UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



(Mark One)

(X)   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended December 31, 2008

or

( )   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        033-14852-01



AMERICAN AFFORDABLE HOUSING II LIMITED PARTNERSHIP(Exact name of registrant as specified in its charter)



|Massachusetts                     | 04-2992309         
|--------------------------------- | -------------------
|(State or other jurisdiction      | (I.R.S. Employer   
|of incorporation or organization) | Identification No.)

One Boston Place, Suite 2100, Boston, Massachusetts  02108(Address of principal executive offices)           (Zip Code)

(617) 624-8900

(Registrant's telephone number, including area code)





Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

|Yes  | No ý
|----- | ----



Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

|Yes  | No ý
|----- | ----



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 ý | No 
|----- | ----

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act  (check one):

|Large accelerated filer  | Accelerated filer         
|------------------------- | ---------------------------
|Non-accelerated filer    | Smaller reporting company ý



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

|Yes  | No ý
|----- | ----











AMERICAN AFFORDABLE HOUSING II LIMITED PARTNESHIP



QUARTERLY REPORT ON FORM 10-QFOR THE QUARTER ENDED DECEMBER 31, 2008



TABLE OF CONTENTS

|PART I - FINANCIAL INFORMATION |                                                                                              
|------------------------------ | ---------------------------------------------------------------------------------------------
|                               |                                                                                              
|                               | Item 1. Financial Statements                                                                 
|                               |                                                                                              
|                               |                                                                                              
|                               |                                                                                              
|                               |                                                                                              
|                               |                                                                                              
|                               |                                                                                              
|                               |                                                                                              
|                               | Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
|                               |                                                                                              
|                               | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                               |                                                                                              
|                               | Item 4T. Controls and Procedures                                                             
|                               |                                                                                              
|PART II - OTHER INFORMATION    |                                                                                              
|                               |                                                                                              
|                               | Item 1. Legal Proceedings                                                                    
|                               |                                                                                              
|                               | Item 1A. Risk Factors                                                                        
|                               |                                                                                              
|                               | Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                          
|                               |                                                                                              
|                               | Item 3. Defaults Upon Senior Securities                                                      
|                               |                                                                                              
|                               | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                               |                                                                                              
|                               | Item 5. Other Information                                                                    
|                               |                                                                                              
|                               | Item 6. Exhibits                                                                             
|                               |                                                                                              
|                               | Signatures                                                                                   
|                               |                                                                                              
|                               |                                                                                              











American Affordable Housing II Limited PartnershipBALANCE SHEETS



|                                  | December 31,
2008(Unaudited)                                                                                        | March 31,
2008(Audited)
|--------------------------------- | ------------------------------------------------------------------------------------------------------------------- | -----------------------
|                                  |                                                                                                                     |                        
|ASSETS                           
|                                  |                                                                                                                     |                        
|Cash and cash equivalents         | $30,450                                                                                                             | $51,354                
|                                  |                                                                                                                     |                        
|                                  | $30,450                                                                                                             | $51,354                
|                                  |                                                                                                                     |                        
|                                 
|LIABILITIES AND PARTNERS' DEFICIT
|                                  |                                                                                                                     |                        
|LIABILITIES                       |                                                                                                                     |                        
|                                  |                                                                                                                     |                        
|Accounts payable                  | $        5,000                                                                                                      | $            381       
|Accounts payable affiliates       | 6,799,282                                                                                                           | 6,730,185              
|                                  |                                                                                                                     |                        
|                                  | 6,804,282                                                                                                           | 6,730,566              
|                                  |                                                                                                                     |                        
|PARTNERS' DEFICIT                 |                                                                                                                     |                        
|                                  |                                                                                                                     |                        
|Limited Partners                  |                                                                                                                     |                        
|                                  | Units of limited partnership 
interest, $1,000 stated value per
unit; issued and outstanding,
26,501 units (Note A) | (6,484,072)            
|General Partner                   | (289,760)                                                                                                           | (288,814)              
|                                  |                                                                                                                     |                        
|                                  | (6,773,832)                                                                                                         | (6,679,212)            
|                                  |                                                                                                                     |                        
|                                  | $30,450                                                                                                             | $51,354                







