<PAGE> 1
=================================================================
                          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 September 30, 1996
                               ------------------
                               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)

                          (301) 654-3100
       Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:
     Beneficial Assignee Interests ("BACs")

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 / /

There  is no public trading market for the BACs.  Therefore,  the
BACs  had  neither a market selling price nor an average  bid  or
asked price within the 60 days prior to the date of this filing.

Index to Exhibits is found on page 5.
=================================================================
<PAGE> 2
          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP
                                
                            FORM 10-Q
                                
                  PART I-FINANCIAL INFORMATION

Item 1.     Financial Statements.

   The  Balance  Sheets  for Oxford Tax Exempt  Fund  II  Limited
Partnership  ("Oxford  Tax Exempt Fund II,"  "OTEF  II,"  or  the
"Partnership")  as of September 30, 1996 and December  31,  1995,
the  Statements  of Income for the three- and nine-month  periods
ended September 30, 1996, the three- and four-month periods ended
September  30, 1995  for OTEF II and five-month period ended  May
31,  1995  for  OTEF  II's predecessor, Oxford  Tax  Exempt  Fund
Limited  Partnership,  a  Maryland limited  partnership  ("OTEF,"
"predecessor,"  or  "OTEF II's predecessor"),  the  Statement  of
Partners' Capital as of September 30, 1996, and the Statements of
Cash  Flows for the nine-month period ended September  30,  1996,
and  the four-month period ended September 30, 1995 for OTEF  II,
and  the  five-month period ended May 31, 1995 for OTEF, and  the
notes  thereto, in accordance with generally accepted  accounting
principles,   are  incorporated  by  reference  to   sequentially
numbered  pages  15  through  27 of OTEF  II's  Quarterly  Report
(Unaudited) dated September 30, 1996, attached hereto as  Exhibit
20 (the "Quarterly Report").

   For  purposes  of  clarity, the Managing General  Partner  has
included an additional column in the Statements of Income and the
Statements  of Cash Flows representing pro forma information  for
the  nine-month period ended September 30, 1995.  This pro  forma
information  has been prepared as if: (i) OTEF  II  had  been  in
existence during the period presented; (ii) OTEF II had  acquired
the  assets  of OTEF in exchange for OTEF II BACs on  January  1,
1995;  and (iii) OTEF II had begun accounting for its investments
in  the  mortgage revenue bonds ("Bonds") on that date under  the
new   accounting   method.    Under  the pro forma  presentation, 
$1 million in  Oxford advances, which were made to the  Operating
Partnerships in December 1994 from the U.S. Treasury  strip  bond
that  matured  November 15, 1994 and paid to OTEF  as  additional
interest  in January 1995, have been excluded from the Statements
of  Income and the Statements of Cash Flows since these  payments
are  nonrecurring in nature. The pro forma presentation  reflects
the  interest  paid by the Operating Partnerships from  available
cash  flows  without  taking  into account  the  effects  of  the
refunding  of  the  Bonds,  which the  Managing  General  Partner
anticipates  will  be  completed during 1996.   These  statements
should   be  read  in  conjunction  with  the  audited  financial
statements  and  the  notes included in the Partnership's  Annual
Report for the year ended December 31, 1995.

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  nine-month   periods   ended
September  30,  1996  is  incorporated  herein  by  reference  to
sequentially  numbered pages 7 through 14,  entitled  "Report  of
Management," included in OTEF II's Quarterly Report (Unaudited).
<PAGE> 3
                    PART II-OTHER INFORMATION

Item 1.     Legal Proceedings.

   Five  lawsuits  were  filed with  respect  to  the  1995  OTEF
Restructuring  Plan as of September 30, 1996.   In  general,  the
complaints  allege  violations  of  certain  provisions  of   the
securities  laws, breach of partnership agreement and  breach  of
fiduciary duty, and seek unspecified monetary damage and  various
forms  of  equitable relief.  On November 29,  1995,  a  putative
class  and  derivative action was filed by a BAC Holder  in  U.S.
District  Court for the District of Maryland against  Oxford  Tax
Exempt  Fund  I  Corporation and certain affiliates.   A  similar
putative class action was filed by another BAC Holder on the same
date  in  U.S.  District  Court  for  the  Northern  District  of
California,  and  subsequently transferred to the  U.S.  District
Court  of  Maryland by agreement of the parties and  consolidated
with  the first case.  On January 23, 1996 and January 25,  1996,
two  additional putative class actions were filed by BAC  Holders
in  the  Circuit  Court of Montgomery County, Maryland,  alleging
similar  claims  against Oxford Tax Exempt  Fund,  L.P.,  certain
affiliates and officers and directors.  These latter two  actions
have  been  consolidated.  Another putative class and  derivative
action  was  filed  by  a  BAC Holder in  the  Circuit  Court  of
Montgomery  County, Maryland on July 3, 1996.  Both  the  federal
and  the  state  courts have issued pretrial orders  coordinating
discovery,  the  effect of rulings and related matters  in  these
cases.

   The Managing  General  Partner believes that these actions are 
without  merit,  although  it cannot  predict the outcome of this 
litigation.  The Managing  General  Partner does not believe that 
these suits will have a material adverse effect on the operations 
of OTEF II.  However,  after  considering  the  expense  and time 
involved  with, and  the  uncertainties regarding the outcome of, 
such   complex  litigation,  the  Managing  General  Partner  has 
determined that it  is  in  the best interests of OTEF II and the 
OTEF II  BAC Holders to agree to a settlement of this litigation.  
The parties expect to file with the  United States District Court 
for  the  District   of   Maryland  ("Court")  a  stipulation  of 
settlement that  will resolve all  pending litigation.  A  notice
of the  proposed settlement, that  will  describe  the settlement
in detail, will be  mailed to  the OTEF  II BAC  Holders  shortly  
following  a preliminary   approval   hearing  before  the  Court
which is currently anticipated to occur later this month.

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.

   For a list of Exhibits as required  by Item 601 of Regulation 
   S-K, see Exhibit Index on page 5 of this report.

   (b)  Reports on Form 8-K.  None.

   No other items were applicable.
<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:  11/7/96    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:  11/7/96    By:  /s/ Leo E. Zickler
       -------         ------------------------------------------
                       Leo E. Zickler
                       Chairman of the Board of Directors and 
                          Chief Executive Officer



Date:  11/7/96    By:  /s/ Francis P. Lavin
       -------         ------------------------------------------
                       Francis P. Lavin
                       Director and President
















<PAGE> 5
          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 September 30,  1996,  follows  on
     sequentially numbered pages 6 through 29 of this report.

(27) Financial Data Schedule.


                                








































<PAGE> 6













          OXFORD TAX EXEMPT FUND II LIMITED PARTNERSHIP

                        Quarterly Report
                           (Unaudited)
                                
                       September 30, 1996





















     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









<PAGE> 7
-----------------------------------------------------------------
Report of Management
-----------------------------------------------------------------

   The following report provides additional information about the
financial  condition  of  Oxford  Tax  Exempt  Fund  II   Limited
Partnership  ("Oxford  Tax Exempt Fund II,"  "OTEF  II,"  or  the
"Partnership")  as  of September 30, 1996,  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

   As  previously  discussed, the managing  general  partners  of
OTEF  II  (the "Managing General Partner") and Oxford Tax  Exempt
Fund Limited Partnership, a Maryland limited partnership ("OTEF,"
"predecessor,"  or  "OTEF II's predecessor"),  adopted  and  have
taken  significant  steps to consummate a plan  (the  "1995  OTEF
Restructuring  Plan")  to restructure OTEF.   We  will  keep  you
apprised in future reports.

   1995 OTEF Restructuring Plan. Under the terms of the 1995 OTEF
Restructuring Plan, on June 1, 1995, OTEF transferred all of  its
assets, including its portfolio of 15 tax-exempt mortgage revenue
bonds  ("Bonds"), to OTEF II in exchange for all of the  existing
beneficial  assignee  interests  ("OTEF  II  BACs")  representing
assignments of limited partnership interests in OTEF II, and  the
agreement  of  OTEF  II  to  assume all rights,  obligations  and
liabilities  of  OTEF.   On June 30, 1995, OTEF  distributed  the
OTEF  II  BACs to the holders ("OTEF BAC Holders") of  beneficial
assignee   certificates  representing  assignments   of   limited
partnership  interests  in OTEF, who thereby  became  holders  of
OTEF  II  BACs ("OTEF II BAC Holders").  (See Note 5 to Financial
Statements.)  The Bonds are collateralized by mortgages on the 10
underlying apartment properties and four senior living properties
which  are  owned  by 14 limited partnerships (collectively,  the
"Operating  Partnerships"), all of which are  all  controlled  by
affiliates of the Managing General Partner.  Pursuant to the 1995
OTEF  Restructuring Plan, the Managing General Partner  currently
is completing the refunding of the Bonds.

