FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                        QUARTERLY OR TRANSITIONAL REPORT
                  (As last amended by 34-32231, eff. 6/3/93.)


                    U. S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-QSB

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934


              For the quarterly period ended September 30, 1996

                                      or

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


              For the transition period from.........to.........

                        Commission file number 0-14369


                  SHELTER PROPERTIES VII LIMITED PARTNERSHIP
      (Exact name of small business issuer as specified in its charter)

         South Carolina                            57-0784852
(State or other jurisdiction of                 (I.R.S. Employer
incorporation or organization)                  Identification No.)

One Insignia Financial Plaza, P.O. Box 1089
      Greenville, South Carolina                      29602
(Address of principal executive offices)            (Zip Code)

                   Issuer's telephone number (864) 239-1000

Check whether the issuer (1) 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      .

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

a)                 SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                           CONSOLIDATED BALANCE SHEET
                                  (Unaudited)
<TABLE>
<CAPTION>
                               September 30, 1996

<S>                                               <C>                  <C>
Assets
  Cash and cash equivalents:
     Unrestricted                                                       $   915,635
     Restricted--tenant security deposits                                    85,122
  Accounts receivable                                                         3,376
  Escrow for taxes                                                          124,362
  Restricted escrows                                                         82,592
  Other assets                                                              211,713
  Investment properties:
     Land                                          $ 1,774,028
     Buildings and related personal property        18,661,101
                                                    20,435,129
     Less accumulated depreciation                  (8,938,196)          11,496,933
                                                                        $12,919,733

Liabilities and Partners' Capital (Deficit)

Liabilities
  Accounts payable                                                      $    25,256
  Tenant security deposits                                                   85,465
  Accrued taxes                                                             130,818
  Other liabilities                                                         100,757
  Mortgage notes payable                                                 11,317,725

Partners' Capital (Deficit)
  General partners                                 $  (135,840)
  Limited partners (17,343 units
     issued and outstanding)                         1,395,552            1,259,712

<FN>
          See Accompanying Notes to Consolidated Financial Statements
</TABLE>

b)                      SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                          CONSOLIDATED STATEMENTS OF OPERATIONS
                                       (Unaudited)
<TABLE>
<CAPTION>
                                   Three Months Ended            Nine Months Ended
                                     September 30,                 September 30,
                                   1996          1995            1996          1995
<S>                            <C>           <C>             <C>           <C>
Revenues:
  Rental income                 $  885,758    $  847,169      $2,615,164    $2,453,724
  Other income                      42,210        35,418         113,827       114,350
     Total revenues                927,968       882,587       2,728,991     2,568,074

Expenses:
  Operating                        250,779       255,084         734,152       751,841
  General and administrative        29,112        28,907          97,305        87,579
  Maintenance                      130,245       151,226         383,145       385,596
  Depreciation                     192,014       180,207         562,196       531,042
  Interest                         228,914       231,872         689,010       697,714
  Property taxes                    40,493        45,158         127,852       138,492
     Total expenses                871,557       892,454       2,593,660     2,592,264

  Net income (loss)             $   56,411    $   (9,867)     $  135,331    $  (24,190)

Net income (loss) allocated
  to general partners (1%)      $      564    $      (99)     $    1,353    $     (242)
Net income (loss) allocated
  to limited partners (99%)         55,847       ( 9,768)        133,978       (23,948)

                                $   56,411    $  ( 9,867)     $  135,331    $  (24,190)

Net income (loss) per limited
  partnership unit              $     3.22    $     (.56)     $     7.73    $    (1.38)

<FN>
          See Accompanying Notes to Consolidated Financial Statements
</TABLE>

c)                      SHELTER PROPERTIES VII LIMITED PARTNERSHIP

             CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
                                       (Unaudited)
<TABLE>
<CAPTION>
                                   Limited
                                 Partnership    General         Limited
                                     Units      Partners        Partners        Total
<S>                                <C>        <C>            <C>            <C>
Original capital contributions      17,343     $   2,000      $17,343,000    $17,345,000

Partners' capital (deficit)
  at December 31, 1995              17,343     $(137,193)     $ 1,261,574    $ 1,124,381

Net income for the nine months
  ended September 30, 1996                         1,353          133,978        135,331

Partners' capital (deficit)
  at September 30, 1996             17,343     $(135,840)     $ 1,395,552    $ 1,259,712

