<PAGE>   1

                                   FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997

                         COMMISSION FILE NUMBER 0-14458


                  NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                        (A MARYLAND LIMITED PARTNERSHIP)
             (Exact name of registrant as specified in its charter)


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


                         8065 LEESBURG PIKE, SUITE 400
                             VIENNA, VIRGINIA 22182
                    (Address of principal executive offices)
                                   (Zip Code)


                                 (703) 394-2400
              (Registrant's telephone number, including area code)

                                 NOT APPLICABLE
              (Former name, former address and former fiscal year,
                         if changed since last report.)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes  X      No
    ----       ----




<PAGE>   2



PART 1 - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS

                  NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                        (A MARYLAND LIMITED PARTNERSHIP)
                        STATEMENTS OF FINANCIAL POSITION


<TABLE>
<CAPTION>
                                                                                    June 30,
                                                                                      1997          December 31,
                                                                                   (Unaudited)         1996       
                                                                                   -----------      ------------
                                                                                  
                                    ASSETS                                        
                                    ------                                        
<S>                                                                                <C>              <C>
Cash and cash equivalents                                                          $    34,087      $    37,396
Investments in and advances to Local Limited Partnerships (Note 2)                   4,281,604        4,241,127
                                                                                   -----------      -----------
                                                                                                     
                                                                                   $ 4,315,691      $ 4,278,523
                                                                                   ===========      ===========
                                                                                                     
                      LIABILITIES AND PARTNERS' DEFICIT                                              
                      ---------------------------------                                              
                                                                                                     
Liabilities:                                                                                         
   Deferred acquisition notes payable to General Partner                           $ 2,414,468      $ 2,414,468
   Accrued interest on deferred acquisition notes payable to                                         
     General Partner                                                                 2,938,711        2,817,988
   Administrative and reporting fee payable to General Partner (Note 3)              1,006,207        1,018,803
   Other accrued expenses                                                               19,500           39,445
                                                                                   -----------      -----------
                                                                                                     
                                                                                     6,378,886        6,290,704
                                                                                   -----------      -----------
                                                                                                     
Partners' deficit:                                                                                   
   General Partner -- The National Housing Partnership (NHP)                          (175,721)        (175,211)
   Original Limited Partner -- 1133 Fifteenth Street Two Associates                   (180,621)        (180,111)
   Other Limited Partners -- 18,300 investment units                                (1,706,853)      (1,656,859)
                                                                                   -----------      -----------
                                                                                                     
                                                                                    (2,063,195)      (2,012,181)
                                                                                   -----------      ----------- 
                                                                                                     
                                                                                   $ 4,315,691      $ 4,278,523
                                                                                   ===========      ===========
</TABLE>
        

                      See notes to financial statements.

                                     -1-


<PAGE>   3


                  NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                        (A MARYLAND LIMITED PARTNERSHIP)
                            STATEMENTS OF OPERATIONS
                                  (UNAUDITED)


<TABLE>
<CAPTION>
                                                                        Three Months Ended         Six Months Ended          
                                                                              June 30,                 June 30,            
                                                                      ----------------------      --------------------
                                                                          1997         1996        1997         1996
                                                                      ----------     -------     -------     --------
<S>                                                                     <C>        <C>          <C>           <C>        
REVENUES:                                                                                                         
   Share of income from Local Limited                                                                                   
     Partnerships                                                       $ 59,483   $ 68,992     $ 61,451      $150,349
   Distributions received in excess of investment                                                                       
     in Local Limited Partnerships                                       103,994     25,000      103,994        25,000
   Interest income                                                           441         69          773         1,612 
                                                                        --------   --------     --------      --------
                                                                                                                        
                                                                         163,918     94,061      166,218       176,961
                                                                        --------   --------     --------      -------- 
                                                                                                                        
COSTS AND EXPENSES:                                                                                                     
   Administrative and reporting fees to                                                                                 
     General Partner (Note 3)                                             34,312     34,312       68,624        68,624
   Interest on deferred acquisition notes                                                                               
     to General Partner                                                   60,361     60,361      120,723       120,723
   Interest on due to General Partner                                        -          766         -            1,519
   Other operating expenses                                               14,763     11,251       27,885        26,057
                                                                        --------   --------     --------      -------- 
                                                                                                                        
