UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q



/X/QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES

EXCHANGE ACT OF 1934.

For the quarterly period ended December 31, 2003

or

/ /TRANSITION REPORT PERSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number 0-17696



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)

617-624-8900

(Registrants telephone number, including area code)

(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 | / /
|--- | --- |  | -- | ---

















AMERICAN AFFORDABLE HOUSING II LIMITED PARTNERSHIP



QUARTERLY REPORT ON FORM 10-QFOR THE QUARTER ENDED DECEMBER 31, 2003



TABLE OF CONTENTS











































































American Affordable Housing II Limited PartnershipBALANCE SHEETS



|                                  | December 31,
2003(Unaudited)                                                                                        | March 31,
2003(Audited)
|--------------------------------- | ------------------------------------------------------------------------------------------------------------------- | -----------------------
|                                  |                                                                                                                     |                        
|ASSETS                           
|                                  |                                                                                                                     |                        
|INVESTMENTS IN OPERATING          |                                                                                                                     |                        
|                                  | PARTNERSHIPS (Note D)                                                                                               | $     503,460          
|                                  |                                                                                                                     |                        
|Cash and cash equivalents         | 986,184                                                                                                             | 925,288                
|Other assets                      | 17,849                                                                                                              | 17,849                 
|                                  |                                                                                                                     |                        
|                                  | $1,507,493                                                                                                          | $1,558,091             
|                                  |                                                                                                                     |                        
|                                 
|LIABILITIES AND PARTNERS' DEFICIT
|                                  |                                                                                                                     |                        
|LIABILITIES                       |                                                                                                                     |                        
|                                  |                                                                                                                     |                        
|Accounts payable affiliates       | $  6,614,715                                                                                                        | $ 6,267,665            
|                                  |                                                                                                                     |                        
|                                  |                                                                                                                     |                        
|                                  |                                                                                                                     |                        
|PARTNERS' DEFICIT                 |                                                                                                                     |                        
|                                  |                                                                                                                     |                        
|Limited Partners                  |                                                                                                                     |                        
|                                  | Units of limited partnership 
interest, $1,000 stated value per
unit; issued and outstanding,
26,501 units (Note A) | (4,826,245)            
|General Partners                  | (280,977)                                                                                                           | (277,001)              
|                                  |                                                                                                                     |                        
|                                  | (5,107,222)                                                                                                         | (4,709,574)            
|                                  |                                                                                                                     |                        
|                                  | $1,507,493                                                                                                          | $1,558,091             







The accompanying notes are an integral part of this statement























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



|                                                            | 2003                                | 2002          
|----------------------------------------------------------- | ----------------------------------- | --------------
|                                                            |                                     |               
|Income                                                      |                                     |               
|                                                            | Interest income                     | $        1,106
|                                                            | Other income                        | 18,600        
|                                                            | 19,706                              | 2             
|                                                            |                                     |               
|Share of income (loss) from Operating Partnerships (Note D) | (2,873)                             | (35,252)      
|                                                            |                                     |               
|Expenses                                                    |                                     |               
|                                                            | Professional fees                   | 16,638        
|                                                            | General and administrative expenses | 1,849         
|                                                            | Asset management fees (Note C)      | 89,722        
|                                                            | 108,209                             | 119,153       
|                                                            |                                     |               
|NET LOSS                                                    | $(91,376)                           | $(154,403)    
|                                                            |                                     |               
|Net loss allocated to general partners                      | $(914)                              | $(1,544)      
|                                                            |                                     |               
|Net loss allocated limited partners                         | $(90,462)                           | $(152,859)    
|                                                            |                                     |               
|Net loss per unit of limited partnership interest           | $(3)                                | $(6)          
|                                                            |                                     |               