The accompanying notes are an integral part of this statement













American Affordable Housing II Limited Partnership
STATEMENTS OF OPERATIONS 
Three Months Ended December 31,
(Unaudited)



|                                                     | 2008                                | 2007            
|---------------------------------------------------- | ----------------------------------- | ----------------
|                                                     |                                     |                 
|Income                                               |                                     |                 
|                                                     | Interest income                     | $             53
|                                                     | Other income                        | -               
|                                                     | 53                                  | 1,556           
|                                                     |                                     |                 
|Share of income from Operating Partnerships (Note D) | 11,167                              | -               
|                                                     |                                     |                 
|Expenses                                             |                                     |                 
|                                                     | Professional fees                   | 3,653           
|                                                     | General and administrative expenses | 12,100          
|                                                     | Asset management fees (Note C)      | 22,057          
|                                                     | 37,810                              | 30,098          
|                                                     |                                     |                 
|NET LOSS                                             | $(26,590)                           | $(28,542)       
|                                                     |                                     |                 
|Net loss allocated to general partner                | $(266)                              | $(285)          
|                                                     |                                     |                 
|Net loss allocated limited partners                  | $(26,324)                           | $(28,257)       
|                                                     |                                     |                 
|Net loss per unit of limited partnership interest    | $(0.99)                             | $(1.07)         
|                                                     |                                     |                 









The accompanying notes are an integral part of this statement





American Affordable Housing II Limited Partnership
STATEMENTS OF OPERATIONS 
Nine Months Ended December 31,
(Unaudited)



|                                                     | 2008                                | 2007           
|---------------------------------------------------- | ----------------------------------- | ---------------
|                                                     |                                     |                
|Income                                               |                                     |                
|                                                     | Interest income                     | $           410
|                                                     | Other income                        | 1,734          
|                                                     | 2,144                               | 6,611          
|                                                     |                                     |                
|Share of income from Operating Partnerships (Note D) | 21,167                              | -              
|                                                     |                                     |                
|Expenses                                             |                                     |                
|                                                     | Professional fees                   | 27,702         
|                                                     | General and administrative expenses | 23,992         
|                                                     | Asset management fees (Note C)      | 66,237         
|                                                     | 117,931                             | 104,277        
|                                                     |                                     |                
|NET LOSS                                             | $(94,620)                           | $(97,666)      
|                                                     |                                     |                
|Net loss allocated to general partner                | $(946)                              | $(977)         
|                                                     |                                     |                
|Net loss allocated limited partners                  | $(93,674)                           | $(96,689)      
|                                                     |                                     |                
|Net loss per unit of limited partnership interest    | $(3.53)                             | $(3.65)        
|                                                     |                                     |                









The accompanying notes are an integral part of this statement











American Affordable Housing II Limited PartnershipSTATEMENTS OF CHANGES IN PARTNERS' DEFICIT
Nine Months Ended December 31,
(Unaudited)



|                                    | LimitedPartners | GeneralPartner | Total       
|----------------------------------- | --------------- | -------------- | ------------
|                                    |                 |                |             
|Partners' deficit
 April 1, 2008    | $ (6,390,398)   | $(288,814)     | $(6,679,212)
|                                    |                 |                |             
|Net loss                            | (93,674)        | (946)          | (94,620)    
|                                    |                 |                |             
|Partners' deficit
December 31, 2008 | $(6,484,072)    | $(289,760)     | $(6,773,832)
|                                    |                 |                |             









