SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB

[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 0-13810

                       REAL ESTATE ASSOCIATES LIMITED VII
                 (Name of small business issuer in its charter)

         California                                               95-3290316
(State or other jurisdiction of                                (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                          55 Beattie Place, PO 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:

                          Limited Partnership Interests
                                (Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding  twelve 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 ninety days.
Yes   X    No ____

Indicate by check mark if  disclosure of  delinquent  filers  pursuant to Item
405 of Regulation S-K is not contained herein,  and will not 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 revenue for its most recent fiscal year $13,000.

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 for the  Registrant's  limited
partnership  interests exists, 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

Real  Estate  Associates  Limited  VII ("REAL  VII" or the  "Partnership")  is a
limited  partnership  which was formed under the laws of the State of California
on May 24,  1983.  On  February 1, 1984,  the  Partnership  offered  2,600 units
consisting  of 5,200  limited  partnership  interests and warrants to purchase a
maximum of 10,400  additional  limited  partnership  interests  through a public
offering  managed by E.F.  Hutton Inc. The Partnership  received  $39,000,000 in
subscriptions  for units of limited  partnership  interests (at $5,000 per unit)
during the period  March 7, 1984 to June 11,  1985,  pursuant to a  registration
statement on Form S-11.

The  Partnership  shall be  dissolved  only upon the  expiration  of 50 complete
calendar  years  (December  31,  2033)  from  the date of the  formation  of the
Partnership  or the  occurrence  of various  other  events as  specified  in the
Partnership  agreement.  The principal business of the Partnership is to invest,
directly or  indirectly,  in other limited  partnerships  which own or lease and
operate Federal, state and local government-assisted housing projects.

The general  partners of the  Partnership are National  Partnership  Investments
Corp.  ("NAPICO"),  a California  Corporation (the "Corporate General Partner"),
and National Partnership  Investments  Associates II ("NAPIA II"). NAPIA II is a
limited  partnership  formed under the California  Limited  Partnership  Act and
consists of Mr.  Charles H.  Boxenbaum as the general  partner and two unrelated
individuals as limited  partners.  The business of the  Partnership is conducted
primarily by NAPICO.

On December 3, 2001, Casden Properties Inc., entered into a merger agreement and
certain other  transaction  documents with  Apartment  Investment and Management
Company ("AIMCO"), a publicly traded real estate investment trust and certain of
its  subsidiaries,  pursuant to which, on March 11, 2002,  AIMCO acquired Casden
Properties Inc. and its subsidiaries,  including 100% of the outstanding capital
stock of NAPICO.  Prior to March 11, 2002, Casden Properties Inc. owned a 95.25%
economic  interest  in  NAPICO,  with the  balance  owned by  Casden  Investment
Corporation ("CIC").  CIC, which is wholly owned by Alan I. Casden, owned 95% of
the voting common stock of NAPICO prior to March 11, 2002.

The  Partnership  holds  limited  partnership  interests  in  13  local  limited
partnerships  (the "Local  Limited  Partnerships")  as of December 31, 2003. The
Partnership also holds a general partner  interest in Real Estate  Associates IV
("REA IV") which, in turn, holds limited partnership  interests in 11 additional
Local Limited Partnerships as of December 31, 2003,  therefore,  the Partnership
holds  interests,  either  directly  or  indirectly  through REA IV, in 24 Local
Limited  Partnerships  as of December 31, 2003. The other general partner of REA
IV is NAPICO.  During  2003,  the  Partnership  sold its  interest  in two Local
Limited  Partnerships.  Each of the Local Limited Partnerships owns a low income
housing project which is subsidized  and/or has a mortgage note payable to or is
insured by agencies of the federal or local government.

The  partnerships in which Real VII has invested are principally  existing Local
Limited Partnerships.  The Partnership became the limited partner in these Local
Limited  Partnerships  pursuant  to  arm's-length  negotiations  with the  Local
Limited  Partnership's  general  partners  who are  often the  original  project
developers.  In certain other cases,  the  Partnership  invested in newly formed
Local Limited  Partnerships which, in turn, acquired the projects.  As a limited
partner,  the  Partnership's  liability  for  obligations  of the Local  Limited
Partnership is limited to its investment. The local general partner of the Local
Limited  Partnership  retains the  responsibility of maintaining,  operating and
managing the property  owned by the Local  Limited  Partnership.  Under  certain
circumstances  of default,  the  Partnership  has the right to replace the local
general partner of the Local Limited  Partnerships,  but otherwise does not have
control of sale, refinancing, etc.

Although each of the  partnerships in which Real VII has invested will generally
own a project  which  must  compete in the market  place for  tenants,  interest
subsidies and rent  supplements from  governmental  agencies make it possible to
offer  these  dwelling  units  to  eligible  "low  income"  tenants  at  a  cost
significantly  below the  market  rate for  comparable  conventionally  financed
dwelling units in the area.

The  Partnership  does not have any  employees.  Services are  performed for the
Partnership  by  the  Corporate  General  Partner  and  agents  retained  by the
Corporate General Partner.

In order to stimulate  private  investment  in low income  housing,  the federal
government  and  certain  state and local  agencies  have  provided  significant
ownership  incentives,   including  among  others,   interest  subsidies,   rent
supplements,  and mortgage insurance, with the intent of reducing certain market
risks and  providing  investors  with  certain tax  benefits,  plus limited cash
distributions  and the  possibility of long-term  capital  gains.  There remain,
however,  significant  risks.  The long-term nature of investments in government
assisted  housing limits the ability of the Partnership to vary its portfolio in
response  to changing  economic,  financial,  and  investment  conditions.  Such
investments  are also  subject to changes in local  economic  circumstances  and
housing patterns, as well as rising operating costs, vacancies,  rent collection
difficulties,  energy shortages,  and other factors which have an impact on real
estate values.  These projects also require greater management expertise and may
have higher operating expenses than conventional housing projects.

Under recently adopted law and policy,  the United States  Department of Housing
and Urban Development ("HUD") has determined not to renew the Housing Assistance
Payment  ("HAP")  Contracts  on a long  term  basis on the  existing  terms.  In
connection with renewals of the HAP Contracts under such new law and policy, the
amount of rental  assistance  payments under renewed HAP Contracts will be based
on market rentals instead of above market  rentals,  which may be the case under
existing HAP Contracts.  The payments under the renewed HAP Contracts may not be
in an amount  that  would  provide  sufficient  cash  flow to  permit  owners of
properties  subject to HAP  Contracts to meet the debt service  requirements  of
existing  loans  insured by the Federal  Housing  Administration  of HUD ("FHA")
unless such mortgage loans are  restructured.  In order to address the reduction
in payments under HAP Contracts as a result of this new policy, the Multi-family
Assisted Housing Reform and  Affordability  Act of 1997 ("MAHRAA")  provides for
the  restructuring  of  mortgage  loans  insured  by the  FHA  with  respect  to
properties  subject  to the  Section 8 program.  Under  MAHRAA,  an  FHA-insured
mortgage  loan can be  restructured  into a first  mortgage  loan  which will be
amortized on a current basis and a low interest  second mortgage loan payable to
FHA which will only be payable on  maturity  of the first  mortgage  loan.  This
restructuring results in a reduction in annual debt service payable by the owner
of the  FHA-insured  mortgage  loan and is  expected  to result in an  insurance
payment from FHA to the holder of the  FHA-insured  loan due to the reduction in
the principal amount. MAHRAA also phases out project-based subsidies on selected
properties  serving  families not located in rental markets with limited supply,
converting such subsidies to a tenant-based subsidy.

When the HAP  Contracts are subject to renewal,  there can be no assurance  that
the Local Limited  Partnerships  in which the Partnership has an investment will
be permitted to restructure its mortgage indebtedness under MAHRAA. In addition,
the  economic  impact  on the  Partnership  of the  combination  of the  reduced
payments  under  the  HAP  Contracts  and  the  restructuring  of  the  existing
FHA-insured mortgage loans under MAHRAA is uncertain.

Laws benefiting  disabled persons may result in the Local Limited  Partnerships'
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  Local  Limited  Partnerships'  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  Corporate  General  Partner
believes that the Local Limited  Partnerships'  properties are  substantially in
compliance with present  requirements,  the Local Limited Partnerships may incur
unanticipated expenses to comply with the ADA and the FHAA.


<PAGE>



During 2003,  all of the  projects in which the  Partnership  had invested  were
substantially  rented. The following is a schedule of the status, as of December
31,  2003,  of the projects  owned by Local  Limited  Partnerships  in which the
Partnership, either directly or indirectly through REA IV, has invested.

            SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
                       IN WHICH REAL VII HAS AN INVESTMENT
                                DECEMBER 31, 2003
<TABLE>
<CAPTION>

                                                          Units
                                                        Authorized
                                                        for Rental
                                                        Assistance
                                           Financed,      Under             Occupancy
                                            Insured    or Other Rent       Percentage
                                              and       Supplement    for the Years Ended
                               Number of  Subsidized     Program          December 31,
Property Name and Location       Units       Under      Section 8(B)      2003       2002


Aristocrat Manor
<S>                                <C>                     <C>         <C>         <C>
Hot Springs, AR                    101        (A)          101         92%         91%

Arkansas City Apts.
Arkansas City, AR                   16        (C)           12         81%         78%

Bellair Manor Apts.
Niles, OH                           68        (A)            7         96%         98%

Birch Manor Apts. I
Medina, OH                          60        (A)           12         98%         96%

Birch Manor Apts. II
Medina, OH                          60        (A)            6         98%         94%

Bluewater Apts.
Port Huron, MI                     116        (E)           --         87%         92%

Clarkwood Apts. I
Elyria, OH                          72        (A)           34         97%         97%

Clarkwood Apts. II
Elyria, OH                         120        (A)           51         98%         96%

Hampshire House
Warren, OH                         150        (A)          150         99%         95%

Ivywood Apts.
Columbus, OH                       124        (A)          124         97%         97%

Jasper County Prop.
Heidelberg, MS                      24        (C)           24         92%         88%

Nantucket Apts.
Alliance, OH                        60        (A)           59         97%         96%

Newton Apts.
Newton, MS                          36        (C)           --         71%         81%

Oak Hill Apts.
Franklin, PA                       120        (A)           82         99%         98%

Oakview Apts.
Monticello, AR                      32        (C)            7         82%         76%

</TABLE>


<PAGE>



            SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
                 IN WHICH REAL VII HAS AN INVESTMENT (continued)
                                DECEMBER 31, 2003
<TABLE>
<CAPTION>

                                                          Units
                                                        Authorized
                                                        for Rental
                                                        Assistance
                                           Financed,      Under             Occupancy
                                            Insured    or Other Rent        Percentage
                                              and       Supplement    for the Years Ended
                               Number of  Subsidized     Program          December 31,
Property Name and Location       Units       Under      Section 8(B)     2003       2002



Oakwood Park I Apts.
<S>                                 <C>                      <C>       <C>         <C>
Lorain, OH                          50        (D)            50        94%         95%

Oakwood Park II Apts.
Lorain, OH                          78        (D)            --        95%         96%

Pachuta Apts.
Pachuta, MS                         16        (C)            16        97%         92%

Rand Grove Village
Palatine, IL                       212        (A)           212        96%         96%

Richards Park Apts.
Elyria, OH                          60        (A)            24        98%         97%

Shubuta Properties
Shubuta, MS                         16        (C)            16        97%        100%

Tradewinds East
Essexville, MI                     150        (E)            30        94%         92%

Warren Heights Apts. I
Warren, OH                          88        (A)            88        94%         95%

Yorkview Estates
Massillon, OH                       50        (A)            50        99%         98%

TOTALS                            1,879                   1,155

(A)   The  mortgage is insured by the  Federal  Housing  Administration  ("FHA")
      under the provisions of Section 236 of the National Housing Act.

(B)   Section 8 of Title II of the  Housing  and  Community  Development  Act of
      1974.

(C)   The mortgage is insured by USDA, Rural Development.

(D)   The mortgage is insured by FHA, under the provisions of section  221(d)(3)
      of the National Housing Act.

(E)   The  mortgage  is  insured  by  the  Michigan  State  Housing  Development
      Authority.
</TABLE>

<PAGE>


Ownership Percentages

The following table details the Partnership's ownership percentages of the Local
Limited  Partnerships  and  the  cost of  acquisition  of  such  ownership.  All
interests are limited  partner  interests.  Also included is the total  mortgage
encumbrance  on each property for each of the Local Limited  Partnerships  as of
December 31, 2003.

<TABLE>
<CAPTION>

                           Real VII     Original Cost                  Notes Payable
                          Percentage     of Ownership     Mortgage      and Accrued
      Partnership          Interest        Interest         Notes        Interest
                                                       (in thousands)
<S>                            <C>          <C>            <C>             <C>
Aristocrat Manor               99%          $ 710          $ 3,074         $ --
Arkansas City Apts.            99%              95             489             --
Bellair Manor Apts.         98.99%             305             703             --
Birch Manor Apts. I         99.55%             250             322          1,061
Birch Manor Apts. II        99.56%             258             575            955
Bluewater Apts.                99%             650           1,370             --
Clarkwood Apts. I           98.99%             289             360          1,406
Clarkwood Apts. II          99.57%             495             737          2,176
Hampshire House             98.99%             690           2,498             --
Ivywood Apts.               98.99%             550           1,307             --
Jasper County Prop.            99%             128             650             --
Nantucket Apts.             98.99%             225             458             --
Newton Apts.                   99%             185             981             --
Oak Hill Apts.              98.99%             565           1,557             --
Oakview Apts.                  99%             214           1,090             --
Oakwood Park I Apts.        98.79%             160             124          1,591
Oakwood Park II Apts.       99.99%             260             243          1,591
Pachuta Apts.                  99%              85             439             --
Rand Grove Village             98%           1,150           2,142             --
Richards Park Apts.          98.99%            275             565             --
Shubuta Properties             99%              86             437             --
Tradewinds East                99%             850           1,829             --
Warren Heights Apts. I      98.99%             375             934             --
Yorkview Estates            98.99%             220             522             --
                                           $ 9,070         $23,406        $ 8,259
</TABLE>

Although each Local Limited  Partnership in which the  Partnership  has invested
owns an apartment complex which must compete with other apartment  complexes for
tenants,  government  mortgage  interest and rent  subsidies make it possible to
rent units to eligible tenants at below market rates. In general, this insulates
the projects from market competition.

Item 2.     Description of Properties

See  "Item  1.  Description  of  Business"  for the  real  estate  owned  by the
Partnership  through the  ownership  of limited  partnership  interests in Local
Limited Partnerships.


<PAGE>



Item 3.     Legal Proceedings

On August 27, 1998, two investors holding an aggregate of eight units of limited
partnership  interest  in Real  Estate  Associates  Limited  III (an  affiliated
partnership in which National  Partnership  Investments Corp.  ("NAPICO") is the
corporate  general partner) and two investors holding an aggregate of five units
of limited  partnership  interests in Real Estate Associates Limited VI (another
affiliated  partnership  in  which  NAPICO  is the  corporate  general  partner)
commenced  an  action  against  the   Partnership,   NAPICO  and  certain  other
defendants. The claims included, but were not limited to, claims for breaches of
fiduciary duty to the limited  partners of certain  NAPICO-managed  partnerships
and  violations of securities  laws by making  materially  false and  misleading
statements in the consent  solicitation  statements sent to the limited partners
of such  partnerships  relating  to  approval  of the  transfer  of  partnership
interests  in  limited  partnerships,  owning  certain  of  the  properties,  to
affiliates of Casden Properties,  Inc.,  organized by an affiliate of NAPICO. On
August 4, 1999, one investor holding one unit of limited partnership interest in
Housing Programs Limited (another affiliated  partnership in which NAPICO is the
corporate  general partner)  commenced a virtually  identical action against the
Partnership,  NAPICO and certain other entities.  The second action was subsumed
in the first action, and was certified as a class action.

On April 29, 2003, the court entered  judgment  against NAPICO and certain other
defendants  in the amount of  approximately  $25.2  million  for  violations  of
securities laws and against NAPICO for approximately  $67.3 million for breaches
of fiduciary  duty, both amounts plus interest of  approximately  $25.6 million,
and for punitive damages against NAPICO in the amount of $2.6 million.

On August 11, 2003,  Apartment  Investment and Management  Company ("AIMCO") and
NAPICO  entered  into  a  Stipulation  of  Settlement   (the   "Stipulation   of
Settlement")  with the  plaintiff  class (the  "Plaintiffs")  and their  counsel
relating  to the  settlement  of the  litigation.  The  principal  terms  of the
Stipulation of Settlement include,  among other things (1) payments in both cash
($29 million) and stock ($19  million) by Alan I. Casden,  on behalf of himself,
NAPICO and other defendants,  to the Plaintiffs,  (2) guaranteed  payments in an
aggregate  amount  of $35  million  ($7  million  per  year for 5  years),  plus
interest,  by NAPICO to the  Plaintiffs,  (3) a release of claims of all parties
associated with the litigation and (4) joint agreement by the parties to request
that a new judgment be entered in the litigation to, among other things, expunge
the judgment originally entered against NAPICO and the other defendants.

