UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-QSB

(Mark One)
[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

                 For the quarterly period ended June 30, 2005


[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT


             For the transition period from _________to _________

                         Commission file number 0-14458


                 NATIONAL  HOUSING  PARTNERSHIP  REALTY  FUND TWO
       (Exact name of small business issuer as specified in its charter)


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

                         55 Beattie Place, P.O. Box 1089
                        Greenville, South Carolina 29601
                    (Address of principal executive offices)

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


Check  whether the issuer (i) 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


                 NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                                  Balance Sheet
                                   (Unaudited)
                        (in thousands, except unit data)

                                  June 30, 2005

<TABLE>
<CAPTION>

ASSETS
<S>                                                                         <C>
   Cash and cash equivalents                                                $ 120
   Receivables - limited partners                                              207
   Investments in and advances to Local Limited
     Partnerships (Note 2)                                                      --
                                                                            $ 327
LIABILITIES AND PARTNERS' CAPITAL (DEFICIENCY)

Liabilities
   Accrued expenses                                                          $ 1
   Administrative and reporting fees payable to
      General Partner (Note 3)                                                 452

Partners' capital (deficiency)
   General Partner -- The National Housing
      Partnership (NHP)                                       $ 641
   Original Limited Partner -- 1133 Fifteenth
      Street Two Associates                                     (169)
   Other Limited Partners -- 17,074 investment
      units                                                     (598)         (126)
                                                                            $ 327

                See Accompanying Notes to Financial Statements
</TABLE>



<PAGE>




                 NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                            Statements of Operations
                                   (Unaudited)
                      (in thousands, except per unit data)

<TABLE>
<CAPTION>

                                                  Three Months Ended       Six Months Ended
                                                       June 30,                June 30,
                                                   2005         2004       2005        2004
REVENUES:
  Share of profits from Local Limited
<S>                    <C>                         <C>          <C>        <C>         <C>
    Partnerships (Note 2)                          $ --         $ --       $ 68        $ --
  Interest income                                       1          --           1          --
                                                        1          --          69          --
COSTS AND EXPENSES:
  Administrative and reporting fees to
    General Partner (Note 3)                            2           3           4           6
  Other operating expenses                             10          15          15          23
                                                       12          18          19          29

(Loss) income from partnership operations             (11)        (18)         50         (29)
Distributions in excess of investment in
  Local Limited Partnerships (Note 2)                  --          --           7           1

NET (LOSS) INCOME                                  $ (11)      $ (18)      $ 57        $ (28)

ALLOCATION OF NET (LOSS) INCOME:
  General Partner - NHP                            $ --         $ --        $ 1        $ --
  Original Limited Partner - 1133 Fifteenth
    Street Two Associates                              --          --           1          --
  Other limited partners                              (11)        (18)         55         (28)

                                                   $ (11)      $ (18)      $ 57        $ (28)

NET (LOSS) INCOME PER OTHER LIMITED
  PARTNERSHIP INTEREST                            $ (.64)     $ (1.02)    $ 3.17     $ (1.58)

                See Accompanying Notes to Financial Statements
</TABLE>



<PAGE>




                 NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
            Statement of Changes in Partners' Capital (Deficiency)
                                   (Unaudited)
                        (in thousands, except unit data)

<TABLE>
<CAPTION>


                                   The National      1133
                                      Housing     Fifteenth       Other
                                    Partnership   Street Two     Limited
                                       (NHP)      Associates    Partners        Total

Partners' capital (deficiency)
<S>           <C> <C>                  <C>          <C>          <C>           <C>
  at December 31, 2004                 $ 640        $ (170)      $ (653)       $ (183)

Net income - six months ended
  June 30, 2005                             1            1            55            57

Partners' capital (deficiency)
  at June 30, 2005                     $ 641        $ (169)      $ (598)       $ (126)

Percentage interest at
  June 30, 2005                           1%           1%           98%         100%
                                          (A)          (B)           (C)


(A)   General Partner

(B)   Original Limited Partner

(C)   Consists of 17,074 investment units at June 30, 2005 and 17,339 investment
      units at December 31, 2004 (see "Note 4" in Notes to Financial Statements;
      "Abandonment of Limited Partnership Units).

