SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB

(Mark One)
[X]   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT OF
      1934


              For the fiscal year ended December 31, 2003

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934


            For the transition period _________to _________

                         Commission file number 0-13454

                          NATIONAL PROPERTY INVESTORS 7
                 (Name of small business issuer in its charter)

         California                                            13-3230613
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                            Identification No.)

                         55 Beattie Place, P.O. Box 1089
                        Greenville, South Carolina 29602
                    (Address of principal executive offices)

                                 (864) 239-1000
                            Issuer's telephone number

     Securities registered under Section 12(b) of the Exchange Act:

                                      None

     Securities registered under Section 12(g) of the Exchange Act:

                 Units of Limited Partnership Interest
                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act of 1934 during the past 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___

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year.  $2,865,000

State the aggregate  market value of the voting  partnership  interests  held by
non-affiliates  computed  by  reference  to the price at which  the  partnership
interests  were sold,  or the average bid and asked  prices of such  partnership
interests as of December 31, 2003. No market exists for the limited  partnership
interests of the Registrant,  and,  therefore,  no aggregate market value can be
determined.


                       DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE


<PAGE>



The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government  regulations.  Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including,  without limitation:  national and local
economic  conditions;  the terms of  governmental  regulations  that  affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates;  financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest;  real estate risks, including variations of real estate values and
the general  economic  climate in local markets and  competition  for tenants in
such markets;  litigation,  including  costs  associated  with  prosecuting  and
defending  claims  and  any  adverse   outcomes,   and  possible   environmental
liabilities.   Readers  should  carefully  review  the  Registrant's   financial
statements and the notes thereto,  as well as the risk factors  described in the
documents  the  Registrant  files  from  time to time  with the  Securities  and
Exchange Commission.

                                     PART I

Item 1.    Description of Business

National  Property   Investors  7  (the  "Partnership"  or  "Registrant")  is  a
California  limited  partnership  formed in October  1983.  The  Partnership  is
engaged in the business of  operating  and holding  real estate  properties  for
investment.  NPI Equity  Investments,  Inc., a Florida  corporation,  became the
Partnership's  managing general partner (the "Managing  General Partner" or "NPI
Equity") on December 20, 1991. The Managing  General Partner was a subsidiary of
National Property Investors, Inc. ("NPI") until December 31, 1996, at which time
Insignia  Properties Trust ("IPT") acquired the stock of NPI Equity.  On October
1, 1998, IPT merged into Apartment  Investment and Management Company ("AIMCO"),
a publicly  traded real  estate  investment  trust.  The  partnership  agreement
provides  that the  Partnership  is to terminate  on December  31, 2008,  unless
terminated prior to such date.

From  February 1984 through  February  1985,  the  Partnership  offered  100,000
limited  partnership  units at $500 per unit for an aggregate of $50,000,000 and
sold  60,517  units  providing  net  proceeds  of  $30,259,000,  pursuant  to  a
Registration Statement filed with the Securities and Exchange Commission.  Since
its initial offering, the Partnership has not received, nor are limited partners
required to make,  additional  capital  contributions.  The net proceeds of this
offering were used to purchase seven income  producing  residential  real estate
properties.  The Partnership's  original property  portfolio was  geographically
diversified  with properties  acquired in six states.  One property was sold and
another was  foreclosed  on in 1994.  Three  properties  were sold in 2003.  The
Partnership continues to own and operate the remaining two properties (see "Item
2. Description of Properties").

The  Partnership has no employees.  The Managing  General Partner is vested with
full authority as to the general  management and supervision of the business and
affairs of the Partnership. The limited partners have no right to participate in
the  management  or conduct of such  business and  affairs.  An affiliate of the
Managing  General  Partner  provides  day-to-day   management  services  to  the
Partnership's investment properties.

Risk Factors

The  real  estate  business  in which  the  Partnership  is  engaged  is  highly
competitive.  There are other  residential  properties within the market area of
the Partnership's properties.  The number and quality of competitive properties,
including  those which may be managed by an affiliate  of the  Managing  General
Partner,  in such market area could have a material  effect on the rental market
for the  apartments at the  Partnership's  properties  and the rents that may be
charged  for  such  apartments.  While  the  Managing  General  Partner  and its
affiliates  own and/or  control a significant  number of apartment  units in the
United  States,  such  units  represent  an  insignificant  percentage  of total
apartment  units in the United  States and  competition  for the  apartments  is
local.

Laws benefiting  disabled persons may result in the Partnership's  incurrence of
unanticipated  expenses.  Under the Americans with  Disabilities Act of 1990, or
ADA,  all places  intended to be used by the public are required to meet certain
Federal  requirements  related to access and use by disabled persons.  Likewise,
the Fair Housing Amendments Act of 1988, or FHAA, requires apartment  properties
first occupied after March 13, 1990 to be accessible to the  handicapped.  These
and other  Federal,  state  and  local  laws may  require  modifications  to the
Partnership's   properties,   or  restrict   renovations   of  the   properties.
Noncompliance  with  these laws could  result in the  imposition  of fines or an
award of  damages  to private  litigants  and also  could  result in an order to
correct any  non-complying  feature,  which could result in substantial  capital
expenditures.   Although  the  Managing   General  Partner   believes  that  the
Partnership's   properties  are   substantially   in  compliance   with  present
requirements,  the Partnership may incur  unanticipated  expenses to comply with
the ADA and the FHAA.

Both  the  income  and  expenses  of  operating  the  properties  owned  by  the
Partnership are subject to factors outside of the Partnership's control, such as
changes in the supply and demand for similar  properties  resulting from various
market  conditions,  increases/decreases  in unemployment or population  shifts,
changes in the availability of permanent mortgage  financing,  changes in zoning
laws,  or changes in patterns or needs of users.  In  addition,  there are risks
inherent in owning and operating residential  properties because such properties
are  susceptible to the impact of economic and other  conditions  outside of the
control of the Partnership.

There have been, and it is possible there may be other, Federal, state and local
legislation  and  regulations   enacted   relating  to  the  protection  of  the
environment.  The Partnership is unable to predict the extent,  if any, to which
such new  legislation  or  regulations  might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.

The Partnership  monitors its properties for evidence of pollutants,  toxins and
other dangerous substances, including the presence of asbestos. In certain cases
environmental  testing has been performed which resulted in no material  adverse
conditions or liabilities.  In no case has the Partnership  received notice that
it is a potentially  responsible party with respect to an environmental clean up
site.

A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operation"  included in "Item 6" of this Form
10-KSB.
Item 2.    Description of Properties

The following table sets forth the Partnership's investment in properties:

                              Date of
Property                      Purchase    Type of Ownership        Use

Fairway View II Apartments     11/84   Fee ownership subject   Apartment
  Baton Rouge, Louisiana               to first mortgage       204 units

The Pines Apartments           04/85   Fee ownership subject   Apartment
  Roanoke, Virginia                    to first mortgage       216 units

On October 31,  2003,  the  Partnership  sold  Patchen  Place  Apartments  to an
unrelated third party for net proceeds of approximately $6,815,000 after payment
of closing costs. The Partnership realized a gain of approximately $4,703,000 as
a result of the sale. The Partnership used  approximately  $4,254,000 of the net
proceeds to repay the  mortgage  encumbering  the  property.  In  addition,  the
Partnership  recorded a loss on early  extinguishment  of debt of  approximately
$92,000 as a result of unamortized  loan costs being written off. This amount is
included  in (loss)  income  from  discontinued  operations.  Included in (loss)
income from  discontinued  operations  for the years ended December 31, 2003 and
2002 is  approximately  $1,076,000  and  $1,246,000,  respectively,  of  revenue
generated by the property.

On December 9, 2003, the Partnership sold Northwoods  Apartments to an unrelated
third  party for net  proceeds of  approximately  $11,454,000  after  payment of
closing costs. The Partnership realized a gain of approximately  $8,028,000 as a
result of the sale. The buyer assumed the mortgage  encumbering  the property of
approximately  $6,611,000. In addition, the Partnership recorded a loss on early
extinguishment of debt of approximately $207,000 as a result of unamortized loan
costs  being  written  off.  This  amount  is  included  in (loss)  income  from
discontinued operations.  Included in (loss) income from discontinued operations
for the years ended December 31, 2003 and 2002 is  approximately  $2,010,000 and
$2,177,000, respectively, of revenue generated by the property.

On  December  30,  2003,  the  Partnership  sold South  Point  Apartments  to an
unrelated third party for net proceeds of approximately $8,135,000 after payment
of closing costs. The Partnership realized a gain of approximately $4,973,000 as
a result of the sale. The Partnership used  approximately  $4,948,000 of the net
proceeds to repay the  mortgage  encumbering  the  property.  In  addition,  the
Partnership  recorded a loss on early  extinguishment  of debt of  approximately
$105,000 as a result of unamortized loan costs being written off. This amount is
included  in (loss)  income  from  discontinued  operations.  Included in (loss)
income from  discontinued  operations  for the years ended December 31, 2003 and
2002 is  approximately  $1,262,000  and  $1,357,000,  respectively,  of  revenue
generated by the property.

Schedule of Properties

Set forth below for each of the  Partnership's  properties is the gross carrying
value, accumulated depreciation,  depreciable life, method of depreciation,  and
Federal tax basis.

                    Carrying  Accumulated                       Federal
Property             Value    Depreciation    Rate    Method   Tax Basis
                       (in thousands)                         (in thousands)

Fairway View II     $11,002     $ 7,155     5-30 yrs   S/L      $ 1,402
The Pines             8,744       6,570     5-30 yrs   S/L        1,016
      Total         $19,746     $13,725                         $ 2,418

See "Item 7.  Financial  Statements,  Note A" for a  description  of the
Partnership's capitalization and depreciation policies.

Schedule of Property Indebtedness

The  following  table  sets  forth  certain  information  relating  to the loans
encumbering the Partnership's properties.

                     Principal                                 Principal
                    Balance At                                  Balance
                   December 31,  Interest  Period   Maturity    Due At
Property               2003        Rate   Amortized   Date   Maturity (1)
                  (in thousands)                            (in thousands)

Fairway View II       $ 5,163     7.03%    20 yrs   12/01/21     $ --
The Pines               3,830     7.97%    20 yrs   01/01/20       --
      Total           $ 8,993                                    $ --

(1)   See "Item 7. Financial  Statements - Note B" for information  with respect
      to the  Partnership's  ability to prepay  these  loans and other  specific
      details about the loans.

On May 16, 2003, the  Partnership  refinanced the mortgage  encumbering  Patchen
Place Apartments.  The refinancing  replaced the existing mortgage of $3,000,000
with a new mortgage in the amount of $4,290,000.  Total  capitalized  loan costs
were  approximately  $98,000  during  the year  ended  December  31,  2003.  The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately  $7,000 during the year ended  December 31, 2003, due to the write
off of unamortized  loan costs and debt  discounts,  which is included in (loss)
income  from  discontinued  operations.  The new  mortgage  was repaid  with the
proceeds from the sale of Patchen Place Apartments in October 2003 (see "Item 7.
Financial Statements - Note E").

On June 27, 2003,  the  Partnership  refinanced the mortgage  encumbering  South
Point Apartments.  The refinancing  replaced the existing mortgage of $4,600,000
with a new mortgage in the amount of $5,000,000.  Total  capitalized  loan costs
were  approximately  $115,000  during  the year ended  December  31,  2003.  The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately  $7,000 during the year ended  December 31, 2003, due to the write
off of unamortized  loan costs and debt  discounts,  which is included in (loss)
income  from  discontinued  operations.  The new  mortgage  was repaid  with the
proceeds from the sale of South Point  Apartments in December 2003 (see "Item 7.
Financial Statements - Note E").

Initially the May 16, 2003  refinancing of Patchen Place Apartments and the June
27, 2003  refinancing  of South Point  Apartments  were under an interim  credit
facility  ("Interim Credit Facility") which also provided for the refinancing of
several other properties. The Interim Credit Facility created separate loans for
each property refinanced thereunder,  which loans were not  cross-collateralized
or  cross-defaulted  with each  other.  During  the term of the  Interim  Credit
Facility,  Patchen  Place and  South  Point  Apartments  were  required  to make
interest-only  payments.  The first  month's  interest  rate for  Patchen  Place
Apartments was 2.78% and for South Point Apartments was 2.60%.

As of July 1 and August 1,  2003,  the loans on  Patchen  Place and South  Point
Apartments,  respectively,  were  assumed  by a  different  lender.  The  credit
facility  ("Permanent Credit Facility") with the new lender matures in September
2007 with an option for the Partnership to elect one five-year  extension.  This
Permanent  Credit  Facility  also  created  separate  loans  for  each  property
refinanced   thereunder,   which   loans   are   not   cross-collateralized   or
cross-defaulted  with each other. Each note under this Permanent Credit Facility
is initially a variable rate loan, and after three years the Partnership has the
option of  converting  the note to a fixed rate loan.  The interest  rate on the
variable  rate  loans  is  85  basis  points  over  the  Fannie  Mae  discounted
mortgage-backed  security index (1.92% per annum at December 31, 2003),  and the
rate resets monthly. Each loan automatically renews at the end of each month. In
addition,   monthly   principal   payments  are  required  based  on  a  30-year
amortization schedule,  using the interest rate in effect during the first month
that the properties are on the Permanent Credit Facility.  The loans were repaid
when Patchen Place  Apartments  sold in October 2003 and South Point  Apartments
sold in December 2003.

