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 March 31, 2007





[ ]

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 (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 ___



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ___  No _X_





PART I - FINANCIAL INFORMATION





ITEM 1.

FINANCIAL STATEMENTS





NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO



STATEMENT OF NET ASSETS IN LIQUIDATION

(Unaudited)

(in thousands)



March 31, 2007





|                                                 |  |        
|------------------------------------------------ |  | -------
|Assets                                           |  |        
|Cash and cash equivalents                        |  | $   269
|Receivables  limited partners                   |  | 117    
|Investments in and advances to Local Limited     |  |        
|Partnership (Note 3)                             |  | 954    
|                                                 |  | 1,340  
|                                                 |  |        
|Liabilities                                      |  |        
|Estimated costs during the period of liquidation |  | 30     
|                                                 |  |        
|Net assets in liquidation                        |  | $1,310 
|                                                 |  |        







See Accompanying Notes to Financial Statements















NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO



STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION

(Unaudited)

(in thousands)







|                                                    |                           
|--------------------------------------------------- | --------------------------
|                                                    | For the Three Months Ended
|                                                    | March 31, 2007            
|                                                    |                           
|Net assets in liquidation at beginning of period    | $   1,791                 
|                                                    |                           
|Changes in net assets in liquidation attributed to: |                           
|Increase in cash and cash equivalents               | 160                       
|Decrease in receivables  limited partners          | (93)                      
|Decrease in investments and advances to Local       |                           
|Limited Partnership                                 | (1,046)                   
|Decrease in accrued expenses                        | 10                        
|Decrease in administrative and reporting fees       |                           
|payable to General Partner                          | 464                       
|Decrease in estimated costs during the period of    |                           
|liquidation                                         | 24                        
|Net assets in liquidation at end of period          | $ 1,310                   









See Accompanying Notes to Financial Statements



















NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO



STATEMENT OF OPERATIONS

(Unaudited)

(in thousands, except per unit data)



|                                                              |                   
|------------------------------------------------------------- | ------------------
|                                                              | Three Months Ended
|                                                              | March 31, 2006    
|REVENUES:                                                     |                   
|Interest income                                               | $1                
|                                                              |                   
|COSTS AND EXPENSES:                                           |                   
|Administrative and reporting fees to General Partner (Note 4) | 2                 
|Other operating expenses                                      | 7                 
|                                                              | 9                 
|                                                              |                   
|Loss from partnership operations                              | (8)               
|                                                              |                   
|NET LOSS                                                      | $(8)              
|                                                              |                   
|ALLOCATION OF NET LOSS:                                       |                   
|General Partner - NHP                                         | $   --            
|Original Limited Partner - 1133 Fifteenth Street Two          |                   
|Associates                                                    | --                
|Other limited partners                                        | (8)               
|                                                              |                   
|                                                              | $(8)              
|                                                              |                   
|NET LOSS PER OTHER LIMITED PARTNERSHIP UNIT                   | $(0.47)           









See Accompanying Notes to Financial Statements



















NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO



STATEMENT OF CASH FLOWS

(Unaudited)

(in thousands)







|                                                                     |                   
|-------------------------------------------------------------------- | ------------------
|                                                                     | Three Months Ended
|                                                                     | March 31,2006     
|CASH FLOWS FROM OPERATING ACTIVITIES:                                |                   
|Interest earned on cash balance                                      | $      1          
|Operating expenses paid                                              | (15)              
|Payment of non-resident income tax withholding to the                |                   
|state of Colorado on behalf of limited partners                      | (3)               
|Net cash used in operating activities                                | (17)              
|                                                                     |                   
|NET DECREASE IN CASH AND CASH EQUIVALENTS                            | (17)              
|                                                                     |                   
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                     | 136               
|                                                                     |                   
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                           | $119              
|                                                                     |                   
|RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES: |                   
|Net loss                                                             | $    (8)          
|Adjustments to reconcile net loss to net cash used in                |                   
|operating activities:                                                |                   
|Payment of non-resident income tax withholding to the                |                   
|state of Colorado on behalf of limited partners                      | (3)               
|Changes in operating assets and liabilities:                         |                   
|Increase in administrative and reporting                             |                   
|fees payable                                                         | 2                 
|Decrease in other accrued expenses/prepaid expenses                  | (8)               
|Total adjustments                                                    | (9)               
|                                                                     |                   
|Net cash used in operating activities                                | $(17)             







See Accompanying Notes to Financial Statements

















NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO



Notes to Financial Statements

(Unaudited)





(1)

BASIS OF PRESENTATION



As of December 31, 2006, National Housing Partnership Realty Fund Two (the Partnership) adopted the liquidation basis of accounting due to the remaining investment of the Partnership selling its property (as discussed in Note 3).