The accompanying notes are an integral part of this statement































American Affordable Housing II Limited Partnership
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31,
(Unaudited)



|                                      | 2008                                                                                              | 2007                                                        
|------------------------------------- | ------------------------------------------------------------------------------------------------- | ------------------------------------------------------------
|Cash flows from operating activities: |                                                                                                   |                                                             
|                                      |                                                                                                   |                                                             
|                                      | Net Loss                                                                                          | $    (94,620)                                               
|                                      | Adjustments to reconcile net income(loss) to net cash (used in)
provided by operating activities: |                                                             
|                                      |                                                                                                   | Share of (Income) from Operating Partnerships               
|                                      |                                                                                                   | Changes in assets and liabilities:                          
|                                      |                                                                                                   | Increase (Decrease) in accounts payable and accrued expenses
|                                      |                                                                                                   | Increase (Decrease) in accounts payable affiliates          
|                                      |                                                                                                   |                                                             
|                                      | Net cash provided by (used in) operating activities                                               | (42,071)                                                    
|                                      |                                                                                                   |                                                             
|                                      | Cash flows from investing activities:                                                             |                                                             
|                                      |                                                                                                   | Proceeds from the sale of Operating Partnerships            
|                                      |                                                                                                   |                                                             
|                                      | Net cash provided by (used in) investing activities                                               | 21,167                                                      
|                                      |                                                                                                   |                                                             
|                                      | INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                  | (20,904)                                                    
|                                      |                                                                                                   |                                                             
|Cash and cash equivalents, beginning  | 51,354                                                                                            | 468,159                                                     
|                                      |                                                                                                   |                                                             
|Cash and cash equivalents, ending     | $ 30,450                                                                                          | $ 152,461                                                   



The accompanying notes are an integral part of this statement







American Affordable Housing II Limited Partnership

NOTES TO FINANCIAL STATEMENTS
December 31, 2008
(Unaudited)

NOTE A - ORGANIZATION

American Affordable Housing II Limited Partnership ("Partnership") was formed under the laws of The Commonwealth of Massachusetts on May 13, 1987, for the purpose of acquiring, holding, and disposing of limited 
partnership interests in operating partnerships which were to acquire, develop, rehabilitate, operate and own newly constructed, existing or rehabilitated low-income apartment complexes ("Operating Partnerships").  Effective as of June 1, 2001 there was a restructuring, and as a result, the Partnership's general partner was reorganized as follows.  The general partner of the Partnership continues to be Boston Capital Associates Limited Partnership, a Massachusetts limited partnership.  The general partner of the Partnership's general partner is BCA Associates Limited Partnership, a Massachusetts limited partnership, whose sole general partner is C&M Management, Inc., a Massachusetts corporation and whose limited partners are Herbert F. Collins and John P. Manning.  Mr. Manning is the principal of Boston Capital Partners, Inc.

Pursuant to the Securities Act of 1933, the Partnership filed a Form S-11 Registration Statement with the Securities and Exchange Commission, effective December 21, 1987, which covered the offering (the "Public Offering") of the Partnership's units of limited partner interest ("Units"), as well as the units of limited partner interest offered by American Affordable Housing I, III, IV, and V Limited Partnerships (together with the Partnership, the "Partnerships").  The Partnerships registered 50,000 units of limited partner interest at $1,000 each unit for sale to the public.  The Partnership sold 26,501 units of limited partner interest, representing $26,501,000 of capital contributions.

NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES

The condensed financial statements included herein as of December 31, 2008 and for the nine months then ended have been prepared by the Registrant, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.  The Registrant's accounting and financial reporting policies are in conformity with generally accepted accounting principles and include adjustments in interim periods considered necessary for a fair presentation of the results of operations.  All such adjustments are of a normal recurring nature.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations.  It is suggested that these condensed financial statements are read in conjunction with the financial statements and the notes thereto included in the Registrant's Annual Report Statement on Form 10-K.

The accompanying financial statements reflect the Partnership's results of operations for an interim period and are not necessarily indicative of the results of operations for the fiscal year ending March 31, 2009.







American Affordable Housing II Limited Partnership

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2008

(Unaudited)

NOTE C - RELATED PARTY TRANSACTIONS

An annual partnership management fee based on 0.5 percent of the aggregate cost of all apartment complexes owned by the Operating Partnerships has been accrued as payable to Boston Capital Asset Management Limited Partnership.  The partnership management fee paid for the nine months ended December 31, 2008 and 2007 was $0 and $286,092, respectively.  The annual partnership management fee accrued for the quarters ended December 31, 2008 and 2007, was $22,057 and $24,705, respectively.  Total partnership management fees accrued as of December 31, 2008 are $6,487,030.