Rental Rates and Occupancy

Average annual rental rates and occupancy for 2003 and 2002 for each property:

                               Average Annual              Average
                                Rental Rates              Occupancy
                                   (per unit)
Property                     2003          2002        2003        2002

Fairway View II (1)         $7,193        $7,098        90%        94%
The Pines                    7,231         7,252        92%        94%

(1)   The  Managing  General  Partner  attributes  the  decrease in occupancy at
      Fairway View II to strong  competition  from new construction in the local
      market area.

As noted under "Item 1.  Description of Business",  the real estate  industry is
highly  competitive.  All of the  properties of the  Partnership  are subject to
competition from other residential apartment complexes in the area. The Managing
General Partner believes that all of the properties are adequately insured. Each
property is an apartment  complex which leases units for lease terms of one year
or less. No residential tenant leases 10% or more of the available rental space.
All  of the  properties  are in  good  physical  condition,  subject  to  normal
depreciation and deterioration as is typical for assets of this type and age.

Real Estate Taxes and Rates

Real estate taxes and rates in 2003 for each property were:

                                 2003          2003
                                 Taxes        Rates
                                 (in thousands)

         Fairway View II         $ 47         10.40%
         The Pines                 79          1.12%

Capital Improvements

Fairway View II

During the year ended December 31, 2003, the Partnership completed approximately
$66,000 of capital improvements at Fairway View II, consisting primarily of roof
and plumbing  fixture  upgrades and floor  covering  and air  conditioning  unit
replacements.  These  improvements  were funded from  operating  cash flow.  The
Partnership  is  currently  evaluating  the  capital  improvement  needs  of the
property for the upcoming  year and  currently  expects to budget  approximately
$112,000.  Additional improvements may be considered during 2004 and will depend
on the physical  condition of the property as well as  replacement  reserves and
anticipated cash flow generated by the property.

The Pines

During the year ended December 31, 2003, the Partnership completed approximately
$52,000 of capital  improvements  at The Pines,  consisting  primarily  of water
heater,  air  conditioning  unit,  office  computer,  cabinet and floor covering
replacements.  These  improvements  were funded from  operating  cash flow.  The
Partnership  is  currently  evaluating  the  capital  improvement  needs  of the
property for the upcoming  year and  currently  expects to budget  approximately
$119,000.  Additional improvements may be considered during 2004 and will depend
on the physical  condition of the  property,  as well as  anticipated  cash flow
generated by the property.

Patchen Place

During the year ended December 31, 2003, the Partnership completed approximately
$202,000 of capital improvements at Patchen Place,  consisting primarily of roof
upgrades and floor covering,  air conditioning unit, water heater, and appliance
replacements. These improvements were funded from operating cash flow, insurance
proceeds, and replacement reserves. Patchen Place was sold in October 2003.

Northwoods I and II

During the year ended December 31, 2003, the Partnership completed approximately
$117,000 of capital improvements at Northwoods I and II, consisting primarily of
floor covering, air conditioning unit, and appliance replacements and structural
improvements.   These   improvements  were  funded  from  operating  cash  flow.
Northwoods I and II was sold in December 2003.

South Point

During the year ended December 31, 2003, the Partnership completed approximately
$109,000 of capital  improvements at South Point,  consisting primarily of floor
covering and air conditioning unit replacements.  These improvements were funded
from  operating  cash flow and  replacement  reserves.  South  Point was sold in
December 2003.

Item 3.    Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the  Partnership,  its Managing  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purported  to  assert  claims  on  behalf  of a class of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  that are named as nominal  defendants,  challenging,  among  other
things,  the  acquisition  of  interests  in certain  Managing  General  Partner
entities by Insignia Financial Group, Inc.  ("Insignia") and entities that were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged into AIMCO.  The plaintiffs  sought  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
In addition, during the third quarter of 2001, a complaint (the "Heller action")
was filed  against  the same  defendants  that are named in the  Nuanes  action,
captioned  Heller v.  Insignia  Financial  Group.  On or about  August 6,  2001,
plaintiffs filed a first amended  complaint.  The Heller action was brought as a
purported derivative action, and asserted claims for, among other things, breach
of fiduciary  duty,  unfair  competition,  conversion,  unjust  enrichment,  and
judicial dissolution.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent  appraisals of the  Partnerships'  properties  by a Court  appointed
appraiser.  An affiliate of the Managing General Partner has also agreed to make
at least one round of tender offers to purchase all of the partnership interests
in the Partnerships within one year of final approval,  if it is granted, and to
provide  partners with the independent  appraisals at the time of these tenders.
The proposed  settlement also provided for the limitation of the allowable costs
which  the  Managing   General   Partner  or  its  affiliates  will  charge  the
Partnerships  in connection with this litigation and imposes limits on the class
counsel  fees and  costs in this  litigation.  On April  11,  2003,  notice  was
distributed  to  limited   partners   providing  the  details  of  the  proposed
settlement.

On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.  On August 12, 2003, an objector
("Objector")  filed an  appeal  seeking  to  vacate  and/or  reverse  the  order
approving the settlement and entering  judgment  thereto.  On November 24, 2003,
the Objector filed an  application  requesting the Court order AIMCO to withdraw
settlement  tender offers it had  commenced,  refrain from making further offers
pending the appeal and auction any units tendered to third  parties,  contending
that the offers did not conform  with the terms of the  Settlement.  Counsel for
the Objector (on behalf of another  investor)  had  alternatively  requested the
Court take certain  action  purportedly  to enforce the terms of the  settlement
agreement.  On December 18, 2003,  the Court heard oral  argument on the motions
and denied them both in their entirety.  On January 28, 2004, Objector filed his
opening brief in his pending appeal.  The Managing  General Partner is currently
scheduled  to file a brief in  support  of the order  approving  settlement  and
entering judgment thereto by April 23, 2004.

On August 8, 2003 AIMCO  Properties  L.P., an affiliate of the Managing  General
Partner,  was served  with a  Complaint  in the United  States  District  Court,
District of Columbia alleging that AIMCO Properties L.P.  willfully violated the
Fair Labor Standards Act (FLSA) by failing to pay maintenance  workers  overtime
for all hours worked in excess of forty per week.  The  Complaint is styled as a
Collective  Action  under  the FLSA and seeks to  certify  state  subclasses  in
California, Maryland, and the District of Columbia. Specifically, the plaintiffs
contend that AIMCO Properties L.P. failed to compensate  maintenance workers for
time  that they were  required  to be  "on-call".  Additionally,  the  Complaint
alleges AIMCO  Properties  L.P.  failed to comply with the FLSA in  compensating
maintenance  workers  for time that they  worked in  responding  to a call while
"on-call".  The  Complaint  also  attempts  to certify a subclass  for  salaried
service  directors who are challenging  their  classification as exempt from the
overtime  provisions of the FLSA.  AIMCO  Properties L.P. has filed an answer to
the  Complaint  denying the  substantive  allegations.  Discovery  is  currently
underway.

The  Managing  General  Partner  does  not  anticipate  that  any  costs  to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.

Item 4.    Submission of Matters to a Vote of Security Holders

During the quarter ended  December 31, 2003, no matter was submitted to the vote
of the unit holders through the solicitation of proxies or otherwise.


<PAGE>


                                     PART II

Item 5.    Market for the Partnership's Equity and Related Partner
           Matters

The  Partnership,  a publicly-held  limited  partnership,  offered up to 100,000
limited  partnership  units (the  "Units") and sold 60,517  limited  partnership
units aggregating  $30,259,000.  At December 31, 2003, the Partnership had 1,112
holders  of  record  owning an  aggregate  of 60,517  Units.  Affiliates  of the
Managing  General  Partner owned 41,649.67 Units or 68.82% at December 31, 2003.
No public trading market has developed for the Units,  and it is not anticipated
that such a market will develop in the future.

The  Partnership  distributed  the  following  amounts  during  the years  ended
December 31, 2003 and 2002 (in thousands, except per unit data):

                                    Per Limited                   Per Limited
                      Year Ended    Partnership    Year Ended     Partnership
                     December 31,      Unit     December 31, 2002    Unit
                         2003

Operations             $ 1,217        $ 19.90        $ 1,584        $ 25.91
Refinancing (1)          1,347          22.04            242           3.97
Sales proceeds (2)       7,340         120.08             --             --
                       $ 9,904        $162.02        $ 1,826        $ 29.88

(1)   For 2003,  distributions from the refinancings of Patchen Place Apartments
      in  May  2003  and  South  Point   Apartments  in  June  2003.  For  2002,
      distribution  from the remaining  proceeds from the refinancing of Fairway
      View II Apartments in November 2001.

(2)   Proceeds from the sale of Patchen Place Apartments in October 2003 and the
      sale of Northwoods I and II Apartments in December 2003.

Subsequent  to  December  31,  2003,  approximately  $2,624,000   (approximately
$2,598,000 to the limited partners or $42.93 per limited  partnership  unit) was
distributed  to the partners  related to the sale of South Point  Apartments  in
December 2003.

Future cash  distributions  will depend on the levels of net cash generated from
operations, the availability of cash reserves and the timing of debt maturities,
refinancings  and/or  property  sales.  The  Partnership's  cash  available  for
distribution is reviewed on a monthly basis. There can be no assurance, however,
that the  Partnership  will  generate  sufficient  funds from  operations  after
required capital  expenditures,  to permit further distributions to its partners
in 2004 or subsequent periods.  See "Item 2. Description of Properties - Capital
Improvements" for information  relating to anticipated  capital  expenditures at
the properties.

In addition to its indirect  ownership of the Managing  General Partner interest
in the Partnership, AIMCO and its affiliates owned 41,649.67 limited partnership
units (the "Units") in the  Partnership  representing  68.82% of the outstanding
Units at December 31, 2003.  A number of these Units were  acquired  pursuant to
tender offers made by AIMCO or its affiliates.  It is possible that AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unit  holders  holding a majority of the Units are  entitled to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove the Managing General  Partner.  As a result of its ownership of 68.82% of
the outstanding  Units,  AIMCO and its affiliates are in a position to influence
all such voting  decisions with respect to the  Partnership.  However,  DeForest
Ventures II L.P., from whom Insignia  Properties LP ("IPLP") an affiliate of the
Managing  General  Partner and of AIMCO  acquired  25,399  Units  (41.97% of the
units), agreed for the benefit of non-tendering unit holders, that it would vote
its Units:  (i) against any  increase in  compensation  payable to the  Managing
General Partner or to its affiliates; and (ii) on all other matters submitted by
it or its  affiliates,  in  proportion  to the votes  cast by third  party  unit
holders.  Except for the foregoing,  no other limitations are imposed on IPLP's,
AIMCO's  or any other  affiliates  right to vote each unit  held.  Although  the
Managing  General Partner owes fiduciary  duties to the limited  partners of the
Partnership, the Managing General Partner also owes fiduciary duties to AIMCO as
its sole stockholder.  As a result,  the duties of the Managing General Partner,
as Managing  General  Partner,  to the Partnership and its limited  partners may
come into conflict with the duties of the Managing  General Partner to AIMCO, as
its sole stockholder.

Item 6.    Management's Discussion and Analysis or Plan of Operation

This item should be read in conjunction with the financial  statements and other
items contained elsewhere in this report.

Results of Operations

The  Partnership's net income for the years ended December 31, 2003 and 2002 was
approximately $17,225,000 and $74,000,  respectively. The increase in net income
for the year ended  December 31, 2003 is due to the  recognition  of the gain on
the sales of Patchen  Place,  Northwoods I and II and South Point  Apartments in
2003.  Effective January 1, 2002, the Partnership adopted Statement of Financial
Accounting  Standards  No. 144,  "Accounting  for the  Impairment or Disposal of
Long-Lived Assets", which established standards for the way that public business
enterprises  report  information  about long-lived  assets that are either being
held for sale or have  already  been  disposed  of by sale or other  means.  The
standard  requires  that results of  operations  for a long-lived  asset that is
being  held  for  sale  or  has  already  been  disposed  of  be  reported  as a
discontinued  operation  on  the  statement  of  operations.  As a  result,  the
accompanying  statements of operations  have been restated as of January 1, 2002
to reflect the operations of Patchen Place,  Northwoods I and II and South Point
Apartments  as (loss)  income from  discontinued  operations  due to the sale of
these properties during 2003.

On October 31,  2003,  the  Partnership  sold  Patchen  Place  Apartments  to an
unrelated third party for net proceeds of approximately $6,815,000 after payment
of closing costs. The Partnership realized a gain of approximately $4,703,000 as
a result of the sale. The Partnership used  approximately  $4,254,000 of the net
proceeds to repay the  mortgage  encumbering  the  property.  In  addition,  the
Partnership  recorded a loss on early  extinguishment  of debt of  approximately
$92,000 as a result of unamortized  loan costs being written off. This amount is
included  in (loss)  income  from  discontinued  operations.  Included in (loss)
income from  discontinued  operations  for the years ended December 31, 2003 and
2002 is  approximately  $1,076,000  and  $1,246,000,  respectively,  of  revenue
generated by the property.

On December 9, 2003, the Partnership sold Northwoods  Apartments to an unrelated
third  party for net  proceeds of  approximately  $11,454,000  after  payment of
closing costs. The Partnership realized a gain of approximately  $8,028,000 as a
result of the sale. The buyer assumed the mortgage  encumbering  the property of
approximately  $6,611,000. In addition, the Partnership recorded a loss on early
extinguishment of debt of approximately $207,000 as a result of unamortized loan
costs  being  written  off.  This  amount  is  included  in (loss)  income  from
discontinued operations.  Included in (loss) income from discontinued operations
for the years ended December 31, 2003 and 2002 is  approximately  $2,010,000 and
$2,177,000, respectively, of revenue generated by the property.

