<PAGE>   1
                                   FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997

                         COMMISSION FILE NUMBER 0-14458



                  NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                        (A MARYLAND LIMITED PARTNERSHIP)
             (Exact name of registrant as specified in its charter)



             MARYLAND                                  52-1365317
   (State or other jurisdiction                     (I.R.S. Employer
of incorporation or organization)                 Identification No.)



                         8065 LEESBURG PIKE, SUITE 400
                             VIENNA, VIRGINIA 22182
                    (Address of principal executive offices)
                                   (Zip Code)


                                 (703) 394-2400
              (Registrant's telephone number, including area code)

                                 NOT APPLICABLE
              (Former name, former address and former fiscal year,
                         if changed since last report.)


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 
    -----          -----     
<PAGE>   2
PART 1 - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS

                  NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                        (A MARYLAND LIMITED PARTNERSHIP)
                        STATEMENTS OF FINANCIAL POSITION


<TABLE>
<CAPTION>
                                                                            March 31,
                                                                               1997           December 31,
                                                                           (Unaudited)             1996       
                                                                           -----------        -------------
<S>                                                                       <C>                 <C>
                             ASSETS
                             ------

Cash and cash equivalents                                                 $    36,606           $    37,396
Investments in and advances to Local Limited Partnerships (Note 2)          4,243,095             4,241,127
                                                                          -----------           -----------

                                                                          $ 4,279,701           $ 4,278,523
                                                                          ===========           ===========

                LIABILITIES AND PARTNERS' DEFICIT
                ---------------------------------

Liabilities:
   Deferred acquisition notes payable to General Partner                   $2,414,468            $2,414,468
   Accrued interest on deferred acquisition notes payable to
     General Partner                                                        2,878,350             2,817,988
   Administrative and reporting fee payable to General Partner (Note 3)     1,053,115             1,018,803
   Other accrued expenses                                                      51,445                39,445
                                                                          -----------           -----------

                                                                            6,397,378             6,290,704
                                                                          -----------           -----------

Partners' deficit:
   General Partner -- The National Housing Partnership (NHP)                 (176,266)             (175,211)
   Original Limited Partner -- 1133 Fifteenth Street Two Associates          (181,166)             (180,111)
   Other Limited Partners -- 18,300 investment units                       (1,760,245)           (1,656,859)
                                                                          -----------           ----------- 

                                                                           (2,117,677)           (2,012,181)
                                                                          -----------           ----------- 

                                                                          $ 4,279,701           $ 4,278,523
                                                                          ===========           ===========
</TABLE>

                       See notes to financial statements.

                                      -1-
<PAGE>   3
                  NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                        (A MARYLAND LIMITED PARTNERSHIP)
                            STATEMENTS OF OPERATIONS
                                  (UNAUDITED)


<TABLE>
<CAPTION>
                                                                     Three Months Ended March 31,     
                                                                  ----------------------------------   
                                                                     1997                      1996    
                                                                  ---------                 --------   
         <S>                                                      <C>                       <C>
         REVENUES:
            Share of income from Local Limited Partnerships       $   1,968                 $ 81,357
            Interest income                                             332                    1,543
                                                                  ---------                 --------
                                                                                             
                                                                      2,300                   82,900
                                                                  ---------                 --------
                                                                                             
         COSTS AND EXPENSES:                                                                 
            Administrative and reporting fees to                                             
              General Partner (Note 3)                               34,312                   34,312
            Interest on deferred acquisition notes                                           
              to General Partner 60,362                              60,362                   60,362
            Interest on partner loans                                 -                          753
            Other operating expenses                                 13,122                   14,806
                                                                  ---------                 --------
                                                                                             
                                                                    107,796                  110,233
                                                                  ---------                 --------
                                                                                             
         NET LOSS                                                 $(105,496)                $(27,333)
                                                                  =========                 ========
                                                                                             
         NET LOSS ASSIGNABLE TO LIMITED PARTNERS                  $(103,386)                $(26,787)
                                                                  =========                 ========
                                                                                             
         NET LOSS PER LIMITED PARTNERSHIP                                                    
           INTEREST                                               $      (6)                $     (1)
                                                                  =========                 ======== 
</TABLE>





                       See notes to financial statements.

