FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                        QUARTERLY OR TRANSITIONAL REPORT



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

                                  FORM 10-QSB

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


                  For the quarterly period ended June 30, 1998

                                       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)

                                 (864) 239-1000
                          (Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes  X  .  No      .

                         PART I - FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS

a)
                   SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                           CONSOLIDATED BALANCE SHEET
                        (in thousands, except unit data)
                                  (Unaudited)

                                 June 30, 1998



Assets
  Cash and cash equivalents                                            $1,031
  Receivables and deposits                                                154
  Restricted escrows                                                       89
  Other assets                                                            179
  Investment properties:
     Land                                                   $ 1,774
     Buildings and related personal property                 19,948
                                                             21,722
     Less accumulated depreciation                          (10,321)    11,401

                                                                       $12,854

Liabilities and Partners' Capital (Deficit)
Liabilities
  Accounts payable                                                     $  130
  Tenant security deposit liabilities                                      76
  Accrued property taxes                                                  125
  Other liabilities                                                       111
  Mortgage notes payable                                               11,025

Partners' Capital (Deficit)
  General partners                                          $  (132)
  Limited partners (17,343 units
     issued and outstanding)                                  1,519      1,387

                                                                       $12,854


          See Accompanying Notes to Consolidated Financial Statements

b)
                   SHELTER PROPERTIES VII LIMITED PARTNERSHIP

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


                                 Three Months Ended     Six Months Ended
                                      June 30,              June 30,
                                   1998       1997       1998       1997
Revenues:
  Rental income                   $  936     $  874     $1,863     $1,734
  Other income                        50         41        100         81
  Casualty loss                       --        (52)        --         --
     Total revenues                  986        863      1,963      1,815

Expenses:
  Operating                          360        395        674        732
  General and administrative          42         50         78         68
  Depreciation                       208        196        415        386
  Interest                           223        227        447        454
  Property taxes                      63         47        125         91
     Total expenses                  896        915      1,739      1,731

  Net income (loss)               $   90     $  (52)    $  224     $   84

Net income (loss) allocated
  to general partners (1%)        $    1     $   --     $    2     $    1
Net income (loss) allocated
  to limited partners (99%)           89        (52)       222         83

                                  $   90     $  (52)    $  224     $   84

Net income (loss) per limited
  partnership unit                $ 5.13     $(2.96)    $12.80     $ 4.80
  

          See Accompanying Notes to Consolidated Financial Statements
c)
                   SHELTER PROPERTIES VII LIMITED PARTNERSHIP

        CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
                        (in thousands, except unit data)
                                  (Unaudited)



                                    Limited
                                  Partnership   General    Limited
                                     Units      Partners   Partners    Total

Original capital contributions      17,343       $   2      $17,343    $17,345

Partners' capital (deficit)
  at December 31, 1997              17,343       $(134)     $ 1,297    $ 1,163

Net income for the six months
  ended June 30, 1998                   --           2          222        224

Partners' capital (deficit)
  at June 30, 1998                  17,343       $(132)     $ 1,519    $ 1,387

          See Accompanying Notes to Consolidated Financial Statements


d)
                   SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                  (Unaudited)


                                                           Six Months Ended
                                                               June 30,
                                                           1998        1997
Cash flows from operating activities:
  Net income                                              $  224      $   84
  Adjustments to reconcile net income to net
   cash provided by operating activities:
    Depreciation                                             415         386
    Amortization of discounts and loan costs                  22          21
    Change in accounts:
      Receivables and deposits                               144          89
      Other assets                                             7          (5)
      Accounts payable                                        33         102
      Tenant security deposit liabilities                     (2)         (8)
      Accrued property taxes                                 (59)        (85)
      Other liabilities                                        7         (54)

         Net cash provided by operating activities           791         530

Cash flows from investing activities:
  Property improvements and replacements                    (275)       (342)
  Deposits to restricted escrows                              (2)         (2)
  Insurance proceeds received                                 --          52