On  December  30,  2003,  the  Partnership  sold South  Point  Apartments  to an
unrelated third party for net proceeds of approximately $8,135,000 after payment
of closing costs. The Partnership realized a gain of approximately $4,973,000 as
a result of the sale. The Partnership used  approximately  $4,948,000 of the net
proceeds to repay the  mortgage  encumbering  the  property.  In  addition,  the
Partnership  recorded a loss on early  extinguishment  of debt of  approximately
$105,000 as a result of unamortized loan costs being written off. This amount is
included  in (loss)  income  from  discontinued  operations.  Included in (loss)
income from  discontinued  operations  for the years ended December 31, 2003 and
2002 is  approximately  $1,262,000  and  $1,357,000,  respectively,  of  revenue
generated by the property.

On February 15, 2003, Patchen Place Apartments incurred damages to its buildings
and  landscaping  as a  result  of an ice  storm.  As a  result  of the  damage,
approximately  $40,000 of fixed assets and $35,000 of  accumulated  depreciation
were  written off  resulting  in a net write off of  approximately  $5,000.  The
Partnership  received  approximately  $59,000  in  proceeds  from the  insurance
company to repair  the  damaged  units.  For  financial  statement  purposes,  a
casualty  gain of  approximately  $54,000 was  recognized  during the year ended
December 31, 2003 as a result of the  difference  between the proceeds  received
and the net book value of the assets  written  off.  This  amount is included in
(loss) income from discontinued operations.

Excluding the gain on sales and the discontinued  operations,  the Partnership's
loss from  continuing  operations for the years ended December 31, 2003 and 2002
was approximately $300,000 and $200,000 respectively.  The increase in loss from
continuing  operations for the year ended December 31, 2003 is due to a decrease
in total  revenue.  Total  revenue  decreased due to a decrease in rental income
caused by a decrease in occupancy and an increase in  concessions at both of the
investment properties. Total expenses remained constant for 2003.

Included in general and administrative expenses for the years ended December 31,
2003 and 2002 are management  reimbursements  to the Managing General Partner as
allowed  under  the  Partnership   Agreement.   Also  included  in  general  and
administrative  expenses  are costs  associated  with the  quarterly  and annual
communications  with  investors  and  regulatory  agencies  and the annual audit
required by the Partnership Agreement.

As part of the ongoing  business plan of the  Partnership,  the Managing General
Partner  monitors  the  rental  market  environment  of each  of its  investment
properties  to assess  the  feasibility  of  increasing  rents,  maintaining  or
increasing  occupancy  levels and protecting the  Partnership  from increases in
expense.  As part of this plan, the Managing General Partner attempts to protect
the Partnership  from the burden of  inflation-related  increases in expenses by
increasing rents and maintaining a high overall  occupancy level.  However,  the
Managing  General Partner may use rental  concessions and rental rate reductions
to offset softening market conditions,  accordingly,  there is no guarantee that
the Managing General Partner will be able to sustain such a plan.

Liquidity and Capital Resources

At  December  31,  2003,  the  Partnership  had  cash and  cash  equivalents  of
approximately  $3,628,000  compared to  approximately  $614,000 at December  31,
2002. The increase in cash and cash equivalents of  approximately  $3,014,000 is
due to  approximately  $26,264,000  and $1,509,000 of cash provided by investing
and  operating  activities,  respectively,  partially  offset  by  approximately
$24,759,000  of cash used in financing  activities.  Cash  provided by investing
activities  consisted of proceeds from the sales of Patchen Place,  Northwoods I
and II and South Point  Apartments,  net  withdrawals  from  restricted  escrows
maintained by the mortgage lender,  and insurance  proceeds  received at Patchen
Place  Apartments,  partially offset by property  improvements and replacements.
Cash used in financing  activities  consisted of the  repayment of the mortgages
encumbering  Patchen  Place,  Northwoods  I and II and South  Point  Apartments,
payment of loan costs,  principal  payments  on the  mortgages  encumbering  the
investment  properties,  and distributions to partners,  offset by proceeds from
mortgage notes payable due to the  refinancings of Patchen Place and South Point
Apartments.  The Partnership  invests its working  capital  reserves in interest
bearing accounts.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the various  properties  to  adequately  maintain  the
physical  assets and other operating needs of the Partnership and to comply with
Federal, state and local legal and regulatory requirements. The Managing General
Partner monitors developments in the area of legal and regulatory compliance and
is studying new federal laws,  including  the  Sarbanes-Oxley  Act of 2002.  The
Sarbanes-Oxley Act of 2002 mandates or suggests  additional  compliance measures
with regard to governance,  disclosure, audit and other areas. In light of these
changes,  the Partnership  expects that it will incur higher expenses related to
compliance,  including  increased  legal  and audit  fees.  The  Partnership  is
currently  evaluating  the capital  improvement  needs of the properties for the
upcoming year and currently expects to budget approximately $231,000 for both of
the  Partnership's   investment  properties.   Additional  improvements  may  be
considered  during  2004  and  will  depend  on the  physical  condition  of the
properties as well as replacement  reserves and anticipated  cash flow generated
by the properties.  The additional capital expenditures will be incurred only if
cash is available from operations or from  Partnership  reserves.  To the extent
that  such  budgeted  capital  improvements  are  completed,  the  Partnership's
distributable cash flow, if any, may be adversely affected at least in the short
term.

On May 16, 2003, the  Partnership  refinanced the mortgage  encumbering  Patchen
Place Apartments.  The refinancing  replaced the existing mortgage of $3,000,000
with a new mortgage in the amount of $4,290,000.  Total  capitalized  loan costs
were  approximately  $98,000  during  the year  ended  December  31,  2003.  The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately  $7,000 during the year ended  December 31, 2003, due to the write
off of unamortized  loan costs and debt  discounts,  which is included in (loss)
income  from  discontinued  operations.  The new  mortgage  was repaid  with the
proceeds from the sale of Patchen Place Apartments in October 2003.

On June 27, 2003,  the  Partnership  refinanced the mortgage  encumbering  South
Point Apartments.  The refinancing  replaced the existing mortgage of $4,600,000
with a new mortgage in the amount of $5,000,000.  Total  capitalized  loan costs
were  approximately  $115,000  during  the year ended  December  31,  2003.  The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately  $7,000 during the year ended  December 31, 2003, due to the write
off of unamortized  loan costs and debt  discounts,  which is included in (loss)
income  from  discontinued  operations.  The new  mortgage  was repaid  with the
proceeds from the sale of South Point Apartments in December 2003.

Initially the May 16, 2003  refinancing of Patchen Place Apartments and the June
27, 2003  refinancing  of South Point  Apartments  were under an interim  credit
facility  ("Interim Credit Facility") which also provided for the refinancing of
several other properties. The Interim Credit Facility created separate loans for
each property refinanced thereunder,  which loans were not  cross-collateralized
or  cross-defaulted  with each  other.  During  the term of the  Interim  Credit
Facility,  Patchen  Place and  South  Point  Apartments  were  required  to make
interest-only  payments.  The first  month's  interest  rate for  Patchen  Place
Apartments was 2.78% and for South Point Apartments was 2.60%.

As of July 1 and August 1,  2003,  the loans on  Patchen  Place and South  Point
Apartments,  respectively,  were  assumed  by a  different  lender.  The  credit
facility  ("Permanent Credit Facility") with the new lender matures in September
2007 with an option for the Partnership to elect one five-year  extension.  This
Permanent  Credit  Facility  also  created  separate  loans  for  each  property
refinanced   thereunder,   which   loans   are   not   cross-collateralized   or
cross-defaulted  with each other. Each note under this Permanent Credit Facility
is initially a variable rate loan, and after three years the Partnership has the
option of  converting  the note to a fixed rate loan.  The interest  rate on the
variable  rate  loans  is  85  basis  points  over  the  Fannie  Mae  discounted
mortgage-backed  security index (1.92% per annum at December 31, 2003),  and the
rate resets monthly. Each loan automatically renews at the end of each month. In
addition,   monthly   principal   payments  are  required  based  on  a  30-year
amortization schedule,  using the interest rate in effect during the first month
that the properties are on the Permanent Credit Facility.  The loans were repaid
when Patchen Place  Apartments  sold in October 2003 and South Point  Apartments
sold in December 2003.

The  Partnership's  assets are thought to be sufficient for any near-term  needs
(exclusive  of  capital   improvements)   of  the   Partnership.   The  mortgage
indebtedness  encumbering the investment properties of approximately  $8,993,000
has  maturity  dates of January 1, 2020 and  December  1, 2021 at which time the
loans are scheduled to be fully amortized.

Pursuant to the Partnership Agreement,  the term of the Partnership is scheduled
to expire on December 31, 2008. Accordingly,  prior to such date the Partnership
will need to either  sell its  investment  properties  or extend the term of the
Partnership.

The  Partnership  distributed  the  following  amounts  during  the years  ended
December 31, 2003 and 2002 (in thousands, except per unit data):

                                    Per Limited                   Per Limited
                      Year Ended    Partnership    Year Ended     Partnership
                     December 31,      Unit     December 31, 2002    Unit
                         2003

Operations             $ 1,217        $ 19.90        $ 1,584        $ 25.91
Refinancing (1)          1,347          22.04            242           3.97
Sales proceeds (2)       7,340         120.08             --             --
                       $ 9,904        $162.02        $ 1,826        $ 29.88

(1)   For 2003,  distributions from the refinancings of Patchen Place Apartments
      in  May  2003  and  South  Point   Apartments  in  June  2003.  For  2002,
      distribution  from the remaining  proceeds from the refinancing of Fairway
      View II Apartments in November 2001.

(2)   Proceeds from the sale of Patchen Place Apartments in October 2003 and the
      sale of Northwoods I and II Apartments in December 2003.

Subsequent  to  December  31,  2003,  approximately  $2,624,000   (approximately
$2,598,000 to the limited partners or $42.93 per limited  partnership  unit) was
distributed  to the partners  related to the sale of South Point  Apartments  in
December 2003.

Future cash  distributions  will depend on the levels of net cash generated from
operations, the availability of cash reserves and the timing of debt maturities,
refinancings  and/or  property  sales.  The  Partnership's  cash  available  for
distribution is reviewed on a monthly basis. There can be no assurance, however,
that the  Partnership  will  generate  sufficient  funds from  operations  after
required capital  expenditures,  to permit further distributions to its partners
in 2004 or subsequent periods.

Other

In addition to its indirect  ownership of the Managing  General Partner interest
in the Partnership, AIMCO and its affiliates owned 41,649.67 limited partnership
units (the "Units") in the  Partnership  representing  68.82% of the outstanding
Units at December 31, 2003.  A number of these Units were  acquired  pursuant to
tender offers made by AIMCO or its affiliates.  It is possible that AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unit  holders  holding a majority of the Units are  entitled to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove the Managing General  Partner.  As a result of its ownership of 68.82% of
the outstanding  Units,  AIMCO and its affiliates are in a position to influence
all such voting  decisions with respect to the  Partnership.  However,  DeForest
Ventures II L.P., from whom Insignia  Properties LP ("IPLP") an affiliate of the
Managing  General  Partner and of AIMCO  acquired  25,399  Units  (41.97% of the
units), agreed for the benefit of non-tendering unit holders, that it would vote
its Units:  (i) against any  increase in  compensation  payable to the  Managing
General Partner or to its affiliates; and (ii) on all other matters submitted by
it or its  affiliates,  in  proportion  to the votes  cast by third  party  unit
holders.  Except for the foregoing,  no other limitations are imposed on IPLP's,
AIMCO's  or any other  affiliates  right to vote each unit  held.  Although  the
Managing  General Partner owes fiduciary  duties to the limited  partners of the
Partnership, the Managing General Partner also owes fiduciary duties to AIMCO as
its sole stockholder.  As a result,  the duties of the Managing General Partner,
as Managing  General  Partner,  to the Partnership and its limited  partners may
come into conflict with the duties of the Managing  General Partner to AIMCO, as
its sole stockholder.

Critical Accounting Policies and Estimates

A summary of the Partnership's  significant  accounting  policies is included in
"Note A - Organization and Significant Accounting Policies" which is included in
the financial statements in "Item 7. Financial Statements". The Managing General
Partner  believes that the consistent  application of these policies enables the
Partnership  to provide  readers of the  financial  statements  with  useful and
reliable  information  about the  Partnership's  operating results and financial
condition. The preparation of financial statements in conformity with accounting
principles  generally  accepted in the United States requires the Partnership to
make  estimates and  assumptions.  These  estimates and  assumptions  affect the
reported  amounts  of  assets  and  liabilities  at the  date  of the  financial
statements  as well as reported  amounts of  revenues  and  expenses  during the
reporting  period.  Actual results could differ from these estimates.  Judgments
and  assessments  of  uncertainties  are required in applying the  Partnership's
accounting  policies  in  many  areas.  The  Partnership  believes  that  of its
significant  accounting  policies,  the following may involve a higher degree of
judgment and complexity.

Impairment of Long-Lived Assets

Investment  properties  are  recorded at cost,  less  accumulated  depreciation,
unless  considered  impaired.  If  events  or  circumstances  indicate  that the
carrying  amount of a property may be  impaired,  the  Partnership  will make an
assessment of its  recoverability  by estimating  the  undiscounted  future cash
flows,  excluding  interest  charges,  of the property.  If the carrying  amount
exceeds the aggregate  future cash flows,  the  Partnership  would  recognize an
impairment  loss to the extent the carrying amount exceeds the fair value of the
property.