                                      -2-
<PAGE>   4
                  NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                        (A MARYLAND LIMITED PARTNERSHIP)
                         STATEMENT OF PARTNERS' DEFICIT
                                  (UNAUDITED)



<TABLE>
<CAPTION>
                                         The National         1133
                                           Housing         Fifteenth        Other
                                         Partnership       Street Two      Limited
                                            (NHP)          Associates      Partners          Total
                                         -----------       ----------    ------------     -----------
<S>                                      <C>              <C>            <C>              <C>
Deficit at January 1, 1997               $(175,211)       $(180,111)     $(1,656,859)     $(2,012,181)

Net loss -- three months ended
  March 31, 1997                            (1,055)          (1,055)        (103,386)        (105,496)
                                         ---------        ---------     ------------     ------------ 

Deficit at March 31, 1997                $(176,266)       $(181,166)     $(1,760,245)     $(2,117,677)
                                         =========        =========      ===========      =========== 

Percentage interest at March 31, 1997            1%               1%              98%             100%
                                         =========        =========      ===========      ===========
                                               (A)              (B)              (C)
</TABLE>

(A)      General Partner
(B)      Original Limited Partner
(C)      Consists of 18,300 investment units of 0.0085% held by 1,297 investors





                       See notes to financial statements.

                                      -3-
<PAGE>   5
                  NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                        (A MARYLAND LIMITED PARTNERSHIP)
                            STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)



<TABLE>
<CAPTION>
                                                                      Three Months Ended March 31,     
                                                                 ------------------------------------    
                                                                    1997                      1996    
                                                                 ----------                 ---------  
<S>                                                              <C>                        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Interest received                                              $     332                 $  1,543
   Operating expenses paid                                           (1,122)                  (4,806)
                                                                  ---------                 -------- 
                                                                                             
Net cash used in operating activities                                  (790)                  (3,263)
                                                                                             
CASH AND CASH EQUIVALENTS, BEGINNING OF                                                      
  PERIOD                                                             37,396                   30,173
                                                                  ---------                 --------
                                                                                             
CASH AND CASH EQUIVALENTS, END OF PERIOD                          $  36,606                 $ 26,910
                                                                  =========                 ========
                                                                                             
RECONCILIATION OF NET LOSS TO NET CASH                                                       
  USED IN OPERATING ACTIVITIES:                                                              
    Net loss                                                      $(105,496)                $(27,333)
                                                                  ---------                 -------- 
    Adjustments to reconcile net loss to net cash used in                                    
      operating activities:                                                                  
         Share of income from Local Limited Partnerships             (1,968)                 (81,357)
         Increase in accrued interest on deferred acquisition                                
           notes                                                     60,362                   60,362
         Increase in accrued interest on partner loans                -                          753
         Increase in administrative and reporting fees                                       
           payable                                                   34,312                   34,312
         Increase in accrued expenses                                12,000                   10,000
                                                                  ---------                 --------
                                                                                             
         Total adjustments                                          104,706                   24,070
                                                                  ---------                 --------
                                                                                             
    Net cash used in operating activities                         $    (790)                $ (3,263)
                                                                  =========                 ======== 
</TABLE>





                       See notes to financial statements.

                                      -4-
<PAGE>   6
                  NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                        (A MARYLAND LIMITED PARTNERSHIP)
                         NOTES TO FINANCIAL STATEMENTS




(1)      ACCOUNTING POLICIES

         ORGANIZATION

         National Housing Partnership Realty Fund Two (the "Partnership") is a
         limited partnership organized under the laws of the State of Maryland
         under the Maryland Revised Uniform Limited Partnership Act on January
         22, 1985. The Partnership was formed for the purpose of raising
         capital by offering and selling limited partnership interests and then
         investing in limited partnerships ("Local Limited Partnerships"), each
         of which owns and operates an existing rental housing project which is
         financed and/or operated with one or more forms of rental assistance
         or financial assistance from the U.S.  Department of Housing and Urban
         Development ("HUD").

         The General Partner raised capital for the Partnership by offering and
         selling to additional limited partners 18,300 investment units at a
         price of $1,000 per unit. The Partnership acquired limited partnership
         interests of 94.5% (98% with respect to allocation of losses) in
         twenty-one Local Limited Partnerships, nineteen of which were
         organized to acquire and operate an existing rental housing project.
         The remaining two Local Limited Partnerships were formed to construct
         and operate rental housing projects.

         BASIS OF PRESENTATION

         The accompanying unaudited interim financial statements reflect all
         adjustments which are, in the opinion of management, necessary to a
         fair statement of the financial condition and results of operations
         for the interim periods presented. All such adjustments are of a
         normal and recurring nature.