In connection with the Stipulation of Settlement, on August 12, 2003, NAPICO and
AIMCO executed a Settlement  Agreement  (the  "Settlement  Agreement")  with the
prior  shareholders  of  Casden  Properties,  Inc.  The  principal  terms of the
Settlement  Agreement  include,   among  other  things,  that  (1)  NAPICO  will
voluntarily  discontinue  the action it  commenced  on May 13, 2003  against the
former  shareholders  of Casden  Properties,  Inc. and other  indemnitors in the
Casden  Merger,  (2) Alan I. Casden and certain  related  entities  will resolve
certain  pending  claims for  indemnification  made by  NAPICO,  AIMCO and their
affiliates,  (3) AIMCO or an  affiliate  will  provide  $25  million  of the $29
million in cash that Alan I. Casden is obligated to provide under the Stipulaton
of Settlement in exchange for 531,915 shares of AIMCO Class A Common Stock owned
by The Casden Company,  and (4) The Casden Company will promise to pay to NAPICO
an  aggregate  amount of $35 million  ($7  million  per year for 5 years),  plus
interest,  on a secured,  nonrecourse  basis.  The Casden Company can prepay its
obligation  set forth in item (4) above in shares of AIMCO Class A Common  Stock
having a value based on the greater of $47 per share or the market value of such
shares at the time of payment.

On December 30, 2003,  the  Stipulation of Settlement  with the plaintiff  class
(the  "Plaintiffs")  and their counsel  relating to the settlement of litigation
against the Registrant,  National Partnership  Investments Corp.  ("NAPICO") and
certain  other  defendants  became  effective in accordance  with its terms.  In
addition,  on  December  30,  2003,  the  Settlement  Agreement  with the  prior
shareholders of Casden  Properties,  Inc.,  NAPICO and Apartment  Investment and
Management Company ("AIMCO") also closed in accordance with its terms.


Other Legal Matters

The  holder of a  Partnership  note  payable in the  amount of  $1,675,000  plus
accrued interest  payable of  approximately  $2,880,000 as of December 31, 2003,
sought to compel the  Partnership  to  execute a UCC-1  financing  statement  to
perfect  plaintiff's  security  interest  in the  Partnership's  interest in the
Henrico  limited  partnership.  On December 11, 2003, the  Partnership  sold its
interest  in the Henrico  limited  partnership.  The  Partnership  received  net
proceeds of approximately $2,322,000, approximately $2,260,000 of which was used
to repay a portion of the interest on the note payable in full  satisfaction  of
the note.  The  remaining  balance of principal  and  interest of  approximately
$2,295,000 was forgiven.  The Partnership  had no investment  balance related to
this Local Limited Partnership.

During the year ended  December 31, 2003, the  Partnership  reached a settlement
with both the general partner and the holders of the non-recourse  notes payable
related to South Glen Limited  Dividend  Housing  Association.  The  Partnership
received net proceeds of  approximately  $232,000 for the purchase of REAL VII's
partnership   interest  and  resolution  of  disputes  with   noteholders.   The
Partnership  had  no  remaining   investment   related  to  this  Local  Limited
Partnership.

During  the year  ended  December  31,  2003,  the  Partnership  entered  into a
settlement  agreement with the general partner of Rand Grove Village Partnership
wherein the general partner of the Local Limited  Partnership would purchase the
property in full satisfaction of the non-recourse note payable.  The Partnership
received  approximately  $100,000  during the year ended  December 31, 2003 as a
deposit pursuant to this settlement  agreement.  However, the general partner of
the Local Limited  Partnership has filed a motion to vacate such agreement.  The
general  partner's motion to vacate the settlement order was denied on April 20,
2004. The  Partnership is negotiating  with an unrelated third party to purchase
the property.  The  Partnership has no remaining  investment  balance related to
this Local Limited Partnership at December 31, 2003.

In addition to the litigation  discussed above, the Corporate General Partner is
involved in various other  lawsuits  arising from  transactions  in the ordinary
course of  business.  In the opinion of  management  and the  Corporate  General
Partner,   the  claims  will  not  result  in  any  material  liability  to  the
Partnership.

Item 4.     Submission Of Matters To A Vote Of Security Holders

On December 31, 2003, the Partnership sent a consent  solicitation  statement to
the  limited  partners  regarding  amendment  to the  Restated  Certificate  and
Agreement of Limited  Partnership (the "Partnership  Agreement") to 1) eliminate
the requirement that the cash proceeds from the sale of an individual project or
project interest must exceed the tax liability to the limited partners resulting
from that sale,  and 2) modify the provision in the  Partnership  Agreement that
requires limited partner approval for a sale of all or substantially  all assets
so that sales of projects or project  interests in  transactions  that are not a
series of related  transactions do not require limited  partner  approval.  This
matter was approved  and the  Partnership  Agreement  was amended on January 21,
2004.


<PAGE>


                                     PART II

Item 5.     Market For The  Registrant's  Partnership  Interests  And  Related
            Partnership Matters

The Limited  Partnership  Interests are not traded on a public exchange but were
sold through a public offering managed by E.F. Hutton Inc. It is not anticipated
that any public market will develop for the purchase and sale of any partnership
interest;  therefore,  an investor may be unable to sell or otherwise dispose of
his or her interest in the  partnership.  Limited  Partnership  Interests may be
transferred only if certain  requirements  are satisfied.  At December 31, 2003,
there were 2,951  registered  holders,  owning an  aggregate  of 15,475  limited
partnership units (the "Units") in the Partnership. The Partnership has invested
in certain  government  assisted projects under programs which in many instances
restrict the cash return  available to project  owners.  The Partnership was not
designed to provide cash distributions to investors in circumstances  other than
refinancing or disposition of its investments in limited partnerships.  In March
1999, the Partnership  made a distribution  of $272,250 to the limited  partners
and  $2,750  to the  general  partners,  using  proceeds  from  the  sale of the
partnership interests.  No other distributions have been made from the inception
of the Partnership.

AIMCO and its  affiliates  owned  583.79 Units or 1,167.58  limited  partnership
interests in the  Partnership  representing  7.54% of the  outstanding  Units at
December 31, 2003. A unit consists of two limited partnership  interests.  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, unitholders 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  Corporate  General  Partner.  Although  the
Corporate  General Partner owes fiduciary  duties to the limited partners of the
Partnership,  the Corporate  General partner also owes fiduciary duties to AIMCO
as its sole  stockholder.  As a  result,  the  duties of the  Corporate  General
Partner,  as  corporate  general  partner,  to the  Partnership  and its limited
partners may come into conflict with the duties of the Corporate 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.

The Corporate  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.

Liquidity and Capital Resources

The  Partnership's  primary sources of funds include interest income earned from
investing  available cash and distributions  from Local Limited  Partnerships in
which the  Partnership  has  invested.  It is not expected that any of the Local
Limited  Partnerships  in which the  Partnership has invested will generate cash
flow sufficient to provide for distributions to limited partners in any material
amount.

The  accompanying   financial   statements  have  been  prepared   assuming  the
Partnership  will  continue as a going  concern.  The  Partnership  continues to
generate recurring operating losses and suffers from a lack of cash as well as a
partners' deficit.  In addition,  the Partnership is in default on notes payable
and related  accrued  interest  payable that matured  between  December 1999 and
January 2002.


<PAGE>



Twelve  of the  Partnership's  twenty-four  investments  involved  purchases  of
partnership interests from partners who subsequently withdrew from the operating
partnership.  The  Partnership  is obligated for  non-recourse  notes payable of
approximately  $8,180,000 to the sellers of the partnership  interests,  bearing
interest at 9.5 to 10 percent.  Total  outstanding  accrued interest at December
31,  2003 is  approximately  $14,333,000.  These  obligations  and  the  related
interest are collaterized by the  Partnership's  investment in the Local Limited
Partnerships  and are  payable  only out of cash  distributions  from the  Local
Limited  Partnerships,  as  defined  in the notes.  Unpaid  interest  was due at
maturity of the notes.

The  Partnership  has not repaid the notes  payable and is in default  under the
terms of the notes  totaling  approximately  $22,513,000.  During the year ended
December 31, 2003, the Partnership entered into a settlement  agreement with the
general partner of Rand Grove Village Partnership wherein the general partner of
the Local Limited  Partnership  would purchase the property in full satisfaction
of  the  non-recourse  note  payable.  The  Partnership  received  approximately
$100,000  during the year ended December 31, 2003 as a deposit  pursuant to this
settlement  agreement.  However,  the  general  partner  of  the  Local  Limited
Partnership has filed a motion to vacate such agreement.  The general  partner's
motion to  vacate  the  settlement  order was  denied  on April  20,  2004.  The
Partnership  is  negotiating  with an  unrelated  third  party to  purchase  the
property.  The Partnership has no remaining  investment  balance related to this
Local  Limited  Partnership  at December 31, 2003.  Management  is attempting to
negotiate  extensions  of  the  maturity  dates  on  the  other  notes.  If  the
negotiations are unsuccessful,  the Partnership could lose its investment in the
Local Limited Partnerships to foreclosure. In addition, the Partnership may seek
operating  advances from the general partner of the  Partnership.  However,  the
Corporate General Partner is not obligated to fund such advances.

As a result of the above,  there is  substantial  doubt about the  Partnership's
ability to continue as a going concern.  The financial statements do not include
any adjustments to reflect the possible future effects of the recoverability and
classification of assets or amounts and  classifications of liabilities that may
result from these uncertainties.

Results of Operations

At December  31, 2003,  the  Partnership  had  investments  in 13 Local  Limited
Partnerships  and a general  partner  interest in REA IV which,  in turn,  holds
limited partner  interests in 11 additional Local Limited  Partnerships,  all of
which own housing projects that were  substantially all rented. The Partnership,
as a  limited  partner,  does  not  exercise  control  over the  activities  and
operations,  including  refinancing  or selling  decisions of the Local  Limited
Partnerships.  Accordingly,  the Partnership  accounts for its investment in the
Local  Limited  Partnerships  using  the  equity  method.  Thus  the  individual
investments  are  carried  at cost  plus the  Partnership's  share of the  Local
Limited  Partnership's profits less the Partnership's share of the Local Limited
Partnership's losses, distributions,  and impairment charges. However, since the
Partnership  is not  legally  liable for the  obligations  of the Local  Limited
Partnerships,  or is not otherwise  committed to provide  additional  support to
them,  it does not  recognize  losses once its  investment  in each of the Local
Limited  Partnerships  reaches  zero.   Distributions  from  the  Local  Limited
Partnerships  are accounted for as a reduction of the  investment  balance until
the investment balance is reduced to zero. Subsequent distributions received are
recognized as income in the  accompanying  statements of  operations.  For those
investments  where the Partnership has determined that the carrying value of its
investments  approximates  the estimated  fair value of those  investments,  the
Partnership's  policy is to  recognize  equity  in  income of the Local  Limited
Partnerships only to the extent of distributions  received,  and amortization of
acquisition costs from those Local Limited Partnerships.

The total (loss) income from the Local Limited  Partnerships  that was allocated
to the Partnership was approximately ($417,000) and $158,000 for the years ended
December 31, 2003 and 2002, respectively. However, because losses incurred after

<PAGE>


the investment  account is reduced to a zero balance are not  recognized,  there
was no  recognition  of  equity  in  (losses)  income  from  the  Local  Limited
Partnerships   for  the  years  ended   December  31,  2003  and  2002,  as  the
Partnership's  investment in all Local Limited Partnership's had been reduced to
zero prior to January 1, 2002.

Distributions  from the local limited  partnerships  in which the  Partnership's
investment  in the Local  Limited  Partnerships  has been  reduced  to zero were
approximately  $29,000 and $41,000  for the years  ended  December  31, 2003 and
2002, respectively.  These amounts were recognized as income on the accompanying
statements of operations, in accordance with the equity method of accounting.

In  December  2003,  the  Partnership  sold  its  interest  in  Henrico  limited
partnership  and  realized a gain on sale of limited  partnership  interests  of
approximately $2,322,000.  The gain is equal to the net proceeds received by the
Partnership as the Partnership had no remaining investment related to this Local
Limited  Partnership.  The Partnership used approximately  $2,260,000 of the net
proceeds to repay a portion of the  interest on the past due  non-recourse  note
payable in full  satisfaction  of the note. The remaining  principal  balance of
approximately  $1,675,000 and related accrued interest of approximately $620,000
was forgiven.  Accordingly,  the Partnership  recognized a gain of approximately
$2,295,000  on the  extinguishment  of debt during the year ended  December  31,
2003.

In  March  2003,  the  Partnership  sold its  interest  in  South  Glen  limited
partnership  and  realized a gain on sale of limited  partnership  interests  of
approximately  $232,000 for the year ended  December 31, 2003. The gain is equal
to the net  proceeds  received  by the  Partnership  as the  Partnership  had no
remaining investment related to this Local Limited Partnership.  In addition, as
part of the sale, the Partnership's obligation on the past due non-recourse note
payable  of   approximately   $970,000  and  the  related  accrued  interest  of
approximately  $1,547,000 was  transferred to the  purchaser.  Accordingly,  the
Partnership recognized a gain of approximately  $2,517,000 on the extinguishment
of debt during the year ended December 31, 2003.

During August 2002, the Partnership  purchased from the holder the matured notes
owed  by  DPM  Associates  which  is a  limited  partner  of the  Local  Limited
Partnership,  which owns Danbury Park Manor, with a face value of $1,150,000 and
related  accrued  interest  of  approximately   $1,800,000,   for  approximately
$765,000.  In order to facilitate this purchase,  the Corporate  General Partner
loaned  the  Partnership  approximately  $518,000.  In October  2002,  the Local
Limited  Partnership  sold its investment  property.  The  Partnership  received
proceeds of approximately $1,502,000 during 2002 in full payment of its advances
and repayment of the notes it purchased in August 2002. The Partnership realized
a gain of  approximately  $869,000 for the year ended December 31, 2002.  During
the year ended December 31, 2003,  additional proceeds of approximately  $50,000
were received by the  Partnership and recorded as an additional gain on the sale
for the year ended December 31, 2003.

In September 2002, the Partnership's  interest in Dexter Apartments was lost due
to  foreclosure.  The note  holders  had  demanded  payment  on  their  past due
non-recourse  note;  however,  the Partnership did not have the means to satisfy
the  note.  Accordingly,  the  Partnership  recognized  a gain of  approximately
$743,000 on this extinguishment of debt during the year ended December 31, 2002.

In June 2002, the  Partnership's  interest in DeSoto  Apartments was lost due to
foreclosure.   The  note  holders  had  demanded   payment  on  their  past  due
non-recourse  note;  however,  the Partnership did not have the means to satisfy
the  note.  Accordingly,  the  Partnership  recognized  a gain of  approximately
$504,000 on this extinguishment of debt during the year ended December 31, 2002.

In February  2002,  the  Partnership  sold its  interest in the  Goodlette  Arms
limited partnership and realized a gain of approximately $8,448,000 for the year
ended December 31, 2002. The gain was equal to the net proceeds  received by the
Partnership as the Partnership had no remaining investment related to this Local
Limited Partnership.



<PAGE>


On December  21,  2001,  the  Partnership  sold its  interest in Parkway  Towers
limited partnership and realized a gain of approximately $1,703,000 for the year
ended December 31, 2001. Net proceeds of approximately $1,801,000 were collected
during the year ended  December 31, 2002,  resulting  in the  recognition  of an
additional gain of approximately $108,000 for the year ended December 31, 2002.

A recurring partnership expense is the annual management fee. The fee is payable
to the Corporate  General  Partner of the  Partnership  and is calculated at 0.5
percent of the Partnership's  original remaining invested assets. The management
fee is paid to the Corporate  General  Partner for its continuing  management of
Partnership  affairs.  The fee is payable beginning with the month following the
Partnership's initial investment in a Local Limited Partnership. Management fees
were  approximately  $325,000 and $351,000 for the years ended December 31, 2003
and 2002,  respectively.  The decrease in management  fees charged is due to the
decrease in the number of Local Limited  Partnerships  in which the  Partnership
held  investments,  as a result of the sales and  foreclosures  of certain Local
Limited Partnerships during the years ended December 31, 2003 and 2002.

Operating expenses,  other than interest expense and management fees, consist of
legal and accounting  fees for services  rendered to the Partnership and general
and  administrative  expenses.  Legal and  accounting  fees  were  approximately
$195,000  and  $305,000  for  the  years  ended  December  31,  2003  and  2002,
respectively.  The  decrease in legal fees is  primarily  related to  litigation
which  occurred  during  2002,  partially  offset by fees  related  to the cases
discussed in "Item 3. Legal  Proceedings".  General and administrative  expenses
were  approximately  $98,000 for each of the years ended  December  31, 2003 and
2002.  Included in general and  administrative  expenses are  reimbursements  to
NAPICO for certain expenses, which totaled approximately $43,000 and $44,000 for
the years ended December 31, 2003 and 2002, respectively.

The Partnership, as a limited partner in the Local Limited Partnerships in which
it has  invested,  is  subject  to the  risks  incident  to the  management  and
ownership of improved real estate. The Partnership  investments are also subject
to adverse  general  economic  conditions  and,  accordingly,  the status of the
national economy,  including substantial unemployment,  concurrent inflation and
changing legislation, could increase vacancy levels, rental payment defaults and
operating  expenses,  which in turn,  could  substantially  increase the risk of
operating losses for the projects.