                                                                         109,436    106,690      217,232       216,923
                                                                        --------   --------     --------      -------- 
                                                                                                                        
NET PROFIT (LOSS)                                                       $ 54,482   $(12,629)    $(51,014)     $(39,962)
                                                                        ========   ========     ========      ========
                                                                                                                        
NET PROFIT (LOSS) ASSIGNABLE TO                                                                                         
  LIMITED PARTNERS                                                      $ 53,392   $(12,375)    $(49,994)     $(39,162)
                                                                        ========   ========     ========      ========
                                                                                                                        
NET PROFIT (LOSS) PER LIMITED                                                                                           
  PARTNERSHIP INTEREST                                                  $      3   $     (1)    $     (3)     $     (2)
                                                                        ========   ========     ========      ========
                                                                                                 
</TABLE>




                       See notes to financial statements.

                                      -2-
<PAGE>   4


                  NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                        (A MARYLAND LIMITED PARTNERSHIP)
                         STATEMENT OF PARTNERS' DEFICIT
                                  (UNAUDITED)



<TABLE>
<CAPTION>
                                         The National         1133
                                           Housing         Fifteenth          Other
                                         Partnership       Street Two        Limited
                                            (NHP)          Associates        Partners            Total
                                         -----------       ----------        --------            -----
<S>                                      <C>              <C>              <C>                <C>
Deficit at January 1, 1997               $(175,211)       $(180,111)       $(1,656,859)       $(2,012,181)
                                                                                              
Net loss -- six months ended                                                                  
  June 30, 1997                               (510)            (510)           (49,994)           (51,014)
                                         ---------        ---------        -----------        ----------- 
                                                                                              
Deficit at June 30, 1997                 $(175,721)       $(180,621)       $(1,706,853)       $(2,063,195)
                                         =========        =========        ===========        =========== 
                                                                                              
Percentage interest at June 30, 1997             1%               1%                98%               100%
                                         =========        =========        ===========        =========== 
                                               (A)              (B)              (C)
</TABLE>

(A)      General Partner
(B)      Original Limited Partner
(C)      Consists of 18,300 investment units of 0.0085% held by 1,297 investors



                      See notes to financial statements.


                                     -3-

<PAGE>   5


                  NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                        (A MARYLAND LIMITED PARTNERSHIP)
                            STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                       Six Months Ended June 30,       
                                                                ---------------------------------------
                                                                    1997                      1996    
                                                                ------------              ------------
<S>                                                               <C>                       <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Distributions from Local Limited Partnerships                   $ 20,974                 $   -
   Distributions received in excess of investment in
     Local Limited Partnerships                                     103,994                   25,000
   Payment of administrative and reporting fees to
     General Partner                                                (81,220)                    -
   Interest received                                                    773                    1,612
   Operating expenses paid                                          (47,830)                 (45,767)
                                                                   --------                 -------- 

   Net cash used in operating activities                             (3,309)                 (19,155)

CASH AND CASH EQUIVALENTS, BEGINNING OF
  PERIOD                                                             37,396                   30,173
                                                                   --------                 --------

CASH AND CASH EQUIVALENTS, END OF PERIOD                           $ 34,087                 $ 11,018
                                                                   ========                 ========

RECONCILIATION OF NET LOSS TO NET CASH
  USED IN OPERATING ACTIVITIES:
    Net loss                                                       $(51,014)                $(39,962)
                                                                   --------                 -------- 
    Adjustments to reconcile net loss to net cash used in
      operating activities:
         Distributions from Local Limited Partnerships               20,974                     -
         Share of income from Local Limited Partnerships            (61,451)                (150,349)
         Increase in accrued interest on deferred
           acquisition notes                                        120,723                  120,723
         Increase in accrued interest on due to General Partner       -                        1,519
         (Decrease) increase in administrative and reporting
           fees payable                                             (12,596)                  68,624
         Decrease in accrued expenses                               (19,945)                 (19,710)
                                                                   --------                 -------- 

         Total adjustments                                           47,705                   20,807
                                                                   --------                 --------

    Net cash used in operating activities                          $ (3,309)                $(19,155)
                                                                   ========                 ======== 
</TABLE>





                       See notes to financial statements.