Real  property  investments  are  subject  to varying  degrees of risk.  Several
factors  may  adversely  affect  the  economic  performance  and  value  of  the
Partnership's investment properties.  These factors include, but are not limited
to,  changes  in the  national,  regional  and  local  economic  climate;  local
conditions,  such as an oversupply of multifamily  properties;  competition from
other available  multifamily property owners and changes in market rental rates.
Any adverse changes in these factors could cause impairment of the Partnership's
assets.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less.
Rental income  attributable to leases is recognized monthly as it is earned. The
Partnership  evaluates all accounts receivable from residents and establishes an
allowance, after the application of security deposits, for accounts greater than
30 days past due on current tenants and all receivables due from former tenants.
The Partnership will offer rental concessions during particularly slow months or
in response to heavy  competition from other similar  complexes in the area. Any
concessions  given at the inception of the lease are amortized  over the life of
the lease.

ITEM 7.    FINANCIAL STATEMENTS

NATIONAL PROPERTY INVESTORS 7

LIST OF FINANCIAL STATEMENTS

      Report of Ernst & Young LLP, Independent Auditors

      Balance Sheet - December 31, 2003

      Statements of Operations - Years ended December 31, 2003 and 2002

      Statements  of Changes in Partners'  (Deficiency)  Capital - Years
      ended December 31, 2003 and 2002

      Statements of Cash Flows - Years ended December 31, 2003 and 2002

      Notes to Financial Statements


<PAGE>


           Report of Ernst & Young LLP, Independent Auditors



The Partners
National Property Investors 7


We have audited the accompanying  balance sheet of National Property Investors 7
as of December 31, 2003, and the related  statements of  operations,  changes in
partners'  (deficiency) capital, and cash flows for each of the two years in the
period  ended   December  31,  2003.   These   financial   statements   are  the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made  by the  Partnership's  management,  as  well  as  evaluating  the  overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of National Property Investors 7
at December 31, 2003,  and the results of its  operations and its cash flows for
each of the two years in the period ended December 31, 2003, in conformity  with
accounting principles generally accepted in the United States.


                                                    /s/ERNST & YOUNG LLP



Greenville, South Carolina
February 27, 2004



<PAGE>




                          NATIONAL PROPERTY INVESTORS 7

                                  BALANCE SHEET
                        (in thousands, except unit data)

                                December 31, 2003



Assets
   Cash and cash equivalents                                     $ 3,628
   Receivables and deposits                                           373
   Restricted escrows                                                 269
   Other assets                                                       305
   Investment properties (Notes B, E and F):
      Land                                           $ 1,678
      Buildings and related personal property          18,068
                                                       19,746
      Less accumulated depreciation                   (13,725)      6,021

                                                                 $ 10,596
Liabilities and Partners' (Deficiency) Capital
Liabilities
   Accounts payable                                               $ 235
   Tenant security deposit liabilities                                 35
   Other liabilities                                                  372
   Mortgage notes payable (Note B)                                  8,993
   Due to affiliates (Note D)                                          72

Partners' (Deficiency) Capital
   General partner                                    $ (293)
   Limited partners (60,517 units issued and
      outstanding)                                      1,182         889

                                                                  $ 10,596

            See Accompanying Notes to Financial Statements


<PAGE>


                          NATIONAL PROPERTY INVESTORS 7

                            STATEMENTS OF OPERATIONS
                      (in thousands, except per unit data)



                                                       Years Ended December 31,
                                                          2003        2002
                                                                   (Restated)
Revenues:
   Rental income                                        $ 2,667    $ 2,781
   Other income                                             198        184
      Total revenues                                      2,865      2,965

Expenses:
   Operating                                              1,162      1,142
   General and administrative                               432        425
   Depreciation                                             758        758
   Interest                                                 692        704
   Property taxes                                           121        136
      Total expenses                                      3,165      3,165

Net loss from continuing operations                        (300)      (200)
Net (loss) income from discontinued operations             (179)       274
Gain on sale of discontinued operations (Note E)         17,704         --

Net income (Note C)                                     $17,225      $ 74

Net income allocated to general partner (1%)             $ 172       $ 1
Net income allocated to limited partners (99%)           17,053         73

                                                        $17,225      $ 74
Net income per limited partnership unit:
  Loss from continuing operations                       $ (4.91)   $ (3.27)
  (Loss) income from discontinued operations (Note E)     (2.92)      4.48
  Gain on sale of discontinued operations                289.62         --

                                                        $281.79     $ 1.21

Distribution per limited partnership unit               $162.02    $ 29.88

            See Accompanying Notes to Financial Statements


<PAGE>


                          NATIONAL PROPERTY INVESTORS 7

        STATEMENTS OF CHANGES IN PARTNERS' (DEFICIENCY) CAPITAL
                        (in thousands, except unit data)



                                 Limited
                                Partnership   General   Limited
                                   Units      Partner  Partners    Total

Original capital contributions     60,517       $ 1     $30,259   $30,260

Partners' deficit at
  December 31, 2001                60,517        (349)   (4,331)   (4,680)

Distributions to partners              --         (18)   (1,808)   (1,826)

Net income for the year ended
  December 31, 2002                    --           1        73        74

Partners' deficit at
  December 31, 2002                60,517        (366)   (6,066)   (6,432)

Distributions to partners              --         (99)   (9,805)   (9,904)

Net income for the year ended
  December 31, 2003                    --         172    17,053    17,225

Partners' (deficiency) capital
at
  December 31, 2003                60,517     $ (293)   $ 1,182    $ 889

            See Accompanying Notes to Financial Statements


<PAGE>




                          NATIONAL PROPERTY INVESTORS 7

                            STATEMENTS OF CASH FLOWS
                                 (in thousands)

                                                       Years Ended December 31,
                                                           2003       2002
Cash flows from operating activities:
  Net income                                             $17,225     $ 74
  Adjustments to reconcile net income to net cash
  provided
   by operating activities:
    Depreciation                                           1,953      2,085
    Amortization of loan costs                                70         68
    Casualty gain                                            (54)        --
    Loss on early extinguishment of debt                     418         --
    Gain on sale of investment property                  (17,704)        --
    Change in accounts:
      Receivables and deposits                              (148)       204
      Other assets                                             8         35
      Accounts payable                                      (142)       (32)
      Tenant security deposit liabilities                    (97)        24
      Accrued property taxes                                   1         --
      Other liabilities                                      (93)       200
      Due to affiliates                                       72         --
         Net cash provided by operating activities         1,509      2,658

Cash flows from investing activities:
  Property improvements and replacements                    (546)      (651)
  Net withdrawals from (deposits to) restricted              347        (77)
  escrows
  Insurance proceeds received                                 59         --
  Net proceeds from sale of discontinued operations       26,404         --
         Net cash provided by (used in) investing         26,264       (728)
         activities

Cash flows from financing activities:
  Payments on mortgage notes payable                        (519)      (402)
  Repayment of mortgage notes payable                    (23,413)        --
  Proceeds from mortgage notes payable                     9,290         --
  Loan costs paid                                           (213)        --
  Distributions to partners                               (9,904)    (1,826)
         Net cash used in financing activities           (24,759)    (2,228)

Net increase (decrease) in cash and cash equivalents       3,014       (298)

Cash and cash equivalents at beginning of year               614        912

Cash and cash equivalents at end of year                 $ 3,628     $ 614

Supplemental disclosure of cash flow information:
  Cash paid for interest                                 $ 1,580    $ 1,739

            See Accompanying Notes to Financial Statements

<PAGE>

                          NATIONAL PROPERTY INVESTORS 7

                          NOTES TO FINANCIAL STATEMENTS

                                December 31, 2003


Note A - Organization and Significant Accounting Policies

Organization:  National Property Investors 7 (the "Partnership" or "Registrant")
is a  California  limited  partnership  organized in October 1983 to acquire and
operate  residential  apartment  complexes.  The Partnership's  managing general
partner is NPI Equity  Investments,  Inc. ("NPI Equity" or the "Managing General
Partner"). NPI Equity was a wholly owned subsidiary of Insignia Properties Trust
("IPT").  On February 26, 1999,  IPT was merged into  Apartment  Investment  and
Management  Company  ("AIMCO"),  a publicly traded real estate investment trust.
The  Partnership  Agreement  provides  that the  Partnership  will  terminate on
December  31, 2008,  unless  terminated  prior to such date.  As of December 31,
2003, the Partnership  operates two residential  apartment  complexes located in
the southeastern United States.

Basis of  Presentation:  Effective  January 1,  2002,  the  Partnership  adopted
Statement of Financial  Accounting  Standards ("SFAS") No. 144,  "Accounting for
the Impairment or Disposal of Long-Lived  Assets",  which established  standards
for the way that public business enterprises report information about long-lived
assets that are either being held for sale or have  already been  disposed of by
sale or other means.  The standard  requires  that results of  operations  for a
long-lived  asset that is being held for sale or has already been disposed of be
reported as a  discontinued  operation  on the  statement  of  operations.  As a
result,  the  accompanying  statements  of  operations  have been restated as of
January 1, 2002 to reflect the  operations of Patchen  Place,  Northwoods I & II
and South Point Apartments as (loss) income from discontinued  operations due to
their sales in 2003.

Allocation of Profits,  Gains,  and Losses:  Profits,  gains,  and losses of the
Partnership are allocated between the general and limited partners in accordance
with the provisions of the Partnership Agreement.

Profits,  not including  gains from property  dispositions,  are allocated as if
they were distributions of net cash from operations.

Any gain from property  dispositions  attributable to the excess, if any, of the
indebtedness relating to a property immediately prior to the disposition of such
property  over  the  Partnership's  adjusted  basis  in the  property  shall  be
allocated to each partner  having a negative  capital  account  balance,  to the
extent of such negative  balance.  The balance of any gain shall be treated on a
cumulative basis as if it constituted an equivalent  amount of distributable net
proceeds and shall be  allocated  to the general  partner to the extent that the
general  partner  would have received  distributable  net proceeds in connection
therewith; the balance shall be allocated to the limited partners.  However, the
interest of the general partner will be equal to at least 1% of each gain at all
times during the existence of the Partnership.

All  losses,  including  losses  attributable  to  property  dispositions,   are
allocated 99% to the limited partners and 1% to the general partner.

Accordingly,  net income as shown in the statements of operations and changes in
partner's  (deficiency)  capital  for 2003 and  2002  was  allocated  99% to the
limited  partners  and  1% to  the  general  partner.  Net  income  per  limited
partnership unit for each such year was computed as 99% of net income divided by
60,517 units outstanding.

Cash and Cash Equivalents: Cash and cash equivalents include cash on hand and in
banks.  At certain times,  the amount of cash deposited at a bank may exceed the
limit on insured  deposits.  Cash balances include  approximately  $3,425,000 at
December 31, 2003 that are  maintained  by an affiliated  management  company on
behalf of affiliated entities in cash concentration accounts.

Leases: The Partnership  generally leases apartment units for twelve-month terms
or less.  The  Partnership  recognizes  income  as  earned  on its  leases.  The
Partnership  evaluates all accounts receivable from residents and establishes an
allowance, after the application of security deposits, for accounts greater than
30 days past due on current tenants and all receivables due from former tenants.
In  addition,   the  Managing  General  Partner's  policy  is  to  offer  rental
concessions  during  periods of  declining  occupancy  or in  response  to heavy
competition from other similar  complexes in the area. Any concessions  given at
the inception of the lease are amortized over the life of the lease.

Tenant  Security  Deposits:  The  Partnership  requires  security  deposits from
lessees  for the  duration  of the  lease  and such  deposits  are  included  in
receivables  and  deposits.  Deposits  are  refunded  when the  tenant  vacates,
provided  the  tenant  has not  damaged  its space and is  current on its rental
payments.

Restricted Escrows:

      Capital  Reserve:   At  the  time  of  the  refinancing  of  the  mortgage
      encumbering Fairway View II Apartments during 2001, approximately $179,000
      of the proceeds  were  designated  for certain  capital  improvements.  At
      December 31, 2003, the escrow balance is approximately $181,000.

      Replacement  Reserve:  A replacement  reserve  account was  maintained for
      Patchen  Place and South Point  Apartments.  Each  property had a required
      monthly   payment   into  its  account  to  cover  the  costs  of  capital
      improvements  and  replacements.  The balance in the Patchen Place reserve
      was  returned to the  Partnership  subsequent  to the  property's  sale in
      October  2003 (see "Note E").  The balance in the South  Point  account at
      December 31, 2003 is  approximately  $88,000.  This amount was returned to
      the Partnership  subsequent to year end due to the sale of the property in
      December 2003.

Loan Costs: Loan costs of approximately $292,000, less accumulated  amortization
of approximately  $41,000,  are included in other assets and are being amortized
over the lives of the related  loans.  Amortization  expense for the years ended
December 31, 2003 and 2002 was $70,000 and $68,000,  respectively.  Amortization
expense is expected to be $14,000 for the years 2004 through 2008.

Investment Properties:  Investment properties consist of two apartment complexes
and are  stated  at cost.  Acquisition  fees are  capitalized  as a cost of real
estate. Expenditures in excess of $250 that maintain an existing asset which has
a useful  life of more  than one year are  capitalized  as  capital  replacement
expenditures  and  depreciated  over the  estimated  useful  life of the  asset.
Expenditures for ordinary repairs,  maintenance and apartment turnover costs are
expensed as incurred.