Under recently adopted law and policy,  the United States  Department of Housing
and Urban Development ("HUD") has determined not to renew the Housing Assistance
Payment  ("HAP")  Contracts  on a long  term  basis on the  existing  terms.  In
connection with renewals of the HAP Contracts under such new law and policy, the
amount of rental  assistance  payments under renewed HAP Contracts will be based
on market rentals instead of above market  rentals,  which may be the case under
existing HAP Contracts.  The payments under the renewed HAP Contracts may not be
in an amount  that  would  provide  sufficient  cash  flow to  permit  owners of
properties  subject to HAP  Contracts to meet the debt service  requirements  of
existing  loans  insured by the Federal  Housing  Administration  of HUD ("FHA")
unless such mortgage loans are  restructured.  In order to address the reduction
in payments under HAP Contracts as a result of this new policy, the Multi-family
Assisted Housing Reform and Affordability  Act of 1997 ("MAHRAA"),  provides for
the  restructuring  of  mortgage  loans  insured  by the  FHA  with  respect  to
properties  subject  to the  Section 8 program.  Under  MAHRAA,  an  FHA-insured
mortgage  loan can be  restructured  into a first  mortgage  loan  which will be
amortized on a current basis and a low interest  second mortgage loan payable to
FHA which will only be payable on  maturity  of the first  mortgage  loan.  This
restructuring results in a reduction in annual debt service payable to the owner
of the  FHA-insured  mortgage  loan and is  expected  to result in an  insurance
payment from FHA to the holder of the  FHA-insured  loan due to the reduction in
the principal amount. MAHRAA also phases out project-based subsidies on selected
properties  serving  families not located in rental markets with limited supply,
converting such subsidies to a tenant-based subsidy.

When the HAP  Contracts are subject to renewal,  there can be no assurance  that
the Local Limited  Partnerships  in which the Partnership has an investment will
be permitted  to  restructure  their  mortgage  indebtedness  under  MAHRAA.  In
addition,  the economic  impact on the  Partnerships  of the  combination of the
reduced  payments under the HAP Contracts and the  restructuring of the existing
FHA-insured mortgage loans under MAHRAA is uncertain.

Other

AIMCO and its  affiliates  owned  583.79 Units or 1,167.58  limited  partnership
interests in the  Partnership  representing  7.54% of the  outstanding  Units at
December 31, 2003. A unit consists of two limited partnership  interests.  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, unitholders 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  Corporate  General  Partner.  Although  the
Corporate  General Partner owes fiduciary  duties to the limited partners of the
Partnership,  the Corporate  General partner also owes fiduciary duties to AIMCO
as its sole  stockholder.  As a  result,  the  duties of the  Corporate  General
Partner,  as  corporate  general  partner,  to the  Partnership  and its limited
partners may come into conflict with the duties of the Corporate General Partner
to AIMCO, as its sole stockholder.

Recent Accounting Pronouncements

In January 2003,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Interpretation  No. 46 ("FIN 46"),  Consolidation of Variable Interest Entities.
FIN 46 requires the  consolidation of entities in which an enterprise  absorbs a
majority of the entity's  expected  losses,  receives a majority of the entity's
expected  residual  returns,  or both, as a result of ownership,  contractual or
other  financial  interests  in the  entity.  Prior to the  issuance  of FIN 46,
entities were generally  consolidated by an enterprise when it had a controlling
financial  interest  through  ownership  of a majority  voting  interest  in the
entity.  FIN 46 applied  immediately to variable interest entities created after
January 31, 2003, and with respect to variable interests held before February 1,
2003, FIN 46 will apply for financial statements filed after December 15, 2004.

The Partnership has not entered into any partnership  investments  subsequent to
January  31,  2003.  The  Partnership  is  in  the  process  of  evaluating  its
investments in unconsolidated  partnerships that may be deemed variable interest
entities under the provisions of FIN 46. The  Partnership has not yet determined
the anticipated  impact of adopting FIN 46 for its  partnership  agreements that
existed as of January 31, 2003. However, FIN 46 may require the consolidation of
the  assets,   liabilities  and  operations  of  certain  of  the  Partnership's
unconsolidated  partnership  investments.  Although  the  Partnership  does  not
believe  the full  adoption  of FIN 46 will  have an impact  on cash  flow,  the
Partnership cannot make any definitive  conclusion on the impact on net earnings
until it completes its evaluation,  including an evaluation of the Partnership's
maximum exposure to loss.

In May 2003,  the FASB issued SFAS 150, which  establishes  standards for how an
issuer   classifies   and   measures   certain   financial    instruments   with
characteristics  of both  liabilities and equity.  The  requirements of SFAS 150
apply  to  the   classification   and  measurement  of  freestanding   financial
instruments.  SFAS 150 is effective  for financial  instruments  entered into or
modified  after May 31, 2003, and otherwise is effective at the beginning of the
first interim period  beginning after June 15, 2003. The Partnership has adopted
SFAS 150 as of July 1, 2003.  Additionally,  in September  2003,  the FASB staff
indicated  that  SFAS 150  also  applies  to the  non-controlling  interests  in
consolidated  finite life partnerships.  However,  on October 29, 2003, the FASB
indefinitely  deferred the provisions of SFAS 150 for finite life  partnerships.
The  adoption  of SFAS 150 did not have a material  impact on the  Partnership's
results of operations taken as a whole.



<PAGE>


Critical Accounting Policies and Estimates

A summary of the Partnership's  significant  accounting  policies is included in
"Note 2 - Organization and Summary of Significant  Accounting Policies" which is
included in the financial  statements  in "Item 7.  Financial  Statements".  The
Corporate  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.

Method of Accounting for Investments in Limited Partnerships

The  Partnership,  as a limited  partner,  does not  exercise  control  over the
activities and operations,  including  refinancing or selling decisions,  of the
Local  Limited  Partnerships.  Accordingly,  the  Partnership  accounts  for its
investments  in the Local  Limited  Partnerships  using the equity  method.  The
Partnership  is allocated  profits and losses of the Local Limited  Partnerships
based upon its respective  ownership  percentage  (between 98% and 99.99%).  The
Partnership  is also entitled to 99% of the profits and losses of REA IV. REA IV
is entitled to a 99% interest in each of the Local Limited Partnerships in which
it has invested.  Distributions of surplus cash from operations from most of the
Local Limited  Partnerships  are  restricted by the Local Limited  Partnerships'
Regulatory  Agreements  with the United  States  Department of Housing and Urban
Development  ("HUD").  These  restrictions  limit the distribution to a portion,
generally  less than 10%, of the initial  invested  capital.  The excess surplus
cash is  deposited  into a  residual  receipts  reserve,  of which the  ultimate
realization by the  Partnership  is uncertain as HUD frequently  retains it upon
sale or  dissolution  of the  Local  Limited  Partnership.  The  Partnership  is
allocated  profits and losses and receives  distributions  from refinancings and
sales in accordance with the Local Limited Partnerships' partnership agreements.
These  agreements  usually limit the  Partnership's  distributions  to an amount
substantially   less  than  its  ownership   percentage  in  the  Local  Limited
Partnership.

The individual  investments are carried at cost plus the Partnership's  share of
the Local  Limited  Partnership's  profits less the  Partnership's  share of the
Local Limited  Partnership's  losses,  distributions and impairment charges. See
"Note 2 -  Organization  and Summary of Significant  Accounting  Policies" for a
description of the impairment  policy. The Partnership is not legally liable for
the obligations of the Local Limited Partnerships and is not otherwise committed
to provide additional support to them.  Therefore,  it does not recognize losses
once its  investment  in each of the Local  Limited  Partnerships  reaches zero.
Distributions  from  the  Local  Limited  Partnerships  are  accounted  for as a
reduction of the investment  balance until the investment  balance is reduced to
zero.  When  the  investment  balance  has  been  reduced  to  zero,  subsequent
distributions  received are recognized as income in the accompanying  statements
of operations.

For those  investments  where the  Partnership  has determined that the carrying
value  of its  investments  approximates  the  estimated  fair  value  of  those
investments,  the  Partnership's  policy is to recognize equity in income of the
Local  Limited  Partnerships  only to the extent of  distributions  received and
amortization  of  acquisition  costs  from  those  Local  Limited  Partnerships.
Therefore,  the  Partnership  limits its  recognition of equity  earnings to the
amount it expects to ultimately realize.


<PAGE>



Item 7.     Financial Statements

Real Estate Associate Limited VII

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'  Deficit - 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 Independent Auditors






The Partners
Real Estate Associates Limited VII

We have audited the accompanying balance sheet of Real Estate Associates Limited
VII as of December 31, 2003, and the related statements of operations, partners'
deficit  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 did not audit the  financial  statements of
certain  limited  partnerships,  the  investments  in which are reflected in the
accompanying  financial  statements  using the equity method of accounting.  The
investee  information for these limited  partnerships is included in Notes 3 and
8. The financial  statements of these limited partnerships were audited by other
auditors,  whose reports have been furnished to us, and our opinion,  insofar as
it relates to the amounts  included  for these  limited  partnerships,  is based
solely on the reports of the other auditors.

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  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe that our audits and the reports of the other  auditors
provide a reasonable basis for our opinion.

In our opinion,  based on our audits and the reports of the other auditors,  the
financial statements referred to above present fairly, in all material respects,
the  financial  position of Real Estate  Associates  Limited VII 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.

The  accompanying  financial  statements  have been  prepared  assuming that the
Partnership will continue as a going concern.  As more fully described in Note 1
to the financial  statements,  the Partnership  continues to generate  recurring
operating  losses and suffers from  inadequate  liquidity.  In  addition,  notes
payable and related accrued interest totaling  approximately  $22,513,000 are in
default due to non-payment upon maturity.  These  conditions  raise  substantial
doubt  about  the  Partnership's   ability  to  continue  as  a  going  concern.
Management's  plans in regard to these matters are also described in Note 1. The
financial  statements  do not include any  adjustments  to reflect the  possible
future effects on the recoverability and classification of assets or the amounts
and  classification  of  liabilities  that may result  from the  outcome of this
uncertainty.



                                                          /s/Ernst & Young LLP
Greenville, SC
April 20, 2004


<PAGE>




                       REAL ESTATE ASSOCIATES LIMITED VII

                                  BALANCE SHEET

                                DECEMBER 31, 2003
                                 (in thousands)

<TABLE>
<CAPTION>

                        Assets

<S>                                       <C>                                  <C>
Investments in limited partnerships (Note 3)                                   $ --
Cash and cash equivalents                                                         237
Advances due from limited partnerships                                             46
     Total assets                                                              $ 283

          Liabilities and Partners' Deficit

Liabilities:
   Notes payable, in default (Notes 1 and 4)                                  $ 8,180
   Accrued interest payable, in default
     (Notes 1 and 4)                                                           14,333
   Accrued fees due to affiliates (Note 5)                                         54
   Accounts payable and accrued expenses                                          105
                                                                               22,672
Contingencies (Note 7)

Partners' deficit:
   General partners                                         $ (547)
   Limited partners                                         (21,842)          (22,389)
        Total liabilities and partners' deficit                                $ 283


                See Accompanying Notes to Financial Statements
</TABLE>

<PAGE>



                       REAL ESTATE ASSOCIATES LIMITED VII

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






                                                     Years Ended December 31,
                                                     2003               2002
Revenues:
  Interest income                                    $ 4                 $ 4
  Other income                                           9                  --
                                                        13                   4
Operating expenses:
  Management fees - partners (Note 5)                  325                 351
  General and administrative (Note 5)                   98                  98
  Legal and accounting                                 195                 305
  Interest                                             934               1,101
        Total operating expenses                     1,552               1,855

Loss from Partnership operations                    (1,539)             (1,851)
Gain on sale of limited partnership
  interests (Note 3)                                 2,604               9,425
Gain on extinguishment of debt (Note 4)              4,812               1,247
Distributions in excess of investment in
  limited partnerships (Note 3)                         29                  41

Net income                                         $ 5,906             $ 8,862

Net income allocated to general partners
  (1%)                                               $ 59               $ 89
Net income allocated to limited partners
  (99%)                                              5,847               8,773
                                                   $ 5,906             $ 8,862
Net income per limited partnership
  interest (Note 2)                                $377.10             $562.37


                See Accompanying Notes to Financial Statements



<PAGE>



                       REAL ESTATE ASSOCIATES LIMITED VII

                   STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
                      (in thousands, except interest data)


<TABLE>
<CAPTION>

                                                  General           Limited
                                                 Partners          Partners         Total

<S>                                                                  <C>
Partnership interests (A)                                            15,475

Partners' Deficit, December 31, 2001              $ (695)          $(36,462)      $(37,157)

Net income for the year ended
  December 31, 2002                                   89              8,773          8,862

Partners' Deficit, December 31, 2002                (606)            (27,689)      (28,295)

Net income for the year ended
  December 31, 2003                                   59              5,847          5,906

Partners' Deficit, December 31, 2003              $ (547)          $(21,842)      $(22,389)


(A)   Consists of 15,475  interests at December 31, 2003 and 15,505 interests at
      December  31,  2002.  During  2003  and  2002,  30 and 95  interests  were
      abandoned, respectively (Notes 2 and 9).

                See Accompanying Notes to Financial Statements
</TABLE>



<PAGE>



                       REAL ESTATE ASSOCIATES LIMITED VII

                            STATEMENTS OF CASH FLOWS
                                 (in thousands)


<TABLE>
<CAPTION>


                                                                          Years Ended
                                                                         December 31,
                                                                      2003            2002
Cash flows from operating activities:
<S>                                                                 <C>             <C>
  Net income                                                        $ 5,906         $ 8,862
  Adjustments to reconcile net income to net cash used in
   operating activities:
     Gain on sale of limited partnership interests                    (2,604)        (9,425)
     Gain on extinguishment of debt                                   (4,812)        (1,247)
     Changes in accounts:
      Due from affiliates, net                                            10            (13)
      Accrued interest payable                                        (1,326)        (2,663)
      Accounts payable and accrued expenses                               99            (58)
      Accrued fees due to affiliates                                     (27)        (4,129)
         Net cash used in operating activities                        (2,754)        (8,673)

Cash flows from investing activities:
  Proceeds from sale of limited partnership interests                  2,604         11,118
  Advances to limited partnerships                                       (73)          (147)
  Repayment of advances to limited partnerships                          174             --
         Net cash provided by investing activities                     2,705         10,971

Cash flows from financing activities:
  Payments on notes payable                                               --         (2,240)
  Repayment of advance from affiliate                                     --           (558)
  Advance from affiliate                                                  --            558
         Net cash used in financing activities                            --         (2,240)

Net (decrease) increase in cash and cash equivalents                     (49)            58
Cash and cash equivalents, beginning of year                             286            228

Cash and cash equivalents, end of year                               $ 237           $ 286

Supplemental disclosure of cash flow information:
  Cash paid for interest                                            $ 2,260         $ 3,764

Supplemental disclosure of non-cash activity:
  Transfer of debt to purchaser of South Glen limited
   partnership                                                      $ 2,517           $ --
  Extinguishment of debt related to Henrico limited
   partnership                                                      $ 2,295           $ --

                See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>



                       REAL ESTATE ASSOCIATES LIMITED VII

                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2003


Note 1 - Going Concern

The accompanying  financial  statements have been prepared  assuming Real Estate
Associates  Limited VII (the  "Partnership" or "Registrant")  will continue as a
going concern. The Partnership  continues to generate recurring operating losses
and suffers from a lack of cash as well as a partners' deficit. In addition, the
Partnership is in default on notes payable and related accrued  interest payable
that matured between December 1999 and January 2002.

Twelve  of the  Partnership's  twenty-four  investments  involved  purchases  of
partnership interests from partners who subsequently withdrew from the operating
partnership.  The  Partnership  is obligated for  non-recourse  notes payable of
approximately  $8,180,000 to the sellers of the partnership  interests,  bearing
interest at 9.5% to 10%. Total outstanding accrued interest at December 31, 2003
is  approximately  $14,333,000.  These  obligations and the related interest are
collateralized by the Partnership's investment in the local limited partnerships
(the  "Local   Limited   Partnerships")   and  are  payable  only  out  of  cash
distributions  from the Local  Limited  Partnerships,  as  defined in the notes.
Unpaid interest was due at maturity of the notes.

The  Partnership  has not repaid the notes  payable and is in default  under the
terms of the notes  totaling  $22,513,000.  During the year ended  December  31,
2003,  the  Partnership  entered  into a settlement  agreement  with the general
partner of Rand Grove  Village  Partnership  wherein the general  partner of the
Local Limited  Partnership  would purchase the property in full  satisfaction of
the non-recourse note payable. The Partnership received  approximately  $100,000
during the year ended December 31, 2003 as a deposit pursuant to this settlement
agreement.  However,  the general  partner of the Local Limited  Partnership has
filed a motion to vacate such agreement.  The general partner's motion to vacate
the  settlement  order  was  denied  on  April  20,  2004.  The  Partnership  is
negotiating  with an  unrelated  third  party  to  purchase  the  property.  The
Partnership  has no remaining  investment  balance related to this Local Limited
Partnership  at  December  31,  2003.  Management  is  attempting  to  negotiate
extensions of the maturity  dates on the other notes.  If the  negotiations  are
unsuccessful,  the  Partnership  could lose its  investment in the Local Limited
Partnerships  to foreclosure.  In addition,  the Partnership may seek additional
operating  advances from the general partner of the  Partnership.  However,  the
general partner is not obligated to fund such advances.

As a result of the above,  there is  substantial  doubt about the  Partnership's
ability to continue as a going concern.  The financial statements do not include
any adjustments to reflect the possible future effects of the recoverability and
classification of assets or amounts and  classifications of liabilities that may
result from these uncertainties.

Note 2 - Organization and Summary of Significant Accounting Policies

Organization

The Partnership was formed under the California  Limited  Partnership Act on May
24,  1983.  The  Partnership  was formed to invest  primarily  in other  limited
partnerships or joint ventures which own and operate primarily federal, state or
local  government-assisted   housing  projects.  The  general  partners  of  the
Partnership are National Partnership Investments Corp. ("NAPICO"),  a California
Corporation  (the  "Corporate  General  Partner"),   and  National   Partnership
Investments Associates II ("NAPIA II"). NAPIA II is a limited partnership formed
under the  California  Limited  Partnership  Act and consists of Mr.  Charles H.
Boxenbaum  as the  general  partner  and two  unrelated  individuals  as limited
partners. The business of the Partnership is conducted primarily by NAPICO.

