<PAGE> 1
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                          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, 1999

                               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:
  Beneficial Assignee Interests

Securities registered pursuant to Section 12(g) of the Act:  NONE

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.  [   ].

At  December  31,  1999,  the  following  classes  of  beneficial
assignee   interests  of  Oxford  Tax  Exempt  Fund  II   Limited
Partnership  were outstanding; (i) 7,338,425 Beneficial  Assignee
Interests   ("BACs")   with   an  aggregate   market   value   of
$166,031,866, and (ii) 737 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 1999 Annual Report are
                           incorporated by reference into Parts I,
                           II and III.

Exhibit Index is on page 11.

Total number of pages is 52.


<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 29 through  49,
respectively,  of  the  1999  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 40 through 46 in the 1999
Annual  Report of the Registrant which is incorporated herein  by
reference.

Item 3.  Legal Proceedings.

       None.

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

       None.

                             PART II

Item 5.  Market Price of 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 47 through
     48  of  the 1999 Annual Report  which is  incorporated  herein
     by reference.

    (b)  Number of Security Holders.

         The number of BAC Holders at  December 31, 1999 is  13,785
     13,785.  The number of SQB  holders  at December 31, 1999  was
     20.

    (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  15 of  the   1999  Annual  Report,
     "Report  of  Management" at  pages 16  through 23,  "Notes  to
     Financial   Statements"  at   pages   29   through   49,   and
     "Distribution  Information" at page  50  of  the  1999  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  15  of  the
1999 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 16 through 23 of the 1999
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 24 through 49 of the 1999  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          63 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        48 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       45 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.  49 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          51 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        46 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    52 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          45 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.


      (d)  Family Relationships.  None.

      (f)  Involvement in Certain Legal Proceedings.  None.

      (g)  Promoters and Controlling Persons.  Not applicable.



<PAGE> 5

          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP

                            FORM 10-K

                      PART III (continued)

     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,  1999
(the "1999 fiscal year"), or representations by reporting persons
that  no  other reports were required for the 1999  fiscal  year,
OTEF  II  believes  that all reporting persons timely  filed  all
reports  required by Section 16(a) of the Exchange Act, with  the
exception  of  Stephen  P.  Gavula,  Jr.,  a  director   of   the
Registrant's  managing general partner.  Mr. Gavula inadvertently
omitted three purchases during three reporting periods in 1999 in
the   aggregate  amount  of  90  BACs  made  through  a  dividend
reinvestment program.  These purchases were reported on a Form  4
filed  with the SEC on March 7, 2000, and on a Form 5 filed  with
the SEC on March 17, 2000.

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
1999,  the two independent directors received a total of  $40,000
in directors' fees.

     OTEF  II's  Incentive  Option Plans.  In October  1995,  the
Financial Accounting Standards Board ("FASB") issued SFAS No. 123
"Accounting for Stock-based Compensation" (SFAS No.  123).   This
Statement  defines  a fair value based method of  accounting  for
stock-based employee compensation.  However, SFAS No. 123  allows
an  entity  to  continue to measure compensation cost  for  those
plans  using  the  intrinsic  value based  method  of  accounting
prescribed by APB Opinion No. 25 "Accounting for Stock Issued  to
Employees" (APB 25).  OTEF II has historically used the intrinsic
value  based method of accounting prescribed by APB25 and related
interpretations,  and has adopted the disclosure-only  provisions
of  SFAS  No. 123.  Under APB 25, compensation expense for  stock
options is measured on the first date at which both the number of
shares  and  the amount to be paid for the shares  (the  exercise
price) are known.  Although OTEF II adopted APB 25 accounting for
its 1997 Incentive Option Plan, it has not yet adopted either APB
25  or SFAS No. 123 accounting for its 1999 Incentive Option Plan
pending the granting of such options.

    On  May 21, 1997,  OTEF  II  adopted an incentive option plan
(the  "1997  Incentive Option Plan") in order  for  the  Managing
General Partner to attract and retain key employees and advisers.
The  1997  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 then 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 1997 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.  Since the exercise price
of  the options approximated the BAC market price at the date  of
grant,  no  compensation expense was recognized at that  time  in
accordance  with APB 25.  At December 31, 1999, the market  price
of  $22.625 was less than the exercise price.  Since the date  of
grant,  no options have been exercised or forfeited.  If OTEF  II
had  adopted SFAS No. 123, it would have recognized a  $2.09  per
option compensation expense charge to net income of approximately
$1.3 million in 1997.  This amount was estimated using the Black-
Scholes  option-pricing model and assumes  a  dividend  yield  of
7.9%,  expected volatility of 18.6%, risk free interest  rate  of
6.2% and an expected option life of 7 years.


<PAGE> 6

          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP

                            FORM 10-K

                      PART III (continued)


      On  December  15, 1999, OTEF II adopted a second  incentive
option  plan  (the  "1999  Incentive  Option  Plan").   The  1999
Incentive Option Plan was subject to certain contingencies  which
were  satisfied in the first quarter of 2000.  The 1999 Incentive
Option  Plan  authorizes the granting to the directors,  officers
and  employees  of  the  Managing  General  Partner  and  certain
affiliates of options to purchase 350,000 BACs. Additionally, the
1999  Incentive Option Plan authorizes the Board of Directors  to
grant  Dividend  Equivalent Rights ("DERs") in  tandem  with  the
options.   The  DERs provide for either quarterly  option  strike
price  reductions  to the option holders in  the  amount  of  the
quarterly  dividend,  or,  with the  approval  of  the  Board  of
Directors, quarterly dividend payments.  When granted, the strike
price  of  the BAC options will be no less than the  fair  market
value of the BACs on the date of grant.  If OTEF II adopts APB 25
with respect to this plan, since the option strike price will  be
no  less  than the then current BAC market price, no compensation
expense  is expected to be recognized at date of grant.  If  OTEF
II  adopts SFAS No. 123 for the 1999 Incentive Option Plan, there
will  be  a charge to compensation expense of approximately  $3.5
million  at  the date of the grant.  This estimate was determined
using the Black-Scholes pricing-model as provided by SFAS No. 123
and assumes a dividend yield of 0%, expected volatility of 15.7%,
risk-free interest rate of 6.3% and an expected option life of  8
years.   No options or DERs were granted under this plan  through
the  opinion  date  of  the  Report  of  Independent  Accountants
accompanying  these  financial statements and  at  the  time  any
options  or  DERs  are granted the actual charge to  compensation
expense  recorded  may differ from Management's current  estimate
given above.

Option Grants In Fiscal 1999

   Shown  below  is information concerning option grants  to  the
executive  officers  of  the Managing General  Partner  who  have
received granted options to purchase OTEF II BACs.

<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>


<PAGE> 7

          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP

                            FORM 10-K

                      PART III (continued)

         Aggregate Option Exercises in Last Fiscal Year and
                        Fiscal Year-End Values

      Shown  below is information with respect to the unexercised
options  to purchase OTEF II BACs held by the executive  officers
of  OTEF  II  Corporation as of the end of OTEF II's 1999  fiscal
year.  None  of  the  executive officers of OTEF  II  Corporation
exercised any options during OTEF II's 1999 fiscal year.

<TABLE>
------------------------------------------------------------------------------
<CAPTION>
                           Number of BACs
                       Underlying Options at       Value of Options at
                        End of Fiscal Year          End of Fiscal 1999 <F1>
Name                Exercisable  Unexercisable    Exercisable  Unexercisable
------------------------------------------------------------------------------
<S>                   <C>              <C>            <C>          <C>
Leo E. Zickler        163,031          0              0             0
Francis P. Lavin      163,031          0              0             0
Robert B. Downing      82,150          0              0             0
Mark E. Schifrin       75,620          0              0             0
Marc B. Abrams         61,606          0              0             0
Richard R. Singleton   47,997          0              0             0
------------------------------------------------------------------------------
   TOTAL              593,435          0              0             0
==============================================================================
<FN>
<F1> Since  the  market  value of the OTEF II BACs  on  the  last
     trading day of 1999  (as  measured  by  the  American  Stock
     Exchange closing bid price of $22.625)  was  less  than  the
     exercise price, the options are not in the money.
</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.

   The  following table sets forth, as of December 31, 1999,  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.


<PAGE> 8

          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP

                            FORM 10-K

                      PART III (continued)

<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                   2.04%

Francis P. Lavin <F3> <F4>
7200 Wisconsin Avenue, Suite 1100
Bethesda, MD  20814                   172,131                   2.15%

Robert B. Downing <F3> <F4>
7200 Wisconsin Avenue, Suite 1100
Bethesda, MD  20814                    91,150                   1.14%

Stephen P. Gavula, Jr. <F3>
8300 Greensboro Drive, Suite 970
McLean, VA  22102                      24,241                   0.30%

Scot B. Barker <F3>
1801 California Street
Denver, Co  80202                      21,261                   0.27%

Mark E. Schifrin <F4>
7200 Wisconsin Avenue, Suite 1100
Bethesda, MD  20814                    83,220                   1.04%

Marc B. Abrams <F4>
7200 Wisconsin Avenue, Suite 1100
Bethesda, MD  20814                    64,486                   0.81%

Richard R. Singleton <F4>
7200 Wisconsin Avenue, Suite 1100
Bethesda, MD  20814                    51,997                   0.65%
------------------------------------------------------------------------------
All executive officers and
directors as a group  (8 persons)     671,517                   8.40%
------------------------------------------------------------------------------
<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 were calculated assuming all BAC options  are
    exercised   by   those  individual  directors  and  executive
    officers of OTEF II Corporation who hold such options.
<F3>Indicates a director of OTEF II Corporation.
<F4>Indicates an executive officer of OTEF II Corporation.
</FN>
</TABLE>

   (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 34  to
     36  of  the  1999 Annual Report of the Registrant  which  is
     incorporated herein by reference.

    (c)  Indebtedness of Management.  None.

    (d)  Transactions with Promoters.  Not applicable.



<PAGE> 9

        OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP

                            FORM 10-K

                             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 1999 Annual Report and are incorporated
        by reference into Part II, Item 8.

                                               Sequentially
                                                 Numbered
                                                  Page(s)
                                               ------------
        Report of Independent Accountants           24


        Balance Sheets as of December 31,
        1999 and 1998.                              25

        Statements    of    Income    and
        Comprehensive  Income   for   the
        years  ended  December 31,  1999,
        1998 and 1997.                              26

        Statement  of  Partners'  Capital
        for the years ended December  31,
        1999, 1998 and 1997 for OTEF  II.           27

        Statements  of Cash Flows for the
        years  ended  December  31, 1999,
        1998 and 1997.                              28

        Notes   to  Financial  Statements,
        which   include  the   information
        required   to   be   included   in
        Schedule  IV - Mortgage  Loans  on
        Real Estate.                               29-49

     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).


<PAGE> 10

          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP

                            FORM 10-K

                       PART IV (continued)



     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, 1998.

     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, 1997.

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

        a. Annual  Report  for  the year ended December 31,  1999
           ("filed" only  to  the  extent material  therefrom  is
           specifically incorporated by reference).

   (b)  Reports on Form 8-K.

        No  reports on Form 8-K were filed during the  fourth
        quarter of 1999.

   (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> 11

          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                    1999 Annual Report    pps 29-49

3.  Legal Proceedings           1999 Annual Report    pps 16-23
                                                      and 29-49

5.  Market for Registrant's
    Partnership Interest and                           pps 15,16-23,
    Related Matters             1999 Annual Report        and 29-52

6.  Selected Financial Data     1999 Annual Report     pp 15

7.  Management's    Discussion
    and  Analysis of Financial
    Condition  and Results  of
    Operations                  1999 Annual Report     pps 16-23

8.  Financial  Statements  and
    Supplementary Data          1999 Annual Report     pps 24-49

11. Executive Compensation      1999 Annual Report     pp 34


14. Exhibits, Financial
    Schedules  and Reports  on
    Form 8-K                    1999 Annual Report     pps 16-49



<PAGE> 12

          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)  1999 Annual Report to Security Holders.