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"), a publicly traded real estate investment trust, 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.



As a result of the decision to liquidate the Partnership, the Partnership changed its basis of accounting for its financial statements at December 31, 2006, to the liquidation basis of accounting.  Consequently, assets have been valued at estimated net realizable value and liabilities are presented at their estimated settlement amounts, including estimated costs associated with carrying out the liquidation of the Partnership.  The valuation of assets and liabilities necessarily requires many estimates and assumptions and there are substantial uncertainties in carrying out the liquidation.  The actual realization of assets and settlement of liabilities could be higher or lower than amounts indicated and is based upon the General Partners estimates as of the date of the financial statements.



The General Partner estimates that the liquidation process will be completed by September 30, 2007.  Because the success in realization of assets and the settlement of liabilities is based on the General Partners best estimates, the liquidation period may be shorter than projected or it may be extended beyond the projected period.



The Partnership was formed for the purpose of raising capital by offering and selling limited partnership units and then investing in limited partnerships (Local Limited Partnership), each of which owned and operated an existing rental housing project.



The accompanying unaudited financial statements of 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 Item 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 the General Partner, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  For further information, refer to the consolidated financial statements and footnotes included in the Partnerships Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006.













(2)

ACCOUNTING POLICIES



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 year ended December 31, 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 was directly engaged in the ownership and management of an apartment property with a total of 150 units. The Local Limited Partnership sold its apartment property in December 2006 (see Note 3). 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 approximately $954,000 at March 31, 2007.  The Partnership may be subject to additional losses to the extent of any financial support that the Partnership voluntarily provides in the future.



(3)

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 March 31, 2007, the Partnership continues to hold an interest in one Local Limited Partnership: San Juan del Centro Limited Partnership.



On December 20, 2006, San Juan Del Centro Limited Partnership sold its investment property to a third party for $7,000,000.  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 an affiliate of the general partner and the Partnership held, and other liabilities of the property and the Local Limited Partnership.  During the three months ended March 31, 2007, the Partnership received an initial distribution of approximately $1,046,000 from the Local Limited Partnership.  The Local Limited Partnership anticipates that it will complete its liquidation during the first half of 2007.



San Juan Del Centro Limited Partnership had a note which was executed by the Local Limited Partnership with the former owners as part of the acquisition of the property by the Local Limited Partnership. The note bore simple interest at the rate of 9% per annum. The note was a nonrecourse note secured by a security interest in all partnership interests in the respective Local Limited Partnership and was subordinated to the respective mortgage note for as long as the mortgage note was insured by HUD. The note was in default and the Local Limited Partnerships interest was subject to potential foreclosure. The note had been purchased by an affiliate of the Partnership. During December 2006, the note and accrued interest of approximately $4,348,000 was paid in full with proceeds from the sale of the property.



Since the Partnership, as a limited partner, does not exercise control over the activities of the Local Limited Partnership in accordance with the partnership agreement, the investment is accounted for using the equity method. Thus, the investment is carried at cost less the Partnership's share of the Local Limited Partnerships losses and distributions plus the Partnerships share of Local Limited Partnership income. However, since the Partnership is not legally liable for the obligations of the Local Limited Partnership, and is not otherwise committed to provide additional support, 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, income reported by a Local Limited Partnership is not recognized by the Partnership until such income equals losses not recognized plus distributions received and previously recognized as revenue.



During the year ended December 31, 2006, the Partnerships share of profits from San Juan Del Centro Limited Partnership was approximately $3,670,000 which were reduced by prior years losses not taken of approximately $1,640,000 and $30,000 of 2006 profits not estimated to be recoverable from the receipt of future distributions from the Local Limited Partnership.  During the three months ended March 31, 2007, the Partnership did not recognize any profits or losses from San Juan Del Centro Limited Partnership as the Local Limited Partnership did not generate any profits or losses for the three months ended March 31, 2007.  During the three months ended March 31, 2006, the Partnership did not recognize approximately $63,000 of losses from San Juan Del Centro Limited Partnership as the Partnerships investment had been reduced to zero at that time.  As of March 31, 2007 the Partnership has an investment balance of approximately $954,000 related to its investment in San Juan Del Centro Limited Partnership, which is equal to the estimated amount of distributions the Partnership anticipates receiving during 2007 from the liquidation of its investment in San Juan Del Centro Limited Partnership.



