  to  the  General Partners and their  affiliates  to
     repay  loans, if any, from them to OTEF II, the proceeds  of
     which  were  used to pay amounts relating to the Status  Quo
     Assets or OTEF II's ownership thereof;
   
   (e)   100%  to the General Partners until the General Partners
     receive  aggregate  distributions   from  Liquidity Residual 
     Proceeds and Status  Quo   Residual   Proceeds  equal to the 
     General Partners' Preference Amount; and

   (f)  98%  to the SQB Holders as a class and 2% to the  General
     Partners  until the SQB Holders as a class have received  an
     amount  (when combined with all prior distributions of  cash
     flow  and  residual  proceeds) equal to  an  average  annual
     noncompounded  return of 11% on the SQB Holders'  Preference
     Amount,  except  that the amounts otherwise payable  to  the
     General  Partners hereunder shall be deferred until the  SQB
     Holders  as  a class have received an amount (when  combined
     with  all  prior  distributions of cash  flow  and  residual
     proceeds)  equal  to an average annual noncompounded  return
     of 10% on the SQB Holders' Preference Amount.


<PAGE> 36

    Status Quo Liquidation Proceeds (which, in general, means all
cash receipts of OTEF II arising from the dissolution of OTEF  II
and  liquidation  of  the Status Quo Assets)  generally  will  be
distributed in the same order of priority as Status Quo  Residual
Proceeds,  except the first application of Status Quo Liquidation
Proceeds will be to establish certain reserves.

    If  Status  Quo  Residual Proceeds or Status Quo  Liquidation
Proceeds  are  insufficient to make any payment set  forth  in  a
particular  paragraphs  (b) through (f) above,  then  Status  Quo
Residual Proceeds or Status Quo Liquidation Proceeds available to
make  the  payment will be distributed proportionately among  the
parties entitled to the payment under such paragraph.

    Allocation  of  Profits and Losses.  Liquidity  Profits  from
operations  generally will be allocated between the  BAC  Holders
and  the  General Partners as follows: first, in accordance  with
distributions  of  Liquidity  Cash  Flow,  until  the  cumulative
Liquidity  Profits  so  allocated are  equal  to  the  cumulative
Liquidity  Cash  Flow  distributions, and thereafter  2%  to  the
General  Partners  and 98% to the BAC Holders.  Liquidity  Losses
from  operations generally will be allocated 2%  to  the  General
Partners  and  98%  to  the BAC Holders.  Liquidity  Profits  and
Liquidity  Losses  arising from a Sale  or  Repayment  (including
Liquidity Profits which represent the receipt of interest  income
on  a  Mortgage Revenue Bond) or liquidation of OTEF II generally
will  be  allocated  in  a manner so as to  cause  the  Liquidity
Capital  Account balances of the General Partners and BAC Holders
to equal the amounts that would be distributable to them.

   Status Quo Profits from operations generally will be allocated
between  the  SQB  Holders and the General Partners  as  follows:
first, in accordance with distributions of Status Quo Cash  Flow,
until the cumulative Status Quo Profits so allocated are equal to
the cumulative Status Quo Cash Flow distributions, and thereafter
2%  to  the General Partners and 98% to the SQB Holders.   Status
Quo  Losses  from operations generally are allocated  2%  to  the
General  Partners and 98% to the SQB Holders.  Status Quo Profits
and Losses arising from a Sale or Repayment of a Status Quo Asset
(including  Status  Quo Profits which represent  the  receipt  of
interest  income  on a Mortgage Revenue Bond) or  liquidation  of
OTEF  II  generally will be allocated in a manner so as to  cause
the  Status Quo Capital Account balances of the General  Partners
and  SQB Holders to equal the amounts that would be distributable
to them.

    The above allocations of Liquidity and Status Quo Profits and
Losses  will be subject to compliance with the principles of  the
Internal  Revenue  Code  of  1986 (the  "Code")  sections  704(b)
(containing  rules concerning the determination  of  a  partner's
distributive  share and capital account maintenance)  and  704(c)
(containing rules for reflecting disparities in the adjusted  tax
basis  and  the  fair  market value of  property  contributed  or
revalued  by  a  partnership)  and  the  regulations  promulgated
thereunder.

Note 6.  BAC Holder Rights Plan

    OTEF  II and the Managing General Partner entered into a  BAC
Holder  Rights  Agreement dated May 30, 1995  with  Crestar  Bank
which governs the terms of the BAC Holder Rights Plan.  Under the
BAC Holder Rights Plan, one Right was issued for each outstanding
BAC   to   BAC  Holders  of  record  immediately  following   the
distribution of the BACs to the holders of OTEF BACs.  Each Right
entitles the holder thereof to buy one OTEF II BAC at an exercise
price of $1,000, subject to adjustment, until May 30, 2005, or an
earlier redemption by OTEF II.

    In  the event OTEF II issues additional BACs, the BAC  Holder
Rights Plan provides that Rights will be issued to the holders of
such  OTEF  II  BACs  in accordance with the  BAC  Holder  Rights
Agreement.   Rights will not be issued with respect to  the  SQBs
and  the  Rights previously issued with respect to BACs that  are
converted into SQBs will be canceled.

    The  Rights could cause substantial dilution to a  person  or
group  that attempts to acquire OTEF II in a manner or  on  terms
not  approved  by the Managing General Partner and therefore  may
make  it more costly or difficult to acquire control of OTEF  II,
which could have the effect of discouraging takeover attempts and
make  it  more  difficult  to remove the existing  management  of
OTEF  II.   The Rights, however, should not deter any prospective
offeror  willing  to negotiate in good faith  with  the  Managing
General Partner.