   Oxford  Tax  Exempt  Fund  II  Limited  Partnership's  Report
dated December 31, 1999, follows on sequentially numbered  pages
14 through 52 of this report.

(27)  Financial Data Schedule.


<PAGE> 13

          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: 3/28/00          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: 3/28/00          By:/S/ Leo E. Zickler
      -------             ----------------------------------------
                          Leo E. Zickler
                          Chairman of the Board of Directors and
                            Chief Executive Officer


Date: 3/28/00          By:/S/ Francis P. Lavin
      -------             ----------------------------------------
                          Francis P. Lavin
                          Director and President


Date: 3/28/00          By:/S/ Robert B. Downing
      -------             ----------------------------------------
                          Robert B. Downing
                          Director and Executive Vice President


Date: 3/28/00          By:/S/ Stephen P. Gavula, Jr.
      -------             ----------------------------------------
                          Stephen P. Gavula, Jr.
                          Director


Date: 3/28/00          By:/S/ Scot B. Barker
      -------             ----------------------------------------
                          Scot B. Barker
                          Director

      No   proxy   material   has been sent  to  the  Registrant's
security  holders.   The   Partnership's  1999  Annual  Report  is
expected  to be mailed to OTEF II  BAC  Holders before August  15,
2000.



<PAGE> 14

          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP

                       1999 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> 15

<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>
                               ---------------------------------------------------------------------------------------||
                                                                                                        |    Seven    ||   Five
                                                    For the years ended December 31,                    |    Months   ||   Months
                               -------------------------------------------------------------------------|    ended    ||   ended
                                                                                              Pro Forma | December 31,||  May 31,
FINANCIAL HIGHLIGHTS                  1999             1998            1997            1996    1995<F4> |  1995<F3>   ||   1995
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                <C>              <C>              <C>             <C>       <C>      |   <C>       ||  <C>
Total Assets                       $321,698         $309,086         $270,663        $228,733  $174,034 |   $174,034  ||  $163,856
Investment in Tax-Exempt                                                                                |             ||
  Securities                       $208,216         $213,900         $217,159        $215,529  $164,000 |   $164,000  ||  $153,032
Investment in Tax-Exempt                                                                                |             ||
  Securities Held in Trust         $ 76,765         $ 62,565         $ 38,820        $      0  $      0 |   $      0  ||  $      0
Total Revenue                      $ 24,607         $ 23,151         $ 19,130        $ 19,762  $ 16,626 |   $  9,610  ||  $  2,452
Net Income                         $ 19,974         $ 19,283         $ 16,642        $ 14,912  $ 15,210 |   $  8,369  ||  $  2,277
Net Income Allocated to                                                                                 |             ||
  BAC Holders                      $ 19,571<F7>     $ 18,509<F7>     $ 15,893<F7>    $ 14,614  $ 14,906 |   $  8,202  ||  $  2,232
Net Income per BAC                 $  2.670<F7>     $  2.576<F7>     $  2.188<F7>    $  1.948  $  1.988 |   $  1.094  ||  $  0.298
Net Income per BAC -                                                                                    |             ||
  assuming dilution                $  2.665<F8>     $  2.556<F8>     $  2.180<F8>    $      0  $      0 |   $      0  ||  $      0
Municipal Income (Tax Basis)       $ 26,278         $ 18,168         $ 16,983        $ 14,644  $ 16,210 |   $  8,369  ||  $  7,841
Municipal Income Allocated                                                                              |             ||
  to BAC Holders (Tax Basis)       $ 25,917<F6>     $ 17,422<F6>     $ 16,041<F6>    $ 14,351  $ 15,886 |   $  8,202  ||  $  7,687
Municipal Income per BAC                                                                                |             ||
  (Tax Basis)                      $  3.535<F6><F7> $  2.425<F6><F7> $  2.233<F6><F7>$  1.914  $  2.118 |   $  1.094  ||  $  1.025
Cash Distributions per BAC<F2>     $  2.090<F7>     $  2.025<F7>     $  1.942<F7>    $  1.904  $  1.904 |   $  1.428  ||  $  0.476
Weighted  Average OTEF II                                                                               |             ||
  BACs Outstanding <F9>               7,331<F7>        7,185<F7>        7,264<F7>       7,500     7,500 |      7,500  ||     7,500
Number of BAC Holders                13,785           15,075           16,009          15,678    15,061 |     15,061  ||    15,249
==================================================================================================================================
<CAPTION>                                                                                                             |
                                                                                                                      |
                                                      OTEF II <F3>                                                    |OTEF II<F1>
----------------------------------------------------------------------------------------------------------------------|-----------
                                                                                                        |   Seven     ||   Five
                                     For the years ended December 31,                                   |   months    ||   months
                               -------------------------------------------------------------------------|   ended     ||   ended
RECONCILIATION OF NET                                                                         Pro Forma |December 31, ||  May 31,
INCOME TO MUNICIPAL INCOME            1999             1998             1997            1996    1995<F4>|   1995      ||    1995
--------------------------------------------------------------------------------------------------------|-------------||----------
<S>                               <C>              <C>              <C>             <C>       <C>       |  <C>        ||  <C>
Net Income per financial                                                                                |             ||
  statements (GAAP)               $ 19,974         $ 19,283         $ 16,642        $ 14,912  $ 16,210  |  $  8,369   ||  $  2,277
Add:                                                                                                    |             ||
  Equity method adjustments:                                                                            |             ||
  - Equity Income <F3>                   0                0                0               0         0  |         0   ||    (2,305)
  - Interest received <F3>               0                0                0               0         0  |         0   ||     7,869
  Taxable interest income           (2,652)<F10>       (837)<F10>          0               0         0  |         0   ||         0
  Accrued base interest/                                                                                |             ||
    (reduction)/other                9,148<F5>         (278)<F5>         341<F5>        (268)<F5>    0  |         0   ||         0
--------------------------------------------------------------------------------------------------------|-------------||----------
Municipal income,                                                                                       |             ||
  net for tax reporting purposes  $ 26,470         $ 18,168         $ 16,983        $ 14,644  $ 16,210  |  $  8,369   ||     7,841
==================================================================================================================================
<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.  For 1999, represents income recognized for
      tax purposes on the San Bruno demand note but not for financial statement purposes.  (See discussion at Note 7 to financial
      statements).
<F6>  Municipal income does not reflect capital losses of $3.6 million and $3.8 million in 1998 and  1997,  respectively, nor 1999
      capital gains of $0.1 million from Financing Transactions (see page 16).
<F7>  On April 1, 1997, 314,675 BACs were converted to 12,587 SQBs.  Amounts presented for 1999, 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 7,344,499
      in 1999, 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 1999 on OTEF II new acquisitions from taxable interest on loans in the amount of
      approximately $2.7 and $0.8 million, respectively for 1999 and 1998, is not included in municipal income.
</FN>
</TABLE>

<PAGE> 16

----------------------------------------------------------------------------
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,
1999,  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   primarily   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
substantially 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   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  (a)  the  bonds  or   other   debt
will   be   classified   as  indebtedness  of  the   owner   of   the   real
estate   for   federal   income  tax  purposes,  and   (b)   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.    For
1999,   the  distributions  per  BAC  equaled  approximately  78%   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   16.4%   of   OTEF   II's   total   assets,    or
approximately   30.4%   of   OTEF  II's  total   assets   if   the    senior
debt   of    entities   in which   OTEF   II   has   made   a   subordinated
debt   investment    is  consolidated.

RECENT DEVELOPMENTS

        Distribution  for  the  Quarter  ended  December   31,   1999.    On
December    15,   1999,   the   Managing   General   Partner   declared    a
distribution   for   the   quarter  ended   December   31,   1999   in   the
amount   of   $0.54  per  BAC,  and  $6.19  per  Status  Quo  BAC   ("SQB").
For   BAC   Holders,  this  represents  an  increase  of  approximately   6%
over   the   distribution  for  the  prior  comparative   period,   and   is
approximately   a  4%  increase  over  the  distributions   paid   for   the
second   and   third  quarters  of  1999.   Distributions  for  the   fourth
quarter   were   paid  on  February  14,  2000  to  BAC  Holders   and   SQB
Holders of record on December 31, 1999.

         Investment   Transactions.    During   1999,   OTEF    II    closed
several    investment    transactions    totaling    approximately     $60.3
million.     On   November   24,  1999,  OTEF  II   closed   a   development
venture   transaction  for  The  Peaks  at  Conyers   Apartments,   a   260-
unit   apartment   community  being  developed  in  Conyers,   Georgia,   an
Atlanta   suburb,   for   a   total  development   cost   of   approximately
$18.2   million.    The  property  owner  is  a  non-profit   affiliate   of

<PAGE> 17

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

Resource     Healthcare    of    America,    Inc.     Property    management
services   will   be   provided   by   Lane   Company.   Construction    and
permanent   financing   for   the  property   was   provided   through   the
issuance  of  Series  A,  Series  B  and  Series  C  Bonds.   The  Series  A
and  Series  B  Bonds  in  the  aggregate  amount  of  $12.75  million  were
credit   enhanced   and  sold  to  third  party  investors.    At   closing,
OTEF  II  acquired  at  par  all  of the Series  C  Bonds  in  the  original
principal  amount  of  $5.4  million.  Interest  on  the  Series   C   Bonds
is   exempt   from  federal  income  tax.   The  Series  C   Bonds   require
payments  of  base  interest  at  an  annual  rate  of  9-7/8%  during   the
construction    period    and    at    9-3/8%,    thereafter.     Additional
interest    accrues   at   an   annual   rate   of   2.625%    during    the
construction   period  and  at  3.125%  thereafter,  and  is  payable   from
70%  of  cash  flow  remaining  after  payment  of  base  interest  and   in
full   upon   a   tender  or  redemption  of  the  Series  C   Bonds.    The
Series   C   Bonds   are   secured  by,  among  other   things,   a   second
mortgage   on   the   property,  and  are  subject  to  optional   call   by
OTEF   II   in   10   years.   The  Series  C  Bonds   are   structured   to
provide    OTEF    II    with    certain    enhanced    rights,    including
construction   and   lease-up   guaranties   and   reserves,   payment   and
performance   bonds,   a   $1  million  construction   letter   of   credit,
various     approval    rights    with    respect    to    the    operation,
refinancing   and  sale  of  the  property,  and  an  option   to   purchase
the property.

        On   June  11,  1999,  an  affiliate  of  OTEF  II  acquired   River
Reach    Apartments,    a   556-unit   garden   apartment    community    in
Naples,   Florida,   for   a   purchase   price   of   approximately   $34.6
million.    The   property  is  financed  with  $24  million   of   floating
rate   tax-exempt  bonds,  which  are  secured  by  a  first   mortgage   on
the   property.    The   credit  enhancement   on   the   tax-exempt   bonds
expires   on  June  9,  2000.   While  the  bonds  are  currently  held   by
third   parties,   OTEF  II  expects  to  purchase  and   restructure   them
in   the   future.    In   connection   with   the  River   Reach investment
transaction, OTEF II executed   a standby   reimbursement   agreement with a
Merrill Lyynch affiliate which  effectively guarantees the approximately $24
million  obligations  of  the  Naples  Borrower  to  Banco Santander Central
Hispano, S.A.  This reimbursement agreement expires  on June 9, 2000.  Based
upon its preliminary discussions, the Managing General Partner believes that
OTEF II will be able to extend this agreement and  the credit enhancement of
the tax-exempt bonds,  although  no  assurances  can  be given. At  closing,
OTEF  II  provided  a   taxable  loan   to the affiliated borrower   in  the
maximum   amount   of approximately $13 million,  with  an initial   advance
of  approximately  $11.6 million.  The  initial advance  was  used  to  fund
a  portion   of   the property's   purchase   price,   and  various   costs,
expenses,  capital improvements   and   reserves.   The  taxable   loan   is
secured   by  a second  mortgage  on  the  property.   In  conjunction  with
this   second taxable  loan, OTEF  II  also   provided  a   second   taxable
loan  in  the amount of $1.3 million,  the  proceeds  of  which  were   used
by   the   affiliated    borrower    to  reimburse  the property seller  for
capitalizable expenditures.  OTEF  II   received a   subordinated   security
interest in the  $1.3  million  debt  service  reserve fund held by the bond
trustee.