The following are unaudited combined statements of operations for the three months ended March 31, 2007 and 2006 of the remaining Local Limited Partnership in which the Partnership has invested. The statements are compiled from financial statements of the Local Limited Partnership which are prepared on the accrual basis of accounting and supplied by the managing agent of the project. As a result of the December 2006 sale of the property held by the Local Limited Partnership the Local Limited Partnership did not recognize any profits or losses for the three months ended March 31, 2007.

















COMBINED STATEMENTS OF OPERATIONS



|                                      |                    |       
|------------------------------------- | ------------------ | ------
|                                      | Three Months Ended
|                                      | March 31,         
|                                      | 2007               | 2006  
|                                      | (in thousands)    
|Rental income                         | $   --             | $  196
|Other income                          | --                 | 47    
|Total revenues                        | --                 | 243   
|                                      |                    |       
|Operating expenses                    | --                 | 172   
|Interest, taxes and insurance         | --                 | 76    
|Depreciation                          | --                 | 59    
|Total expenses                        | --                 | 307   
|                                      |                    |       
|Net loss from discontinued operations | --                 | (64)  
|                                      |                    |       
|Net loss                              | $ --               | $(64) 
|                                      |                    |       
|National Housing Partnership Realty   |                    |       
|Fund Two share of net (loss) income   | $ (--)             | $(63) 





(4)

TRANSACTIONS WITH THE GENERAL PARTNER



During the three months ended March 31, 2006, the Partnership accrued administrative and reporting fees payable to the General Partner in the amount of approximately $2,000 for services provided to the Partnership.  There were no such fees accrued for the three months ended March 31, 2007.  During the three months ended March 31, 2007, the Partnership made a payment of approximately $464,000 to the General Partner which was the entire balance owed.





(5)

CONTINGENCIES



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













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; 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 March 31, 2007, the Partnership retained an interest in one of its original twenty-one Local Limited Partnerships. On December 20, 2006 the Local Limited Partnership sold its property and currently expects to complete its liquidation during the first half of 2007.  The property in which the Local Limited Partnership had invested in received 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 was generally restricted by these government-assistance programs.



Since the Partnership, as a limited partner, does not exercise control over the activities of the Local Limited Partnership in accordance with the partnership agreement, the investment is accounted for using the equity method. Thus, the investment is carried atcost less the Partnership's share of the Local Limited Partnerships losses and distributions plus the Partnerships share of Local Limited Partnership income. However, since the Partnership is not legally liable for the obligations of the Local Limited Partnership, and is not otherwise committed to provide additional support, 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, income reported by a Local Limited Partnership is not recognized by the Partnership until such income equals losses not recognized plus distributions received and previously recognized as revenue.



During the year ended December 31, 2006, the Partnerships share of profits from San Juan Del Centro Limited Partnership was approximately $3,670,000 which were reduced by prior years losses not taken of approximately $1,640,000 and $30,000 of 2006 profits not estimated to be recoverable from the receipt of future distributions from the Local Limited Partnership.  During the three months ended March 31, 2007, the Partnership did not recognize any profits or losses from San Juan Del Centro Limited Partnership as the Local Limited Partnership did not generate any profits or losses for the three months ended March 31, 2007.  During the three months ended March 31, 2006, the Partnership did not recognize approximately $63,000 of losses from San Juan Del Centro Limited Partnership as the Partnerships investment had been reduced to zero at that time.  As of March 31, 2007 the Partnership has an investment balance of approximately $954,000 related to its investment in San Juan Del Centro Limited Partnership, which is equal to the estimated amount of distributions the Partnership anticipates receiving during 2007 from the liquidation of its investment in San Juan Del Centro Limited Partnership.















Results of Operations



As of December 31, 2006, the Partnership adopted the liquidation basis of accounting, due to the remaining investment of the Partnership selling its property.