In accordance  with SFAS No. 144,  "Accounting for the Impairment or Disposal of
Long-Lived  Assets",  the Partnership  records  impairment  losses on long-lived
assets used in operations when events and circumstances indicate that the assets
might be impaired and the  undiscounted  cash flows estimated to be generated by
those assets are less than the carrying amounts of those assets.  No adjustments
for  impairment of value were  recorded in the years ended  December 31, 2003 or
2002.

Depreciation:  Depreciation  is  provided by the  straight-line  method over the
estimated lives of the apartment  properties and related personal property.  For
Federal income tax purposes,  the  accelerated  cost recovery method is used for
real property over 18 years for additions after March 15, 1984 and before May 9,
1985, and 19 years for additions  after May 8, 1985, and before January 1, 1987.
As a result of the Tax Reform Act of 1986,  for  additions  after  December  31,
1986, the modified  accelerated cost recovery method is used for depreciation of
(1) real property over 27 1/2 years and (2) personal  property  additions over 5
years.

Fair Value of Financial Statements:  SFAS No. 107, "Disclosures about Fair Value
of  Financial  Instruments",  as amended  by SFAS No.  119,  "Disclosures  about
Derivative  Financial  Instruments  and Fair  Value of  Financial  Instruments",
requires  disclosure  of fair value  information  about  financial  instruments,
whether or not recognized in the balance  sheet,  for which it is practicable to
estimate  fair  value.  Fair value is defined in the SFAS as the amount at which
the  instruments  could be exchanged in a current  transaction  between  willing
parties,  other than in a forced or liquidation  sale. The Partnership  believes
that the carrying  amounts of its  financial  instruments  (except for long term
debt)  approximate  their fair  values due to the short term  maturity  of these
instruments.  The  fair  value  of  the  Partnership's  long  term  debt  at the
Partnership's incremental borrowing rate is approximately $9,493,000.

Segment Reporting: SFAS No. 131, "Disclosure about Segments of an Enterprise and
Related  Information"  established  standards  for the way that public  business
enterprises  report  information  about operating  segments in annual  financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports.  It also established  standards
for related disclosures about products and services, geographic areas, and major
customers.  As defined in SFAS No. 131, the  Partnership has only one reportable
segment.

Use of Estimates:  The  preparation of financial  statements in conformity  with
accounting   principles   generally  accepted  in  the  United  States  requires
management to make estimates and assumptions that affect the amounts reported in
the financial  statements and  accompanying  notes.  Actual results could differ
from those estimates.

Advertising:  The  Partnership  expenses the costs of  advertising  as incurred.
Advertising  costs of  approximately  $132,000  and  $99,000 for the years ended
December 31, 2003 and 2002, respectively,  are included in operating expense and
(loss) income from discontinued operations.

Note B - Mortgage Notes Payable

                    Principal    Monthly                        Principal
                   Balance At    Payment    Stated               Balance
                  December 31,   Including  Interest  Maturity    Due At
Property              2003      Interest     Rate      Date     Maturity
                       (in thousands)                         (in thousands)

Fairway View II      $ 5,163      $ 42       7.03%   12/01/21     $ --
The Pines              3,830         35      7.97%   01/01/20         --
      Total          $ 8,993      $ 77                            $ --

On May 16, 2003, the  Partnership  refinanced the mortgage  encumbering  Patchen
Place Apartments.  The refinancing  replaced the existing mortgage of $3,000,000
with a new mortgage in the amount of $4,290,000.  Total  capitalized  loan costs
were  approximately  $98,000  during  the year  ended  December  31,  2003.  The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately  $7,000 during the year ended  December 31, 2003, due to the write
off of unamortized  loan costs and debt  discounts,  which is included in (loss)
income  from  discontinued  operations.  The new  mortgage  was repaid  with the
proceeds  from the sale of Patchen  Place  Apartments in October 2003 (see "Note
E").

On June 27, 2003,  the  Partnership  refinanced the mortgage  encumbering  South
Point Apartments.  The refinancing  replaced the existing mortgage of $4,600,000
with a new mortgage in the amount of $5,000,000.  Total  capitalized  loan costs
were  approximately  $115,000  during  the year ended  December  31,  2003.  The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately  $7,000 during the year ended  December 31, 2003, due to the write
off of unamortized  loan costs and debt  discounts,  which is included in (loss)
income  from  discontinued  operations.  The new  mortgage  was repaid  with the
proceeds  from the sale of South Point  Apartments  in December  2003 (see "Note
E").

Initially the May 16, 2003  refinancing of Patchen Place Apartments and the June
27, 2003  refinancing  of South Point  Apartments  were under an interim  credit
facility  ("Interim Credit Facility") which also provided for the refinancing of
several other properties. The Interim Credit Facility created separate loans for
each property refinanced thereunder,  which loans were not  cross-collateralized
or  cross-defaulted  with each  other.  During  the term of the  Interim  Credit
Facility,  Patchen  Place and  South  Point  Apartments  were  required  to make
interest-only  payments.  The first  month's  interest  rate for  Patchen  Place
Apartments was 2.78% and for South Point Apartments was 2.60%.

As of July 1 and August 1,  2003,  the loans on  Patchen  Place and South  Point
Apartments,  respectively,  were  assumed  by a  different  lender.  The  credit
facility  ("Permanent Credit Facility") with the new lender matures in September
2007 with an option for the Partnership to elect one five-year  extension.  This
Permanent  Credit  Facility  also  created  separate  loans  for  each  property
refinanced   thereunder,   which   loans   are   not   cross-collateralized   or
cross-defaulted  with each other. Each note under this Permanent Credit Facility
is initially a variable rate loan, and after three years the Partnership has the
option of  converting  the note to a fixed rate loan.  The interest  rate on the
variable  rate  loans  is  85  basis  points  over  the  Fannie  Mae  discounted
mortgage-backed  security index (1.92% per annum at December 31, 2003),  and the
rate resets monthly. Each loan automatically renews at the end of each month. In
addition,   monthly   principal   payments  are  required  based  on  a  30-year
amortization schedule,  using the interest rate in effect during the first month
that the properties are on the Permanent Credit Facility.  The loans were repaid
when Patchen Place  Apartments  sold in October 2003 and South Point  Apartments
sold in December 2003.

The mortgage  notes  payable are  non-recourse  and are secured by pledge of the
respective  apartment  properties  and by pledge of revenues from the respective
apartment properties.  The notes require prepayment penalties if repaid prior to
maturity and prohibit resale of the properties subject to existing indebtedness.

Scheduled  principal  payments  of the  mortgage  notes  payable  subsequent  to
December 31, 2003 are as follows (in thousands):


                           2004           $ 271
                           2005              291
                           2006              314
                           2007              338
                           2008              364
                        Thereafter         7,415

                          Total          $ 8,993


Note C - Income Taxes

The Partnership has received a ruling from the Internal  Revenue Service that it
will  be  classified  as  a  partnership   for  Federal   income  tax  purposes.
Accordingly,  no provision for income taxes is made in the financial  statements
of the Partnership. Taxable income or loss of the Partnership is reported in the
income tax returns of its partners.

The  following is a  reconciliation  of reported net income and Federal  taxable
income (in thousands, except per unit data):

                                       2003       2002
Net income as reported                $17,225     $ 74
Add (deduct):
  Depreciation differences                811        155
  Prepaid rent                            (53)        --
  Gain on sale                          4,173         --
  Other                                   (27)       135

Federal taxable income                $22,129     $ 364

Federal taxable income per
  limited partnership unit            $362.01    $ 5.95

The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):

                                          2003
Net assets as reported                   $ 889
Land and buildings                         (592)
Accumulated depreciation                 (3,011)
Syndication and distribution costs        3,555
Prepaid rent                                161
Other                                       431

Net assets - Federal tax basis          $ 1,433

Note D - Transactions with Affiliated Parties

The  Partnership  has no employees  and is  dependent  on the  Managing  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
Partnership  activities.  The  Partnership  Agreement  provides  for payments to
affiliates for services and as  reimbursement  of certain  expenses  incurred by
affiliates on behalf of the Partnership.

During the years ended  December 31, 2003 and 2002,  affiliates  of the Managing
General  Partner were  entitled to receive 5% of gross  receipts from all of the
Partnership's  properties  as  compensation  for providing  property  management
services.  The Partnership  paid to such affiliates  approximately  $339,000 and
$373,000 for the years ended December 31, 2003 and 2002, respectively,  which is
included in operating expenses and (loss) income from discontinued operations.

An  affiliate  of  the  Managing  General  Partner  received   reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $270,000 and
$254,000 for the years ended December 31, 2003 and 2002, respectively, which are
included in general  and  administrative  expenses  and  investment  properties.
Included in these amounts are fees related to construction  management  services
provided  by an  affiliate  of the  Managing  General  Partner of  approximately
$15,000  and  $26,000  for  the  years  ended   December   31,  2003  and  2002,
respectively. The construction management service fees are calculated based on a
percentage of current year additions to investment  properties.  At December 31,
2003,  approximately  $30,000 in  reimbursement  was due to the Managing General
Partner and was included in Due to affiliates on the accompanying balance sheet.

For services relating to the  administration of the Partnership and operation of
Partnership  properties,  the  Managing  General  Partner is entitled to receive
payment for  non-accountable  expenses up to a maximum of $150,000 per year from
distributions from operations,  based upon the number of Partnership units sold,
subject  to  certain   limitations.   The  Managing   General  Partner  received
approximately  $62,000  and $91,000 in such  reimbursements  for the years ended
December  31,  2003 and 2002,  respectively,  which is  included  in general and
administrative expenses.

For managing the affairs of the Partnership, the Managing General Partner of the
Partnership  is entitled to receive a  partnership  management  fee.  The fee is
equal to 4% of the  Partnership's  adjusted cash from operations,  as defined in
the Partnership  Agreement,  in any year, provided that 50% of the fee shall not
be paid until the Partnership has distributed to the limited  partners  adjusted
cash from operations in such year which is equal to 5% of the limited  partners'
adjusted invested capital, as defined,  on a non-cumulative  basis. In addition,
50% of the fee shall not be paid until the  Partnership  has  distributed to the
limited partners adjusted cash from operations in such year which is equal to 8%
of the limited partners'  adjusted  invested capital on a non-cumulative  basis.
The fee shall be paid when adjusted cash from  operations is  distributed to the
limited partners.  The Managing General Partner earned approximately $53,000 and
$33,000  for such  fees  during  the years  ended  December  31,  2003 and 2002,
respectively, which is included in general and administrative expenses.

Upon the sale of the Partnership's properties, NPI Equity will be entitled to an
incentive  compensation  fee equal to a declining  percentage of the  difference
between the total amount distributed to limited partners and the appraised value
of their investment at February 1, 1992. The percentage amount to be realized by
NPI Equity,  if any,  will be  dependent  upon the year in which the property is
sold.  Payment of the incentive  compensation fee is subordinated to the receipt
by the limited partners, of: (a) distributions from capital transaction proceeds
of an amount equal to their appraised  investment in the Partnership at February
1, 1992; and (b) distributions from all sources (capital transactions as well as
cash  flow)  of an  amount  equal to six  percent  (6%)  per  annum  cumulative,
non-compounded,  on their present  appraised  investment in the  Partnership  at
February 1, 1992.  During the year ended  December 31, 2003,  these  preferences
were met and the Managing General Partner was entitled to approximately $180,000
related  to the  sales of  Northwoods  I & II and  South  Point  Apartments.  At
December  31,  2003,  approximately  $42,000  related to the sale of South Point
Apartments  was due to the Managing  General  Partner and was included in Due to
affiliates.

An affiliate of the Managing  General Partner earned  approximately  $93,000 for
services  related to the refinancings of Patchen Place and South Point Apartment
during the year ended  December 31, 2003.  These costs were  capitalized  at the
time of the refinancings  and subsequently  written off when the properties were
sold later in 2003 (see "Note E").

NPI Equity,  on behalf of the Partnership and certain  affiliated  partnerships,
has established a revolving credit facility (the  "Partnership  Revolver") to be
used to fund deferred  maintenance  and working capital needs of the Partnership
and certain other  affiliated  partnerships in the National  Property  Investors
Partnership  Series.  The maximum draw  available to the  Partnership  under the
Partnership Revolver is $500,000. Loans under the Partnership Revolver will have
a term of 365 days, be unsecured and bear interest at the prime rate plus 2% per
annum. The maturity date of any such borrowing  accelerates in the event of: (i)
the removal of NPI Equity as the managing  general  partner  (whether or not for
cause);  (ii) the sale or refinancing of a property by the Partnership  (whether
or not a borrowing under the Partnership  Revolver was made with respect to such
property);  or (iii) the liquidation of the  Partnership.  At December 31, 2003,
the Partnership had no outstanding amounts due under this Partnership Revolver.

The  Partnership  insures its properties up to certain  limits through  coverage
provided by AIMCO which is  generally  self-insured  for a portion of losses and
liabilities  related to workers  compensation,  property  casualty  and  vehicle
liability. The Partnership insures its properties above the AIMCO limits through
insurance  policies  obtained  by  AIMCO  from  insurers  unaffiliated  with the
Managing General Partner. During the years ended December 31, 2003 and 2002, the
Partnership  was charged by AIMCO and its affiliates  approximately  $92,000 and
$78,000,  respectively,  for insurance  coverage and fees associated with policy
claims administration.