   The  business  of OTEF II initially consists  of  holding  the
assets  it  acquired from OTEF and consummating the refunding  of
the  Bonds.   The Bonds were transferred by OTEF to  OTEF  II  to
facilitate  refunding of the Bonds and to permit the  development
of  a  new  business plan.  In general, the purpose  of  the  new
business  plan  is: (i) to enable OTEF II to increase  its  asset
base;   (ii)   to  increase  its  earnings  and  the   level   of
distributions  to the OTEF II BAC Holders; and (iii)  to  improve
the  resale  value of the OTEF II BACs.  Following implementation
of  the new business plan, OTEF II will also apply for listing of
the OTEF II BACs for trading on a national securities exchange or
NASDAQ  to provide better liquidity and a more efficient  trading
market for the OTEF II BACs.



<PAGE> 8
-----------------------------------------------------------------
Report of Management
-----------------------------------------------------------------

Liquidity and Capital Resources

   Current  Position.   OTEF  II uses the  interest  payments  it
receives  under the terms of the Bonds to: (i) make distributions
to  its  General  Partners  and OTEF II  BAC  Holders;  (ii)  pay
administrative expenses; (iii) pay for costs associated with  the
development  of the 1995 OTEF Restructuring Plan; and  (iv)  fund
reserves.   OTEF  II  has no  commitments   for  capital or other 
expenditures, except as may be  required in  connection  with the
1995   OTEF   Restructuring   Plan   as   discussed   below   and 
expenditures  that   may  be  incurred  in  connection  with  the   
settlement of  the lawsuits described in  Note 5 to the Financial
Statements.  A distribution for the  quarter  ended September 30,
1996,  in  the  amount of $3,643,000,  or $11.90  per BAC  (4.76% 
per annum on the original $1,000  invested per BAC), will be made 
on November 14, 1996.

   As of September 30, 1996, OTEF II held $12,019,000 in cash and
cash  equivalents,  representing an increase  of  $2,321,000,  or
23.9%,  from  $9,698,000  in  cash and  cash  equivalents  as  of
December  31,  1995.   The increase in OTEF II's  cash  and  cash
equivalents is due primarily to increasing interest paid  on  the
Bonds during the nine-month period ended September 30, 1996.  The
increase  in  OTEF II's cash and cash equivalents was  offset  by
administrative   and   governance  costs  associated   with   the
development of the 1995 OTEF Restructuring Plan.  (See Results of
Operations-The Partnership's Operations.)

   Bond  Refunding  Costs.  These costs totaled  $310,000  as  of
December  31, 1995.  During 1995, OTEF II paid for such costs  on
behalf  of  the  Operating Partnerships to  facilitate  the  Bond
refunding   process.   Under  the  Amended  and   Restated   Debt
Modification Agreement, the Operating Partnerships are  obligated
to  reimburse OTEF II for up to $1.5 million of such  costs.   To
the  extent  the actual costs exceed this amount,  the  Operating
Partnerships  will  use any of their available  cash  sources  to
cover the excess, which in certain cases may reduce the amount of
interest paid to OTEF II, or OTEF II will fund the expenses  from
its   existing  reserves.   Consequently,  these  costs  totaling
$310,000   were  classified  by  OTEF  II  as  receivables   from
affiliates  as  of  December  31, 1995.   In  March  1996,  these
receivables were extinguished through a payment made to  OTEF  II
by  the Operating Partnerships from the proceeds of advances made
by  Oxford Development Corporation and its affiliates ("Oxford").
In September 1996, Oxford paid additional Bond refunding costs on
behalf of certain Operating Partnerships totaling $21,000,  which
represent   Oxford   Advances   to   the   applicable   Operating
Partnerships.  (See "Other Sources" below.)

   Bond Interest. The primary source of cash receipts for OTEF II
is  tax-exempt interest received from the Operating  Partnerships
pursuant  to  their  debt  service  obligations  under  the  Bond
documents and interest earned on OTEF II's cash reserves.   Under
the  1988  OTEF Restructuring Plan (discussed in prior  reports),
the  Bonds and the underlying Mortgage Loans continue to  provide
<PAGE> 9
-----------------------------------------------------------------
Report of Management
-----------------------------------------------------------------
for the payment of interest at an aggregate annual rate of up  to
16%,  consisting  of  Base  Interest  and  additional  Contingent
Interest.  Base Interest is owed at the rate of 8.25% per  annum,
but  is payable only to the extent funds are available from  cash
flow  and  sale or refinance proceeds.  Unpaid Base  Interest  is
deferred,  with  additional interest  charged  on  such  deferred
amounts  at  the rate of 8.25% per annum, compounded monthly  and
payable  from future cash flow and sale or refinancing  proceeds.
As  of  September  30,  1996, the 14 Operating  Partnerships  had
cumulative  unpaid  Base  Interest and interest  on  unpaid  Base
Interest  of  $104  million.   Under  the  applicable  method  of
accounting,  this  unpaid  interest  was  not  reflected  in  the
financial  statements of OTEF II or OTEF.  Under  the  1995  OTEF
Restructuring  Plan, this unpaid interest will be  forgiven  upon
completion  of the Bond refunding.  The Managing General  Partner
believes   interest   payments  received   from   the   Operating
Partnerships,  together  with OTEF II's existing  cash  reserves,
should be adequate to fund anticipated expenses and maintain  the
current level of distributions to the OTEF II BAC Holders.

  Other Sources.  The Operating Partnerships have paid additional
base  interest  to  OTEF II and OTEF, as the case  may  be,  from
advances made by Oxford, pursuant to operating deficit guarantees
and   obligations  under  a  Yield  Maintenance  Reserve  ("YMR")
Agreement,  as amended.  Through September 30, 1996,  Oxford  had
advanced  a total of $17.8 million to the Operating Partnerships,
which in turn, have used substantially all of these funds to make
interest  payments on the Bonds.  During 1994,  Oxford  satisfied
all  of  its  remaining obligations under the  operating  deficit
guarantees.   As  of  September  30,  1996,  the  remaining   YMR
obligations  of  Oxford  and  the Operating Partnerships  totaled 
$2 million.  As part of the Oxford/NHP transaction purchase price
(discussed in prior reports), Oxford received a $1.7 million face
amount  U.S. Treasury strip bond that matured in August 1995  and
an  additional  $2 million face amount U.S. Treasury  strip  bond
that  matured in August 1996.  Oxford will satisfy the $2 million
of  remaining YMR obligations either by advancing these funds  to
the  Operating Partnerships or by paying for their Bond refunding
expenses  and  recording  such  payments  as  advances   to   the
applicable  Operating Partnerships.  From the $1.7  million  U.S.
Treasury  strip  bond  that matured on August  15,  1995,  Oxford
advanced,   in  the  aggregate,  $310,000  to  certain  Operating
Partnerships  in  March 1996 and paid additional  Bond  refunding
costs   totaling   $21,000  on  behalf   of   certain   Operating
Partnerships  in September 1996.  Certain Operating Partnerships,
in  turn,  reimbursed OTEF II $310,000 in March  1996  for  costs
previously  incurred  in connection with  the  refunding  of  the
Bonds.   The remaining $1.4 million of the $1.7 million  Treasury
strip  bond  received in August 1995, as well as the  $2  million
Treasury strip bond received in August 1996, is being held in  an
interest-bearing  account  pending a determination  as  to  which
Operating  Partnerships these funds should  be  allocated,  which
will  be based on their individual Bond refunding costs and their
individual  reserve  requirements,  or  upon  the  completion  of
Oxford's  paying  Bond  refunding  expenses  on  behalf  of   the
Operating Partnerships.
<PAGE> 10
-----------------------------------------------------------------
Report of Management
-----------------------------------------------------------------

   These  sources  of  funds  are  nonrecurring  in  nature,  and
therefore,  the  ability of the Operating  Partnerships  to  make
interest payments will, in the future, depend to a greater degree
on the operations and performance of the Properties.

Results of Operations

The Partnership's Operations

  Distributions. Distributions to Partners amounted to $3,643,000
or  $11.90  per  BAC  (4.76% per annum  on  the  original  $1,000
invested  per  BAC) to BAC Holders of record as of September  30,
1996.  This distribution is consistent with the distribution made
for  the  previous  six  quarters. The Managing  General  Partner
anticipates that the amount of the quarterly distribution will be
increased following implementation of the new business plan.