                See Accompanying Notes to Financial Statements
</TABLE>



<PAGE>


                 NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                            Statements of Cash Flows
                                   (Unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                       Six Months Ended
                                                                           June 30,
                                                                      2005           2004
CASH FLOWS FROM OPERATING ACTIVITIES:
  Payment of non-resident income tax withholding to the
   states of Colorado and North Carolina on behalf of
<S>                                                                  <C>            <C>
   limited partners                                                  $ (5)          $ (27)
  Reimbursement by limited partners of non-resident income
   tax withholding paid by the Partnership to the state of
   North Carolina on behalf of limited partners                          --              7
  Operating expenses paid                                               (18)            (8)
  Interest earned on cash balances                                        1             --
        Net cash used in operating activities                           (22)           (28)

CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:
  Distributions from Local Limited Partnerships                         125              1

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                    103            (27)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                         17             53

CASH AND CASH EQUIVALENTS AT END OF PERIOD                           $ 120           $ 26

RECONCILIATION OF NET INCOME (LOSS) TO NET CASH USED IN
  OPERATING ACTIVITIES:
   Net income (loss)                                                  $ 57          $ (28)
   Adjustments to reconcile net income (loss) to net cash
     used in operating activities:
      Share of profits from Local Limited Partnerships                  (68)            --
      Distributions in excess of investment in Local Limited
        Partnerships                                                     (7)            (1)
      Changes in operating assets and liabilities:
        Increase in administrative and reporting
           fees payable                                                   4              6
        Increase in receivables - limited partners                       (5)           (20)
        Increase (decrease) in other accrued expenses                    (3)            15
        Total adjustments                                               (79)            --

Net cash used in operating activities                                $ (22)         $ (28)

                See Accompanying Notes to Financial Statements
</TABLE>



<PAGE>


                 NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                          Notes to Financial Statements
                                   (Unaudited)


(1)   ACCOUNTING POLICIES

Organization

National  Housing   Partnership  Realty  Fund  Two  (the  "Partnership"  or  the
"Registrant")  is a limited  partnership  organized  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").  On April 30, 1985, the Partnership  began raising capital
and acquiring interests in Local Limited Partnerships.

The National Housing  Partnership,  a District of Columbia  limited  partnership
("NHP" or the  "General  Partner"),  was  authorized  to raise  capital  for the
Partnership by offering and selling to additional limited partners not more than
18,300  interests  at a price of  $1,000  per  unit.  During  1985,  the sale of
interests  was closed after the sale of 18,300  interests  to limited  partners.
Apartment  Investment  and  Management  Company  ("AIMCO")  and  its  affiliates
ultimately  control the General  Partner.  The original  Limited  Partner of the
Partnership is 1133 Fifteenth Street Two Associates, whose limited partners were
key  employees  of the general  partner of NHP at the time the  Partnership  was
formed. The general partner of 1133 Fifteenth Street Two Associates is NHP.

Basis of Presentation

The accompanying  unaudited interim financial statements reflect all adjustments
which are, in the opinion of management,  necessary for a fair  presentation  of
the  financial  condition  and results of  operations  for the  interim  periods
presented.  All such adjustments are of a normal and recurring nature. Operating
results  for the  three  and six  month  periods  ended  June  30,  2005 are not
necessarily  indicative  of the results that may be expected for the year ending
December 31,  2005.  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 the  Partnership's  Annual Report filed on Form
10-KSB for the year ended December 31, 2004.

FASB Interpretation No. 46

As of December 31, 2004,  the  Partnership  adopted FASB  Interpretation  No. 46
"Consolidation  of  Variable  Interest  Entities"  (or "FIN 46") and applied its
requirements to all Local Limited  Partnerships in which the Partnership  held a
variable interest. FIN 46 addresses the consolidation by business enterprises of
variable interest entities. Generally, a variable interest entity, or VIE, is an
entity with one or more of the following  characteristics:  (a) the total equity
investment  at risk is not  sufficient  to  permit  the  entity to  finance  its
activities without additional subordinated financial support; (b) as a group the
holders of the equity  investment at risk lack (i) the ability to make decisions
about  an  entity's  activities  through  voting  or  similar  rights,  (ii) the
obligation  to absorb the expected  losses of the entity,  or (iii) the right to
receive the expected residual returns of the entity; or (c) the equity investors
have voting rights that are not  proportional  to their  economic  interests and
substantially all of the entity's activities either involve, or are conducted on
behalf of, an investor that has  disproportionately  few voting  rights.  FIN 46
requires a VIE to be consolidated in the financial statements of the entity that
is determined to be the primary beneficiary of the VIE. Upon adoption of FIN 46,
the Partnership  determined that its Local Limited  Partnership in which it held
an  investment  was not a VIE.  During the six months ended June 30,  2005,  the
Partnership   reconsidered  its  initial  determination  of  the  Local  Limited
Partnership  for VIE status.  As a result the  Partnership  determined it held a
variable interest in its Local Limited Partnership; however, the Partnership was
not the primary  beneficiary.  The Local Limited Partnership is directly engaged
in the  ownership and  management  of an apartment  property with a total of 150
units.  The  Partnership is involved with the VIE as a  non-controlling  limited
partner equity holder. The Partnership's maximum exposure to loss as a result of
its  involvement  with the  unconsolidated  VIE is limited to the  Partnership's
recorded  investment in and receivable  from the VIE, which was zero at June 30,
2005. The Partnership  may be subject to additional  losses to the extent of any
financial support that the Partnership voluntarily provides in the future.