On December 20, 2006, San Juan Del Centro Limited Partnership sold its investment property to a third party for $7,000,000.  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 an affiliate of the general partner and the Partnership held, and other liabilities of the property and the Local Limited Partnership.  During the three months ended March 31, 2007, the Partnership received an initial distribution of approximately $1,046,000 from the Local Limited Partnership.  The Local Limited Partnership anticipates that it will complete its liquidation during the first half of 2007.



As a result of the decision to liquidate the Partnership, the Partnership changed its basis of accounting for its financial statements at December 31, 2006, to the liquidation basis of accounting.  Consequently, assets have been valued at estimated realizable value and liabilities are presented at their estimated settlement amounts, including estimated costs associated with carrying out the liquidation of the Partnership.  The valuation of assets and liabilities necessarily requires many estimates and assumptions and there are substantial uncertainties in carrying out the liquidation.  The actual realization of assets and settlement of liabilities could be higher or lower than amounts indicated and is based upon estimates of the General Partner as of the date of the financial statements.



During the three months ended March 31, 2007, net assets in liquidation decreased by approximately $481,000.  The decrease in net assets in liquidation is primarily due to a distribution made to the limited partners, as discussed below, decreases in investments in and advances to Local Limited Partnership, administrative and reporting fees payable to General Partner, accrued expenses and receivables from limited partners and a decrease in the estimated costs to liquidate partially offset by an increase in cash and cash equivalents.  The decrease in investment in and advances to Local Limited Partnership is due to the receipt of a distribution of approximately $1,046,000 from the Local Limited Partnership.  The decrease in administrative and reporting fees payable to the General Partner and accrued expenses is due to payment of the respective liabilities during the period.  The decrease in receivables from limited partners is due to collecting payment of the receivable owed at December 31, 2006 partially offset by the payment of current year Colorado non-resident withholding on behalf of limited partners during the period. The decrease in the estimated costs to liquidate is due to a decrease in the costs associated with liquidating the partnership as a result of the costs being lower than originally estimated.



The statement of net assets in liquidation as of Mach 31, 2007 includes approximately $30,000 of costs that the General Partner estimates will be incurred during the period of liquidation, based on the assumption the liquidation process will be completed by September 30, 2007.  Because the success in realization of assets and the settlement of liabilities is based on the General Partners best estimates, the liquidation period may be shorter than projected or extended beyond September 30, 2007, the projected date of liquidation.



During the three months ended March 31, 2007, a distribution of approximately $493,000 or $29.07 per other limited partnership unit was made to the limited partners.  The distribution was made from the receipt by the Partnership of a distribution from San Juan Del Centro Limited Partnership of sale proceeds.  There were no distributions made during the three months ended March 31, 2006.





Future cash distributions will depend on the amount of cash received by the Partnership from the liquidation of San Juan Del Centro Limited Partnership and the amount of cash remaining at the Partnership after fully liquidating the Partnership.  The Partnerships cash available for distribution will be reviewed on a quarterly basis.  There can be no assurance, however, that the Partnership will have any funds available after liquidation to permit additional distributions to its limited partners in 2007.



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 year ended December 31, 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 was directly engaged in the ownership and management of an apartment property with a total of 150 units. The Local Limited Partnership sold its apartment property in December 2006 (see Note 3). 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 approximately $954,000 at March 31, 2007.  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.















PART II - OTHER INFORMATION





ITEM 5

OTHER INFORMATION



None.



ITEM 6

EXHIBITS



See Exhibit Index.















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      
|                   |                                             
|Date: May 15, 2007 | By:   /s/David R. Robertson                 
|                   | David R. Robertson                          
|                   | President and Chief Executive Officer       
|                   |                                             
|Date: May 15, 2007 | By:   /s/Stephen B. Waters                  
|                   | Stephen B. Waters                           
|                   | Vice President                              



















NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO

EXHIBIT INDEX





Exhibit



3.1

Amendment to the Limited Partnership Agreement dated February 14, 2006. Incorporated by reference to the Annual Report on Form 10-KSB for the year ended December 31, 2005.



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.













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:  May 15, 2007

/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











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:  May 15, 2007

/s/Stephen B. Waters

Stephen B. Waters

Vice President of National Corporation for Housing Partnerships, equivalent of the chief financial officer of the Partnership













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 March 31, 2007 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:  May 15, 2007      
|                         
|                         
|/s/Stephen B. Waters     
|Name:  Stephen B. Waters 
|Date:  May 15, 2007      









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.