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                          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 June 30, 1998
                                    -------------
                               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:  0-25600
        
           OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP
     --------------------------------------------------------
      (Exact name of registrant as specified in its charter)
                                
         Maryland                            52-1394232
-------------------------------           -------------------
(State or other jurisdiction of           (I.R.S. Employer
incorporation or organization)            Identification No.)

   7200 Wisconsin Avenue, 11th floor, Bethesda, Maryland 20814
   -----------------------------------------------------------   
   (Address of principal executive offices)          (Zip Code)
                                        
Registrant's telephone number, including area code (301) 654-3100

Securities registered pursuant to Section 12(b) of the Act:
Beneficial Assignee Interests
-----------------------------
Securities registered pursuant to Section 12(g) of the Act:
Beneficial Assignee Interests
-----------------------------
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 / /

At  June  30, 1998, the following classes of beneficial  assignee
interests  of Oxford Tax Exempt Fund II Limited Partnership  were
outstanding:    (i)   7,185,200  beneficial  assignee   interests
("BACs")  with  an aggregate market value ($27.75 per  share)  of
$199,389,300, and (ii) 6,946 Status Quo BACs ("SQBs").

Index to Exhibits is found on page 3.
=================================================================
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          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP
                                
                            FORM 10-Q
                               
                  PART I-FINANCIAL INFORMATION
                                
Item 1.  Financial Statements.

    The financial statements of OTEF II  are  incorporated herein
by reference to sequentially numbered pages 14 through 17 of OTEF
II's Quarterly Report (Unaudited).

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

    A  discussion of OTEF II's financial condition and results of
operations  for  the three and six-month periods ended  June  30,
1998 is incorporated herein by reference to sequentially numbered
pages  6 through 13 entitled "Report of Management"  included  in
OTEF II's Quarterly Report (Unaudited).

                    PART II-OTHER INFORMATION

Item 1.  Legal Proceedings.
         
    Information responsive to this Item regarding putative  class
and  derivative  lawsuits is contained in  Note  8  to  Financial
Statements of the Form 10-K for the year ended December 31,  1997
filed by OTEF II.
         
Item 2.  Changes in Securities.
         
    Information  responsive  to   this  Item regarding changes in
securities  is  contained  in  Item  2 of the Form 10-Q/A for the
quarter ended March 31, 1997, filed by OTEF II.
         
Item 3. Defaults Upon Senior Securities.
    None.

Item 4. Submission of Matters to a Vote of Security Holders.
    None.

Item 5. Other Information.

   In  connection with the incentive option BACs, a  Registration
   Statement on Form S-8 was filed with the SEC on June 10, 1998,
   and a Post Effective Amendment was filed  with the SEC on June
   12, 1998.

Item 6. Exhibits and Reports on Form 8-K.
    (a) Exhibits.
        For a  list  of  Exhibits  as  required  by  Item  601 of
        Regulation  S-K,   see  Exhibit  Index on  page 3 of this
        report.
    (b) Reports on Form 8-K.
        None.
       
    No other items were applicable.
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          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP
                                
                            FORM 10-Q
                                
                          EXHIBIT INDEX

(Listed according to the number assigned in the Exhibit  Table in
Item 601 of Regulation S-K).

(20) Report furnished to Security Holders.

     Oxford  Tax  Exempt  Fund II Limited Partnership's Quarterly
     Report  (Unaudited)  dated   June   30,   1998,  follows  on 
     sequentially numbered pages 5 through 24 of this report.

(27) Financial Data Schedule.









































<PAGE> 4
                                
          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP
                                
                            FORM 10-Q
                                
                           SIGNATURES

    Pursuant  to the requirements of Section 13 or 15(d)  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.

                  Oxford Tax Exempt Fund II Limited Partnership

                  By:  Oxford Tax Exempt Fund II Corporation
                       Managing General Partner of the registrant

Date: 8/14/98     By:  /S/ Richard R. Singleton
      -------          ------------------------------------------ 
                       Richard R. Singleton
                       Senior Vice President and 
                         Chief Financial Officer

   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: 8/14/98     By: /S/ Francis P. Lavin 
      -------         -------------------------------------------
                      Francis P. Lavin
                      Director and President


Date: 8/14/98     By: /S/ Robert B. Downing
      -------         -------------------------------------------
                      Robert B. Downing
                      Director and Executive Vice President






                                












<PAGE> 5











            OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP

                        Quarterly Report
                           (Unaudited)

                          June 30, 1998





















     CONTENTS

     Report of Management
     Balance Sheets
     Statements of Income
     Statement of Partners' Capital
     Statements of Cash Flows
     Notes to Financial Statements
     Instructions for Investors who wish to reregister or
       transfer OTEF II BACs










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Report of Management
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    The following report provides information about the financial
condition  of  Oxford Tax Exempt Fund II Limited  Partnership,  a
Maryland limited partnership ("OTEF II" or the "Partnership"), as
of  June  30, 1998, and its results of operations and cash  flows
for  the  period then ended.  This report and analysis should  be
read  together  with the financial statements and  related  notes
thereto  and  the selected financial data appearing elsewhere  in
this Quarterly Report.

Recent Developments

    Distribution  for  the  Quarter ended  June  30,  1998.   The
Managing  General  Partner  declared,  on  June  17,   1998,    a
distribution for the quarter ended June 30, 1998 in the amount of
$0.51  per  BAC  for the Liquidity BAC holders,  and  $12.38  per
Status  Quo  BAC (SQB) holders.  For the Liquidity  BAC  holders,
this  represents a 3% increase in the amount of the  distribution
paid for the last quarter.

    Investments  in  New  Assets.   On July  20,  1998,  OTEF  II
acquired $10,300,000 Texas Department of  Housing  and  Community  
Affairs  Multifamily Mortgage  Revenue  Refunding Bonds  (Dallas-
Oxford Development) Series 1998 (the "Dallas  Refunding  Bonds").
As previously reported, on December 30, 1997, OTEF II  purchased, 
at a discount, $11,700,000  of  tax-exempt bonds  issued  by  the 
Texas Department of Housing and Community Affairs. The bonds  are 
collateralized by Springhouse Apartments,  a  372-unit  apartment
community located in Dallas, Texas, that is owned by a privately-
held Maryland limited  partnership  whose  general  partners  are
affiliates of OTEF II ("Dallas Borrower").

     In connection with the recent refunding transaction, OTEF II
exchanged the bonds that it acquired on December 30, 1997 for the
Dallas  Refunding Bonds.  The Dallas Refunding  Bonds  bear  tax-
exempt  interest at an annual fixed rate of 7.25% for an  initial
term through July 1, 2005, at which time the interest rate resets
based on various formulas.  The Dallas Refunding Bonds mature  on
April  1,  2018,  subject  to earlier  redemption  (optional  and
mandatory) upon the occurrence of certain events.

