UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
(Mark One)

   X    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
------- ACT OF 1934


For the fiscal year ended March 31, 2003
                                       OR

------- TRANSITION  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
        EXCHANGE ACT OF 1934

                       Commission File Number 33-37704-03

                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                      ------------------------------------
             (Exact name of registrant as specified in its charter)

             Delaware                                           13-3646846
-------------------------------------                     ----------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

625 Madison Avenue, New York, New York                             10022
---------------------------------------                   ----------------------
  (Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code (212) 421-5333

Securities registered pursuant to Section 12(b) of the Act:

     None

Securities registered pursuant to Section 12(g) of the Act:

     Title of Class
     --------------
     Limited Partnership Interests and Beneficial Assignment Certificates

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes   X      No
                                             ------       ------

     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-K or any amendment to this
Form 10-K. [X]

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined    in    Exchange    Act    Rule    12b-2). Yes        No   X
                                                       ------    ------

     The  approximate  aggregate book value of the voting and non-voting  common
equity held by  non-affiliates  of the  Registrant  as of September 30, 2002 was
$14,882,000, based on Limited Partner equity as of such date.

                       DOCUMENTS INCORPORATED BY REFERENCE
     None


<PAGE>
                                     PART I

Item 1. Business.

General
-------

Independence  Tax  Credit  Plus  L.P.  II  (the   "Partnership")  is  a  limited
partnership which was formed under the laws of the State of Delaware on February
11,  1992.  The  general  partner of the  Partnership  is  Related  Independence
Associates L.P., a Delaware limited  partnership  (the "General  Partner").  The
general partner of the General Partner is Related Independence  Associates Inc.,
a Delaware  corporation  ("RIAI") and is an affiliate of Related Capital Company
("RCC").

On  January  19,  1993,  the  Partnership   commenced  a  public  offering  (the
"Offering")  of  Beneficial   Assignment   Certificates   ("BACs")  representing
assignments  of  limited  partnership  interests  in the  Partnership  ("Limited
Partnership Interests").  The Partnership received $58,928,000 of gross proceeds
from the Offering (the "Gross  Proceeds") from 3,475 investors ("BACs holders").
The Offering was terminated on April 7, 1994.

The Partnership's  business is primarily to invest as a limited partner in other
partnerships  ("Local  Partnerships")  owning  apartment  complexes  ("Apartment
Complexes" or  "Properties")  that are eligible for the  low-income  housing tax
credit  ("Housing  Tax Credit")  enacted in the Tax Reform Act of 1986,  some of
which may also be eligible for the historic rehabilitation tax credit ("Historic
Tax  Credit";  and  together  with  Housing Tax  Credits,  "Tax  Credits").  The
Partnership's  investment  in each Local  Partnership  represents  98.99% of the
partnership  interests  in the  Local  Partnership.  As of March 31,  2003,  the
Partnership had acquired  interests in fifteen Local  Partnerships  and does not
anticipate   making  any   additional   investments.   As  of  March  31,  2003,
approximately  $47,000,000  (not  including  acquisition  fees of  approximately
$3,502,000) of net proceeds has been invested in fifteen Local  Partnerships  of
which approximately  $282,000 remains to be paid to the Local  Partnerships,  as
certain  benchmarks  such as  occupancy  levels  must be  attained  prior to the
release of such funds.  The  Partnership  does not intend to acquire  additional
properties,  however,  the  Partnership  may be  required  to pay for  potential
purchase price  adjustments  based on tax credit adjustor  clauses.  See Item 2.
Properties, below.

Investment Objectives/Government Incentives
-------------------------------------------

The  Partnership  was formed to invest in Apartment  Complexes that are eligible
for the Housing Tax Credit enacted in the Tax Reform Act of 1986. Some Apartment
Complexes  may  also be  eligible  for  Historic  Tax  Credits.  The  investment
objectives of the Partnership are described below.