During the quarters ended December 31, 2008 and 2007, affiliates of the Partnership's general partner did not advance any money to the Partnership to pay operating expenses of the Partnership, or make advances and/or loans to Operating Partnerships.  Total advances for these costs at December 31, 2008 were $261,667.  These and any additional advances will be repaid, without interest, from available cash flow or the proceeds of sales or refinancing of the Partnership's interests in Operating Partnerships.

The Partnership also accrued various affiliate administrative expenses including travel, printing, salaries, postage, and overhead allocations.   Total accruals at December 31, 2008 were $50,585.



NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS

At December 31, 2008 and 2007, the Partnership had limited partnership equity interests in 13 and 15 Operating Partnerships, each of which owned an apartment complex.

Under the terms of the Partnership's investment in each Operating Partnership, the Partnership was required to make capital contributions to the Operating Partnerships.  These contributions were payable in installments upon each Operating Partnership achieving specified levels of construction and/or operations.  At December 31, 2008 and 2007, all such capital contributions had been paid to the Operating Partnerships.

The Partnership's fiscal year ends March 31st of each year, while all the Operating Partnerships' fiscal years are the calendar year. Pursuant to the provisions of each Operating Partnership Agreement, financial results for each of the Operating Partnerships are provided to the Partnership within 45 days after the close of each Operating Partnership's quarterly period.  Accordingly, the current financial results available for the Operating Partnerships are for the nine months ended September 30, 2008.

























American Affordable Housing II Limited Partnership



NOTES TO FINANCIAL STATEMENTS

December 31, 2008
(Unaudited)

COMBINED SUMMARIZED STATEMENTS OF OPERATIONS

NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)

The unaudited combined statements of operations of the Operating

Partnerships for the nine months ended September 30, 2008 and 2007 are as follows:



|                                                                               | 2008           | 2007          
|------------------------------------------------------------------------------ | -------------- | --------------
|                                                                               |                |               
|Revenues                                                                       |                |               
|Rental income                                                                  | $      614,577 | $      718,408
|Interest and other                                                             | 16,260         | 21,834        
|                                                                               |                |               
|                                                                               | 630,837        | 740,242       
|                                                                               |                |               
|Expenses                                                                       |                |               
|Interest expense                                                               | 99,543         | 125,861       
|Depreciation and amortization                                                  | 157,304        | 179,129       
|Operating expenses                                                             | 441,237        | 585,550       
|                                                                               | 698,084        | 890,540       
|                                                                               |                |               
|NET LOSS                                                                       | $(67,247)      | $(150,298)    
|                                                                               |                |               
|Net loss allocation to American
  Affordable Housing II Limited
  Partnership* | $(66,575)      | $(148,795)    
|                                                                               |                |               
|                                                                               |                |               
|Net loss allocated to other 
  partners                                        | $(672)         | $(1,503)      
|                                                                               |                |               

*Amounts include $66,575 and $148,795 for 2008 and 2007, respectively, of loss not recognized under the equity method of accounting.

The Partnership accounts for its investments using the equity method of accounting.  Under the equity method of accounting, the Partnership adjusts its investment cost for its share of each Operating Partnership's results of
operations and for any distributions received or accrued.  However, the Partnership recognizes individual operating losses only to the extent of capital contributions.  Excess losses are suspended for use in future years to 
offset excess income.

American Affordable Housing II Limited Partnership



NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2008

(Unaudited)

NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (CONTINUED)





NOTE E - TAXABLE LOSS

The Partnership's taxable loss for the calendar year ended December 31, 2008 is expected to differ from its loss for financial reporting purposes. This is primarily due to accounting differences in depreciation incurred by the Operating Partnerships and also differences between the equity method of accounting and IRS accounting methods. No provision or benefit for income taxes has been included in these financial statements since taxable income or loss passes through to, and is reportable by, the partners individually.