<PAGE> 37

    As  part  of  the  settlement of the OTEF II Litigation,  the
Managing  General  Partner  has  agreed  to  amend  the  OTEF  II
partnership  agreement to provide that, if the  Managing  General
Partner  or  an affiliate of the Managing General Partner  (other
than  OTEF  II), initiates a tender offer in which  the  Managing
General Partner or its affiliate offers to purchase more than 10%
of  the BACs then outstanding, and at the time such tender  offer
is  initiated there is not pending any public offer  to  purchase
OTEF  II  BACs  by any person, then the Managing General  Partner
will  not  employ the OTEF II BAC Holder Rights  Plan  so  as  to
prevent the closing of any subsequent competing offer to purchase
BACs  that may be published and that is outstanding prior to  the
published  termination date of the tender offer by  the  Managing
General  Partner  or  an  affiliate (regardless  of  any  earlier
termination  of the offer by the Managing General Partner  or  an
affiliate).

Note 7.  Investments in Tax-Exempt and Taxable Securities

    As  shown in the tables below, at December 31, 1998, OTEF  II
owned  beneficial interests, whether direct or indirect,  in  the
following  financial  assets:  (i) $276.5 million  of  tax-exempt
bonds, and $11.8 million of taxable loans.  The $276.5 million of
tax-exempt  bonds includes the following:  (i) $154.6 million  of
Original  Refunding Bonds, (ii) $62.6 million of Securities  Held
in  Trust,  (iii)  $30.7  million of Existing  MRBs,  (iv)  $24.4
million of recently acquired senior refunding bonds, and (v) $4.2
million of recently acquired subordinated bonds.  These financial
assets are collateralized by mortgage loans on the properties  to
which  this debt relates.  The safekeeping and administration  of
these financial assets is performed by various trustees under the
terms of the Trust Indentures.

    Other  Sources.   In  connection with  the  closing  of  each
Original  Refunding  Bond, the applicable Operating  Partnerships
entered  into certain pooling agreements which may provide  under
certain circumstances additional sources of funds to enable  them
to  pay  their respective debt service on the Series A Bonds  and
the Series B Bonds and related fees and expenses.  As of December
31,  1998, the aggregate amount of net excess cash flow  held  in
the Operating Partnership escrows was approximately $2.2 million,
including deposits from the December 1998 cash flow.

  During 1998, Oxford Development Corporation ("Oxford") advanced
to  certain of the original Operating Partnerships all  remaining
treasury  strip  proceeds in the amount  of  approximately  $1.34
million.   Of  this  amount,  approximately  $0.10  million   was
advanced  to the Allview operating partnership and $0.45  million
to  the  Colonel  operating  partnership.   An  additional  $0.28
million  was advanced to various operating partnerships  to  help
defray their respective bond refunding costs that were previously
incurred.  The final $0.51 million was advanced to the San  Bruno
operating  partnership  to enable it to  pay  a  portion  of  the
deferred bond interest owed to OTEF II, which OTEF II reported as
income in 1998.

   Prior  to 1998, certain of the original Operating Partnerships
made  additional  interest payments on their  Existing  MRBs  and
funded certain costs associated with the bond refundings from two
additional  sources:   advances made by Oxford  pursuant  to  its
operating deficit guarantees, and obligations of Oxford  and  the
Operating  Partnerships  under  the  Yield  Maintenance   Reserve
("YMR") Agreement.  All YMR obligations were satisfied in full on
March 4, 1997.

   Existing MRBs.  As of December 31, 1998, OTEF II held Existing
MRBs  for  two  of  the  original  Operating  Partnerships.   The
Managing  General Partner is continuing its efforts to cause  the
refunding of these Existing MRBs.

   The table below sets forth the cumulative Unpaid Base Interest
and  Interest on Unpaid Base Interest as of December 31, 1998 for
Existing MRBs:

<TABLE>
-----------------------------------------------------------------------------
<CAPTION>
                                                       (In thousands)        
                                          -----------------------------------
                                           Interest on       Unpaid          
                                              Unpaid          Base           
Property Name/Partnership Name             Base Interest   Interest   Total  
-----------------------------------------------------------------------------
<S>                                          <C>            <C>       <C>
San Bruno (San Bruno) (2 Existing MRB's)     $  208         $  448    $  656  
The Harbour (Apollo)                          1,622          2,948     4,570    
-----------------------------------------------------------------------------
                     Total                   $1,830         $3,396    $5,226  
=============================================================================
</TABLE>

    The above unpaid interest has not been accrued or recorded as income.


<PAGE> 38

    Original Refunding Bonds (Series A Bonds).  The term of  each
Original Refunding Bond and, accordingly, each Mortgage  Loan  is
30  years  following the date of refunding.  The Series  A  Bonds
require interest only payments during the first three years  and,
thereafter,  are subject to annual sinking fund redemptions  that
will result in full amortization of the Series A Bonds during the
27-year  remaining  term.   This annual sinking  fund  redemption
begins  April  15,  2000  for all twelve  Series  A  Bonds.   The
Managing  General Partner is considering whether the  elimination
of this annual sinking fund redemption would facilitate financing
transactions involving  these  assets  or   would   otherwise  be
advantageous to OTEF II.