1.  Entitle  qualified  BACs  holders  to Tax  Credits  over the  period  of the
Partnership's entitlement to claim Tax Credits (for each Property, generally ten
years from the date of investment or, if later,  the date the Property is leased
to qualified tenants; referred to herein as the "Credit Period") with respect to
each Apartment Complex.

2. Preserve and protect the Partnership's capital.

3.  Participate in any capital  appreciation  in the value of the Properties and
provide  distributions  of Sale or Refinancing  Proceeds upon the disposition of
the Properties.

4. Allocate  passive losses to individual  BACs holders to offset passive income
that they may realize  from rental real  estate  investments  and other  passive
activities,  and allocate  passive  losses to  corporate  BACs holders to offset
business income.



                                       3
<PAGE>


One of the Partnership's  objectives is to entitle qualified BACs holders to Tax
Credits  over the Credit  Period.  Each of the Local  Partnerships  in which the
Partnership  has acquired an interest has been  allocated by the relevant  state
credit  agencies the authority to recognize Tax Credits during the Credit Period
provided  that the Local  Partnership  satisfies the rent  restriction,  minimum
set-aside and other requirements for recognition of the Tax Credits at all times
during such period.  Once a Local  Partnership  has become eligible to recognize
Tax Credits,  it may lose such eligibility and suffer an event of "recapture" if
its Property  fails to remain in  compliance  with the Tax Credit  requirements.
None of the Local Partnerships in which the Partnership has acquired an interest
has suffered an event of recapture.

There can be no  assurance  that the  Partnership  will  achieve its  investment
objectives as described above.

The  Partnership  is subject to the risks  incident to potential  losses arising
from the management and ownership of improved real estate.  The  Partnership can
also be affected by poor economic conditions generally, however no more than 33%
of the  Properties are located in any single state.  There are also  substantial
risks associated with owning  interests in properties,  as does the Partnership,
which receive government  assistance,  for example the possibility that Congress
may not appropriate funds to enable HUD to make rental assistance payments.  HUD
also restricts annual cash  distributions to partners based on operating results
and a percentage of the owner's equity contribution. The Partnership cannot sell
or substantially liquidate its investments in subsidiary partnerships during the
period that the subsidy  agreements  are in existence,  without HUD's  approval.
Furthermore,  there may not be market demand for apartments at full market rents
when the rental assistance contracts expire.

Segments
--------
The Partnership operates in one segment, which is the investment in multi-family
residential property.

Competition
-----------
The real estate  business is highly  competitive  and  substantially  all of the
Properties  acquired by the Partnership are expected to have active  competition
from similar  properties in their respective  vicinities.  Various other limited
partnerships have, in the past, and may, in the future, be formed by the General
Partner and/or its  affiliates to engage in businesses  which may be competitive
with the Partnership.

Employees
---------
The Partnership does not have any direct  employees.  All services are performed
for the  Partnership  by the  General  Partner and its  affiliates.  The General
Partner receives compensation in connection with such activities as set forth in
Items 11 and 13. In addition, the Partnership reimburses the General Partner and
certain  of  its  affiliates  for  expenses  incurred  in  connection  with  the
performance  by their  employees of services for the  Partnership  in accordance
with the  Partnership's  Amended and Restated  Agreement of Limited  Partnership
(the "Partnership Agreement").



                                       4
<PAGE>

Item 2.  Properties.

The  Partnership  holds a 98.99% limited  partnership  interest in fifteen Local
Partnerships  as of March 31,  2003.  Set forth below is a schedule of the Local
Partnerships including certain information concerning their respective Apartment
Complexes (the "Local Partnership  Schedule").  Further  information  concerning
these  Local  Partnerships  and their  properties,  including  any  encumbrances
affecting the properties, may be found in Item 15. Schedule III.