On January 10, 2008, our general partner recommended that the Unit holders approve a plan of liquidation and dissolution for the Partnership, or the "Plan."  The Plan was approved by the Unit holders on April 1, 2008, and was adopted by the general partner on April 1, 2008.   Pursuant to the Plan, the general partner may, without further action by the Unit holders:

- liquidate the assets and wind up the business of the Partnership;
- make liquidating distributions in cancellation of the Units;
- dissolve the Partnership after the sale of all of the Partnership's assets; and
- take, or cause the Partnership to take, such other acts and deeds and shall do, or cause the Partnership to do, such other things, as are necessary or appropriate in connection with the dissolution, winding up and liquidation of the Partnership, the termination of the responsibilities and liabilities of the Partnership under applicable law, and the termination of the existence of the Partnership.

Since the approval of the Plan by the Unit holders, we have continued to seek to sell the assets of the Partnership and use the sales proceeds and/or other Partnership funds to pay all expenses in connection with such sales, pay or make provision for payment of all Partnership obligations and liabilities, including accrued fees and unpaid loans to the general partner, and distribute the remaining assets as set forth in the Partnership Agreement. We expect to complete the sale of the apartment complexes approximately three to four years after the Unit holders' approval of the Plan, which was April 1, 2008. However, because of numerous uncertainties, the liquidation may take longer or shorter than expected, and the final liquidating distribution may occur months after all of the apartment complexes have been sold.

NOTE G - SUBSEQUENT EVENT

As of December 31, 2008, the Partnership has entered into an agreement to sell the interest in one Operating Partnership.  The estimated sales price and other terms for the disposition of the Operating Partnership have been determined.  The estimated proceeds to be received for the Operating Partnership is $105,248.  The estimated gain on sale of the Operating Partnership is $29,348 and is expected to be recognized in the third quarter of 2009.

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

This Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements including our intentions, hopes, beliefs, expectations, strategies and predictions of our future activities, or other future events or conditions. These statements are "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbors created by these acts. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including, for example, the factors identified in Part I, Item 1A. "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended March 31, 2008. Although we believe that the assumptions underlying these forward-looking statements are reasonable, any of the assumptions could be inaccurate, and there can be no assurance that the forward-looking statements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in these forward-looking statements, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved.

Liquidity

The Partnership's primary source of funds was the proceeds of its Public Offering.  Other sources of liquidity have included (i) interest earned on working capital reserves, and (ii) cash distributions from operations of the Operating Partnerships in which the Partnership has invested.  Both of these sources of liquidity are available to meet the obligations of the Partnership.

The Partnership is currently accruing the annual partnership management fee. Partnership management fees accrued during the quarter ended December 31, 2008 were $22,057 and total partnership management fees accrued as of December 31, 2008 were $6,487,030. During the quarter and year ended December 31, 2008, none of the accrued partnership management fees were paid.  Pursuant to the Partnership Agreement, these liabilities will be deferred until the Partnership receives sales or refinancing proceeds from Operating Partnerships, which will be used to satisfy these liabilities.

As of December 31, 2008, an affiliate of the general partner of the Partnership advanced a total of $312,252 to the Partnership to pay various operating expenses of the Partnership, and to make advances and/or loans to Operating Partnerships. These advances are included in Accounts payable-affiliates. There were no advances during the quarter ended December 31, 2008.





Capital Resources

The Partnership received $26,501,000 in subscriptions for Units (at $1,000 per Unit) during the period February 2, 1988 to December 21, 1988 pursuant to the Public Offering, resulting in net proceeds available for investment in Operating Partnerships (after payment of acquisition fees and expenses and funding of a reserve) of $18,550,700.

As of December 31, 2008, the Partnership had committed to investments requiring cash payments of $18,613,793, all of which has been paid.  At December 31, 2008, the Partnership held $30,450, which is comprised of working capital.  Since the Partnership has completed funding of all investments, it anticipates that there should be no significant need for capital resources in the future.