   The   Partnership's  Three-Month   Operations.  For  financial
statement  purposes,  Net  Income and Net  Income  per  BAC  were
$4,237,000  and $13.84, respectively, for the three-month  period
ended   September   30,   1996,  and   $3,983,000   and   $13.01,
respectively,  for  the three-month period  ended  September  30,
1995.

   Administrative  Expenses.   These normal  recurring  costs  of
OTEF II, other than the governance costs discussed below, totaled
$330,000  for  the three-month period ended September  30,  1996,
compared   to   $126,000   for  the  three-month   period   ended
September 30, 1995.  The increase is primarily attributable to an
increase  in  legal  fees relating to the general  operations  of
OTEF II.

   Governance  Costs.   These   costs,  which  are  included   in
administrative expenses in the Statements of Income for the three-
month period ended September 30, 1996, are accounting, legal  and
consultation costs primarily relating to:  (i) the development of
the  1995 OTEF Restructuring Plan; and (ii) legal defense against
certain  lawsuits  described in Note 5 to  Financial  Statements.
Such   costs  incurred  during  the  three-month  periods   ended
September  30,  1996  and  1995 totaled  $204,000  and  $754,000,
respectively.   As  of  September  30,  1995,  these  costs  were
included  in deferred costs on the balance sheet and reclassified
to  governance costs during the fourth quarter of 1995.  Deferred
costs  as  of September 30, 1995 totaled $2,645,000 and  included
$754,000  of  governance  costs and $1,891,000  of  BAC  Issuance
Costs.   (See BAC Issuance Costs below.)  Beginning in the fourth
quarter   of   1995,  governance  costs  have  been  consistently
presented  as administrative expenses and the BAC Issuance  Costs
have  been  reclassified for financial statement  purposes  as  a
reduction in Partners' Capital.





<PAGE> 11
-----------------------------------------------------------------
Report of Management
-----------------------------------------------------------------

   Other revenues for the three-month period ended September  30,
1996  relate to the interest income earned on cash accounts  held
by  OTEF  II.   Other revenues for the three-month  period  ended
September 30, 1995 include interest associated with the repayment
of  the project loan made to the Operating Partnership that  owns
the  Chambrel  at Club Hill Senior Living Property,  as  well  as
interest income earned on cash accounts held by OTEF II.

   The   Partnership's  Nine-Month  Operations.   For   financial
statement  purposes,  Net  Income and Net  Income  per  BAC  were
$12,700,000  and $41.49, respectively, for the nine-month  period
ended  September 30, 1996 for OTEF II.  Net Income and Net Income
per  BAC were $5,188,000 and $16.95, respectively, for the  four-
month period ended September 30, 1995 for OTEF II under SFAS  No.
115,  and  $2,277,000 and $7.44, respectively, for the five-month
period  ended May 31, 1995 under the equity method of  accounting
for OTEF.

   Administrative  Expenses.   These normal  recurring  costs  of
OTEF  II,  other  than governance costs discussed below,  totaled
$579,000  for  the  nine-month period ended September  30,  1996,
compared   to   $388,000   for  the   nine-month   period   ended
September  30,  1995  for  OTEF II and  OTEF.   The  increase  is
primarily  attributable to an increase in legal fees relating  to
the general operations of OTEF II.

   Governance  Costs.   These  costs,  which   are  included   in
administrative expenses in the Statements of Income for the nine-
month period ended September 30, 1996, are accounting, legal  and
consultation costs primarily relating to:  (i) the development of
the  1995 OTEF Restructuring Plan; and (ii) legal defense against
certain  lawsuits  described in Note 5 to  Financial  Statements.
Such   costs   incurred  during  the  nine-month  periods   ended
September  30,  1996  and  1995 totaled  $856,000  and  $754,000,
respectively.   As  of  September  30,  1995,  these  costs  were
included  in deferred costs on the balance sheet and reclassified
to  governance costs during the fourth quarter of 1995.  Deferred
costs  as  of September 30, 1995 totaled $2,645,000 and  included
$754,000  of  governance  costs and $1,891,000  of  BAC  Issuance
Costs.   (See BAC Issuance Costs below.)  Beginning in the fourth
quarter   of   1995,  governance  costs  have  been  consistently
presented  as administrative expenses and the BAC Issuance  Costs
have  been  reclassified for financial statement  purposes  as  a
reduction in Partners' Capital.

   Other  revenues for the nine-month period ended September  30,
1996  relate to the interest income earned on cash accounts  held
by  OTEF  II.   Other  revenues for the nine-month  period  ended
September 30, 1995 include interest associated with the repayment
of  the project loan made to the Operating Partnership that  owns
the  Chambrel  at Club Hill Senior Living Property,  as  well  as
interest income earned on cash accounts held by OTEF and OTEF II.



<PAGE> 12
-----------------------------------------------------------------
Report of Management
-----------------------------------------------------------------

   BAC Issuance Costs.  Costs associated with issuing the OTEF II
BACs,  in the amount of $1,891,000 as of December 31, 1995,  were
reclassified for financial statement purposes from deferred costs
to  a reduction in Partners' Capital during the fourth quarter of
1995.   No  additional  BAC issuance costs were  incurred  as  of
September  30, 1996, nor are any expected to be incurred  in  the
future.

   The  Partnership's  Pro  forma Operations.   For  purposes  of
clarity,  the Managing General Partner has included an additional
column  in  the Statements of Income and the Statements  of  Cash
Flows  representing  pro  forma information  for  the  nine-month
period ended September 30, 1995.  This pro forma information  has
been prepared as if: (i) OTEF II had been in existence during the
period presented; (ii) OTEF II had acquired the assets of OTEF in
exchange for OTEF II BACs on January 1, 1995; and (iii)  OTEF  II
had  begun  accounting for its investments in the Bonds  on  that
date  under  the  new  accounting method.  Under  the  pro  forma
presentation, $1 million in Oxford advances, which were  made  to
the  Operating  Partnerships  in  December  1994  from  the  U.S.
Treasury  strip bond that matured November 15, 1994 and  paid  to
OTEF  as  additional interest in January 1995, have been excluded
from  the  Statements of Income and the Statements of Cash  Flows
since  these payments are nonrecurring in nature.  The pro  forma
presentation   reflects  the  interest  paid  by  the   Operating
Partnerships  from  available  cash  flows  without  taking  into
account  the  effects of the refunding of the  Bonds,  which  the
Managing  General  Partner anticipates will be  completed  during
1996.

   The  Partnership's Pro forma Nine-Month Operations.   For  pro
forma financial statement purposes, Net Income and Net Income per
BAC were $12,700,000 and $41.49, respectively, for the nine-month
period  ended  September 30, 1996, compared  to  $12,032,000  and
$39.31,   respectively,   for   the   nine-month   period   ended
September 30, 1995. The $668,000, or 5.6%, increase for the nine-
month period ended September 30, 1996, compared to the nine-month
period  ended  September 30, 1995, is primarily  attributable  to
improvements  in  the  aggregate  operations  of  the   Operating
Partnerships and their ability to pay more interest on the Bonds.

The Properties' Operations

   The primary source of funds for the payment of interest on the
Bonds  is  the  aggregate net operating income of  the  Operating
Partnerships.   Except with respect to the  Ocala  and  Tidewater
partnerships, none of the Operating Partnerships was able to  pay
fully  its  current Base Interest from operations for  the  nine-
month  period ended September 30, 1996, and the Managing  General
Partner  anticipates, based on information available to it,  that
none of the remaining Operating Partnerships will be able to  pay
all  of  its respective Base Interest from operations  until  the
related  Bond  is  refunded  in accordance  with  the  1995  OTEF
Restructuring   Plan.    Although   the   Ocala   and   Tidewater
partnerships are expected to pay fully all of their current  Base
<PAGE> 13
-----------------------------------------------------------------
Report of Management
-----------------------------------------------------------------

Interest from operations for 1996, they have accrued unpaid  Base
Interest  and interest on unpaid Base Interest of $7,518,000  and
$4,437,000,  respectively.  Based on the current and  anticipated
performance  of  the  Properties, the  Managing  General  Partner
expects   each   Operating  Partnership  to  meet   its   payment
obligations once the Bonds are refunded.

   The  operating  performance of each of the Properties  depends
primarily on: (i) occupancy and rental rates; (ii) the amount  of
rent  actually collected; and (iii) the expenditures for property
improvements  and operating expenses.  The occupancy  and  rental
rates, in turn, depend on a number of factors, including: (i) the
location  of a Property in its particular community;  (ii)  local
economic  conditions and changes in neighborhood characteristics;
(iii)  demand  for  similar housing; and  (iv)  competition  from
existing  and  future housing complexes in the vicinity  of  each
Property.