On December 3, 2001, Casden Properties Inc., entered into a merger agreement and
certain other  transaction  documents with  Apartment  Investment and Management
Company ("AIMCO"), a publicly traded real estate investment trust and certain of
its  subsidiaries,  pursuant to which, on March 11, 2002,  AIMCO acquired Casden
Properties Inc. and its subsidiaries,  including 100% of the outstanding capital
stock of NAPICO.  Prior to March 11, 2002, Casden Properties Inc. owned a 95.25%
economic  interest  in  NAPICO,  with the  balance  owned by  Casden  Investment
Corporation ("CIC").  CIC, which is wholly owned by Alan I. Casden, owned 95% of
the voting common stock of NAPICO prior to March 11, 2002.

These  financial  statements  include the  accounts  of Real  Estate  Associates
Limited  VII and Real Estate  Associates  IV ("REA IV"),  a  California  general
partnership  in  which  the  Partnership  holds  a 99  percent  general  partner
interest.  Losses in excess of the minority  investment  that would otherwise be
attributed to the minority interest are being allocated to the Partnership.

The general  partners  have a one percent  interest in profits and losses of the
Partnership.  The limited  partners  have the  remaining 99 percent  interest in
proportion to their respective investments.

The  Partnership  shall be  dissolved  only upon the  expiration  of 50 complete
calendar  years  (December  31,  2033)  from  the date of the  formation  of the
Partnership  or the  occurrence  of various  other  events as  specified  in the
Partnership agreement.

On December 31, 2003, the Partnership sent a consent  solicitation  statement to
the  limited  partners  regarding  amendment  to the  Restated  Certificate  and
Agreement of Limited  Partnership (the "Partnership  Agreement") to 1) eliminate
the requirement that the cash proceeds from the sale of an individual project or
project interest must exceed the tax liability to the limited partners resulting
from that sale,  and 2) modify the provision in the  Partnership  Agreement that
requires limited partner approval for a sale of all or substantially  all assets
so that sales of projects or project  interests in  transactions  that are not a
series of related  transactions do not require limited  partner  approval.  This
matter was approved  and the  Partnership  Agreement  was amended on January 21,
2004.

Upon total or partial  liquidation  of the  Partnership  or the  disposition  or
partial  disposition of a project or project  interest and  distribution  of the
proceeds,  the  general  partners  will  be  entitled  to a  liquidation  fee as
stipulated  in the  Partnership  Agreement.  The  limited  partners  will have a
priority return equal to their invested  capital  attributable to the project(s)
or project interest(s) sold and shall receive from the sale of the project(s) or
project  interest(s) an amount sufficient to pay state and federal income taxes,
if any, calculated at the maximum rate then in effect. The general partners' fee
may  accrue  but shall not be paid  until the  limited  partners  have  received
distributions equal to 100 percent of their capital contributions.

Basis of Presentation

The  accompanying  financial  statements  have been prepared in conformity  with
accounting principles generally accepted in the United States.

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.

Method of Accounting for Investments in Limited Partnerships

The investments in limited  partnerships are accounted for on the equity method.
Acquisition,  selection  and  other  costs  related  to the  acquisition  of the
projects have been  capitalized as part of the investment  account and are being
amortized by the straight line method over the estimated lives of the underlying
assets, which is generally 30 years.

Net Income Per Limited Partnership Interest

Net income per limited partnership interest was computed by dividing the limited
partners'  share of net income by the number of  limited  partnership  interests
outstanding  at the  beginning  of the year.  The number of limited  partnership
interests  used was 15,505 and 15,600 for the years ended  December 31, 2003 and
2002, respectively.

Cash and Cash Equivalents

Cash and cash  equivalents  includes  cash and money  market  funds.  At certain
times,  the amount of cash  deposited  at a bank may exceed the limit on insured
deposits. Cash balances include approximately $237,000 at December 31, 2003 that
are  maintained  by an  affiliated  management  company on behalf of  affiliated
entities in a cash concentration account.

Impairment of Long-Lived Assets

The  Partnership  reviews its  investments in long-lived  assets to determine if
there  has  been  any  permanent   impairment  whenever  events  or  changes  in
circumstances  indicate  that  the  carrying  amount  of the  asset  may  not be
recoverable.  If the sum of the  expected  future  cash  flows is less  than the
carrying amount of the assets, the Partnership recognizes an impairment loss. No
impairment  losses were recognized  during the years ended December 31, 2003 and
2002.

Segment Reporting

Statement of Financial  Accounting Standards ("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. SFAS
No. 131 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.

Fair Value of Financial Instruments

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.  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  amount of its  financial  instruments
approximates  their  fair  value  due  to  the  short  term  maturity  of  these
instruments.

Recent Accounting Pronouncements

In January 2003,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Interpretation  No. 46 ("FIN 46"),  Consolidation of Variable Interest Entities.
FIN 46 requires the  consolidation of entities in which an enterprise  absorbs a
majority of the entity's  expected  losses,  receives a majority of the entity's
expected  residual  returns,  or both, as a result of ownership,  contractual or
other  financial  interests  in the  entity.  Prior to the  issuance  of FIN 46,
entities were generally  consolidated by an enterprise when it had a controlling
financial  interest  through  ownership  of a majority  voting  interest  in the
entity.  FIN 46 applied  immediately to variable interest entities created after
January 31, 2003, and with respect to variable interests held before February 1,
2003, FIN 46 will apply for financial statements filed after December 15, 2004.

The Partnership has not entered into any partnership  investments  subsequent to
January  31,  2003.  The  Partnership  is  in  the  process  of  evaluating  its
investments in unconsolidated  partnerships that may be deemed variable interest
entities under the provisions of FIN 46. The  Partnership has not yet determined
the anticipated  impact of adopting FIN 46 for its  partnership  agreements that
existed as of January 31, 2003. However, FIN 46 may require the consolidation of
the  assets,   liabilities  and  operations  of  certain  of  the  Partnership's
unconsolidated  partnership  investments.  Although  the  Partnership  does  not
believe  the full  adoption  of FIN 46 will  have an impact  on cash  flow,  the
Partnership cannot make any definitive  conclusion on the impact on net earnings
until it completes its evaluation,  including an evaluation of the Partnership's
maximum exposure to loss.

In May 2003,  the FASB issued SFAS 150, which  establishes  standards for how an
issuer   classifies   and   measures   certain   financial    instruments   with
characteristics  of both  liabilities and equity.  The  requirements of SFAS 150
apply  to  the   classification   and  measurement  of  freestanding   financial
instruments.  SFAS 150 is effective  for financial  instruments  entered into or
modified  after May 31, 2003, and otherwise is effective at the beginning of the
first interim period  beginning after June 15, 2003. The Partnership has adopted
SFAS 150 as of July 1, 2003.  Additionally,  in September  2003,  the FASB staff
indicated  that  SFAS 150  also  applies  to the  non-controlling  interests  in
consolidated  finite life partnerships.  However,  on October 29, 2003, the FASB
indefinitely  deferred the provisions of SFAS 150 for finite life  partnerships.
The  adoption  of SFAS 150 did not have a material  impact on the  Partnership's
results of operations taken as a whole.

Effective January 1, 2002, the Partnership adopted 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 combined  statements of operations  information in Note 3 below have
been  restated  as of January 1, 2002 to reflect  the  operations  of South Glen
Apartments and Henrico  Apartments as loss from  discontinued  operations due to
the sales of the Partnership's  interests in these Local Limited Partnerships in
2003.



<PAGE>



Note 3 - Investments in Limited Partnerships

As of December 31, 2003, the Partnership holds limited partnership  interests in
13 Local Limited  Partnerships.  In addition,  the  Partnership  holds a general
partner  interest in Real Estate  Associates IV ("REA IV"), which in turn, holds
limited partner interests in 11 additional Local Limited Partnerships. NAPICO is
also a general  partner in REA IV. In total,  therefore  the  Partnership  holds
interests,  either  directly or  indirectly  through REA IV, in 24 Local Limited
Partnerships  which own  residential  low income rental  projects  consisting of
1,879  apartment  units.  The mortgage loans of these projects are payable to or
insured by various governmental agencies.

The  Partnership,  as a limited  partner,  does not  exercise  control  over the
activities and operations,  including  refinancing or selling decisions,  of the
Local  Limited  Partnerships.  Accordingly,  the  Partnership  accounts  for its
investments  in the Local  Limited  Partnerships  using the equity  method.  The
Partnership  is allocated  profits and losses of the Local Limited  Partnerships
based upon its respective  ownership  percentage  (between 98% and 99.99%).  The
Partnership  is also entitled to 99% of the profits and losses of REA IV. REA IV
is entitled to a 99% interest in each of the Local Limited Partnerships in which
it has invested.  Distributions of surplus cash from operations from most of the
Local Limited  Partnerships  are  restricted by the Local Limited  Partnerships'
Regulatory  Agreements  with the United  States  Department of Housing and Urban
Development  ("HUD").  These  restrictions  limit the distribution to a portion,
generally  less than 10%, of the initial  invested  capital.  The excess surplus
cash is  deposited  into a  residual  receipts  reserve,  of which the  ultimate
realization by the  Partnership  is uncertain as HUD frequently  retains it upon
sale or  dissolution  of the  Local  Limited  Partnership.  The  Partnership  is
allocated  profits and losses and receives  distributions  from refinancings and
sales in accordance with the Local Limited Partnerships' partnership agreements.
These  agreements  usually limit the  Partnership's  distributions  to an amount
substantially   less  than  its  ownership   percentage  in  the  Local  Limited
Partnership.

The individual  investments are carried at cost plus the Partnership's  share of
the Local  Limited  Partnership's  profits less the  Partnership's  share of the
Local Limited  Partnership's  losses,  distributions and impairment charges. See
"Note 2 -  Organization  and Summary of Significant  Accounting  Policies" for a
description of the impairment  policy. The Partnership is not legally liable for
the obligations of the Local Limited Partnerships and is not otherwise committed
to provide additional support to them.  Therefore,  it does not recognize losses
once its  investment  in each of the Local  Limited  Partnerships  reaches zero.
Distributions  from  the  Local  Limited  Partnerships  are  accounted  for as a
reduction of the investment  balance until the investment  balance is reduced to
zero.  When  the  investment  balance  has  been  reduced  to  zero,  subsequent
distributions  received are recognized as income in the accompanying  statements
of operations.

For those  investments  where the  Partnership  has determined that the carrying
value  of its  investments  approximates  the  estimated  fair  value  of  those
investments,  the  Partnership's  policy is to recognize equity in income of the
Local  Limited  Partnerships  only to the extent of  distributions  received and
amortization  of  acquisition  costs  from  those  Local  Limited  Partnerships.
Therefore,  the  Partnership  limits its  recognition of equity  earnings to the
amount it expects to ultimately realize.

The   Partnership  has  no  carrying  value  in  investments  in  Local  Limited
Partnerships as of December 31, 2003.

In  December  2003,  the  Partnership  sold  its  interest  in  Henrico  limited
partnership  and  realized a gain on sale of limited  partnership  interests  of
approximately $2,322,000.  The gain is equal to the net proceeds received by the
Partnership as the Partnership had no remaining investment related to this Local
Limited  Partnership.  The Partnership used approximately  $2,260,000 of the net
proceeds to repay a portion of the interest on the non-recourse  note payable in
full satisfaction of the note. The remaining  principal balance of approximately
$1,675,000 and related accrued interest of approximately  $620,000 was forgiven.
Accordingly,  the Partnership  recognized a gain of approximately  $2,295,000 on
the extinguishment of debt during the year ended December 31, 2003.

In  March  2003,  the  Partnership  sold its  interest  in  South  Glen  limited
partnership  and  realized a gain on sale of limited  partnership  interests  of
approximately  $232,000 for the year ended  December 31, 2003. The gain is equal
to the net  proceeds  received  by the  Partnership  as the  Partnership  had no
remaining investment related to this Local Limited Partnership.  In addition, as
part of the sale, the Partnership's obligation on the past due non-recourse note
payable  of   approximately   $970,000  and  the  related  accrued  interest  of
approximately  $1,547,000 was  transferred to the  purchaser.  Accordingly,  the
Partnership recognized a gain of approximately  $2,517,000 on the extinguishment
of debt during the year ended December 31, 2003.

During August 2002, the Partnership  purchased from the holder the matured notes
owed  by DPM  Associates,  which  is a  limited  partner  of the  Local  Limited
Partnership  which owns Danbury Park Manor,  with a face value of $1,150,000 and
related  accrued  interest  of  approximately   $1,800,000,   for  approximately
$765,000.  In order to facilitate this purchase,  the Corporate  General Partner
loaned  the  Partnership  approximately  $518,000.  In October  2002,  the Local
Limited  Partnership  sold its investment  property.  The  Partnership  received
proceeds of approximately $1,502,000 during 2002 in full payment of its advances
and repayment of the notes it purchased in August 2002. The Partnership realized
a gain of  approximately  $869,000 for the year ended December 31, 2002.  During
the year ended December 31, 2003,  additional proceeds of approximately  $50,000
were received by the  Partnership and recorded as an additional gain on the sale
for the year ended December 31, 2003.

In September 2002, the Partnership's  interest in Dexter Apartments was lost due
to  foreclosure.  The note  holders  had  demanded  payment  on  their  past due
non-recourse  note;  however,  the Partnership did not have the means to satisfy
the  note.  Accordingly,  the  Partnership  recognized  a gain of  approximately
$743,000 on this extinguishment of debt during the year ended December 31, 2002.

In June 2002, the  Partnership's  interest in DeSoto  Apartments was lost due to
foreclosure.   The  note  holders  had  demanded   payment  on  their  past  due
non-recourse  note;  however,  the Partnership did not have the means to satisfy
the  note.  Accordingly,  the  Partnership  recognized  a gain of  approximately
$504,000 on this extinguishment of debt during the year ended December 31, 2002.

In February  2002,  the  Partnership  sold its  interest in the  Goodlette  Arms
limited partnership and realized a gain of approximately $8,448,000 for the year
ended December 31, 2002. The gain was equal to the net proceeds  received by the
Partnership as the Partnership had no remaining investment related to this Local
Limited Partnership.

On December  21,  2001,  the  Partnership  sold its  interest in Parkway  Towers
limited partnership and realized a gain of approximately $1,703,000 for the year
ended December 31, 2001. Net proceeds of approximately $1,801,000 were collected
during the year ended  December 31, 2002,  resulting  in the  recognition  of an
additional gain of approximately $108,000 for the year ended December 31, 2002.

Summaries of the condensed  combined balance sheet of the  aforementioned  Local
Limited  Partnerships  as of December  31,  2003,  and the  combined  results of
operations  for each of the two years in the period ended December 31, 2003, are
as follows:

                           CONDENSED COMBINED BALANCE SHEET
                          OF THE LOCAL LIMITED PARTNERSHIPS
                                    (in thousands)
                                                           December 31, 2003
Assets:
  Land                                                           $ 2,332
  Buildings and improvements, net of accumulated
   depreciation of approximately $35,498                          17,176
  Other assets                                                     7,268
      Total assets                                               $26,776
Liabilities and Partners' Deficit:
  Mortgage notes payable                                         $23,406
  Notes payable                                                    3,085
  Accrued interest on notes payable                                5,174
  Other liabilities                                                2,991
                                                                  34,656

Partners' Deficit                                                 (7,880)

      Total Liabilities and Partners' Deficit                    $26,776

                       CONDENSED COMBINED RESULTS OF OPERATIONS
                          OF THE LOCAL LIMITED PARTNERSHIPS
                                    (in thousands)

<TABLE>
<CAPTION>

                                                         Years Ended December 31,
                                                           2003             2002
                                                                         (Restated)
Revenues:
<S>                                                     <C>              <C>
   Rental and other                                     $ 11,309         $ 10,882

Expenses:
  Depreciation and amortization                            1,512            1,525
  Interest                                                   870              892
  Operating                                                9,347            8,641
    Total expenses                                        11,729           11,058

  Loss from continuing operations                           (420)            (176)
  Income from discontinued operations                         --              339
Net (loss) income                                       $   (420)        $    163
</TABLE>

Under recently adopted law and policy,  the United States  Department of Housing
and Urban Development ("HUD") has determined not to renew the Housing Assistance
Payment  ("HAP")  Contracts  on a long  term  basis on the  existing  terms.  In
connection with renewals of the HAP Contracts under such new law and policy, the
amount of rental  assistance  payments under renewed HAP Contracts will be based
on market rentals instead of above market  rentals,  which may be the case under
existing HAP Contracts.  The payments under the renewed HAP Contracts may not be
in an amount  that  would  provide  sufficient  cash  flow to  permit  owners of
properties  subject to HAP  Contracts to meet the debt service  requirements  of
existing  loans  insured by the Federal  Housing  Administration  of HUD ("FHA")
unless such mortgage loans are  restructured.  In order to address the reduction
in payments under HAP Contracts as a result of this new policy, the Multi-family
Assisted Housing Reform and  Affordability  Act of 1997 ("MAHRAA")  provides for
the  restructuring  of  mortgage  loans  insured  by the  FHA  with  respect  to
properties  subject  to the  Section 8 program.  Under  MAHRAA,  an  FHA-insured
mortgage  loan can be  restructured  into a first  mortgage  loan  which will be
amortized on a current basis and a low interest  second mortgage loan payable to
FHA which will only be payable on  maturity  of the first  mortgage  loan.  This
restructuring results in a reduction in annual debt service payable by the owner
of the  FHA-insured  mortgage  loan and is  expected  to result in an  insurance
payment from FHA to the holder of the  FHA-insured  loan due to the reduction in
the principal amount. MAHRAA also phases out project-based subsidies on selected
properties  serving  families not located in rental markets with limited supply,
converting such subsidies to a tenant-based subsidy.