                                      -4-
<PAGE>   6

                 NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                       (A MARYLAND LIMITED PARTNERSHIP)
                        NOTES TO FINANCIAL STATEMENTS



(1)      ACCOUNTING POLICIES

         ORGANIZATION

         National Housing Partnership Realty Fund Two (the "Partnership") is a
         limited partnership organized under the laws of the State of Maryland
         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").

         The General Partner raised capital for the Partnership by offering and
         selling to additional limited partners 18,300 investment units at a
         price of $1,000 per unit.  The Partnership acquired limited partnership
         interests of 94.5% (98% with respect to allocation of losses) in
         twenty-one Local Limited Partnerships, nineteen of which were
         organized to acquire and operate an existing rental housing project.
         The remaining two Local Limited Partnerships were formed to construct
         and operate rental housing projects.

         On June 3, 1997, Apartment Investment and Management Company, a
         Maryland corporation ("AIMCO" and, together with its subsidiaries and
         other controlled entities, the "AIMCO Group"), acquired all of the
         issued and outstanding capital stock of NHP Partners, Inc., a Delaware
         corporation ("NHP Partners"), and the AIMCO Group acquired all of the
         outstanding interests in NHP Partners Two Limited Partnership, a
         Delaware limited partnership ("NHP Partners Two").  The Acquisition was
         made pursuant to a Real Estate Acquisition Agreement, dated as of May
         22, 1997 (the "Agreement"), by and among AIMCO, AIMCO Properties,
         L.P., a Delaware limited partnership (the "Operating Partnership"),
         Demeter Holdings Corporation, a Massachusetts corporation ("Demeter"),
         Phemus Corporation, a Massachusetts corporation ("Phemus"), Capricorn
         Investors, L.P., a Delaware limited partnership ("Capricorn"), J.
         Roderick Heller, III and NHP Partners Two LLC, a Delaware limited
         liability company ("NHP Partners Two LLC").  NHP Partners owns all of
         the outstanding capital stock of the National Corporation for Housing
         Partnerships, a District of Columbia corporation ("NCHP"), which is
         the general partner of The National Housing Partnership, a District of
         Columbia limited partnership (the "NHP Partnership").  Together, NCHP
         and NHP Partners Two own all of the outstanding partnership interests
         in the NHP Partnership.  The NHP Partnership is the general partner of
         National Housing Partnership Realty Fund Two (a Maryland Limited
         Partnership) (the "Registrant").  As a result of these transactions,
         the AIMCO Group has acquired control of the general partner of the
         Registrant and, therefore, may be deemed to have acquired control of
         the Registrant.

         BASIS OF PRESENTATION

         The accompanying unaudited interim financial statements reflect all
         adjustments which are, in the opinion of management, necessary to a
         fair statement of the financial condition and results of operations
         for the interim periods presented.  All such adjustments are of a
         normal and recurring nature.

         While the General Partner believes that the disclosures presented are
         adequate to make the information not misleading, it is suggested that
         these financial statements be read in conjunction with the financial
         statements and notes included in NHP Realty Fund Two's Annual Report
         filed in Form 10-K for the year ended December 31, 1996.


                                     -5-


<PAGE>   7
                  NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                        (A MARYLAND LIMITED PARTNERSHIP)
                         NOTES TO FINANCIAL STATEMENTS