        On   April   9,   1999,  affiliates  of  OTEF   II   completed   the
acquisition   of   all   of   the  partnership  interests   of   Carrollwood
Lakeside   North   Partners,   Ltd.,   which   owns   Lakeside   North    at
Carrollwood   Apartments,   a  168-unit  garden   apartment   community   in
Tampa,    Florida   for   a   purchase   price   of   approximately    $7.48
million.    The   property   is  financed  with  $6.13   million   of   tax-
exempt   bonds,   which   bear   annual   interest   at   5.95%,   and   are
secured  by  a  first  mortgage  on  the  property.   While  the  bonds  are
currently   held  by  third  parties,  OTEF  II  expects  to  purchase   and
restructure   them  in  the  future.   At  closing,  OTEF  II   provided   a
taxable   loan  to  the  affiliated  borrower  in  the  maximum  amount   of
$2    million,    with   an   initial   advance   of   approximately    $1.6
million.   The  initial  advance  was  used  to  fund  a  portion   of   the
property's   purchase   price,   and  various   costs,   expenses,   capital
improvements   and   reserves.   The  taxable   loan   is   secured   by   a
second mortgage on the property.

       On  November  1,  1999,  the  Existing  MRBs  held  by  OTEF  II  and
secured   by   the   properties  owned  by  the   Apollo   and   San   Bruno
operating   partnerships   were   remarketed.    See   "Remarketed    Bonds"
below.   OTEF   II   is   continuing  to  work   on   bond   refunding   and
refinancing   transactions   with  respect  to   the   Summerwalk   property
and    the   River   Reach   property.    The   senior   tax-exempt    bonds
secured   by   these  properties  are  currently  held  by  third   parties.
Based    on    its    preliminary   discussions,   the   Managing    General
Partner     anticipates     consummating    refunding     or     refinancing
transactions for these properties.

        Amortization  of  Series  A  Bonds.   Effective  April   15,   2000,
mandatory   sinking   fund  redemptions  begin  on   the   twelve   Original
Refunding    Bonds   (as   defined   below).    These   Original   Refunding
Bonds   provide  for  payments  of  interest  only  for  the   first   three
years   and   then  amortize  over  a  27-year  period  beginning   in   the
fourth   bond   year.    While   the   total   payments   on   these   bonds
increase   each   year,   the   portion  of  the   payments   allocable   to
interest   will  decrease  in  the  fourth  year  and  increase  each   year
thereafter.    Accordingly,   it   is  anticipated   that   OTEF   II   will
receive  aggregate   principal  payments  of  approximately   $1.4   million
in   2000.    Of   this  amount,  approximately  41%  may  be   applied   to
reduce   the   financing  debt  reported  by  OTEF   II   on   its   balance
sheet,   which   was   approximately   $52.6   million   at   December   31,
1999.    Substantially  all  of  the  balance  of  the  principal   payments
will   reduce   OTEF  II's  remaining  investment  in  the  related   bonds.
While  the  interest  earned  on  these  bonds  will  decrease  in  2000  by
approximately   $0.19   per  share,  the  total   principal   and   interest
that  is  projected  to  be  received by  OTEF  II  with  respect  to  these
bonds   for   2000   will   be   higher  than   the   amount   of   interest
received   on   these  bonds  for  1999.   The  interest  rates   on   these

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bonds   will  increase  in  2001  and  each  year  thereafter  through   the
remaining term of the Original Refunding Bonds.

        Book   Value.   At  December  31,  1999,  the  book  value  of   the
BACs  was  $35.97  on  a  fully  diluted  basis,  taking  into  account  the
1997   Incentive  Options.   Book  value  is  calculated  as  the   sum   of
the   BAC   capital   account   plus   the   BACs'   allowable   share    of
accumulated   comprehensive   income,   divided   by   the   fully   diluted
shares outstanding at December 31, 1999.

        BAC   Repurchase  Program.   On  October  30,  1998,  the   Managing
General   Partner  authorized  the  repurchase,  from  time  to   time,   of
up  to  250,000  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.   On  January  18,   2000,   OTEF   II
acquired    an    additional   10,000   BACs   for    approximately    $0.24
million.

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)   from   the   issuance   of
additional   equity  securities  in  exchange  for  New   Assets;   or   (v)
by    funds   borrowed   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,  1999,  OTEF  II  held   approximately
$5.5    million   in   cash   and   cash   equivalents,   a   decrease    of
approximately   $12.5  million,  or  approximately   69%,   from   the   $18
million   in   cash   and  cash  equivalents  held  as   of   December   31,
1998.    The   decrease  in  OTEF  II's  cash  and  cash   equivalents   was
primarily   the   result  of  funding  three  investment   transactions   in
1999   which required, net of new financing debt, $19.97  million  in  cash,
offset by net income allocable to BAC Holders in  excess  of   distributions
to such   BAC   Holders.    Total  liabilities  of   OTEF  II increased   to
approximately    $57.2   million   as   of   December    31,    1999    from
approximately   $52.0   million  at  December  31,   1998.    The   increase
in   liabilities  is  due  to  the  increase  in  financing  debt  discussed
below,   and   an  increase  in  quarterly  distributions  to  BAC   Holders
of approximately 6%.

        Financing   Transactions.    OTEF   II   undertakes   securitization
transactions  with  respect  to  its  bond  portfolio  from  time  to   time
to   enhance   its   overall   return  on   investment   and   to   generate
proceeds,   which   facilitate  the  acquisition  of   New   Assets.    OTEF
II    has   securitized   approximately   $76.8   million   of   its    bond
portfolio   by   assigning  these  bonds  to  a  Merrill   Lynch   affiliate
which,  in  turn,  deposited  them  into  trusts.   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  bonds  held  in  these  trusts.   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.    In
addition,  in  a  transaction  involving  the  Carpenter  bonds,   OTEF   II
acquired    approximately   $9   million   of   senior   trust    interests,
which  may  be  sold  at  any  time to provide  cash  to  OTEF  II  for  new
acquisitions   or   for   any   other  purpose.    OTEF   II   has   certain
rights   to   repurchase  and/or  refinance  the  bonds  and  to  repurchase
the   senior   securities  and,  therefore,  retains  a  level  of   control
over   the   bonds.    These   securitization  transactions   provide a low-
cost financing option 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.

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        In   connection   with  these  transactions,   OTEF   II   converted
the   interest  rate  mode  on  the  Series  A  Bonds  involved   in   these
transactions  from  an  annual  to  weekly  reset.   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.    Through   December   31,   1999   no   payments   were
required   to   be   made   by   the   counter-party   pursuant   to   these
interest cap agreements.

        For   financial   statement   purposes,   these   transactions   are
accounted   for   as   financing  transactions.    The   amount   of   bonds
financed,   approximately   $76.8  million,  is  reflected   as   Securities
Held    in    Trust,   the   net   cash   proceeds   not   reinvested    are
classified    as   Cash   and   Cash   Equivalents   and   the    difference
between   the   principal   amount   of   the   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,    1999    was
approximately   $52.6   million,   compared   to   $47.6   million   as   of
December    31,    1998.     OTEF    II's    financing    debt    represents
approximately   16.4%  of  OTEF  II's  total  assets  (or  30.4%   of   OTEF
II's   total  assets  if  the  entities  in  which  OTEF  II  has   made   a
subordinated   debt   investment   were   consolidated).    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
Bond   Marketing   Association  (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,  4.33%  for  the
twelve   months  of  1998  and  4.18%  for  the  twelve  months   of   1999.
The   credit   enhancement  associated  with  substantially   all   of   the
financing  debt  was  extended  to  February  15,  2001.   While   OTEF   II
is   not  an  obligor  and,  therefore,  is  not  liable  for  repayment  of
this   financing  debt,  the  Securitized  Bonds  (in  which  OTEF  II  owns
approximately   $24   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
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   bonds   and   a
purchase of senior and subordinated interests in the trusts.

        Original   Refunding  Bonds.     OTEF  II  has  acquired   refunding
bonds   ("Original   Refunding   Bonds")   for   twelve   of   the   fifteen
original   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.   The  total  amount  of  such  sinking  fund  redemption  in  2000   is
expected    to    be    approximately    $1.4    million.     See    "Recent
Developments-Amortization of Series A Bonds."

        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-

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year   U.S.   Treasury  Bill  rate,  with  a  maximum  rate  of   5.6%   per
annum.   The  interest  rate  on  seven  of  the  Series  A  Bonds  retained
by   OTEF  II  was  reset  on  November  1,  1999  to  4.88%;  the  interest
rate   on   three  Series  A  Bonds  retained  by  OTEF  II  was  reset   on
December  1,  1999  to  5.12%.   On  January  1,  2000,  the  interest  rate
on  one  Series  A  Bond  retained  by OTEF  II  was  reset  to  5.37%,  and
the  interest  rate  on  another  Series  A  Bond  was  reset  on  March  1,
2000   to  5.54%.   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,  4.33%  for  the  twelve   months   of   1998
and  4.18%  for  the  twelve  months  of  1999.   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,   1999,  the  aggregate  amount  of  net  excess  cash  flow   held   in
the   Operating   Partnership  escrows  was  approximately   $3.8   million,
including   deposits   from   December's  cash   flow   compared   to   $2.2
million at the end of 1998.

        Remarketed   Bonds.    As  required  under  the   trust   indentures
for  the  Existing  MRBs,  on  November  1,  1999,  the  Existing  MRBs  for
the   Apollo   and   San  Bruno  Operating  Partnerships  were   remarketed,
which   means   that   OTEF  II  exchanged  the  Existing   MRBs   for   new
bonds  that  bear  a  fixed  rate  of  interest  to  maturity  at  a  market
rate   determined   by   a   remarketing  agent.   The   remarketing   agent
determined  the  fixed  rate  of  interest  on  the  San  Bruno   bonds   to
be   9%   per   annum.    The   trust  indenture  for   the   Apollo   bonds
specified  that  the  fixed  rate  of  interest  on  the  remarketed   bonds
was  the  lower  of  the  rate  established  by  the  remarketing  agent  or
150   basis  points  in  excess  of  the  Bond  Buyer  20-bond  index.   The
new  rate  was  determined  to  be  7.49%  on  the  remarketing  date.   The
original maturity date of November 2009 was not changed.

        In   addition,   in  connection  with  the  remarketing,   the   San
Bruno   and   Apollo   Operating   Partnerships   delivered   to   OTEF   II
interest-bearing,   demand  promissory  notes  dated   November   1,   1999,
in    the   original   principal   amount   of   $8.8   million   and   $5.2
million,   respectively.    The  principal   amount   of   the   San   Bruno
note   reflects   contingent  interest  in  the  amount  of   $8.6   million
due   and  payable  on  the  remarketing  date  together  with  accrued  but
unpaid   base   interest.   The  principal  amount  of   the   Apollo   note
reflects   accrued   but   unpaid  interest   only   since   no   contingent
interest  was  due  and  payable  on  the  remarketing  date.   The   demand
notes   bear  floating  rate  interest  at  the  short-term  federal   rate.
For   tax   purposes   the  principal  amount  of  the  San   Bruno   demand
note   was   reported  as  tax  exempt  interest  income.    For   financial
statement   purposes,  the  estimated  amounts  to  be  collected   on   the
San   Bruno   note  are  being  accrued  to  income,  under  the   effective
interest   method,   over   the  expected  remaining   life   of   the   San
Bruno   bond.    Due  to  uncertainty  of  collection,  the  Apollo   demand
note    has    not   been   recognized   for   either   tax   or   financial
statement    purposes.    As   of   December   31,    1999,    the    unpaid
principal  and  accrued  interest  on  the  San  Bruno  and  Apollo   demand
notes     was    approximately    $8.5    million    and    $5.2    million,
respectively.

