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, 2003


[ ] 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, 2003


ASSETS
   Cash and cash equivalents                                              $ 378
   Investments in and advances to Local Limited
      Partnerships (Note 2)                                                 148

                                                                          $ 526
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

Liabilities
   Accrued expenses                                                        $ 11
   Administrative and reporting fees payable to
      General Partner (Note 3)                                              681

Partners' capital (deficit)
   General Partner -- The National Housing
      Partnership (NHP)                                       $ 641
   Original Limited Partner -- 1133 Fifteenth
      Street Two Associates                                     (169)
   Other Limited Partners -- 17,723 investment
      units                                                     (638)      (166)

                                                                          $ 526

                   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
                                                                       March 31,
                                                                   2003         2002
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                 4            5
  Other operating expenses                                            15           13
  Interest on advances from General Partner                           --            1
                                                                      19           19

NET INCOME (LOSS)                                                 $1,255        $ (19)

ALLOCATION OF NET INCOME (LOSS):
  General Partner - NHP                                            $ 13         $ --
  Original Limited Partner - 1133 Fifteenth Street Two
    Associates                                                        13           --
  Other limited partners                                           1,229          (19)

                                                                  $1,255        $ (19)

NET INCOME (LOSS) PER LIMITED PARTNERSHIP INTEREST                $68.12       $(1.05)

                   See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

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

<TABLE>
<CAPTION>

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

Partners' capital (deficit) at
<S>        <C> <C>                     <C>          <C>          <C>           <C>
  December 31, 2002                    $ 628        $ (182)      $(1,867)      $(1,421)

Net income - three months ended
  March 31, 2003                           13           13         1,229         1,255

Partners' capital (deficit) at
  March 31, 2003                       $ 641        $ (169)      $ (638)       $ (166)

Percentage interest at
  March 31, 2003                          1%           1%           98%         100%
                                          (A)          (B)           (C)


(A)   General Partner
(B)   Original Limited Partner
(C)   Consists  of  17,723  investment  units at March  31,  2003 and  18,043 at
      December  31, 2002 (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,
                                                                      2003             2002
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)            (43)
  Payment of interest on advances payable to General Partner              (1)             --
        Net cash used in operating activities                           (667)            (43)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Distributions from Local Limited Partnerships                          928              43
  Repayment of advances to Local Limited Partnerships                    130              --
        Net cash provided by investing activities                      1,058              43

CASH FLOWS FROM FINANCING ACTIVITIES:
  Advances from General Partner                                           60              38
  Payment on advances from General Partner                               (73)             --
        Net cash (used in) provided by financing activities              (13)             38

NET INCREASE IN CASH AND CASH EQUIVALENTS                                378              38

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                          --               5

CASH AND CASH EQUIVALENTS AT END OF PERIOD                            $ 378            $ 43

RECONCILIATION OF NET INCOME (LOSS) TO NET CASH USED IN
  OPERATING ACTIVITIES:
   Net income (loss)                                                 $ 1,255          $ (19)
   Adjustments to reconcile net income (loss) to net cash
     used in operating activities:
      Share of profits from Local Limited Partnerships                (1,206)             --
      Changes in operating assets and liabilities:
        (Decrease) increase in administrative and reporting
          fees payable                                                  (677)              5
        Decrease in other accrued expenses                               (38)            (30)
       (Decrease) increase in accrued interest on advances
          from General Partner                                            (1)              1
        Total adjustments                                             (1,922)            (24)

Net cash used in operating activities                                $ (667)          $ (43)

                   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, 2003 are not  necessarily
indicative of the results that may be expected for the year ending  December 31,
2003.  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, 2002.