<FN>
          See Accompanying Notes to Consolidated Financial Statements
</TABLE>

d)                 SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                      (Unaudited)
<TABLE>
<CAPTION>
                                                             Nine Months Ended
                                                                September 30,
                                                           1996             1995
<S>                                                    <C>             <C>
Cash flows from operating activities:
  Net income (loss)                                     $ 135,331       $  (24,190)
  Adjustments to reconcile net income (loss) to
   net cash provided by operating activities:
    Depreciation                                          562,196          531,042
    Amortization of discounts and loan costs               32,498           32,141
    Change in accounts:
      Restricted cash                                       5,640          (19,321)
      Accounts receivable                                     823           (1,608)
      Escrows for taxes                                    36,364           32,745
      Other assets                                         16,911           15,289
      Accounts payable                                    (10,294)         (36,679)
      Tenant security deposit liabilities                  (5,640)          20,906
      Accrued taxes                                       (44,366)         (33,522)
      Other liabilities                                     4,058           (3,537)

         Net cash provided by operating activities        733,521          513,266

Cash flows from investing activities:
  Property improvements and replacements                 (394,435)        (504,204)
  Deposits to restricted escrows                           (3,369)          (7,026)
  Receipts from restricted escrows                         24,295           12,428
  Insurance proceeds from property damage                      --           31,366

         Net cash used in investing activities           (373,509)        (467,436)

Cash flows from financing activities:
  Payments on mortgage notes payable                     (124,053)        (114,992)

         Net cash used in financing activities           (124,053)        (114,992)

Net increase (decrease) in cash                           235,959          (69,162)

Cash and cash equivalents at beginning of period          679,676          771,413
Cash and cash equivalents at end of period              $ 915,635       $  702,251

Supplemental disclosure of cash flow information:
  Cash paid for interest                                $ 656,511       $  665,573
<FN>
               See Accompanying Notes to Consolidated Financial Statements
</TABLE>

e)                  SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


NOTE A - BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Article 310(b) of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of Shelter Realty VII Corporation (the "Corporate General
Partner"), all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included.  Operating results for the
nine month period ended September 30, 1996, are not necessarily indicative of
the results that may be expected for the fiscal year ending December 31, 1996.
For further information, refer to the financial statements and footnotes thereto
included in the Partnership's annual report on Form 10-KSB for the year ended
December 31, 1995.

Certain reclassifications have been made to the 1995 information to conform to
the 1996 presentation.

Cash and Cash Equivalents:

Unrestricted - Unrestricted cash includes cash on hand and in banks and
Certificates of Deposit with original maturities less than 90 days.  At certain
times, the amount of cash deposited at a bank may exceed the limit on insured
deposits.

Restricted cash - tenant security deposits - The Partnership requires security
deposits from lessees for the duration of the lease and such deposits are
considered restricted cash.  Deposits are refunded when the tenant vacates,
provided the tenant has not damaged the unit and is current on rental payments.

NOTE B - RECONCILIATION OF CASH FLOWS

The following is a reconciliation of the subtotal on the accompanying statements
of cash flows captioned "net cash provided by operating activities" to "net cash
used in operations," as defined in the partnership agreement.  However, "net
cash used in operations" should not be considered an alternative to net income
as an indicator of the Partnership's operating performance or to cash flows as a
measure of liquidity.

                                                       Nine Months Ended
                                                          September 30,
                                                     1996                1995

Net cash provided by operating activities         $ 733,521           $ 513,266
  Payments on mortgage notes payable               (124,053)           (114,992)
  Property improvements and replacements           (394,435)           (504,204)
  Change in restricted escrows, net                  20,926               5,402
  Changes in reserves for net operating
   liabilities                                       (3,496)             25,727
  Additional reserves                              (235,000)                 --

      Net cash used in operations                 $  (2,537)          $ (74,801)

The Corporate General Partner believes it to be in the best interest of the
Partnership to reserve an additional $235,000 to fund maintenance items and
capital improvements including the second phase of the vinyl siding project and
possible roof repairs at Hickory Ridge.

NOTE C - TRANSACTIONS WITH AFFILIATED PARTIES

The Partnership has no employees and is dependent on the Corporate General
Partner and its affiliates for the management and administration of all
partnership activities.  The Partnership Agreement provides for payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.  Property management fees paid to
affiliates of Insignia Financial Group, Inc. during the nine months ended
September 30, 1996 and 1995, are included in operating expenses on the
consolidated statement of operations and are reflected in the following table.
The Corporate General Partner and its affiliates received reimbursements and
fees as reflected in the following table:

                                                     Nine Months Ended
                                                        September 30,
                                                   1996           1995

Property management fees                        $ 134,959      $ 126,928
Reimbursement for services of affiliates           72,226         51,184

Included in "reimbursements for services of affiliates" for 1996 is $13,093 in
reimbursements for construction oversight costs.