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        OTEF   II  is  continuing  to  explore  with  the  Apollo  Operating
Partnership     a    possible    bond    restructuring    or     refinancing
transaction.     The    Managing   General   Partner   currently    believes
that   the   amount   of  the  Apollo  bond  and  cumulative   unpaid   base
interest   exceeds  the  value  of  the  property  owned   by   the   Apollo
Operating   Partnership.    The   San   Bruno   Operating   Partnership   is
currently   considering   a   refinancing  of  its   mortgage   indebtedness
in   addition   to   a   possible  bond  restructuring  or   other   capital
transaction.     The    Managing   General   Partner   currently    believes
that   the   value  of  the  property  owned  by  the  San  Bruno  Operating
Partnership   exceeds   the  combined  outstanding  principal   balance   of
the   $26   million  San  Bruno  bond  and  the  new  $8.8  million   demand
note,  and  that  OTEF  II  will  realize in  full  the  value  of  the  San
Bruno   bond   and  demand  note  through  a  future  sale,  securitization,
refinancing    or   other   capital   transaction   involving    the    bond
and/or  the  note,  or  a  repayment  of  the  bond  and  note  by  the  San
Bruno   Operating  Partnership  in  accordance  with  the  terms   of   such
instruments.

Status Quo BACs

        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  expired  on
July   31,   1999.    As   of   December   31,   1999,   6,209   SQBs,    or
approximately   89%  of  the  6,946  SQBs  outstanding   at   December   31,
1998,   had   been   converted   to   155,225   BACs,   leaving   737   SQBs
outstanding,   which   represent   approximately   0.25%   of   all   shares
outstanding   at   December   31,   1999.    During   January,   2000,    an
additional   25  SQBs  were  converted  to  625  BACs,  leaving   712   SQBs
outstanding as of the date of this report.

        As   previously  reported,  since  substantially  all  of  the  SQBs
have   been   exchanged   for   BACs,   the   remaining   SQBs   have   been
allocated   increased   shares   of   administrative   costs,   which    are
relatively   fixed  costs  and  not  dependent  on  the   number   of   SQBs
outstanding.    For   the   quarter   ended   December   31,   1999,   these
costs   exceeded  income  allocable  to  SQBs  resulting  in  a   net   loss
of    $7.84    per    SQB.     Accordingly,   the    February    15,    2000
distribution   was   paid   exclusively   from   existing   cash    reserves
allocable to remaining SQB holders.

        Based  on  OTEF  II's  existing  cash  reserves  allocable  to   the
remaining   SQBs   and   the   Managing  General  Partner's   estimates   of
allocable   interest   payments  received  by   OTEF   II   from   recurring
cash   flow   and   expenses   allocable  to   SQB   holders,   these   cash
reserves   have   been   substantially   depleted.    Therefore,   in    the
absence  of  a  sale  of  any  remaining SQB  assets,  or  a  redemption  by
one  or  more  borrowers  of  the  bonds  in  which  SQB  holders  have   an
ownership    interest,   or   some   other   transaction   of   a    capital
nature,   it   is   anticipated   that  SQB   holders   will   continue   to
realize   net  losses  and  the  SQBs  will  no  longer  receive   quarterly
distributions     payable    from    recurring    operations.      Continued
losses   will  cause  a  reduction  in  the  SQB  capital  accounts,   which
will   reduce   the  amount  of  net  proceeds  from  any   future   capital
transaction otherwise payable to SQB holders.

        The  Information  Memorandum  furnished  on  December  2,  1996   to
OTEF   holders   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.   The  Status  Quo  Assets  include  a  small  portion   of
the   Series  A  Bonds,  Series  B  Bonds  and  Remarketed  Bonds  allocable
to   SQB   Holders,  not  the  underlying  real  estate,  and  exclude   all
of OTEF II's New Assets.

<PAGE> 22

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

Results of Operations

      OTEF II's Operations.

        1999   versus   1998.    Distributions  to  Partners   amounted   to
approximately  $15.7  million,  or  $2.09  per  BAC  and  $37.14  per   SQB.
For   financial   statement  purposes,  Net  Income  and  Net   Income   per
BAC   were  approximately  $20.0  million  and  $2.67,   respectively,   for
the   year   ended   December  31,  1999,  as  compared   to   approximately
$19.3    million   and   $2.58,   respectively,   for   the    year    ended
December   31,   1998.    Net   income  per  BAC   for   the   years   ended
December   31,   1999   and  December  31,  1998,  assuming   dilution   for
stock    options    granted    in    1997,    was    $2.67    and     $2.56,
respectively.

         OTEF   II's   revenues   for   1999   reflect   an   increase    of
approximately   $1.5   million,   or   6.3%,   compared    to    1998    due
primarily    to   new   acquisitions,   but   also   from   the    increased
interest    payments   on   the   Original   Refunding   Bonds    and    the
Remarketed   Bonds.    For   comparative   purposes,   the   1999   revenues
would  have  increased  10.1%  over  1998,  excluding  the  one  time   1998
revenues of $0.795 million.

        For   1999,   OTEF   II's   expenses  increased   by   approximately
$0.8   million,   or   20%,   compared   to   1998.    This   increase    in
expenses   reflects   nearly   a   $0.3   million   increase   in    finance
interest    expense   and   approximately   $0.2   million    increase    in
advisory fees, compared to 1998.

        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    $0.285     million
representing   bond  refunding  costs  previously  advanced   by   OTEF   II
to certain operating partnerships.

        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  over  the  prior  year.   In  addition,  commencing  in  1997,   OTEF
II   was   required   to  report  interest  expense  attributable   to   the
financing transaction that was completed on August 22, 1997.

<PAGE> 23

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

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> 24

----------------------------------------------------------------------------
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   and  comprehensive  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,  1999  and  1998,  and  the  results   of
its  operations  and  its  cash  flows  for  each  of  the  three  years  in
the   period   ended  December  31,  1999,  in  conformity  with  accounting
principles    generally    accepted   in   the   United    States.     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
auditing   standards   generally  accepted  in  the  United   States   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.
January 28, 2000


<PAGE> 25

<TABLE>

Oxford Tax Exempt Fund II Limited Partnership
------------------------------------------------------------------------------
Balance Sheets (in thousands, except per BAC and SQB amounts)
------------------------------------------------------------------------------
December 31,                                     1999            1998
------------------------------------------------------------------------------
<CAPTION>
<S>                                            <C>             <C>
Assets
 Investments:
   Tax-exempt securities                       $208,216        $213,900
   Tax-exempt securities held in trust           76,765          62,565
   Taxable securities                            27,190          11,840
------------------------------------------------------------------------------
     Total Investments                          312,171         288,305
------------------------------------------------------------------------------
 Cash and cash equivalents                        5,500          18,011
 Other assets                                     4,027           2,770
------------------------------------------------------------------------------
     Total Assets                              $321,698        $309,086
==============================================================================
Liabilities and Partners' Capital
  Liabilities
   Financing debt                              $ 52,614        $ 47,614
   Distributions payable                          4,049           3,826
   Accounts payable and accrued expenses            571             573
------------------------------------------------------------------------------
     Total Liabilities                           57,234          52,013
------------------------------------------------------------------------------
Partners' Capital
  General Partners' Interests                    (2,189)         (2,275)
  Limited Partners' Interests:
    Beneficial    Assignee    Interests
     (7,499,875  interests issued  and
     7,338,425 and 7,183,200 interests
     outstanding  as of  December  31,
     1999 and 1998, respectively)               168,308         160,632
   SQB Interests (12,587 interests
     issued and 737 and 6,946
     interests outstanding as of
     December 31, 1999 and 1998,
     respectively)                                  379           3,849
Accumulated other comprehensive income           97,966          94,867
------------------------------------------------------------------------------
     Total Partners' Capital                    264,464         257,073
------------------------------------------------------------------------------
     Total Liabilities and Partners' Capital   $321,698        $309,086
==============================================================================

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

</TABLE>

<PAGE> 26

<TABLE>

Oxford Tax Exempt Fund II Limited Partnership
------------------------------------------------------------------------------
Statements of Income and Comprehensive Income (in thousands, except per BAC
  amounts)
------------------------------------------------------------------------------

                                                        OTEF II
                                             For the years ended December 31,
                                           -----------------------------------
                                              1999        1998        1997
------------------------------------------------------------------------------
  <S>                                     <C>         <C>         <C>
Interest Earned:
  Interest on tax-exempt securities       $ 18,985    $ 18,967    $ 17,734
  Interest on tax-exempt securities
    held in trust                            3,204       2,459         667
  Interest on taxable securities             1,967         837           0
  Other, primarily tax-exempt income           451         888         729
------------------------------------------------------------------------------
    Total Interest Earned                   24,607      23,151      19,130
------------------------------------------------------------------------------
  Finance interest expense                  (2,121)     (1,809)       (462)
------------------------------------------------------------------------------
    Net Interest Margin                     22,486      21,342      18,668
------------------------------------------------------------------------------
Expenses
  Third party expenses                       1,236       1,095       1,436
  Related party expenses                     1,276         964         590
------------------------------------------------------------------------------
    Total Expenses                           2,512       2,059       2,026
------------------------------------------------------------------------------
Net income                                $ 19,974    $ 19,283    $ 16,642
==============================================================================
Other comprehensive income:

    Unrealized gains on investments       $  3,099    $ 16,286    $ 16,084
==============================================================================
Comprehensive income                      $ 23,073    $ 35,569    $ 32,726
==============================================================================
Net income allocated to BAC holders       $ 19,571    $ 18,509    $ 15,893
==============================================================================
Net income per  BAC                       $  2.670    $  2.576    $  2.188
==============================================================================
Net Income per BAC - assuming dilution    $  2.665    $  2.556    $  2.182
==============================================================================
Distribution per  BAC                     $  2.090    $  2.025    $  1.942
==============================================================================
Weighted average BACs outstanding            7,331       7,185       7,264
==============================================================================
Weighted average BAC - assuming dilution     7,344       7,241       7,284
==============================================================================

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

</TABLE>

<PAGE> 27

<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, 1999, 1998      General   -----------------   Comprehensive
and 1997                     Partners   BACs        SQBs      Income    Total
------------------------------------------------------------------------------
<S>                         <C>        <C>      <C>         <C>      <C>
Balance, December 31, 1996  $(2,393)   $161,665  $    0     $ 62,497 $221,769
==============================================================================
Comprehensive income:

Net Income, including
  $2.188 per BAC 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
  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 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
  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
==============================================================================
Comprehensive income:

Net Income, including
  $2.670 per BAC and
  $3.58 per SQB                 399      19,571       4            0   19,974

Unrealized gains on
  investments                     0           0       0        3,099    3,099
------------------------------------------------------------------------------

    Total comprehensive         399      19,571       4        3,099   23,073
      income

Allocation of SQB Capital         0       3,432  (3,432)           0        0

Distributions to Partners
  including $2.09 per BAC
  and $37.14 per SQB           (313)    (15,327)    (42)           0  (15,682)
------------------------------------------------------------------------------
Balance, December 31, 1999  $(2,189)   $168,308 $   379      $97,966 $264,464
==============================================================================