In addition to its indirect  ownership of the Managing  General Partner interest
in the Partnership, AIMCO and its affiliates owned 41,649.67 limited partnership
units (the "Units") in the  Partnership  representing  68.82% of the outstanding
Units at December 31, 2003.  A number of these Units were  acquired  pursuant to
tender offers made by AIMCO or its affiliates.  It is possible that AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unit  holders  holding a majority of the Units are  entitled to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove the Managing General  Partner.  As a result of its ownership of 68.82% of
the outstanding  Units,  AIMCO and its affiliates are in a position to influence
all such voting  decisions with respect to the  Partnership.  However,  DeForest
Ventures II L.P., from whom Insignia  Properties LP ("IPLP") an affiliate of the
Managing  General  Partner and of AIMCO  acquired  25,399  Units  (41.97% of the
units), agreed for the benefit of non-tendering unit holders, that it would vote
its Units:  (i) against any  increase in  compensation  payable to the  Managing
General Partner or to its affiliates; and (ii) on all other matters submitted by
it or its  affiliates,  in  proportion  to the votes  cast by third  party  unit
holders.  Except for the foregoing,  no other limitations are imposed on IPLP's,
AIMCO's  or any other  affiliates  right to vote each unit  held.  Although  the
Managing  General Partner owes fiduciary  duties to the limited  partners of the
Partnership, the Managing General Partner also owes fiduciary duties to AIMCO as
its sole stockholder.  As a result,  the duties of the Managing General Partner,
as Managing  General  Partner,  to the Partnership and its limited  partners may
come into conflict with the duties of the Managing  General Partner to AIMCO, as
its sole stockholder.

Note E - Sale of Discontinued Operations

On October 31,  2003,  the  Partnership  sold  Patchen  Place  Apartments  to an
unrelated third party for net proceeds of approximately $6,815,000 after payment
of closing costs. The Partnership realized a gain of approximately $4,703,000 as
a result of the sale. The Partnership used  approximately  $4,254,000 of the net
proceeds to repay the  mortgage  encumbering  the  property.  In  addition,  the
Partnership  recorded a loss on early  extinguishment  of debt of  approximately
$92,000 as a result of unamortized  loan costs being written off. This amount is
included  in (loss)  income  from  discontinued  operations.  Included in (loss)
income from  discontinued  operations  for the years ended December 31, 2003 and
2002 is  approximately  $1,076,000  and  $1,246,000,  respectively,  of  revenue
generated by the property.

On December 9, 2003, the Partnership sold Northwoods  Apartments to an unrelated
third  party for net  proceeds of  approximately  $11,454,000  after  payment of
closing costs. The Partnership realized a gain of approximately  $8,028,000 as a
result of the sale. The buyer assumed the mortgage  encumbering  the property of
approximately  $6,611,000. In addition, the Partnership recorded a loss on early
extinguishment of debt of approximately $207,000 as a result of unamortized loan
costs  being  written  off.  This  amount  is  included  in (loss)  income  from
discontinued operations.  Included in (loss) income from discontinued operations
for the years ended December 31, 2003 and 2002 is  approximately  $2,010,000 and
$2,177,000, respectively, of revenue generated by the property.

On  December  30,  2003,  the  Partnership  sold South  Point  Apartments  to an
unrelated third party for net proceeds of approximately $8,135,000 after payment
of closing costs. The Partnership realized a gain of approximately $4,973,000 as
a result of the sale. The Partnership used  approximately  $4,948,000 of the net
proceeds to repay the  mortgage  encumbering  the  property.  In  addition,  the
Partnership  recorded a loss on early  extinguishment  of debt of  approximately
$105,000 as a result of unamortized loan costs being written off. This amount is
included  in (loss)  income  from  discontinued  operations.  Included in (loss)
income from  discontinued  operations  for the years ended December 31, 2003 and
2002 is  approximately  $1,262,000  and  $1,357,000,  respectively,  of  revenue
generated  by the  property.  Subsequent  to December  31,  2003,  approximately
$2,624,000 was  distributed  to the partners  related to the sale of South Point
Apartments in December 2003.

Note F - Real Estate and Accumulated Depreciation

                                       Initial Cost
                                      To Partnership
                                      (in thousands)
                                              Buildings         Cost
                                             and Related    Capitalized
                                               Personal    Subsequent to
Description         Encumbrances     Land      Property     Acquisition
                   (in thousands)                          (in thousands)

Fairway View II       $ 5,163      $ 1,086     $ 8,788        $ 1,128
The Pines               3,830          579       6,521          1,644
Totals                $ 8,993      $ 1,665     $15,309        $ 2,772
<TABLE>
<CAPTION>

                 Gross Amount at Which Carried
                   At December 31, 2003
                    (in thousands)
                       Buildings
                       And Related
                        Personal         Accumulated    Year of       Date   Depreciable
Description      Land   Property  Total  Depreciation Construction  Acquired Life-Years
                                        (in thousands)

<S>             <C>     <C>       <C>      <C>          <C>          <C>       <C>
Fairway View II $1,094  $ 9,908   $11,002  $ 7,155      1981         11/84     5-30
The Pines          584    8,160     8,744    6,570      1978         04/85     5-30
Total           $1,678  $18,068   $19,746  $13,725
</TABLE>

Reconciliation of "real estate and accumulated depreciation":

                                       Years Ended December 31,
                                           2003        2002
                                            (in thousands)
Investment Properties
Balance at beginning of year             $ 49,491    $ 48,840
  Property improvements                       546         651
  Property dispositions from casualty         (40)         --
  Property dispositions from sales        (30,251)         --
Balance at end of year                   $ 19,746    $ 49,491

Accumulated Depreciation
Balance at beginning of year             $ 33,658    $ 31,573
  Additions charged to expense              1,953       2,085
  Property dispositions from casualty         (35)         --
  Property dispositions from sales        (21,851)         --
Balance at end of year                   $ 13,725    $ 33,658

The  aggregate  cost of the real  estate  for  Federal  income tax  purposes  at
December  31,  2003 and 2002,  is  approximately  $19,154,000  and  $47,942,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December 31, 2003 and 2002, is  approximately  $16,736,000  and  $40,360,000,
respectively.

Note G - Casualty Gain

On February 15, 2003 an ice storm caused damage to exterior  sections on some of
the buildings and to the  landscaping  at Patchen  Place  Apartments.  No actual
units were damaged  during the storm.  As a result of the damage,  approximately
$40,000 of fixed assets and $35,000 of accumulated depreciation were written off
resulting in a net write off of approximately  $5,000. The Partnership  received
approximately  $59,000  in  proceeds  from the  insurance  company to repair the
damaged  units.   For  financial   statement   purposes,   a  casualty  gain  of
approximately  $54,000 was recognized during the year ended December 31, 2003 as
a result of the difference  between the proceeds received and the net book value
of the assets  written  off.  This  amount is  included  in (loss)  income  from
discontinued operations.

Note H - Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the  Partnership,  its Managing  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purported  to  assert  claims  on  behalf  of a class of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  that are named as nominal  defendants,  challenging,  among  other
things,  the  acquisition  of  interests  in certain  Managing  General  Partner
entities by Insignia Financial Group, Inc.  ("Insignia") and entities that were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged into AIMCO.  The plaintiffs  sought  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
In addition, during the third quarter of 2001, a complaint (the "Heller action")
was filed  against  the same  defendants  that are named in the  Nuanes  action,
captioned  Heller v.  Insignia  Financial  Group.  On or about  August 6,  2001,
plaintiffs filed a first amended  complaint.  The Heller action was brought as a
purported derivative action, and asserted claims for, among other things, breach
of fiduciary  duty,  unfair  competition,  conversion,  unjust  enrichment,  and
judicial dissolution.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent  appraisals of the  Partnerships'  properties  by a Court  appointed
appraiser.  An affiliate of the Managing General Partner has also agreed to make
at least one round of tender offers to purchase all of the partnership interests
in the Partnerships within one year of final approval,  if it is granted, and to
provide  partners with the independent  appraisals at the time of these tenders.
The proposed  settlement also provided for the limitation of the allowable costs
which  the  Managing   General   Partner  or  its  affiliates  will  charge  the
Partnerships  in connection with this litigation and imposes limits on the class
counsel  fees and  costs in this  litigation.  On April  11,  2003,  notice  was
distributed  to  limited   partners   providing  the  details  of  the  proposed
settlement.

On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.  On August 12, 2003, an objector
("Objector")  filed an  appeal  seeking  to  vacate  and/or  reverse  the  order
approving the settlement and entering  judgment  thereto.  On November 24, 2003,
the Objector filed an  application  requesting the Court order AIMCO to withdraw
settlement  tender offers it had  commenced,  refrain from making further offers
pending the appeal and auction any units tendered to third  parties,  contending
that the offers did not conform  with the terms of the  Settlement.  Counsel for
the Objector (on behalf of another  investor)  had  alternatively  requested the
Court take certain  action  purportedly  to enforce the terms of the  settlement
agreement.  On December 18, 2003,  the Court heard oral  argument on the motions
and denied them both in their entirety.  On January 28, 2004, Objector filed his
opening brief in his pending appeal.  The Managing  General Partner is currently
scheduled  to file a brief in  support  of the order  approving  settlement  and
entering judgment thereto by April 23, 2004.

On August 8, 2003 AIMCO  Properties  L.P., an affiliate of the Managing  General
Partner,  was served  with a  Complaint  in the United  States  District  Court,
District of Columbia alleging that AIMCO Properties L.P.  willfully violated the
Fair Labor Standards Act (FLSA) by failing to pay maintenance  workers  overtime
for all hours worked in excess of forty per week.  The  Complaint is styled as a
Collective  Action  under  the FLSA and seeks to  certify  state  subclasses  in
California, Maryland, and the District of Columbia. Specifically, the plaintiffs
contend that AIMCO Properties L.P. failed to compensate  maintenance workers for
time  that they were  required  to be  "on-call".  Additionally,  the  Complaint
alleges AIMCO  Properties  L.P.  failed to comply with the FLSA in  compensating
maintenance  workers  for time that they  worked in  responding  to a call while
"on-call".  The  Complaint  also  attempts  to certify a subclass  for  salaried
service  directors who are challenging  their  classification as exempt from the
overtime  provisions of the FLSA.  AIMCO  Properties L.P. has filed an answer to
the  Complaint  denying the  substantive  allegations.  Discovery  is  currently
underway.

The  Managing  General  Partner  does  not  anticipate  that  any  costs  to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.

The  Partnership  is unaware  of any other  pending  or  outstanding  litigation
matters  involving  it or its  investment  properties  that are not of a routine
nature arising in the ordinary course of business.

Item 8.    Changes in and  Disagreements  with Accountants on Accounting
           and Financial Disclosures

           None.

Item 8a.   Controls and Procedures

(a) Disclosure Controls and Procedures.  The Partnership's management,  with the
participation of the principal executive officer and principal financial officer
of the Managing  General  Partner,  who are the equivalent of the  Partnership's
principal executive officer and principal financial officer,  respectively,  has
evaluated  the  effectiveness  of  the  Partnership's  disclosure  controls  and
procedures (as such term is defined in Rules  13a-15(e) and 15d-15(e)  under the
Securities  Exchange Act of 1934, as amended (the "Exchange Act")) as of the end
of the period covered by this report.  Based on such  evaluation,  the principal
executive  officer  and  principal  financial  officer of the  Managing  General
Partner, who are the equivalent of the Partnership's principal executive officer
and principal  financial officer,  respectively,  have concluded that, as of the
end of such period,  the  Partnership's  disclosure  controls and procedures are
effective.

(b) Internal Control Over Financial  Reporting.  There have not been any changes
in the Partnership's  internal control over financial reporting (as such term is
defined in Rules  13a-15(f)  and  15d-15(f)  under the Exchange  Act) during the
fourth quarter of 2003 that have materially  affected,  or are reasonably likely
to  materially  affect,  the  Partnership's   internal  control  over  financial
reporting.



<PAGE>




                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        with Section 16(a) of the Exchange Act

National  Property  Investors 7 (the  "Partnership" or the  "Registrant") has no
officers or directors.  The managing  general  partner of the Partnership is NPI
Equity Investments,  Inc. ("NPI Equity" or the "Managing General Partner").  The
present directors and officers of the Managing General Partner are listed below:

Name                    Age   Position

Peter K. Kompaniez       59   Director
Martha L. Long           44   Director and Senior Vice President
Harry G. Alcock          41   Executive Vice President
Miles Cortez             60   Executive Vice President, General Counsel
                                and Secretary
Patti K. Fielding        40   Executive Vice President
Paul J. McAuliffe        47   Executive Vice President and Chief
                                Financial Officer
Thomas M. Herzog         41   Senior Vice President and Chief Accounting
                                Officer

Peter K.  Kompaniez  has been  Director of the Managing  General  Partner  since
February 2004. Mr. Kompaniez has been Vice Chairman of the Board of Directors of
AIMCO since July 1994 and was appointed  President in July 1997.  Mr.  Kompaniez
has also  served as Chief  Operating  Officer of NHP  Incorporated  after it was
acquired by AIMCO in  December  1997.  Effective  April 1, 2004,  Mr.  Kompaniez
resigned as  President  of AIMCO.  Mr.  Kompaniez  will  continue in his role as
Director of the Managing  General Partner and Vice Chairman of AIMCO's Board and
will serve AIMCO on a variety of special and  ongoing  projects in an  operating
role.

Martha L. Long has been a Director  and Senior Vice  President  of the  Managing
General  Partner since February 2004. Ms. Long has been with AIMCO since October
1998 and has served in various capacities. From 1998 to 2001, Ms. Long served as
Senior Vice President and Controller of AIMCO and the Managing  General Partner.
During 2002 and 2003,  Ms. Long served as Senior Vice  President  of  Continuous
Improvement for AIMCO.