    In addition, OTEF II funded the balance of a taxable loan  in
the  amount of $355,000.  The Dallas Borrower will apply the  net
proceeds  of this loan to fund certain capital improvements,  and
pay  transactional, bond refunding and certain other costs.   The
taxable  loan in the aggregate principal amount of $680,000  will
be  repaid on an interest-only basis with taxable interest at  an
annual  fixed rate of 9.30% on the principal balance  outstanding
from  time  to  time  with the principal due  at  maturity.   The
taxable  loan  matures on the same date as the  Dallas  Refunding
Bonds  and is prepayable on the same terms and conditions as  the
Dallas Refunding Bonds.


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Report of Management 
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   On May 28, 1998, Summerwalk Properties L.L.C. (the "Summerwalk
Borrower"), an affiliate of OTEF II, completed its acquisition of
Summerwalk  at  the  Crossings  Apartments,  a  264-unit   garden
apartment  community  located in a  suburb  of  Atlanta,  Georgia
("Summerwalk Transaction").  The total purchase price paid by the
Summerwalk  Borrower  was  approximately  $16.65  million.    The
property  is financed with $10 million of tax-exempt  bonds  that
bear  interest at an adjustable one-year rate, which is currently
3.9%.   This  debt  was  assumed by the  Summerwalk  Borrower  in
connection  with  the  acquisition.   The  tax-exempt  bonds  are
secured by a first mortgage on the property and held by unrelated
third parties.  OTEF II expects to purchase these bonds at a  to-
be-determined future date.

   At the closing, OTEF II purchased a certificate from a grantor
trust, which represents all of the economic interest of the trust
in connection with the Summerwalk Transaction.  The trust made  a
taxable  loan  to  the  Summerwalk  Borrower  in  the  amount  of
approximately $6.9 million bearing an  annual  fixed accrual rate
of interest of 12%, with the option of additional advances to  be
made  in  the  future.  This loan will be used by the  Summerwalk
Borrower  to  fund  the  balance of the purchase  price  for  the
property,   as   well   as  various  costs,   expenses,   capital
improvements and reserves.  This taxable loan is also secured  by
a subordinated mortgage on the property.

     The  terms  of  this  loan  are  anticipated  to  result  in
substantially  all of the property's current and expected  future
increases in both cash flow and property value being paid to OTEF
II  as  interest on this loan.  OTEF II anticipates that it  will
restructure the tax-exempt bonds and the taxable loan as soon  as
practicable  following  the  closing,  which  restructuring   may
include, among other things, a refunding of the tax-exempt  bonds
and  a  modification of the interest rate on the tax-exempt bonds
to  a  higher rate.  OTEF II expects to purchase the restructured
or  refunded bonds, and may sell or finance all or a  portion  of
the taxable loan.

    On  April  30,  1998,  OTEF II and  an  affiliate  closed  an
investment  transaction ("Jacaranda Transaction")  involving  the
acquisition  by  OTEF  II of approximately  $7  million  of  debt
secured  by real estate simultaneously acquired by such affiliate
from  a  third  party.   In  connection  with  this  transaction,
Jacaranda-Oxford  Limited Partnership ("Jacaranda  Borrower"),  a
Maryland   limited  partnership,  purchased   Harbour   Town   of
Jacaranda,  a  280-unit  garden apartment  community  located  in
Plantation,  Broward County, Florida.  The total  purchase  price
paid  by the Jacaranda Borrower was approximately $18.75 million.
The property is financed with $11.8 million of senior, tax-exempt
bonds  that  bear interest at a weekly floating rate based  on  a
spread  over  the  applicable short-term,  tax-exempt  securities
index.   The senior bonds are secured by a first mortgage on  the
property  and are currently held by third parties.  OTEF  II  may
purchase these senior bonds at a future date.
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Report of Management
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    At  closing, OTEF II purchased from an unrelated third  party
$4.2  million of subordinated, tax-exempt bonds, which  currently
bear an annual fixed rate of interest of 6.25% and are secured by
a subordinated mortgage on the property.  It is expected that the
interest rate on the subordinated, tax-exempt bonds held by  OTEF
II will be increased to approximately 13% later this year.

    At  closing, OTEF II purchased a certificate from  a  grantor
trust,  which  represents  all of the economic  interest  of  the
trust.   The  trust made a taxable loan to the  Borrower  in  the
amount  of  approximately $2.9 million, due  on  April  1,  2006,
bearing an annual fixed accrual rate of interest of 12%, with the 
option to make additional advances in the  future.  This loan was
used by the Jacaranda  Borrower to fund a portion of the purchase 
price  for  the  property,  as  well  as various costs, expenses,  
capital improvements and reserves. This loan  is  secured  by   a
subordinated  mortgage on the property.  The terms of  this  loan
are  anticipated to result in substantially all of the property's
current  and  expected future increases in cash  flow,  remaining
after  payment  of  debt service on the senior  and  subordinated
bonds,  and  property value being paid to OTEF II as interest  on
this loan.

    Financing Transactions.  On May 21, 1998, OTEF II closed  the
third   in   a   series  of  transactions  with  Merrill   Lynch,
securitizing approximately $11 million of Series A Bonds held  in
OTEF  II's  portfolio.   OTEF II also  purchased  a  subordinated
interest  in  this securitization transaction for  $0.1  million.
This  transaction involved a newer and more favorable  structure,
compared with prior securitization transactions completed by OTEF
II.   OTEF  II  netted  approximately  $10.8  million  from  this
transaction, after taking into account transaction costs and  the
purchase of the subordinated interest.  As previously reported, a
portion of these proceeds were used by OTEF II in connection with
the  Summerwalk Transaction.  The remaining proceeds will be used
for  additional  transactions that are expected to  be  completed
later  this  year.     See  "Liquidity and  Capital  Resources  -
Financing Transactions" for additional information.

    Status  Quo  BACs.  Effective April 1, 1997, OTEF  II  issued
SQBs,  representing 12,587 shares, in uncertificated,  book-entry
form.   During  1997, a total of 5,494 SQBs were redeemed  for  a
cost of $3.0 million.  During the first two quarters of 1998,  an
additional 147 SQBs were redeemed at prices ranging from $540  to
$550 per share, leaving 6,946 SQBs outstanding at June 30, 1998.

    The Information Memorandum states that, subject to receipt of
a  fairness  opinion  from  OTEF  II's  independent  real  estate
consultant, all outstanding SQBs will be purchased or redeemed by
OTEF  II  at  such time as the Managing General Partner  believes
that it would be in the best interests of OTEF II and the holders
of the non-tendered SQBs, but in no event later than December 31,
2006,  which  date  may be extended under certain  circumstances.
The purchase or redemption price will be the fair market value of
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Report of Management
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the Status Quo Assets at the time of purchase or redemption, less
the  costs  of sale.  The Managing General Partner has undertaken
an  analysis of whether such a purchase or redemption by OTEF  II
would be in the best interests of the SQB Holders and OTEF II  at
the  present time and, in connection therewith, is reviewing  all
ownership  attributes of the SQBs.  The Managing General  Partner
expects to complete its analysis later this year.

