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

                                   Form 10-QSB

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

               For the quarterly period ended March 31, 2004


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


            For the transition period from _________to _________

                         Commission file number 0-14458


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

                                 March 31, 2004
<TABLE>
<CAPTION>

ASSETS
<S>                                                                          <C>
   Cash and cash equivalents                                                 $ 61
   Receivables - limited partners                                              175
   Investments in and advances to Local Limited
      Partnerships (Note 2)                                                     --

                                                                            $ 236
LIABILITIES AND PARTNERS' CAPITAL (DEFICIENCY)

Liabilities
   Accrued expenses                                                          $ 8
   Administrative and reporting fees payable to
      General Partner (Note 3)                                                 440

Partners' capital (deficiency)
   General Partner -- The National Housing
      Partnership (NHP)                                       $ 640
   Original Limited Partner -- 1133 Fifteenth
      Street Two Associates                                     (170)
   Other Limited Partners -- 17,723 investment
      units                                                     (682)         (212)

                                                                            $ 236

               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
                                                                       March 31,
                                                                   2004         2003
REVENUES:
<S>                                                      <C>       <C>         <C>
  Share of profits from Local Limited Partnerships (Note 2)        $ --        $1,206
  Interest received on advances to Local Limited
    Partnerships (Note 2)                                             --           68
                                                                      --        1,274

COSTS AND EXPENSES:
  Administrative and reporting fees to General Partner                 3            4
  Other operating expenses                                             8           15
                                                                      11           19

(Loss) income from partnership operations                            (11)        1,255
Distributions in excess of investment in Local Limited
  Partnerships (Note 2)                                                1            --

Net (LOSS) INCOME                                                  $ (10)      $1,255

ALLOCATION OF NET (LOSS) INCOME:
  General Partner - NHP                                            $ --         $ 13
  Original Limited Partner - 1133 Fifteenth Street Two
    Associates                                                        --           13
  Other limited partners                                             (10)       1,229

                                                                   $ (10)      $1,255

NET (LOSS) INCOME PER OTHER LIMITED PARTNERSHIP UNIT              $(0.56)      $68.12

               See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

                NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                Statement of 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, 2003                 $ 640        $ (170)      $ (672)       $ (202)

Net loss - three months ended
  March 31, 2004                           --           --           (10)          (10)

Partners' capital (deficiency)
  at March 31, 2004                    $ 640        $ (170)      $ (682)       $ (212)

Percentage interest at
  March 31, 2004                          1%           1%           98%         100%
                                          (A)          (B)           (C)


(A)   General Partner

(B)   Original Limited Partner

(C)   Consists of 17,723  investment  units at March 31, 2004 and  December  31,
      2003 (see "Footnote 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>

                                                                    Three Months Ended March 31,
                                                                       2004            2003
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                    <C>             <C>
  Interest received on advances to Local Limited Partnerships          $ --            $ 68
  Payment of administrative and reporting fees                             --           (681)
  Operating expenses paid                                                  --            (53)
  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             --
  Payment of interest on advances payable to General Partner               --             (1)
        Net cash provided by (used in) operating activities                 7           (667)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Distributions from Local Limited Partnerships                             1            928
  Repayment of advances to Local Limited Partnerships                      --            130
        Net cash provided by investing activities                           1          1,058

CASH FLOWS FROM FINANCING ACTIVITIES:
  Advances from General Partner                                            --             60
  Payment on advances from General Partner                                 --            (73)
        Net cash used in financing activities                              --            (13)

NET INCREASE IN CASH AND CASH EQUIVALENTS                                   8            378

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                           53             --

CASH AND CASH EQUIVALENTS AT END OF PERIOD                             $ 61           $ 378

RECONCILIATION  OF NET (LOSS) INCOME TO NET CASH PROVIDED BY
  (USED IN) OPERATING ACTIVITIES:
   Net (loss) income                                                   $ (10)        $ 1,255
   Adjustments to reconcile net (loss) income to net cash
     provided by (used in) operating activities:
      Share of profits from Local Limited Partnerships                     --         (1,206)
      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             --
      Distributions in excess of investment in Local Limited
        Partnerships                                                       (1)            --
      Changes in operating assets and liabilities:
        Increase (decrease) in administrative and reporting
          fees payable                                                      3           (677)
        Increase (decrease) in other accrued expenses                       8            (38)
        Decrease in accrued interest on advances from General
          Partner                                                          --             (1)
        Total adjustments                                                  17         (1,922)

Net cash provided by (used in) operating activities                     $ 7           $ (667)

               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  month  period  ended  March 31, 2004 are not  necessarily
indicative of the results that may be expected for the year ending  December 31,
2004.  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, 2003.