(2)   INVESTMENTS IN AND ADVANCES TO LOCAL LIMITED PARTNERSHIP

During 1985, the Partnership  acquired a 94.5% limited partnership interest (98%
with respect to allocation of losses) in twenty-one Local Limited  Partnerships.
At June 30,  2005,  the  Partnership  continues to hold an interest in two Local
Limited  Partnerships:  San Juan del Centro Limited Partnership and Harold House
Limited Partnership. On November 22, 2004, Harold House Limited Partnership sold
its investment  property to a third party for  approximately  $2,220,000.  After
paying  closing  costs,  the net  proceeds  were  used  to  repay  the  mortgage
encumbering the property,  the deferred  acquisition  note and accrued  interest
thereon, which a third party held, and other liabilities of the property and the
Local  Limited  Partnership.  During the six months  ended  June 30,  2005,  the
Partnership received a distribution of approximately $125,000. It is anticipated
that the Local Limited  Partnership  will be completely  liquidated by September
30, 2005.

San Juan Del Centro  Limited  Partnership  has a note which was  executed by the
Local  Limited  Partnership  with the seller as part of the  acquisition  of the
property  by the  Local  Limited  Partnership.  The note is a  nonrecourse  note
secured  by a  security  interest  in the  Partnership's  interest  in the Local
Limited  Partnership and is subordinated to the respective  mortgage note on the
property  for as long as the  mortgage  note is insured by HUD. Any payments due
from  project  income  are  payable  from  surplus  cash,  as defined by the HUD
Regulatory  Agreement.  Neither the Local Limited  Partnership  nor any partners
thereof,  present or future assume any personal liability for the payment of the
note.  The note was due December 20, 1999.  The note is in default and the Local
Limited Partnership interest is subject to potential  foreclosure.  Continuation
of the Local Limited  Partnership's  operations in the present form is dependent
on its ability to extend the maturity date of the  respective  note, or to repay
or refinance the note. The financial  statements do not include any  adjustments
to reflect the possible  effects on the  recoverability  and  classification  of
assets or amounts and  classifications  of liabilities that may result from this
uncertainty.  On February 14, 2005 the Local Limited  Partnership entered into a
contract,  with an affiliated party, to sell its investment property during 2005
for a purchase price of $7,000,000.

Since the Partnership,  as a limited partner, does not exercise control over the
activities of the Local Limited  Partnerships in accordance with the partnership
agreements,  these investments are accounted for using the equity method.  Thus,
the  investments are carried at cost less the  Partnership's  share of the Local
Limited  Partnerships'  losses and distributions plus the Partnership's share of
Local Limited  Partnerships'  profits.  However,  since 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  investment  in the Local  Limited  Partnership  reduced for its
share of losses and cash distributions, reaches zero. Once an investment account
has been reduced to zero,  profits  reported by a Local Limited  Partnership are
not recognized by the Partnership until such profits equal losses not recognized
plus distributions  received and previously  recognized as revenue. As a result,
the  Partnership did not recognize  approximately  $48,000 and $36,000 of losses
from San Juan del Centro  Partnership  during the six months ended June 30, 2005
and 2004, respectively.  As of June 30, 2005, the Partnership has not recognized
approximately  $1,575,000 of its allocated  cumulative  share of losses from San
Juan del Centro  Partnership  in which its  investment has been reduced to zero.
During the six months ended June 30, 2005,  the  Partnership's  share of profits
from Harold House Limited  Partnership was approximately  $68,000.  Such profits
are  the  result  of  the  reversal  of  an  accrual  of  approximately  $72,000
established  upon the sale of Harold  House due to actual  costs being less than
expected.  During the six months ended June 30, 2004,  the  Partnership  did not
recognize  approximately $22,000 of losses from Harold House Limited Partnership
as the  Partnership  had no investment in the Local Limited  Partnership at June
30, 2004.