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

</TABLE>

<PAGE> 28

<TABLE>

Oxford Tax Exempt Fund II Limited Partnership
-----------------------------------------------------------------------------------
Statements of Cash Flows (in thousands)
-----------------------------------------------------------------------------------
<CAPTION>
                                                            OTEF II
                                              For the years ended December 31,
                                              ---------------------------------
                                               1999        1998        1997
-------------------------------------------------------------------------------
<S>                                          <C>         <C>         <C>
Operating Activities:
  Net income                                 $19,974     $19,283     $16,642
  Adjustments to reconcile net income to net
   cash provided by operating activities:
Changes in assets and liabilities:
  Other assets, primarily interest
    receivable                                  (180)       (140)       (307)
  Accounts payable and accrued expenses           (2)       (877)       (333)
------------------------------------------------------------------------------
Net cash provided by operating activities     19,792      18,266      16,002
------------------------------------------------------------------------------
Investing activities:
Investment in new assets                     (20,767)      (16,040)  (24,366)
Redemption of SQBs                                 0           (80)   (2,966)
Litigation settlement payments                     0        (1,538)     (962)
Other assets                                  (1,077)          360      (589)
------------------------------------------------------------------------------
Net cash (used in) provided by
investing activities                         (21,844)      (17,298)  (28,883)
------------------------------------------------------------------------------
Financing activities:
Net proceeds from debt refinancing             5,000        20,440    27,174
Distributions paid                           (15,459)      (15,091)  (14,671)
------------------------------------------------------------------------------
Net cash (used) provided in financing
  activities                                 (10,459)        5,349    12,503
------------------------------------------------------------------------------
Net (decrease) increase in cash and
  cash equivalents                           (12,511)        6,317      (378)
Cash and cash equivalents,
  beginning of period                         18,011        11,694    12,072
------------------------------------------------------------------------------
Cash and cash equivalents, end of period      $5,500       $18,011   $11,694
------------------------------------------------------------------------------

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

</TABLE>

<PAGE> 29
----------------------------------------------------------------------------
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,  1999   and   1998,
the   Statements  of  Income  and  Comprehensive  Income   for   the   years
ended    December   31,   1999,   1998   and   1997,   the   Statement    of
Partners'   Capital  as  of  December  31,  1999,  1998,   and   1997,   and
the   Statements   of   Cash  Flows  for  the  years  ended   December   31,
1999, 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.

         Investment   Transactions.    During   1999,   OTEF    II    closed
several    investments    transactions    totaling    approximately    $60.3
million.    On   November   24,   1999  OTEF   II   closed   a   development
venture   transaction  for  The  Peaks  at  Conyers   Apartments,   a   260-
unit   apartment   community  being  developed  in  Conyers,   Georgia,   an
Atlanta   suburb.   The  property  owner  is  a  non-profit   affiliate   of
Resource     Healthcare    of    America,    Inc.     Property    management
services will be provided by Lane Company.

        Construction   and  permanent  financing  for   the   property   was
provided  through  the  issuance  of  Series  A,  Series  B  and  Series   C
Bonds.  The  Series  A  and  Series  B Bonds  in  the  aggregate  amount  of
$12.75   million   were   credit  enhanced   and   sold   to   third   party
investors.    These   bonds   bear  interest  at   fixed   rates   and   are
subject   to   a  10-year  remarketing.   At  closing,  OTEF   II   acquired
at  par  all  of  the  Series  C  Bonds in  the  original  principal  amount
of   $5.42  million.   Interest  on  the  Series  C  Bonds  is  exempt  from
federal   income  tax.  The  Series  C  Bonds  require  payments   of   base
interest   at   an   annual   rate  of  9-7/8%   during   the   construction
period   and   at  9-3/8%  thereafter.   Additional  interest   accrues   at
an   annual   rate  of  2.625%  during  the  construction  period   and   at
3.125%   thereafter,  and  is  payable  from  70%  of  cash  flow  remaining
after   payment   of   base  interest  and  in  full  upon   a   tender   or
redemption  of  the  Series  C  Bonds.   The  Series  C  Bonds  are  secured
by,   among   other  things,  a  second  mortgage  on  the   property,   and
are  subject  to  optional  call  by  OTEF  II  in  10  years.   The  Series
C   Bonds   are  structured  to  provide  OTEF  II  with  certain   enhanced
rights,    including    construction    and    lease-up    guaranties    and
reserves,     payment    and    performance    bonds,    a    $1     million
construction    letter   of   credit,   various   approval    rights    with
respect   to   the  operation,  refinancing  and  sale  of   the   property,
and an option to purchase the property.

        On   June  11,  1999,  an  affiliate  of  OTEF  II  acquired   River
Reach    Apartments,    a   556-unit   garden   apartment    community    in
Naples,   Florida   for   a   purchase   price   of   approximately    $34.6
million.    The   property  is  financed  with  $24  million   of   floating
rate   tax-exempt  bonds,  which  are  secured  by  a  first   mortgage   on
the   property.    The   credit  enhancement   on   the   tax-exempt   bonds
expires   on  June  9,  2000.   While  the  bonds  are  currently  held   by
third   parties,   OTEF  II  expects  to  purchase  and   restructure   them
in  the future.   In connection with the River Reach investment transaction,
OTEF II  executed  a  standby  reimbursement  agreement with a Merrill Lynch
affiliate   which  effectively   guarantees  the  approximately  $24 million
obligations of the Naples Borrower to Banco Santander Central  Hispano, S.A.
This   reimbursement   agreement  expires  on  June 9, 2000.  Based upon its
preliminary discussions, the Managing General  Partner believes that OTEF II
will  be  able  to extend this agreement and  the  credit enhancement of the
tax-exempt bonds, although no assurances can be given.  At  closing, OTEF II
provided  a  taxable  loan to the   affiliated   borrower   in  the  maximum
amount of approximately $13    million,   with   an   initial   advance   of
approximately   $12.1 million.   The  initial  advance  was used to  fund  a
portion of the property's  purchase price,  and various   costs,   expenses,
capital improvements  and reserves.  The  taxable    loan    bears    annual
interest   at   12%   and   is  secured  by  a  second   mortgage   on   the
property.    OTEF   II  also  provided  a  second  taxable   loan   in   the
amount   of  $1.3  million,  the  proceeds  of  which  were  used   by   the
affiliated    borrower    to    reimburse   the    property    seller    for
capitalizable expenditures.

<PAGE> 30
----------------------------------------------------------------------------
Notes to Financial Statements
----------------------------------------------------------------------------

        On   April   9,   1999,  affiliates  of  OTEF   II   completed   the
acquisition   of   all   of   the  partnership  interests   of   Carrollwood
Lakeside   North   Partners,   Ltd.,   which   owns   Lakeside   North    at
Carrollwood   Apartments,   a  168-unit  garden   apartment   community   in
Tampa,   Florida.    The  property  is  financed  with  $6.13   million   of
tax-exempt   bonds,   which  bear  annual  interest  at   5.95%,   and   are
secured  by  a  first  mortgage  on  the  property.   While  the  bonds  are
currently   held  by  third  parties,  OTEF  II  expects  to  purchase   and
restructure   them  in  the  future.   At  closing,  OTEF  II   provided   a
taxable    loan    which   bears   annual   interest   at    15.48%to    the
affiliated  borrower  in  the  maximum  amount  of  $2  million,   with   an
initial    advance   of   approximately   $1.6   million.     The    initial
advance   was   used   to   fund  a  portion  of  the  property's   purchase
price,    and   various   costs,   expenses,   capital   improvements    and
reserves.    The   taxable  loan  is  secured  by  a  second   mortgage   on
the property.

       On  November  1,  1999,  the  Existing  MRBs  held  by  OTEF  II  and
secured   by   the   properties  owned  by  the   Apollo   and   San   Bruno
operating   partnerships   were  remarketed.    See   Note   7   "Remarketed
Bonds" below.

        Original   Refunding   Bonds.   OTEF  II  has   acquired   refunding
bonds    ("Original   Refunding   Bonds")   for    12   of    the    fifteen
original   mortgage   revenue  bonds,  which  comprise   approximately   88%
of   the   face   amount  of  OTEF  II's  original  bond   portfolio.    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)    from    the   issuance   of   additional   equity   securities    in
exchange  for  New  Assets;  or  (v)  funds  borrowed  from  lenders  or  by
issuing evidences of indebtedness.

        OTEF   II   has   securitized  a  total   of   approximately   $76.8
million   of   its   bond  portfolio  by  assigning   these   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.
In   addition,  in  a  transaction  involving  the  Carpenter  bonds,   OTEF
II   acquired   approximately  $9  million  of   senior   trust   interests,
which  may  be  sold  at  any  time to provide  cash  to  OTEF  II  for  new
acquisitions   or   for   any   other  purpose.    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,  1999,  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,  1999,   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.

<PAGE> 31
----------------------------------------------------------------------------
Notes to Financial Statements
----------------------------------------------------------------------------

        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,  4.33%  for  the  twelve  months  of  1998  and   4.18%
for   the  twelve  months  of  1999.   While  OTEF  II  is  not  an  obligor
and,   therefore,   is   not  liable  for  repayment   of   this   financing
debt,   the   Securitized  Bonds  (in  which  OTEF  II  owns   approximately
$24   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.    Substantially   all   of    the    credit
enhancement   associated  with  this  financing  debt  has   been   extended
to February 15, 2001.

        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.    Through   December
31,   1999   no   payments  were  required  to  be  made  by  the   counter-
party pursuant to these interest cap agreements.

     In   addition,   credit   enhancement   associated   with   the   bonds
secured    by    the    property   owned   by   the   Summerwalk    borrower
terminates on December 15, 2000.

Note 3.  Significant Accounting Policies

        Method   of   Accounting.   OTEF  II's  financial   statements   are
prepared     in    accordance    with    generally    accepted    accounting
principles.    Effective   June   15,   1999,   the   Financial   Accounting
Standards     Board    issued    Statement    of    Financial     Accounting
Standards    No.   133   "Accounting   for   Derivative   Instruments    and
Hedging   Activities".   Management  believes  that  this  SFAS   will   not
have   a  material  impact  on  OTEF  II's  financial  position  or  results
of operations.

        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,    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.   Comprehensive   income   includes    both
"Net   Income"   and   "Other  Comprehensive  Income".    OTEF   II's   only
source    of    "Other   Comprehensive   Income"   is   related    to    the
valuation    of    its   investments   to   market,   which    results    in
unrealized   gains   or   losses   previously   charged   to    an    equity
account   under  SFAS  No.  115  "Accounting  for  Certain  Investments   in
Debt and Equity Securities".

        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,   1999   that   the   fair
value   of   the   Original  Refunding  Bonds  and  the   Remarketed   Bonds
was    approximately    $251    million   and,    accordingly,    unrealized
appreciation  on  these  investments  of  $98  million  is  recorded  as   a
credit   to   partners'  capital.   The  Series  A  Bonds,  the   Remarketed
Bonds    and   the   Other   Refunding   Bonds   are   valued    based    on
comparable   municipal  bond  securities,  and  the  Series  B   Bonds   and
the   taxable   loans   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.

<PAGE> 32
----------------------------------------------------------------------------
Notes to Financial Statements
----------------------------------------------------------------------------

         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.

        Accounting   for   earnings   per   share.    Basic   earnings   per
share,   a   measure   required  by  Statement   of   Financial   Accounting
Standards    No.   128,   "Earnings   Per   Share,"   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  $24.38  and  $26.14  for  the  years   ended
1999    and    1998,    respectively.    The   incremental    shares    (the
difference   between   the  number  of  shares  assumed   issued   and   the
number    of    shares   assumed   purchased)   are    included    in    the
denominator    of    the    diluted   earnings   per   share    computation.
Dilutive   "incremental"  BAC  shares  were  7.34  million   in   1999   and
7.24   million  in  1998.   For  the  impact  of  OTEF  II's  option   plan,
see   Note   3.  "Net  Income  and  Distributions  per  Beneficial  Assignee
Interest   (BAC)   and   SQB".    All  amounts   have   been   restated   to
reflect the 25-for-1 stock split effective July 1, 1997.