Harry G. Alcock was appointed  Executive Vice President of the Managing  General
Partner  in  February  2004 and has been  Executive  Vice  President  and  Chief
Investment Officer of AIMCO since October 1999. Prior to October 1999 Mr. Alcock
served as a Vice President of AIMCO from July 1996 to October 1997,  when he was
promoted to Senior Vice  President-Acquisitions  where he served  until  October
1999. Mr. Alcock has had responsibility for acquisition and financing activities
of AIMCO since July 1994.

Miles  Cortez was  appointed  Executive  Vice  President,  General  Counsel  and
Secretary  of the  Managing  General  Partner in  February  2004 and of AIMCO in
August 2001. Prior to joining AIMCO, Mr. Cortez was the senior partner of Cortez
Macaulay Bernhardt & Schuetze LLC, a Denver law firm, from December 1997 through
September 2001.

Patti K. Fielding was appointed  Executive  Vice President - Securities and Debt
of the Managing  General Partner in February 2004 and of AIMCO in February 2003.
Ms. Fielding previously served as Senior Vice President - Securities and Debt of
AIMCO from  January  2000 to February  2003.  Ms.  Fielding is  responsible  for
securities and debt financing and the treasury  department.  Ms. Fielding joined
AIMCO in February 1997 and served as Vice  President - Tenders,  Securities  and
Debt until January 2000.

Paul J. McAuliffe has been Executive Vice President and Chief Financial  Officer
of the Managing  General  Partner since April 2002. Mr.  McAuliffe has served as
Executive Vice  President of AIMCO since  February 1999 and was appointed  Chief
Financial Officer of AIMCO in October 1999. From May 1996 until he joined AIMCO,
Mr. McAuliffe was Senior Managing Director of Secured Capital Corp.

Thomas M.  Herzog was  appointed  Senior  Vice  President  and Chief  Accounting
Officer of the Managing General Partner in February 2004 and of AIMCO in January
2004.  Prior to joining AIMCO in January 2004, Mr. Herzog was at GE Real Estate,
serving  as Chief  Accounting  Officer & Global  Controller  from  April 2002 to
January 2004 and as Chief Technical Advisor from March 2000 to April 2002. Prior
to joining GE Real  Estate,  Mr.  Herzog was at  Deloitte & Touche LLP from 1990
until 2000, including a two-year assignment in the real estate national office.

One or more of the above persons are also directors and/or officers of a general
partner (or general partner of a general partner) of limited  partnerships which
either have a class of  securities  registered  pursuant to Section 12(g) of the
Securities Exchange Act of 1934, or are subject to the reporting requirements of
Section  15(d) of such Act.  Further,  one or more of the above persons are also
directors and/or officers of Apartment Investment and Management Company and the
general  partner  of  AIMCO  Properties,  L.P.,  entities  that  have a class of
securities  registered  pursuant to Section 12(g) of the Securities Exchange Act
of 1934, or are subject to the reporting  requirements of Section 15 (d) of such
Act.

The board of directors of the Managing  General Partner does not have a separate
audit committee. As such, the board of directors of the Managing General Partner
fulfills  the  functions  of an audit  committee.  The  board of  directors  has
determined  that  Martha L. Long meets the  requirement  of an "audit  committee
financial expert".

The directors and officers of the Managing  General  Partner with authority over
the Partnership are all employees of subsidiaries of AIMCO.  AIMCO has adopted a
code of ethics that applies to such  directors  and  officers  that is posted on
AIMCO's  website  (www.AIMCO.com).   AIMCO's  website  is  not  incorporated  by
reference to this filing.

Item 10.   Executive Compensation

Neither the directors nor officers of the Managing  General Partner received any
remuneration from the Partnership during the year ended December 31, 2003.

Item 11. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information regarding limited partnership
units of the Partnership owned by each person who is known by the Partnership to
own beneficially or exercise voting or dispositive  control over more than 5% of
the Partnership's limited partnership units, by each of the directors and by all
directors and executive  officers of the Managing  General Partner as a group as
of December 31, 2003.

                                Amount and Nature
       Name of Beneficial Owner   of Beneficial     % of Class
                                      Owner

       AIMCO IPLP, L.P.             25,399.00         41.97%
        (an affiliate of AIMCO)
       AIMCO Properties, L.P.       16,250.67         26.85%
        (an affiliate of AIMCO)

AIMCO IPLP,  L.P.  (formerly known as Insignia  Properties,  L.P.) is indirectly
ultimately owned by AIMCO. Its business address is 55 Beattie Place, Greenville,
South Carolina 29602.

AIMCO  Properties,  L.P.  is  indirectly  ultimately  controlled  by AIMCO.  Its
business  address is 4582 S. Ulster St. Parkway,  Suite 1100,  Denver,  Colorado
80237.

No director or officer of the Managing General Partner owns any units.

Item 12.   Certain Relationships and Related Transactions

The  Partnership  has no employees  and is  dependent  on the  Managing  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
Partnership  activities.  The  Partnership  Agreement  provides  for payments to
affiliates for services and as  reimbursement  of certain  expenses  incurred by
affiliates on behalf of the Partnership.

During the years ended  December 31, 2003 and 2002,  affiliates  of the Managing
General  Partner were  entitled to receive 5% of gross  receipts from all of the
Partnership's  properties  as  compensation  for providing  property  management
services.  The Partnership  paid to such affiliates  approximately  $339,000 and
$373,000 for the years ended December 31, 2003 and 2002, respectively,  which is
included in operating expenses and (loss) income from discontinued operations.

An  affiliate  of  the  Managing  General  Partner  received   reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $270,000 and
$254,000 for the years ended December 31, 2003 and 2002, respectively, which are
included in general  and  administrative  expenses  and  investment  properties.
Included in these amounts are fees related to construction  management  services
provided  by an  affiliate  of the  Managing  General  Partner of  approximately
$15,000  and  $26,000  for  the  years  ended   December   31,  2003  and  2002,
respectively. The construction management service fees are calculated based on a
percentage of current year additions to investment  properties.  At December 31,
2003,  approximately  $30,000 in  reimbursement  was due to the Managing General
Partner and was included in Due to affiliates on the accompanying balance sheet.

For services relating to the  administration of the Partnership and operation of
Partnership  properties,  the  Managing  General  Partner is entitled to receive
payment for  non-accountable  expenses up to a maximum of $150,000 per year from
distributions from operations,  based upon the number of Partnership units sold,
subject  to  certain   limitations.   The  Managing   General  Partner  received
approximately  $62,000  and $91,000 in such  reimbursements  for the years ended
December  31,  2003 and 2002,  respectively,  which is  included  in general and
administrative expenses.

For managing the affairs of the Partnership, the Managing General Partner of the
Partnership  is entitled to receive a  partnership  management  fee.  The fee is
equal to 4% of the  Partnership's  adjusted cash from operations,  as defined in
the Partnership  Agreement,  in any year, provided that 50% of the fee shall not
be paid until the Partnership has distributed to the limited  partners  adjusted
cash from operations in such year which is equal to 5% of the limited  partners'
adjusted invested capital, as defined,  on a non-cumulative  basis. In addition,
50% of the fee shall not be paid until the  Partnership  has  distributed to the
limited partners adjusted cash from operations in such year which is equal to 8%
of the limited partners'  adjusted  invested capital on a non-cumulative  basis.
The fee shall be paid when adjusted cash from  operations is  distributed to the
limited partners.  The Managing General Partner earned approximately $53,000 and
$33,000  for such  fees  during  the years  ended  December  31,  2003 and 2002,
respectively, which is included in general and administrative expenses.

Upon the sale of the Partnership's properties, NPI Equity will be entitled to an
incentive  compensation  fee equal to a declining  percentage of the  difference
between the total amount distributed to limited partners and the appraised value
of their investment at February 1, 1992. The percentage amount to be realized by
NPI Equity,  if any,  will be  dependent  upon the year in which the property is
sold.  Payment of the incentive  compensation fee is subordinated to the receipt
by the limited partners, of: (a) distributions from capital transaction proceeds
of an amount equal to their appraised  investment in the Partnership at February
1, 1992; and (b) distributions from all sources (capital transactions as well as
cash  flow)  of an  amount  equal to six  percent  (6%)  per  annum  cumulative,
non-compounded,  on their present  appraised  investment in the  Partnership  at
February 1, 1992.  During the year ended  December 31, 2003,  these  preferences
were met and the Managing General Partner was entitled to approximately $180,000
related  to the  sales of  Northwoods  I & II and  South  Point  Apartments.  At
December  31,  2003,  approximately  $42,000  related to the sale of South Point
Apartments  was due to the Managing  General  Partner and was included in Due to
affiliates.

An affiliate of the Managing  General Partner earned  approximately  $93,000 for
services  related to the refinancings of Patchen Place and South Point Apartment
during the year ended  December 31, 2003.  These costs were  capitalized  at the
time of the refinancings  and subsequently  written off when the properties were
sold later in 2003.

NPI Equity,  on behalf of the Partnership and certain  affiliated  partnerships,
has established a revolving credit facility (the  "Partnership  Revolver") to be
used to fund deferred  maintenance  and working capital needs of the Partnership
and certain other  affiliated  partnerships in the National  Property  Investors
Partnership  Series.  The maximum draw  available to the  Partnership  under the
Partnership Revolver is $500,000. Loans under the Partnership Revolver will have
a term of 365 days, be unsecured and bear interest at the prime rate plus 2% per
annum. The maturity date of any such borrowing  accelerates in the event of: (i)
the removal of NPI Equity as the managing  general  partner  (whether or not for
cause);  (ii) the sale or refinancing of a property by the Partnership  (whether
or not a borrowing under the Partnership  Revolver was made with respect to such
property);  or (iii) the liquidation of the  Partnership.  At December 31, 2003,
the Partnership had no outstanding amounts due under this Partnership Revolver.

The  Partnership  insures its properties up to certain  limits through  coverage
provided by AIMCO which is  generally  self-insured  for a portion of losses and
liabilities  related to workers  compensation,  property  casualty  and  vehicle
liability. The Partnership insures its properties above the AIMCO limits through
insurance  policies  obtained  by  AIMCO  from  insurers  unaffiliated  with the
Managing General Partner. During the years ended December 31, 2003 and 2002, the
Partnership  was charged by AIMCO and its affiliates  approximately  $92,000 and
$78,000,  respectively,  for insurance  coverage and fees associated with policy
claims administration.

In addition to its indirect  ownership of the Managing  General Partner interest
in the Partnership, AIMCO and its affiliates owned 41,649.67 limited partnership
units (the "Units") in the  Partnership  representing  68.82% of the outstanding
Units at December 31, 2003.  A number of these Units were  acquired  pursuant to
tender offers made by AIMCO or its affiliates.  It is possible that AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unit  holders  holding a majority of the Units are  entitled to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove the Managing General  Partner.  As a result of its ownership of 68.82% of
the outstanding  Units,  AIMCO and its affiliates are in a position to influence
all such voting  decisions with respect to the  Partnership.  However,  DeForest
Ventures II L.P., from whom Insignia  Properties LP ("IPLP") an affiliate of the
Managing  General  Partner and of AIMCO  acquired  25,399  Units  (41.97% of the
units), agreed for the benefit of non-tendering unit holders, that it would vote
its Units:  (i) against any  increase in  compensation  payable to the  Managing
General Partner or to its affiliates; and (ii) on all other matters submitted by
it or its  affiliates,  in  proportion  to the votes  cast by third  party  unit
holders.  Except for the foregoing,  no other limitations are imposed on IPLP's,
AIMCO's  or any other  affiliates  right to vote each unit  held.  Although  the
Managing  General Partner owes fiduciary  duties to the limited  partners of the
Partnership, the Managing General Partner also owes fiduciary duties to AIMCO as
its sole stockholder.  As a result,  the duties of the Managing General Partner,
as Managing  General  Partner,  to the Partnership and its limited  partners may
come into conflict with the duties of the Managing  General Partner to AIMCO, as
its sole stockholder.

Item 13.   Exhibits and Reports on Form 8-K

      (a)  Exhibits:

           See Exhibit Index attached.

      (b)  Reports on Form 8-K filed in the  fourth  quarter  of  calendar  year
           2003:

           Current  Report  on Form 8-K  dated  December  9,  2003 and  filed on
           December  23,  2003  disclosing  the  sale  of  Northwoods  I and  II
           Apartments.

Item 14.   Principal Accounting Fees and Services

The Managing  General Partner has  reappointed  Ernst & Young LLP as independent
auditors to audit the financial statements of the Partnership for 2004.

Audit Fees. The Partnership  paid to Ernst & Young LLP audit fees of $67,000 and
$53,000 for 2003 and 2002, respectively.

Tax Fees.  The  Partnership  paid to Ernst & Young LLP fees for tax services for
2003 and 2002 of approximately $28,000 and $26,000, respectively.