(2)      INVESTMENTS IN AND ADVANCES TO LOCAL LIMITED PARTNERSHIPS

         The Partnership owns a 94.5% limited partnership interest (98% with
         respect to allocation of losses) in twenty-one Local Limited
         Partnerships.  Because the Partnership, as a limited partner, does not
         exercise control over the activities of the Local Limited Partnerships
         in accordance with the partnership agreements, the investments in
         Local Limited Partnerships are accounted for using the equity method.
         Thus, the investments (and the advances made to the Local Limited
         Partnerships as discussed below) are carried at cost less the
         Partnership's share of the Local Limited Partnerships' losses and
         distributions.  However, because 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 investments, reduced for its share of losses
         and cash distributions, reaches zero in each of the individual Local
         Limited Partnerships.  As of June 30, 1997 and December 31, 1996,
         investments in nineteen of the twenty-one Local Limited Partnerships
         had been reduced to zero.  As a result, the Partnership did not
         recognize $764,184 and $724,472 of losses from these nineteen Local
         Limited Partnerships during the six months ended June 30, 1997 and
         1996, respectively. As of June 30, 1997 and December 31, 1996, the
         Partnership has not recognized a total of $21,729,453 and $20,965,269,
         respectively, of its allocated share of cumulative losses from the
         Local Limited Partnerships in which its investment is zero.

         Advances made by the Partnership to the individual Local Limited
         Partnerships are considered part of the Partnership's investment in
         Local Limited Partnerships.  When advances are made, they are charged
         to operations as a loss on investment in the Local Limited Partnership
         using previously unrecognized cumulative losses.  As discussed above,
         due to the cumulative losses incurred by nineteen of the Local Limited
         Partnerships, the aggregate balance of investments in and advances to
         Local Limited Partnerships, for these nineteen Local Limited
         Partnerships, has been reduced to zero at June 30, 1997 and December
         31, 1996.  To the extent these advances are repaid by the Local Limited
         Partnerships in the future, the repayments will be credited as
         distributions and repayments received in excess of investment in Local
         Limited Partnerships.  These advances are carried as a payable to the
         Partnership by the Local Limited Partnerships.

         No working capital advances or repayments were made during the six
         months ended June 30, 1997 and 1996.  The combined amount carried as
         due to the Partnership by the Local Limited Partnerships was $592,927
         at June 30, 1997.

         The following are combined statements of operations for the three and
         six months ended June 30, 1997 and 1996, respectively, of the Local
         Limited Partnerships in which the Partnership has invested.  The
         statements are compiled from financial statements of the Local Limited
         Partnerships, prepared on the accrual basis of accounting, as supplied
         by the management agents of the projects, and are unaudited.





                                      -6-
<PAGE>   8

                 NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                       (A MARYLAND LIMITED PARTNERSHIP)
                        NOTES TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                   COMBINED STATEMENTS OF OPERATIONS
                                   ---------------------------------

                                            Three Months Ended                  Six Months Ended
                                                 June 30,                           June 30,          
                                        -----------------------------    --------------------------------
                                            1997             1996             1997             1996     
                                        ------------     ------------    -------------        -----------
<S>                                      <C>              <C>               <C>                <C>
Rental income                            $3,652,344       $3,583,598       $7,272,939          $7,248,554
Other income                                 93,088          134,582          247,948             228,155
                                         ----------       ----------       ----------          ---------- 

   Total income                           3,745,432        3,718,180        7,520,887           7,476,709
                                         ----------       ----------       ----------          ----------

Operating expenses                        2,406,455        2,294,438        4,859,367           4,717,923
Interest, taxes and insurance             1,064,076        1,065,344        2,158,734           2,157,254
Depreciation                                608,414          604,183        1,217,390           1,177,573
                                         ----------       ----------       ----------          ----------

   Total expenses                         4,078,945        3,963,965        8,235,491           8,052,750
                                         ----------       ----------       ----------          ----------

Net loss                                 $ (333,513)      $ (245,785)      $ (714,604)         $ (576,041)
                                         ==========       ==========       ==========          ==========  

National Housing Partnership
  Realty Fund Two share of losses        $ (327,685)      $ (245,809)      $ (702,733)         $ (574,123)
                                         ==========       ==========       ==========          ========== 
</TABLE>


(3)      TRANSACTIONS WITH THE GENERAL PARTNER

         During the six month periods ended June 30, 1997 and 1996, the
         Partnership accrued administrative and reporting fees payable to the
         General Partner in the amount of $68,624 for services provided to the
         Partnership.  The Partnership paid the General Partner $81,220 for
         these fees during the six months ended June 30, 1997.  The Partnership
         did not make any payments to the General Partner for these fees during
         the six months ended June 30, 1996. The amount of fees due to the
         General Partner by the Partnership was $1,006,207 and $1,018,803 at
         June 30, 1997 and December 31, 1996, respectively.