    Series  A  Bond Interest and Principal.  The Series  A  Bonds
require pre-determined annual sinking fund redemptions based on a
27-year  amortization  schedule beginning  in  the  fourth  year,
calculated with an assumed rate of interest of 5.6% per year.  In
the  annual reset mode, Series A Bond interest was set  initially
at  closing of the refundings and is reset annually thereafter at
a market rate based upon a percentage of the then prevailing one-
year  U.S.  Treasury Bill rate, with a maximum rate of  5.6%  per
annum.  The initial interest rate on the Series A Bonds that have
been  issued to date was 4.9%. The interest rate on seven of  the
Series A Bonds retained by OTEF II was reset on November 1,  1998
to  3.75%; the interest rate on three Series A Bonds retained  by
OTEF  II  was reset on December 1, 1998 to 4.01%.  On January  1,
1999, the interest rate on one Series A Bond retained by OTEF  II
was  reset  to 4.03%, and the interest rate on another  Series  A
Bond  was reset on March 1, 1999 to 4.32%.  The interest rate  on
the  Series  A  Bonds  involved  in  the  financing  transactions
described  above  was converted from annual  reset  to  a  weekly
floating  rate based on a spread over the BMA index.   This  rate
averaged 4.63% from the date of closing through December 31, 1997
and 4.33% for the twelve months of 1998.  Upon a remarketing, the
Series A Bonds may be converted to a different interest rate mode
(fixed  or  floating) and the interest rates may be  modified  at
that  time  to reflect the prevailing market interest  rates  for
whatever rate mode and remaining term is then applicable.

    Original Refunding Bonds (Series B Bonds).  The term of  each
Series  B  Bond and, accordingly, each Mortgage Loan is 30  years
following the date of refunding.

    Series  B  Bond Interest and Principal.  The Series  B  Bonds
accrue  interest  equal to the product of the Combined  Rate  (as
defined below) multiplied by the total combined principal balance
of  the  Series A Bonds and the Series B Bonds for each Operating
Partnership,  less the interest payable on the related  Series  A
Bonds;  the resulting amount of interest divided by the principal
balance of the Series B Bonds equals the interest accrual rate on
the  Series  B Bonds.  Interest-only is payable on the  Series  B
Bonds  to  the  extent of available cash flow  of  the  Operating
Partnerships, with the entire principal balance due at maturity.

<TABLE>

The Combined Rates on the Original Refunding Bonds over  the next 10 years 
  are as follows:

----------------------------------------------------------------------------------
<CAPTION>
                    1999  2000  2001  2002  2003  2004   2005   2006   2007   2008               
----------------------------------------------------------------------------------
                                                                                   
<S>                <C>   <C>   <C>   <C>   <C>   <C>   <C>    <C>    <C>    <C>
Akron              9.04% 8.38% 8.73% 9.07% 9.43% 9.82% 10.22% 10.65% 11.11% 11.60%
Allview <F1>       7.77% 7.24% 7.54% 7.82% 8.12% 8.44%  8.77%  9.12%  9.50%  9.89%
Colonel            4.61% 4.23% 4.90% 5.08% 5.26% 5.46%  5.66%  5.87%  6.09%  6.32%
Fox Valley <F1>    7.50% 6.95% 7.23% 7.51% 7.79% 8.10%  8.42%  8.75%  9.11%  9.49%
Middletown         7.67% 7.13% 7.42% 7.70% 8.00% 8.31%  8.64%  8.99%  9.36%  9.75%
Ocala              8.94% 8.35% 8.70% 9.04% 9.39% 9.77% 10.17% 10.60% 11.05% 11.53%
Schaumburg <F1>    6.38% 5.84% 6.09% 6.32% 6.56% 6.81%  7.08%  7.36%  7.65%  7.97%
Southridge         5.53% 5.11% 5.32% 5.52% 5.72% 5.93%  6.16%  6.39%  6.64%  6.89%
Tidewater <F1>     7.57% 6.98% 7.27% 7.56% 7.85% 8.16%  8.49%  8.84%  9.21%  9.60%
Travis             5.63% 5.14% 5.36% 5.56% 5.76% 5.98%  6.21%  6.45%  6.70%  6.96%
Westridge <F1>     6.46% 5.97% 6.22% 6.45% 6.69% 6.95%  7.22%  7.50%  7.80%  8.12%
Williamsburg <F1>  8.05% 7.47% 7.78% 8.09% 8.40% 8.74%  9.09%  9.47%  9.86% 10.29%
----------------------------------------------------------------------------------
<FN>                                                                              
<F1>   Note  that even though the Series A Bonds bears interest at a              
     spread  over the weekly BMA floating rate index, as  previously              
     described  under  "Financing  Transaction", the rate associated               
     with the related Series B Bonds must fluctuate to maintain  the              
     "Combined  Rate"  stated  above.  Consequently,  the  financing              
     transaction has no effect on the combined rate of these  select              
     bonds.                                                                       
</FN>
</TABLE>


<PAGE> 39

    The Combined Rates decrease in the fourth year following  the
date  of refunding due to the principal payments commencing under
the  Original Refunding Bonds and, thereafter, the Combined Rates
increase  every year through the remaining term of  the  Original
Refunding Bonds.

    The table below sets forth the cumulative taxable investments
and loans as of December 31, 1998:

<TABLE>
=============================================================================
Schedule of Taxable Investments and Loans (in thousands except interest rate)
=============================================================================
<CAPTION>
                    Principal at          Annualized          Monthly        
Property         December 31, 1998       Interest Rate      Interest <F1>     
-----------------------------------------------------------------------------
<S>                 <C>                     <C>                <C>
Dallas              $   680                  9.30%             $  5
Carpenter               915                  9.30%                7
Jacaranda             3,174                 12.00%               32
Summerwalk            7,070                 12.00%               71
-----------------------------------------------------------------------------
Total               $11,839                   N/A              $115
-----------------------------------------------------------------------------
<FN>
<F1>   Monthly interest is accrued at the stated interest rate. Payments are 
     received according to cash availability.
</FN>

</TABLE>


      Guarantees.   In connection with the Summerwalk  investment, OTEF II, 
along with the operating partnership that  owns this  property,  executed a 
guaranty  agreement   relating  to  payment  of issuer and trustee fees and
expenses (including expenses of their  respective counsel),  as  well as an  
indemnity agreement relating to  environmental  matters  pertaining  to the 
property.  OTEF II obtained Phase I environmental  site assessment  reports
for  the  Summerwalk  and  Jacaranda  investments  which,  subject  to  the 
limitations    stated   therein,   conclude   generally  that  no   adverse 
environmental   conditions   requiring   remediation exist  at either site.
Accordingly, the Managing General Partner  believes  that OTEF II does  not   
have material financial  exposure  under  these  agreements.   OTEF II  may 
execute similar agreements in connection with  new investments  made  after 
the date of this report.