Set  forth below is a discussion of the Properties which compares
their  respective  operations for the three-month  periods  ended
September 30, 1996 and 1995.

   The Operating Partnerships reported an aggregate net operating
income  before property improvements of $5,538,000 for the three-
month  period ended September 30, 1996, representing an  increase
of  $82,000,  or  1.5%, from the aggregate net  operating  income
before  property  improvements reported for the  same  period  in
1995.    In   addition,  during  the  three-month  period   ended
September  30,  1996,  overall property improvement  expenditures
were  $802,000,  representing a decrease of $106,000,  or  11.7%,
compared to the same period in 1995.

   Senior Living Properties.  The Operating Partnerships that own
the  four  Senior  Living Properties reported  an  aggregate  net
operating  income before property improvements of $1,493,000  for
the three-month period ended September 30, 1996, representing  an
increase  of $137,000, or 10.1%, from the aggregate net operating
income  before property improvements reported for the same period
in  1995.   In  addition,  during the  three-month  period  ended
September 30, 1996, overall property improvement expenditures for
the four Senior Living Properties were $225,000, representing  an
increase  of  $10,000, or 4.6%, compared to the  same  period  in
1995.

   Apartment Properties.  The Operating Partnerships that own the
10  garden apartments reported an aggregate net operating  income
before  property  improvements of $4,045,000 for the  three-month
period  ended  September  30, 1996, representing  a  decrease  of
$55,000, or 1.4%, from the aggregate net operating income  before
property  improvements reported for the same period in 1995.   In
addition, during the three-month period ended September 30, 1996,
overall  property  improvement expenditures  for  the  10  garden
apartments were $577,000, representing a decrease of $116,000, or
16.8%, compared to the same period in 1995.

<PAGE> 14
-----------------------------------------------------------------
Report of Management
-----------------------------------------------------------------

Set  forth below is a discussion of the Properties which compares
their  respective  operations for the  nine-month  periods  ended
September 30, 1996 and 1995.

   The Operating Partnerships reported an aggregate net operating
income before property improvements of $16,032,000 for the  nine-
month  period ended September 30, 1996, representing an  increase
of  $501,000,  or  3.2%, from the aggregate net operating  income
before  property  improvements reported for the  same  period  in
1995.    In   addition,  during  the  nine-month   period   ended
September  30,  1996,  overall property improvement  expenditures
were  $1,683,000, representing a decrease of $182,000,  or  9.8%,
compared to the same period in 1995.

   Senior Living Properties.  The Operating Partnerships that own
the  four  Senior  Living Properties reported  an  aggregate  net
operating  income before property improvements of $4,211,000  for
the  nine-month period ended September 30, 1996, representing  an
increase  of $479,000, or 12.8%, from the aggregate net operating
income  before property improvements reported for the same period
in  1995.   In  addition,  during  the  nine-month  period  ended
September 30, 1996, overall property improvement expenditures for
the four Senior Living Properties were $447,000, representing  an
increase  of  $37,000, or 9.1%, compared to the  same  period  in
1995.

   Apartment Properties.  The Operating Partnerships that own the
10  garden apartments reported an aggregate net operating  income
before  property improvements of $11,821,000 for  the  nine-month
period  ended  September 30, 1996, representing  an  increase  of
$22,000, or less than 1%, from the aggregate net operating income
before  property  improvements reported for the  same  period  in
1995.    In   addition,  during  the  nine-month   period   ended
September 30, 1996, overall property improvement expenditures for
the 10 garden apartments were $1,236,000, representing a decrease
of $219,000, or 15.1%, compared to the same period in 1995.

Summary

   Based upon actual results through September 30, 1996, and  the
current  outlook for the remainder of 1996, the Managing  General
Partner believes there will be sufficient interest payments  from
the  Operating Partnerships to fund anticipated expenses  and  to
maintain  the current level of distributions to the OTEF  II  BAC
Holders.   The  Managing  General Partner  anticipates  that  the
amount  of the quarterly distribution will be increased following
implementation of the new business plan.








<PAGE> 15

Oxford Tax Exempt Fund II Limited Partnership
<TABLE>
------------------------------------------------------------------------
Balance Sheets (in thousands)
------------------------------------------------------------------------
<CAPTION>
                                             September 30,  December 31,
                                                 1996           1995
                                              (Unaudited)
------------------------------------------------------------------------
<S>                                             <C>           <C>
Assets                                              
  Investments in Bonds                          $164,000      $164,000
  Cash and cash equivalents                       12,019         9,698
  Interest receivable                                 29            26
  Due from affiliates                                  -           310
------------------------------------------------------------------------
      Total Assets                              $176,048      $174,034
========================================================================
Liabilities and Partners' Capital                   
  Liabilities
    Accounts payable and accrued expenses       $    735      $    492
    Distributions payable                          3,643         3,643
------------------------------------------------------------------------
      Total Liabilities                            4,378         4,135
------------------------------------------------------------------------
  Partners' Capital                                
    General Partners                              (2,365)       (2,400)
    Limited Partners' Interests (Beneficial
      Assignee Interests-299,995 interests
      issued and outstanding)                    163,067       161,331
    Unrealized Gain on Investments                10,968        10,968
------------------------------------------------------------------------
      Total Partners' Capital                    171,670       169,899
------------------------------------------------------------------------
      Total Liabilities and Partners' Capital   $176,048      $174,034
========================================================================

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

</TABLE>
















<PAGE> 16
Oxford Tax Exempt Fund II Limited Partnership
<TABLE>
----------------------------------------------------------------------------------------------------------------------------
Statements of Income (in thousands, except per BAC amounts)
(Unaudited)
----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
                            Three months ended September 30,                   Nine months ended September 30,
                          -----------------------------------   ------------------------------------------------------------
                                   OTEF II     OTEF II            OTEF II      Pro forma<5>  |  OTEF II      ||    OTEF     
                                    Three       Three              Nine          Nine        |   Four        ||    Five     
                                    months      months             months        months      |   months      ||   months    
                                     ended      ended              ended         ended       |   ended       ||    ended    
                                September 30, September 30,     September 30,  September 30, | September 30, ||    May 31,  
                                     1996        1995                1996          1995      |     1995      ||     1995
-----------------------------------------------------------   -------------------------------|---------------||-------------
<S>                                <C>          <C>               <C>            <C>         |   <C>         ||  <C> 
Revenues                                                                                     |               ||    
  Interest on Bonds<F1>            $4,684       $4,024            $13,879        $12,159     |   $5,287      ||  $    -     
  Equity income on                      -            -                  -              -     |        -      ||   2,305     
   investments in Bonds<F2>                                                                  |               || 
  Other, primarily interest                                                                  |               ||  
   on short-term investments           87           85                256            261     |      114      ||     147     
-----------------------------------------------------------   -------------------------------|---------------||-------------
                                    4,771        4,109             14,135         12,420     |     5,401     ||   2,452     
Expenses                                                                                     |               ||    
  Administrative expenses             534<F3>      126<F4>          1,435<F3>        388<F4> |       213<F4> ||     175     
-----------------------------------------------------------   -------------------------------|---------------||-------------
Net income                         $4,237       $3,983            $12,700        $12,032     |    $5,188     ||  $2,277     
===========================================================   ===============================|===============||=============
Net income allocated to            $   85       $   80            $   254        $   241     |    $  104     ||  $   45     
  General Partners                                                                           |               ||    
===========================================================   ===============================|===============||=============
Net income allocated to            $4,152       $3,903            $12,446        $11,791     |    $5,084     ||  $2,232     
  BAC Holders                                                                                |               ||    
===========================================================   ===============================|===============||=============
Net income per BAC                 $13.84       $13.01            $ 41.49        $ 39.31     |    $16.95     ||  $ 7.44
===========================================================   ===============================|===============||=============
Distribution per BAC               $11.90       $11.90            $ 35.70        $ 35.70     |    $23.80     ||  $11.90     
===========================================================   ===============================|===============||=============












