When the HAP  Contracts are subject to renewal,  there can be no assurance  that
the Local Limited  Partnerships  in which the Partnership has an investment will
be permitted to restructure its mortgage indebtedness under MAHRAA. In addition,
the  economic  impact  on the  Partnership  of the  combination  of the  reduced
payments  under  the  HAP  Contracts  and  the  restructuring  of  the  existing
FHA-insured mortgage loans under MAHRAA is uncertain.

Note 4 - Notes Payable

Certain of the  Partnership's  investments  involved  purchases  of  partnership
interests   from   partners  who   subsequently   withdrew  from  the  operating
partnership.   As  of  December  31,  2003,  the  Partnership  is  obligated  on
non-recourse  notes payable of approximately  $8,180,000 bearing interest at 9.5
to 10 percent, to the sellers of the partnership interests.  Accrued interest is
approximately  $14,333,000  as of December 31, 2003.  The notes matured  between
December  1999 and January  2002.  These  obligations  and related  interest are
collateralized   by  the   Partnership's   investments   in  the  Local  Limited
Partnerships  and are payable only out of cash  distributions  from the investee
partnerships,  as defined in the notes.  Unpaid  interest was due at maturity of
the notes.

All  notes   payable  and  related   accrued   interest   payable,   aggregating
approximately  $22,513,000  as of December  31, 2003,  are  currently in default
under the terms of the notes.  During 2003, the Partnership  paid  approximately
$2,260,000 in accrued  interest  payments from proceeds from the sale of Henrico
Apartments.  During 2002,  the  Partnership  paid  approximately  $2,240,000  in
principal  payments and  approximately  $3,758,000 in accrued interest  payments
from proceeds from the sale of Goodlette  Arms and the  distribution  of surplus
cash associated  with Rand Grove in 2002.  Management is attempting to negotiate
extensions of the maturity dates on the notes payable.  If the  negotiations are
unsuccessful,  the  Partnership  could lose its investments in the Local Limited
Partnerships to foreclosure.

In connection with the sale of the partnership  interest in Henrico in 2003 (see
Note 3), the Partnership  paid  approximately  $2,260,000 in accrued interest on
the  non-recourse  note payable in full  satisfaction of the note. The remaining
principal and interest aggregating  approximately  $2,295,000 was forgiven.  The
Partnership  had  no  remaining   investment   related  to  this  Local  Limited
Partnership.

During the year ended  December 31, 2003, the  Partnership  reached a settlement
with both the  general  partner and the  holders of the  non-recourse  notes and
related accrued  interest payable related to South Glen Limited Dividend Housing
Association. The Partnership received net proceeds of approximately $232,000 for
the purchase of REAL VII's partnership  interest and resolution of disputes with
noteholders.  The Partnership had no remaining  investment related to this Local
Limited Partnership at December 31, 2003, and accordingly,  recognized a gain of
approximately   $2,517,000  on  the  extinguishment  of  debt  related  to  this
transaction.

During  the year  ended  December  31,  2003,  the  Partnership  entered  into a
settlement  agreement with the general partner of Rand Grove Village Partnership
wherein the general partner of the Local Limited  Partnership would purchase the
property in full satisfaction of the non-recourse note payable.  The Partnership
received  approximately  $100,000  during the year ended  December 31, 2003 as a
deposit pursuant to this settlement  agreement.  However, the general partner of
the Local Limited  Partnership has filed a motion to vacate such agreement.  The
general  partner's motion to vacate the settlement order was denied on April 20,
2004. The  Partnership is negotiating  with an unrelated third party to purchase
the property.  The  Partnership has no remaining  investment  balance related to
this Local Limited Partnership at December 31, 2003.

In connection  with the sale of the  partnership  interest in Goodlette  Arms in
2002 (See Note 3),  the  Partnership  paid off  non-recourse  notes and  related
accrued interest payable, related to this investment,  aggregating approximately
$5,992,000.

In  connection  with the  foreclosure  of the  partnership  interest  in  DeSoto
Apartments  in June 2002 (see Note 3), the  Partnership  wrote off  non-recourse
notes  and  related  accrued  interest  payable,  related  to  this  investment,
aggregating approximately $504,000, as the debt was extinguished pursuant to the
foreclosure.

In  connection  with the  foreclosure  of the  partnership  interest  in  Dexter
Apartments  in  September  2002  (see  Note  3),  the   Partnership   wrote  off
non-recourse  notes  and  related  accrued  interest  payable,  related  to this
investment,  aggregating  approximately  $743,000,  as the debt was extinguished
pursuant to the foreclosure.

Note 5 - Transactions with Affiliated Parties

Under  the  terms  of  the  Restated   Certificate   and  Agreement  of  Limited
Partnership, the Partnership is obligated to NAPICO for an annual management fee
equal to 0.5 percent of the original  remaining invested assets of the remaining
partnerships.  Invested  assets are  defined as the costs of  acquiring  project
interests,  including the proportionate  amount of the mortgage loans related to
the   Partnership's   interest  in  the  capital   accounts  of  the  respective
partnerships.  The fee was  approximately  $325,000  and  $351,000 for the years
ended December 31, 2003 and 2002, respectively.  During the years ended December
31, 2003 and 2002,  the  Partnership  made payments of accrued fees to NAPICO of
approximately  $352,000 and  $4,480,000,  respectively,  from  proceeds from the
sales of the  Partnership's  interest in Local Limited  Partnerships  (see "Note
3").

The Partnership  reimburses  NAPICO for certain  expenses.  The reimbursement to
NAPICO was  approximately  $43,000 and $44,000 for the years ended  December 31,
2003 and 2002,  respectively,  and are  included in general  and  administrative
expenses.

During the year ended December 31, 2002, the Corporate  General Partner advanced
approximately  $558,000 to the  Partnership to fund  operating  expenses and the
purchase of notes payable from one of the Local Limited  Partnerships (see "Note
3").  Interest was charged at the prime rate plus 2%. Interest  expense on these
advances was  approximately  $6,000 for the year ended December 31, 2002.  These
advances  and related  accrued  interest  were repaid to the  Corporate  General
Partner in October 2002.

AIMCO and its  affiliates  owned  583.79 Units or 1,167.58  limited  partnership
interests in the  Partnership  representing  7.54% of the  outstanding  Units at
December 31, 2003. A unit consists of two limited partnership  interests.  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, unitholders 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  Corporate  General  Partner.  Although  the
Corporate  General Partner owes fiduciary  duties to the limited partners of the
Partnership,  the Corporate  General partner also owes fiduciary duties to AIMCO
as its sole  stockholder.  As a  result,  the  duties of the  Corporate  General
Partner,  as  corporate  general  partner,  to the  Partnership  and its limited
partners may come into conflict with the duties of the Corporate General Partner
to AIMCO, as its sole stockholder.

Note 6 - Income Taxes

The  Partnership  is not taxed on its income.  The  partners  are taxed in their
individual  capacities based upon their  distributive share of the Partnership's
taxable  income  or  loss  and are  allowed  the  benefits  to be  derived  from
off-setting  their  distributive  share of the tax losses against taxable income
from other sources  subject to passive loss  limitations.  The taxable income or
loss differs from  amounts  included in the  statements  of  operations  because
different  methods  are used in  determining  the  losses of the  Local  Limited
Partnerships as discussed below. The tax loss is allocated to the partner groups
in accordance with Section 704(b) of the Internal  Revenue Code and therefore is
not necessarily proportionate to the interest percentage owned.

A  reconciliation  is as follows (in thousands,  except per limited  partnership
interest):

                                                  Years Ended December 31,
                                                     2003            2002

Net income per financial statements                $ 5,906         $ 8,862

  Other                                             (3,585)         (2,196)
  Partnership's share of limited local
   Partnership                                       3,737           2,342
Income per tax return                              $ 6,058         $ 9,008

Net income per limited partnership interest         $ 383           $ 568

The following is a reconciliation between the Partnership's reported amounts and
the federal tax basis of net liabilities:

                                                   December 31, 2003
                                                     (in thousands)

      Net deficit as reported                          $(22,389)
      Add (deduct):
        Deferred offering costs                           5,091
        Investment in Partnerships                      (19,011)
        Other                                            10,799
      Net deficit - federal tax basis                  $(25,510)

Note 7 - Contingencies

On August 27, 1998, two investors holding an aggregate of eight units of limited
partnership  interest  in Real  Estate  Associates  Limited  III (an  affiliated
partnership in which National  Partnership  Investments Corp.  ("NAPICO") is the
corporate  general partner) and two investors holding an aggregate of five units
of limited  partnership  interests in Real Estate Associates Limited VI (another
affiliated  partnership  in  which  NAPICO  is the  corporate  general  partner)
commenced  an  action  against  the   Partnership,   NAPICO  and  certain  other
defendants. The claims included, but were not limited to, claims for breaches of
fiduciary duty to the limited  partners of certain  NAPICO-managed  partnerships
and  violations of securities  laws by making  materially  false and  misleading
statements in the consent  solicitation  statements sent to the limited partners
of such  partnerships  relating  to  approval  of the  transfer  of  partnership
interests  in  limited  partnerships,  owning  certain  of  the  properties,  to
affiliates of Casden Properties,  Inc.,  organized by an affiliate of NAPICO. On
August 4, 1999, one investor holding one unit of limited partnership interest in
Housing Programs Limited (another affiliated  partnership in which NAPICO is the
corporate  general partner)  commenced a virtually  identical action against the
Partnership,  NAPICO and certain other entities.  The second action was subsumed
in the first action, and was certified as a class action.

On April 29, 2003, the court entered  judgment  against NAPICO and certain other
defendants  in the amount of  approximately  $25.2  million  for  violations  of
securities laws and against NAPICO for approximately  $67.3 million for breaches
of fiduciary  duty, both amounts plus interest of  approximately  $25.6 million,
and for punitive damages against NAPICO in the amount of $2.6 million.

On August 11, 2003,  Apartment  Investment and Management  Company ("AIMCO") and
NAPICO  entered  into  a  Stipulation  of  Settlement   (the   "Stipulation   of
Settlement")  with the  plaintiff  class (the  "Plaintiffs")  and their  counsel
relating  to the  settlement  of the  litigation.  The  principal  terms  of the
Stipulation of Settlement include,  among other things (1) payments in both cash
($29 million) and stock ($19  million) by Alan I. Casden,  on behalf of himself,
NAPICO and other defendants,  to the Plaintiffs,  (2) guaranteed  payments in an
aggregate  amount  of $35  million  ($7  million  per  year for 5  years),  plus
interest,  by NAPICO to the  Plaintiffs,  (3) a release of claims of all parties
associated with the litigation and (4) joint agreement by the parties to request
that a new judgment be entered in the litigation to, among other things, expunge
the judgment originally entered against NAPICO and the other defendants.

In connection with the Stipulation of Settlement, on August 12, 2003, NAPICO and
AIMCO executed a Settlement  Agreement  (the  "Settlement  Agreement")  with the
prior  shareholders  of  Casden  Properties,  Inc.  The  principal  terms of the
Settlement  Agreement  include,   among  other  things,  that  (1)  NAPICO  will
voluntarily discontinue the action it commenced

on May 13, 2003 against the former  shareholders of Casden Properties,  Inc. and
other  indemnitors in the Casden Merger,  (2) Alan I. Casden and certain related
entities will resolve certain pending claims for indemnification made by NAPICO,
AIMCO and their  affiliates,  (3) AIMCO or an affiliate will provide $25 million
of the $29 million in cash that Alan I. Casden is obligated to provide under the
Stipulaton of Settlement in exchange for 531,915  shares of AIMCO Class A Common
Stock owned by The Casden  Company,  and (4) The Casden  Company will promise to
pay to NAPICO an  aggregate  amount of $35  million  ($7  million per year for 5
years), plus interest,  on a secured,  nonrecourse basis. The Casden Company can
prepay  its  obligation  set forth in item (4) above in shares of AIMCO  Class A
Common  Stock having a value based on the greater of $47 per share or the market
value of such shares at the time of payment.

On December 30, 2003,  the  Stipulation of Settlement  with the plaintiff  class
(the  "Plaintiffs")  and their counsel  relating to the settlement of litigation
against the Registrant,  National Partnership  Investments Corp.  ("NAPICO") and
certain  other  defendants  became  effective in accordance  with its terms.  In
addition,  on  December  30,  2003,  the  Settlement  Agreement  with the  prior
shareholders of Casden  Properties,  Inc.,  NAPICO and Apartment  Investment and
Management Company ("AIMCO") also closed in accordance with its terms.

Other Legal Matters

The  holder of a  Partnership  note  payable in the  amount of  $1,675,000  plus
accrued interest  payable of  approximately  $2,880,000 as of December 31, 2003,
sought to compel the  Partnership  to  execute a UCC-1  financing  statement  to
perfect  plaintiff's  security  interest  in the  Partnership's  interest in the
Henrico  limited  partnership.  On December 11, 2003, the  Partnership  sold its
interest  in the Henrico  limited  partnership.  The  Partnership  received  net
proceeds of approximately $2,322,000, approximately $2,260,000 of which was used
to repay a portion of the interest on the note payable in full  satisfaction  of
the note.  The  remaining  balance of principal  and  interest of  approximately
$2,295,000 was forgiven.  The Partnership  had no investment  balance related to
this Local Limited Partnership.

During the year ended  December 31, 2003, the  Partnership  reached a settlement
with both the general partner and the holders of the non-recourse  notes payable
related to South Glen Limited  Dividend  Housing  Association.  The  Partnership
received net proceeds of  approximately  $232,000 for the purchase of REAL VII's
partnership   interest  and  resolution  of  disputes  with   noteholders.   The
Partnership  had  no  remaining   investment   related  to  this  Local  Limited
Partnership.

During  the year  ended  December  31,  2003,  the  Partnership  entered  into a
settlement  agreement with the general partner of Rand Grove Village Partnership
wherein the general partner of the Local Limited  Partnership would purchase the
property in full satisfaction of the non-recourse note payable.  The Partnership
received  approximately  $100,000  during the year ended  December 31, 2003 as a
deposit pursuant to this settlement  agreement.  However, the general partner of
the Local Limited  Partnership has filed a motion to vacate such agreement.  The
general  partner's motion to vacate the settlement order was denied on April 20,
2004. The  Partnership is negotiating  with an unrelated third party to purchase
the property.  The  Partnership has no remaining  investment  balance related to
this Local Limited Partnership at December 31, 2003.

In addition to the litigation  discussed above, the Corporate General Partner is
involved in various other  lawsuits  arising from  transactions  in the ordinary
course of  business.  In the opinion of  management  and the  Corporate  General
Partner,   the  claims  will  not  result  in  any  material  liability  to  the
Partnership.



<PAGE>


Note  8  -  Real  Estate  and   Accumulated   Depreciation  of  Local  Limited
         Partnerships in which Real VII Has Invested

All amounts in thousands

<TABLE>
<CAPTION>

                                                         Buildings
                                                            And
                                        Notes             Related
                                       Payable            Personal
                           Mortgage  and Accrued          Property           Accumulated
       Description          Notes     Interest     Land    Total(2)(3)       Depreciation (3)

<S>                        <C>          <C>       <C>     <C>        <C>        <C>
Aristocrat Manor           $ 3,074      $ --      $ 265   $ 4,394    $ 4,659    $ 1,960
Arkansas City Apts.            489          --       22       505      527         214
Bellair Manor Apts.            703          --      153     1,547    1,700        1,006
Birch Manor Apts. I            322       1,061       61     1,323    1,384          860
Birch Manor Apts. II           575         955       50     1,386    1,436          901
Bluewater Apts.              1,370          --      130     4,200    4,330        2,530
Clarkwood Apts. I              360       1,406       69     1,532    1,601          996
Clarkwood Apts. II             737       2,176       93     2,628    2,721        1,708
Hampshire House              2,498          --      101     3,945    4,046        2,564
Ivywood Apts.                1,307          --      200     2,939    3,139        1,914
Jasper County Prop.            650          --       33       833      866          751
Nantucket Apts.                458          --       35     1,304    1,339          849
Newton Apts.                   981          --       55     1,111    1,166        1,065
Oak Hill Apts.               1,557          --       76     3,089    3,165        2,010
Oakview Apts.                1,090          --       75     1,180    1,255          475
Oakwood Park I Apts.           124       1,070       63       854      917          556
Oakwood Park II Apts.          243       1,591      102     1,379    1,481          896
Pachuta Apts.                  439          --       21       505      526          493
Rand Grove Village           2,142          --      491     6,886    7,377        6,489
Richards Park Apts.            565          --       52     1,419    1,471          915
Shubuta Properties             437          --       23       590      613          530
Tradewinds East              1,829          --      118     5,719    5,837        3,602
Warren Heights Apts. I         934          --       22     2,203    2,225        1,432
Yorkview Estates               522          --       22     1,203    1,225          782
Total                      $23,406     $ 8,259    $2,332  $ 52,674  $55,006    $ 35,498
</TABLE>

(2) Reconciliation of real estate and accumulated depreciation

                                                 Years Ended December 31,
                                                   2003           2002
                                                      (in thousands)

Real Estate

Balance at beginning of year                     $ 64,957       $ 84,151
Improvements (disposals) during the period            272        (3,086)
Loss of investments in Local Limited
 Partnerships                                     (10,223)      (16,108)
Balance at end of year                           $ 55,006       $ 64,957

                                                 Years Ended December 31,
                                                   2003           2002
                                                      (in thousands)
Accumulated Depreciation

Balance at beginning of year                     $ 42,621       $ 52,575
Depreciation expense for the period                 1,512          1,666
Loss of investments in Local Limited
 Partnerships                                      (8,635)       (8,857)
Disposals of rental properties                         --        (2,763)
Balance at end of year                           $ 35,498       $ 42,621

Note 9 - Abandonment Of Limited Partnership Interests

In 2003 and 2002, the number of Limited  Partnership  Interests  decreased by 30
and  95  interests  due to  limited  partners  abandoning  their  interests.  In
abandoning  his  or her  Limited  Partnership  Interest(s),  a  limited  partner
relinquishes all right, title, and interest in the partnership as of the date of
abandonment.  However,  the limited partner is allocated his or her share of net
income  or loss for that  year.  The  income  or loss  per  Limited  Partnership
Interest in the accompanying statements of operations is calculated based on the
number of interests outstanding at the beginning of the year.