<PAGE> 40

Notes to Financial Statements

Note 7.   Investments in Bonds (continued)

<TABLE>

   Information on the Bonds as of December 31, 1998 and 1997 (in thousands) and the related properties is as follows:          
<CAPTION>                                                                                                                       
                                                  Carrying Value at 12/31/98         1998       1997     Total  Monthly Interest
                                         Combined --------------------------      Unrealized Unrealized Carrying----------------
                              Maturity     Face     Other     A        B            Gain or    Gain or  Value @ Other  A     B  
Bond Investment                 Date      Amount     Bond    Bond     Bond    Total  (Loss)     (Loss)  12/31/97 Bond Bond  Bond
--------------------------------------------------------------------------------------------------------------------------------
REFUNDED BONDS:                                                                                                                 
                                                                                                                                
<S>                        <C>            <C>      <C>     <C>      <C>      <C>      <C>     <C>     <C>      <C>  <C>  <C>  
Chesapeake Landing,        November 2026  $ 25,450 $     0 $ 13,102 $ 12,264 $ 25,366 $11,253 $ 9,407 $ 23,520 $  0 $ 41 $  118 
Fox Valley-Oxford L.P.<F1>                                                                                                      
                                                                                                                                
Hunt Club,                 December 2026    20,270       0    8,732    6,814   15,546   2,791   1,801   14,557    0   29     66 
Travis One-Oxford L.P.                                                                                                          
                                                                                                                                
Savannah Trace,            November 2026    23,400       0   11,232    9,229   20,461   5,755   4,264   18,970    0   35     89 
Schaumburg-Oxford L.P.<F1>                                                                                                      
                                                                                                                                
Windrift at Seaview Ridge, December 2026    29,430       0   11,258   10,126   21,384   2,948   1,582   20,018    0   37     98 
Southridge-Oxford L.P.                                                                                                          
                                                                                                                                
Chambrel at Pinecastle,    November 2026     9,500       0    5,458    4,042    9,500   4,043   4,859   10,316    0   17     54 
Ocala-Oxford L.P.                                                                                                               
                                                                                                                                
Chambrel at Montrose,      December 2026    12,800       0    7,354    5,446   12,800   4,325   5,492   13,967    0   25     72 
Akron One Retirement-                                                                                                           
  Oxford L.P.                                                                                                                   
                                                                                                                                
Chambrel at Club Hill,     March 2027       25,430       0    8,673    7,739   16,412   1,491     523   15,444    0   31     67 
Colonel I-Oxford L.P.                                                                                                           
                                                                                                                                
Northwoods,                January 2027     21,700       0   11,126   10,574   21,700  12,129  10,775   20,346    0   37    101 
Middletown-Oxford L.P                                                                                                           
                                                                                                                                
Reflections,              November 2026     25,644       0   13,998   11,646   25,644  12,553  11,335   24,426    0   44    118  
Tidewater-Oxford L.P.<F1>                                                                                                       
                                                                                                                                
Island Club,              November 2026     11,300       0    5,744    5,556   11,300   6,675   6,030   10,655    0   18     55 
Allview-Oxford L.P.<F1>                                                                                                         
                                                                                                                                
Windsor Park,             November 2026     14,000       0    6,333    5,743   12,076   6,428   5,552   11,200    0   20     56 
Westridge-Oxford L.P.<F1>                                                                                                       


<PAGE> 41
                                                                                                                                
Notes to Financial Statements                                                                                                   
                                                                                                                                
Note 7.   Investments in Bonds (continued)                                                                                       
                                                                                                                                
   Information on the Bonds as of December 31, 1998 and 1997 (in thousands) and the related properties is as follows:           
<CAPTION>                                                                                                                       
                                                  Carrying Value at 12/31/98         1998       1997     Total  Monthly Interest
                                         Combined --------------------------      Unrealized Unrealized Carrying----------------
                              Maturity     Face      Other    A        B            Gain or    Gain or  value @ Other  A     B  
Bond Investment                 Date      Amount     Bond    Bond     Bond    Total  (Loss)     (Loss)  12/31/97 Bond Bond  Bond
--------------------------------------------------------------------------------------------------------------------------------
<S>                       <C>             <C>      <C>     <C>      <C>      <C>      <C>     <C>     <C>      <C>  <C>  <C>    
Chambrel at Williamsburg, November 2026   $ 25,000 $     0 $ 13,708 $ 11,292 $ 25,000 $ 9,563 $ 9,377 $ 24,814 $  0 $ 43 $  125 
Williamsburg-Oxford L.P.<F1>                                                                                                    
                                                                                                                                
Springhouse,              April 2018        10,300  10,296        0        0   10,296       0       0   10,296   62    0      0 
Dallas-Oxford L.P.<F3>                                                                                                          
                                                                                                                                
Steeplechase,             September 2018    14,200  14,070        0        0   14,070       0       0   14,070   86    0      0 
Carpenter-Oxford L.P.<F3>                                                                                                       
                                                                                                                                