Recent Accounting Pronouncements

In January 2003, the Financial  Accounting  Standards Board ("FASB") issued FASB
Interpretation No. 46 ("FIN46"), Consolidation of Variable Interest Entities, an
Interpretation  of ARB No. 51. FIN46 requires certain variable interest entities
to be  consolidated  by the  primary  beneficiary  of the  entity if the  equity
investors  in the  entity  do not  have  the  characteristics  of a  controlling
financial  interest or do not have  sufficient  equity at risk for the entity to
finance its activities  without additional  subordinated  financial support from
other parties. FIN46 is effective for all new variable interest entities created
or acquired after January 31, 2003. For variable  interest  entities  created or
acquired  prior to February 1, 2003, the provisions of FIN46 must be applied for
the  first  interim  or  annual  period  beginning  after  June  15,  2003.  The
Partnership  is currently  evaluating  the effect,  if any, that the adoption of
FIN46 will have on its results of operations and financial condition.

(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, 2003, 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 three
months  ended  March  31,  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 of the remainder was
paid against the  principal of this note and 40% or  approximately  $928,000 was
distributed  to the  Partnership.  An  additional  $198,000  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
and were treated as an additional  investment in the Local Limited  Partnership.
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.

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  $62,000
and $46,000 of losses from two and three Local Limited  Partnerships  during the
three  months  ended  March 31,  2003 and 2002,  respectively.  During 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.  For the three months ended
March 31, 2002,  there were no profits  offset  against  prior years' losses not
taken. As of March 31, 2003, the  Partnership  has not recognized  approximately
$1,780,000  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, 2003 and
2002.

Advances  to the  Local  Limited  Partnership  remain  due  and  payable  to the
Partnership.  Interest is  calculated  at the prime rate plus 2% (6.25% at March
31,  2003).  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.  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  and  treated as an  additional  advance  to the Local  Limited
Partnership.  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, 2003.

The  following  are unaudited  combined  statements of operations  for the three
months ended March 31, 2003 and 2002 of the Local Limited  Partnerships in which
the  Partnership  has  invested.  The  statements  are compiled  from  financial
statements of the Local Limited  Partnerships  which are prepared on the accrual
basis of accounting  and supplied by the managing  agents of the  projects.  The
information  for the three  months  ended  March 31,  2002 has been  restated to
reflect the operations of the Local Limited  Partnerships which were either sold
or foreclosed as discontinued operations.

                        COMBINED STATEMENTS OF OPERATIONS

                                                  Three Months Ended
                                                      March 31,
                                                 2003             2002
                                                    (in thousands)
Rental income                                    $ 320           $ 316
Other income                                        77               30
   Total income                                    397              346

Operating expenses                                 240              201
Interest, taxes and insurance                      118               72
Depreciation                                       103              101
   Total expense                                   461              374

Net loss before discontinued operations            (64)             (28)
Loss from discontinued operations                  (27)             (19)
Gain on sale of discontinued operations            202               --
Gain on forgiveness of debt of
  discontinued operations                        2,754               --
Net income (loss)                               $2,865           $ (47)

National Housing Partnership Realty
  Fund Two share of net income (loss)           $2,705           $ (46)

(3) TRANSACTIONS WITH THE GENERAL PARTNER

During the three month  periods ended March 31, 2003 and 2002,  the  Partnership
accrued  administrative and reporting fees payable to the General Partner in the
amount of approximately $4,000 and $5,000,  respectively,  for services provided
to the  Partnership.  The  amount  of fees  due to the  General  Partner  by the
Partnership  was   approximately   $681,000  at  March  31,  2003.  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.

The General Partner advanced the Partnership  approximately  $60,000 and $38,000
during the three months ended March 31, 2003 and 2002, respectively.  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.  There were no  repayments  made during the three months ended
March 31, 2002.  Interest is charged on borrowings at the Chase  Manhattan  Bank
prime  interest  rate plus 2% and  amounted  to less than  $1,000  for the three
months ended March 31, 2003 and approximately  $1,000 for the three months ended
March 31, 2002.  There were no advances or accrued  interest owed to the General
Partner at March 31, 2003.

(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 18,043 units.

(5) 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.