Results of Operations

As of December 31, 2008 and 2007, the Partnership held limited partnership interests in 13 and 15 Operating Partnerships, respectively.  In each instance the apartment complex owned by the applicable Operating Partnership is eligible for the federal housing tax credit.  Initial occupancy of a unit in each apartment complex which complied with the minimum set-aside test (i.e., initial occupancy by tenants with incomes equal to no more than a certain percentage of area median income) and the rent restriction test (i.e., gross rent charged tenants does not exceed 30% of the applicable income standards) is referred to as "Qualified Occupancy."  Each of the Operating Partnerships and each of the respective apartment complexes are described more fully in the Prospectus or applicable report on Form 8-K.  The general partner of the Partnership believes that there is adequate casualty insurance on the properties.

As of December 31, 2008 and 2007, the Qualified Occupancy of the Operating Partnerships was 100%.  The Partnership had a total of 13 properties at December 31, 2008, all of which were at 100% Qualified Occupancy.





|3 Months
Management Fee Net
of Reporting Fee | 3 MonthsReporting Fee | 9 Months
Management Fee Net of Reporting Fee | 9 MonthsReporting Fee
|-------------------------------------------- | --------------------- | -------------------------------------------- | ---------------------
|$ 22,057                                     | $ 0                   | $ 66,237                                     | $ 2,860              

The Partnership's investment objectives do not include receipt of significant cash distributions from the Operating Partnerships in which it has invested.  The Partnership's investments in Operating Partnerships have been made principally with a view towards realization of federal housing tax credits for allocation to its partners and Unit holders.

In June 2007, the investment general partner of Lovington Housing approved an agreement to sell the property and the transaction is anticipated to close in September 2009.  The anticipated sales price is $1,208,004, which includes the outstanding mortgage balance of approximately $1,004,000 and cash proceeds to the investment limited partners of $105,248. Of the total proceeds anticipated to be received, $68,400 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the sale. Of the remaining proceeds, it is anticipated that $7,500 will be paid to BCAMLP for expenses related to the sale, which includes third party legal costs. The remaining proceeds from the sale of $29,348 are anticipated to be returned to cash reserves held by the Partnership. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid partnership management fees, and accrued but unpaid expenses of the investment limited partnership. After all outstanding obligations of the investment limited partnership are satisfied, any remaining monies will be distributed based on the number of Units held by each investor at the time of distribution.

In July 2008, the investment general partner entered into an agreement to transfer its interest in Nicollet Island Historic Homes to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,683,669 and cash proceeds to the investment limited partner of $20,000.  Of the total proceeds received, $10,000 was paid to BCAMLP for expenses related to the transfer, which includes third party legal costs.  The remaining proceeds of $10,000 will be returned to cash reserves held by the Partnership.  The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership.  After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of Units held by each investor at the time of distribution.  In addition, the investment general partner on behalf of the investment limited partnership entered into an investment limited partner interest pledge agreement with the Operating Partnership for receipt of a residual payment.  Under the terms of the investment limited partner interest pledge agreement, if the property owned by the Operating Partnership is refinanced or sold, within 5 years from the initial transfer date, there would be a residual payment of $100 plus the capital transaction proceeds distributable to the investment limited partnership in accordance with the Operating Partnership Agreement in effect at the date the investment limited partner transferred its interest.  Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership's investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment in the Operating Partnership to zero.  Accordingly, a gain on the sale of the Operating Partnership of the proceeds from the sale, net of the overhead and expense reimbursement, has been recorded in the amount of $10,000 as of September 30, 2008.





Off Balance Sheet Arrangements

None.





Critical Accounting Policies and Estimates

The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which requires the Partnership to make certain estimates and assumptions.  A summary of significant accounting policies is provided in Note 1 to the financial statements.  The following section is a summary of some aspects of those accounting policies that may require subjective or complex judgments and are most important to the portrayal of the Partnership's financial condition and results of operations.  The Partnership believes that there is a low probability that the use of different estimates or assumptions in making these judgments would result in materially different amounts being reported in the financial statements.

The Partnership is required to assess potential impairments to its long-lived assets, which are primarily investments in limited partnerships.  The Partnership accounts for its investment in limited partnerships in accordance with the equity method of accounting since the Partnership does not control the operations of the Operating Partnerships.