UNREFUNDED BONDS:                                                                                                               
                                                                                                                                
San Bruno,                November 2009     25,000  24,658        0        0   24,658  14,267   7,971   18,362  172    0      0 
San Bruno-Oxford L.P.<F2> December 2009      1,060   1,045        0        0    1,045     604     338      779    7    0      0 
                                                                                                                                
The Harbour,              November 2009      8,710   5,006        0        0    5,006      42    (725)   4,239   60    0      0 
Apollo-Oxford Associates L.P.<F2>                                                                                               
                                                                                                                                
Harbor Town Jacaranda,    April 2006         4,200   4,200        0        0    4,200       0       0        0   22    0      0 
Jacaranda-Oxford L.P.<F4>                                                                                                       
                                          --------------------------------------------------------------------------------------
                                    Total $307,394 $59,275 $116,718 $100,472 $276,465 $94,867 $78,581 $255,979 $409 $377 $1,019 
                                          ======================================================================================
<FN>                                                                                                                            
<F1> Financing  Transaction.  On  August  22,  1997  OTEF II securitized approximately $38.8 million of Series  A  Bonds        
     collateralized by four properties and on February 14, 1998 and May 21, 1998 OTEF II securitized an additional $23.8        
     million of Series A Bonds collaterizing by the underlying properties Fox Valley and Schaumburg.   OTEF II  retained        
     all of its interest in the corresponding Series B Bonds.  In addition,  OTEF  II  applied approximately $15 million        
     of the proceeds  to  the  purchase  of  a subordinated interest in the  securitized transactions.   OTEF II    also        
     retained certain rights to reacquire the securitized assets. In connection with this transaction, OTEF II converted        
     the interest rate mode on these six  Series  A Bonds from an annual  reset  to  weekly  floaters.   For   financial        
     statement purposes, these transactions are accounted for as a  financing  transaction  and, accordingly, the amount        
     of the Series A Bonds financed of $62.6  million  is  reflected  as  Securities  Held  in  Trust,  the   net   cash        
     proceeds are classified  as  Cash  and  Cash Equivalents and the difference  between  the  principal  amount of the        
     Series A Bonds financed and the principal amount  of the subordinated interest acquired by OTEF  is  classified  as        
     financing debt.  The financing debt bears interest at the Banking Marketing Association weekly  floating  bond rate        
     ("BMA") plus approximately 80 to 85 basis points which averaged  4.41%  from  the date of closing through  December        
     31, 1998. For federal income tax purposes, these transactions are treated as a sale by OTEF  II  of the  Series   A        
     Bonds and a purchase of the subordinated interests, which resulted in  capital  losses in 1998 and 1997,  of   $3.6        
     million  and  $3.8 million, respectively.                                                                                 -
<F2> The  Managing General Partner is continuing its efforts to  refund  these bonds.                                            
<F3> The Dallas and Carpenter bonds acquired in December of 1997 were refinanced in 1998, canceling approximately $3.4          
     million in combined face amount.  The Carpenter Refunding Bonds and the Dallas Refunding Bonds  each   bear   fixed        
     interest at the annual rate of 7.25% for an initial term through October 1, 2005 and July 1, 2005, respectively, at        
     which time the bonds must be remarketed.                                                                                   
<F4> On April 30, 1998, OTEF II purchased an unrelated third party $4.2 million tax exempt bond in connection with the          
     Jacaranda transaction discussed above.  This bond currently bears an annual fixed  rate  of  6.25%,  however,   the        
     Managing General Partner anticipates that it will be able to increase the interest rate during  1999 in  connection        
     with a refinancing or refunding.                                                                                           
</FN>                                                                                                                           
</TABLE>


<PAGE> 42
                                                            
Notes to Financial Statements                                         
                                                                       
Note 7.   Investments in Bonds (continued)                       

<TABLE>
                                                                                                                                
   Information on the Bonds as of December 31, 1998 and 1997 (in thousands) and the related properties is 
     summarized as follows:                                                                               
                                                                                                                                
Schedule of Tax-Exempt Securities Summary                                                                                       
-----------------------------------------                                                                                       
<CAPTION>
                                                  Carry Value at 12/31/98                                Total  
                                         Combined --------------------------         1998       1997    Carrying 
                                           Face      Other    A        B          Unrealized Unrealized Value @ 
Bond Investment                           Amount     Bond    Bond     Bond    Total  Gain       Gain    12/31/97 
----------------------------------------------------------------------------------------------------------------
<S>                                       <C>      <C>     <C>      <C>      <C>      <C>     <C>     <C>
Investments in tax-exempt securities      $307,394 $59,275 $ 54,153 $100,472 $213,900 $67,711 $61,223 $217,159  
Investments in tax-exempt securities                                                                             
  held in trust                                  0       0   62,565        0   62,565  27,156  17,628   38,820  
                                          ----------------------------------------------------------------------
                            Total Bonds   $307,394 $59,275 $116,718 $100,472 $276,465 $94,867 $78,851 $255,979  
                                          ====================================================================== 
</TABLE>


<PAGE> 43

<TABLE>

Note 8. Quarterly Results and Market Information (in thousands, except per BACs 
        and Market Prices) (Unaudited)