         The accrued administrative and reporting fees payable to the General
         Partner will be paid only as cash flow permits or from the sale or
         refinancing of one or more of the underlying properties of the Local
         Limited Partnerships.



                                     -7-

<PAGE>   9
ITEM 2 -     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
             RESULTS OF OPERATIONS


                  NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                        (A MARYLAND LIMITED PARTNERSHIP)


The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements in certain circumstances. Certain information
included in this Report and other Partnership filings (collectively "SEC
Filings") under the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended (as well as information communicated orally or
in writing between the dates of such SEC Filings) contains or may contain
information that is forward looking, including statements regarding 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 factors including national and local economic conditions, the general level
of interest rates, terms of governmental regulations that affect the
Partnership and interpretations of those regulations, the competitive
environment in which the properties owned by the Local Limited Partnerships
operate, the availability of working capital and dispositions of properties
owned by the Partnership.

LIQUIDITY AND CAPITAL RESOURCES

The properties in which the Partnership has invested, through its investments
in the Local Limited Partnerships, receive one or more forms of assistance from
Federal, state or local governments or agencies.  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,
however, are not expected to impact the Partnership's ability to meet its cash
obligations.

For the past several years, various proposals have been advanced by the United
States Department of Housing and Urban Development ("HUD"), Congress and others
proposing the restructuring of HUD's rental assistance programs under Section 8
of the United States Housing Act of 1937 ("Section 8"), under which 2,289
units, 84 percent of the total units owned by the properties in which the
Partnership has invested, receive rental subsidies.  One such proposal has
recently been introduced in the U.S. Senate, and two such proposals have
recently been introduced in the U.S. House of Representatives.  Three such
proposals are now pending before Congress.  These proposals generally seek to
lower subsidized rents to market levels, thereby reducing rent subsidies, and
to lower required debt service costs as needed to ensure financial viability at
the reduced rents and rent subsidies, but vary greatly as to how that result is
to be achieved.  Some proposals include a phase-out of project-based subsidies
on a property-by-property basis upon expiration of a property's Housing
Assistance Payments Contract ("HAP Contract"), with a conversion to a
tenant-based subsidy.  Under a tenant-based system, rent vouchers would be
issued to qualified tenants who then could elect to reside at a property of
their choice, provided the tenant has the financial ability to pay the
difference between the selected property's monthly rent and the value of the
vouchers, which would be established based on HUD's regulated fair market rent
for that geographical area. Congress has not yet accepted any of these
restructuring proposals.  With respect to HAP Contracts expiring on or before
September 30, 1997, Congress has elected to renew expiring HAP Contracts for
one year terms, generally at existing rents.  Congress is now considering what
action to take with respect to HAP Contracts expiring October 1, 1997 through
September 30, 1998.  While the Partnership does not believe that the proposed
changes would result in a significant number of tenants relocating from
properties owned by the Local Limited Partnerships, there can be no assurance
that the proposed changes would not significantly affect the operations of the
properties of the Local Limited Partnerships.  Furthermore, there can be no
assurance that changes in federal subsidies will not be more restrictive than
those currently proposed or that other changes in policy will not occur.  Any
such changes could have an adverse effect on the operation of the Partnership.

Net cash used in operations for the six months ended June 30, 1997 was $3,309
as compared to $19,155 for the six months ended June 30, 1996. The decrease in
cash used in operations resulted from an increase in distributions and in
distributions received in excess of investment in and advances to Local Limited
Partnerships, partially offset by an 




                                      -8-
<PAGE>   10
                 NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                       (A MARYLAND LIMITED PARTNERSHIP)
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                          AND RESULTS OF OPERATIONS


increase in payment of administrative and reporting fees to the General 
Partner during the six months ended June 30, 1997, compared to the six months 
ended June 30, 1996.