<PAGE>




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 Corporate  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  Corporate  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 and Executive Officers of the Registrant

Real Estate Associates  Limited VII (the  "Partnership" or the "Registrant") has
no officers or directors.  The general  partner  responsible  for conducting the
business  of  the  Partnership  is  National  Partnership   Investments  Corp  a
California Corporation ("NAPICO" or the "Corporate General Partner").

The names and ages of, as well as the positions and offices held by, the present
directors  and officers of NAPICO are set forth  below:  The  Corporate  General
Partner manages and controls  substantially all of the Partnership's affairs and
has general  responsibility  and ultimate authority in all matters affecting its
business.  There are no family  relationships  between or among any directors or
officers.

Peter K. Kompaniez              59    Director
David R. Robertson              38    President, Chief Executive Officer
                                        and Director
Charles McKinney                52    Senior Vice President and Director
                                        of Asset Management
Jeffrey H. Sussman              38    Senior Vice President, General
                                        Counsel and Secretary
Brian H. Shuman                 41    Senior Vice President and Chief
                                        Financial Officer

Peter K.  Kompaniez has been Director of the Corporate  General  Partner since
April  1,  2002.  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  Corporate  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.

David R. Robertson has been President, Chief Executive Officer and a Director of
the Corporate  General  Partner since  October 2002.  Mr.  Robertson has been an
Executive  Vice  President  of AIMCO  since  February  2002,  and was  appointed
President and Chief  Executive  Officer of AIMCO  Capital in October  2002.  Mr.
Robertson  is  responsible  for  property   operations,   asset  management  and
transaction   activities   within  AIMCO   Capital's   portfolio  of  affordable
properties,  and for  redevelopment  and  construction  activities  for both the
conventional  and  affordable  property  portfolios.  Since  February  1996, Mr.
Robertson has been Chairman and Chief Executive Officer of Robeks Corporation, a
privately held chain of specialty food stores.

Charles McKinney has been Senior Vice President and Director of Asset Management
of the  Corporate  General  Partner and AIMCO Capital since January 2003 and has
overall responsibility for monitoring the construction, lease-up, operations and
compliance  issues for all  assets  constituting  a part of  AIMCO's  affordable
portfolio.  Mr.  McKinney  joined AIMCO as Vice President of Transactions in the
Affordable  Group  in  June  2002  and  had   responsibility   for  value  added
dispositions  of  affordable  properties  in the  Western  portion of the United
States.  From  September  2000  through  May 2002,  Mr.  McKinney  was  Managing
Underwriter for Real Estate Recovery, Inc. where he was responsible for the real
estate loan underwriting and loan review for the company's  clients.  From March
1998 through August 2000, Mr.  McKinney was the Executive  Managing  Director of
American Capital Advisors, Inc. an investment banking company.

Jeffrey H. Sussman has been Senior Vice President, General Counsel and Secretary
of the Corporate  General  Partner since joining  NAPICO in 1998. Mr. Sussman is
responsible for the legal affairs of NAPICO and its affiliates. Prior to joining
NAPICO in 1998, Mr. Sussman was an associate with the law firm of Rus, Miliband,
Williams & Smith in Irvine,  California.  His  practice  emphasized  real estate
finance  and  insolvency  law and  included  the  representation  of  borrowers,
lenders, and court-appointed  trustees in matters involving apartment complexes,
retail centers and hotels.

Brian H. Shuman has been Senior Vice  President and Chief  Financial  Officer of
the  Corporate  General  Partner  since  joining  NAPICO in 2000.  Mr. Shuman is
responsible  for  the  financial  affairs  of  NAPICO  as  well  as the  limited
partnership  sponsored by it. From 1996 until joining NAPICO in August 2000, Mr.
Shuman was Vice President - Finance for Preferred  Health  Management  Inc., the
largest  provider  of  worker   compensation   diagnostic  imaging  services  in
California formed in 1996, and was responsible for establishing and managing the
accounting, billing, collection, treasury and financial reporting departments.

The board of directors of the Corporate General Partner does not have a separate
audit  committee.  As such,  the board of  directors  of the  Corporate  General
Partner fulfills the functions of an audit committee. The board of directors has
determined  that Brian H. Shuman meets the  requirement  of an "audit  committee
financial expert".

The directors and officers of the Corporate  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

None of the directors and officers of the Corporate 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

(a)   Security Ownership of Certain Beneficial Owners

The General Partners own all of the outstanding general partnership interests of
REAL VII; no person is known to own  beneficially  in excess of 5 percent of the
outstanding limited partnership interests.

The following table sets forth certain information regarding limited partnership
interests  of the  Partnership  owned by each  person  or entity as known by the
Partnership to own  beneficially or exercise voting or dispositive  control over
more than 5% of the Partnership's  limited partnership  interests as of December
31, 2003.

            Name of Beneficial Owner             Number of Interests  % of Class

AIMCO Properties, L.P.                                 1,167.58          7.54%
  (affiliate of the Corporate General Partner)

The business address of AIMCO Properties,  L.P. is 4582 S. Ulster St. Parkway,
Suite 1100, Denver, Colorado 80237.

(b)    None of the officers or directors of the  Corporate  General  Partner own
       directly or beneficially any limited partnership interests in REAL VII.


<PAGE>


Item 12.    Certain Relationships and Related Transactions

Under  the  terms  of  the  Restated   Certificate   and  Agreement  of  Limited
Partnership, the Partnership is obligated to NAPICO for an annual management fee
equal to 0.5 percent of the original  remaining invested assets of the remaining
partnerships.  Invested  assets are  defined as the costs of  acquiring  project
interests,  including the proportionate  amount of the mortgage loans related to
the   Partnership's   interest  in  the  capital   accounts  of  the  respective
partnerships.  The fee was  approximately  $325,000  and  $351,000 for the years
ended December 31, 2003 and 2002, respectively.  During the years ended December
31, 2003 and 2002,  the  Partnership  made payments of accrued fees to NAPICO of
approximately  $352,000 and  $4,480,000,  respectively,  from  proceeds from the
sales of the Partnership's interest in Local Limited Partnerships.

The Partnership  reimburses  NAPICO for certain  expenses.  The reimbursement to
NAPICO was  approximately  $43,000 and $44,000 for the years ended  December 31,
2003 and 2002,  respectively,  and are  included in general  and  administrative
expenses.

During the year ended December 31, 2002, the Corporate  General Partner advanced
approximately  $558,000 to the  Partnership to fund  operating  expenses and the
purchase of notes payable from one of the Local Limited  Partnerships (see "Item
7. Financial  Statements - Note 3"). Interest was charged at the prime rate plus
2%.  Interest  expense on these advances was  approximately  $6,000 for the year
ended December 31, 2002. These advances and related accrued interest were repaid
to the Corporate General Partner in October 2002.

AIMCO and its  affiliates  owned  583.79 Units or 1,167.58  limited  partnership
interests in the  Partnership  representing  7.54% of the  outstanding  Units at
December 31, 2003. A unit consists of two limited partnership  interests.  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, unitholders 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  Corporate  General  Partner.  Although  the
Corporate  General Partner owes fiduciary  duties to the limited partners of the
Partnership,  the Corporate  General partner also owes fiduciary duties to AIMCO
as its sole  stockholder.  As a  result,  the  duties of the  Corporate  General
Partner,  as  corporate  general  partner,  to the  Partnership  and its limited
partners may come into conflict with the duties of the Corporate General Partner
to AIMCO, as its sole stockholder.

ITEM 13.    Exhibits and Reports on Form 8-K

a)    Exhibits

      Exhibit           3  Restated   Certificate   and   Agreement  of  Limited
                        Partnership dated May 24, 1983 filed with the Securities
                        and Exchange  Commission on Form S-11 No 2-84816,  which
                        is hereby incorporated by reference.

      Exhibit           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.

      Exhibit           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.

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

      Exhibit 99.1      Independent   Auditors   Report  for   Bellair   Manor
                        Apartments

      Exhibit 99.2      Independent    Auditors   Report   for   Birch   Manor
                        Apartments - Phase I

      Exhibit 99.3      Independent    Auditors   Report   for   Birch   Manor
                        Apartments - Phase II

      Exhibit 99.4      Independent  Auditors Report for Clarkwood  Apartments
                        - Phase I

      Exhibit 99.5      Independent  Auditors Report for Clarkwood  Apartments
                        - Phase II

      Exhibit 99.6      Independent   Auditors   Report  for  Hampshire  House
                        Apartments, Ltd.

      Exhibit 99.7      Independent Auditors Report for Ivywood Apartments

      Exhibit 99.8      Independent Auditors Report for Oak Hill Apartments

      Exhibit 99.9      Independent   Auditors   Report   for   Oakwood   Park
                        Apartments - Phase I

      Exhibit 99.10     Independent   Auditors   Report   for   Oakwood   Park
                        Apartments - Phase II

      Exhibit 99.11     Independent   Auditors   Report  for   Richards   Park
                        Apartments

      Exhibit 99.12     Independent   Auditors   Report  for  Warren   Heights
                        Apartments

      Exhibit 99.13     Independent Auditors Report for Yorkview Estates, Ltd.

      Exhibit 99.14     Independent Auditors Report for Aristocrat Manor, Ltd.

      Exhibit 99.15     Independent   Auditors   Report  for   Arkansas   City
                        Apartments

      Exhibit 99.16     Independent  Auditors  Report  for  Bluewater  Limited
                        Partnership

      Exhibit 99.17     Independent Auditors Report for Mount Union Apartments,
                        Ltd.

      Exhibit 99.18     Independent Auditors Report for Newton Apartments,
                        Ltd.

      Exhibit 99.19     Independent Auditors Report for Oakview Apartments

      Exhibit 99.20     Independent  Auditors  Report for Rand  Grove  Village
                        Partnership

      Exhibit 99.21     Independent   Auditors   Report  for  Tradewinds  East
                        Associates Limited Dividend Housing Association

b) Reports on Form 8-K filed during the quarter ended December 31, 2003:

Current  Report on Form 8-K dated  November  24, 2003 and filed on November  26,
2003, disclosing the court approval of the Stipulation of Settlement between the
Corporate General Partner and the plaintiffs.

Current  Report on Form 8-K dated December 30, 2003 and filed on January 2, 2004
disclosing  the principal  terms of the  Stipulation  of Settlement  between the
Corporate General Partner and the plaintiffs.

Item 14.    Principal Accounting Fees and Services

The Corporate  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
approximately $44,000 for both 2003 and 2002.

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


<PAGE>


                                   SIGNATURES


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


                       REAL ESTATE ASSOCIATES LIMITED VII

                        By:   NATIONAL PARTNERSHIP INVESTMENTS CORP.
                              Corporate General Partner


                                    By:   /s/David R. Robertson
                                          David R. Robertson
                                          President and Chief Executive
                                          Officer


                                    By:   /s/Brian H. Shuman
                                          Brian H. Shuman
                                          Senior Vice President and
                                          Chief Financial Officer


                                    Date: April 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
dates indicated.


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


/s/David R. Robertson         President, Chief Executive    Date: April 26, 2004
David R. Robertson             Officer and Director


/s/Brian H. Shuman            Senior Vice President and     Date: April 26, 2004
Brian H. Shuman                 Chief Financial Officer


<PAGE>


                       REAL ESTATE ASSOCIATES LIMITED VII
                                  EXHIBIT INDEX


Exhibit     Description of Exhibit

   3        Restated  Certificate and Agreement of Limited Partnership dated May
            24, 1983 filed with the Securities  and Exchange  Commission on Form
            S-11 No 2-84816, which is hereby incorporated by reference.

   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.

   99.1     Independent Auditors Report for Bellair Manor Apartments

   99.2     Independent Auditors Report for Birch Manor Apartments - Phase I

   99.3     Independent Auditors Report for Birch Manor Apartments - Phase II

   99.4     Independent Auditors Report for Clarkwood Apartments - Phase I

   99.5     Independent Auditors Report for Clarkwood Apartments - Phase II

   99.6     Independent Auditors Report for Hampshire House Apartments, Ltd.

   99.7     Independent Auditors Report for Ivywood Apartments

   99.8     Independent Auditors Report for Oak Hill Apartments

   99.9     Independent Auditors Report for Oakwood Park Apartments - Phase I

   99.10    Independent Auditors Report for Oakwood Park Apartments - Phase II

   99.11    Independent Auditors Report for Richards Park Apartments

   99.12    Independent Auditors Report for Warren Heights Apartments

   99.13    Independent Auditors Report for Yorkview Estates, Ltd.

   99.14    Independent Auditors Report for Aristocrat Manor, Ltd.

   99.15    Independent Auditors Report for Arkansas City Apartments

   99.16    Independent Auditors Report for Bluewater Limited Partnership

   99.17    Independent Auditors Report for Mount Union Apartments, Ltd.

   99.18    Independent Auditors Report for Newton Apartments, Ltd.

   99.19    Independent Auditors Report for Oakview Apartments

   99.20    Independent Auditors Report for Rand Grove Village Partnership

   99.21    Independent   Auditors   Report  for  Tradewinds  East  Associates
            Limited Dividend Housing Association


<PAGE>




Exhibit 31.1


                                  CERTIFICATION


I, David R. Robertson, certify that:


1.    I have  reviewed  this  annual  report  on  Form  10-KSB  of  Real  Estate
      Associates Limited VII;

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:  April 26, 2004

                                    /s/David R. Robertson
                                    David R. Robertson
                                    President and Chief  Executive  Officer of
                                    National Partnership Investments Corp.,
                                    equivalent of the chief executive  officer
                                    of the Partnership


<PAGE>



Exhibit 31.2


                                  CERTIFICATION


I, Brian H. Shuman, certify that:


1.    I have  reviewed  this  annual  report  on  Form  10-KSB  of  Real  Estate
      Associates Limited VII;

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:  April 26, 2004
                                    /s/Brian H. Shuman
                                    Brian H. Shuman
                                    Senior Vice President and Chief Financial
                                    Officer of National Partnership
                                    Investments Corp., 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 Real Estate  Associates
Limited VII (the  "Partnership"),  for the year ended December 31, 2003 as filed
with the Securities and Exchange  Commission on the date hereof (the  "Report"),
David R.  Robertson,  as the  equivalent of the chief  executive  officer of the
Partnership,  and Brian H.  Shuman,  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/David R. Robertson
                                    Name:  David R. Robertson
                                    Date:  April 26, 2004


                                           /s/Brian H. Shuman
                                    Name:  Brian H. Shuman
                                    Date:  April 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.



<PAGE>


Exhibit 99.1


Independent Auditors' Report

To the Partners
Bellair Manor Apartments, Limited Partnership

We have audited the  accompanying  balance  sheets of Bellair Manor  Apartments,
Limited Partnership,  FHA Project No.  042-44174-LDP (the "Partnership"),  as of
December 31, 2003 and 2002 and the related statements of operations,  changes in
partners'  equity  and cash  flows for the years  then  ended.  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 U.S.  generally  accepted  auditing
standards  and  the  standards  applicable  to  financial  audits  contained  in
Government  Auditing  Standards issued by the Comptroller  General of 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
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 Bellair  Manor  Apartments,
Limited  Partnership  as of  December  31,  2003 and 2002 and the results of its
operations  and its cash flows for the years then ended in conformity  with U.S.
generally accepted accounting principles.

As discussed in Note 3, the  Partnership's  partners could change in 2004, which
might result in a change in Partnership operations. The ultimate effect, if any,
on the  Partnership's  operations  of a change in ownership  cannot be presently
determined.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  February  12, 2004 on our  consideration  of the  Partnership's  internal
control and on our tests of its  compliance  with  certain  provisions  of laws,
regulations,  contracts  and grants.  Those  reports are an integral  part of an
audit performed in accordance with Government  Auditing  Standards and should be
read in conjunction with this report in considering the results of our audits.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The  accompanying  additional  financial
data (shown on pages 12 through 14) are  presented for the purpose of additional
analysis and are not a required  part of the basic  financial  statements of the
Partnership.  Such  information  has been  subjected to the auditing  procedures
applied in the audit of the basic financial  statements and, in our opinion,  is
fairly  stated in all  material  respects  in  relation  to the basic  financial
statements taken as a whole.

/s/Altschuler, Melvoin and Glasser LLP

Los Angeles, California
February 12, 2004


<PAGE>


Exhibit 99.2

Independent Auditors' Report

To the Partners
Birch Manor Apartments - Phase I

We have  audited the  accompanying  balance  sheets of Birch Manor  Apartments -
Phase I, FHA Project No. 042-44031-LDP (the  "Partnership"),  as of December 31,
2003 and 2002 and the related statements of income,  changes in partners' equity
and cash flows for the years then  ended.  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 U.S.  generally  accepted  auditing
standards  and  the  standards  applicable  to  financial  audits  contained  in
Government  Auditing  Standards issued by the Comptroller  General of 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
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 Birch Manor Apartments - Phase
I as of December  31, 2003 and 2002 and the  results of its  operations  and its
cash flows for the years then ended in conformity with U.S.  generally  accepted
accounting principles.