<CAPTION>
                                     For the Three Months Ended in 1998
                                ---------------------------------------------
                                March 31   June 30  September 30  December 31
                                ---------------------------------------------
<S>                              <C>       <C>           <C>         <C>
Revenues                                                                     
 Interest on Investment in                                                   
   tax-exempt securities         $4,727    $4,335        $4,593      $ 5,312
 Interest on Investments in                                                  
   tax-exempt sercurities held                                               
   in trust                         474       669           665          651
 Interest on taxable and loans       20       153           318          346
 Other tax-exempt income            121       162           157          448
-----------------------------------------------------------------------------
   Total Revenues                 5,342     5,319         5,733        6,757
-----------------------------------------------------------------------------
Expenses                                                                     
 Governance and                                                              
   administrative expenses          234       207           214          365
 Litigation and settlement costs      5         2             1            0
 Other liquidity and growth                                                   
   expense                          215       170           251          395
 Finance interest expense           331       489           500          489
-----------------------------------------------------------------------------
   Total Expenses                   785       868           966        1,249
-----------------------------------------------------------------------------
Net income                       $4,557    $4,451        $4,767      $ 5,508
-----------------------------------------------------------------------------
Other comprehensive income:                                                   
  Unrealized gains on                                                         
  investments                    $  135    $1,502        $4,913      $ 9,736
-----------------------------------------------------------------------------
Comprehensive income:            $4,692    $5,953        $9,680      $15,244
=============================================================================
Net income allocated to                                                       
  BAC holders                    $4,377    $4,269        $4,576      $ 5,287
=============================================================================
Net income per BAC               $0.609    $0.594        $0.637      $ 0.736
=============================================================================
Weighted average BACs                                                         
  outstanding                     7,185     7,185         7,185        7,185
=============================================================================
Net income per BAC -                                                          
  assuming dilution <F1>         $0.603    $0.587        $0.631      $ 0.735
=============================================================================
Weighted average BACs                                                        
  outstanding - assuming                                                     
  dilution <F1>                   7,262     7,271         7,252        7,187 
=============================================================================
Distribution per BAC             $0.495    $0.510        $0.510      $ 0.510
=============================================================================
Market Information:                                                           
  Opening Price                  $25.31    $26.75        $27.75      $ 25.75
  High                           $27.81    $28.88        $28.31      $ 25.88
  Low                            $25.31    $26.31        $24.00      $ 22.50
  Closing Price                  $26.75    $27.75        $25.75      $ 23.50
=============================================================================
<FN>                                                                         
<F1>  As required  by  FASB  128, net income  per  BAC  assuming dilution has 
      been presented as if the stock options awarded on May 21, 1997 had been 
      exercised.  The effect would be to increase the number  of  shares      
      outstanding and  effectively  decrease earnings.  See Notes 1 and 4 for 
      further discussion.                                                     
</FN>

</TABLE>

<PAGE> 44

<TABLE>

Note 8. Quarterly Results and Market Information (in thousands, except per 
        BACs and Market Prices) (Unaudited) (Continued)

<CAPTION>
                                      For the Three Months Ended in 1997 <F2>  
                                  -------------------------------------------
                                  March 31  June 30  September 30 December 31
                                  -------------------------------------------
<S>                                <C>      <C>         <C>          <C>     
Revenues                                                                      
  Interest on Investments in                                                   
    tax-exempt securities          $4,605   $4,629      $4,387       $4,113
  Interest on Investments in                                                   
    tax-exempt securities held                                                  
    in trust                            0        0         202          465
  Other tax-exempt income              91      113         187          338
-----------------------------------------------------------------------------
      Total Revenues                4,696    4,742       4,776        4,916
-----------------------------------------------------------------------------
Expenses                                                                      
  Governance and                                                               
    administrative expenses           312      185         151          274
  Litigation and settlement costs      98      106          37           24
  Other liquidity and growth                                                   
    expense                            20      127         435          258
  Finance interest expense              0        0         139          322
-----------------------------------------------------------------------------
      Total Expenses                  430      418         762          878
-----------------------------------------------------------------------------
Net income                         $4,266   $4,324      $4,014       $4,038
=============================================================================
Net income allocated to                                                       
  BAC holders                      $4,181   $4,054      $3,801       $3,857
=============================================================================
Net income per BAC                 $0.557   $0.565      $0.529       $0.537
=============================================================================
Weighted average BACs                                                         
  outstanding                       7,500    7,185       7,185        7,185
=============================================================================
Net income per BAC -                                                          
  assuming dilution <F3>           $0.557   $0.564      $0.526       $0.535
=============================================================================
Weighted average BACs outstanding                                            
  -assuming dilution <F3>           7,500    7,197       7,219        7,219
=============================================================================
Distribution per BAC               $0.476   $0.476      $0.495       $0.495
=============================================================================
Market Information:                                                           
  Opening Price <F1>                 N/A      N/A       $20.00       $26.31
  High                               N/A      N/A       $27.63       $26.44
  Low                                N/A      N/A       $21.38       $25.19
  Closing Price                      N/A      N/A       $26.31       $25.31 
=============================================================================
<FN>
<F1>  OTEF II began trading on the American Stock Exchange on July 22, 1997.
<F2>  On April 1, 1997, 314,675 BACs were converted to 12,587 SQB shares in 
     accordance with the class action litigation settlement discussed in Note
     9. Consequently, the number of BACs decreased from 7,499,875 in the first
     quarter to 7,185,200 in the second  quarter.
<F3> As  required  by  FASB  128, net income  per  BAC  assuming dilution has
     been presented as if the stock options awarded  on May 21, 1997 had been
     exercised.  The effect would be to increase the  number  of  shares  
     outstanding and  effectively  decrease earnings.
</FN>