Liquidity and Capital Resources

    Current  Position.   OTEF  II uses  the  interest  income  it
receives from Refunding Bonds, Existing MRBs, New Assets (each as
defined   below),  and  cash  reserves  to  make  periodic   cash
distributions  to its General Partners, OTEF II BAC  Holders  and
SQB  Holders,  pay administrative expenses and fund reserves,  as
well as the costs and expenses associated with the implementation
of  the 1995 OTEF Restructuring Plan  and the acquisition of  New
Assets.  In   connection  with  the  settlement  of the  OTEF  II
Litigation  discussed  in prior reports, OTEF  II  made  a  final
payment of plaintiff's counsel fees and expenses in the amount of
$1.54  million in the second quarter upon the expiration  of  all
appeal periods and dismissal of the state court action.

    As of June 30, 1998, OTEF II held approximately $16.5 million
in  cash  and  cash equivalents, an increase of  $5  million,  or
approximately  41%,  from  the $11.7 million  in  cash  and  cash
equivalents  held  as  of December 31, 1997.   This  increase  in
OTEF  II's cash and cash equivalents was primarily the result  of
the   $20  million  of  net  proceeds  generated  from  Financing
Transactions offset by $14 million in acquisitions and loans made
as described above.  Total assets were $291.7 million compared to
$270.7   million  at  December  31,  1997.  In  addition,   total
liabilities  of OTEF II shown on the balance sheet  increased  by
$18 million to approximately $52 million as of June 30, 1998 from
approximately  $34  million  at December  31,  1997  due  to  the
Financing Transactions.

    Investment  in  New  Assets.  The  Managing  General  Partner
intends  to  invest primarily in additional tax  exempt  mortgage
revenue  bonds and securities of other entities, which  primarily
hold  tax-exempt mortgage revenue bonds.  OTEF II also may invest
in   multifamily  real  estate,  senior  living   facilities   or
residential  health care facilities, or other direct or  indirect
debt  or equity interests in such real estate, some of which  may
give rise to taxable income (all of the foregoing are referred to
collectively  as  "New Assets").  See "Recent  Developments"  for
additional information regarding New Assets.

    OTEF  II  generally will acquire additional mortgage  revenue
bonds  and  taxable  bonds  that are not  rated  by  any  of  the
nationally  recognized rating agencies (such as Moody's  Investor
Services, Inc. or Standard & Poor's Ratings Group) and  that  are
not credit-enhanced at the time of acquisition, although OTEF  II

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Report of Management
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may  seek  to have all or a portion of such bonds credit-enhanced
or  rated at a future date.  It also is expected that OTEF II may
invest in bonds, including bonds that may be secured by bonds  or
mortgages that are subordinated to senior bonds or mortgages held
by  third parties, on terms that may permit it, in some cases, to
participate (either through stepped interest rates or  otherwise)
in  the  future  growth and increase in value of  the  properties
financed by such bonds.

    Refunding Bonds.  As of June 30, 1998, twelve of the  fifteen
mortgage revenue bonds owed by OTEF II prior to implementation of
the  1995 Restructuring Plan ("Existing MRBs") had been refunded,
representing  88% of the combined face amounts  of  the  Existing
MRBs and Refunding Bonds portfolio.

    The  refunding bonds that were issued to refund Existing MRBs
("Refunding  Bonds") are structured so as to  consist  of  senior
bonds  ("Series  A  Bonds")  and subordinated  bonds  ("Series  B
Bonds").    This  senior/subordinated  structure  has   permitted
OTEF II to undertake one or more financings, pursuant to which it
will  sell  all or a portion of the Series A Bonds, or  interests
therein,  that  are  allocable to the OTEF  II  BACs  ("Liquidity
Assets"),  or issue debt that may be secured by such assets,  New
Assets  or both.  The net proceeds from these financings will  be
invested in New Assets, as discussed above.  OTEF II will  retain
the  related Series B Bonds for the benefit of the Liquidity  BAC
Holders, and will retain both the senior Series A Bonds  and  the
subordinated  Series B Bonds, or interests therein, allocable  to
the  SQBs  ("Status  Quo  Assets") for the  benefit  of  the  SQB
Holders.

    Series  A  Bonds.   The  term of  each  Refunding  Bond  and,
accordingly, each Mortgage Loan is 30 years following the date of
refunding.   The  Series A Bonds require interest  only  payments
during  the  first three years and, thereafter,  are  subject  to
annual  sinking  fund  redemptions  that  will  result  in   full
amortization  of the Series A Bonds during the 27-year  remaining
term.

    Series  A  Bond Interest and Principal.  The Series  A  Bonds
require pre-determined annual sinking fund redemptions based on a
27-year  amortization  schedule beginning  in  the  fourth  year,
calculated with an assumed rate of interest of 5.6% per year.  In
the current rate mode, Series A Bond interest is set initially at
closing  of  the  refundings and reset annually thereafter  at  a
market  rate based upon a percentage of the then prevailing  one-
year  U.S.  Treasury Bill rate, with a maximum rate of  5.6%  per
annum.  The initial interest rate on the Series A Bonds that have
been issued to date was 4.9%.  The interest rate on the Series  A
Bonds retained by OTEF II were reset to a rate ranging from  4.8%
-4.95%  depending on the annual reset date.  The interest rate on
the  Series  A  Bonds  involved  in  the  financing  transactions
described  above  was converted from annual  reset  to  a  weekly
floating  rate  based on a spread over the  PSA  index.   Upon  a
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Report of Management
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remarketing, the Series A Bonds may be converted to  a  different
interest rate mode (fixed or floating) and the interest rates may
be  modified  at  that  time  to reflect  the  prevailing  market
interest rates for whatever rate mode and remaining term is  then
applicable.

    Series  B  Bonds.   The  term of  each  Series  B  Bond  and,
accordingly, each Mortgage Loan is 30 years following the date of
refunding.

    Series  B  Bond Interest and Principal.  The Series  B  Bonds
accrue  interest  equal to the product of the Combined  Rate  (as
defined below) multiplied by the total combined principal balance
of  the  Series A Bonds and the Series B Bonds for each Operating
Partnership,  less the interest payable on the related  Series  A
Bonds;  the resulting amount of interest divided by the principal
balance of the Series B Bonds equals the interest accrual rate on
the  Series  B Bonds.  Interest-only is payable on the  Series  B
Bonds  to  the  extent of available cash flow  of  the  Operating
Partnership,  with the entire principal balance  and  any  unpaid
interest due at maturity.

    Combined Rate.  The Combined Rate represents that portion  of
each Property's projected cash flow before debt service  for each
year  (projected  at the time of the refunding of  each  Existing
MRB)  that  may be applied to interest on the combined  Series  A
Bonds  and  Series  B Bonds.  The 1998 weighted average  Combined
Rate for the 12 Refunding Bonds is 6.62%.  See Note 7 to the 1997
Annual  Report for a schedule of Combined Rates of the  Refunding
Bonds over the next ten years.

