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, 2002


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


             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)

<PAGE>



                         PART I - FINANCIAL INFORMATION


ITEM 1.     FINANCIAL STATEMENTS


                 NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                         Statement of Financial Position
                                   (Unaudited)
                       (in thousands, except unit data)

                                  June 30, 2002


ASSETS
   Cash and cash equivalents                                                $ 2
   Investments in and advances to Local Limited
      Partnerships (Note 2)                                                   --

                                                                             $ 2
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

Liabilities
   Accrued expenses                                                         $ 22
   Administrative and reporting fees payable to
      General Partner (Note 3)                                             1,348
   Notes payable to General Partner (Note 3)                                  13

Partners' capital (deficit)
   General Partner -- The National Housing
      Partnership (NHP)                                      $ 629
   Original Limited Partner -- 1133 Fifteenth
      Street Two Associates                                    (181)
   Other Limited Partners -- 18,043 investment
      units                                                  (1,829)     (1,381)

                                                                           $ 2

                See Accompanying Notes to Financial Statements

<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,
                                                   2002         2001       2002        2001
Revenues:
  Share of profits from Local Limited
<S>                                                <C>          <C>        <C>         <C>
     Partnership                                   $ --         $ 18       $ --        $ 459
  Interest income                                      --           1          --           1
  Other income                                         --           1          --          98
  Gain on forgiveness of debt (Note 4)                 --          --          --         708
                                                       --          20          --       1,266
Costs and Expenses:
  Administrative and reporting fees to
    General Partner                                     5          10          10          25
  Interest on notes payable                            --          --          --          10
  Other operating expenses                             16          23          29          47
  Interest on advances from General Partner            --          --           1          --
                                                       21          33          40          82

Net (loss) income                                  $ (21)      $ (13)      $ (40)     $ 1,184

Allocation of net (loss) income:
  General Partner - NHP                            $ --         $ --       $ --         $ 5
  Original Limited Partner - 1133 Fifteenth
    Street Two Associates                              --          --          --          12
  Other limited partners                              (21)        (13)        (40)      1,167

                                                   $ (21)      $ (13)      $ (40)     $ 1,184

Net (loss) income per limited partnership
  interest                                        $ (1.16)    $ (0.71)   $ (2.21)    $ 63.92

                See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

                 NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                   Statement of Partners' Capital (Deficit)
                                   (Unaudited)
                                (in thousands)
<TABLE>
<CAPTION>


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

Partners' deficit at
<S>        <C> <C>                    <C>          <C>          <C>            <C>
  December 31, 2001                   $ 629        $ (181)      $(1,789)       $(1,341)

Net loss - six months ended
  June 30, 2002                           --           --           (40)           (40)

Partners' capital (deficit) at
  June 30, 2002                       $ 629        $ (181)      $(1,829)       $(1,381)

Percentage interest at
  June 30, 2002                          1%           1%            98%         100%
                                         (A)          (B)           (C)


(A)   General Partner
(B)   Original Limited Partner
(C)   Consists  of  18,043  investment  units at June 30,  2002  and  18,138  at
      December  31,  2001  (see  "Item  5" in  Notes  to  Financial  Statements;
      "Abandonment of Limited Parntership 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,
                                                                      2002           2001
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                   <C>            <C>
  Interest income received                                            $ --           $ 1
  Distributions received in excess of investment in Local
   Limited Partnership                                                   --             98
  Advances made in excess of investment in Local Limited
   Limited Partnership                                                   --             (3)
  Operating expenses paid                                               (49)           (60)
  Payment of interest on note payable                                    --         (1,575)
        Net cash used in operating activities                           (49)        (1,539)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Distributions from Local Limited Partnerships                          43          2,027
  Advances to Local Limited Partnership                                  --             (3)
        Net cash provided by investing activities                        43          2,024

CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayment of advances from General Partner                            (38)           (33)
  Proceeds from advances from General Partner                            41             --
  Payments on deferred acquisition note payable                          --           (452)
        Net cash provided by (used in) financing activities               3           (485)

NET DECREASE IN CASH AND CASH EQUIVALENTS                                (3)            --

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                          5              1

CASH AND CASH EQUIVALENTS AT END OF PERIOD                            $ 2            $ 1

RECONCILIATION OF NET (LOSS) INCOME TO NET CASH USED IN
  OPERATING ACTIVITIES:
   Net (loss) income                                                 $ (40)        $ 1,184
   Adjustments to reconcile net (loss) income to net cash
     used in operating activities:
      Share of income from Local Limited Partnerships                    --           (459)
      Changes in operating assets and liabilities:
        Gain on forgiveness of debt                                      --           (708)
        Decrease in accrued interest on deferred acquisition
          note                                                           --         (1,564)
        Increase in administrative and reporting fees payable            10             25
        Decrease in other accrued expenses                              (19)           (17)
        Total adjustments                                                (9)        (2,723)

Net cash used in operating activities                                $ (49)        $(1,539)

                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 statement of the
financial condition and results of operations for the interim periods presented.
All such adjustments are of a normal and recurring nature.