        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.  During  1999  6,209  SQBs  were
exchanged   for   155,225   BACs  under  the  exchange   program.    As   of
December    31,    1999,   there   were   737   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  $4  million,  $3.8  million,  and  $3.7  million  at  December
31,    1999,    1998,   and   1997,   respectively.    Non-cash    investing
activity   includes   a  change  in  unrealized  gain  on   investments   of
approximately   $3.1   million,  $16.3  million  and   $16.1   million   for
years ended December 31, 1999, 1998 and 1997, 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   securitization  transactions  described  in  Note  2   are   accounted
for   as   financing  transactions.   The  amount  of  the  bonds   financed
of   approximately  $76.8  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   bonds   financed  and  the  principal  amount  of   the   subordinated
interests  acquired  by  OTEF  II  is  classified  as  financing   debt   on
the accompanying balance sheet.

<PAGE>33
----------------------------------------------------------------------------
Notes to Financial Statements
----------------------------------------------------------------------------
         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.   These  deferred  costs  are  included  in  other
assets   on   the   balance  sheet.   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  Original  Refunding  Bonds  and  the  Remarketed
Bonds   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.

        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.    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.   During  1999,  6,209  SQBs  were  exchanged  for  155,225
BACs.    As   of   December  31,  1999,  there  were  737  SQBs  outstanding
representing approximately 0.25% of all outstanding shares.

        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.    The   Status   Quo   Assets
include   a  small   portion  of  the  Series  A  Bonds,  Series   B   Bonds
and   Remarketed  Bonds  allocable  to  SQB  Holders,  not  the   underlying
real estate, and exclude all of OTEF II's New Assets.

        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  1999  SQB  income   is   as
follows:

<PAGE> 34
----------------------------------------------------------------------------
Notes to Financial Statements
----------------------------------------------------------------------------
<TABLE>
----------------------------------------------------------------------------
STATEMENT OF STATUS QUO BAC INCOME BY QUARTER
  (in thousands, except per interest) (Unaudited)
----------------------------------------------------------------------------
<CAPTION>
                                    For the Three Months Ended in 1999
                               ---------------------------------------------
                               March 31   June 30  September 30  December 31
                               ---------------------------------------------
<S>                            <C>        <C>       <C>           <C>
Interest Earned:
  Interest on tax-exempt
   securities                  $   29     $   15    $   12        $   13
  Other  tax-exempt income          1          0         0             0
----------------------------------------------------------------------------
  Total Revenues                   30         15        12            13
----------------------------------------------------------------------------
Expenses:
  Governance and Administration   (17)       (15)      (15)          (19)
----------------------------------------------------------------------------
  Total Expenses                  (17)       (15)      (15)          (19)
----------------------------------------------------------------------------
Net income alloaction to
  SQB holders                  $   13     $    0    $   (3)       $   (6)
----------------------------------------------------------------------------
Other comprehensive income:
  Unrealized gains on
    investments                $   12     $    1    $    1        $    1
----------------------------------------------------------------------------
Comprehensive income           $   25     $    1    $   (2)       $   (5)
----------------------------------------------------------------------------
Net  income (loss) per SQB
  interest                     $ 7.57     $(0.34)   $(4.56)       $(7.84)
----------------------------------------------------------------------------
Distribution per SQB interest  $12.38     $12.38    $ 6.19        $ 6.19
----------------------------------------------------------------------------
Weighted average SQB shares
  outstanding                   1,756        846       777           737
----------------------------------------------------------------------------

</TABLE>

Note 4.  Related Party Transactions

      The Oxford Affiliates.  The General Partner and each of the
affiliates discussed below are collectively referred  to  as  the
Oxford Affiliates in the accompanying financial statements.   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, 1999, 1998 and 1997.

      Interests in the Operating Partnerships.  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 1998, 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,
1999  total  charges  incurred by  OTEF  II  from  Oxford  Realty
Financial  Group, Inc. ("ORFG") and other Oxford  affiliates  for
new  acquisitions amounted to approximately $1 million  and  $0.6
million   for   1999  and  1998,  respectively,  with   no   such
compensation accruing in 1997, 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.  These ORFG services (the "Existing  Fees")
are  operating  expenses of the Operating Partnerships  that  are
payable prior to the payment of interest on the Remarketed Bonds.

<PAGE> 35
-----------------------------------------------------------------
Notes to Financial Statements
-----------------------------------------------------------------

       ORFG generally receives a 1% acquisition fee from OTEF  II
for services rendered in connection with investment transactions.
Total  acquisition fees paid by OTEF II to ORFG in 1999 and  1998
were  approximately $0.6 million and $0.35 million, respectively.
The Carpenter and Dallas borrowers also paid acquisition fees  of
approximately $0.26 million to ORFG in 1998 upon closing  of  the
bond refunding transactions.

       OTEF  II also generally pays ORFG a 0.5% advisory fee  for
managing OTEF II's new investments after their acquisition.   The
advisory  fees  associated with the acquisition  of  the  Dallas,
Carpenter,  Jacaranda  and  Summerwalk investments  commenced  in
1998.   The advisory fees associated with the acquisition of  the
Lakeside, River Reach and Conyers investments commenced in  1999.
Total  advisory fees incurred by OTEF II from ORFG  in  1999  and
1998 were approximately $0.4 and $0.25 million, respectively.

       For  the  year  ended  December 31,  1999,  the  Operating
Partnerships,  including the Carpenter Borrower  and  the  Dallas
Borrower,  paid ORFG total asset management fees of approximately
$0.8  million.  For the years ended December 31, 1998  and  1997,
the   original  Operating  Partnerships  paid  ORFG  total  asset
management  fees of approximately $0.8 million and $0.6  million,
respectively.   The  original Operating  Partnerships  also  paid
ORFG,  in  the  aggregate, approximately  $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,  1999,  1998  and  1997   were
approximately  $0.8  million, $0.7  million,  and  $0.6  million,
respectively, representing primarily staff rebillable time.   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.

    OTEF  II's  Incentive  Option Plans.  In  October  1995,  the
Financial Accounting Standards Board ("FASB") issued SFAS No. 123
"Accounting for Stock-based Compensation" (SFAS No.  123).   This
Statement  defines  a fair value based method of  accounting  for
stock-based employee compensation.  However, SFAS No. 123  allows
an  entity  to  continue to measure compensation cost  for  those
plans  using  the  intrinsic  value based  method  of  accounting
prescribed by APB Opinion No. 25 "Accounting for Stock Issued  to
Employees" (APB 25).  OTEF II has historically used the intrinsic
value  based method of accounting prescribed by APB25 and related
interpretations,  and has adopted the disclosure-only  provisions
of  SFAS  No. 123.  Under APB 25, compensation expense for  stock
options is measured on the first date at which both the number of
shares  and  the amount to be paid for the shares  (the  exercise
price) are known.  Although OTEF II adopted APB 25 accounting for
its 1997 Incentive Option Plan, it has not yet adopted either APB
25  or SFAS No. 123 accounting for its 1999 Incentive Option Plan
pending the granting of such options.

        On May 21, 1997, OTEF II adopted an incentive option plan
(the  "1997  Incentive Option Plan") in order  for  the  Managing
General Partner to attract and retain key  employees of  ORFG and
advisers. The 1997  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  then  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 1997 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.  Since
the  exercise  price of  the options  approximated the BAC market
price   at   the  date  of  grant,  no   compensation expense was
recognized at that  time in accordance  with APB 25.  At December
31, 1999, the market price of  $22.625 was less than the exercise
price.  Since the date  of grant,  no options have been exercised
or forfeited.  If OTEF II had adopted SFAS No. 123, it would have
recognized a  $2.09 per option compensation expense charge to net
income  of  approximately  $1.3 million in 1997.  This amount was
estimated  using  the  Black-Scholes  option-pricing   model  and
assumes  a dividend yield of 7.9%,  expected volatility of 18.6%,
risk free interest  rate  of  6.2% and an expected option life of
7 years.

<PAGE> 36
-----------------------------------------------------------------
Notes to Financial Statements
-----------------------------------------------------------------

The  following table summarizes the Net BAC earnings and earnings
per  BAC  using  the  SFAS No. 123,  fair  value method to record
                   compensation expense
           (In thousands, except per share amounts)
<TABLE>
-----------------------------------------------------------------
<CAPTION>
                                        1999     1998      1997
                                      ---------------------------
<S>                                    <C>      <C>       <C>
Net BAC Earnings-As Reported           $19,571  $18,509   $15,893
Net BAC Earnings-Proforma              $19,544  $18,482   $14,585
-----------------------------------------------------------------
BAC Earnings per share-As Reported:
  Basic                                 $2.670   $2.576    $2.188
  Diluted                               $2.666   $2.556    $2.182
-----------------------------------------------------------------
BAC Earnings per share-Proforma:
  Basic                                 $2.666   $2.572    $2.009
  Diluted                               $2.661   $2.552    $2.004
-----------------------------------------------------------------
</TABLE>

       On  December 15, 1999, OTEF II adopted a second  incentive
option  plan  (the  "1999  Incentive  Option  Plan").   The  1999
Incentive Option Plan was subject to certain contingencies  which
were  satisfied in the first quarter of 2000.  The 1999 Incentive
Option  Plan  authorizes the granting to the directors,  officers
and  employees  of  the  Managing  General  Partner  and  certain
affiliates of options to purchase 350,000 BACs. Additionally, the
1999  Incentive Option Plan authorizes the Board of Directors  to
grant  Dividend  Equivalent Rights ("DERs") in  tandem  with  the
options.   The  DERs provide for either quarterly  option  strike
price  reductions  to the option holders in  the  amount  of  the
quarterly  dividend,  or,  with the  approval  of  the  Board  of
Directors, quarterly dividend payments.  When granted, the strike
price  of  the BAC options will be no less than the  fair  market
value of the BACs on the date of grant.  If OTEF II adopts APB 25
with respect to this plan, since the option strike price will  be
no  less  than the then current BAC market price, no compensation
expense  is expected to be recognized at date of grant.  If  OTEF
II  adopts SFAS No. 123 for the 1999 Incentive Option Plan, there
will  be  a charge to compensation expense of approximately  $3.5
million  at  the date of the grant.  This estimate was determined
using the Black-Scholes pricing-model as provided by SFAS No. 123
and assumes a dividend yield of 0%, expected volatility of 15.7%,
risk-free interest rate of 6.3% and an expected option life of  8
years.   No options or DERs were granted under this plan  through
the  opinion  date  of  the  Report  of  Independent  Accountants
accompanying  these  financial statements and  at  the  time  any
options  or  DERs  are granted the actual charge to  compensation
expense  recorded  may differ from Management's current  estimate
given above.

   Guarantees and Pledges.  In connection with the Lakeside North
and  Summerwalk  investments, OTEF II, along with  the  operating
partnership  that  owns  the  applicable  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  these
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.    In
connection with the Carpenter bond securization, OTEF II  pledged
the  $10.3  million of Dallas bonds as collateral.  In connection
with  the River Reach investment transaction, OTEF II executed  a
standby  reimbursement agreement with a Merrill  Lynch  affiliate
which  effectively  guarantees  the  approximately  $24   million
obligations  of  the  Naples Borrower  to Banco Santander Central
Hispano, S.A.  This reimbursement agreement  expires on   June 9,
2000.   Based  upon  its  preliminary   discussions, the Managing
General Partner believes that OTEF  II  will  be  able  to extend
this   agreement   and  the  credit enhancement on the tax-exempt
bonds, although no assurances  can be given.  OTEF II may execute
similar  agreements in connection with new investments made after
the dateof this report.

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.

<PAGE> 37
-----------------------------------------------------------------
Notes to Financial Statement
-----------------------------------------------------------------

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.

       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:

<PAGE> 38
-----------------------------------------------------------------
Notes to Financial Statement
-----------------------------------------------------------------

   (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

   (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;

<PAGE> 39
-----------------------------------------------------------------
Notes to Financial Statements
-----------------------------------------------------------------

   (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.

       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.

<PAGE> 40
----------------------------------------------------------------
Notes to Financial Statements
----------------------------------------------------------------

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.