         While the General Partner believes that the disclosures presented are
         adequate to make the information not misleading, it is suggested that
         these financial statements be read in conjunction with the financial
         statements and notes included in NHP Realty Fund Two's Annual Report
         filed in Form 10-K for the year ended December 31, 1996.

(2)      INVESTMENTS IN AND ADVANCES TO LOCAL LIMITED PARTNERSHIPS

         The Partnership owns a 94.5% limited partnership interest (98% with
         respect to allocation of losses) in twenty-one Local Limited
         Partnerships. Because the Partnership, as a limited partner, does not
         exercise control over the activities of the Local Limited Partnerships
         in accordance with the partnership agreements, the investments in
         Local Limited Partnerships are accounted for using the equity method.
         Thus, the investments (and the advances made to the Local Limited
         Partnerships as discussed below) are carried at cost less the
         Partnership's share of the Local Limited Partnerships' losses and
         distributions. However, because the Partnership is not legally liable
         for the obligations of the Local Limited Partnerships, and is not
         otherwise committed to provide additional support to them, it does not
         recognize losses once its investments, reduced for its share of losses
         and cash distributions, reaches zero in each of the individual Local
         Limited Partnerships. As of March 31, 1997 and December 31, 1996,
         investments in nineteen of the twenty-one Local Limited Partnerships
         had been reduced to zero. As a result, the Partnership did not
         recognize $377,016 and $409,671 of losses from these nineteen Local
         Limited Partnerships during the three months ended March 31, 1997 and
         1996, respectively. As of March 31, 1997 and December 31, 1996, the
         Partnership has not recognized a total of $21,342,285 and $20,965,269,
         respectively, of its allocated share of cumulative losses from the
         Local Limited Partnerships in which its investment is zero.





                                      -5-
<PAGE>   7
                  NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                        (A MARYLAND LIMITED PARTNERSHIP)
                         NOTES TO FINANCIAL STATEMENTS





         Advances made by the Partnership to the individual Local Limited
         Partnerships are considered part of the Partnership's investment in
         Local Limited Partnerships. When advances are made, they are charged
         to operations as a loss on investment in the Local Limited Partnership
         using previously unrecognized cumulative losses. As discussed above,
         due to the cumulative losses incurred by nineteen of the Local Limited
         Partnerships, the aggregate balance of investments in and advances to
         Local Limited Partnerships, for these nineteen Local Limited
         Partnerships, has been reduced to zero at March 31, 1997 and December
         31, 1996. To the extent these advances are repaid by the Local Limited
         Partnerships in the future, the repayments will be credited as
         distributions and repayments received in excess of investment in Local
         Limited Partnerships. These advances are carried as a payable to the
         Partnership by the Local Limited Partnerships.

         No working capital advances or repayments were made during the three
         months ended March 31, 1997 and 1996. The combined amount carried as
         due to the Partnership by the Local Limited Partnerships was $592,927
         at March 31, 1997.

         The following are combined statements of operations for the three
         months ended March 31, 1997 and 1996, respectively, of the Local
         Limited Partnerships in which the Partnership has invested. The
         statements are compiled from financial statements of the Local Limited
         Partnerships, prepared on the accrual basis of accounting, as supplied
         by the management agents of the projects, and are unaudited.

                       COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                      Three Months Ended March 31,      
                                                                 -------------------------------------   
                                                                     1997                      1996      
                                                                 ------------             ------------
         <S>                                                     <C>                      <C>
         Rental income                                             $3,620,595               $3,664,956
         Other income                                                 154,860                   93,573
                                                                   ----------               ----------
                                                                                             
             Total income                                           3,775,455                3,758,529
                                                                   ----------               ----------
                                                                                             
         Operating expenses                                         2,452,912                2,423,485
         Interest, taxes and insurance                              1,094,658                1,091,910
         Depreciation                                                 608,976                  573,390
                                                                   ----------               ----------
                                                                                             
             Total expenses                                         4,156,546                4,088,785
                                                                   ----------               ----------
                                                                                             
         Net loss                                                  $ (381,091)              $ (330,256)
                                                                   ==========               ========== 
                                                                                             
         National Housing Partnership Realty Fund Two                                        
           share of losses                                         $ (375,048)              $ (328,314)
                                                                   ==========               ==========
</TABLE>


(3)      TRANSACTIONS WITH THE GENERAL PARTNER

         During the three month periods ended March 31, 1997 and 1996, the
         Partnership accrued administrative and reporting fees payable to the
         General Partner in the amount of $34,312 for services provided to the
         Partnership. The Partnership did not make any payments to the General
         Partner for these fees during each of the respective periods. The
         amount due the General Partner by the Partnership was $1,053,115 and
         $1,018,803 at March 31, 1997 and December 31, 1996, respectively.