<TABLE>
<CAPTION>
                           Local Partnership Schedule
                           --------------------------

                                                    % of Units Occupied  at  May 1,
Name and Location                                   -------------------------------
(Number of Units)                  Date Acquired    2003   2002   2001  2000   1999
-----------------                  -------------    ----   ----   ----  ----   ----
<S>                                <C>              <C>    <C>    <C>   <C>    <C>
Lincoln Renaissance
Reading, PA (52)                   April 1993       100%    98%    96%   98%    90%

United Germano-Millgate
Limited Partnership
Chicago, IL (350)                  October 1993      99%    99%    99%   99%    98%

Mansion Court Associates
Philadelphia, PA (30)              November 1993     87%    97%    90%   97%    97%

Derby Run Associates, L.P.
Hampton, VA (160)                  February 1994     96%    98%    98%   89%    82%

Renaissance Plaza '93
Associates , L.P.
Baltimore, MD (95)                 February 1994     98%   100%   100%   95%    99%

Tasker Village Associates
Philadelphia, PA (28)              May 1994         100%   100%    96%   93%    93%

Martha Bryant Manor, L.P.
Los Angeles, CA (77)               September 1994   100%    95%   100%   97%    93%

Colden Oaks
Limited Partnership
Los Angeles, CA (38)               September 1994   100%   100%    97%  100%   100%

Brynview Terrace, L.P.
Los Angeles, CA (8)                September 1994   100%   100%   100%  100%   100%

NLEDC, L.P.
Los Angeles, CA (43)               September 1994   100%   100%   100%  100%    98%

Creative Choice
Homes VI, Ltd.
Miami, FL (102)                    September 1994    99%   100%   100%  100%   100%

P&P Homes for the Elderly, L.P.
Los Angeles, CA (107)              September 1994   100%   100%   100%   99%    97%
</TABLE>

                                       5
<PAGE>

<TABLE>
<CAPTION>
                           Local Partnership Schedule
                           --------------------------
                                   (continued)

Name and Location                                   % of Units Occupied  at  May 1,
                                                    -------------------------------
(Number of Units)                  Date Acquired    2003   2002   2001  2000   1999
-----------------                  -------------    ----   ----   ----  ----   ----

<S>                                <C>              <C>    <C>    <C>    <C>   <C>
Clear Horizons
Limited Partnership
Shreveport, LA (84)                December 1994     99%    95%    99%   98%    96%

Neptune Venture, L.P.
Neptune Township, NJ (99)          April 1995       100%   100%   100%   97%    99%

Affordable Green Associates L.P.
New York, NY (41)                  April 1995       100%   100%   100%  100%   100%
</TABLE>

All leases are  generally  for  periods  not  exceeding  one to two years and no
tenant occupies more than 10% of the rentable square footage.

Rents from commercial  tenants (to which average rental per square foot applies)
comprise  less  than  5% of the  rental  revenues  of the  Partnership.  Maximum
allowable rents for the residential units are determined annually by HUD.

Management  continuously  reviews  the  physical  state  of the  Properties  and
suggests to the respective  general partners of the Local  Partnerships  ("Local
General Partners") budget improvements which are generally funded from cash flow
from operations or release of replacement reserve escrows.

Management  continuously  reviews the insurance  coverage of the  Properties and
believes such coverage is adequate.

See Item 1, Business,  above for the general competitive conditions to which the
properties described above are subject.

Real estate taxes are calculated using rates and assessed valuations  determined
by the  township  or city in which the  property  is  located.  Such  taxes have
approximated 1% of the aggregate cost of the properties as shown in Schedule III
to the financial statements included herein.

Housing Tax Credits with respect to a given Apartment  Complex are available for
a ten-year  period that  commences  when the  property  is placed into  service.
However,  the annual Tax Credits  available  in the year in which the  Apartment
Complex is placed in service,  must be prorated based upon the months  remaining
in the year. The amount of the annual Tax Credit not available in the first year
will be  available in the  eleventh  year.  In certain  cases,  the  Partnership
acquired its interest in a Local  Partnership  after the Local  Partnership  had
placed its Apartment Complex in service.  In these cases, the Partnership may be
allocated Tax Credits only  beginning in the month  following the month in which
it acquired its  interest and Tax Credits  allocated in any prior period are not
available to the Partnership.