<PAGE> 17
<FN>
<F1>   On  June  1,  1995, OTEF II adopted the provisions of  SFAS  No.  115-
    Accounting  for  Certain  Investments  in  Debt  and  Equity  Securities  in
    connection  with  the transfer of all assets and liabilities  from  OTEF  to
    OTEF  II.   Under  this  method, payments on  the  Bonds  by  the  Operating
    Partnerships are treated as interest income.
<F2>   From October 1, 1987 to May 31, 1995, OTEF's investments in the  Bonds
    were  accounted  for under the equity method, in accordance  with  Financial
    Release  No.  28  and a notice issued to practitioners, dated  February  10,
    1986,  by  the  Accounting  Standards Executive  Committee,  which  provides
    guidance  on  accounting  for  real  estate  acquisition,  development   and
    construction lending arrangements.  Under this method, OTEF's investments in
    Bonds were: (i) reduced for interest payments (Base Interest) received; (ii)
    increased   or  decreased  by  OTEF's  equity,  which  was  based   on   its
    participation  percentages (generally 50%, except when  it  had  outstanding
    project advances to an Operating Partnership) in the income or losses of the
    related Operating Partnerships; and (iii) written down to the fair value  of
    the  Properties with such fair value representing the present value  of  the
    projected  cash  flows  from  the Properties.  Since  OTEF  had  outstanding
    project  loans to certain senior living Operating Partnerships from 1989  to
    1995,  OTEF's  participation percentages were increased to  100%  for  these
    Operating Partnerships during these years.
<F3>   For  the  three-  and  nine-month periods ended  September  30,  1996,
    administrative  expenses also included $204,000 and $856,000,  respectively,
    of  governance costs associated with the accounting, legal and  consultation
    fees   primarily  relating  to:   (i)  the  development  of  the  1995  OTEF
    Restructuring  Plan;  and  (ii)  legal  defense  against  certain   lawsuits
    described in Note 5 to Financial Statements.
<F4>   Excludes governance costs totaling $754,000 for the three-, four-  and
    pro  forma nine-month periods ended September 30, 1995.  As of September 30,
    1995,  these  costs  were included in deferred costs on the  balance  sheet.
    Deferred  costs  as  of September 30, 1995 totaled $2,645,000  and  included
    $754,000  of  governance  costs  and  $1,891,000  of  BAC  Issuance   Costs.
    Beginning  in  the  fourth  quarter  of 1995,  governance  costs  have  been
    consistently presented as administrative expenses and the BAC issuance costs
    have  been  reclassified for financial statement purposes as a reduction  in
    Partners' Capital.
<F5>   This pro forma column has been prepared as if: (i) OTEF II had been in
    existence during the period presented; (ii) OTEF II had acquired the  assets
    of  OTEF in exchange for OTEF II BACs on January 1, 1995; and (iii) OTEF  II
    had begun accounting for its investments in the Bonds on that date under the
    new  accounting  method.  Under the pro forma presentation,  $1  million  in
    Oxford  advances, which were made to the Operating Partnerships in  December
    1994  from the U.S. Treasury strip bond that matured November 15,  1994  and
    paid to OTEF as additional interest in January 1995, have been excluded from
    the  Statements  of  Income and the Statements of  Cash  Flows  since  these
    payments are nonrecurring in nature.
</FN>
                                        
    The accompanying notes are an integral part of these financial statements.

</TABLE>





























<PAGE> 18

Oxford Tax Exempt Fund II Limited Partnership
<TABLE>
-----------------------------------------------------------------------------
Statement of Partners' Capital (in thousands)
-----------------------------------------------------------------------------
<CAPTION>
                                         Limited
                                         Partners'
                                        Interests
                                       -----------
                                        Beneficial   Unrealized
                             General     Assignee      Gain on
                             Partners   Interests    Investments     Total
-----------------------------------------------------------------------------
<S>                          <C>         <C>           <C>         <C>       
Balance, December 31, 1995   $(2,400)    $161,331      $10,968     $169,899
-----------------------------------------------------------------------------
Net income                       254       12,446            -       12,700
                                                          
Distributions to Partners,                                
  including $35.70 per BAC      (219)     (10,710)           -      (10,929)
-----------------------------------------------------------------------------
Balance, September 30, 1996  $(2,365)    $163,067      $10,968     $171,670
  (Unaudited)
=============================================================================

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

</TABLE>




























<PAGE> 19
Oxford Tax Exempt Fund II Limited Partnership
<TABLE>
-----------------------------------------------------------------------------------------------------------
Statements of Cash Flows (in thousands) (Note 3)
(Unaudited)
-----------------------------------------------------------------------------------------------------------
<CAPTION>
                                                                   OTEF II    |             ||
                                                   OTEF II      Pro forma<F3> |  OTEF II    ||    OTEF
                                                     Nine           Nine      |    Four     ||    Five
                                                 months ended   months ended  |months ended ||months ended
                                                 September 30,  September 30, |September 30,||   May 31,       
                                                      1996           1995     |   1995      ||     1995        
------------------------------------------------------------------------------|-------------||-------------
<S>                                                                           |             || 
Operating Activities                               <C>            <C>         |  <C>        ||   <C>
  Net income<F1>                                   $ 12,700       $ 12,032    |  $  5,188   ||   $ 2,277
  Adjustments to reconcile net income                                         |             ||         
    to net cash provided by operating                                         |             ||         
    activities:                                                               |             ||         
      Equity income from investments                                          |             ||         
        in Bonds<F2>                                      -              -    |         -   ||    (2,305)
  Changes in assets and liabilities:                                          |             ||                
    Interest receivabe                                   (3)            (9)   |         -   ||        (9)
    Due from affiliates                                 310              -    |         -   ||         -
    Accounts payable                                    243            266    |       169   ||        97
------------------------------------------------------------------------------|-------------||--------------
Net cash provided by operating activities            13,250         12,289    |     5,357   ||        60   
------------------------------------------------------------------------------|-------------||--------------
Investing activities                                                          |             ||
  Working capital reserve                                 -          1,518    |         -   ||     1,518    
  Payments received from investments                                          |             ||  
    in Bonds<F1>                                          -              -    |         -   ||     7,872
  Project loans                                           -            534    |       123   ||       411
  Capital contributions                                   -              1    |         1   ||         -
------------------------------------------------------------------------------|-------------||--------------
Net cash provided by investing activities                 -          2,053    |       124   ||     9,801
------------------------------------------------------------------------------|-------------||--------------
Financing activities                                                          |             ||  
  Distributions paid to Partners and BAC Holders     (10,929)      (10,730)   |    (3,643)  ||    (7,087)
  Deferred costs paid                                      -        (2,057)   |    (1,386)  ||      (671)
------------------------------------------------------------------------------|-------------||--------------
Net cash used by financing activities                (10,929)      (12,787)   |    (5,029)  ||    (7,758)
------------------------------------------------------------------------------|-------------||--------------
Net increase in cash and cash equivalents              2,321         1,555    |       452   ||     2,103
Cash and cash equivalents, beginning of period         9,698         7,338    |     9,441   ||     7,338
------------------------------------------------------------------------------|-------------||--------------
Cash and cash equivalents, end of period            $ 12,019      $  8,893    |   $ 9,893   ||   $ 9,441
==============================================================================|=============||==============


























<PAGE> 20
<FN>
<F1>    On June 1, 1995, OTEF II adopted the provisions of SFAS No. 115-
  Accounting  for Certain Investments in Debt and Equity  Securities  in
  connection with the transfer of all assets and liabilities  from  OTEF
  to  OTEF  II.   Under  this  method, payments  on  the  Bonds  by  the
  Operating Partnerships are treated as interest income.

<F2>    From October 1, 1987 to May 31, 1995, OTEF's investments in  the
  Bonds  were accounted for under the equity method, in accordance  with
  Financial  Release No. 28 and a notice issued to practitioners,  dated
  February  10,  1986, by the Accounting Standards Executive  Committee,
  which  provides  guidance on accounting for real  estate  acquisition,
  development  and  construction  lending  arrangements.    Under   this
  method,  OTEF's  investments in Bonds were: (i) reduced  for  interest
  payments  (Base  Interest) received; (ii) increased  or  decreased  by
  OTEF's  equity,  which  was  based on  its  participation  percentages
  (generally 50%, except when it had outstanding project advances to  an
  Operating  Partnership)  in  the  income  or  losses  of  the  related
  Operating  Partnerships; and (iii) written down to the fair  value  of
  the Properties with such fair value representing the present value  of
  the  projected  cash  flows  from  the  Properties.   Since  OTEF  had
  outstanding   project  loans  to  certain  senior   living   Operating
  Partnerships from 1989 to 1995, OTEF's participation percentages  were
  increased  to  100%  for  these Operating  Partnerships  during  these
  years.

<F3>    This  pro forma column has been prepared as if: (i) OTEF II  had
  been  in  existence  during the period presented;  (ii)  OTEF  II  had
  acquired the assets of OTEF in exchange for OTEF II BACs on January 1,
  1995;  and  (iii) OTEF II had begun accounting for its investments  in
  the Bonds on that date under the new accounting method.  Under the pro
  forma presentation, $1 million in Oxford advances, which were made  to
  the  Operating  Partnerships in December 1994 from the  U.S.  Treasury
  strip  bond  that  matured  November 15, 1994  and  paid  to  OTEF  as
  additional  interest  in  January 1995, have been  excluded  from  the
  Statements  of  Income and the Statements of Cash  Flows  since  these
  payments are nonrecurring in nature.
</FN>
                                    
                          The accompanying notes are an integral 
                            part of these financial statements.