No working capital advances or repayments were made to the Local Limited
Partnerships during the six months ended June 30, 1997 and 1996.  The combined
amount carried as due to the Partnership by the Local Limited Partnerships was
$592,927 at June 30, 1997.  Future advances made to the nineteen Local Limited
Partnerships' properties whose investments have been reduced to zero, will be
charged to operations; likewise, future repayments from these properties will
be credited to operations.

Distributions received from 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, as of June 30, 1997,
investments in nineteen Local Limited Partnerships had been reduced to zero.
For these investments, cash distributions received are recorded in income as
distributions received in excess of investment in Local Limited Partnerships.
For those investments not reduced to zero, distributions received are recorded
as distributions from Local Limited Partnerships.  Cash distributions of
$124,968 and $25,000 were received from six and one Local Limited Partnerships
during the six months ended June 30, 1997 and 1996, respectively.  The receipt
of distributions in future quarters is dependent upon the operations of the
underlying properties of the Local Limited Partnerships.

Cash and cash equivalents amounted to $34,087 at June 30, 1997.  The ability of
the Partnership to meet its on-going cash requirements, in excess of cash on
hand at June 30, 1997, is dependent upon the future receipt of distributions
from the Local Limited Partnerships or proceeds from sales or refinancings of
one or more of the underlying properties of the Local Limited Partnerships.
Cash on hand at June 30, 1997, plus any distributions from the underlying
operations of the combined Local Limited Partnerships is expected to adequately
fund the operations of the Partnership in the current year.  However, there can
be no assurance that future distributions will be adequate to fund the
operations beyond the current year.

The Partnership currently owes the General Partner $1,006,207 for
administrative and reporting services performed.  The payment of these unpaid
administrative and reporting fees will most likely result from the sale or
refinancing of the underlying properties of the Local Limited Partnerships,
rather than through recurring operations.

Nineteen of the Local Limited Partnerships in which the Partnership has
invested carry deferred acquisition notes due to the original owners of the
Properties.  These notes are secured by both the Partnership's and NHP's
interests in the Local Limited Partnerships and, as discussed below, mature
between 1996 and 1999.  In the event of a default on the notes, the noteholders
would be able to assume NHP's and the Partnership's interests in the Local
Limited Partnerships.

Although the West Oak Village note finally matured on November 30, 1996, the
General Partner is continuing to negotiate with the note holders to extend the
maturity date of the note to protect the interests of the Partnership.  In
addition, the deferred acquisition notes of eight of the other Local Limited
Partnerships mature during the three months ending December 31, 1997.  Due to
weak rental market conditions where some of the Properties are located, the
General Partner believes the amount due on the deferred acquisition notes may
likely exceed the value to be obtained through sale or refinancing
opportunities.  The General Partner intends to continue negotiations with the
note holders to either extend the maturity date of the notes and/or to
structure an arrangement under which both the note holders and the partners can
receive a financial benefit by having the eligible Properties participate in
sale or refinancing opportunities.  Should no agreement be reached and the notes
mature, absent of sale or refinancing which produces sufficient funds to repay
the notes in full, a default would occur on the notes.  Such default could lead
to a foreclosure by the noteholder of the security underlying the notes such
that the Partnership may lose its interest in these Local Limited Partnerships.


                                     -9-


<PAGE>   11
                  NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                        (A MARYLAND LIMITED PARTNERSHIP)
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS



Should the Partnership lose its interest in a Local Limited Partnership,
partners in the Partnership may incur adverse tax consequences.  The impact of
the tax consequence is dependent upon each partner's individual tax situation.

All other notes have final maturity dates in 1999.

RESULTS OF OPERATIONS

The Partnership has invested as a limited partner in Local Limited Partnerships
which operate twenty-one rental housing properties.  In prior years, results of
operations of NHP Realty Fund Two were significantly impacted by the
Partnership's share of the losses of the Local Limited Partnerships.  These
losses included depreciation and accrued deferred acquisition note interest
expense which are noncash in nature.  Nineteen of the twenty-one investments in
Local Limited Partnerships have been reduced to zero.  As a result, the
Partnership's operations are no longer being affected by its share of the
operations from these nineteen partnerships.  The Partnership has recorded its
share of income in the remaining two Local Limited Partnerships which amounted
to $61,451 and $150,349 for the six months ended June 30, 1997 and 1996,
respectively.