Recent Accounting Pronouncements

In January 2003,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Interpretation  No. 46 ("FIN 46"),  Consolidation of Variable Interest Entities.
FIN 46 requires the  consolidation of entities in which an enterprise  absorbs a
majority of the entity's  expected  losses,  receives a majority of the entity's
expected  residual  returns,  or both, as a result of ownership,  contractual or
other  financial  interests  in the  entity.  Prior to the  issuance  of FIN 46,
entities were generally  consolidated by an enterprise when it had a controlling
financial  interest  through  ownership  of a majority  voting  interest  in the
entity.  FIN 46 applied  immediately to variable interest entities created after
January 31, 2003, and with respect to variable interests held before February 1,
2003,  FIN 46 will  apply to  financial  statements  for  periods  ending  after
December 15, 2004.

The Partnership has not entered into any partnership  investments  subsequent to
January  31,  2003.  The  Partnership  is  in  the  process  of  evaluating  its
investments in unconsolidated  partnerships that may be deemed variable interest
entities under the provisions of FIN 46. The  Partnership has not yet determined
the anticipated  impact of adopting FIN 46 for its  partnership  agreements that
existed as of January 31, 2003. However, FIN 46 may require the consolidation of
the  assets,   liabilities  and  operations  of  certain  of  the  Partnership's
unconsolidated  partnership  investments.  Although  the  Partnership  does  not
believe  the full  adoption  of FIN 46 will  have an impact  on cash  flow,  the
Partnership cannot make any definitive  conclusion on the impact on net earnings
until it completes its evaluation,  including an evaluation of the Partnership's
maximum exposure to loss.

(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 March 31, 2004,  the  Partnership  continues to hold an interest in two Local
Limited  Partnerships:  San Juan del Centro Limited Partnership and Harold House
Limited  Partnership.  On February 13, 2003,  Caroline Arms Limited  Partnership
sold its  investment  property to an  unaffiliated  third party for  $4,600,000.
After paying the closing costs, the net proceeds were used to repay the mortgage
encumbering  the property  along with other  liabilities of the property and the
Local Limited Partnership. In accordance with an agreement reached with the note
holder of the deferred  acquisition note, 60% or approximately  $1,393,000 as of
March 31,  2003 and  approximately  $1,670,000  as of  December  31, 2003 of the
remainder was paid against the  principal of this note and 40% or  approximately
$928,000 as of March 31, 2003 and  approximately  $1,113,000  as of December 31,
2003 was distributed to the Partnership.  An additional $198,000 as of March 31,
2003 and December 31, 2003 was received by the  Partnership for the repayment of
advances and accrued  interest to Caroline  Arms Limited  Partnership  which had
previously  been deemed  unlikely  to be  collected.  The funds  received by the
Partnership  were used to pay  certain  of its  liabilities,  including  accrued
administrative  and reporting  fees due to an affiliate of the General  Partner.
The  Local  Limited  Partnership  recognized  a gain on  sale  of  approximately
$202,000,  a gain on forgiveness of debt of approximately  $2,754,000 and a loss
from discontinued operations of approximately $27,000 for the three months ended
March 31, 2003. As of December 31, 2003, the Local Limited  Partnership had been
completely liquidated.

Harold  House and San Juan Del  Centro  Limited  Partnerships  both  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  $38,000
and  $62,000  of losses  from two Local  Limited  Partnerships  during the three
months  ended March 31,  2004 and 2003,  respectively.  During the three  months
ended March 31, 2004,  there were no profits  offset against prior years' losses
not taken. For the three months ended March 31, 2003, the Partnership's share of
profits from  Caroline Arms Limited  Partnership  was  approximately  $2,767,000
offset against prior years' losses not taken of approximately  $1,561,000. As of
March 31, 2004, the Partnership has not recognized  approximately  $1,860,000 of
its allocated  cumulative share of losses from two Local Limited Partnerships in
which its investment has been reduced to zero.