</TABLE>
















<PAGE> 21
-------------------------------------------------------------------------
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   ("Oxford   Tax   Exempt   Fund   II,"
"OTEF  II,"  or  the  "Partnership"), are  necessary  to  present  fairly
OTEF   II's   financial   position  as  of   September   30,   1996   and
December  31,  1995,  the  Statements  of  Income  for  the  three-   and
nine-month   periods  ended  September  30,  1996  and  the  three-   and
four-month  periods  ended  September 30, 1995  for  OTEF  II  and  five-
month  period  ended  May  31,  1995 for OTEF  II's  predecessor,  Oxford
Tax    Exempt    Fund    Limited   Partnership,   a   Maryland    limited
partnership   ("OTEF,"  "predecessor,"  or  "OTEF   II's   predecessor"),
the  Statement  of  Partners'  Capital as  of  September  30,  1996,  and
the   Statements   of  Cash  Flows  for  the  nine-month   period   ended
September  30,  1996,  and  the four-month  period  ended  September  30,
1995  for  OTEF  II,  and  the  five-month  period  ended  May  31,  1995
for   OTEF,   and  the  notes  thereto,  in  accordance  with   generally
accepted accounting principles.

   For   purposes   of  clarity,  the   Managing  General   Partner   has
included  an  additional  column in the  Statements  of  Income  and  the
Statements   of  Cash  Flows  representing  pro  forma  information   for
the   nine-month  period  ended  September  30,  1995.   This  pro  forma
information  has  been  prepared  as  if:  (i)  OTEF  II  had   been   in
existence  during  the  period  presented;  (ii)  OTEF  II  had  acquired
the  assets  of  OTEF  in  exchange  for  OTEF  II  BACs  on  January  1,
1995;  and  (iii)  OTEF  II  had  begun accounting  for  its  investments
in   the  mortgage  revenue  bonds  ("Bonds")  on  that  date  under  the
new    accounting    method.    Under   the   pro   forma    presentation,   
$1 million  in  Oxford  advances,  which  were  made  to  the   Operating
Partnerships  in  December  1994  from  the  U.S.  Treasury  strip   bond
that   matured  November  15,  1994  and  paid  to  OTEF  as   additional
interest  in  January  1995,  have  been  excluded  from  the  Statements
of  Income  and  Statements  of  Cash  Flows  since  these  payments  are
nonrecurring  in  nature.   The  pro  forma  presentation  reflects   the
interest   paid  by  the  Operating  Partnerships  from  available   cash
flows  without  taking  into  account the effects  of  the  refunding  of
the  Bonds,  which  the  Managing General  Partner  anticipates  will  be
completed   during   1996.    These  statements   should   be   read   in
conjunction  with  the  audited  financial  statements  and   the   notes
included   in  the  Partnership's  Annual  Report  for  the  year   ended
December 31, 1995.

Note 2.  Business

   OTEF  II  was  formed  under the laws of  the  State  of  Maryland  on
February   9,   1995  in  connection  with  a  plan   (the   "1995   OTEF
Restructuring   Plan")   to   restructure  OTEF.    Oxford   Tax   Exempt
Fund   II   Corporation,  a  Maryland  corporation,   is   the   Managing
General  Partner  of  OTEF  II  ("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").    There   is
currently  no  established  public market  in  which  the  OTEF  II  BACs
are traded.
<PAGE> 22
-------------------------------------------------------------------------
Notes to Financial Statements
-------------------------------------------------------------------------

   1995  OTEF  Restructuring Plan.  Under the  terms  of  the  1995  OTEF
Restructuring  Plan,  on  June  1, 1995,  OTEF  transferred  all  of  its
assets,   including   its   portfolio  of   15   tax-exempt   Bonds,   to
OTEF  II  in  exchange  for  all  of  the  existing  beneficial  assignee
interests   ("OTEF   II  BACs")  representing  assignments   of   limited
partnership  interests  in  OTEF II, and the  agreement  of  OTEF  II  to
assume   all   rights,   obligations  and  liabilities   of   OTEF.    On
June  30,  1995,  OTEF  distributed the  OTEF  II  BACs  to  the  holders
("OTEF    BAC    Holders")    of   beneficial    assignee    certificates
representing   assignments   of   limited   partnership   interests    in
OTEF,  who  thereby  became  holders  of  OTEF  II  BACs  ("OTEF  II  BAC
Holders").   (See  Note  5  to  Financial  Statements.)   The  Bonds  are
collateralized   by   mortgages   on   the   10   underlying    apartment
properties  and  four  senior  living  properties  which  are  owned   by
14     limited     partnerships     (collectively,     the     "Operating
Partnerships"),  all  of  which  are  all  controlled  by  affiliates  of
the    Managing   General   Partner.    Pursuant   to   the   1995   OTEF
Restructuring   Plan,   the  Managing  General   Partner   currently   is
completing the refunding of the Bonds.

   The   business  of  OTEF  II   initially  consists  of   holding   the
assets   it  acquired  from  OTEF  and  consummating  the  refunding   of
the   Bonds.   The  Bonds  were  transferred  by  OTEF  to  OTEF  II   to
facilitate   refunding  of  the  Bonds  and  to  permit  the  development
of   a   new  business  plan.   In  general,  the  purpose  of  the   new
business  plan  is:  (i)  to  enable  OTEF  II  to  increase  its   asset
base;    (ii)   to   increase   its   earnings   and   the    level    of
distributions  to  the  OTEF  II  BAC  Holders;  and  (iii)  to   improve
the   resale  value  of  the  OTEF  II  BACs.   Following  implementation
of  the  new  business  plan,  OTEF II will also  apply  for  listing  of
the  OTEF  II  BACs  for  trading on a national  securities  exchange  or
NASDAQ   to  provide  better  liquidity  and  a  more  efficient  trading
market for the OTEF II BACs.

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.

   Income  Taxes.   No  provision  has  been  made  for  federal,  state,
or   local  income  taxes  in  the  financial  statements  of   OTEF   II
since   the   Partners   and  OTEF  II,  formerly   OTEF,   BAC   Holders
(collectively,   "BAC  Holders")  are  required  to   report   on   their
individual   tax  returns  their  allocable  share  of  taxable   income,
gains, losses, deductions, and credits of OTEF II.

<PAGE> 23
-------------------------------------------------------------------------
Notes to Financial Statements
-------------------------------------------------------------------------

   Investment   in   Bonds   and   Change  in  Accounting   Method.    As
previously  reported,  on  June  1,  1995,  the  Bonds  were  transferred
from  OTEF  to  OTEF  II  at  their book  value  of  $153  million.   The
Managing  General  Partner  estimated  at  December  31,  1995  that  the
fair  value  of  the  Bonds,  in the aggregate,  was  $164  million  and,
accordingly,  OTEF  II  recorded a credit  to  Partners'  Capital  in  an
amount  equal  to  approximately  $11  million  of  unrealized  gain   on
investments.   As  of  September  30,  1996,  the  fair  value   of   the
Bonds   remained  unchanged.   The  current  fair  value  of  the   Bonds
was   determined  by  the  Managing  General  Partner  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.   In
accordance  with  this  methodology,  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.

   In  connection  with the transfer of the Bonds  to  OTEF  II  and  the
change   in   the  Managing  General  Partner  from  Oxford  Tax   Exempt
Fund   I   Corporation  to  Oxford  Tax  Exempt  Fund   II   Corporation,
OTEF   II   adopted   a   new   accounting   method   governed   by   the
provisions  of  the  Statement  of  Financial  Accounting  Standards  No.
115-"Accounting   for   Certain   Investments   in   Debt   and    Equity
Securities"  ("SFAS  No.  115").   Under  this  method,  (i)  the   Bonds
are   reflected  at  their  current  fair  value  on  the  face  of   the
Balance   Sheet,  with  cumulative  unrealized  gains  or  losses   being
charged  or  credited  as  unrealized  gains  or  losses  on  investments
and  included  in  capital  as  applicable,  rather  than  reflected   in
the   Statements  of  Income;  and  (ii)  cash  payments  on  the   Bonds
received   from  the  Operating  Partnerships  are  treated  as  interest
income on the Bonds.