The following are unaudited combined  statements of operations for the three and
six months  ended June 30, 2005 and 2004 of the Local  Limited  Partnerships  in
which the Partnership  has invested.  The statements are compiled from financial
statements of the Local Limited  Partnerships  which are prepared on the accrual
basis of accounting  and supplied by the managing  agents of the  projects.  The
condensed  combined  statement of operations for the three and six month periods
ended June 30, 2004 has been restated to reflect the  operations of Harold House
Limited Partnership, which was sold during 2004, as discontinued operations.

                            COMBINED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                         Three Months Ended           Six Months Ended
                                              June 30,                    June 30,
                                         2005          2004          2005          2004
                                                    (Restated)                 (Restated)
                                                         (In Thousands)
<S>                                    <C>            <C>          <C>           <C>
Rental income                          $   198        $  197       $   400       $   392
Rental income
Other income                                48            46            99            88
   Total income                            246           243           499           480

Operating expenses                         134           130           286           273
Interest, taxes, and insurance              78            62           149           136
Depreciation                                57            56           113           108
   Total expenses                          269           248           548           517

Net loss before discontinued
   operations                              (23)           (5)          (49)          (37)
Loss from discontinued
   operations                               --           (15)           --           (22)
Gain on sale of discontinued
   operations                               --            --            72            --

Net (loss) income                      $   (23)       $  (20)      $    23       $   (59)

National Housing Partnership
   Realty Fund Two share of income
    (loss)                             $   (23)       $  (20)      $    20       $   (58)
</TABLE>

(3)   TRANSACTIONS WITH THE GENERAL PARTNER

During the six month  periods  ended  June 30,  2005 and 2004,  the  Partnership
accrued  administrative and reporting fees payable to the General Partner in the
amount of approximately $4,000 and $6,000 respectively, for services provided to
the  Partnership.  The  amount  of  fees  due  to  the  General  Partner  by the
Partnership  was  approximately  $452,000 at June 30, 2005.  If paid at all, the
accrued administrative and reporting fees payable to the General Partner will be
paid as cash flow  permits  or from the sale or  refinancing  of the  underlying
property of the  remaining  Local  Limited  Partnership.  No payments  were made
during the six months ended June 30, 2005 and 2004.

(4)   ABANDONMENT OF LIMITED PARTNERSHIP UNITS

During  the six  months  ended  June 30,  2005 and 2004 the  number  of  limited
partnership units decreased by 265 and 384 units,  respectively,  due to limited
partners  abandoning  their units. In abandoning his or her Limited  Partnership
Unit(s),  a limited partner  relinquishes all right,  title, and interest in the
partnership  as of the date of  abandonment.  However,  the  limited  partner is
allocated  his or her share of net income or loss for that  year.  The income or
loss per  other  limited  partnership  unit in the  accompanying  statements  of
operations  is  calculated  based  on the  number  of units  outstanding  at the
beginning   of  the  year  or  17,339  and  17,723  units  for  2005  and  2004,
respectively.

(5)   CONTINGENCIES

The  Partnership  is unaware of any pending or  outstanding  litigation  matters
involving  it or  the  underlying  investment  property  of  the  Local  Limited
Partnerships in which the  Partnership  invests that are not of a routine nature
arising in the ordinary course of business.

SEC Investigation

The  Central  Regional  Office of the  United  States  Securities  and  Exchange
Commission (the "SEC")  continues its formal  investigation  relating to certain
matters.  Although  the staff of the SEC is not limited in the areas that it may
investigate,  AIMCO believes the areas of  investigation  have included  AIMCO's
miscalculated   monthly  net  rental  income  figures  in  third  quarter  2003,
forecasted  guidance,  accounts  payable,  rent  concessions,   vendor  rebates,
capitalization of payroll and certain other costs, tax credit transactions,  and
tender offers for limited  partnership  interests.  AIMCO is cooperating  fully.
AIMCO is not able to predict when the investigation will be resolved. AIMCO does
not believe that the ultimate outcome will have a material adverse effect on its
consolidated  financial  condition  or results  of  operations.  Similarly,  the
General Partner does not believe that the ultimate  outcome will have a material
adverse  effect  on  the  Partnership's   financial   condition  or  results  of
operations.

(6)   GOING CONCERN

The San Juan Del Centro Limited  Partnership  note payable is past due (see Note
2).  Therefore,  there is the  possibility  that the  Partnership  will lose its
ownership interest in the Local Limited  Partnership  through foreclosure by the
noteholder.  Continuation of the Local Limited  Partnership's  operations in the
present form depends on its ability to extend the maturity  date of this note or
to repay or refinance the note. This condition  raises  substantial  doubt about
its ability to continue as a going  concern.  The  financial  statements  do not
include any adjustments which might result from the outcome of this uncertainty.
On February 14, 2005 the Local Limited Partnership entered into a contract, with
an affiliated party, to sell its investment  property during 2005 for a purchase
price of $7,000,000.