</TABLE>


<PAGE> 45

Note 9.  Other Events

    As previously reported, OTEF II and certain of its affiliates
(collectively,  "Defendants") were Defendants in  putative  class
and  derivative lawsuits consolidated as In re Oxford Tax  Exempt
Fund  Securities  Litigation, No.  WMN  95-3643  (D.Md.).   These
complaints alleged breach of OTEF's partnership agreement, breach
of  fiduciary duty by the general partners, and breach of Federal
and  state  securities  laws,  and  sought  unspecified  monetary
damages  and  various forms of equitable relief.  The  plaintiffs
and  the  Defendants in the consolidated action  entered  into  a
Stipulation  of  Settlement (the "Settlement"), which  was  filed
with  the  U.S.  District  Court for  the  District  of  Maryland
("Court")  on November 18, 1996.  At a hearing held  on  November
21,  1996,  the  Court  entered  an  order  granting  preliminary
approval  of  the  Settlement  and  providing  certification  for
settlement purposes only of a class consisting of all OTEF II BAC
Holders  as of the record date.  On January 31, 1997,  the  Court
issued  an  order  granting final approval of the  terms  of  the
settlement  of the OTEF II litigation.  An appeal was filed  with
the  United States Court of Appeals for the Fourth Circuit by  an
OTEF  II BAC Holder who was appearing pro se and on February  24,
1998,  the United States Court of Appeals for the Fourth  Circuit
affirmed the lower court decision by per curiam opinion.  In June
1998, OTEF II made the final payment of plaintiff's counsel  fees
and  expenses in the amount of $1.54 million upon the  expiration
of all appeal periods and dismissal of the state court action.

Note 10.  Subsequent Events

     On  February  12,  1999,  OTEF  II  made  a  quarterly  cash
distribution of approximately $3.8 million or $0.510 per BAC   to
BAC  Holders of record and $12.38 to SQB holders of record as  of
December 31, 1998.

    On  February  8,  1999, OTEF II distributed to  existing  SQB
Holders  an  offering circular describing a  voluntary  offer  to
exchange BACs for SQBs on a 25-for-1 basis.  The offer expires on
May  30,  1999, unless extended.  See Notes 2 and 3.  If all  SQB
Holders  elected to exchange their SQBs for BACs, OTEF  II  would
issue  an additional 173,650 BACs, or approximately 2.4%  of  the
issued  and  outstanding  BACs.  This would  increase  the  total
number  of  issued  and  outstanding BACs to  7,356,850  (without
giving  effect  to  outstanding options).  Any  dilution  of  the
existing  BACs, however, would be immaterial because  the  assets
currently  segregated for SQB Holders would be  released  to  the
benefit of BAC Holders.


<PAGE> 46

The following table sets forth, on a quarterly basis, all distributions
declared by OTEF II and OTEF.

<TABLE>
                                             Amount Distributed <F1>          
--------------------------------------------------------------------------------
<CAPTION>
                                            BAC       Per      SQB              
                     Quarterly  Per BAC    Holders    SQB    Holders   General  
Quarter Ended <F1>    Payments    <F5>       <F2>     <F6>     <F6>    Partners 
--------------------------------------------------------------------------------
<S>                       <C>  <C>      <C>          <C>    <C>       <C> 
1998                                                                             
December 31, 1998         53   $ 0.5100 $  3,663,432 $12.38 $ 85,991  $   76,519 
September 30, 1998        52   $ 0.5100 $  3,664,452 $12.38 $ 85,991  $   76,540 
June 30, 1998             51   $ 0.5100 $  3,664,452 $12.38 $ 85,991  $   76,540 
March 31, 1998            50   $ 0.4950 $  3,556,674 $12.38 $ 86,549  $   74,351 
                               -------- ------------ ------ --------- ----------
                               $ 2.0250 $ 14,549,010 $49.52 $344,522  $  303,950
--------------------------------------------------------------------------------
1997                                                                            
December 31, 1997         49   $ 0.4950 $  3,556,674 $12.38 $ 87,811  $   74,378
September 30, 1997        48   $ 0.4950 $  3,556,674 $12.38 $110,566  $   74,842
June 30, 1997             47   $ 0.4760 $  3,420,155 $11.90 $149,785  $   72,856
March 31, 1997            46   $ 0.4760 $  3,569,940 $  N/A $    N/A  $   72,856
                               -------- ------------ ------ --------- ----------
                               $ 1.9420 $ 14,103,443 $36.66 $348,162  $  294,932
--------------------------------------------------------------------------------
1996                                                                            
December 31, 1996         45   $ 0.4760 $  3,569,940 $ N/A  $    N/A  $   72,856 
September 30, 1996        44   $ 0.4760 $  3,569,940 $ N/A  $    N/A  $   72,856
June 30, 1996             43   $ 0.4760 $  3,569,940 $ N/A  $    N/A  $   72,856 
March 31, 1996            42   $ 0.4760 $  3,569,940 $ N/A  $    N/A  $   72,856 
                               -------- ------------ ------ --------  ----------
                               $ 1.9040 $ 14,279,760 $ N/A  $    N/A  $  291,424
--------------------------------------------------------------------------------
1995                                                                            
For the 4 quarters ended 38-41 $ 1.9040 $ 14,279,760 $ N/A  $    N/A  $  291,424
--------------------------------------------------------------------------------
1994                                                                            
For the 4 quarters ended 34-37 $ 1.8000 $ 13,499,776 $ N/A  $    N/A  $  275,504
--------------------------------------------------------------------------------
1993                                                                            
For the 4 quarters ended 30-33 $ 1.7628 $ 13,220,779 $ N/A  $    N/A  $  269,813
--------------------------------------------------------------------------------
1992                                                                            
For the 4 quarters ended 26-29 $ 1.7008 $ 12,755,787 $ N/A  $    N/A  $  260,323
--------------------------------------------------------------------------------
1991                                                                            
For the 4 quarters ended 22-25 $ 1.6512 $ 12,384,000 $ N/A  $    N/A  $  252,736
--------------------------------------------------------------------------------
1990                                                                            
For the 4 quarters ended 18-21 $ 1.6512 $ 12,384,000 $ N/A  $    N/A  $  252,736
--------------------------------------------------------------------------------
1989                                                                            
For the 4 quarters ended 14-17 $ 1.6512 $ 12,384,000 $ N/A  $    N/A  $  252,736
--------------------------------------------------------------------------------
1988 <F3>                                                                       
For the 4 quarters ended 10-13 $ 2.4760 $ 18,570,000 $ N/A  $    N/A  $  378,980
--------------------------------------------------------------------------------
1987                                                                            
For the 4 quarters ended  6-9  $ 3.4124 $ 25,593,000 $ N/A  $    N/A  $  522,306  
--------------------------------------------------------------------------------
1986                                                                            
For the 4 quarters ended  2-5  $ 3.4000 $ 25,500,000 $ N/A  $    N/A  $  520,408  
--------------------------------------------------------------------------------
1985 <F4>                                                                        
December 31, 1985          1   $ 0.5952 $  3,894,287 $ N/A  $    N/A  $   79,475  
--------------------------------------------------------------------------------
Total                          $27.8758 $207,397,602 $86.18 $692,684  $4,246,747  
================================================================================
<FN>                                                                            
<F1> Distributions  in  all  cases  were  paid  in  the  quarter  immediately   
     following the quarter to which the distribution relates.                   
<F2> The  aggregate  amount  distributed to BAC Holders  since  inception  is   
     $207,397,602,  or approximately 69% based on an original  investment  of   
     $1,000 per BAC.                                                            
<F3> Excludes  the $507,450 ($0.068 per BAC) distributed on August  15,  1988   
     as a return of capital.                                                    
<F4> Assumes BAC Holders were admitted on October 10, 1985.                     
<F5> All periods have been restated to reflect the 25-for-1 stock split         
     effectuated on July 22, 1997.                                              
<F6> On April 1, 1997, in accordance with the class action litigation, OTEF     
     granted the option to BAC Holders to elect SQB  status.  Of the 12,587     
     units held as SQBs as of April 1, 1997, 5,484 elected to be redeemed as    
     of August 1, 1997.  SQBs were not affected in the 25-for-1 stock split     
     on July 1, 1997.  There were 7,093 SQBs outstanding at 12/31/97, and     
     6,946 SQBs outstanding at 12/31/98.                                        
</FN>                                                                           