If the book value of the Partnership's investment in an Operating Partnership exceeds the estimated value derived by management, which generally consists of the remaining future low-income housing credits allocable to the Partnership and the estimated residual value to the Partnership, the Partnership reduces its investment the such Operating Partnership and includes the reduction in equity in loss of investment of limited partnerships.

As of March 31, 2004, the Partnership adopted FASB Interpretation No. 46 - Revised ("FIN46R"), "Consolidation of Variable Interest Entities." FIN 46R provides guidance on when a company should include the assets, liabilities, and activities of a variable interest entity ("VIE'') in its financial statements and when it should disclose information about its relationship with a VIE. A VIE is a legal structure used to conduct activities or hold assets, which must be consolidated by a company if it is the primary beneficiary because it absorbs the majority of the entity's expected losses, the majority of the expected returns, or both.

Based on the guidance of FIN 46R, the Operating Partnerships in which the Partnership invests meet the definition of a VIE.  However, management does not consolidate the Partnership's interests in these VIEs under FIN 46R, as it is not considered to be the primary beneficiary.  The Partnership currently records the amount of its investment in these partnerships as an asset in the balance sheet, recognizes its share of partnership income or losses in the statement of operations, and discloses how it accounts for material types of these investments in the financial statements.

The Partnership's balance in investment in Operating Partnerships, plus the risk of recapture of tax credits previously recognized on these investments, represents its maximum exposure to loss.  The Partnership's exposure to loss on these partnerships is mitigated by the condition and financial performance of the underlying properties as well as the strength of the local general partners and their guarantee against credit recapture.

Recent Accounting Changes

In September 2006, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 157, "Fair Value Measurements," ("SFAS 157"), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosure about fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and shall be applied prospectively except for very limited transactions, which for the Partnership is April 1, 2008.  In December 2007, the FASB delayed the implementation of SFAS 157 as it pertains to non-financial assets and liabilities for fiscal years beginning after November 15, 2008, which for the Partnership is April 1, 2009. The Partnership is currently evaluating the potential impact of the adoption of SFAS 157 on its financial statements.

In February 2007 the FASB issued SFAS No. 159 "The Fair Value Option for Financial Assets and Financial Liabilities" ("SFAS 159").  SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value.  The fair value election is designed to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions.  SFAS 159 is effective for fiscal years beginning after November 15, 2007.  The Partnership does not expect to elect the fair value option.

On December 4, 2007, the FASB issued SFAS No. 141R, "Business Combinations" ("SFAS 141R").  This statement changes the accounting for acquisitions specifically eliminating the step acquisition model, changing the recognition of contingent consideration from being recognized when it is probable to being recognized at the time of acquisition, and disallowing the capitalization of transaction costs and delays when restructurings related to acquisitions can be recognized.  The standard is effective for fiscal years ending after December 15, 2008.  The Partnership is currently evaluating the impact of the adoption of SFAS 141R on its financial statements.  However, the Partnership does not expect SFAS 141R to have a material impact on the Partnership's statement of operations or financial position.

On December 4, 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51" ("SFAS 160").  SFAS 160 replaces the concept of minority interest with noncontrolling interests in subsidiaries.  Noncontrolling interests will now be reported as a component of equity in the consolidated statement of financial position.  Earnings attributable to noncontrolling interests will continue to be reported as a part of consolidated earnings; however, SFAS 160 requires that income attributable to both controlling and noncontrolling interests be presented separately on the face of the consolidated income statement.  In addition, SFAS 160 provides that when losses attributable to noncontrolling interests exceed the noncontrolling interest's basis, losses continue to be attributed to the noncontrolling interest as opposed to being absorbed by the consolidating entity.  SFAS 160 requires retroactive adoption of the presentation and disclosure requirements for existing minority interests.  All other requirements of SFAS 160 shall be applied prospectively. SFAS 160 is effective for the first annual reporting period beginning on or after December 15, 2008. However, the Partnership does not expect SFAS 160 to have a material impact on the Partnership's financial statements.