         Net cash used in investing activities              (277)       (292)

Cash flows from financing activities:
  Payments on mortgage notes payable                         (95)        (88)
  Distributions to partners                                   --        (304)

         Net cash used in financing activities               (95)       (392)

Net increase (decrease) in cash                              419        (154)

Cash and cash equivalents at beginning of period             612       1,055

Cash and cash equivalents at end of period                $1,031      $  901

Supplemental disclosure of cash flow information:
  Cash paid for interest                                  $  425      $  432

           See Accompanying Notes to Consolidated Financial Statements

e)
                   SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


NOTE A - BASIS OF PRESENTATION

The accompanying unaudited financial statements of Shelter Properties VII (the
"Partnership") 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 three and six
month periods ended June 30, 1998, are not necessarily indicative of the results
that may be expected for the fiscal year ending December 31, 1998.  For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Partnership's annual report on Form 10-KSB for the year
ended December 31, 1997.

Certain reclassifications have been made to the 1997 information to conform to
the 1998 presentation.

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.

                                                       Six Months Ended
                                                           June 30,
                                                        (in thousands)
                                                        1998       1997

Net cash provided by operating activities              $ 791      $ 530
  Payments on mortgage notes payable                     (95)       (88)
  Property improvements and replacements                (275)      (342)
  Change in restricted escrows, net                       (2)        (2)
  Changes in reserves for net operating
   liabilities                                          (130)       (39)
  Additional reserves                                   (289)       (61)

      Net cash used in operations                      $  --      $  (2)

At June 30, 1998 and 1997, the Corporate General Partner believes it to be in
the best interest of the Partnership to reserve an additional $289,000 and
$61,000, respectively, to fund maintenance items and capital improvements at
both properties.

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 Corporate General Partner is wholly-owned by
Insignia Properties Trust ("IPT"), an affiliate of Insignia Financial Group,
Inc. ("Insignia").  The Partnership Agreement provides for payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. The following transactions with
Insignia and its affiliates were incurred in 1998 and 1997:


                                               Six Months Ended June 30,
                                                    1998       1997
                                                    (in thousands)

Property management fees (included in operating      $ 97       $ 90
 expenses)
Reimbursement for services of affiliates
 (included in general and administrative and
 operating expenses) (1)                               47         39

(1) Included in "Reimbursements for Services of Affiliates" for 1998 is
    approximately $3,000 in reimbursements for construction oversight costs.

For the period of January 1, 1997 to August 31, 1997, the Partnership insured
its properties under a master policy through an agency affiliated with the
Corporate General Partner with an 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 master policy.  The
agent assumed the financial obligations to the affiliate of the Corporate
General Partner, which receives payment 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.

During December 1997, Insignia affiliates (the "Purchaser") commenced tender
offers for limited partnership interests in ten real estate limited partnerships
(including the Partnership) in which various Insignia affiliates act as general
partner. The Purchaser offered to purchase up to 7,000 of the outstanding units
of limited partnership interest in the Partnership at $350 per Unit, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated December 17, 1997 (the "Offer to Purchase") and the
related Assignment of Partnership Interest attached as Exhibits (a)(1) and
(a)(2), respectively, to the Tender Offer Statement on Schedule 14D-1 originally
filed with the Securities and Exchange Commission on December 17, 1997. Because
of the existing and potential future conflicts of interest (described in the
Partnership's Statements on Schedule 14D-9 filed with the Securities and
Exchange Commission), neither the Partnership nor the Corporate General Partner
expressed any opinion as to the Offer to Purchase and made no recommendation as
to whether unit holders should tender their units in response to the Offer to
Purchase. In addition, because of these conflicts of interest, including as a
result of the Purchaser's affiliation with various Insignia affiliates that
provide property management services to the Partnership's properties, the manner
in which the Purchaser votes its limited partner interests in the Partnership
may not always be consistent with the best interests of the other limited
partners.  During February 1998, the tender offers were completed and Insignia
Properties, L.P., an affiliate of Insignia, tendered 2,180 units of limited
partnership interest in the Partnership.