   From  October  1,  1987  to May 31, 1995, OTEF's  investments  in  the
Bonds   were  accounted  for  under  the  equity  method,  in  accordance
with    Financial   Release   No.   28   and   a   notice    issued    to
practitioners,    dated   February   10,   1986,   by   the    Accounting
Standards    Executive    Committee,   which   provides    guidance    on
accounting    for    real    estate    acquisition,    development    and
construction   lending   arrangements.    Under   this   method,   OTEF's
investments  in  the  Bonds  were:  (i)  reduced  for  interest  payments
(Base   Interest)  received;  (ii)  increased  or  decreased  by   OTEF's
equity,    which    was   based   on   its   participation    percentages
(generally   50%,  except  when  it  had  outstanding  project   advances
to   an   Operating  Partnership)  in  the  income  or  losses   of   the
related   Operating  Partnerships;  and  (iii)  written   down   to   the
fair   value   of  the  Properties  with  such  fair  value  representing
the    present   value   of   the   projected   cash   flows   from   the
Properties.   Since  OTEF  had  outstanding  project  loans  to   certain
senior   living  Operating  Partnerships  from  1989  to   1995,   OTEF's
participation   percentages   were   increased   to   100%   for    these
Operating Partnerships during these years.



<PAGE> 24
-------------------------------------------------------------------------
Notes to Financial Statements
-------------------------------------------------------------------------

   The   change   in   accounting   treatment  for  financial   reporting
purposes  is  technical  in  nature and does not  affect  the  amount  of
payments   received  by  OTEF  II  or  the  level  of  distributions   to
OTEF  II  BAC  Holders.   In  addition, this  change  has  no  effect  on
the  tax-exempt  nature  of  OTEF  II's  net  income  or  the  obligation
of   the  Operating  Partnerships  to  make  all  payments  due  on   the
Bonds.   To  permit  OTEF  II  BAC Holders to  evaluate  the  results  of
operations   of   OTEF   II,  as  reported  under  the   new   accounting
method,   the  Managing  General  Partner  has  included  an   additional
column   in  the  Statements  of  Income  and  the  Statements  of   Cash
Flows  which  reflects  the operations of OTEF II  as  if:  (i)  OTEF  II
had  been  in  existence  during  the  period  presented;  (ii)  OTEF  II
had  acquired  the  assets  of  OTEF in exchange  for  OTEF  II  BACs  on
January  1,  1995;  and  (iii)  OTEF II  had  begun  accounting  for  its
investments  in  the  Bonds  on  that  date  under  the  new   accounting
method.   Under  the  pro  forma  presentation,  $1  million  in   Oxford
advances,   which   were   made   to  the   Operating   Partnerships   in
December   1994   from  the  U.S.  Treasury  strip  bond   that   matured
November   15,  1994  and  paid  to  OTEF  as  additional   interest   in
January   1995,  have  been  excluded  from  the  Statements  of   Income
and    Statements    of   Cash   Flows   since   these    payments    are
nonrecurring in nature.

   Net   Income   and  Distributions  per  Beneficial  Assignee  Interest
(BAC).   Net  income  and  distributions  per  BAC  are  based  upon  the
weighted  average  number  of  BACs  outstanding  during  the  applicable
year.

   Working  Capital  Reserve.   OTEF  II   invests  in  tax-exempt  money
market   funds   stated  at  cost,  which  approximates   market   value.
The  partnership  agreement  for  OTEF  provided  for  additions  to  the
reserve   as  deemed  advisable  by  the  Managing  General  Partner   of
OTEF.   The  reserve  was  used  at  the discretion  of  OTEF's  Managing
General    Partner    to   pay   operating   expenses    and/or    future
distributions.    The   Managing  General  Partner   of   OTEF   II   has
determined  that  a  separate  working  capital  reserve  is  no   longer
warranted  and,  accordingly,  the  proceeds  have  been  combined   with
cash and cash equivalents for financial statement purposes.

   Statements  of   Cash  Flows.   The  Statements  of  Cash  Flows   are
intended  to  reflect  only  cash receipts  and  cash  payment  activity.
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.    This   non-cash   activity
consists   of  distributions  payable  to  Partners  and  OTEF   II   BAC
Holders   of   $3,643,000  at  September  30,  1996  and  September   30,
1995.

   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.



<PAGE> 25
-------------------------------------------------------------------------
Notes to Financial Statements
-------------------------------------------------------------------------

   Governance   Costs.    These    costs,    which   are   included    in
administrative  expenses  in  the Statements  of  Income  for  the  nine-
month  period  ended  September  30,  1996,  are  accounting,  legal  and
consultation  costs  primarily  relating  to:   (i)  the  development  of
the  1995  OTEF  Restructuring  Plan;  and  (ii)  legal  defense  against
certain   lawsuits   described  in  Note  5  to   Financial   Statements.
Such    costs    incurred   during   the   nine-month    periods    ended
September   30,   1996   and   1995  totaled   $856,000   and   $754,000,
respectively.    As   of   September   30,   1995,   these   costs   were
included  in  deferred  costs  on  the  balance  sheet  and  reclassified
to  governance  costs  during  the  fourth  quarter  of  1995.   Deferred
costs   as   of  September  30,  1995  totaled  $2,645,000  and  included
$754,000   of   governance   costs  and  $1,891,000   of   BAC   Issuance
Costs.   (See  BAC  Issuance  Costs  below.)   Beginning  in  the  fourth
quarter    of    1995,   governance   costs   have   been    consistently
presented   as  administrative  expenses  and  the  BAC  Issuance   Costs
have   been   reclassified  for  financial  statement   purposes   as   a
reduction in Partners' Capital.

   BAC  Issuance  Costs.   Costs associated  with  issuing  the  OTEF  II
BACs,  in  the  amount  of  $1,891,000 as  of  December  31,  1995,  were
reclassified  for  financial  statement  purposes  from  deferred   costs
to  a  reduction  in  Partners'  Capital during  the  fourth  quarter  of
1995.    No   additional  BAC  issuance  costs  were   incurred   as   of
September  30,  1996,  nor  are  any  expected  to  be  incurred  in  the
future.

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  cash  flow  and  possibly   of   sale,
refinancing   and   liquidation  proceeds.   The   percentage   interests
of  the  General  Partners  in OTEF II are the  same  as  the  percentage
interests  of  the  General  Partners  in  OTEF.   Distributions  to  the
General   Partners  for  the  quarters  ended  September  30,  1996   and
1995 totaled $73,000 for each period.

   Affiliates  of  the  Managing General Partner  that  are  general  and
limited   partners  of  the  Operating  Partnerships  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.   Since   inception,   the
Operating    Partnerships   have   not   been   able    to    make    any
distributions   of   cash   flow  to  their  respective   partners.    In
addition,  in  connection  with  the 1995  OTEF  Restructuring  Plan  and
after  the  Bonds  are  refunded,  it  is  anticipated  that  all  or   a
portion  of  any  cash  distributions  attributable  to  these  interests
will be pledged for the benefit of OTEF II.

   Compensation   and    Fees.    For  the   nine-month   periods   ended
September   30,   1996   and  1995,  the  Operating   Partnerships   paid
total   property   and   asset  management   fees   of   $1,759,000   and
$1,701,000,   respectively.    The  increase   of   $58,000,   or   3.4%,
between  the  two  periods  is  due  to improved  operating  revenues  of
<PAGE> 26
-------------------------------------------------------------------------
Notes to Financial Statements
-------------------------------------------------------------------------

the    Operating   Partnerships   for   the   nine-month   period   ended
September    30,    1996.    During   the   nine-month   periods    ended
September  30,  1996  and  1995,  the Operating  Partnerships  also  paid
ORFG,   in  the  aggregate,  $523,000  of  fees  pursuant  to  the   OTEF
Restructuring   Plan  Administration/Asset  Management   Fee   Agreement,
which  amount  is  equal  to  .25%  per annum  of  the  principal  amount
of the Bonds.

   Operating  Partnership  Loans.  As of  September  30,  1996,  none  of
the    Operating    Partnerships   had   any   taxable    project    loan
obligations  to  OTEF  II,  and  no such  additional  project  loans  are
anticipated.    On   July  28,  1995,  the  Operating  Partnership   that
owns  the  Chambrel  at  Club  Hill  Senior  Living  Property  paid   its
project loan in full.

   Reimbursement   for   Expenses.   The  General  Partners   and   their
affiliates  are  entitled  to  be  reimbursed  for  expenses  they  incur
on   behalf   of   OTEF  II.   Total  reimbursements   to   the   General
Partners    and    their    affiliates    for    the    quarters    ended
September    30,    1996   and   1995   were   $54,000    and    $79,000,
respectively,    for   administrative   expenses   (excluding    expenses
relating to the 1995 OTEF Restructuring Plan).