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. The Partnership did not advance any funds to
the Local Limited  Partnerships during the three months ended March 31, 2004 and
2003.

On  February  25,  2003,   Caroline  Arms  Local  Limited   Partnership   repaid
approximately  $198,000 to the  Partnership in repayment of advances and accrued
interest  deemed by the  Partnership  as  unlikely to be  collected.  The amount
repaid included  approximately  $68,000 in accrued  interest.  The remaining two
Local Limited  Partnerships  do not have any advances owed to the Partnership at
March 31, 2004.

The  following  are unaudited  combined  statements of operations  for the three
months ended March 31, 2004 and 2003 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.

                        COMBINED STATEMENTS OF OPERATIONS

                                                  Three Months Ended
                                                      March 31,
                                                 2004             2003
                                                    (in thousands)
Rental income                                    $ 336           $ 320
Other income                                        63               77
   Total income                                    399              397

Operating expenses                                 217              240
Interest, taxes and insurance                      111              118
Depreciation                                       110              103
   Total expense                                   438              461

Net loss before discontinued operations            (39)             (64)
Loss from discontinued operations                   --              (27)
Gain on sale of discontinued operations             --              202
Gain on forgiveness of debt of
  discontinued operations                           --            2,754
Net (loss) income                                $ (39)          $2,865

National Housing Partnership Realty
  Fund Two share of net (loss) income            $ (38)          $2,705

(3) TRANSACTIONS WITH THE GENERAL PARTNER

During the three month  periods ended March 31, 2004 and 2003,  the  Partnership
accrued  administrative and reporting fees payable to the General Partner in the
amount of approximately $3,000 and $4,000,  respectively,  for services provided
to the  Partnership.  The  amount  of fees  due to the  General  Partner  by the
Partnership  was  approximately  $440,000 at March 31, 2004. 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 one or more of the
underlying properties of the Local Limited Partnerships.  Approximately $681,000
of  administrative  and  reporting  fees was paid during the three  months ended
March 31, 2003 from the  distribution  received from the proceeds of the sale of
Caroline Arms Limited  Partnership's  investment property. No payments were made
during the three months ended March 31, 2004.

The General Partner  advanced the Partnership  approximately  $60,000 during the
three  months  ended March 31,  2003.  There were no  advances  from the General
Partner  during the three months  ended March 31, 2004.  During the three months
ended March 31, 2003, the Partnership  repaid advances of approximately  $73,000
and accrued interest of approximately $1,000 to the General Partner. Interest is
charged on  borrowings  at the JP Morgan Chase prime  interest  rate plus 2% and
amounted to less than $1,000 for the three months  ended March 31,  2003.  There
were no advances or accrued  interest  owed to the General  Partner at March 31,
2004.

(4) ABANDONMENT OF LIMITED PARTNERSHIP UNITS

During the three months  ended March 31, 2003 the number of limited  partnership
units decreased by 320 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 or 17,723 and 18,043
units for 2004 and 2003, respectively.

(5)   CONTINGENCIES

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

Pursuant to a formal order of investigation received by AIMCO on March 29, 2004,
the  Central  Regional  Office of the  United  States  Securities  and  Exchange
Commission is conducting an  investigation  relating to certain  matters.  AIMCO
believes the areas of investigation  include AIMCO's  miscalculated  monthly net
rental  income  figures in third  quarter 2003,  forecasted  guidance,  accounts
payable,  rent concessions,  vendor rebates,  and capitalization of expenses and
payroll.  AIMCO is cooperating  fully.  AIMCO does not believe that the ultimate
outcome  will  have a  material  adverse  effect on its  consolidated  financial
condition  or results of  operations  taken as a whole.  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 taken
as a whole.

(6) GOING CONCERN

Both of the remaining two Local Limited Partnership's notes payable are past due
(see Note 2).  Continuation  of the Local  Limited  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
their  and  the  Partnership's  ability  to  continue  as a going  concern.  The
financial  statements do not include any adjustments which might result from the
outcome of this uncertainty.