<PAGE>

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

The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and 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 risks and factors including,  without limitation:  national and local
economic  conditions;  the terms of  governmental  regulations  that  affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates;  financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest;  real estate risks, including variations of real estate values and
the general  economic  climate in local markets and  competition  for tenants in
such markets;  litigation,  including  costs  associated  with  prosecuting  and
defending  claims  and  any  adverse   outcomes,   and  possible   environmental
liabilities.   Readers  should  carefully  review  the  Registrant's   financial
statements and the notes thereto,  as well as the risk factors  described in the
documents  the  Registrant  files  from  time to time  with the  Securities  and
Exchange Commission.

This item should be read in conjunction with the financial  statements and other
items contained elsewhere in this report.

Liquidity and Capital Resources

As of June 30, 2005, the Partnership retained an interest in two of its original
twenty-one  Local Limited  Partnerships.  The property in which one of the Local
Limited  Partnerships  has invested in receives one or more forms of  assistance
from the  Federal  Government.  As a  result,  the Local  Limited  Partnership's
ability to transfer funds to the Partnership in the form of cash  distributions,
loans,  or  advances  is  generally  restricted  by these  government-assistance
programs.  These restrictions could impact the Partnership's ability to meet its
cash obligations  given the low level of reserves at the Partnership  level. The
General  Partner  monitors  developments  in the  area of legal  and  regulatory
compliance.  For example,  the  Sarbanes-Oxley  Act of 2002 mandates or suggests
additional compliance measures with regard to governance,  disclosure, audit and
other areas.  In light of these changes,  the  Partnership  expects that it will
incur higher expenses related to compliance.

Distributions  received in excess of investment  in 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,  investments in
the remaining  Local Limited  Partnerships  have been reduced to zero as of June
30, 2005. For these  investments,  cash  distributions  received are recorded in
income  as  distributions  received  in excess of  investment  in Local  Limited
Partnerships.  If these investments had not been reduced to zero,  distributions
received would be recorded as distributions  from the Local Limited  Partnership
in the statement of cash flow and would reduce the  Partnership's  investment on
the balance sheet. Distributions of approximately $125,000 comprised of proceeds
from the sale of Harold House were received during the six months ended June 30,
2005 of which approximately $7,000 was in excess of the Partnership's investment
in Harold House Limited Partnership.  A distribution of approximately $1,000 was
received  during  the six  months  ended  June  30,  2004  from a Local  Limited
Partnership, which was sold several years ago as a result of some remaining cash
it had not used.  The receipt of  distributions  in the future is dependent upon
the  operations  of the  underlying  property  of the  remaining  Local  Limited
Partnership to generate  sufficient  cash for  distribution  in accordance  with
applicable HUD regulations.

Cash and cash equivalents  amounted to  approximately  $120,000 at June 30, 2005
compared to  approximately  $26,000 at June 30, 2004. Cash and cash  equivalents
increased  approximately  $103,000 from  December 31, 2004 due to  approximately
$125,000  of  cash  provided  by  investing   activities   partially  offset  by
approximately  $22,000 of cash used in operating  activities.  Cash  provided by
investing  activities  consisted of distributions from the sale of Harold House.
Cash used in  operating  activities  consisted  of the  payment of  non-resident
income  tax  withholding  to the state of  Colorado  on  behalf  of the  limited
partners and the payment of operating  expenses.  The ability of the Partnership
to meet its on-going  cash  requirements  in excess of cash on hand depends upon
the future  receipt of  distributions  from the Local  Limited  Partnerships  or
proceeds from a sale or refinancing of the underlying  property of the remaining
Local Limited  Partnership.  The  Partnership's  only other form of liquidity is
advances from the General Partner.  The General Partner will evaluate  advancing
the  Partnership  funds  as such  funds  are  needed,  but is in no way  legally
obligated to make such advances.

The Partnership  currently owes the General Partner  approximately  $452,000 for
administrative  and  reporting  services  performed.  The  payment of the unpaid
administrative  and reporting fees will most likely result,  if at all, from the
sale or refinancing of the  underlying  property of the remaining  Local Limited
Partnership,  rather than through  recurring  operations.  No payments were made
during the six months ended June 30, 2005 and 2004.