  Other Sources.  In connection with the closing of the Refunding
Bonds, the applicable Operating Partnerships entered into certain
pooling  agreements which may provide under certain circumstances
additional  sources  of  funds  to  enable  them  to  pay   their
respective  debt service on the Series A Bonds and the  Series  B
Bonds  and  related fees and expenses. As of June 30,  1998,  the
aggregate  amount of net excess cash flow held in  the  Operating
Partnership  escrows was approximately $1.6 million, compared  to
$1.1  million at the end of 1997.  As discussed in prior reports,
in  connection with the closing of the Oxford/NHP transaction  in
1993,  Oxford  committed  certain proceeds  of  such  closing  to
satisfy   certain   obligations  it  had   to   these   Operating
Partnerships.   Of this commitment, $1.3 million  remains  as  of
June 30, 1998.  The Managing General Partner anticipates that the
remaining   balance   will  be  advanced  to  certain   Operating
Partnerships to help defray the costs of refunding the  remaining
Existing MRBs, increase property improvement reserves and  create
operating  reserves, as deemed necessary by the Managing  General
Partner.

    Financing  Transactions. OTEF II has securitized a  total  of
approximately  $62.6  million of  its  Series  A  Bonds  and  has
purchased  approximately  $15 million of subordinated  interests.
<PAGE> 12
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Report of Management
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The  portion of the net proceeds from these transactions that  is
not invested in New Assets is temporarily invested in liquid tax-
exempt money market securities.

    In  connection with these transactions, OTEF II converted the
interest rate mode on the Series A Bonds from an annual reset  to
weekly  floaters.   In  the first securitization  transaction  on
August  22,  1997,  OTEF II also purchased a three-year  interest
rate  cap  on a notional amount of approximately $27  million  to
minimize  the  effects of interest rate volatility.   Under  this
arrangement, if the average short-term, tax-exempt interest rates
for  any  month  during  the term of the  cap  increase  above  a
specified level (6%), the counter-party to the interest rate  cap
transaction is required to pay directly to OTEF II the amount  by
which such rates exceed the specified level.

    For  financial  statement purposes,  these  transactions  are
accounted  for  as  financing transactions.  The  amount  of  the
Series  A  Bonds  financed  of  approximately  $62.6  million  is
reflected as Securities Held in Trust, the net cash proceeds  are
classified  as  Cash  and  Cash Equivalents  and  the  difference
between  the principal amount of the Series A Bonds financed  and
the  principal amount of the subordinated interests  acquired  by
OTEF II is classified as financing debt.  The aggregate financing
debt  at  June  30, 1998 was $47.6 million as compared  to  $27.2
million  as  of  December  31, 1997.  The  financing  debt  bears
interest  at  the  Public Securities Association  ("PSA")  weekly
floating  bond  index plus approximately 80 to 85  basis  points,
which  averaged  4.46% from the date of closing through  December
31,  1997  and  4.16% for the first six months  of  1998.   Costs
associated with these financing transactions are being  amortized
over  10  years  for  financial  statement  purposes,  and  costs
associated  with the interest rate cap are being  amortized  over
the  life  of the interest rate cap agreement, which is 3  years.
For  federal income tax purposes, these transactions are  treated
as  sales  by  OTEF II of the applicable Series  A  Bonds  and  a
purchase  of  the subordinated interests.  With  respect  to  the
first transaction, the sale of the Series A Bonds resulted  in  a
1997   capital   loss  for  federal  income   tax   purposes   of
approximately  $3.8 million.  Information regarding  the  federal
income  tax  consequences  of  financing  transactions  completed
during 1998 will be provided later this year.

    Existing  MRBs.  As of June 30, 1998, OTEF II  held  Existing
MRBs  for two of the Operating Partnerships.  It is expected that
the  refunding  of  at  least one of the Operating  Partnership's
Existing MRBs will close in 1998.

Results of Operations
   
OTEF II's  Operations

    OTEF II Distributions.  Distributions to Partners will amount
to  approximately  $3.8 million, or $0.51 per Liquidity  BAC  and
$12.38 per SQB holders of record as of June 30, 1998.
<PAGE> 13
-----------------------------------------------------------------
Report of Management
-----------------------------------------------------------------

    OTEF  II's  Three-Month Operations.  For financial  statement
purposes,  Net Income and Net Income per Liquidity BAC  was  $4.5
million and $0.59, respectively, for the three-month period ended
June  30, 1998, compared to $4.3 million and $0.56, respectively,
for  the  same  period  in 1997.  Net Income  per  Liquidity  BAC
assuming dilution due to the incentive option plan for the three-
month  period ended June 30, 1998 was $0.58. The increase in  Net
Income  for the comparative three-month periods is the result  of
additional  interest received on New Assets exceeding  the  costs
associated with the implementation of the Liquidity & Growth Plan
that were not incurred in the prior comparative period.

    OTEF  II's  Six-Month  Operations.  For  financial  statement
purposes,  Net Income and Net Income per Liquidity BAC  was  $9.0
million  and $1.20, respectively, for the six-month period  ended
June   30,   1998,  as  compared  to  $8.6  million  and   $1.12,
respectively, for the six-month period ended June 30, 1997.   The
increase  in  Net  Income  is the result of  additional  interest
received  on New Assets exceeding the costs associated  with  the
implementation  of  the Liquidity & Growth  Plan  that  were  not
incurred  in  the  prior  comparative  period.   Net  Income  per
Liquidity BAC assuming dilution due to the incentive option  plan
for the six-month period ended June 30, 1998 was $1.18.

    Due to OTEF II's conversion of a portion of the BACs to SQBs,
effective April 1, 1997, there were 7,499,875 BACs outstanding in
the  first  quarter of 1997 compared to 7,185,200  in  the  first
quarter  of  1998.   Consequently, the weighted average number of
Liquidity  BACs outstanding for the computation of  earnings  per
share  was 7,185,200 and 7,342,538, respectively as of  June  30,
1998  and  1997, respectively.  Beginning in 1998,  the  relative
portion  of  OTEF  II's  administrative costs  allocated  to  SQB
Holders  increased  due to the adoption by the  Managing  General
Partner  of a new cost allocation methodology designed to reflect
the  actual  time  incurred to administratively service  the  SQB
Holders.   During the period from April 1, 1997 to  December  31,
1997,  these administrative costs were allocated based  upon  the
ratio  of  SQB  Holders to BAC Holders.  After consultation  with
OTEF  II's  professional advisors, the Managing  General  Partner
believes  that  this  new methodology is more  equitable  to  all
parties.