While the General Partner  believes that the disclosures  presented are adequate
to make the  information  not  misleading,  it is suggested that these financial
statements  be read in  conjunction  with the  financial  statements  and  notes
included in the  Partnership's  Annual  Report filed on Form 10-KSB for the year
ended December 31, 2001.

(2)   INVESTMENTS IN AND ADVANCES TO LOCAL LIMITED PARTNERSHIPS

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, 2002, the  Partnership  continues to hold an interest in three Local
Limited  Partnerships:  San Juan del Centro Limited  Partnership,  Caroline Arms
Limited Partnership and Harold House Limited Partnership.  During the six months
ended  June  30,  2002,  the  Partnership   received  its  share  of  the  final
distribution of Windsor Apartments  Associates Limited Partnership and the Local
Limited Partnership was liquidated.  During 2001, the Partnership's  interest in
Esbro Limited Partnership, Mayfair Manor Limited Partnership, and Hurbell II and
III Limited  Partnership  were foreclosed upon. Also during 2001, the properties
owned by Windsor Apartment  Associates and West Oak Village Limited  Partnership
were sold.

Caroline Arms,  Harold House,  and San Juan Del Centro Limited  Partnerships all
have notes  payable which are  currently in default and  accordingly,  the Local
Limited  Partnership  interests are subject to foreclosure.  Continuation of the
Local Limited Partnerships' operations in the present form is dependent on their
ability to extend the  maturity  date of the  respective  notes,  or to repay or
refinance their respective  notes.  The financial  statements do not include any
adjustments which might result from the outcome of this uncertainty.

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 each of the individual Local Limited  Partnerships
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  $123,000
and $462,000 of losses from three and six Local Limited  Partnerships during the
six months  ended June 30,  2002 and 2001,  respectively.  During the six months
ended June 30, 2001,  the  Partnership's  share of profits in one Local  Limited
Partnership  in the amount of  approximately  $6,000 was  offset  against  prior
years' losses not taken.  For the six months ended June 30, 2002,  there were no
profits offset  against prior years' losses not taken.  As of June 30, 2002, the
Partnership  has  not  recognized  approximately  $3,083,000  of  its  allocated
cumulative  share of losses from three Local Limited  Partnerships  in which its
investment has been reduced to zero.

Effective  April  1,  2002,  the  Partnership  adopted  Statement  of  Financial
Accounting  Standards ("SFAS") No. 145, "Rescission of FASB Statements No. 4, 44
and 64". SFAS No. 4 "Reporting  Gains and Losses from  Extinguishment  of Debt,"
required  that all gains and losses from  extinguishment  of debt be  aggregated
and, if material,  classified as an  extraordinary  item.  SFAS No. 145 rescinds
SFAS No. 4, and accordingly, gains and losses from extinguishment of debt should
only be  classified  as  extraordinary  if they are  unusual in nature and occur
infrequently. Neither of these criteria applies to the Partnership. As a result,
the accompanying statements of operations have been restated to reflect the gain
on forgiveness of the balance of the note payable  secured by the  Partnership's
interest in Windsor Apartments  Associates Limited Partnership in 2001 (see Note
4 -  Sale  of  Investment  Property  Owned  by  Local  Limited  Partnership)  in
operations rather than as an extraordinary item.

During the six months ended June 30, 2001, the Partnership  made working capital
advances  of  approximately  $6,000  to  two  Local  Limited  Partnerships.   No
repayments  were received  during the six months ended June 30, 2001. No working
capital  advances or repayments  were made between the Partnership and the Local
Limited  Partnerships  for the six months ended June 30, 2002.  During 1993, the
Partnership  re-evaluated the timing of the  collectibility  of the advances and
determined,  based on the  Local  Limited  Partnerships'  operations,  that such
advances  are  not  likely  to  be  collected.   For  accounting  purposes,  the
Partnership  treated the advance balance as additional  investments in the Local
Limited Partnerships. The balance was then reduced to zero, with a corresponding
charge to operations to reflect a portion of the previously  unrecognized losses
on investments.