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

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 March  31,  2004,  the  Partnership  retained  an  interest  in two 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. The General Partner monitors  developments in
the area of legal and  regulatory  compliance  and is studying new federal laws,
including  the  Sarbanes-Oxley  Act of  2002.  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,  including
increased legal and audit fees.

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 two  remaining  Local  Limited  Partnerships  had been reduced to zero as of
March 31, 2004. 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 in
the  statements of cash flows and would reduce the  Partnership's  investment on
the balance sheet. A distribution  of  approximately  $1,000 was received during
the three months ended March 31, 2004 from a Local Limited Partnership which was
sold  several  years  ago as a result  of some  remaining  cash it had not used.
Distributions of approximately  $928,000  comprised of proceeds from the sale of
Caroline  Arms were received  during the three months ended March 31, 2003.  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  $61,000 and  $378,000 at
March  31,  2004 and 2003,  respectively.  Cash and cash  equivalents  increased
approximately  $8,000 from  December  31, 2003 due to  approximately  $1,000 and
$7,000 of cash  provided by investing and  operating  activities,  respectively.
Cash provided by investing activities consisted of the receipt of a distribution
from  a  Local  Limited  Partnership.  Cash  provided  by  operating  activities
consisted  of  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.  The ability of the  Partnership  to meet its  on-going  cash
requirements  in excess of cash on hand at March 31, 2004 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 Partnership's  only other form of liquidity is
advances from the General Partner.  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  $440,000 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.  The Partnership repaid
approximately  $681,000 of  administrative  and reporting  fees during the three
months  ended March 31,  2003.  There was no such  payment made during the three
months ended March 31, 2004.

On February 13, 2003  Caroline  Arms  Limited  Partnership  sold its  investment
property to an  unaffiliated  third party for  $4,600,000.  After paying closing
costs, the net proceeds were used to repay the mortgage encumbering the property
along with other liabilities of the property and the Local Limited  Partnership.
In  accordance  with an  agreement  reached with the note holder of the deferred
acquisition  note  60% or  approximately  $1,393,000  as of March  31,  2003 and
approximately  $1,670,000  as of  December  31, 2003 of the  remainder  was paid
against  the  principal  of this note and 40%, or  approximately  $928,000 as of
March 31,  2003 and  approximately  $1,113,000  as of  December  31,  2003,  was
distributed to the Partnership.  An additional $198,000 as of March 31, 2003 and
December 31, 2003 was received by the  Partnership for the repayment of advances
to Caroline Arms Limited  Partnership  which had previously been deemed unlikely
to be collected.  The funds received by the Partnership were used to pay certain
of its liabilities.  As of December 31, 2003, the Local Limited  Partnership had
been completely liquidated.

Harold House and San Juan Del Centro Limited  Partnerships both 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 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.  Both of the Local  Limited  Partnerships  are  actively
attempting to sell their respective net assets.

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  originally  invested  as a limited  partner  in Local  Limited
Partnerships which operated twenty-one rental housing  properties.  At March 31,
2004,  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 noncash in nature. As of March 31, 2004,
the  Partnership  had no  carrying  basis  in the two  remaining  Local  Limited
Partnerships  and therefore  reflected no results of operations for its share of
profits or losses from these Local Limited Partnerships.

The  Partnership  had a net loss of  approximately  $10,000 for the three months
ended March 31, 2004, compared to net income of approximately $1,255,000 for the
three months ended March 31, 2003. Net loss per unit of limited  partnership was
$0.56 for the three months ended March 31, 2004 compared to net income of $68.12
per limited  partnership  unit for the three months  ended March 31,  2003.  The
increase in net loss for the three months  ended March 31, 2004 is  attributable
to the recognition of approximately $1,206,000 of profits from the Local Limited
Partnerships  and interest  received on advances to Local  Limited  Partnerships
during the three months ended March 31, 2003.  Both amounts were a result of the
sale of the property owned by Caroline Arms Limited  Partnership as noted above.
The Partnership did not recognize  approximately  $38,000 of its allocated share
of losses from the remaining two Local Limited Partnerships for the three months
ended March 31, 2004,  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  $25,000  between  periods.  The
decrease  is  primarily  due  to  the  decrease  in  operating  expenses  at the
properties owned by the two remaining Local Limited Partnerships.