<PAGE> 14

Oxford Tax Exempt Fund II Limited Partnership
<TABLE>
-----------------------------------------------------------------------------
Balance Sheets (in thousands)
-----------------------------------------------------------------------------
<CAPTION>
                                                        June 30,   
                                                         1998    December 31,
                                                      (Unaudited)    1997
-----------------------------------------------------------------------------
<S>                                                     <C>        <C>
Assets                                                 
  Investments in tax-exempt securities                  $199,250   $217,159
  Investments in tax-exempt securities held in trust      62,565     38,820
  Investment in taxable securities and loans              10,714          0
  Cash and cash equivalents                               16,517     11,694
  Bond and other interest receivable                       1,594      1,439
  Other assets                                             1,073      1,551
-----------------------------------------------------------------------------
      Total Assets                                      $291,713   $270,663
=============================================================================
                                                                             
Liabilities and Partners' Capital                                            
  Liabilities                                                                
    Financing debt                                      $ 47,614   $ 27,174  
    Accounts payable and accrued expenses                    470      2,988  
    Distributions payable                                  3,827      3,719  
-----------------------------------------------------------------------------
      Total Liabilities                                   51,911     33,881
-----------------------------------------------------------------------------
                                                                             
Partners' Capital                                                            
  General Partners' Interests                             (2,327)    (2,356)
  Limited Partners' Interests:                                               
    Beneficial Assignee Interests (7,499,875                                 
      interests issued and 7,185,200 interests                               
      outstanding as of June 30, 1998)                   158,097    156,672  
    Status Quo BAC Interests (12,587 interests                               
      issued as of April 1, 1997, and 7,093 and                              
      6,946 interests outstanding as of December 31,                         
      1997 and June 30, 1998, respectively)                3,814      3,885
  Accumulated other comprehensive income                  80,218     78,581
-----------------------------------------------------------------------------
      Total Partners' Capital                            239,802    236,782
-----------------------------------------------------------------------------
      Total Liabilities and Partners' Capital           $291,713   $270,663
=============================================================================
                                                                             
       The accompanying notes are an integral part of these financial
                             statements.
</TABLE>
                                





<PAGE> 15

Oxford Tax Exempt Fund II Limited Partnership
<TABLE>
-----------------------------------------------------------------------------
Statements of Income and Comprehensive Income (in thousands,except per 
                                               Liquidity BAC amounts) 
(Unaudited)
-----------------------------------------------------------------------------
<CAPTION>
                                            Three months        Six months 
                                           ended June 30,     ended June 30,
                                          ----------------   ----------------
                                           1998     1997      1998     1997
-----------------------------------------------------------------------------
<S>                                        <C>     <C>      <C>      <C>
Revenues                                                                     
  Interest on tax-exempt securities        $4,335  $4,629   $ 9,062  $ 9,234
  Interest on tax-exempt securities                                           
    held in trust                             669       0     1,143        0 
  Interest on taxable securities                                             
    and loans                                 153       0       173        0 
  Other, primarily interest                   162     113       283      204 
-----------------------------------------------------------------------------
    Total Revenues                          5,319   4,742    10,661    9,438 
-----------------------------------------------------------------------------
Expenses                                                                     
  Governance and administrative expenses     (207)   (185)     (441)    (497)
  Litigation and settlement costs              (2)   (106)       (7)    (204)
  Liquidity and growth expenses              (170)   (127)     (385)    (147)
  Finance interest expense                   (489)      0      (820)       0 
-----------------------------------------------------------------------------
    Total Expenses                           (868)   (418)   (1,653)    (848)
-----------------------------------------------------------------------------
Net Income                                 $4,451  $4,324   $ 9,008  $ 8,590
=============================================================================
Other comprehensive income:                                                  
  Unrealized gains on investments           1,502   2,996     1,637    5,383
============================================================================= 
Comprehensive income                       $5,953  $7,320   $10,645  $13,973
=============================================================================
Net income allocated to Liquidity BACs     $4,269  $4,054   $ 8,646  $ 8,235
=============================================================================
Weighted Average Liquidity                                                    
  BACs outstanding                          7,185   7,185     7,185    7,343
=============================================================================
Net income per Liquidity BAC<F1>           $ 0.59  $ 0.56   $  1.20  $  1.12
=============================================================================
Weighted Average Liquidity                                                   
BACs outstanding-assuming dilution<F2>      7,271   7,185     7,266    7,349
=============================================================================
Net income per Liquidity BAC-assuming                                        
  dilution<F2>                             $ 0.58  $ 0.56   $  1.18  $  1.11
=============================================================================
Distribution per Liquidity BAC<F1>         $ 0.51  $0.476   $ 1.005  $ 0.952
=============================================================================



<PAGE> 15 (continued)

<FN>
<F1>  Prior periods Liquidity BAC interest amounts have  been restated to 
      reflect the 25-for-1 stock split which occurred  on  July  1,  1997  
      and amounts presented are after allocation of net income to General 
      Partners  and  Status  Quo  BAC  holders. (See  Note  3 for the SQB 
      Statement of Income).
<F2>  Reflects the dilutive  effect  of unexercised stock options granted
      in the second quarter of 1997.
</FN>
                                
The accompanying notes are an integral part of these financial statements.

</TABLE>












































<PAGE> 16
Oxford Tax Exempt Fund II Limited Partnership
<TABLE>
-----------------------------------------------------------------------------
Statement of Partners' Capital (in thousands)(Unaudited)
-----------------------------------------------------------------------------
<CAPTION>                                 Partners'     
                                      Limited Interests                      
                                     ------------------- Accumulated        
                                     Beneficial  Status     Other            
                             General  Assignee   Quo BAC Comprehensive  
                             Partners Interests Interests   Income   Total
-----------------------------------------------------------------------------
<S>                          <C>       <C>        <C>      <C>      <C>
Balance, December 31, 1997   $(2,356)  $156,672   $3,885   $78,581  $236,782
=============================================================================
SQB Redemption                     0          0      (55)        0       (55)
                                                                            
Net Income, including                                                        
  $0.609 per Liquidity BAC                                                 
  <F1> and $12.63 per SQB         91      4,377       89         0     4,557 
                                                                             
Unrealized gains on                                                          
  investments                      0          0        0       135       135  
                              -----------------------------------------------
  Comprehensive income            91      4,377       34       135     4,637
                                                                             
Distributions payable to                                                     
  Partners including $0.495                                                    
  per Liquidity BAC<F1> and                                                    
  $12.38 per SQB                 (74)    (3,557)     (87)        0    (3,718)
-----------------------------------------------------------------------------
Balance, March 31, 1998      $(2,339)  $157,492   $3,832   $78,716  $237,701
=============================================================================
SQB Redemption                     0          0      (25)        0       (25)
                                                                             
Net Income, including                                                        
  $0.59 per Liquidity BAC<F1>                                                
  and $13.31 per SQB              89      4,269       93         0     4,451
                                                                             
Unrealized gains on                                                          
  investments                      0          0        0     1,502     1,502
                             ------------------------------------------------ 
  Comprehensive income            89      4,269       68     1,502     5,928 
                                                                             