                                      -6-
<PAGE>   8
                  NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                        (A MARYLAND LIMITED PARTNERSHIP)
                         NOTES TO FINANCIAL STATEMENTS





         The accrued administrative and reporting fees payable to the General
         Partner will be paid only as cash flow permits or from the sale or
         refinancing of one or more of the underlying properties of the Local
         Limited Partnerships.





                                      -7-
<PAGE>   9



ITEM 2 -     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
             RESULTS OF OPERATIONS

                  NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                        (A MARYLAND LIMITED PARTNERSHIP)

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements in certain circumstances. Certain information
included in this Report and other Partnership filings (collectively "SEC
Filings") under the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended (as well as information communicated orally or
in writing between the dates of such SEC Filings) contains or may contain
information that is forward looking, including statements regarding the effect
of government regulations. Actual results may differ materially from those
described in the forward-looking statements and will be affected by a variety
of factors including national and local economic conditions, the general level
of interest rates, terms of governmental regulations that affect the
Partnership and interpretations of those regulations, the competitive
environment in which the properties owned by the Local Limited Partnerships
operate, the availability of working capital and dispositions of properties
owned by the Partnership.

LIQUIDITY AND CAPITAL RESOURCES

The properties in which the Partnership has invested, through its investments
in the Local Limited Partnerships, receive one or more forms of assistance from
Federal, state or local governments or agencies. As a result, the Local Limited
Partnerships' ability to transfer funds either to the Partnership or among
themselves in the form of cash distributions, loans or advances is generally
restricted by these government-assistance programs. These restrictions,
however, are not expected to impact the Partnership's ability to meet its cash
obligations.

For the past several years, various proposals have been advanced by the United
States Department of Housing and Urban Development ("HUD"), Congress and others
proposing the restructuring of HUD's rental assistance programs under Section 8
of the United States Housing Act of 1937 ("Section 8"), under which many
affiliated properties receive rental subsidies. One such proposal has recently
been introduced in the U.S. Senate, and two such proposals have recently been
introduced in the U.S. House of Representatives. These proposals generally seek
to lower subsidized rents to market levels and to lower required debt service
costs as needed to ensure financial viability at the reduced rents, but utilize
varying approaches to achieve that goal. Congress is currently also considering
various proposals for the renewal of Section 8 contracts that will expire
during the federal fiscal year 1998 (October 1997 through September 1998).
While the Partnership does not believe that the proposed changes would result
in a significant number of tenants relocating from properties owned by the
Local Limited Partnerships, there can be no assurance that the proposed changes
would not significantly affect the operations of the properties of the Local
Limited Partnerships. Furthermore, there can be no assurance that changes in
federal subsidies will not be more restrictive than those currently proposed or
that other changes in policy will not occur. Any such changes could have an
adverse effect on the operation of the Partnership.

Net cash used in operations for the three months ended March 31, 1997 was $790
as compared to $3,263 for the three months ended March 31, 1996. The decrease
in cash used in operations resulted from a decrease in operating expenses paid,
partially offset by a decrease in interest received during the three months
ended March 31, 1997, compared to the three months ended March 31, 1996.

No working capital advances or repayments were made to the Local Limited
Partnerships during the three months ended March 31, 1997 and 1996. The
combined amount carried as due to the Partnership by the Local Limited
Partnerships was $592,927 at March 31, 1997.  Future advances made to the
nineteen Local Limited Partnerships' properties whose investments have been
reduced to zero, will be charged to operations; likewise, future repayments
from these properties will be credited to operations.





                                      -8-
<PAGE>   10
                  NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                        (A MARYLAND LIMITED PARTNERSHIP)
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

Distributions received from Local Limited Partnerships represent the
Partnership's proportionate share of the excess cash available for distribution
from the Local Limited Partnerships. As a result of the use of the equity
method of accounting for the Partnership's investments, as of March 31, 1997,
investments in nineteen Local Limited Partnerships had been reduced to zero.
For these investments, cash distributions received are recorded in income as
distributions received in excess of investment in Local Limited Partnerships.
For those investments not reduced to zero, distributions received are recorded
as distributions from Local Limited Partnerships. There were no cash
distributions during the three months March 31, 1997 and 1996. The receipt of
distributions in future quarters is dependent upon the operations of the
underlying properties of the Local Limited Partnerships.