(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
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 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.  The discussions of the  Registrant's
business  and  results  of  operations,   including  forward-looking  statements
pertaining to such matters,  do not take into account the effects of any changes
to the  Registrant's  business  and results of  operations.  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; 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,  2003,  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. 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
two of the three remaining Local Limited  Partnerships  had been reduced to zero
as of March 31, 2003. 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.  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  $378,000  and $43,000 at
March  31,  2003 and 2002,  respectively.  Cash and cash  equivalents  increased
approximately $378,000 from December 31, 2002 due to approximately $1,058,000 of
cash provided by investing activities partially offset by approximately $667,000
and $13,000 of cash used in operating  and financing  activities,  respectively.
Cash provided by investing activities  consisted of distributions  received from
Local  Limited  Partnerships  and the  repayment  of advances  to Local  Limited
Partnerships.  Cash  used in  financing  activities  consisted  of  payments  on
advances from the General Partner partially offset by advances received from the
General  Partner.  Cash used in  operating  activities  consisted  of payment of
administrative and reporting fees to the General Partner, operating expenses and
interest on advances from the General Partner partially offset by the receipt of
interest  on  advances  to  Local   Limited   Partnerships   previously   deemed
uncollectable.  The  ability  of the  Partnership  to  meet  its  on-going  cash
requirements  in excess of cash on hand at March 31, 2003 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 three months ended March 31, 2003
approximately  $60,000  of working  capital  advances  were made by the  General
Partner to the  Partnership.  The Partnership  repaid advances of  approximately
$73,000 during the three months ended March 31, 2003.  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  $681,000 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, 2002.

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  of the  remainder  was paid
against the  principal  of this note and 40%,  or  approximately  $928,000,  was
distributed  to the  Partnership.  An  additional  $198,000  was received by the
Partnership  for the repayment of advances to Caroline Arms Limited  Partnership
which had previously been deemed unlikely to be collected and were treated as an
additional  investment in the Local Limited  Partnership.  The funds received by
the Partnership were used to pay certain of its liabilities.

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  invested as a limited  partner in Local  Limited  Partnerships
which  operated  twenty-one  rental housing  properties.  At March 31, 2003, 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 March 31, 2003, the  Partnership had
no carrying basis in two of the remaining three Local Limited  Partnerships  and
therefore  reflected no results of operations for its share of profits or losses
from these Local Limited  Partnerships.  The Partnership has a carrying value of
approximately  $148,000 in one Local Limited Partnership,  Caroline Arms Limited
Partnership,  at March 31, 2003. It is anticipated  that this investment will be
received  during  2003 upon the  final  liquidation  of  Caroline  Arms  Limited
Partnership in 2003.

The Partnership had net income of approximately  $1,255,000 for the three months
ended March 31, 2003,  compared to a net loss of  approximately  $19,000 for the
three months ended March 31,  2002.  Net income per unit of limited  partnership
was $68.12 for the three months  ended March 31, 2003  compared to a net loss of
$1.05 per limited  partnership  unit for the three  months ended March 31, 2002.
The  increase  in net  income  for the three  months  ended  March  31,  2003 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.  Both amounts  were a result of the sale of the property  owned by
Caroline Arms Limited  Partnership  as noted above.  The profits  recognized are
comprised  of the  Partnership's  share of the profits of Caroline  Arms Limited
Partnership of approximately  $2,767,000  offset against prior years' net losses
not  taken  of  approximately  $1,561,000.  The  Partnership  did not  recognize
approximately  $62,000 of its  allocated  share of losses from two Local Limited
Partnerships for the three months ended March 31, 2003, as the Partnership's net
carrying basis in these Local Limited Partnerships had been reduced to zero. The
Partnership's  share of  losses  from the  Local  Limited  Partnerships,  if not
limited to its investment  account balance,  would have increased  approximately
$15,000  between  periods.  The  increase is primarily  due to the  increases 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 FASB
Interpretation No. 46 ("FIN46"), Consolidation of Variable Interest Entities, an
Interpretation  of ARB No. 51. FIN46 requires certain variable interest entities
to be  consolidated  by the  primary  beneficiary  of the  entity if the  equity
investors  in the  entity  do not  have  the  characteristics  of a  controlling
financial  interest or do not have  sufficient  equity at risk for the entity to
finance its activities  without additional  subordinated  financial support from
other parties. FIN46 is effective for all new variable interest entities created
or acquired after January 31, 2003. For variable  interest  entities  created or
acquired  prior to February 1, 2003, the provisions of FIN46 must be applied for
the  first  interim  or  annual  period  beginning  after  June  15,  2003.  The
Partnership  is currently  evaluating  the effect,  if any, that the adoption of
FIN46 will have on its results of operations and financial condition.