On November  22, 2004,  Harold House  Limited  Partnership  sold its  investment
property to a third party for  approximately  $2,220,000.  After paying  closing
costs,  the net  proceeds  were  used to  repay  the  mortgage  encumbering  the
property,  the deferred  acquisition note and accrued interest thereon,  which a
third party held,  and other  liabilities  of the property and the Local Limited
Partnership. During the six months ended June 30, 2005, the Partnership received
a distribution  of  approximately  $125,000.  It is  anticipated  that the Local
Limited Partnership will be completely liquidated by September 30, 2005.

Pursuant to the Partnership Agreement,  the term of the Partnership is scheduled
to expire on December 31, 2005. The General  Partner is currently  evaluating an
extension of the Partnership's term and expects to have such extension completed
by the end of 2005.

San Juan Del Centro  Limited  Partnership  has a note which was  executed by the
Local  Limited  Partnership  with the seller as part of the  acquisition  of the
property  by the  Local  Limited  Partnership.  The note is a  nonrecourse  note
secured  by a  security  interest  in the  Partnership's  interest  in the Local
Limited  Partnership and is subordinated to the respective  mortgage note on the
property  for as long as the  mortgage  note is insured by HUD. Any payments due
from  project  income  are  payable  from  surplus  cash,  as defined by the HUD
Regulatory  Agreement.  Neither the Local Limited  Partnership  nor any partners
thereof,  present or future assume any personal liability for the payment of the
note.  The note was due December 20, 1999.  The note is in default and the Local
Limited Partnership interest is subject to potential  foreclosure.  Continuation
of the Local Limited  Partnership's  operations in the present form is dependent
on its ability to extend the maturity date of the  respective  note, or to repay
or refinance the note.

As a result of the conditions above,  there is substantial doubt about the Local
Limited  Partnership's  ability to continue as a going  concern.  The  financial
statements do not include any adjustments to reflect the possible effects on the
recoverability  and  classification of assets or amounts and  classifications of
liabilities  that may result from this  uncertainty.  On  February  14, 2005 the
Local Limited Partnership entered into a contract,  with an affiliated party, to
sell its investment property during 2005 for a purchase price of $7,000,000.

<PAGE>

Results of Operations

The  Partnership  originally  invested  as a limited  partner  in Local  Limited
Partnerships which operated  twenty-one rental housing  properties.  At June 30,
2005,  the  Partnership  continued  to hold an  interest  in two  Local  Limited
Partnerships.  To the extent  the  Partnership  still has a carrying  basis in a
respective Local Limited  Partnership,  results of operations are  significantly
impacted  by the  Partnership's  share of the  profits  or  losses  in the Local
Limited  Partnership.  These profits or losses include  depreciation and accrued
note payable interest expense which are non cash in nature. As of June 30, 2005,
the Partnership had no carrying basis in both of its investment in Local Limited
Partnerships  and therefore  reflected no results of operations for its share of
profits or losses from the Local Limited Partnerships for the three months ended
June 30, 2005.  However,  for the six months ended June 30, 2005 the Partnership
did  recognize  its share of profits  from one of its two  investments  in Local
Limited Partnerships as discussed below.

The Partnership had net income of approximately $57,000 for the six months ended
June 30,  2005,  compared  to a net loss of  approximately  $28,000  for the six
months ended June 30, 2004. Net income per unit of limited partnership was $3.17
for the six  months  ended  June 30,  2005  compared  to a net loss of $1.58 per
limited partnership unit for the six months ended June 30, 2004. The increase in
net income for the six months ended June 30, 2005 is attributable to the sale of
the  property  owned  by  Harold  House  Limited  Partnership.  The  Partnership
recognized  approximately  $68,000 in income  for the six months  ended June 30,
2005 relating to the sale of Harold  House.  The  Partnership  did not recognize
approximately  $48,000 of its allocated share of losses from the remaining Local
Limited Partnership for the six months ended June 30, 2005, as the Partnership's
net carrying basis in this Local Limited  Partnership  had been reduced to zero.
The  Partnership's  share of losses from the Local Limited  Partnership,  if not
limited to its investment  account balance,  would have increased  approximately
$12,000 between  periods.  The increase is primarily due to an increase in total
expenses partially offset by an increase in total revenues of the property owned
by the one remaining Local Limited Partnership.