As discussed in Note 3, the  Partnership's  partners could change in 2004, which
might result in a change in Partnership operations. The ultimate effect, if any,
on the  Partnership's  operations  of a change in ownership  cannot be presently
determined.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  February  12, 2004 on our  consideration  of the  Partnership's  internal
control and on our tests of its  compliance  with  certain  provisions  of laws,
regulations,  contracts  and grants.  Those  reports are an integral  part of an
audit performed in accordance with Government  Auditing  Standards and should be
read in conjunction with this report in considering the results of our audits.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The  accompanying  additional  financial
data (shown on pages 12 through 14) are  presented for the purpose of additional
analysis and are not a required  part of the basic  financial  statements of the
Partnership.  Such  information  has been  subjected to the auditing  procedures
applied in the audit of the basic financial  statements and, in our opinion,  is
fairly  stated in all  material  respects  in  relation  to the basic  financial
statements taken as a whole.

/s/Altschuler, Melvoin and Glasser LLP

Los Angeles, California
February 12, 2004


<PAGE>


Exhibit 99.3

Independent Auditors' Report

To the Partners
Birch Manor Apartments - Phase II

We have  audited the  accompanying  balance  sheets of Birch Manor  Apartments -
Phase II, FHA Project No. 042-44144-LDP (the "Partnership"),  as of December 31,
2003 and 2002 and the related  statements  of  operations,  changes in partners'
equity and cash flows for the years then ended.  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 U.S.  generally  accepted  auditing
standards  and  the  standards  applicable  to  financial  audits  contained  in
Government  Auditing  Standards issued by the Comptroller  General of 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
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 Birch Manor Apartments - Phase
II as of December  31, 2003 and 2002 and the results of its  operations  and its
cash flows for the years then ended in conformity with U.S.  generally  accepted
accounting principles.

As discussed in Note 3, the  Partnership's  partners could change in 2004, which
might result in a change in Partnership operations. The ultimate effect, if any,
on the  Partnership's  operations  of a change in ownership  cannot be presently
determined.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  February  12, 2004 on our  consideration  of the  Partnership's  internal
control and on our tests of its  compliance  with  certain  provisions  of laws,
regulations,  contracts  and grants.  Those  reports are an integral  part of an
audit performed in accordance with Government  Auditing  Standards and should be
read in conjunction with this report in considering the results of our audit.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The  accompanying  additional  financial
data (shown on pages 12 through 14) are  presented for the purpose of additional
analysis and are not a required  part of the basic  financial  statements of the
Partnership.  Such  information  has been  subjected to the auditing  procedures
applied in the audit of the basic financial  statements and, in our opinion,  is
fairly  stated in all  material  respects  in  relation  to the basic  financial
statements taken as a whole.

/s/Altschuler, Melvoin and Glasser LLP

Los Angeles, California
February 12, 2004


<PAGE>



Exhibit 99.4

Independent Auditors' Report

To the Partners
Clarkwood Apartments - Phase I

We have audited the accompanying  balance sheets of Clarkwood Apartments - Phase
I, FHA Project No.  042-44009-LDP (the  "Partnership"),  as of December 31, 2003
and 2002 and the related  statements of income,  changes in partners' equity and
cash  flows  for the  years  then  ended.  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 U.S.  generally  accepted  auditing
standards  and  the  standards  applicable  to  financial  audits  contained  in
Government  Auditing  Standards issued by the Comptroller  General of 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
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 Clarkwood Apartments - Phase I
as of December 31, 2003 and 2002 and the results of its  operations and its cash
flows for the years  then  ended in  conformity  with  U.S.  generally  accepted
accounting principles.

As discussed in Note 3, the  Partnership's  partners could change in 2004, which
might result in a change in Partnership operations. The ultimate effect, if any,
on the  Partnership's  operations  of a change in ownership  cannot be presently
determined.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  February  12, 2004 on our  consideration  of the  Partnership's  internal
control and on our tests of its  compliance  with  certain  provisions  of laws,
regulations,  contracts  and grants.  Those  reports are an integral  part of an
audit performed in accordance with Government  Auditing  Standards and should be
read in conjunction with this report in considering the results of our audits.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The  accompanying  additional  financial
data (shown on pages 12 through 14) are  presented for the purpose of additional
analysis and are not a required  part of the basic  financial  statements of the
Partnership.  Such  information  has been  subjected to the auditing  procedures
applied in the audits of the basic financial  statements and, in our opinion, is
fairly  stated in all  material  respects  in  relation  to the basic  financial
statements taken as a whole.

/s/Altschuler, Melvoin and Glasser LLP

Los Angeles, California
February 12, 2004


<PAGE>


Exhibit 99.5

Independent Auditors' Report

To the Partners
Clarkwood Apartments - Phase II

We have audited the accompanying  balance sheets of Clarkwood Apartments - Phase
II, FHA Project No. 042-44066-PM-L8 (the "Partnership"), as of December 31, 2003
and 2002 and the related  statements of operations,  changes in partners' equity
and cash flows for the years then  ended.  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 U.S.  generally  accepted  auditing
standards  and  the  standards  applicable  to  financial  audits  contained  in
Government  Auditing  Standards issued by the Comptroller  General of 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
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 Clarkwood Apartments - Phase II
as of December 31, 2003 and 2002 and the results of its  operations and its cash
flows for the years  then  ended in  conformity  with  U.S.  generally  accepted
accounting principles.

As discussed in Note 3, the  Partnership's  partners could change in 2004, which
might result in a change in Partnership operations. The ultimate effect, if any,
on the  Partnership's  operations  of a change in ownership  cannot be presently
determined.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  February  12, 2004 on our  consideration  of the  Partnership's  internal
control and on our tests of its  compliance  with  certain  provisions  of laws,
regulations,  contracts  and grants.  Those  reports are an integral  part of an
audit performed in accordance with Government  Auditing  Standards and should be
read in conjunction with this report in considering the results of our audit.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The  accompanying  additional  financial
data (shown on pages 12 through 14) are  presented for the purpose of additional
analysis and are not a required  part of the basic  financial  statements of the
Partnership.  Such  information  has been  subjected to the auditing  procedures
applied in the audit of the basic financial  statements and, in our opinion,  is
fairly  stated in all  material  respects  in  relation  to the basic  financial
statements taken as a whole.


/s/Altschuler, Melvoin and Glasser LLP

Los Angeles, California
February 12, 2004


<PAGE>


Exhibit 99.6

Independent Auditors' Report

To the Partners
Hampshire House Apartments, Ltd.

We have audited the accompanying  balance sheets of Hampshire House  Apartments,
Ltd., FHA Project No. 042-44274-LDP (the "Partnership"), as of December 31, 2003
and  2002  and the  related  statements  of  operations,  changes  in  partners'
deficiency and cash flows for the years then ended.  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 U.S.  generally  accepted  auditing
standards  and  the  standards  applicable  to  financial  audits  contained  in
Government  Auditing  Standards issued by the Comptroller  General of 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
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 Hampshire House  Apartments,
Ltd. as of December 31, 2003 and 2002 and the results of its  operations and its
cash flows for the years then ended in conformity with U.S.  generally  accepted
accounting principles.

As discussed in Note 3, the  Partnership's  partners could change in 2004, which
might result in a change in Partnership operations. The ultimate effect, if any,
on the  Partnership's  operations  of a change in ownership  cannot be presently
determined.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  February  12, 2004 on our  consideration  of the  Partnership's  internal
control and on our tests of its  compliance  with  certain  provisions  of laws,
regulations,  contracts  and grants.  Those  reports are an integral  part of an
audit performed in accordance with Government  Auditing  Standards and should be
read in conjunction with this report in considering the results of our audit.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The  accompanying  additional  financial
data (shown on pages 12 through 14) are  presented for the purpose of additional
analysis and are not a required  part of the basic  financial  statements of the
Partnership.  Such  information  has been  subjected to the auditing  procedures
applied in the audit of the basic financial  statements and, in our opinion,  is
fairly  stated in all  material  respects  in  relation  to the basic  financial
statements taken as a whole.

/s/Altschuler, Melvoin and Glasser LLP

Los Angeles, California
February 12, 2004


<PAGE>


Exhibit 99.7

Independent Auditors' Report

To the Partners
Ivywood Apartments Limited Partnership

We have audited the accompanying  balance sheets of Ivywood  Apartments  Limited
Partnership,  FHA Project No. 043-44072-LDP (the "Partnership"),  as of December
31, 2003 and 2002 and the related statements of operations, changes in partners'
equity and cash flows for the years then ended.  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 U.S.  generally  accepted  auditing
standards  and  the  standards  applicable  to  financial  audits  contained  in
Government  Auditing  Standards issued by the Comptroller  General of 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
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 Ivywood  Apartments  Limited
Partnership  as of December 31, 2003 and 2002 and the results of its  operations
and its cash flows for the years then ended in  conformity  with U.S.  generally
accepted accounting principles.

As discussed in Note 3, the  Partnership's  partners could change in 2004, which
might result in a change in Partnership operations. The ultimate effect, if any,
on the  Partnership's  operations  of a change in ownership  cannot be presently
determined.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  February  12, 2004 on our  consideration  of the  Partnership's  internal
control and on our tests of its  compliance  with  certain  provisions  of laws,
regulations,  contracts  and grants.  Those  reports are an integral  part of an
audit performed in accordance with Government  Auditing  Standards and should be
read in conjunction with this report in considering the results of our audits.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The  accompanying  additional  financial
data (shown on pages 12 through 14) are  presented for the purpose of additional
analysis and are not a required  part of the basic  financial  statements of the
Partnership.  Such  information  has been  subjected to the auditing  procedures
applied in the audit of the basic financial  statements and, in our opinion,  is
fairly  stated in all  material  respects  in  relation  to the basic  financial
statements taken as a whole.

/s/Altschuler, Melvoin and Glasser LLP


Los Angeles, California
February 12, 2004


<PAGE>


Exhibit 99.8

Independent Auditors' Report

To the Partners
Oak Hill Apartments, Ltd.

We have audited the accompanying  balance sheets of Oak Hill  Apartments,  Ltd.,
FHA Project No. 033-44149-LDP (the  "Partnership"),  as of December 31, 2003 and
2002 and the related statements of operations,  changes in partners'  deficiency
and cash flows for the years then  ended.  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 U.S.  generally  accepted  auditing
standards  and  the  standards  applicable  to  financial  audits  contained  in
Government  Auditing  Standards issued by the Comptroller  General of 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
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 Oak Hill Apartments, Ltd. as of
December 31, 2003 and 2002 and the results of its  operations and its cash flows
for the years then ended in conformity with U.S. generally  accepted  accounting
principles.

As discussed in Note 3, the  Partnership's  partners could change in 2004, which
might result in a change in Partnership operations. The ultimate effect, if any,
on the  Partnership's  operations  of a change in ownership  cannot be presently
determined.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  February  12, 2004 on our  consideration  of the  Partnership's  internal
control and on our tests of its  compliance  with  certain  provisions  of laws,
regulations,  contracts  and grants.  Those  reports are an integral  part of an
audit performed in accordance with Government  Auditing  Standards and should be
read in conjunction with this report in considering the results of our audits.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The  accompanying  additional  financial
data (shown on pages 12 through 14) are  presented for the purpose of additional
analysis and are not a required  part of the basic  financial  statements of the
Partnership.  Such  information  has been  subjected to the auditing  procedures
applied in the audit of the basic financial  statements and, in our opinion,  is
fairly  stated in all  material  respects  in  relation  to the basic  financial
statements taken as a whole.

/s/Altschuler, Melvoin and Glasser LLP

Los Angeles, California
February 12, 2004


<PAGE>


Exhibit 99.9

Independent Auditors' Report

To the Partners
Oakwood Park Apartments - Phase I

We have audited the  accompanying  balance  sheets of Oakwood Park  Apartments -
Phase I, FHA Project No. 042-92503-LDC (the  "Partnership"),  as of December 31,
2003 and 2002 and the related  statements  of  operations,  changes in partners'
equity and cash flows for the years then ended.  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 U.S.  generally  accepted  auditing
standards  and  the  standards  applicable  to  financial  audits  contained  in
Government  Auditing  Standards issued by the Comptroller  General of 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
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 Oakwood Park Apartments - Phase
I as of December  31, 2003 and 2002 and the  results of its  operations  and its
cash flows for the years then ended in conformity with U.S.  generally  accepted
accounting principles.

As discussed in Note 3, the  Partnership's  partners could change in 2004, which
might result in a change in Partnership operations. The ultimate effect, if any,
on the  Partnership's  operations  of a change in ownership  cannot be presently
determined.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  February  12, 2004 on our  consideration  of the  Partnership's  internal
control and on our tests of its  compliance  with  certain  provisions  of laws,
regulations,  contracts  and grants.  Those  reports are an integral  part of an
audit performed in accordance with Government  Auditing  Standards and should be
read in conjunction with this report in considering the results of our audit.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The  accompanying  additional  financial
data (shown on pages 12 through 14) are  presented for the purpose of additional
analysis and are not a required  part of the basic  financial  statements of the
Partnership.  Such  information  has been  subjected to the auditing  procedures
applied in the audit of the basic financial  statements and, in our opinion,  is
fairly  stated in all  material  respects  in  relation  to the basic  financial
statements taken as a whole.


/s/Altschuler, Melvoin and Glasser LLP

Los Angeles, California
February 12, 2004


<PAGE>


Exhibit 99.10

Independent Auditors' Report

To the Partners
Oakwood Park Apartments - Phase II

We have audited the  accompanying  balance  sheets of Oakwood Park  Apartments -
Phase II, FHA Project No. 042-55049-LDC (the "Partnership"),  as of December 31,
2003 and 2002 and the related statements of income,  changes in partners' equity
and cash flows for the years then  ended.  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 U.S.  generally  accepted  auditing
standards  and  the  standards  applicable  to  financial  audits  contained  in
Government  Auditing  Standards issued by the Comptroller  General of 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
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 Oakwood Park Apartments - Phase
II as of December  31, 2003 and 2002 and the results of its  operations  and its
cash flows for the years then ended in conformity with U.S.  generally  accepted
accounting principles.

As discussed in Note 3, the  Partnership's  partners could change in 2004, which
might result in a change in Partnership operations. The ultimate effect, if any,
on the  Partnership's  operations  of a change in ownership  cannot be presently
determined.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  February  12, 2004 on our  consideration  of the  Partnership's  internal
control and on our tests of its  compliance  with  certain  provisions  of laws,
regulations,  contracts  and grants.  Those  reports are an integral  part of an
audit performed in accordance with Government  Auditing  Standards and should be
read in conjunction with this report in considering the results of our audit.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The  accompanying  additional  financial
data (shown on pages 12 through 14) are  presented for the purpose of additional
analysis and are not a required  part of the basic  financial  statements of the
Partnership.  Such  information  has been  subjected to the auditing  procedures
applied in the audit of the basic financial  statements and, in our opinion,  is
fairly  stated in all  material  respects  in  relation  to the basic  financial
statements taken as a whole.

/s/Altschuler, Melvoin and Glasser LLP

Los Angeles, California
February 12, 2004


<PAGE>


Exhibit 99.11

Independent Auditors' Report

To the Partners
Richards Park Apartments

We have audited the accompanying balance sheets of Richards Park Apartments, FHA
Project No. 042-44089-LDP (the "Partnership"),  as of December 31, 2003 and 2002
and the related  statements of operations,  changes in partners' equity and cash
flows  for  the  years  then  ended.   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 U.S.  generally  accepted  auditing
standards  and  the  standards  applicable  to  financial  audits  contained  in
Government  Auditing  Standards issued by the Comptroller  General of 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
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 Richards Park Apartments as of
December 31, 2003 and 2002 and the results of its  operations and its cash flows
for the years then ended in conformity with U.S. generally  accepted  accounting
principles.

As discussed in Note 3, the  Partnership's  partners could change in 2004, which
might result in a change in Partnership operations. The ultimate effect, if any,
on the  Partnership's  operations  of a change in ownership  cannot be presently
determined.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  February  12, 2004 on our  consideration  of the  Partnership's  internal
control and on our tests of its  compliance  with  certain  provisions  of laws,
regulations,  contracts  and grants.  Those  reports are an integral  part of an
audit performed in accordance with Government  Auditing  Standards and should be
read in conjunction with this report in considering the results of our audit.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The  accompanying  additional  financial
data (shown on pages 12 through 14) are  presented for the purpose of additional
analysis and are not a required  part of the basic  financial  statements of the
Partnership.  Such  information  has been  subjected to the auditing  procedures
applied in the audit of the basic financial  statements and, in our opinion,  is
fairly  stated in all  material  respects  in  relation  to the basic  financial
statements taken as a whole.

/s/Altschuler, Melvoin and Glasser LLP


Los Angeles, California
February 12, 2004


<PAGE>


Exhibit 99.12

Independent Auditors' Report

To the Partners
Warren Heights Apartments, Ltd.

We have audited the  accompanying  balance sheets of Warren Heights  Apartments,
Ltd., FHA Project No. 042-44156-LDP (the "Partnership"), as of December 31, 2003
and 2002 and the related  statements of operations,  changes in partners' equity
and cash flows for the years then  ended.  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 U.S.  generally  accepted  auditing
standards  and  the  standards  applicable  to  financial  audits  contained  in
Government  Auditing  Standards issued by the Comptroller  General of 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
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 Warren Heights Apartments, Ltd.
as of December 31, 2003 and 2002 and the results of its  operations and its cash
flows for the years  then  ended in  conformity  with  U.S.  generally  accepted
accounting principles.