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)



|                                                            | 2003                                | 2002          
|----------------------------------------------------------- | ----------------------------------- | --------------
|                                                            |                                     |               
|Income                                                      |                                     |               
|                                                            | Interest income                     | $        3,505
|                                                            | Other income                        | 21,717        
|                                                            | 25,222                              | 4,127         
|                                                            |                                     |               
|Share of income (loss) from Operating Partnerships (Note D) | (68,540)*                           | (140,755)     
|                                                            |                                     |               
|Expenses                                                    |                                     |               
|                                                            | Professional fees                   | 64,664        
|                                                            | General and administrative expenses | 9,090         
|                                                            | Asset management fees (Note C)      | 280,576       
|                                                            | 354,330                             | 363,925       
|                                                            |                                     |               
|NET LOSS                                                    | $(397,648)                          | $(500,553)    
|                                                            |                                     |               
|Net loss allocated to general partners                      | $(3,976)                            | $(5,006)      
|                                                            |                                     |               
|Net loss allocated limited partners                         | $(393,672)                          | $(495,547)    
|                                                            |                                     |               
|Net loss per unit of limited partnership interest           | $(15)                               | $(19)         
|                                                            |                                     |               



* Includes gain on sale of Operating Partnerships of $42,955.





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)



|                                    | Assignees    | GeneralPartner | Total       
|----------------------------------- | ------------ | -------------- | ------------
|                                    |              |                |             
|Partners' Deficit
 April 1, 2003    | $(4,432,573) | $(277,001)     | $(4,709,574)
|                                    |              |                |             
|                                    |              |                |             
|Net loss                            | (393,672)    | (3,976)        | (397,648)   
|                                    |              |                |             
|Partners' Deficit
December 31, 2003 | $(4,826,245) | $(280,977)     | $(5,107,222)
|                                    |              |                |             









The accompanying notes are an integral part of this statement











































American Affordable Housing II Limited PartnershipSTATEMENTS OF CASH FLOWSNine Months Ended December 31,
(Unaudited)



|                                      | 2003                                                | 2002                                             
|------------------------------------- | --------------------------------------------------- | -------------------------------------------------
|Cash flows from operating activities: |                                                     |                                                  
|                                      |                                                     |                                                  
|                                      | Net Loss                                            | $  (397,648)                                     
|                                      | Adjustments:                                        |                                                  
|                                      |                                                     | Distributions from Operating Partnerships        
|                                      |                                                     | Share of Loss from Operating Partnerships        
|                                      |                                                     | Changes in assets and liabilities:               
|                                      |                                                     | Decrease (Increase) in other assets              
|                                      |                                                     | Increase in accounts payable and accrued expenses
|                                      |                                                     |                                                  
|                                      | Net cash provided by (used in) operating activities | 17,941                                           
|                                      |                                                     |                                                  
|                                      | Cash Flows from investing activities:               |                                                  
|                                      |                                                     | Proceeds from the sale of Operating Partnerships 
|                                      |                                                     |                                                  
|                                      | Net cash provided by (used in) operating activities | 42,955                                           
|                                      |                                                     |                                                  
|                                      | INCREASE (DECREASE) IN CASH                         | 60,896                                           
|                                      |                                                     |                                                  
|Cash and cash equivalents, beginning  | 925,288                                             | 35,131                                           
|                                      |                                                     |                                                  
|Cash and cash equivalents, ending     | $ 986,184                                           | $3,786                                           

The accompanying notes are an integral part of this statement





American Affordable Housing II Limited Partnership

NOTES TO FINANCIAL STATEMENTS
December 31, 2003
(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. Effective as of September 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 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, 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, 2003 and for the three and 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, 2004.







American Affordable Housing II Limited Partnership

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2003

(Unaudited)

NOTE C - RELATED PARTY TRANSACTIONS

An annual asset 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 annual asset management fees accrued for the quarters ended December 31, 2003 and 2002 were $99,756 and $110,465, respectively.  Total asset management fees accrued as of December 31, 2003 were $6,330,301.

During the quarters ended December 31, 2003 and 2002 affiliates of the General Partner advanced $16,173 and $5,000, respectively, to the Partnership to pay operating expenses of the Partnership, or to make advances and/or loans to Operating Partnerships.  Total advances for such costs at December 31, 2003 were $256,301.  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 has also accrued certain affiliate administrative expenses including but not limited to travel, printing, salaries, postage, and overhead allocations.  The amounts accrued during the quarters ended December 31, 2003 and 2002 were $136 and $454, respectively.  Total accruals at December 31, 2003 were $28,113.



NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS

At December 31, 2003 and 2002, the Partnership had limited partnership equity interests in 45 and 49 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 such Operating Partnerships.  These contributions were payable in installments 
upon each Operating Partnership achieving specified levels of construction and/or operations.  At December 31, 2003 and 2002, 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, 2003.





























American Affordable Housing II Limited Partnership



NOTES TO FINANCIAL STATEMENTS

December 31, 2003
(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, 2003 and 2002 are as follows:



|                                                                              | 2003           | 2002          
|----------------------------------------------------------------------------- | -------------- | --------------
|                                                                              |                |               
|Revenues                                                                      |                |               
|Rental income                                                                 | $    6,212,108 | $    7,770,044
|Interest and other                                                            | 162,510        | 405,833       
|                                                                              |                |               
|                                                                              | 6,374,618      | 8,175,877     
|                                                                              |                |               
|Expenses                                                                      |                |               
|Interest expense                                                              | 1,924,834      | 2,405,547     
|Depreciation and amortization                                                 | 1,836,358      | 1,985,699     
|Operating expenses                                                            | 4,508,307      | 5,462,626     
|                                                                              | 8,269,499      | 9,853,872     
|                                                                              |                |               
|NET LOSS                                                                      | $(1,894,881)   | $(1,677,995)  
|                                                                              |                |               
|Net loss allocation to American
  Affordable Housing II Limited
  Partnership | $(75,904)      | $(140,756)    
|                                                                              |                |               
|                                                                              |                |               
|Net loss allocated to other 
  partners                                       | $(759)         | $(1,408)      
|                                                                              |                |               
|Net loss suspended                                                            | $(1,818,218)   | $(1,535,831)  



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, 2003

(Unaudited)

NOTE E - TAXABLE LOSS

The Partnerships taxable loss for the year ended December 31, 2003 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.



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

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 asset management fee. Asset management fees accrued during the quarters ended December 31, 2003 and 2002 were $99,756 and $110,465, and total asset management fees accrued as of December 31, 2003 were $6,330,301. Pursuant to the Partnership Agreement, such liabilities will be deferred until the Partnership receives sales or refinancing proceeds from Operating Partnerships, which will be used to satisfy such liabilities.

The Partnership has recognized other income as of December 31, 2003 in the amount of $21,717.  Of this amount, $3,117 represents distributions from Operating Partnerships, which the Partnership normally would record as a decrease in the Investment in Operating Partnerships.  Due to the equity method of accounting, the Partnership has recorded these distributions as other income.   The balance of $18,600 represents transfer fees charged on changes in limited partner interest.

The Partnership has recorded $6,614,714 as payable to affiliates.  This represents advances to pay certain third party operating expenses of the Partnership, advances and/or loans to Operating Partnerships, accrued partnership management fees, and accrued overhead allocations.  These and any future advances or accruals will be paid, without interest, from available cash flow, reporting fees, or the proceeds of sales or refinancing of the Partnership's interest in Operating Partnerships.

Cash flow and reporting fees will be added to the Partnership's working capital and will be available to meet future third party obligations of the Partnership.  The Partnership is currently pursuing, and will continue to aggressively pursue, available cash flow and reporting fees and anticipates that the amount collected will be sufficient to cover future third party operating expenses.



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, 2003, the Partnership had committed to investments requiring cash payments of $18,613,793, all of which has been paid.  At December 31, 2003, the Partnership held $986,184, in cash and cash equivalents.  Of the total $947,745 represented proceeds from the sale of 4 Operating Partnerships and $38,439 represented 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, 2003 and 2002 the Partnership held limited partnership interests in 45 and 49 Operating Partnerships. 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 hereinafter 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 believes that there is adequate casualty insurance on the properties.

As of December 31, 2003 and 2002 the Qualified Occupancy of the Operating Partnership's was 100%, respectively.  The Partnership had a total of 45 properties at December 31, 2003, all of which were at 100% Qualified Occupancy.