FASB Interpretation No. 46

As of December 31, 2004,  the  Partnership  adopted FASB  Interpretation  No. 46
"Consolidation  of  Variable  Interest  Entities"  (or "FIN 46") and applied its
requirements to all Local Limited  Partnerships in which the Partnership  held a
variable interest. FIN 46 addresses the consolidation by business enterprises of
variable interest entities. Generally, a variable interest entity, or VIE, is an
entity with one or more of the following  characteristics:  (a) the total equity
investment  at risk is not  sufficient  to  permit  the  entity to  finance  its
activities without additional subordinated financial support; (b) as a group the
holders of the equity  investment at risk lack (i) the ability to make decisions
about  an  entity's  activities  through  voting  or  similar  rights,  (ii) the
obligation  to absorb the expected  losses of the entity,  or (iii) the right to
receive the expected residual returns of the entity; or (c) the equity investors
have voting rights that are not  proportional  to their  economic  interests and
substantially all of the entity's activities either involve, or are conducted on
behalf of, an investor that has  disproportionately  few voting  rights.  FIN 46
requires a VIE to be consolidated in the financial statements of the entity that
is determined to be the primary beneficiary of the VIE. Upon adoption of FIN 46,
the Partnership  determined that its Local Limited  Partnership in which it held
an  investment  was not a VIE.  During the six months ended June 30,  2005,  the
Partnership   reconsidered  its  initial  determination  of  the  Local  Limited
Partnership  for VIE status.  As a result the  Partnership  determined it held a
variable interest in its Local Limited Partnership; however, the Partnership was
not the primary  beneficiary.  The Local Limited Partnership is directly engaged
in the  ownership and  management  of an apartment  property with a total of 150
units.  The  Partnership is involved with the VIE as a  non-controlling  limited
partner equity holder. The Partnership's maximum exposure to loss as a result of
its  involvement  with the  unconsolidated  VIE is limited to the  Partnership's
recorded  investment in and receivable  from the VIE, which was zero at June 30,
2005. The Partnership  may be subject to additional  losses to the extent of any
financial support that the Partnership voluntarily provides in the future.

ITEM 3.     CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures.  The Partnership's management,  with the
participation of the principal executive officer and principal financial officer
of the General Partner,  who are the equivalent of the  Partnership's  principal
executive officer and principal financial officer,  respectively,  has evaluated
the  effectiveness of the Partnership's  disclosure  controls and procedures (as
such term is defined  in Rules  13a-15(e)  and  15d-15(e)  under the  Securities
Exchange  Act of 1934,  as amended  (the  "Exchange  Act")) as of the end of the
period covered by this report. Based on such evaluation, the principal executive
officer and  principal  financial  officer of the General  Partner,  who are the
equivalent  of the  Partnership's  principal  executive  officer  and  principal
financial  officer,  respectively,  have  concluded  that, as of the end of such
period, the Partnership's disclosure controls and procedures are effective.

(b) Internal Control Over Financial  Reporting.  There have not been any changes
in the Partnership's  internal control over financial reporting (as such term is
defined in Rules  13a-15(f)  and  15d-15(f)  under the Exchange  Act) during the
fiscal quarter to which this report relates that have  materially  affected,  or
are reasonably likely to materially affect,  the Partnership's  internal control
over financial reporting.



<PAGE>


                           PART II - OTHER INFORMATION


ITEM 5      OTHER INFORMATION

            None.

ITEM 6      EXHIBITS

            See Exhibit Index.



<PAGE>


                                   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.



                                    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

                                    By:   /s/David R. Robertson
                                          David R. Robertson
                                          President and Chief Executive
                                          Officer

                                    By:   /s/Stephen B. Waters
                                          Stephen B. Waters
                                          Vice President


                                    Date: August 12, 2005



<PAGE>



                 NATIONAL HOUSING PARTNERSHIP REALTY FUND II
                                  EXHIBIT INDEX


Exhibit


31.1        Certification  of equivalent of Chief Executive  Officer pursuant to
            Securities  Exchange  Act  Rules  13a-14(a)/15d-14(a),   as  Adopted
            Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2        Certification  of equivalent of Chief Financial  Officer pursuant to
            Securities  Exchange  Act  Rules  13a-14(a)/15d-14(a),   as  Adopted
            Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1        Certification  of the equivalent of the Chief Executive  Officer and
            Chief  Financial  Officer  Pursuant to 18 U.S.C.  Section  1350,  as
            Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



<PAGE>




Exhibit 31.1


                                  CERTIFICATION


I, David R. Robertson, certify that:


1.    I have reviewed this quarterly  report on Form 10-QSB of National  Housing
      Partnership Realty Fund Two;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the small  business  issuer as of, and for, the periods  presented in this
      report;

4.    The  small  business  issuer's  other  certifying  officer(s)  and  I  are
      responsible  for  establishing  and  maintaining  disclosure  controls and
      procedures (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for
      the small business issuer and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            small business issuer, including its consolidated  subsidiaries,  is
            made  known to us by  others  within  those  entities,  particularly
            during the period in which this report is being prepared;