</TABLE>


<PAGE> 47

General Partnership Information


Legal Counsel
Shaw, Pittman, Potts & Trowbridge
Washington, D.C.

Independent Accountants
PricewaterhouseCoopers LLP
Washington, D.C.

Transfer Agent and Registrar
Registrar & Transfer Company
ATTN:  William Tatler, Vice President
Stock Transfer Department
10 Commerce Drive
Cranford, NJ 07016
1-800-368-5948

Managing General Partner
Oxford Tax Exempt Fund II Corporation
7200 Wisconsin Avenue, 11th floor
Bethesda, Maryland  20814

The Annual Report on Form 10-K for the
year ended December 31, 1998, filed with
the Securities and Exchange Commission,
is available to SQB and OTEF II BAC Holders and may be
obtained by writing:

Investor Services
Oxford Tax Exempt Fund II Limited Partnership
7200 Wisconsin Avenue, 11th floor
Bethesda, MD 20814
1-888-321-OTEF


<PAGE> 48

Instructions for Investors who wish to reregister or transfer
OTEF II BACs or SQBs

On   July  22,  1997,  the American Stock Exchange began  trading
OTEF  II  BACs under the ticker symbol, OTF.       Please  follow
the instructions below to expedite the reregistration or transfer
of  ownership  of any OTEF II BACs or SQBs ("SQB") that  you  may
own.

  IF YOU DO NOT HOLD CERTIFICATES

  Your  shares are being held by your brokerage firm  in  "street
  name".  To register a change of ownership of OTEF II BACs  held
  in  such  accounts, please have your account representative  or
  financial  consultant request the necessary transfer documents.
  YOU   MUST  HAVE  THE  PROPER  TRANSFER  DOCUMENTS  FROM   YOUR
  BROKERAGE  FIRM.   Additionally, please  contact  your  account
  representative or financial consultant for address changes.


  IF YOU HOLD CERTIFICATES

  Effective  July  1,  1997,  OTEF  II  appointed  Registrar  and
  Transfer  Company  ("R&T") as the sole registrar  and  transfer
  agent with respect to the OTEF II BACs and SQBs.

  All  notices, claims, certificates, requests, demands and other
  communications relating to transfers of OTEF II BACs  and  SQBs
  should be sent to:

                    Registrar and Transfer Company
                    Attn:  William Tatler, Vice President
                    Stock Transfer Department
                    10 Commerce Drive
                    Cranford, NJ  07016

  All  phone calls relating to such transfers should be  directed
  to:
                    
                    Registrar and Transfer Company
                    Stock Transfer Department
                    1-800-368-5948

  GENERAL INFORMATION

  All  general  inquiries relating to OTEF II should be  directed
  to OTEF II Investor Services at 1-888-321-OTEF.

  The  Annual Report on Form 10-K for the year ended December 31,
  1998,  filed  with the Securities and Exchange  Commission,  is
  available  to SQB and OTEF II BAC Holders and may  be  obtained
  by writing:


                                
                        Investor Services
          Oxford Tax Exempt Fund II Limited Partnership
                7200 Wisconsin Avenue, 11th Floor
                    Bethesda, Maryland  20814
                                
                                
             ALSO VISIT OUR WEB PAGE AT WWW.OTEF.COM