The Partnership had invested in a total of 45 and 49 Operating Partnerships as of December 31, 2003 and 2002. During the quarters ended December 31, 2003 and 2002, the Partnership received $10,033 and $0, respectively, of reporting fees from the Operating Partnerships.

The Partnership incurred an annual asset management fee to Boston Capital Asset Management Limited Partnership in an amount equal to 0.5% of the aggregate cost of the apartment complexes owned by the Operating Partnerships, less the amount of certain partnership management and reporting fees paid by the Operating Partnerships.  The annual asset management fee incurred, net of reporting fees received, during the quarters ended December 31, 2003 and 2002 was $89,722 and $110,466, respectively.   The reduction in the fee incurred was a result of the removal of the portion of the fee attributed to the 4 Operating Partnerships sold, and an increase in reporting fees received.

Liberty Center, Limited owned a 109-unit property (Liberty Center I) located in Jacksonville, FL (the "Property").  The Property is a single room occupancy facility with shared bath and kitchen facilities designed to serve homeless individuals.  The Property was subject to a Low Income Housing Tax Credit Compliance Period which ended December 31, 2002.  The Operating General Partner offered to purchase the Partnership's interest in the Property for $70,000.  After conducting an internal analysis of the Property's value and hiring an independent consultant to conduct an analysis of the Property's value, the Investment General Partner accepted the Operating General Partner's offer and on January 2, 2003, the sale was completed.  The Investment Partnership, its General Partner and various affiliates have agreed to forego certain payables due upon the sale of its interest in the Property, and will return all sale proceeds generated by the sale (net of costs) to the Limited Partners of the Investment Partnership.  
Washington Mews LP owned a 20-unit property (Washington Mews) located in Dorchester, Massachusetts (the "Property").  The Property was subject to a Low Income Housing Tax Credit Compliance Period which ended December 31, 2002.  In anticipation of the expiration of the Compliance Period, the Property was offered for sale through Coldwell Banker-Hunneman.  An offer to purchase the Property for $1,950,000 by an unrelated third party (the "Buyer") was received.  The Property was sold to the Buyer on January 3, 2003 and full consideration of $1,950,000 was received at that time.  The Investment Partnership's share of the total sale proceeds was $852,740.  
The Property was subject to a first mortgage loan from the Massachusetts Housing Partnership Fund (MHP).  Prior to the sale of the Property, a payoff letter was requested and issued by MHP (the "Payoff Letter").  At closing, funds were distributed to MHP in accordance with the Payoff Letter.  In addition, sale proceeds due to the Investment Partnership were distributed at closing.  Subsequent to the receipt of these funds, MHP refused to issue a discharge of the mortgage in accordance with the Payoff Letter.  The MHP mortgage provides for (under certain circumstances) the lender's participation in gain realized at sale over and above the mortgage amount.  A calculation of this participation was made and included in the Payoff Letter issued by MHP.  However, after payment of this amount, MHP indicated that it disagreed with the participation calculation and refused to issue a discharge of mortgage and to release certain funds belonging to Washington Mews and held in escrow by MHP.

MHP commenced litigation against Washington Mews and requested that the court hold the mortgage discharge until the litigation is resolved.  The court denied MHP's request, and MHP and Washington Mews have attempted to reach an agreement regarding the participation payment.  To date no agreement has been reached.  The Buyer and the Buyer's title insurer have commenced litigation against MHP to compel the release of the mortgage discharge.  Once the litigation between the Buyer, the Buyer's title insurer and MHP is adjudicated, Washington Mews hopes to resolve the issue regarding the participation payment with MHP without further litigation.
The Investment Partnership will continue to hold sale proceeds distributed to it upon the sale of the property until such time as an agreement is reached with MHP and Washington Mews regarding the participation payment.