       As  part of the settlement of the OTEF II Litigation,  the
Managing   General  Partner  amended  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, 1999, OTEF II
owned  beneficial interests, whether direct or indirect, in  tax-
exempt bonds and taxable loans with aggregate carrying values  of
$285  million and $27.2 million, respectively.  The $285  million
of  tax-exempt bonds includes the following:  (i) $156.1  million
of  Original  Refunding Bonds, (ii) $76.8 million  of  Securities
Held  in  Trust,  (iii) $32.2 million of Remarketed  Bonds,  (iv)
$10.3  million of Other Refunding Bonds, and (v) $9.6 million  of
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 pursuant to which the bonds were issued.

       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,  1999, the aggregate amount of net excess cash flow  held  in
the Operating Partnership escrows was approximately $3.2 million,
including  deposits from the December 1999 cash flow compared  to
$2.2 million at the end of 1998.

       Remarketed Bonds.  As required under the trust  indentures
for the Existing MRBs, on November 1, 1999, the Existing MRBs for
the  Apollo and San Bruno Operating Partnerships were remarketed,
which  means  that OTEF II exchanged the Existing  MRBs  for  new
bonds  that bear a fixed rate of interest to maturity at a market
rate  determined  by a remarketing agent.  The remarketing  agent
determined the fixed rate of interest on the San Bruno  bonds  to
be  9%  per  annum.   The trust indenture for  the  Apollo  bonds
specified that the fixed rate of interest on the remarketed bonds
was the lower of the rate established by the remarketing agent or
150  basis points in excess of the Bond Buyer 20-bond index.  The
new rate was determined to be 7.49% on the remarketing date.  The
original maturity date of November 2009 was not changed.

<PAGE> 41
-----------------------------------------------------------------
Notes to Financial Statements
-----------------------------------------------------------------

       In  addition, in connection with the remarketing, the  San
Bruno  and  Apollo Operating Partnerships delivered  to  OTEF  II
interest-bearing, demand promissory notes dated November 1, 1999,
in  the  original  principal amount  of  $8.8  million  and  $5.2
million,  respectively.  The principal amount of  the  San  Bruno
note  reflects contingent interest in the amount of $8.6  million
due and payable on the remarketing date together with accrued but
unpaid  base  interest; the principal amount of the  Apollo  note
reflects  accrued  but unpaid interest only since  no  contingent
interest was due and payable on the remarketing date.  The demand
notes  bear  floating rate interest at the short-term  applicable
federal rate.  For tax purposes, the principal amount of the  San
Bruno demand note was treated as tax exempt interest income.  For
financial  statement  purposes  the  estimated  amounts   to   be
collected  on  the  San Bruno note are being accrued  to  income,
under the effective interest method, over the estimated remaining
life  of  the  San Bruno bond.  Due to uncertainty of collection,
the Apollo demand note has not been recognized for either tax  or
financial statement purpose.  As of December 31, 1999, the unpaid
principal and accrued interest on the San Bruno and Apollo demand
notes was $8.5 million and $5.2 million, respectively.

       The  table below sets forth the demand note principal  and
unpaid interest as of December 31, 1999 for Remarketed Bonds:

<TABLE>
----------------------------------------------------------------------
<CAPTION>
                                    Unpaid Demande Note (in thousands)
                                    ----------------------------------
Property Name/Partnership Name        Principal    Interest    Total
----------------------------------------------------------------------
<S>                                   <C>          <C>        <C>
San Bruno (San Bruno)                 $  8,393     $   79     $ 8,472
The Harbour (Apollo)                     5,181         48       5,229
----------------------------------------------------------------------
Total                                  $13,574     $  127     $13,701
----------------------------------------------------------------------
</TABLE>

       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, calculated using an assumed interest rate
of  5.6%  per  year.  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.  The total amount of such sinking  fund
redemption in 2000 is expected to be approximately $1.4 million.

      Series A Bond Interest.  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 Series A Bonds
were reset to the following interest rates:

<TABLE>
-----------------------------------------------------------------
<CAPTION>
                           Bond Amount
         Date            (in thousands)       Interest Rate
-----------------------------------------------------------------
      <S>                   <C>                     <C>
      November 1, 1999      $ 69,575               4.88%
      December 1, 1999        27,344               5.12%
      January  1, 2000        11,126               5.37%
      March    1, 2000         8,673               5.54%
-----------------------------------------------------------------
        Total                 $116,718
-----------------------------------------------------------------
</TABLE>

    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  and
4.18%  for  the  twelve months of 1999.  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.

<PAGE> 42
-----------------------------------------------------------------
Notes to Financial Statements
-----------------------------------------------------------------

       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.

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

<TABLE>
----------------------------------------------------------------------------------
<CAPTION>
                 2000  2001  2002  2003  2004  2005   2006   2007    2008    2009
----------------------------------------------------------------------------------
<S>              <C>   <C>   <C>   <C>   <C>   <C>    <C>    <C>    <C>     <C>
Akron            8.38% 8.73% 9.07% 9.43% 9.82% 10.22% 10.65% 11.11% 11.60%  12.11%
Allview<F1>      7.24% 7.54% 7.82% 8.12% 8.44%  8.77%  9.12%  9.50%  9.89%  10.31%
Colonel          4.23% 4.90% 5.08% 5.26% 5.46%  5.66%  5.87%  6.09%  6.32%   6.56%
Fox Valley <F1>  6.95% 7.23% 7.51% 7.79% 8.10%  8.42%  8.75%  9.11%  9.49%   9.89%
Middletown       7.13% 7.42% 7.70% 8.00% 8.31%  8.64%  8.99%  9.36%  9.75%  10.16%
Ocala            8.35% 8.70% 9.04% 9.39% 9.77% 10.17% 10.60% 11.05% 11.53%  12.04%
Schaumburg <F1>  5.84% 6.09% 6.32% 6.56% 6.81%  7.08%  7.36%  7.65%  7.97%   8.30%
Southridge       5.11% 5.32% 5.52% 5.72% 5.93%  6.16%  6.39%  6.64%  6.89%   7.16%
Tidewater <F1>   6.98% 7.27% 7.56% 7.85% 8.16%  8.49%  8.84%  9.21%  9.60%  10.02%
Travis           5.14% 5.36% 5.56% 5.76% 5.98%  6.21%  6.45%  6.70%  6.96%   7.24%
Westridge <F1>   5.97% 6.22% 6.45% 6.69% 6.95%  7.22%  7.50%  7.80%  8.12%   8.45%
Williamsbu <F1>  7.47% 7.78% 8.09% 8.40% 8.74%  9.09%  9.47%  9.86% 10.29%  10.74%
----------------------------------------------------------------------------------
<FN>
<F1> Although the Series A Bonds bear 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.

</FN>
</TABLE>

       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.

<PAGE> 43
<TABLE>

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

    The table below sets forth the cumulative taxable investments
and loans as of December 31, 1999:

-------------------------------------------------------------------------------
Schedule of Taxable Securities
(in thousands except interest rate)
-------------------------------------------------------------------------------
<CAPTION>
                          Year     Principal at      Interest     Effective Pay
Property                Acquired December 31, 1999  Stated Rate   Rate in 1999
-------------------------------------------------------------------------------
<S>                       <C>        <C>               <C>            <C>
River Reach <F3>          1999       $11,574           12.00%         8.80%
River Reach Reserve <F2>  1999         1,300            4.50%         4.50%
Lakeside North <F3>       1999         1,678           15.48%         7.10%
Summerwalk <F3>           1998         7,199           12.00%         6.00%
Jacaranda <F3>            1998         3,844           12.00%         4.20%
Carpenter <F1>            1997           915            9.30%         9.30%
Dallas <F1>               1997           680            9.30%         9.30%
-------------------------------------------------------------------------------
Total                                $27,190            N/A            N/A
-------------------------------------------------------------------------------
<FN>
<F1>  Monthly interest is earned at the stated interest rate.
<F2>  On June 11, 1999, OTEF II made a loan to the affiliated
      borrower  in the amount of $1.3 million, which was used
      to  reimburse  the  property  seller  for capitalizable
      expenditures.  This loan  earns  interest at a 30 to 60
      day treasury rate, which averaged 4.5% in 1999.
<F3>  These taxable loans accrue interest at the stated rates
      but require payments of  interest only to the extent of
      available cash flow.  For financial statement purposes,
      interest on these taxable loans is recorded as received
      such  that  the  effective  yield  may be less than the
      stated rate.

</FN>
</TABLE>

<PAGE> 44
<TABLE>
-----------------------------------------------------------------------------------------------------------------------------------
Notes to Financial Statements
-----------------------------------------------------------------------------------------------------------------------------------

Note 7.   Investments in Tax-Exempt and Taxable Securities (continued)
      Information on the Bonds as of December 31, 1999 and 1998 (in thousands) and the related properties is as follows:
<CAPTION>
                                                                                      Unrealized Gain
                                                      Carrying Value at 12/31/99       or (Loss)         Total    Monthly Interest
                                            Combined -------------------------------- ---------------- Carrying   ----------------
Tax-Exempt                    Maturity        Face   Other                                              Value       Other
Bond Investments                Date         Amount  Bond    A Bond   B Bond    Total    1999     1998   @12/31/98  Bond   A    B
-----------------------------------------------------------------------------------------------------------------------------------
ORIGINAL REFUNDING
BONDS:
<S>                         <C>           <C>      <C>     <C>      <C>      <C>       <C>     <C>       <C>         <C>  <C>   <C>
Chesapeake Landing,
Fox Valley-Oxford L.P.<F1>  November 2026 $ 25,450 $    0  $ 13,102 $ 12,348 $ 25,450  $11,336  $11,253  $ 25,366    $  0  $53  $ 94

Hunt Club,
Travis One-Oxford L.P.      December 2026   20,270     0      8,732    7,598   16,330    3,574    2,791    15,546       0   37    50

Savannah Trace,
Schaumburg-Oxford L.P.<F1>  November 2026   23,400     0     11,232   10,299   21,531    6,825    5,755    20,461       0   46    68

Windrift at Seaview Ridge
Southridge-Oxford L.P.      December 2026   29,430     0     11,258   11,386   22,644    4,208    2,948    21,384       0   48    77

Chambrel at Pinecastle
Ocala-Oxford L.P.           November 2026    9,500     0      5,458    4,042    9,500    4,043    4,043     9,500       0   22    44

Chambrel at Montrose
Akron One Retirement-
Oxford L.P.                 December 2026   12,800     0      7,354    5,446   12,800    4,325    4,325    12,800       0   31    58

Chambrel at Club Hill
Colonel I-Oxford L.P.       March 2027      25,430     0      8,673    5,265   13,938     (983)   1,491    16,412       0   40    50

Northwoods,
Middletown-Oxford L.P.      January 2027    21,700     0     11,126   10,574   21,700   12,129   12,129    21,700       0   50    79

Reflections,
Tidewater-Oxford L.P.<F1>   November 2026   25,644     0     13,998   11,646   25,644   12,553   12,553    25,644       0   57    92

Island Club,
Allview-Oxford L.P.<F1>     November 2026   11,300     0      5,744    5,556   11,300    6,675    6,675    11,300       0   23    45

Windsor Park,
Westridge-Oxford L.P.<F1>   November 2026   14,000     0      6,333    6,445   12,778    7,130    6,428    12,076       0   26    44

</TABLE>

<PAGE> 45
<TABLE>
----------------------------------------------------------------------------------------------------------------------------------
Notes to Financial Statements
----------------------------------------------------------------------------------------------------------------------------------