ITEM 3.     CONTROLS AND PROCEDURES

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,  within 90 days of the
filing  date  of this  quarterly  report,  evaluated  the  effectiveness  of the
Partnership's  disclosure  controls and  procedures  (as defined in Exchange Act
Rules 13a-14(c) and 15d-14(c)) and have determined that such disclosure controls
and  procedures  are  adequate.  There have been no  significant  changes in the
Partnership's  internal  controls or in other  factors that could  significantly
affect the  Partnership's  internal  controls since the date of evaluation.  The
Partnership does not believe any significant deficiencies or material weaknesses
exist in the Partnership's internal controls. Accordingly, no corrective actions
have been taken.


<PAGE>


                           PART II - OTHER INFORMATION



ITEM 6      EXHIBITS AND REPORTS ON FORM 8-K

            a)    Exhibits

                  Exhibit 99, 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, 2003.


<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: May 14, 2003



<PAGE>

                                  CERTIFICATION


I, Patrick J. Foye, 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  quarterly  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 quarterly
report;


3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  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 quarterly report;


4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


      a)  Designed  such  disclosure  controls  and  procedures  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 quarterly report is
      being prepared;


      b) Evaluated the effectiveness of the registrant's disclosure controls and
      procedures  as of a date  within 90 days prior to the filing  date of this
      quarterly report (the "Evaluation Date"); and


      c)  Presented  in  this  quarterly   report  our  conclusions   about  the
      effectiveness  of the  disclosure  controls  and  procedures  based on our
      evaluation as of the Evaluation Date;


5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):


      a) All  significant  deficiencies  in the design or  operation of internal
      controls which could adversely affect the registrant's  ability to record,
      process,  summarize and report  financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and


      b) Any fraud,  whether or not material,  that involves management or other
      employees  who  have  a  significant  role  in the  registrant's  internal
      controls; and


6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:  May 14, 2003

                                   /s/Patrick J. Foye
                                   Patrick J. Foye
                                   President of National Corporation for Housing
                                   Partnerships, equivalent of the chief
                                   executive officer of the Partnership

<PAGE>

                                  CERTIFICATION


I, Paul J. McAuliffe, 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  quarterly  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 quarterly
report;


3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  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 quarterly report;


4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


      a)  Designed  such  disclosure  controls  and  procedures  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 quarterly report is
      being prepared;


      b) Evaluated the effectiveness of the registrant's disclosure controls and
      procedures  as of a date  within 90 days prior to the filing  date of this
      quarterly report (the "Evaluation Date"); and


      c)  Presented  in  this  quarterly   report  our  conclusions   about  the
      effectiveness  of the  disclosure  controls  and  procedures  based on our
      evaluation as of the Evaluation Date;


5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):


      a) All  significant  deficiencies  in the design or  operation of internal
      controls which could adversely affect the registrant's  ability to record,
      process,  summarize and report  financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and


      b) Any fraud,  whether or not material,  that involves management or other
      employees  who  have  a  significant  role  in the  registrant's  internal
      controls; and


6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:  May 14, 2003

                                    /s/Paul J. McAuliffe
                                    Paul J. McAuliffe
                                    Executive Vice President and Chief Financial
                                    Officer of National  Corporation for Housing
                                    Partnerships,   equivalent   of  the   chief
                                    financial officer of the Partnership


<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 March 31,
2003 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:  May 14, 2003


                                           /s/Paul J. McAuliffe
                                    Name:  Paul J. McAuliffe
                                    Date:  May 14, 2003


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.