On July 21, 1998, an Insignia affiliate (the "Purchaser") commenced tender
offers for limited partnership interests in six real estate limited partnerships
(including the Partnership) in which various Insignia affiliates act as general
partner.  The Purchaser offered to purchase up to 6,000 of the outstanding units
of limited partnership interest in the Partnership, at $450 per Unit, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated July 27, 1998 (the "Offer to Purchase") and the related
Assignment of Partnership Interest attached as Exhibits (a) (1) and  (a)(2),
respectively, to the Tender Offer Statement on Schedule 14D-1 originally filed
with the Securities and Exchange Commission), neither the Partnership nor the
Corporate General Partner expressed any opinion as to the Offer to Purchase and
made no recommendation as to whether unit holders should tender their units in
response to the Offer to Purchase. In addition, because of these conflicts of
interest, including as a result of the Purchaser's affiliation with various
Insignia affiliates that provide property management services to the
Partnership's properties, the manner in which the Purchaser votes its limited
partner interests in the Partnership may not always be consistent with the best
interests of the other limited partners.

On March 17, 1998, Insignia entered into an agreement to merge its national
residential property management operations, and its controlling interest in IPT,
with Apartment Investment and Management Company ("AIMCO"), a publicly traded
real estate investment trust.  The closing, which is anticipated to happen in
September or October of 1998, is subject to customary conditions, including
government approvals and the approval of Insignia's shareholders.  If the
closing occurs, AIMCO will then control the Corporate General Partner of the
Partnership.

NOTE D - CASUALTY LOSS

During the three months ended June 30, 1997, the Partnership recorded a $52,000
casualty loss as a result of the write-off of the cost of roofs damaged in a
hail storm at Governor's Park Apartments.  This loss offset the $52,000 casualty
gain recognized in the first quarter of 1997 as a result of the receipt of
insurance proceeds for this damage.


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 six
months ended June 30, 1998 and 1997:


                                          Average
                                         Occupancy
                                      1998        1997
Hickory Ridge Apartments
  Memphis, Tennessee                   95%         89%

Governor's Park Apartments
  Ft. Collins, Colorado                96%         94%


The Corporate General Partner attributes the increase in occupancy at Hickory
Ridge to increased curb appeal as a result of the completion of an exterior
building improvement project in 1997.   In addition, the increase is also
attributable to an increase in employment at two large area employers.  The
increase in occupancy at Governor's Park is attributable to roof repairs which
were completed at the property during 1997 which has improved the appeal of this
property.

Results of Operations

The Partnership reported net income of approximately $90,000 and $224,000,
respectively for the three and six month periods ended June 30, 1998.  The
Partnership reported net (loss) income  of approximately $(52,000) and $84,000
for the three and six month periods ended June 30, 1997.   The increase in net
income for both periods is attributable to increases in rental income, other
income and a decrease in operating expenses.  Rental income increased at both
Governor's Park and Hickory Ridge as a result of rental rate increases and an
increase in occupancy at both properties as discussed above. Other income
increased primarily due to increases in late charges and application fees at
Hickory Ridge. Operating expenses decreased as a result of building improvements
and property appearance costs and repairs which were completed in 1997 at both
properties.

The increase in net income was partially offset by an increase in property taxes
and depreciation expense.  Property taxes increased due to an increase in the
assessed value at Hickory Ridge Apartments during 1998.  Depreciation expense
increased due to an increase in depreciable assets.

Included in operating expense for the six months ended June 30, 1998 is
approximately $18,000 of major repairs and maintenance comprised of gutter
repairs, construction services and window coverings.  Included in operating
expense for the six months ended June 30, 1997 is approximately $70,000 of major
repairs and maintenance comprised of exterior building improvements and parking
lot repairs, construction services and swimming pool repairs.

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.