Recent Accounting Changes - Continued

Financial Accounting Standards Board (FASB) Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes ("FIN 48") was issued in July 2006 and interprets SFAS No. 109, Accounting for Income Taxes. FIN 48 requires all taxpayers to analyze all material positions they have taken or plan to take in all tax returns that have been filed or should have been filed with all taxing authorities for all years still subject to challenge by those taxing authorities. If the position taken is "more-likely-than-not" to be sustained by the taxing authority on its technical merits and if there is more than a 50% likelihood that the position would be sustained if challenged and considered by the highest court in the relevant jurisdiction, the tax consequences of that position should be reflected in the taxpayer's GAAP financial statements. Earlier proposed interpretations of SFAS 109 had recommended a "probable" standard for recognition of tax consequences rather than the "more-likely-than-not" standard finally adopted.

Because we are a pass-through entity and are not required to pay income taxes, FIN 48 does not currently have any impact on our financial statements. On December 30, 2008, the FASB issued FASB Staff Position (FSP) No. FIN 48-3: *Effective Date of FASB Interpretation No. 48 for Certain Nonpublic Enterprises* ("FSP No. FIN 48-3") , which defers the effective date of FIN 48 for nonpublic enterprises included within the scope of FSP No. FIN 48-3 to the annual financial statements for fiscal years beginning after December 15, 2008. The deferred effective date is intended to give the Board additional time to develop guidance on the application of FIN 48 by pass-through entities and not-for-profit organizations. We may modify our disclosures if the FASB's guidance regarding application of FIN 48 to pass-through entities changes.



|Item 3. | Quantitative and Qualitative Disclosure About Market Risk
|------- | ---------------------------------------------------------
|        |                                                          
|        | Not Applicable                                           



|Item 4T. | Controls & Procedures
|-------- | ---------------------
|         |                      
|         | (a)                  
|         |                      
|         |                      
|         | (b)                  
|         |                      





PART II - OTHER INFORMATION



|Item 1.  | Legal Proceedings                                                                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |                                                                                                                                                                     
|         | None                                                                                                                                                                
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|Item 1A. | Risk Factors                                                                                                                                                        
|         |                                                                                                                                                                     
|         | There have been no material changes from the risk factors set forth under Part I, Item 1A. "Risk Factors" in our Form 10-K for the fiscal year ended March 31, 2008.
|         |                                                                                                                                                                     
|Item 2.  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                         
|         |                                                                                                                                                                     
|         | None                                                                                                                                                                
|         |                                                                                                                                                                     
|Item 3.  | Defaults upon Senior Securities                                                                                                                                     
|         |                                                                                                                                                                     
|         | None                                                                                                                                                                
|         |                                                                                                                                                                     
|Item 4.  | Submission of Matters to a Vote of Security 
Holders                                                                                                                
|         |                                                                                                                                                                     
|         | None                                                                                                                                                                
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|Item 5.  | Other Information                                                                                                                                                   
|         |                                                                                                                                                                     
|         | None                                                                                                                                                                
|         |                                                                                                                                                                     
|Item 6.  | Exhibits                                                                                                                                                            
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|         | (a)Exhibits                                                                                                                                                         
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SIGNATURES
Pursuant to the requirements of Section 13 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.

|                        | American Affordable Housing II
|----------------------- | ------------------------------
|                        | Limited Partnership           
|                        |                               
|                        | By:                           
|                        |                               
|                        |                               
|                        |                               
|                        |                               
|                        |                               
|                        |                               
|                        |                               
|                        |                               
|Date: February 17, 2009 |                               
|                        |                               
|                        |                               

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:

|DATE              | SIGNATURE           | TITLE               
|----------------- | ------------------- | --------------------
|                  |                     |                     
|February 17, 2009 | /s/ John P. Manning | Director, President 
|                  | John P. Manning     | (Principal Executive
|                  |                     | Officer), C&M       
|                  |                     | Management Inc;     



|DATE              | SIGNATURE        | TITLE                                         
|----------------- | ---------------- | ----------------------------------------------
|                  |                  |                                               
|February 17, 2009 | /s/ Marc N. Teal | Senior Vice President, Chief Financial Officer
|                  | Marc N. Teal     | (Principal Accounting and Financial Officer)  
|                  |                  | C&M Management Inc.