Advances  to the  Local  Limited  Partnership  remain  due  and  payable  to the
Partnership. Interest is calculated at the prime rate plus 2% (6.75% at June 30,
2002).  Payment of principal and interest is  contingent  upon the Local Limited
Partnerships having available surplus cash, as defined by HUD regulations,  from
operations  or from the sale or  refinancing  of the Local  Limited  Partnership
properties.  Any future  repayment of advances or interest  will be reflected as
Partnership income when received.

The following are unaudited combined statements of operations for the six months
ended  June 30,  2002 and 2001 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.

<TABLE>
<CAPTION>

                        COMBINED STATEMENTS OF OPERATIONS

                                          Three Months Ended       Six Months Ended
                                               June 30,                June 30,
                                           2002        2001        2002        2001
                                            (in thousands)          (in thousands)

<S>                                       <C>         <C>         <C>         <C>
Rental income                             $ 642       $1,192      $1,265      $2,847
Other income                                  24          45          62         126
Gain on sale of property                      --          --          --         667
   Total income                              666       1,237       1,327       3,640

Operating expenses                           408         681         793       1,871
Interest, taxes and insurance                152         361         278         870
Depreciation                                 185         297         381         759
   Total expense                             745       1,339       1,452       3,500

Net (loss) income                         $ (79)      $ (102)     $ (125)      $ 140

National Housing Partnership
  Realty Fund Two share of net
  (loss) income                           $ (77)      $ (102)     $ (123)      $ 112
</TABLE>

(3)   TRANSACTIONS WITH THE GENERAL PARTNER

During the six month  periods  ended  June 30,  2002 and 2001,  the  Partnership
accrued  administrative and reporting fees payable to the General Partner in the
amount of approximately $10,000 and $25,000, respectively, for services provided
to the  Partnership.  The  amount  of fees  due to the  General  Partner  by the
Partnership  was  approximately   $1,348,000  at  June  30,  2002.  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 one or more of the
underlying properties of the Local Limited Partnerships.

The General Partner  advanced the Partnership  approximately  $41,000 during the
six months ended June 30, 2002. No such advances were made during the six months
ended June 30,  2001.  For the six  months  ended  June 30,  2002 and 2001,  the
Partnership repaid advances of approximately $38,000 and $33,000,  respectively,
to the General Partner. Interest is charged on borrowings at the Chase Manhattan
Bank prime interest rate plus 2% and amounted to  approximately  $1,000 and less
than $1,000 for the six months ended June 30, 2002 and 2001, respectively. Chase
Manhattan  Bank's prime rate was 4.75% at June 30, 2002.  At June 30, 2002,  the
Partnership owed  approximately  $13,000 in unpaid borrowings due to the General
Partner, including accrued interest.

During the six months ended June 30, 2001, the Partnership  made working capital
advances  of  approximately  $6,000  to  two  Local  Limited  Partnerships.   No
repayments  were received  during the six months ended June 30, 2001. No working
capital  advances or repayments  were made between the Partnership and the Local
Limited Partnerships for the six months ended June 30, 2002.

Beginning  in  2001,  the  Local  Limited   Partnerships  began  insuring  their
properties  up to certain  limits  through  coverage  provided by AIMCO which is
generally  self-insured  for a portion  of losses  and  liabilities  related  to
workers compensation, property casualty and vehicle liability. The Local Limited
Partnerships  insure their properties  above the AIMCO limits through  insurance
policies obtained by AIMCO from insurers  unaffiliated with the General Partner.
During  the six  months  ended  June  30,  2002  and  2001,  the  Local  Limited
Partnerships were charged by AIMCO and its affiliates  approximately $31,000 and
$93,000,  respectively,  for insurance  coverage and fees associated with policy
claims administration.