The Partnership's net loss increased to $51,014 for the six months ended June
30, 1997 from a net loss of $39,962 for the six months ended June 30, 1996.  Net
loss per unit of limited partnership increased from $2 to $3 for the 18,300
units outstanding throughout both periods.  The increase in net loss was
primarily due to a decrease in the Partnership's share of income from the Local
Limited Partnerships, partially offset by an increase in distributions received
in excess of investment in and advances to Local Limited Partnerships.  The
Partnership did not recognize $764,184 of its allocated share of losses from
nineteen Local Limited Partnerships for the six months ended June 30, 1997, 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 $128,610 between periods, primarily due to an increase in 
operating expenses and depreciation, partially offset by an increase in rental 
income.

PART II - OTHER INFORMATION

ITEM 6  -  EXHIBITS AND REPORTS ON FORM 8-K

         (a)     Exhibits

                 Exhibit No.

                 2.1      Real Estate Agreement, dated as of May 22, 1997, by
                          and among Apartment Investment and Management
                          Company, AIMCO Properties, L.P., Demeter Holdings
                          Corporation, Phemus Corporation, Capricorn Investors,
                          L.P., J. Roderick Heller, III and NHP Partners Two
                          LLC (Exhibit 2.1 to the Partnership's report on Form
                          8-K, dated June 3, 1997, is incorporated herein by
                          reference).

         (b)     Report on Form 8-K

                 The Partnership filed a report on Form 8-K, dated June 3,
                 1997, filed with the commission on June 17, 1997, reporting
                 events under Item 1, Changes in Control of the Registrant.  The
                 Partnership reported that on June 3, 1997, Apartment
                 Investment and Management Company, a Maryland corporation
                 ("AIMCO" and, together with its subsidiaries and other
                 controlled entities, the "AIMCO





                                      -10-
<PAGE>   12
                 NATIONAL HOUSING PARTNERSHIP REALTY FUND TWO
                       (A MARYLAND LIMITED PARTNERSHIP)
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                          AND RESULTS OF OPERATIONS


                 Group"), acquired all of the issued and outstanding capital 
                 stock of NHP Partners, Inc., a Delaware corporation ("NHP 
                 Partners"), and the AIMCO Group acquired all of the 
                 outstanding interests in NHP Partners Two Limited Partnership, 
                 a Delaware limited partnership ("NHP Partners Two").  The 
                 Acquisition was made pursuant to a Real Estate Acquisition 
                 Agreement, dated as of May 22, 1997 (the "Agreement"), by and 
                 among AIMCO, AIMCO Properties, L.P., a Delaware limited 
                 partnership (the "Operating Partnership"), Demeter Holdings 
                 Corporation, a Massachusetts corporation ("Demeter"), Phemus 
                 Corporation, a Massachusetts corporation ("Phemus"),  
                 Capricorn Investors, L.P., a Delaware limited partnership 
                 ("Capricorn"), J. Roderick Heller, III and NHP Partners Two 
                 LLC, a Delaware limited liability company ("NHP Partners Two 
                 LLC").  NHP Partners owns all of the outstanding capital 
                 stock of the National Corporation for Housing Partnerships, a 
                 District of Columbia corporation ("NCHP"), which is the 
                 general partner of The National Housing Partnership, a 
                 District of Columbia limited partnership (the "NHP 
                 Partnership").  Together, NCHP and NHP Partners Two own all 
                 of the outstanding partnership interests in the NHP 
                 Partnership.  The NHP Partnership is the general partner of
                 National Housing Partnership Realty Fund Two (a Maryland
                 Limited Partnership) (the "Registrant").  As a result of these
                 transactions, the AIMCO Group has acquired control of the
                 general partner of the Registrant and, therefore, may be
                 deemed to have acquired control of the Registrant. 









                                     -11-


<PAGE>   13
  
                                   SIGNATURES



         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly 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
                         
                         
                         
August 12, 1997          By:                       /s/            
---------------               -----------------------------------------------
                              Jeffrey J. Ochs
                              As Vice President and Chief Accounting Officer








                                     -12-