<PAGE>


                                   SIGNATURES



In accordance  with Section 13 or 15(d) of the Exchange Act, the  Registrant has
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                               NATIONAL PROPERTY INVESTORS 7


                               By:  NPI EQUITY INVESTMENTS, INC.
                                    Managing General Partner


                               By:  /s/Martha L. Long
                                    Martha L. Long
                                    Senior Vice President


                               By:  /s/Thomas M. Herzog
                                    Thomas M. Herzog
                                    Senior Vice President
                                    and Chief Accounting Officer


                               Date:March 26, 2004


In  accordance  with the Exchange  Act, this Report has been signed below by the
following  persons on behalf of the  Registrant and in the capacities and on the
date indicated.


s/Peter K. Kompaniez      Director                    Date:March 26, 2004
Peter K. Kompaniez


/s/Martha L. Long         Director and Senior Vice    Date:March 26, 2004
Martha L. Long            President


/s/Thomas M. Herzog       Senior Vice President and   Date:March 26, 2004
Thomas M. Herzog          Chief Accounting Officer


<PAGE>



                                  EXHIBIT INDEX



Exhibit Number Description of Exhibit

 2.5           Master  Indemnity  Agreement dated as of August 17, 1995.
               (1)

 3.4           (a)   Agreement of Limited Partnership. (3)

               (b) Amendments to the Agreement of Limited Partnership. (4)

               (c) Amendments to the Agreement of Limited Partnership. (5)

               (d) Amendments to the Agreements of Limited Partnership. (6)

10.3           Property Management Agreement dated June 21, 1991, by and between
               the Registrant and NPI  Management  incorporated  by reference to
               Exhibit 10.4 to the  Registrant's  Annual Report on Form 10-K for
               the year ended December 31, 1991. (7)

10.10          Multifamily  Note dated  December 9, 1999, by and between
               National  Property  Investors  7,  a  California  limited
               partnership and GMAC Commercial Mortgage  Corporation,  a
               California corporation. (10)

(1)            Incorporated  by  reference  to  Exhibit  2.5 to Form 8-K
               filed  by  Insignia  with  the  Securities  and  Exchange
               Commission on September 1, 1995.

(3)            Incorporated  by reference to Exhibit A to the  Prospectus of the
               Registrant  dated July 5,  1978,  contained  in the  Registrant's
               Registration Statement on Form S-11 (Reg. No. 2-599991).

(4)            Incorporated  by reference to the Definitive  Proxy  Statement of
               the Partnership dated July 2, 1981.

(5)            Incorporated  by reference to Definitive  Proxy  statement of the
               Partnership dated April 3, 1991.

(6)            Incorporated  by  reference,   to  the  Statement   Furnished  in
               Connection  With the  Solicitation  of Consents of the Registrant
               dated August 28, 1992.

(7)            Incorporated  by reference to the  Registrant's  Annual Report on
               Form  10-K  for the  year  ended  December  31,  1991.  Identical
               agreements  have been entered  into for each of the  Registrant's
               properties.  The only  difference  in the  agreements is that the
               applicable property name has been inserted into the agreement.

(10)           Incorporated  by  reference  to the  Registrant's  Annual
               Report on Form 10-KSB for the period  ended  December 31,
               1999.

10.11          Multifamily  Note dated August 31, 2001, by and between  National
               Property Investors 7, a California Limited Partnership,  and GMAC
               Commercial  Mortgage   Corporation,   a  California   Corporation
               relating to  Northwoods  I and II  Apartments.  (incorporated  by
               reference to the Registrant's Quarterly Report on Form 10-QSB for
               the quarter ended September 30, 2001).

10.12          Multifamily Note dated November 30, 2001, by and between National
               Property Investors 7, a California  Limited  Partnership and GMAC
               Commercial  Mortgage   Corporation,   a  California   corporation
               relating to Fairway View II Apartments (incorporated by reference
               to the  Registrant's  Annual  Report on Form  10-KSB for the year
               ended December 31, 2002).

10.13          Multifamily  Note dated May 16,  2003,  between  National
               Property Investors 7, a California  limited  partnership,
               and GMAC Commercial  Mortgage  Corporation,  a California
               corporation,   related   to  Patchen   Place   Apartments
               (incorporated by reference to the Registrant's  Quarterly
               Report on Form  10-QSB  for the  quarter  ended  June 30,
               2003).

10.14          Seventh  Reaffirmation  and Joinder Agreement dated June 16, 2003
               between AIMCO  Properties,  LP, a Delaware  limited  partnership,
               National Property Investors 7, a California limited  partnership,
               GMAC Commercial Mortgage Corporation,  a California  corporation,
               the  parties  who  are  the  current  borrowers  under  the  Loan
               Agreement,  the parties who are the Spring Hill Guarantors  under
               the Loan  Agreement  and Fannie  Mae, a federally  chartered  and
               stockholder-owned   corporation,   related   to   Patchen   Place
               Apartments   (incorporated   by  reference  to  the  Registrant's
               Quarterly  Report on Form 10-QSB for the  quarter  ended June 30,
               2003).

10.15          Multifamily  Note dated June 27, 2003,  between  National
               Property Investors 7, a California  limited  partnership,
               and  Stewart  Title  of  North  Carolina,  Inc.,  a North
               Carolina  corporation,  related to South Point Apartments
               (incorporated by reference to the Registrant's  Quarterly
               Report on Form  10-QSB  for the  quarter  ended  June 30,
               2003).

10.16          Eighth  Reaffirmation  and Joinder  Agreement dated July 17, 2003
               between AIMCO  Properties,  LP, a Delaware  limited  partnership,
               National Property Investors 7, a California limited  partnership,
               GMAC Commercial Mortgage Corporation,  a California  corporation,
               the  parties  who  are  the  current  borrowers  under  the  Loan
               Agreement,  the parties who are the Spring Hill Guarantors  under
               the Loan  Agreement  and Fannie  Mae, a federally  chartered  and
               stockholder-owned corporation,  related to South Point Apartments
               (incorporated by reference to the  Registrant's  Quarterly Report
               on Form 10-QSB for the quarter ended June 30, 2003).

10.17          Purchase and Sale Contract between  Registrant and Vermeil,  LLC,
               dated  July  31,  2003   (incorporated   by   reference   to  the
               Registrant's  Quarterly  Report on Form  10-QSB  for the  quarter
               ended September 30, 2003).

10.18          Reinstatement and Amendment of Purchase and Sale Contract between
               Registrant   and   Vermeil,   LLC,   dated   September   5,  2003
               (incorporated by reference to the  Registrant's  Quarterly Report
               on Form 10-QSB for the quarter ended September 30, 2003).

10.19          Purchase and Sale  Contract  between  Registrant  and  Watervliet
               Shores  Associates,  dated  September 11, 2003  (incorporated  by
               reference to the  Registrant's  Current  Report on Form 8-K dated
               December 9, 2003).

10.20          Purchase  and Sale  Contract  between  Registrant  and The Dilweg
               Companies, LLC, dated October 20, 2003 (incorporated by reference
               to the Registrant's Current Report on Form 8-K dated December 30,
               2003).

10.21          Amendment to Purchase and Sale Contract  between  Registrant  and
               The Dilweg Companies,  LLC, dated October 27, 2003  (incorporated
               by reference to the Registrant's Current Report on Form 8-K dated
               December 30, 2003).

10.22          Reinstatement  and Second Amendment to Purchase and Sale Contract
               between Registrant and The Dilweg Companies,  LLC, dated November
               6, 2003  (incorporated by reference to the  Registrant's  Current
               Report on Form 8-K dated December 30, 2003).

10.23          Third Amendment to Purchase and Sale Contract between  Registrant
               and  The  Dilweg   Companies,   LLC,   dated  December  17,  2003
               (incorporated by reference to the Registrant's  Current Report on
               Form 8-K dated December 30, 2003).

10.24          Assignment and  Assumption of Real Estate Sale Agreement  between
               The Dilweg Companies, LLC and HD South Point, LLC, dated December
               30, 2003  (incorporated by reference to the Registrant's  Current
               Report on Form 8-K dated December 30, 2003).

31.1           Certification  of equivalent of Chief Executive  Officer pursuant
               to Securities Exchange Act Rules 13a-14(a)/15d-14(a),  as Adopted
               Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2           Certification  of equivalent of Chief Financial  Officer pursuant
               to Securities Exchange Act Rules 13a-14(a)/15d-14(a),  as Adopted
               Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1           Certification  Pursuant  to 18 U.S.C.  Section  1350,  as
               Adopted  Pursuant  to Section  906 of the  Sarbanes-Oxley
               Act of 2002.




<PAGE>




Exhibit 31.1


                                  CERTIFICATION


I, Martha L. Long, certify that:


1.    I have  reviewed  this annual  report on Form 10-KSB of National  Property
      Investors 7;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the registrant as of, and for, the periods presented in this report;

4.    The  registrant's  other  certifying  officer(s) and I are responsible for
      establishing  and  maintaining  disclosure  controls  and  procedures  (as
      defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for the registrant
      and have:

      (a)  Designed  such  disclosure  controls and  procedures,  or caused such
           disclosure   controls  and   procedures  to  be  designed  under  our
           supervision,  to ensure  that  material  information  relating to the
           registrant, including its consolidated subsidiaries, is made known to
           us by others within those entities, particularly during the period in
           which this report is being prepared;

      (b)  Evaluated the effectiveness of the registrant's  disclosure  controls
           and procedures and presented in this report our conclusions about the
           effectiveness  of the disclosure  controls and procedures,  as of the
           end of the period  covered by this report  based on such  evaluation;
           and

      (c)  Disclosed  in this  report  any change in the  registrant's  internal
           control  over   financial   reporting   that   occurred   during  the
           registrant's  most recent  fiscal  quarter (the  registrant's  fourth
           fiscal  quarter in the case of an annual  report) that has materially
           affected,   or  is  reasonably  likely  to  materially   affect,  the
           registrant's internal control over financial reporting; and

5.    The registrant's other certifying  officer(s) and I have disclosed,  based
      on  our  most  recent   evaluation  of  internal  control  over  financial
      reporting,  to the  registrant's  auditors and the audit  committee of the
      registrant's  board of directors  (or persons  performing  the  equivalent
      functions):

      (a)  All significant deficiencies and material weaknesses in the design or
           operation of internal  control  over  financial  reporting  which are
           reasonably  likely to adversely  affect the  registrant's  ability to
           record, process, summarize and report financial information; and

      (b)  Any fraud, whether or not material, that involves management or other
           employees who have a significant  role in the  registrant's  internal
           control over financial reporting.

Date:  March 26, 2004

                               /s/Martha L. Long
                               Martha L. Long
                               Senior  Vice   President  of  NPI  Equity
                               Investments,   Inc.,  equivalent  of  the
                               chief    executive    officer    of   the
                               Partnership


<PAGE>



Exhibit 31.2


                                  CERTIFICATION


I, Thomas M. Herzog, certify that:


1.    I have  reviewed  this annual  report on Form 10-KSB of National  Property
      Investors 7;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the registrant as of, and for, the periods presented in this report;

4.    The  registrant's  other  certifying  officer(s) and I are responsible for
      establishing  and  maintaining  disclosure  controls  and  procedures  (as
      defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for the registrant
      and have:

      (a)  Designed  such  disclosure  controls and  procedures,  or caused such
           disclosure   controls  and   procedures  to  be  designed  under  our
           supervision,  to ensure  that  material  information  relating to the
           registrant, including its consolidated subsidiaries, is made known to
           us by others within those entities, particularly during the period in
           which this report is being prepared;

      (b)  Evaluated the effectiveness of the registrant's  disclosure  controls
           and procedures and presented in this report our conclusions about the
           effectiveness  of the disclosure  controls and procedures,  as of the
           end of the period  covered by this report  based on such  evaluation;
           and

      (c)  Disclosed  in this  report  any change in the  registrant's  internal
           control  over   financial   reporting   that   occurred   during  the
           registrant's  most recent  fiscal  quarter (the  registrant's  fourth
           fiscal  quarter in the case of an annual  report) that has materially
           affected,   or  is  reasonably  likely  to  materially   affect,  the
           registrant's internal control over financial reporting; and

5.    The registrant's other certifying  officer(s) and I have disclosed,  based
      on  our  most  recent   evaluation  of  internal  control  over  financial
      reporting,  to the  registrant's  auditors and the audit  committee of the
      registrant's  board of directors  (or persons  performing  the  equivalent
      functions):

      (a)  All significant deficiencies and material weaknesses in the design or
           operation of internal  control  over  financial  reporting  which are
           reasonably  likely to adversely  affect the  registrant's  ability to
           record, process, summarize and report financial information; and

      (b)  Any fraud, whether or not material, that involves management or other
           employees who have a significant  role in the  registrant's  internal
           control over financial reporting.

Date:  March 26, 2004

                               /s/Thomas M. Herzog
                               Thomas M. Herzog
                               Senior   Vice    President    and   Chief
                               Accounting    Officer   of   NPI   Equity
                               Investments,   Inc.,  equivalent  of  the
                               chief    financial    officer    of   the
                               Partnership


<PAGE>


Exhibit 32.1


                          Certification of CEO and CFO
                       Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002



In  connection  with the  Annual  Report  on Form  10-KSB of  National  Property
Investors 7 (the  "Partnership"),  for the year ended December 31, 2003 as filed
with the Securities and Exchange  Commission on the date hereof (the  "Report"),
Martha  L.  Long,  as the  equivalent  of the  Chief  Executive  Officer  of the
Partnership,  and Thomas M. Herzog,  as the  equivalent  of the Chief  Financial
Officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350,  as adopted  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of 2002,
that, to the best of his knowledge:

      (1)  The Report fully complies with the  requirements  of Section 13(a) or
           15(d) of the Securities Exchange Act of 1934; and

      (2)  The  information  contained  in the Report  fairly  presents,  in all
           material respects,  the financial condition and results of operations
           of the Partnership.


                                      /s/Martha L. Long
                               Name:  Martha L. Long
                               Date:  March 26, 2004


                                      /s/Thomas M. Herzog
                               Name:  Thomas M. Herzog
                               Date:  March 26, 2004


This  certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley  Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.