(4)   SALE OF INVESTMENT PROPERTY OWNED BY LOCAL LIMITED PARTNERSHIP

On January 31, 2001, Windsor Apartment  Associates Limited  Partnership sold its
investment property to an unaffiliated third party for $4,600,000.  After paying
closing  costs,  a portion of the net  proceeds  were used to repay the mortgage
encumbering the property. The Partnership received approximately $2,027,000 from
the Local Limited  Partnership as its portion of the sales  proceeds  during the
six months  ended June 30,  2001.  The  Partnership  used these funds to repay a
portion  of the note  payable  and  accrued  interest  which was  secured by the
Partnership's interest in the Windsor Apartments Associates Limited Partnership.
The  remaining  unpaid  balance  of  approximately  $708,000  was  forgiven  and
recognized as a gain on debt forgiveness.

On December 28, 2001, West Oak Village Limited  Partnership  sold its investment
property to an  unaffiliated  third party for  approximately  $3,172,000.  After
paying  closing  costs,  the net  proceeds  were  used  to  repay  the  mortgage
encumbering the property. The remaining proceeds were used to repay a portion of
the deferred acquisition note and accrued interest thereon which was held by the
general partner of the Local Limited Partnership. The unpaid portion of the note
was  forgiven  and  treated  as a  capital  contribution  to the  Local  Limited
Partnership.  With the sale of the Local  Limited  Partnership's  property,  the
Partnership will receive no future benefits from this Local Limited Partnership.

(5)   ABANDONMENT OF LIMITED PARTNERSHIP UNITS

During the six  months  ended  June 30,  2002 the number of limited  partnership
units decreased by 95 units 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.  There were no such
abandonments during the six months ended June 30, 2001.

(6)   LEGAL PROCEEDINGS

The Partnership is unaware of any pending or outstanding  litigation that is not
of a routine nature arising in the ordinary course of business.

(7)   GOING CONCERN

All of the  Local  Partnership's  notes  payable  are  past  due  (see  Note 2).
Continuation  of the Local  Partnerships'  operations  in their  present form is
dependent on their ability to extend the maturity date, repay or refinance these
notes.  These  conditions  raise  substantial  doubt  about the  ability  of the
Partnership  to continue as a going  concern.  The  financial  statements do not
include any adjustments which might result from the outcome of this uncertainty.



<PAGE>




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

The  matters  discussed  in this Form  10-QSB  contain  certain  forward-looking
statements  and  involve  risks and  uncertainties  (including  changing  market
conditions,   competitive  and  regulatory   matters,   etc.)  detailed  in  the
disclosures  contained  in this  Form  10-QSB  and the  other  filings  with the
Securities and Exchange Commission made by the Registrant from time to time. The
discussion of the  Registrant's  business and results of  operations,  including
forward-looking  statements  pertaining  to such  matters,  does not  take  into
account the effects of any changes to the  Registrant's  business and results of
operations.  Accordingly,  actual  results  could differ  materially  from those
projected in the forward-looking  statements as a result of a number of factors,
including those identified herein.

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,  2002,  the  Partnership  retained  an  interest  in three of its
original  twenty-one  Local Limited  Partnerships.  The  properties in which the
Local Limited Partnerships have invested receive one or more forms of assistance
from the  Federal  Government.  As a  result,  the Local  Limited  Partnerships'
ability to transfer funds either to the  Partnership or among  themselves in the
form of cash distributions,  loans, or advances is generally restricted by these
government-assistance    programs.   These   restrictions   could   impact   the
Partnership's  ability  to meet  its cash  obligations  given  the low  level of
reserves at the Partnership level.

During the six months ended June 30, 2001, the Partnership  made working capital
advances  of  approximately  $6,000  to  two  Local  Limited  Partnerships.   No
repayments  were made  during the six months  ended  June 30,  2001.  No working
capital  advances were made or repayments were received  between the Partnership
and the Local Limited Partnerships for the six months ended June 30, 2002.

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
all of the remaining Local Limited  Partnerships  had been reduced to zero as of
June 30, 2002. 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 Local Limited  Partnerships.  A
distribution of approximately  $43,000  comprised of the final proceeds from the
sale of Windsor  Apartments  was  received  during the six months ended June 30,
2002. A distribution of approximately $2,027,000,  comprised of initial proceeds
from the sale of Windsor Apartments and distributions in excess of investment in
Local Limited  Partnerships of approximately  $98,000,  were received during the
six months ended June 30, 2001.  The receipt of  distributions  in the future is
dependent upon the operations of the underlying  properties of the Local Limited
Partnerships  to generate  sufficient  cash for  distribution in accordance with
applicable HUD regulations.