Liquidity and Capital Resources

At June 30, 1998, the Partnership had unrestricted cash of approximately
$1,031,000 compared to approximately $901,000 for June 30, 1997.  The net
increase (decrease) in cash and cash equivalents for the six months ended June
30, 1998 and 1997 is $419,000 and $(154,000), respectively.  Net cash provided
by operating activities increased due to an increase in net income as discussed
above, an increase in other liabilities and a decrease in receivables and
deposits.  These changes were partially offset by a smaller increase in accounts
payable due to the timing of payments.  The increase in other liabilities is a
result of increases in the accruals for wages and insurance as a result of the
timing of payments.  The decrease in accounts receivables and deposits is a
result of improved collections and the receipt of refunds due the Partnership at
the end of 1997.  Net cash used in investing activities decreased due to a
decrease in property improvements and replacements in 1998 as compared to 1997.
This decrease was partially offset by the absence of any insurance proceeds in
1998.  Net cash used in financing activities decreased due to a decrease in
distributions to partners in 1998 as compared to 1997.

The Corporate General Partner has budgeted $155,000 in 1998 for parking area
repair and overlay and roof repairs at Hickory Ridge Apartments, which are to be
funded from operations and Partnership reserves.  This work is approximately
two-thirds complete as of June 30, 1998.  The Partnership has no other material
capital programs scheduled to be performed in 1998, although certain routine
capital expenditures and maintenance expenses will be incurred only if cash is
available from operations or is received from the capital reserve account.

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 approximately $11,025,000, 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. In May 1997, the Partnership distributed approximately $300,000 to the
limited partners and in April 1997, the Partnership paid approximately $4,000 to
Colorado for state tax withholdings on behalf of the limited partners.  Future
cash distributions will depend on the levels of net cash generated from
operations, property sales, and the availability of cash reserves.

Year 2000

The Partnership is dependent upon the Corporate General Partner and Insignia for
management and administrative services.  Insignia has completed an assessment
and will have to modify or replace portions of its software so that its computer
systems will function properly with respect to dates in the year 2000 and
thereafter (the "Year 2000 Issue").  The project is estimated to be completed
not later than December 31, 1998, which is prior to any anticipated impact on
its operating systems.  The Corporate General Partner believes that with
modifications to existing software and conversions to new software, the Year
2000 Issue will not pose significant operational problems for its computer
systems. However, if such modifications and conversions are not made, or are not
completed timely, the Year 2000 Issue could have a material impact on the
operations of the Partnership.

Other

Certain items discussed in this quarterly report may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 (the "Reform Act") and as such may involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Partnership to be materially different from any future
results, performance or achievements expressed or implied by such forward-
looking statements.  Such forward-looking statements speak only as of the date
of this quarterly report.  The Partnership expressly disclaims any obligation or
undertaking to release publicly any updates of revisions to any forward-looking
statements contained herein to reflect any change in the Partnership's
expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.


                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDING

In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled ROSALIE NUANES, ET AL. V. INSIGNIA
FINANCIAL GROUP, INC., ET AL. in the Superior Court of the State of California
for the County of San Mateo.  The plaintiffs named as defendants, among others,
the Partnership, the Corporate General Partner and several of their affiliated
partnerships and corporate entities.  The complaint purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia and its affiliates of
interests in certain general partner entities, past tender offers by Insignia
affiliates as well as a recently announced agreement between Insignia and
Apartment Investment and Management Company.  The complaint seeks monetary
damages and equitable relief, including judicial dissolution of the Partnership.
The Corporate General Partner believes the action to be without merit, and
intends to vigorously defend it.  On June 24, 1998, the Corporate General
Partner filed a motion seeking dismissal of the action.

The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature.  The Corporate General Partner of the Partnership
believes that all such pending or outstanding litigation will be resolved
without a material adverse effect upon the business, financial condition, or
operations of the Partnership.


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 June 30, 1998.


                                   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
                                   Vice President and Treasurer



                             Date: August 7, 1998