The Operating General Partner of Carthage Court Housing Company (Champion Apartments II) negotiated a sale of his General Partner interest.  As the tax credit compliance period has expired the Investment Limited Partner negotiated an agreement with the new Operating General Partner to sell the Investment Limited Partner interest.  This transaction was finalized in August 2003, and proceeds payable to the Investment Partnership of $19,091.06 were received September 9, 2003.  Of the total proceeds received, it is anticipated that $10,000 or $.38 per unit will be returned to the Limited Partners.  The balance of $9,091.06 will be used to paydown accrued asset management fees.
The Operating General Partner of Malone Housing Redevelopment Company (Maple Ridge Apartments) negotiated a sale of his General Partner interest.  As the Operating Partnership tax credit compliance period has expired the Investment Limited Partner negotiated an agreement with the new Operating General Partner to sell the Investment Limited Partner interest.  This transaction was finalized in August 2003, and proceeds payable to the Investment Partnership of $23,863.83 were received on September 9, 2003.  Of the total proceeds received, it is anticipated that $10,000 or $.38 per unit will be returned to the Limited Partners.  The balance of $13,863.83 will be used to paydown accrued asset management fees.Historically, the financial statements of Rouse Stokes Rowe Housing Associates, L.P. (Stokes Rowe Apartments) have been prepared assuming that the Operating Partnership would continue as a going concern.  In the past the property has always experienced high occupancy but has never been able to support operations due to excessive operating expenses.  During the fourth quarter of 2002 average occupancy decreased to 75%, and remained at 75% through the fourth quarter of 2003.  Both of the Operating Partnership's mortgages remain in technical default for non-payment.  The first permanent loan is payable to the stockholder of Southwark Realty, an affiliate of the Operating General Partner. The Operating General Partner continues to show support for this property and the operations therein and continues to fund operating deficits. It was noted in a site visit in 2001 that the property had a number of tenant files that were not in compliance due to improper documentation.  In addition, the State Agency issued Low Income Housing Credit Agencies Report of Noncompliance forms 8823's for failing to file the required Annual Owner's Certifications. The tax credit compliance period ended on December 31, 2002.  The Investment General Partner continues negotiations to sell the Operating Partnership interest to the Operating General Partner.  Should the negotiations prove to be unsuccessful, there remains a chance that the Operating Partnership will be foreclosed upon by the holder of the first permanent loan.  
The management company's marketing at Lovington Housing Associates, L.P. (Southview Place Apartments) was successful in increasing and maintaining high occupancy.  The average occupancy for year-end 2003 was 91%.  The management company's aggressive marketing continues to benefit the property and a waiting list is being accumulated to offset any future vacancies. The property operated above break even for year ending December 31, 2002 and is anticipated to operate above break even in 2003. Annualized year to date information for 2003 indicates the property will produce net income of $5,762.  The cash flow will be used to pay down trade payables and address deferred maintenance. The property's mortgage, taxes and insurance payments are current.

East Ridge Associates Limited Partnership (East Ridge Estates) received a copy of a Notice of Acceleration and Demand for Payment, filed by the United States Department of Agriculture/Rural Development (USDA/RD), in May 1999. The Operating General Partner filed an appeal with the National Appeals Division in November 1999 and the decision to accelerate the mortgage was upheld by the USDA/RD National Appeals Division on January 31, 2000. Subsequently the Operating General Partner submitted a workout plan, but the plan was not accepted by the lender, USDA/RD. The Partnership's operations continue to suffer from ongoing operating deficits, the delinquent mortgage, and under funded reserves. The auditors issued a "going concern opinion" in 2002.   East Ridge Associates was scheduled for a foreclosure auction in early December 2003. The expiration of the Tax Credit Compliance Period is December 31, 2003. To prevent tax credit recapture of approximately $70,000, the Investment General Partner engaged an attorney to file Chapter 11 bankruptcy. The bankruptcy proceedings have successfully delayed the foreclosure until March 12, 2004.

The liquidity of the Harbor Hill Associates Limited Partnership (Harbor Hill Estates) has been adversely affected by recurring losses from operations.  The operating deficits have prevented the Operating Partnership from meeting obligations as they become due and from making required deposits into the replacement reserve account.   The Operating Partnership received a service letter (mortgage default notice) from USDA/RD on January 3, 2001.  A workout plan to address these issues was approved by USDA/RD in December 2001.  The Operating General Partner has requested that future advances per the workout plan to the Operating Partnership be interest bearing.  The Operating General Partner is in compliance with the terms of the workout plan, and the workout plan appears to be helping with the turn around of the property.  USDA/RD has allowed the property to admit non-elderly tenants that are income qualified due to a change in the demographics of the marketplace of Bar Harbor, ME.  While fourth quarter occupancy declined to 92%. Foreclosure remains a possibility for this partnership, however all required actions are in order to prevent this from occurring.