As discussed in Note 3, the  Partnership's  partners could change in 2004, which
might result in a change in Partnership operations. The ultimate effect, if any,
on the  Partnership's  operations  of a change in ownership  cannot be presently
determined.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  February  12, 2004 on our  consideration  of the  Partnership's  internal
control and on our tests of its  compliance  with  certain  provisions  of laws,
regulations,  contracts  and grants.  Those  reports are an integral  part of an
audit performed in accordance with Government  Auditing  Standards and should be
read in conjunction with this report in considering the results of our audit.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The  accompanying  additional  financial
data (shown on pages 12 through 14) are  presented for the purpose of additional
analysis and are not a required  part of the basic  financial  statements of the
Partnership.  Such  information  has been  subjected to the auditing  procedures
applied in the audit of the basic financial  statements and, in our opinion,  is
fairly  stated in all  material  respects  in  relation  to the basic  financial
statements taken as a whole.

/s/Altschuler, Melvoin and Glasser LLP

Los Angeles, California
February 12, 2004


<PAGE>


Exhibit 99.13

Independent Auditors' Report


To the Partners
Yorkview Estates, Ltd.

We have audited the accompanying  balance sheets of Yorkview Estates,  Ltd., FHA
Project No. 042-44151-LDP (the "Partnership"),  as of December 31, 2003 and 2002
and the related  statements of operations,  changes in partners' equity and cash
flows  for  the  years  then  ended.   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 U.S.  generally  accepted  auditing
standards  and  the  standards  applicable  to  financial  audits  contained  in
Government  Auditing  Standards issued by the Comptroller  General of 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
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 Yorkview Estates,  Ltd. as of
December 31, 2003 and 2002 and the results of its  operations and its cash flows
for the years then ended in conformity with U.S. generally  accepted  accounting
principles.

As discussed in Note 3, the  Partnership's  partners could change in 2004, which
might result in a change in Partnership operations. The ultimate effect, if any,
on the  Partnership's  operations  of a change in ownership  cannot be presently
determined.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  February  12, 2004 on our  consideration  of the  Partnership's  internal
control and on our tests of its  compliance  with  certain  provisions  of laws,
regulations,  contracts  and grants.  Those  reports are an integral  part of an
audit performed in accordance with Government  Auditing  Standards and should be
read in conjunction with this report in considering the results of our audit.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The  accompanying  additional  financial
data (shown on pages 12 through 14) are  presented for the purpose of additional
analysis and are not a required  part of the basic  financial  statements of the
Partnership.  Such  information  has been  subjected to the auditing  procedures
applied in the audit of the basic financial  statements and, in our opinion,  is
fairly  stated in all  material  respects  in  relation  to the basic  financial
statements taken as a whole.

/s/Altschuler, Melvoin and Glasser LLP

Los Angeles, California
February 12, 2004



<PAGE>


Exhibit 99.14

                          INDEPENDENT AUDITORS' REPORT

To the Partners
Aristocrat Manor, Ltd.:

We have audited the accompanying  financial statements of Aristocrat Manor, Ltd.
(the  "Partnership")  as of December 31, 2003,  and for the year then ended,  as
listed in the foregoing table of contents.  These  financial  statements are the
responsibility  of the  general  partner.  Our  responsibility  is to express an
opinion on these financial statements based on our audit.

We conducted our audit with auditing standards  generally accepted in the United
States of America and Government Auditing  Standards,  issued by the Comptroller
General of 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  General  Partner,  as well as  evaluating  the  overall
financial  statement  presentation.   We  believe  that  our  audit  provides  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 the Partnership as of December
31, 2003, and the results of its operations,  changes in partners' deficit,  and
cash flows for the year then ended,  in conformity  with  accounting  principles
generally accepted in the United States of America.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  January 20, 2004,  on our  consideration  of the  Partnership's  internal
control,  and on our test of its  compliance  with certain  provisions  of laws,
regulations,  contracts  and grants.  Those  reports are an integral  part of an
audit performed in accordance with Government  Auditing  Standards and should be
read in conjunction with this report in considering the results of our audit.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial   statements  taken  as  a  whole.   The  accompanying   supplementary
information  shown on pages 9 through 14 is presented  for purpose of additional
analysis and is not a required  part of the basic  financial  statements  of the
Partnership.  Such  information  has been  subjected to the auditing  procedures
applied in our audit of the basic financial  statements and, in our opinion,  is
fairly  stated in all  material  respects  in  relation  to the basic  financial
statements taken as a whole.


/s/  Jeffrey, Phillips, Mosley & Scott, P.A.

Little Rock, Arkansas
January 20, 2004


<PAGE>


Exhibit 99.15

                          INDEPENDENT AUDITORS' REPORT

Partners
Arkansas City Apartments Limited Partnership
Arkansas City, Arkansas



      We  have  audited  the  accompanying   Balance  Sheets  of  ARKANSAS  CITY
APARTMENTS  LIMITED  PARTNERSHIP,  as of  December  31,  2003 and 2002,  and the
related Statements of Operations,  Partners' Equity (Deficit) and Cash Flows for
the years then ended.  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 of America  and  Government  Auditing  Standards
issued by the Comptroller General of the United States.  Those standards require
that we plan and perform the audits 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  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 ARKANSAS CITY  APARTMENTS
LIMITED  PARTNERSHIP  as of December  31, 2003 and 2002,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.

      Our  audits  were made for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental  information included is
presented for purposes of additional  analysis and is not a required part of the
basic  financial  statements.  Such  information has been subjected to the audit
procedures  applied in the audit of the basic  financial  statements and, in our
opinion,  is fairly  stated in all  material  respects  in relation to the basic
financial statements taken as a whole.

      In accordance with Government  Auditing  Standards,  we have also issued a
report dated January 16, 2004, on our  consideration of ARKANSAS CITY APARTMENTS
LIMITED PARTNERSHIP'S  internal control structure and a report dated January 16,
2004, on its compliance  with laws and  regulations  applicable to the financial
statements.



/s/  Berry & Caccamisi, P.C.


Memphis, Tennessee
January 16, 2004


<PAGE>


Exhibit 99.16

                          INDEPENDENT AUDITORS' REPORT

To the Partners of:
Bluewater Limited Dividend Housing Association
4275 Five Oaks Drive
Lansing, Michigan 48911

We have audited the  accompanying  balance sheet of Bluewater  Limited  Dividend
Housing Association (a Michigan limited  partnership),  MSHDA Development No. 35
as of December 31, 2003, and the related  statements of profit and loss, changes
in accumulated  earnings and cash flows for the year then ended. These financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility is to express an opinion on the financial statements based on our
audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the United States of America and Government Auditing Standards, issued by the
Comptroller  General of 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  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis or our opinion.

In our  opinion,  such  financial  statements  present  fairly  in all  material
respects,   the  financial   position  of  Bluewater  Limited  Dividend  Housing
Association,  MSHDA No. 35 as of  December  31,  2003,  and the  results  of its
operations,  the changes in its cumulative income and its cash flow for the year
then ended in conformity with accounting  principles  generally  accepted in the
United States of America.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The additional  information of Bluewater
Limited  Dividend  Housing  Association,  MSHDA  No.  35  on  pages  13 to 15 is
presented for the purpose of  additional  analysis and is not a required part of
the  basic   financial   statements.   This   additional   information   is  the
responsibility  of the  partnership's  management.  Such  information  has  been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion,  is fairly stated,  in all material  respects in
relation to the basic financial statements taken as a whole.

The data on page 15 for the years 1974  trough  2000 was not  audited by us and,
accordingly,  we do not express an opinion on such data.  The data for the years
1990 trough 2000 was audited by other  auditors  whose report dated  January 29,
2001, stated that such information was fairly stated,  in al material  respects,
in relation to the financial statements taken as a whole. The data for the years
1974 through 1989 was audited by other  auditors who have ceased  operation  and
whose report,  dated January 24, 1990,  stated that such  information was fairly
stated, in all material respects,  in relation to the basic financial statements
taken as a whole.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January  28,  2004 on our  consideration  of the  partnership's  internal
control structure and on its compliance with laws and regulations

/s/FOLLMER RUDZEWICZ PLC
Certified Public Accountants
Southfield, Michigan
38-3460430


January 28, 2004


<PAGE>


Exhibit 99.17

Independent Auditors' Report



To the Partners
Mount Union Apartments, Ltd.
a/k/a Nantucket Circle

We have audited the accompanying balance sheets of Mount Union Apartments, Ltd.,
a/k/a Nantucket Circle, FHA Project No. 042-44070-LDP (the "Partnership"), as of
December 31, 2003 and 2002 and the related statements of operations,  changes in
partners'  equity  and cash  flows for the years  then  ended.  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 U.S.  generally  accepted  auditing
standards  and  the  standards  applicable  to  financial  audits  contained  in
Government  Auditing  Standards issued by the Comptroller  General of 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
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 Mount Union Apartments, Ltd. as
of December  31, 2003 and 2002 and the  results of its  operations  and its cash
flows for the years  then  ended in  conformity  with  U.S.  generally  accepted
accounting principles.

As discussed in Note 3, the  Partnership's  partners could change in 2004, which
might result in a change in Partnership operations. The ultimate effect, if any,
on the  Partnership's  operations  of a change in ownership  cannot be presently
determined.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  February  12, 2004 on our  consideration  of the  Partnership's  internal
control and on our tests of its  compliance  with  certain  provisions  of laws,
regulations,  contracts  and grants.  Those  reports are an integral  part of an
audit performed in accordance with Government  Auditing  Standards and should be
read in conjunction with this report in considering the results of our audits.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The  accompanying  additional  financial
data (shown on pages 12 through 14) are  presented for the purpose of additional
analysis and are not a required  part of the basic  financial  statements of the
Partnership.  Such  information  has been  subjected to the auditing  procedures
applied in the audit of the basic financial  statements and, in our opinion,  is
fairly  stated in all  material  respects  in  relation  to the basic  financial
statements taken as a whole.


/s/Altschuler, Melvoin and Glasser LLP
Los Angeles, California
February 12, 2004


<PAGE>


Exhibit 99.18

                          INDEPENDENT AUDITORS' REPORT

The Partners
Newton Apartments, Ltd.
Jackson, Mississippi

We have audited the accompanying  balance sheets of Newton Apartments,  Ltd., RD
Case No. 28-51-6406687535, a Mississippi limited partnership, as of December 31,
2003 and 2002, and the related statements of income, partners' capital, and cash
flows  for  the  years  then  ended.   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 audit in accordance with auditing standards  generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government  Auditing Standards issued by the Comptroller General of
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  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audit  provides 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 Newton  Apartments,  Ltd., RD
Case No.  28-51-64087535,  as of December 31, 2003 and 2002,  and the results of
its  operations  and its cash flows for the years then ended in conformity  with
generally accepted accounting principles.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial  statements taken as a whole. The accompanying  financial  information
included on pages 15 through 21 is presented for purposes of additional analysis
and is not a required part of the basic financial statements.  Such information,
except for the budget, the proposed budget, and the market rent budget, on pages
17  through  20, on which we  express  no  opinion,  has been  subjected  to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion,  is fairly  stated in all  material  respects in relation to the
basic financial statements taken as a whole.

In accordance with Government Auditing Standards and the Audit Program issued by
the United States  Department of Agriculture,  Rural  Development,  we have also
issued  our  reports  dated  March  3,  2004,  on our  consideration  of  Newton
Apartments,  Ltd.'s  internal  control  and  on  its  compliance  with  specific
requirements  applicable  to major RD  programs  and for  non-major  RD  program
transactions.


/s/Lyle, Walker & Co., P.A.
Ridgeland, Mississippi
March 3, 2004


<PAGE>


Exhibit 99.19

                          INDEPENDENT AUDITORS' REPORT

Partners
Oakview Apartments Limited Partnership
Monticello, Arkansas



      We have  audited the  accompanying  Balance  Sheets of OAKVIEW  APARTMENTS
LIMITED  PARTNERSHIP,  as of  December  31,  2003  and  2002,  and  the  related
Statements  of  Operations,  Partners'  Equity  (Deficit) and Cash Flows for the
years then ended.  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 of America  and  Government  Auditing  Standards
issued by the Comptroller General of the United States.  Those standards require
that we plan and perform the audits 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  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 OAKVIEW APARTMENTS LIMITED
PARTNERSHIP  as of December 31, 2003 and 2002, and the results of its operations
and its cash  flows for the  years  then  ended in  conformity  with  accounting
principles generally accepted in the United States of America.

      Our  audits  were made for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental  information included is
presented for purposes of additional  analysis and is not a required part of the
basic  financial  statements.  Such  information has been subjected to the audit
procedures  applied in the audit of the basic  financial  statements and, in our
opinion,  is fairly  stated in all  material  respects  in relation to the basic
financial statements taken as a whole.

      In accordance with Government  Auditing  Standards,  we have also issued a
report  dated  January 16,  2004,  on our  consideration  of OAKVIEW  APARTMENTS
LIMITED PARTNERSHIP'S  internal control structure and a report dated January 16,
2004, on its compliance  with laws and  regulations  applicable to the financial
statements.



/s/Berry & Caccamisi, P.C.


Memphis, Tennessee
January 16, 2004


<PAGE>


Exhibit 99.20

                          Independent Auditor's Report



To          the           Partners          HUD          Field          office
Director
RAND GROVE VILLAGE PARTNERSHIP                        Chicago, Illinois
Chicago, Illinois


We  have  audited  the   accompanying   balance  sheet  of  RAND  GROVE  VILLAGE
PARTNERSHIP,  project No.  071-44126-LD an Illinois Limited  Partnership,  as of
December 31, 2003,  and the related  statements  of profit and loss,  changes in
partners'  equity (deficit) and statement of cash flows for the year then ended.
These  financial   statements  are  the   responsibility  of  the  Partnership's
management.  Our  responsibility  is to  express  an  opinion  on the  financial
statements based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the United States of America,  the standards  applicable to financial  audits
contained in Government  Auditing Standards issued by the Comptroller General of
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  misstatements.  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  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We  believe  that our audit  provides a  reasonable  basis or our
opinion.

In our opinion,  such financial  statements  referred to in the first  paragraph
present fairly, in all material  respects,  the financial position of RAND GROVE
VILLAGE  PARTNERSHIP as of December 31, 2003, and its profit or loss, changes in
partners'  equity  (deficit)  and its  cash  flows  for the year  then  ended in
conformity with accounting principles generally accepted in the United States or
America.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated January 14, 2004, on our consideration of RAND GROVE VILLAGE PARTNERSHIP'S
internal  control and on our test of its compliance  with certain  provisions of
laws, regulations,  contracts, and grants. These reports are an integral part of
an audit performed in accordance with Government  Auditing  Standards and should
be read in conjunction with this report in considering the results of our audit.

The  accompanying  supplementary  information  (shown  on  pages  15 to  17)  is
presented for purposes of additional  analysis and is not a required part of the
basic financial statements.  Such information has been subjected to the auditing
procedures  applied in the audit of the basic  financial  statements and, in our
opinion,  is fairly  stated in all  material  respects  in relation to the basic
financial statements taken as a whole.




HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Federal Certification No. 36-3097692
Audit Partner:  W. Garrett Heinl (847) 853-2576



January 14, 2004


<PAGE>


Exhibit 99.21



                          INDEPENDENT AUDITORS' REPORT

To the Partners of:
Tradewinds East Associates Limited Dividend Housing Association
4275 Five Oaks Drive
Lansing, Michigan 48911

We have audited the  accompanying  balance sheet of Tradewinds  East  Associates
Limited Dividend Housing  Association (a Michigan  limited  partnership),  MSHDA
Development  No. 147 as of December  31,  2003,  and the related  statements  of
profit and loss,  changes in  accumulated  earnings  and cash flows for the year
then  ended.   These  financial   statements  are  the   responsibility  of  the
Partnership's  management.  Our  responsibility  is to express an opinion on the
financial statements based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the United States of America and Government Auditing Standards, issued by the
Comptroller  General of 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  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis or our opinion.

In our  opinion,  such  financial  statements  present  fairly,  in all material
respects,  the financial position of Tradewinds East Associates Limited Dividend
Housing  Association,  MSHDA No. 147 as of December 31, 2003, and the results of
its operations,  the changes in its cumulative income and its cash flows for the
year then ended in conformity with accounting  principles  generally accepted in
the United States of America.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The additional  information of Tradewinds
East Associates Limited Dividend Housing Association,  MSHDA No. 147 on pages 13
to 15 is presented for the purpose of additional  analysis and is not a required
part of the basic  financial  statements.  This  additional  information  is the
responsibility  of the  partnership's  management.  Such  information  has  been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion,  is fairly stated,  in all material  respects in
relation to the basic financial statements taken as a whole.

The data on page 15 for the years 1975  trough  2000 was not  audited by us and,
accordingly,  we do not express an opinion on such data.  The data for the years
1990 trough 2000 was audited by other  auditors  whose report,  date January 29,
2001, stated that such information was fairly stated, in all material  respects,
in relation to the financial statements taken as a whole. The data for the years
1975 through 1989 was audited by other  auditors who have ceased  operation  and
whose report,  dated January 24, 1990,  stated that such  information was fairly
stated, in all material respects,  in relation to the financial statements taken
as a whole.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January  28,  2004 on our  consideration  of the  Partnership's  internal
control structure and on its compliance with laws and regulations

/s/FOLLMER RUDZEWICZ PLC
Certified Public Accountants
Southfield, Michigan
38-3460430

January 28, 2004