The Partnership insures its properties under a master policy through an agency
and insurer unaffiliated with the Corporate General Partner.  An affiliate of
the Corporate General Partner acquired, in the acquisition of a business,
certain financial obligations from an insurance agency which was later acquired
by the agent who placed the current year's master policy.  The current agent
assumed the financial obligations to the affiliate of the Corporate General
Partner who receives payments on these obligations from the agent.  The amount
of the Partnership's insurance premiums accruing to the benefit of the affiliate
of the Corporate General Partner by virtue of the agent's obligations is not
significant.

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The Partnership's investment properties consist of two apartment complexes.  The
following table sets forth the average occupancy of the properties for the nine
months ended September 30, 1996 and 1995:

                                                       Average
                                                      Occupancy
Property                                          1996         1995

Hickory Ridge Apartments
  Memphis, Tennessee                               97%         97%

Governor's Park Apartments
  Ft. Collins, Colorado                            94%         89%

The Corporate General Partner attributes the increase in occupancy at Governor's
Park to increased performance by the leasing staff, a tighter housing market,
and a decrease in tenant turnover.

The Partnership reported net income for the nine months ended September 30,
1996, of $135,331, with the third quarter having net income of $56,411.  The
Partnership reported net losses of $24,190 and $9,867 for the corresponding
periods in 1995.  The increase in net income is primarily attributable to an
increase in rental income due to increased occupancy at Governor's Park and
rental rate increases at both properties. Other income increased for the three
months ended September 30, 1996, due to higher interest rates and increased cash
balances being held in interest bearing accounts.  Also contributing to the
increase in net income was the decrease in maintenance expense for the three
months ended September 30, 1996, at Hickory Ridge.  Hickory Ridge completed some
major repair projects in 1995 such as exterior painting, gutter repairs, and
landscaping.

Offsetting the increase in net income was an increase in general and
administrative expense. General and administrative expense increased due to
increased reimbursements to the General Partner and increased insurance expense
due to additional coverage.

As part of the ongoing business plan of the Partnership, the Corporate General
Partner monitors the rental market environment of each of its investment
properties to assess the feasibility of increasing rents, maintaining or
increasing occupancy levels and protecting the Partnership from increases in
expense.  As part of this plan, the Corporate General Partner attempts to
protect the Partnership from the burden of inflation-related increases in
expenses by increasing rents and maintaining a high overall occupancy level.
However, due to changing market conditions, which can result in the use of
rental concessions and rental reductions to offset softening market conditions,
there is no guarantee that the Corporate General Partner will be able to sustain
such a plan.

At September 30, 1996, the Partnership had unrestricted cash of $915,635
compared to $702,251 for the same period in 1995.  Net cash provided by
operating activities increased as a result of the increase in net income as
previously discussed.  Net cash used in investing activities decreased primarily
due to a decrease in property improvements and replacements in 1996 as compared
to 1995. This decrease is mainly attributable to vinyl siding and other exterior
renovations on the majority of buildings at Hickory Ridge being completed in
1995.  Insurance proceeds from property damage decreased as the Partnership's
investment properties have not incurred any material casualties in 1996 or 1995.
Governor's Park received insurance proceeds of approximately $31,000 in 1995
related to fire damage incurred in 1994.  Net cash used in financing activities
increased due to the increase in principal payments in 1996 as a result of the
amortization of mortgage indebtedness.

The Corporate General Partner budgeted $217,000 for vinyl siding and other
exterior renovations on the remaining buildings at Hickory Ridge Apartments,
which will be funded from property operations and Partnership reserves.  The
Partnership may have to fund significant roof repairs at Hickory Ridge in 1996
due to their age and condition.

The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the property to adequately maintain the physical assets
and other operating needs of the Partnership.  Such assets are currently thought
to be sufficient for any near-term needs of the Partnership.  The mortgage
indebtedness of $11,317,725, net of discount, is amortized over varying periods
with required balloon payments ranging from March 1, 2001, to October 15, 2003,
at which time the properties will either be refinanced or sold.  Future cash
distributions will depend on the levels of net cash generated from operations,
property sales, and the availability of cash reserves.  No cash distributions
were recorded in 1995 or the nine months ended September 30, 1996.


                           PART II - OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

       a)    Exhibits:

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

       b)    Reports on Form 8-K:

             None filed during the quarter ended September 30, 1996.


                                    SIGNATURES



 In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



                             SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                             By: Shelter Realty VII Corporation
                                 Corporate General Partner


                             By:/s/ William H. Jarrard, Jr.
                                William H. Jarrard, Jr.
                                President and Director


                             By:/s/ Ronald Uretta      
                                Ronald Uretta
                                Treasurer
                                (Principal Financial Officer
                                and Principal Accounting Officer)


                             Date:  October 28, 1996