Kingsley Park Associates Limited Partnership (Kingsley Park Apartments) is a 312-unit project located in Essex, Maryland.  Physical occupancy as of August 31, 2003 is 97%, however, the property was unable to operate above breakeven during 2003 due to the continuing inefficiencies of the boiler system. Due to the operating deficits the Partnership is now delinquent with its mortgage payment. The 15 year tax credit compliance period expired December 31, 2002.  The Operating General Partner has been unsuccessful to date in developing a proposal for tax credit re-syndication that will allow for the rehabilitation of the units and the replacement of the boiler system.  If the Operating General Partner is unable to develop a  viable re-syndication strategy the lender may begin foreclosure proceedings in 2004.
Lake Havasu Investment Group (Anacapa Apartments) is a 40-unit family property located in Lake Havasu, AZ.  Occupancy for 2003 averaged 98%, and as of 12/31/03 occupancy has improved to 100%.  The property operated above breakeven for 2003.  A rental increase that was awarded to the property in January 2003 is allowing the property to generate significant cash, reduce payables, and replenish the under funded escrow accounts.  Provided that the improved performance continues, the Investment General Partner will no longer provide special disclosure on the Partnership.

Nebraska City Senior, A Limited Partnership, (Southside Estates) an elderly housing complex located in Nebraska City, Nebraska, operated below breakeven for 2003 due to low occupancy and high turnover, which





Garden City Family Housing, (Harvest View Apartments) located in Garden City, Missouri, operated below breakeven for 2003 due to low occupancy and increased capital expenditures. Occupancy averaged 81% for 2003, and as of 12/31/03 has improved to 88%.   The major issues impacting occupancy are the lack of rental assistance and units not being rent ready.  The property has rental assistance for 12 of the units and is petitioning rural development for additional rental assistance.  Currently the property has two vacant units that are not rent ready, however management is in the process of getting these units rent ready for use.  Management continues to market the property to prospective tenants through newspapers and local civic agencies.   The property has had high maintenance expenses due to its age.  In 2003 management addressed a number of the maintenance issues, and anticipates addressing the remaining issues in 2004.  Management is actively watching expenses to ensure that they do not increase above budgeted figures and the property's mortgage, taxes and insurance are all current.







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 A to the financial statements.  The following section is a summary of certain aspects of those accounting policies that may require subjective or complex judgments and are most important to the portrayal of 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 accounts for its investment in local partnerships in accordance with the equity method of accounting since the Partnership does not control the operations of an Operating Partnership.

If the book value of Partnership's investment in a Operating Partnership exceeds the estimated value derived by management, the Partnership reduces its investment in any such Operating Partnership and includes such reduction in equity in loss of investment in operating partnerships.



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



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





PART II - OTHER INFORMATION





|Item 1. | Legal Proceedings                                   
|------- | ----------------------------------------------------
|        |                                                     
|        | None                                                
|        |                                                     
|Item 2. | Changes in Securities                               
|        |                                                     
|        | None                                                
|        |                                                     
|Item 3. | Defaults upon Senior Securities                     
|        |                                                     
|        | None                                                
|        |                                                     
|Item 4. | Submission of Matters to a Vote of Security 
Holders
|        |                                                     
|        | None                                                
|        |                                                     
|Item 5. | Other Information                                   
|        |                                                     
|        | None                                                
|        |                                                     
|Item 6. | Exhibits and Reports on Form 8-K                    
|        |                                                     
|        | (a)Exhibits                                         
|        |                                                     
|        |                                                     
|        |                                                     
|        |                                                     
|        |                                                     
|        |                                                     
|        |                                                     
|        |                                                     
|        |                                                     
|        | (b)Reports on Form 8-K                              
|        |                                                     
|        |                                                     















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 20 , 2004 |                               
|                         |                               
|                         |