      (b)   Evaluated  the   effectiveness   of  the  small  business   issuer's
            disclosure  controls and procedures and presented in this report our
            conclusions about the  effectiveness of the disclosure  controls and
            procedures, as of the end of the period covered by this report based
            on such evaluation; and

      (c)   Disclosed in this report any change in the small  business  issuer's
            internal  control over financial  reporting that occurred during the
            small  business  issuer's  most  recent  fiscal  quarter  (the small
            business  issuer's  fourth  fiscal  quarter in the case of an annual
            report) that has  materially  affected,  or is reasonably  likely to
            materially affect, the small business issuer's internal control over
            financial reporting; and

5.    The  small  business  issuer's  other  certifying  officer(s)  and I  have
      disclosed,  based on our most recent  evaluation of internal  control over
      financial reporting, to the small business issuer's auditors and the audit
      committee of the small  business  issuer's  board of directors (or persons
      performing the equivalent functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely  affect the small business  issuer's
            ability  to  record,   process,   summarize  and  report   financial
            information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees who have a significant  role in the small  business
            issuer's internal control over financial reporting.

Date:  August 12, 2005

                                    /s/David R. Robertson
                                    David R. Robertson
                                    President  and Chief  Executive  Officer  of
                                    National     Corporation     for     Housing
                                    Partnerships,   equivalent   of  the   chief
                                    executive officer of the Partnership


<PAGE>



Exhibit 31.2


                                  CERTIFICATION


I, Stephen B. Waters, certify that:


1.    I have reviewed this quarterly  report on Form 10-QSB of National  Housing
      Partnership Realty Fund Two;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the small  business  issuer as of, and for, the periods  presented in this
      report;

4.    The  small  business  issuer's  other  certifying  officer(s)  and  I  are
      responsible  for  establishing  and  maintaining  disclosure  controls and
      procedures (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for
      the small business issuer and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            small business issuer, including its consolidated  subsidiaries,  is
            made  known to us by  others  within  those  entities,  particularly
            during the period in which this report is being prepared;

      (b)   Evaluated  the   effectiveness   of  the  small  business   issuer's
            disclosure  controls and procedures and presented in this report our
            conclusions about the  effectiveness of the disclosure  controls and
            procedures, as of the end of the period covered by this report based
            on such evaluation; and

      (c)   Disclosed in this report any change in the small  business  issuer's
            internal  control over financial  reporting that occurred during the
            small  business  issuer's  most  recent  fiscal  quarter  (the small
            business  issuer's  fourth  fiscal  quarter in the case of an annual
            report) that has  materially  affected,  or is reasonably  likely to
            materially affect, the small business issuer's internal control over
            financial reporting; and

5.    The  small  business  issuer's  other  certifying  officer(s)  and I  have
      disclosed,  based on our most recent  evaluation of internal  control over
      financial reporting, to the small business issuer's auditors and the audit
      committee of the small  business  issuer's  board of directors (or persons
      performing the equivalent functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely  affect the small business  issuer's
            ability  to  record,   process,   summarize  and  report   financial
            information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees who have a significant  role in the small  business
            issuer's internal control over financial reporting.

Date:  August 12, 2005

                                   /s/Stephen B. Waters
                                   Stephen B. Waters
                                   Vice President of National Corporation for
                                   Housing Partnerships, equivalent of the chief
                                   financial officer of the Partnership



<PAGE>


Exhibit 32.1


                          Certification of CEO and CFO
                       Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                Section 906 of the Sarbanes-Oxley Act of 2002



In  connection  with the  Quarterly  Report on Form 10-QSB of  National  Housing
Partnership Realty Fund Two (the "Partnership"),  for the quarterly period ended
June 30, 2005 as filed with the Securities  and Exchange  Commission on the date
hereof  (the  "Report"),  David R.  Robertson,  as the  equivalent  of the Chief
Executive  Officer of the Partnership,  and Stephen B. Waters, as the equivalent
of the Chief  Financial  Officer  of the  Partnership,  each  hereby  certifies,
pursuant to 18 U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

      (1)   The Report fully complies with the  requirements of Section 13(a) or
            15(d) of the Securities Exchange Act of 1934; and

      (2)   The  information  contained in the Report  fairly  presents,  in all
            material respects, the financial condition and results of operations
            of the Partnership.


                                           /s/David R. Robertson
                                    Name:  David R. Robertson
                                    Date:  August 12, 2005


                                           /s/Stephen B. Waters
                                    Name:  Stephen B. Waters
                                    Date:  August 12, 2005


This  certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley  Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.