Recent Accounting Pronouncements

In January 2003,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Interpretation  No. 46 ("FIN 46"),  Consolidation of Variable Interest Entities.
FIN 46 requires the  consolidation of entities in which an enterprise  absorbs a
majority of the entity's  expected  losses,  receives a majority of the entity's
expected  residual  returns,  or both, as a result of ownership,  contractual or
other  financial  interests  in the  entity.  Prior to the  issuance  of FIN 46,
entities were generally  consolidated by an enterprise when it had a controlling
financial  interest  through  ownership  of a majority  voting  interest  in the
entity.  FIN 46 applied  immediately to variable interest entities created after
January 31, 2003, and with respect to variable interests held before February 1,
2003,  FIN 46 will  apply to  financial  statements  for  periods  ending  after
December 15, 2004.

The Partnership has not entered into any partnership  investments  subsequent to
January  31,  2003.  The  Partnership  is  in  the  process  of  evaluating  its
investments in unconsolidated  partnerships that may be deemed variable interest
entities under the provisions of FIN 46. The  Partnership has not yet determined
the anticipated  impact of adopting FIN 46 for its  partnership  agreements that
existed as of January 31, 2003. However, FIN 46 may require the consolidation of
the  assets,   liabilities  and  operations  of  certain  of  the  Partnership's
unconsolidated  partnership  investments.  Although  the  Partnership  does  not
believe  the full  adoption  of FIN 46 will  have an impact  on cash  flow,  the
Partnership cannot make any definitive  conclusion on the impact on net earnings
until it completes its evaluation,  including an evaluation of the Partnership's
maximum exposure to loss.

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 6      EXHIBITS AND REPORTS ON FORM 8-K

            a)    Exhibits

                  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.

                  Exhibit 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.

                  Exhibit  32.1,  Certification  Pursuant  to 18 U.S.C.  Section
                  1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002.

            b)    Reports on Form 8-K:

                  None filed during the quarter ended March 31, 2004.


<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/Thomas M. Herzog
                                          Thomas M. Herzog
                                          Senior Vice President and
                                          Chief Accounting Officer


                                    Date: May 13, 2004
<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 registrant as of, and for, the periods presented in this report;

4.    The  registrant'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 registrant
      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
            registrant,  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 registrant'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  registrant's  internal
            control  over   financial   reporting   that  occurred   during  the
            registrant's  most recent fiscal  quarter (the  registrant's  fourth
            fiscal  quarter in the case of an annual report) that has materially
            affected,   or  is  reasonably  likely  to  materially  affect,  the
            registrant's internal control over financial reporting; and

5.    The registrant's other certifying  officer(s) and I have disclosed,  based
      on  our  most  recent   evaluation  of  internal  control  over  financial
      reporting,  to the  registrant's  auditors and the audit  committee of the
      registrant'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  registrant'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  registrant's
            internal control over financial reporting.

Date:  May 13, 2004

                                    /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, Thomas M. Herzog, 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 registrant as of, and for, the periods presented in this report;

4.    The  registrant'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 registrant
      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
            registrant,  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 registrant'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  registrant's  internal
            control  over   financial   reporting   that  occurred   during  the
            registrant's  most recent fiscal  quarter (the  registrant's  fourth
            fiscal  quarter in the case of an annual report) that has materially
            affected,   or  is  reasonably  likely  to  materially  affect,  the
            registrant's internal control over financial reporting; and

5.    The registrant's other certifying  officer(s) and I have disclosed,  based
      on  our  most  recent   evaluation  of  internal  control  over  financial
      reporting,  to the  registrant's  auditors and the audit  committee of the
      registrant'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  registrant'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  registrant's
            internal control over financial reporting.

Date:  May 13, 2004

                                    /s/Thomas M. Herzog
                                    Thomas M. Herzog
                                    Senior Vice  President and Chief  Accounting
                                    Officer 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
March 31, 2004 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 Thomas M. Herzog, 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 13, 2004


                                           /s/Thomas M. Herzog
                                    Name:  Thomas M. Herzog
                                    Date:  May 13, 2004


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.