Cash and cash  equivalents  amounted  to  approximately  $2,000 at June 30, 2002
compared to approximately  $5,000 at December 31, 2001. The decrease in cash and
cash  equivalents  is due to  approximately  $49,000  of cash used in  operating
activities partially offset by approximately $43,000 and $3,000 of cash provided
by investing and financing activities,  respectively. Cash provided by investing
activities  consisted of the final distribution from the proceeds of the sale of
Windsor Apartments.  Cash provided by financing activities consisted of advances
to the Partnership  from the General Partner  partially  offset by repayments of
prior  advances  from the General  Partner.  Cash used in  operating  activities
consisted of the payment of operating  expenses.  The ability of the Partnership
to meet its  on-going  cash  requirements  in excess of cash on hand at June 30,
2002 is  dependent  upon the  future  receipt  of  distributions  from the Local
Limited Partnerships or proceeds from sales or refinancing of one or more of the
underlying properties of the Local Limited  Partnerships.  The Partnerships only
other form of liquidity  is advances  from the General  Partner.  During the six
months ended June 30, 2002  approximately  $41,000 of working  capital  advances
were made by the General  Partner to the  Partnership.  The  Partnership  repaid
advances of approximately $38,000 during the six months ended June 30, 2002. The
General Partner will evaluate advancing the Partnership additional 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  $1,348,000 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   properties  of  the  Local  Limited
Partnerships, rather than through recurring operations.

On January 31, 2001, Windsor Apartment  Associates Limited  Partnership sold its
investment property to an unaffiliated third party for $4,600,000.  After paying
closing  costs,  a portion of the net  proceeds  were used to repay the mortgage
encumbering the property. The Partnership received approximately $2,027,000 from
the Local Limited  Partnership as its portion of the sales  proceeds  during the
six months  ended June 30,  2001.  The  Partnership  used these funds to repay a
portion  of the note  payable  and  accrued  interest  which was  secured by the
Partnership's interest in the Windsor Apartments Associates Limited Partnership.
The  remaining  unpaid  balance  of  approximately  $708,000  was  forgiven  and
recognized as a gain on debt forgiveness.

On December 28, 2001, West Oak Village Limited  Partnership  sold its investment
property to an  unaffiliated  third party for  approximately  $3,172,000.  After
paying  closing  costs,  the net  proceeds  were  used  to  repay  the  mortgage
encumbering the property. The remaining proceeds were used to repay a portion of
the deferred acquisition note and accrued interest thereon which was held by the
general partner of the Local Limited Partnership. The unpaid portion of the note
was  forgiven  and  treated  as a  capital  contribution  to the  Local  Limited
Partnership.  With the sale of its  property,  the  Partnership  will receive no
future benefits from this Local Limited Partnership.

Caroline  Arms,  Harold House and San Juan Del Centro Limited  Partnerships  all
have notes which were executed by the respective Local Limited Partnerships with
the  seller as part of the  acquisition  of the  property  by the Local  Limited
Partnership.  The notes were nonrecourse notes secured by a security interest in
all Partnership  interests in the Local Limited Partnership and are subordinated
to the  respective  mortgage  notes on each property for as long as the mortgage
notes are insured by HUD. Any payments due from project  income are payable from
surplus cash, as defined by the HUD  Regulatory  Agreement.  Neither the Limited
Partnership  nor any  partners  thereof,  present or future  assume any personal
liability for the payment of the notes.  The notes were due November,  15, 1999,
November 15, 1999 and December 20, 1999,  respectively.  Each note is in default
and  the  Local   Limited   Partnership   interests  are  subject  to  potential
foreclosure.  Continuation of the Local Limited Partnerships'  operations in the
present form is  dependent  on its ability to extend the maturity  date of their
respective  notes, or to repay or refinance their note. All of the Local Limited
Partnerships are actively attempting to sell their respective net assets.

Esbro and  Mayfair  Manor  Limited  Partnerships  had notes  payable  which were
originally due on October 15, 1997.  Effective February 16, 1998, both Esbro and
Mayfair  Manor Limited  Partnerships  executed  Amended and Restated  Promissory
Notes  for each of their  respective  notes.  The  Amended  Notes  extended  the
maturity of the notes to October 25, 1999.  The Local Limited  Partnerships  did
not have the  resources to pay the amounts due. On July 20, 2001,  the holder of
these notes  exercised its remedy under the security  agreement  with respect to
such notes and was  substituted as the sole limited partner of the Local Limited
Partnerships  in place of the  Partnership  and the  noteholder's  assignee  was
substituted  as the  General  Partner.  No gain or loss has been  recorded  as a
result of the  transfer  of these  partnership  interests.  With the loss of the
Partnership's  interest in Esbro and Mayfair  Manor,  the  Partnership  will not
receive any future  benefits from these Local Limited  Partnerships  and taxable
income  through the date of  foreclosure  will be generated and allocated to the
Partnership's  investors without any distributable  cash. The specific impact of
the tax consequence is dependent upon each partners' individual tax situation.