Cash and cash equivalents amounted to $36,606 at March 31, 1997. The ability of
the Partnership to meet its on-going cash requirements, in excess of cash on
hand at March 31, 1997, is dependent upon the future receipt of distributions
from the Local Limited Partnerships or proceeds from sales or refinancings of
one or more of the underlying properties of the Local Limited Partnerships.
Cash on hand at March 31, 1997, plus any distributions from the underlying
operations of the combined Local Limited Partnerships is expected to adequately
fund the operations of the Partnership in the current year. However, there can
be no assurance that future distributions will be adequate to fund the
operations beyond the current year.

The Partnership currently owes the General Partner $1,053,115 for
administrative and reporting  services performed. The payment of these unpaid
administrative and reporting fees will most likely result from the sale or
refinancing of the underlying properties of the Local Limited Partnerships,
rather than through recurring operations.

Nineteen of the Local Limited Partnerships in which the Partnership has
invested carry deferred acquisition notes due to the original owners of the
Properties. These notes are secured by both the Partnership's and NHP's
interests in the Local Limited Partnerships and, as discussed below, mature
between 1996 and 1999. In the event of a default on the notes, the noteholders
would be able to assume NHP's and the Partnership's interests in the Local
Limited Partnerships.

The West Oak Village note finally matured on November 30, 1996. The General
Partner is negotiating with the note holders to extend the maturity date of the
note to protect the interests of the Partnership. In addition, the deferred
acquisition notes of eight of the other Local Limited Partnerships mature
during 1997. Due to weak rental market conditions where some of the Properties
are located, the General Partner believes the amount due on the deferred
acquisition notes may likely exceed the value to be obtained through sale or
refinancing opportunities. The General Partner intends to continue negotiations
with the note holders to either extend the maturity date of the notes and/or to
structure an arrangement under which both the note holders and the partners can
receive a financial benefit by having the eligible Properties participate in
sale or refinancing opportunities. Should no agreement be reached and the notes
mature, absent of sale or refinancing which produces sufficient funds to repay
the notes in full, a default would occur on the notes. Such default could lead
to a foreclosure by the noteholder of the security underlying the notes such
that the Partnership may lose its interest in these Local Limited Partnerships.
Should the Partnership lose its interest in a Local Limited Partnership,
partners in the Partnership may incur adverse tax consequences. The impact of
the tax consequence is dependent upon each partner's individual tax situation.

All other notes have final maturity dates in 1999.

RESULTS OF OPERATIONS

The Partnership has invested as a limited partner in Local Limited Partnerships
which operate twenty-one rental housing properties.  In prior years, results of
operations of NHP Realty Fund Two were significantly impacted by the
Partnership's share of the losses of the Local Limited Partnerships. These
losses included depreciation and accrued
<PAGE>   11
                  NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                        (A MARYLAND LIMITED PARTNERSHIP)
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS




deferred acquisition note interest expense which are noncash in nature.
Nineteen of the twenty-one investments in Local Limited Partnerships have been
reduced to zero. As a result, the Partnership's operations are no longer being
affected by its share of the operations from these nineteen partnerships. The
Partnership has recorded its share of income in the remaining two Local Limited
Partnerships which amounted to $1,968 and $81,357 for the three months ended
March 31, 1997 and 1996, respectively.

The Partnership's net loss increased to $105,496 for the three months ended
March 31, 1997 from a net loss of $27,333 for the three months ended March 31,
1996. Net loss per unit of limited partnership increased from $1 to $6 for the
18,300 units outstanding throughout both periods. The increase in net loss was
primarily due to a decrease in the Partnership's share of income from the Local
Limited Partnerships. The Partnership did not recognize $377,016 of its
allocated share of losses from nineteen Local Limited Partnerships for the
three months ended March 31, 1997, as the Partnership's net carrying basis in
these Local Limited Partnerships had been reduced to zero. The Partnership's
share of losses from the Local Limited Partnerships, if not limited to its
investment account balance, would have increased $46,734 between periods,
primarily due to an increase in operating expenses and depreciation, partially
offset by an increase in other income.





                                      -10-
<PAGE>   12



                                   SIGNATURES



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



                       NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                       --------------------------------------------
                       (Registrant)
                       
                       
                       By:     The National Housing Partnership,
                               its sole General Partner
                       
                       
                       By:     National Corporation for Housing
                               Partnerships, its sole General Partner
                       
                       
                       
May 12, 1997           By:                          /s/ 
------------                   ----------------------------------------------
                               Jeffrey J. Ochs
                               As Vice President and Chief Accounting Officer





                                      -11-