   Bond    Refunding  Costs.   These  costs  totaled   $310,000   as   of
December  31,  1995.   During  1995, OTEF  II  paid  for  such  costs  on
behalf   of   the   Operating  Partnerships  to   facilitate   the   Bond
refunding    process.    Under   the   Amended    and    Restated    Debt
Modification   Agreement,  the  Operating  Partnerships   are   obligated
to  reimburse  OTEF  II  for  up  to $1.5  million  of  such  costs.   To
the   extent   the  actual  costs  exceed  this  amount,  the   Operating
Partnerships   will  use  any  of  their  available   cash   sources   to
cover  the  excess,  which  in certain cases may  reduce  the  amount  of
interest  paid  to  OTEF  II,  or OTEF II will  fund  the  expenses  from
its    existing    reserves.    Consequently,   these   costs    totaling
$310,000    were   classified   by   OTEF   II   as   receivables    from
affiliates   as   of   December  31,  1995.    In   March   1996,   these
receivables  were  extinguished  through  a  payment  made  to  OTEF   II
by  the  Operating  Partnerships  from  the  proceeds  of  advances  made
by   Oxford   Development  Corporation  and  its  affiliates  ("Oxford").
In  September  1996,  Oxford  paid additional  Bond  refunding  costs  on
behalf   of  certain  Operating  Partnerships  totaling  $21,000,   which
represent     Oxford    Advances    to    the    applicable     Operating
Partnerships.

Note 5.  Other

   Five   lawsuits   were   filed  with  respect   to   the   1995   OTEF
Restructuring   Plan  as  of  September  30,  1996.   In   general,   the
complaints   allege   violations   of   certain   provisions    of    the
securities   laws,  breach  of  partnership  agreement  and   breach   of
fiduciary  duty,  and  seek  unspecified  monetary  damage  and   various
forms   of   equitable  relief.   On  November  29,  1995,   a   putative
class  and  derivative  action  was  filed  by  a  BAC  Holder  in   U.S.
District   Court  for  the  District  of  Maryland  against  Oxford   Tax
Exempt   Fund   I   Corporation  and  certain  affiliates.    A   similar
<PAGE> 27
-------------------------------------------------------------------------
Notes to Financial Statements
-------------------------------------------------------------------------

putative  class  action  was filed by another  BAC  Holder  on  the  same
date   in   U.S.   District   Court  for   the   Northern   District   of
California,   and   subsequently  transferred  to   the   U.S.   District
Court   of   Maryland  by  agreement  of  the  parties  and  consolidated
with  the  first  case.   On  January 23,  1996  and  January  25,  1996,
two   additional  putative  class  actions  were  filed  by  BAC  Holders
in   the   Circuit   Court  of  Montgomery  County,  Maryland,   alleging
similar   claims   against  Oxford  Tax  Exempt   Fund,   L.P.,   certain
affiliates  and  officers  and  directors.   These  latter  two   actions
have   been   consolidated.   Another  putative  class   and   derivative
action   was   filed   by  a  BAC  Holder  in  the   Circuit   Court   of
Montgomery   County,  Maryland  on  July  3,  1996.   Both  the   federal
and   the   state   courts  have  issued  pretrial  orders   coordinating
discovery,   the  effect  of  rulings  and  related  matters   in   these
cases.

   The  Managing General  Partner believes that these actions are without 
merit,  although it cannot  predict the  outcome of this litigation.  The 
Managing General  Partner does not  believe that these  suits will have a 
material adverse  effect on the  operations of  OTEF II.  However,  after  
considering    the   expense   and   time    involved   with,   and   the
uncertainties   regarding  the  outcome  of,  such  complex   litigation,
the   Managing  General  Partner  has  determined  that  it  is  in   the
best  interests  of  OTEF  II and the OTEF II BAC  Holders  to  agree  to
a  settlement  of  this  litigation.  The parties  expect  to  file  with
the  United  States   District   Court   for  the  District  of  Maryland 
("Court")  a  stipulation  of  settlement  that  will resolve all pending 
litigation.    A notice   of   the   proposed   settlement,   that   will
describe  the settlement  in  detail,  will  be mailed  to  the  OTEF  II
BAC  Holders shortly  following  a  preliminary approval  hearing  before
the Court which is currently anticipated to occur later this month.
























<PAGE> 28
-------------------------------------------------------------------------
Instructions for Investors who wish to reregister or transfer
 OTEF II BACs
-------------------------------------------------------------------------

Please    follow    the    instructions    below   to    expedite     the
reregistration  or  transfer  of  ownership  of  any  Oxford  Tax  Exempt
Fund   II   Limited   Partnership   ("OTEF   II")   Beneficial   Assignee
Interests  ("BACs")  that  you  may  own.   Note  that  no  transfers  or
sales  can  be  effected  without the consent  of  the  Managing  General
Partner and the completion of the proper documents.

  To   cover   the  costs  associated  with  processing  transfers,   MMS
  Escrow  &  Transfer  Agency,  Inc.  ("MMS"),  the  transfer  agent  for
  OTEF  II,  charges  $25  for each transfer  of  OTEF  II  BACs  between
  related   parties,   and  $50  per  seller  for   each   transfer   for
  consideration  (sale).   The  only  exception  is  a  transfer   to   a
  surviving   joint   holder  of  BACs  when  the  other   joint   holder
  dies,  in  which  case  no  fee  is  charged.   MMS  will  continue  to
  charge  $150  for  the  conversion of a  BAC  into  a  limited  partner
  interest.

  To  transfer  ownership  of  BACs held  in  a  Merrill  Lynch  account,
  please   have   your   Merrill  Lynch  financial   consultant   contact
  Merrill   Lynch   Partnership  Operations  in  New  Jersey   at   (201)
  557-1619   to  request  the  necessary  transfer  documents.    Merrill
  Lynch   Partnership  Operations  will  only  accept  calls  from   your
  financial   consultant.    YOU   MUST   HAVE   THE   PROPER    TRANSFER
  DOCUMENTS  FROM  MERRILL  LYNCH  TO  EFFECT  A  TRANSFER.    You   must
  have   your   financial  consultant  contact  Partnership   Operations,
  as  OTEF  II  Investor  Services  does not  send  out  transfer  papers
  for BACs held in a Merrill Lynch account.

  Investors  who  no  longer  hold  OTEF  II  BACs  in  a  Merrill  Lynch
  account  should  contact  OTEF  II  Investor  Services  at  (810)  614-
  4550   or   P.O.  Box  7090,  Troy,  Michigan  48007-9921,  to   obtain
  transfer    documents.    YOU   MUST   OBTAIN   THE   PROPER   TRANSFER
  DOCUMENTS  FROM  OTEF  II  INVESTOR  SERVICES  TO  EFFECT  A   TRANSFER
  OF BACs WHICH YOU HOLD PERSONALLY.

  MMS   does   not  issue  paper  certificates  to  investors  who   take
  their  OTEF  II  BACs  out  of  their Merrill  Lynch  accounts.   Paper
  confirmations    are    issued    instead.     (Please    note     that
  previously  issued  OTEF  paper  certificates  are  no  longer   valid.
  Investors   who   hold  OTEF  certificates  may   retain   or   discard
  them,   as   they  choose.   It  is  no  longer  necessary  to   return
  certificates to MMS when transferring ownership interests.)

  If   an  individual  who  holds  his  or  her  OTEF  II  BACs  directly
  wishes  to  redeposit  the  BACs  into  a  Merrill  Lynch  account,  he
  or   she   should  send  written  instructions  to  OTEF  II   Investor
  Services   after   the   Merrill  Lynch  account   has   been   opened.
  OTEF  II  Investor  Services  will  then  instruct  Merrill  Lynch   to
  deposit the BACs into the account.





<PAGE> 29
-------------------------------------------------------------------------
Instructions for Investors who wish to reregister or transfer
  OTEF II BACs
-------------------------------------------------------------------------

  Please  remember  to  notify  OTEF  II  Investor  Services  in  writing
  at  the  address  below  or  by calling (810)  614-4550  in  the  event
  you   change   your  mailing  address  or  your  financial  consultant.
  We   can   then   continue  to  provide  you  and  your  representative
  with timely information about your investment in OTEF II.

  The   Quarterly   Report   on  Form  10-Q   for   the   quarter   ended
  September   30,   1996,   filed  with  the  Securities   and   Exchange
  Commission,  is  available  to  BAC Holders  and  may  be  obtained  by
  writing:

                                
                        Investor Services
          Oxford Tax Exempt Fund II Limited Partnership
                          P.O. Box 7090
                    Troy, Michigan 48007-9921
                                
                       (810) 614-4550