Hurbell II and Hurbell III Limited Partnerships had notes payable which were due
on November 2, 1999. The Local Limited  Partnerships  did not have the resources
to pay the amounts due. On April 2, 2001 and March 28, 2001,  respectively,  the
holder of these notes  exercised  its remedy under the security  agreement  with
respect to such notes and was  substituted  as the sole  limited  partner of the
Local  Limited  Partnerships  in place of the  Partnership  and the  noteholders
assignee  was  substituted  as the  general  partner.  No gain or loss  has been
recorded as a result of the transfer of these  partnership  interests.  With the
loss  of  the  Partnership's  interest  in  Hurbell  II  and  Hurbell  III,  the
Partnership  will not  receive  any future  benefits  from these  Local  Limited
Partnerships  and  taxable  income  through  the  date  of  foreclosure  will be
generated and allocated to the Partnership's investors without any distributable
cash. The specific impact of the tax consequence is dependent upon each specific
partners' individual tax situation.

As a result  of the  conditions  above,  there is  substantial  doubt  about the
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 these uncertainties.

Results of Operations

The  Partnership  invested as a limited  partner in Local  Limited  Partnerships
which  operated  twenty-one  rental  housing  properties.  At June 30, 2002, the
Partnership  continued to hold an interest in three 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 noncash in nature. As of June 30, 2002, the Partnership had no
carrying basis in any of the Local Limited  Partnerships and therefore reflected
no results  of  operations  for its share of  profits or losses for these  Local
Limited Partnerships.

The Partnership had a net loss of approximately $40,000 for the six months ended
June 30, 2002,  compared to net income of  approximately  $1,184,000 for the six
months ended June 30, 2001. Net loss per unit of limited  partnership  was $2.21
for the six months  ended  June 30,  2002  compared  to net income of $63.92 per
limited partnership unit for the six months ended June 30, 2001. The decrease is
primarily  attributable to the Partnership's share of the gain recognized during
the six months ended June 30, 2001 related to the sale of Windsor Apartments and
an  extraordinary  gain on  forgiveness  of debt  relating  to the note  payable
secured by the  Partnership's  interest in the Local Limited  Partnership  which
owned  Windsor  Apartments.  The  Partnership  did not  recognize  approximately
$123,000 of its allocated share of losses from three Local Limited  Partnerships
for the six months ended June 30, 2002, as the  Partnership's net carrying basis
in these Local Limited  Partnerships had been reduced to zero. The Partnership's
share of losses  from the Local  Limited  Partnerships,  if not  limited  to its
investment account balance, would have decreased  approximately $338,000 between
periods. The decrease is primarily due to the foreclosure on the properties held
by Esbro,  Mayfair Manor, Hurbell II and Hurbell III Limited Partnerships during
2001.


<PAGE>


                           PART II - OTHER INFORMATION



ITEM 6      EXHIBITS AND REPORTS ON FORM 8-K

            a)    Exhibits

                  Exhibit 99,  Certification  of Chief  Executive  Officer and
                  Chief Financial Officer.

            b)    Reports on Form 8-K:

                  None filed during the quarter ended June 30, 2002.


<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/Patrick J. Foye
                                          Patrick J. Foye
                                          President


                                    By:   /s/Thomas C. Novosel
                                          Thomas C. Novosel
                                          Senior Vice President
                                          and Chief Accounting Officer


                                    Date: August 14, 2002


<PAGE>


Exhibit 99


                          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
Realty Fund II (the "Partnership"), for the quarterly period ended June 30, 2002
as filed with the  Securities  and Exchange  Commission  on the date hereof (the
"Report"),  Patrick J. Foye, as the equivalent of the Chief Executive Officer of
the Partnership, and Paul J. McAuliffe, 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/  Patrick J. Foye
                                    Name:  Patrick J. Foye
                                    Date:  August 14, 2002


                                    /s/  Paul J. McAuliffe
                                    Name:  Paul J. McAuliffe
                                    Date:  August 14, 2002


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