Distributions payable to                                                     
  Partners including $0.51                                                   
  per Liquidity BAC<F1> and                                                  
  $12.38 per SQB                 (77)    (3,664)     (86)        0    (3,827)   
-----------------------------------------------------------------------------
Balance, June 30, 1998       $(2,327)  $158,097   $3,814   $80,218  $239,802
=============================================================================
<FN>
<F1>  Liquidity BAC share amounts reflect the 25-for-1 stock split which
      occurred on July 1, 1997.
</FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 17

Oxford Tax Exempt Fund II Limited Partnership
<TABLE>
-----------------------------------------------------------------------------
Statements of Cash Flows (in thousands)
(Unaudited)
-----------------------------------------------------------------------------
<CAPTION>
                                                   Six months ended June 30,
                                                   ------------------------- 
                                                       1998         1997
-----------------------------------------------------------------------------
<S>                                                  <C>          <C>
Operating Activities                                                         
  Net income                                         $ 9,008      $ 8,590
  Adjustments to reconcile net income                                        
    to net cash Provided by operating Activities:                            
  Changes in assets and liabilities:                                         
  Interest receivable and other                         (155)        (598)
  Litigation settlement payment                       (1,538)           0
  Accounts payable and accrued expenses                 (980)        (150)
-----------------------------------------------------------------------------
Net cash provided by operating activities              6,335        7,842
-----------------------------------------------------------------------------
Investing Activities                                                        
  Acquisitions<F2>                                   (13,958)           0      
  Decrease in other assets<F1>                          (478)           0
  Redemption of SQBs                                     (80)           0 
-----------------------------------------------------------------------------
Net cash used in investing activities                (14,516)           0    
-----------------------------------------------------------------------------
Financing activities                                                         
  Net proceeds from debt refinancing                  20,440            0   
  Distributions paid                                  (7,436)      (7,286)
-----------------------------------------------------------------------------
Net cash provided (used) by financing  activities     13,004       (7,286)
-----------------------------------------------------------------------------
Net  increase in cash and cash equivalents             4,823          556
Cash and cash equivalents, beginning of period        11,694       12,072 
-----------------------------------------------------------------------------
Cash and cash equivalents, end of period             $16,517      $12,628
=============================================================================
<FN>
<F1>  Other assets represent deferred costs incurred in association with the
      Liquidity & Growth  Plan  financing  transactions,  prepaid items, and
      short-term promissory note associated  with  the  OTEF  II  Litigation
      settlement, which are not recurring operating activities.

<F2>  Acquisitions include new tax-exempt bonds, other tax exempt securities 
      and interests in taxable loans.
</FN>

 The accompanying notes are an integral part of these financial statements.

</TABLE>



<PAGE> 18

-----------------------------------------------------------------
Notes to Financial Statements
-----------------------------------------------------------------

Note 1.  Financial Statements

   The financial statements reflect all adjustments, which in the
opinion  of  the  Managing General Partner of Oxford  Tax  Exempt
Fund II Limited Partnership ("OTEF II" or the "Partnership"), are
necessary  to present fairly OTEF II's financial position  as  of
June 30, 1998 and December 31, 1997, the Statements of Income and
Comprehensive  Income for the three and six-month  periods  ended
June 30, 1998 and 1997, the Statement of Partners' Capital as  of
June 30, 1998, and the Statements of Cash Flows for the six-month
period  ended June 30, 1998 and 1997, and the notes  thereto,  in
accordance with generally accepted accounting principles.   These
statements  should  be  read  in  conjunction  with  the  audited
financial  statements  and notes included  in  the  Partnership's
Annual Report for the year ended December 31, 1997.

    In  February  1997, the Financial Accounting Standards  Board
issued  a  Statement of Financial Accounting Standards  No.  128,
"Earnings Per Share", which changed the reporting of earnings per
share  beginning in the fourth quarter of 1997.   Basic  earnings
per  share,  a  measure required by the new  standard,  does  not
include  stock  options  as  common stock  equivalents.   However
diluted earnings per share includes the effect of stock options.

Note 2.  Business

    The  Partnership was formed under the laws of  the  State  of
Maryland in February, 1995, in connection with a plan (the  "1995
OTEF  Restructuring Plan") to restructure Oxford Tax Exempt  Fund
Limited  Partnership,  a Maryland limited partnership  ("OTEF,  "
"Predecessor, " or "OTEF II's predecessor").  Oxford  Tax  Exempt
Fund  II  Corporation, a Maryland corporation,  is  the  Managing
General  Partner  of  OTEF II (the "Managing  General  Partner").
OTEF  II  Associates  Limited  Partnership,  a  Maryland  limited
partnership,  is  the  associate  general  partner  of  OTEF   II
(together  with  the  Managing  General  Partner,  the   "General
Partners").

Note 3.  Significant Accounting Policies

    Method  of  Accounting.  OTEF II's financial  statements  are
prepared   in  accordance  with  generally  accepted   accounting
principles.    The   preparation  of  financial   statements   in
conformity with generally accepted accounting principles requires
management  to  make estimates and assumptions  that  affect  the
reported  amounts  of assets and liabilities  and  disclosure  of
contingent  assets and liabilities at the dates of the  financial
statements  and  the  reported amounts of revenues  and  expenses
during  the reporting periods.  Actual results could differ  from
those estimates.



<PAGE> 19
-----------------------------------------------------------------
Notes to Financial Statements
-----------------------------------------------------------------
   
    Income Taxes.  No provision has been made for federal, state,
or  local  income taxes in the financial statements  of  OTEF  II
since  the  Partners of OTEF II are required to report  on  their
individual  tax returns their allocable share of taxable  income,
gains, losses, deductions, and credits of OTEF II.

   Valuation of Bonds.  The Managing General Partner estimated at
June 30, 1998 that the fair value of the 12 Series A and Series B
Bonds, the two Existing MRBs and the New Assets was approximately
$261.8  million and, accordingly, OTEF II recorded  a  credit  to
Partners'  Capital  in  an amount equal  to  approximately  $80.2
million  of  unrealized gain on investments.  This represents  an
increase  of approximately $1.6 million since December 31,  1997.
The  Managing General Partner determined these values  using  the
same  cash flow methodology applied by a major investment banking
firm  in  connection with structuring advice rendered to OTEF  II
and  its  predecessor with respect to the 1995 OTEF Restructuring
Plan.   The  Series A Bonds are valued at par based on comparable
municipal  bond securities, the Existing MRBs and  the  Series  B
Bonds  are valued based on a discounted cash flow analysis.   For
this  purpose,  the applicable cash flows are  based  on  certain
assumptions  concerning the Properties and the markets  in  which
they  are located, including the timing and realization  of  such
cash  flows.   The New Assets are also valued at  their  original
purchase price at date of acquisition.

    Net Income and Distributions per Beneficial Assignee Interest
(BAC)  and  SQB.  Net income and distributions per  BAC  and  net
income  and  distributions per Status Quo BAC ("SQB")  are  based
upon  the  weighted average number of BACs and  SQBs  outstanding
during  the  applicable  period. On  April  1,  1997  there  were
7,499,875  BACs outstanding, and 314,675 BACs were  converted  to
12,587 SQBs, leaving 7,185,200 Liquidity BACs outstanding. During
1997,  5,494 SQBs were redeemed for a total cost of $3.0 million.
In  the first six-month period of 1998, 147 SQBs were redeemed at
a  cost  of  $0.08 million, including 45 SQBs during  the  second
quarter, leaving 6,946 SQBs outstanding at June 30, 1998.