Note 7.   Investments in Tax-Exempt and Taxable Securities (continued)
      Information on the Bonds as of December 31, 1999 and 1998 (in thousands) and the related properties is as follows:
                                                                                    Unrealized Gain
                                                       Carrying Value at 12/31/99     or (Loss)        Value    Monthly Interest
                                           Combined  ------------------------------ ----------------  Carrying  ----------------
Tax-Exempt                   Maturity        Face    Other                                              Value    Other
Bond Investments               Date         Amount   Bond  A Bond   B Bond     Total   1999     1998   @12/31/98  Bond   A    B
--------------------------------------------------------------------------------------------------------------------------------
ORIGINAL REFUNDING
BONDS:
<S>                         <C>           <C>      <C>     <C>      <C>      <C>      <C>      <C>      <C>       <C>   <C> <C>
Chambrel at Williamsburg,
Williamsburg-Oxford L.P.<F1>November 2026 $ 25,000 $     0 $13,708  $11,292  $ 25,000 $ 9,563  $ 9,563  $ 25,000  $  0  $56 $100

OTHER REFUNDING BONDS:
Springhouse,
Dallas-Oxford Associates<F3>April 2018      10,300  10,300       0        0    10,300       4        0    10,296     62    0    0

Steeplechase,
Carpenter-Oxford Associates
II L.P. <F3>                September 2018  14,200  14,200       0        0    14,200     130        0    14,070     86    0    0

Harbour Town of Jacaranda,
Jacaranda-Oxford L.P.<F2>   April 2006       4,200   4,200       0        0     4,200       0        0     4,200     39    0    0

REMARKETED BONDS:
San Bruno,                  November 2009   25,000  25,000       0        0    25,000  14,609   14,267    24,658    187    0    0
San Bruno-Oxford L.P.<F2>   December 2009    1,060   1,060       0        0     1,060     619      604     1,045      8    0    0

The Harbour,                November 2009    8,710   6,186       0        0     6,186   1,223       42     5,006     54    0    0
Apollo-Oxford Associates L.P.<F2>

OTHER BONDS:
Conyers,                    November 2009    5,420   5,420       0        0     5,420       0      N/A       N/A     45    0    0
Conyers-Oxford Associates L.P.<F5>
---------------------------------------------------------------------------------------------------------------------------------
                            Total         $312,814 $66,366 $116,718 $101,897 $284,981 $97,963  $94,867  $276,464   $481 $489 $801
=================================================================================================================================

</TABLE>

<PAGE> 46
<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
Notes to Financial Statements
------------------------------------------------------------------------------------------------------------------------------------

Note 7.   Investments in Tax-Exempt and Taxable Securities (continued)
      Information on the Bonds as of December 31, 1999 and 1998 (in thousands) and the related properties is summarized as follows:

SCHEDULE OF TAX-EXEMPT SECURITIES - SUMMARY:
<CAPTION>

                                                           Carrying Value at 12/31/99                               Total
                                           Combined    ---------------------------------     1999        1998     Carrying
Tax-Exempt                                   Face      Other                              Unrealized  Unrealized    Value
Bond Investment                             Amount     Bond   A Bond   B Bond      Total     Gain        Gain     @12/31/98
----------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>        <C>      <C>      <C>       <C>       <C>         <C>         <C>
Investments in tax-exempt securities      $312,814   $52,166  $54,153  $101,897  $208,216  $70,103     $67,711     $213,900
Investments in tax-exempt securities
  held in trust                                  0    14,200   62,565         0    76,765   27,860      27,156       62,565
                                         -----------------------------------------------------------------------------------
           Total Tax-Exempt Bonds         $312,814   $66,366 $116,718  $101,897  $284,981  $97,963     $94,867     $276,465
                                         ===================================================================================

<FN>
<F1>  Financing  Transactions.  OTEF  II  retained  all  of  its interest  in  the corresponding Series B Bonds relating to
      these  properties. In  addition, OTEF II applied approximately $52.6 million of the proceeds  to  the  purchase of
      subordinated interests in the securitized transactions. OTEF II  also  retained  certain rights to reacquire the
      securitized  assets.   In connection with these transactions, 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 II is  classified  as financing debt.  The financing debt bears interest at the BMA
      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 Existing MRBs were remarketed on November 1, 1999.
<F3>  The Dallas and Carpenter bonds acquired in December 1997 were refinanced in  1998.  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 a $4.2 million subordinated, tax exempt bond from an unrelated party in connection
      with the Jacaranda transaction.  On June 15, 1999, the Jacaranda senior and subordinated bonds were  refunded.  The
      interest rate on the subordinated bonds held by OTEF II increased from 6.25% to 11%.
<F5>  On November 24, 1999 OTEF II closed a development venture transaction  for  The Peaks at Conyers Apartments.   At closing,
      OTEF  II acquired at par all of the Series C Bonds in the original principal amount of $5,420,000. Interest on  the Series
      C Bonds is exempt from federal income tax. The Series C Bonds require payments  of base interest at an annual rate of
      9-7/8% during the construction period and at 9-3/8% thereafter. Additional interest accrues at an annual rate  of  2.625%
      during  the construction period and at 3.125% thereafter,  and  is  payable from 70% of cash flow remaining after payment
      of base interest and  in  full upon a tender or redemption of the Series C Bonds.
</FN>
</TABLE>

<PAGE> 47
<TABLE>

------------------------------------------------------------------------------
Notes to Financial Statements
------------------------------------------------------------------------------
<CAPTION>

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

                                      For the Three Months Ended in 1999
                               -----------------------------------------------
                                March 31   June 30  September 30  December 31
                               -----------------------------------------------
<S>                              <C>       <C>         <C>           <C>
Interest Earned:
 Interest on tax-exempt
   securities                    $4,873    $4,719      $4,597        $4,796
 Interest on tax-exempt
   securities held in trust         589       739         901           975
 Interest on taxable and loans      266       406         718           577
 Other tax-exempt income            135       143          92            81
------------------------------------------------------------------------------
    Total Interest Earned         5,863     6,007       6,308         6,429
------------------------------------------------------------------------------
 Finance interest expense          (443)     (531)       (536)         (611)
------------------------------------------------------------------------------
    Net Interest Margin           5,420     5,476       5,772         5,818
------------------------------------------------------------------------------
Expenses
 Third party expenses               323       286         271           356
 Related party expenses             276       328         343           329
------------------------------------------------------------------------------
    Total Expenses                  599       614         614           685
------------------------------------------------------------------------------
Net income                       $4,821    $4,862      $5,158        $5,133
------------------------------------------------------------------------------
Other comprehensive income:
  Unrealized gains on
  investments                    $2,774    $  508     $(2,280)       $2,097
------------------------------------------------------------------------------
Comprehensive income:            $7,595    $5,370      $2,878        $7,230
==============================================================================
Net  income allocated to
  BAC holders                    $4,711    $4,765      $5,058        $5,037
==============================================================================
Net income per BAC               $0.644    $0.650      $0.689        $0.687
==============================================================================
Net income per BAC -
  assuming dilution              $0.644    $0.648      $0.688        $0.685
==============================================================================
Weighted average BACs
  outstanding                     7,313     7,336       7,337         7,338
==============================================================================
Weighted average BACs
  outstanding - assuming
  dilution                        7,318     7,351       7,352         7,344
==============================================================================
Distribution per BAC             $0.510    $0.520      $0.520        $0.540
==============================================================================
Market Information:
 Opening Price                   $23.63    $24.13      $24.69        $24.13
 High                            $26.00    $25.00      $25.88        $24.88
 Low                             $23.63    $23.50      $23.88        $22.44
 Closing Price                   $24.06    $24.56      $24.00        $22.63
==============================================================================
</TABLE>


<PAGE> 48
<TABLE>

------------------------------------------------------------------------------
Notes to Financial Statements
------------------------------------------------------------------------------
<CAPTION>

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


                                    For the Three Months Ended in 1998
                               -----------------------------------------------
                                March 31   June 30  September 30  December 31
                               -----------------------------------------------
<S>                              <C>       <C>           <C>          <C>
Interest Earned:
 Interest on tax-exempt
   securities                    $4,727    $4,335        $4,593       $5,312
 Interest on tax-exempt
   securities held in trust         474       669           665          651
 Interest on taxable securities      20       153           318          346
 Other tax-exempt income            121       162           157          448
------------------------------------------------------------------------------
     Total Interest Earned        5,342     5,319         5,733        6,757
------------------------------------------------------------------------------
 Finance interest expense          (331)     (489)         (500)        (489)
------------------------------------------------------------------------------
     Net Interest Margin          5,011     4,830         5,233        6,268
------------------------------------------------------------------------------
Expenses
 Third party expenses               261       181           205          448
 Related party expenses             193       198           261          312
------------------------------------------------------------------------------
     Total Expenses                 454       379           466          760
------------------------------------------------------------------------------
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
==============================================================================
Net income per BAC -
  assuming dilution              $0.603    $0.587        $0.631       $0.735
==============================================================================
Weighted average BACs
  outstanding                     7,185     7,185         7,185        7,185
==============================================================================
Weighted average BACs
  outstanding - assuming
  dilution                        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
==============================================================================
</TABLE>

<PAGE> 49

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

Note 9.  Subsequent Events

    In  January 2000, an additional 25 SQBs were converted to 625
BACs  leaving 712 SQBs outstanding as of the date of this report.

    On  January  18, 2000, OTEF  II acquired an additional 10,000
BACs  for  approximately  $0.24 million in  accordance  with  its
previously announced repurchase program.

    On   February  14,  2000,  OTEF  II  made  a  quarterly  cash
distribution of approximately $4 million or $0.540 per BAC to BAC
Holders  of  record  and $6.19 to SQB Holders  of  record  as  of
December 31, 1999.

       On  March 16, 2000, the Board of Directors of the Managing
General Partner OTEF II declared a quarterly cash distribution of
approximately  $4  million or $0.540 per BAC to  BAC  Holders  of
record as of March 31, 2000.


<PAGE> 50
<TABLE>
------------------------------------------------------------------------------
Distribution Information
------------------------------------------------------------------------------

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


                                             Amount Distributed <F1>
-----------------------------------------------------------------------------------
<CAPTION>                                       BAC       Per      SQB
                       Quarterly   Per        Holders     SQB    Holders   General
Quarter Ended<F1>      Payments   BAC<F5>      <F2>       <F6>    <F6>     Partners
------------------------------------------------------------------------------------
<S>                        <C>   <C>       <C>          <C>     <C>       <C>
1999
December 31, 1999          57    $ 0.5400  $  3,963,830 $  6.19 $  4,562  $   80,988
September 30, 1999         56    $ 0.5200  $  3,816,501 $  6.19 $  4,810  $   77,986
June 30, 1999              55    $ 0.5200  $  3,815,604 $ 12.38 $ 10,473  $   78,083
March 31, 1999             54    $ 0.5100  $  3,730,625 $ 12.38 $ 21,739  $   76,579
                                 --------  ------------ ------- --------  ----------
                                 $ 2.0900  $ 15,326,560 $ 37.14 $ 41,584  $  313,636
------------------------------------------------------------------------------------
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
For the 4 quarters ended 42-45   $ 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  $ 25,593,00  $   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
December 31, 1985 <F4>       1   $ 0.5952  $  3,894,287 $   N/A $    N/A  $   79,475
------------------------------------------------------------------------------------
Total                            $29.9658  $222,724,162 $123.32 $734,268  $4,560,383
====================================================================================
<FN>
<F1> Distributions  in  all  cases were paid in the  quarter  immediately
     following  the  quarter  to  which  the  distribution  relates. Includes
     distributions on 2,000 BAC shares OTEF II acquired in December 1998.
<F2> The  aggregate amount distributed to BAC Holders since inception  is
     $222,724,162, or approximately 74% 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 II 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, 6,946 SQBs outstanding at 12/31/98 and 737 SQBs outstanding at
     12/31/99.
</FN>
</TABLE>

<PAGE> 51

------------------------------------------------------------------------------
General Partnership Information
------------------------------------------------------------------------------

Legal Counsel
Shaw, Pittman
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, 1999, 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> 52

------------------------------------------------------------------------------
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 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

  Registrar  and  Transfer Company ("R&T")  serves  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,
  1999,  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