    Comprehensive Income.  In June 1997, the Financial Accounting
Standards   Board   issued  Statement  of  Financial   Accounting
Standards No. 130 "Reporting Comprehensive Income" which requires
the  reporting of comprehensive income as part of a full  set  of
financial  statements.  Comprehensive income includes  both  "Net
Income" and "Other Comprehensive Income".  OTEF's only source  of
"other  comprehensive income" is related to the valuation of  its
tax-exempt  investments  to market which  results  in  unrealized
gains  or  losses previously charged to an equity  account  under
SFAS  115 "Accounting for Certain Investments in Debt and  Equity
Securities".    SFAS  130  does  not  require   presentation   of
comprehensive  earnings per share.  For the  three  month  period
ended  June 30, 1998, OTEF recorded "Other Comprehensive  Income"
from  unrealized gains on its investment in tax-exempt securities
of   $1.5  million and $3.0 million for the same period in  1997.
For  the  six-month  period ended June 30,  1998,  OTEF  recorded
<PAGE> 20

-----------------------------------------------------------------
Notes to Finanacial Statements
-----------------------------------------------------------------

"Other  Comprehensive  Income"  from  unrealized  gains  on  it's
investments  in tax exempt securities of  $1.6 million  and  $5.4
million for the same period in 1997.

    Statements of cash flows.  The statements of cash  flows  are
intended  to reflect only cash receipts and cash payment activity
during  the  reporting  period.  The statements  do  not  reflect
investing and financing activity that affect recognized assets or
liabilities that do not result in cash receipts or cash  payments
during  such period, including distributions payable to Partners,
SQB  Holders,  and  OTEF  II BAC Holders  of  approximately  $3.8
million at June 30, 1998 and $3.6 million at June 30, 1997.

    Cash and cash equivalents.  Cash and cash equivalents consist
of  all  demand deposits and tax-exempt money market funds stated
at   cost,   which  approximates  market  value,  with   original
maturities of three months or less.

   Accounting for Status Quo Interests.  The SQBs are designed to
replicate, to the extent possible, the economic interest that the
holders of the SQBs (the "Status Quo BAC Holders") would have had
in  the  Existing MRBs, as refunded, if the partnership agreement
for  Oxford  Tax  Exempt Fund Limited Partnership ("OTEF"),  OTEF
II's  predecessor, had continued to govern and the Liquidity  and
Growth Plan was not implemented.

    For  financial statement purposes, the SQBs are treated as  a
separate class of security and, accordingly, net income allocated
to SQB holders, net income per SQB, and distributions per SQB are
reflected  separately  from  the  OTEF  II  BAC  Holders  on  the
Statement of Partners' Capital.  The SQBs were not split as  were
the  OTEF  II  BACs  on  July 1, 1997.   The  redeemed  SQBs  are
reflected  as  a reduction of Partners' Capital and  were  offset
against the SQB Holders' interests when redeemed.

    The  SQB Holders do not share in the growth or other benefits
expected to be achieved under the Liquidity and Growth Plan.   In
addition,  the SQBs will not be allocated any capital losses  for
federal  income tax purposes that may result from the disposition
of  the  Refunding Bonds or interests therein or  new  assets  in
connection with a financing undertaken pursuant to the  Liquidity
and Growth Plan.  Set forth below is a schedule of SQB income for
the three and six-months ended June 30, 1998:










<PAGE> 21

-----------------------------------------------------------------
Notes to Financial Statements
-----------------------------------------------------------------

<TABLE>
-----------------------------------------------------------------
                STATEMENT OF STATUS QUO BAC INCOME
          (in thousands, except per SQB interest amounts)
                          (Unaudited)
-----------------------------------------------------------------
<CAPTION>
                                Three Months        Six Months
                                    Ended         Ended June 30,
                                  June 30,          Pro Forma
                               --------------   ----------------- 
                                1998<F2> 1997   1998<F2> 1997<F1>
                               ----------------------------------   
<S>                            <C>     <C>     <C>      <C>
Revenues                                                         
  Interest on Bonds            $  103  $  190  $  212   $  380
  Other Interest                    3       5       6        8
-----------------------------------------------------------------
                                  106     195     218      388
                                                                  
Expenses                                                         
  Governance and Administration   (13)     (8)    (34)     (21)
  Litigation expenses              (1)     (4)     (2)      (8)
-----------------------------------------------------------------     
Net income to SQB holders      $   93  $  183  $  182   $  358
=================================================================
Other comprehensive income:                                      
 Unrealized gains on investment                                 
    in tax-exempt securities       35     126      38      226 
=================================================================
Comprehensive income           $  128  $  309  $  220   $  584
=================================================================
Weighted average SQB                                             
  shares outstanding            6,961  12,587   6,993   12,587
=================================================================
Net income per SQB interest    $13.31  $14.54  $26.03   $28.48 
=================================================================
Distribution per SQB interest  $12.38  $11.90  $24.76   $23.64  
=================================================================    
<FN>                                                             
<F1>  Since  the SQBs were issued on April 1, 1997, there are no
      actual comparative results of SQB operations for the three
      months ended March 31, 1997.  This  Pro Forma presentation 
      includes the SQB holders' earnings  for  the first quarter 
      of 1997, before  their  Beneficial  Assignee  Certificates
      (BACs) were converted to SQBs.                             
                                                                
<F2>  The Information Memorandum states that, subject to receipt
      of  a  fairness  opinion  from  OTEF II's independent real 
      estate consultant,  all outstanding SQBs will be purchased
      or redeemed by OTEF II  at  such  time  as  the   Managing 
      General Partner believes  that  it  would  be  in the best

<PAGE> 22

----------------------------------------------------------------
Notes to Financial Statements
----------------------------------------------------------------

<F2> (continued)
      interests of OTEF II and the holders  of  the non-tendered
      SQBs, but in no event later than December 31, 2006,  which
      date may be  extended  under  certain  circumstances.  The 
      purchase or redemption price will be the fair market value
      of  the  Status  Quo  Assets  at  the  time of purchase or 
      redemption, less the costs of sale.  The  Managing General 
      Partner has undertaken  an  analysis  of  whether  such  a 
      purchase or redemption by OTEF II would  be  in  the  best
      interests of the SQB Holders and OTEF II  at  the  present 
      time  and,  in  connection  therewith,  is  reviewing  all
      ownership  attributes  of the  SQBs.  The Managing General 
      Partner expects to complete its analysis later this year.
</FN>
</TABLE>

Note 4.  Related Party Transactions

    Interests  in  OTEF II and the Operating  Partnerships.   The
General  Partners own interests in OTEF II that entitle  them  to
receive  a  share  of OTEF II's cash flow and possibly  of  sale,
refinancing  and  liquidation  proceeds.  Distributions  to   the
General Partners totaled approximately $0.08 million for the  six
months ended June 30, 1998 and 1997.

    Affiliates  of the Managing General Partner that are  general
and  limited  partners of the various real estate-owning  limited
partnerships  (collectively, the "Operating Partnerships")  whose
property collateralizes or secures the tax-exempt bonds  held  by
OTEF  II  have  an  interest in the Operating  Partnerships  that
entitles  them  to  receive a share of any cash  flow  and  sale,
refinancing   and   liquidation   proceeds   of   the   Operating
Partnerships.   In  addition, in connection with  the  1995  OTEF
Restructuring Plan and after the Existing MRBs are refunded, cash
flow  attributable  to these interests with  respect  to  the  14
original  Operating Partnerships is pledged for  the  benefit  of
OTEF  II  to  secure  the repayment of the  Refunding  Bonds  and
interest thereon.

    Compensation and Fees.  For the six-month periods ended  June
30,  1998  and  1997, certain of the Operating Partnerships  paid
ORFG  total asset management fees of approximately $0.38  million
and  $0.30  million, respectively.  During the six-month  periods
ended  June  30,  1998 and 1997, the Operating Partnerships  also
paid  ORFG, in the aggregate, approximately $0.35 million of fees
pursuant  to  the  OTEF  Restructuring Plan  Administration/Asset
Management  Fee  Agreement, which amount is equal  to  0.25%  per
annum  of the principal amount of the Existing MRBs and Refunding
Bonds  collateralized  by the properties  owned  by  the  related
Operating Partnerships.



<PAGE> 23

-----------------------------------------------------------------
Notes to Financial Statements
-----------------------------------------------------------------

   In connection with OTEF II's investment in New Assets, ORFG is
entitled  to  an acquisition fee of 1-2.5% of the purchase  price
(depending on the type of transaction) for finding, analyzing and
acquiring  New  Assets, which is payable on the  closing  of  any
transaction in which OTEF II acquires a New Asset.  OTEF II  also
will  pay  ORFG  an  annual advisory fee equal  to  0.5%  of  the
purchase  price  for  managing OTEF II's New Assets  after  their
acquisition.

For the six month period ended June 30, 1998, OTEF II had paid or
accrued approximately $0.35 million in acquisition fees and $0.09
million  in  advisory fees paid or payable to ORFG.   Acquisition
fees   are   treated  as  deferred  costs  associated  with   the
acquisition and are amortized over 10 years.  Advisory  fees  are
deducted as period costs.

    Expense Reimbursements.  The Operating Partnerships and  OTEF
II  also  reimburse  ORFG  for  certain  expenses  it  incurs  in
providing  services  with respect to (i) the  Existing  Mortgaged
Properties, (ii) the investment in New Assets, (iii) the sale  or
disposition  of  the Refunding Bonds, and (iv) the administration
of  OTEF  II's  affairs.   Total reimbursements  to  the  General
Partners and their affiliates for the six-month period ended June
30,  1998  and 1997, were approximately $0.285  million (of which
$0.128 million amount is included in Liquidity & Growth expenses)
and $0.117 million, respectively.  Such  reimbursable  amount  is 
determined  based  on  the actual time the officers and employees 
devote to OTEF II based upon their respective salaries.

    Incentive  Option Plan.  On May 21, 1997, OTEF II adopted  an
incentive option plan (the "1997 Incentive Option Plan") in order
for  the  Managing  General Partner to  attract  and  retain  key
employees and advisers.  The Incentive Option Plan authorizes the
granting to the directors, officers and employees of the Managing
General  Partner  and certain affiliates of options  to  purchase
652,125  OTEF  II  BACs  (on  a post-split  basis),  representing
approximately  8.3% of the outstanding OTEF II BACs  on  a  fully
diluted  basis.  Such options are exercisable for 10 years. As of
August 18, 1997 the  Managing  General Partner had granted all of
the  OTEF  II   BAC  options  authorized  under the terms of  the  
Incentive Option  Plan.  Of the  652,125  options,  613,000  were 
vested immediately, 13,000  were vested as of January 1, 1998 and 
26,083 are vested equally  over  2 years  commencing  January  1, 
1999. The exercise price for all options is $23.88 per BAC, which
was  equal  to  the  20-day average market price of the Liquidity
BACs at the date the options were granted.

Note 5.  Subsequent Events.

    Distributions:   On  August 14, 1998,  the  Managing  General
Partner paid a distribution of $0.51 per Liquidity BAC and $12.38
per SQB to holders of record as of June 30, 1998.

<PAGE> 24
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Instructions for Investors who wish to reregister or transfer
OTEF II BACs or SQBs
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   On   July 22, 1997,  the American Stock Exchange began trading
OTEF  II  BACs under the ticker symbol, OTF.   Please follow  the 
instructions below to expedite the reregistration or transfer  of 
ownership of any OTEF II BACs or Status Quo BACs ("SQB") that you
may own.

  IF YOU DO NOT HOLD CERTIFICATES

  Your  shares are being held by your brokerage firm  in  "street
  name".  To register a change of ownership of OTEF II BACs  held
  in  such  accounts, please have your account representative  or
  financial  consultant request the necessary transfer documents.
  YOU   MUST  HAVE  THE  PROPER  TRANSFER  DOCUMENTS  FROM   YOUR
  BROKERAGE  FIRM.   Additionally, please  contact  your  account
  representative or  financial consultant for address changes.

  IF YOU HOLD CERTIFICATES

  Effective  July  1,  1997,  OTEF  II  appointed  Registrar  and
  Transfer  Company  ("R&T") as the sole registrar  and  transfer
  agent with respect to the OTEF II BACs and SQBs.

  All  notices, claims, certificates, requests, demands and other
  communications relating to transfers of OTEF II BACs  and  SQBs
  should be sent to:
                    Registrar and Transfer Company
                    Attn:  William Tatler, Vice President
                    Stock Transfer Department
                    10 Commerce Drive
                    Cranford, NJ  07016

All phone calls relating to such transfers should be directed to:
                    Registrar and Transfer Company
                    Stock Transfer Department
                    1-800-368-5948

  GENERAL INFORMATION

  All  general  inquiries relating to OTEF II should be  directed
  to OTEF II Investor Services at 1-888-321-OTEF.

  The  Quarterly Report on Form 10-Q for the quarter  ended  June
  30,  1998,  filed with the Securities and Exchange  Commission,
  is  available  to  SQB  and OTEF II  BAC  Holders  and  may  be
  obtained by writing:
                        Investor Services
          Oxford Tax Exempt Fund II Limited Partnership
                7200 Wisconsin Avenue, 11th Floor
                    Bethesda, Maryland  20814
                         1-888-321-OTEF
                               
             ALSO VISIT OUR WEB SITE AT WWW.OTEF.COM