Item 3.  Legal Proceedings.

None.

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

None.


                                       6
<PAGE>

                                     PART II

Item 5. Market for the  Registrant's  Common Equity and Related  Security Holder
Matters.

As of March 31, 2003, the Partnership had issued and outstanding  58,928 Limited
Partnership  Interests,  each representing a $1,000 capital  contribution to the
Partnership,  or an aggregate capital  contribution of $58,928,000 before volume
discounts  of  $2,000.  All of the issued and  outstanding  Limited  Partnership
Interests have been issued to Independence  Assignor Inc. (the "Assignor Limited
Partner"), which has in turn issued 58,928 BACs to the purchasers thereof for an
aggregate  purchase price of $58,928,000  reduced by volume discounts of $2,000.
Each BAC  represents  all of the economic  and  virtually  all of the  ownership
rights  attributable  to a Limited  Partnership  Interest  held by the  Assignor
Limited Partner.  BACs may be converted into Limited Partnership Interests at no
cost to the  holder  (other  than the  payment of  transfer  costs not to exceed
$100),  but  Limited  Partnership  Interests  so  acquired  are  not  thereafter
convertible into BACs.

Neither  the  BACs nor the  Limited  Partnership  Interests  are  traded  on any
established  trading market. The Partnership does not intend to include the BACs
for  quotation  on NASDAQ or for  listing  on any  national  or  regional  stock
exchange or any other  established  securities  market.  The Revenue Act of 1987
contained  provisions  which have an adverse  impact on  investors  in "publicly
traded  partnerships."  Accordingly,  the General  Partner  has imposed  limited
restrictions  on the  transferability  of the BACs and the  Limited  Partnership
Interests in secondary market  transactions.  Implementation of the restrictions
should prevent a public trading market from developing and may adversely  affect
the ability of an investor to liquidate  his or her  investment  quickly.  It is
expected that these  procedures  will remain in effect until such time, if ever,
as further  revision of the Revenue  Act of 1987 may permit the  Partnership  to
lessen the scope of the restrictions.

As of May 8, 2003, the Partnership has approximately 3,436 registered holders of
an aggregate of 58,928 BACs.

All  of  the  Partnership's  general  partnership  interests,   representing  an
aggregate capital contribution of $1,000, are held by the General Partner.

There are no material legal  restrictions  in the  Partnership  Agreement on the
ability of the Partnership to make distributions.  However,  the Partnership has
made no  distributions to the BACs holders as of March 31, 2003. The Partnership
does not anticipate  providing cash distributions to its BACs holders other than
from net refinancing or sales proceeds.


                                       7
<PAGE>



Item 6.  Selected Financial Data.

The  information  set  forth  below  presents  selected  financial  data  of the
Partnership.  Additional  financial  information  is set  forth  in the  audited
consolidated financial statements in Item 8 hereof.
<TABLE>
<CAPTION>
                                                 Year Ended March 31,
                       ----------------------------------------------------------------------
OPERATIONS                 2003          2002          2001           2000          1999
----------             ------------  ------------   ------------   -----------   ------------
<S>                    <C>           <C>            <C>            <C>           <C>
Revenues               $  9,140,057  $  9,013,667   $  8,662,312   $  8,211,451  $  7,932,980
Operating expenses      (13,685,802)  (13,154,549)   (13,480,310)   (13,137,023)  (12,665,156)
                       ------------  ------------   ------------   ------------  ------------
Loss before minority
  interest               (4,545,745)   (4,140,882)    (4,817,998)    (4,925,572)   (4,732,176)
Minority interest in
  loss of subsidiaries       10,959         8,204         11,423         10,908        11,063
                       ------------  ------------   ------------   ------------  ------------

Net loss               $( 4,534,786) $ (4,132,678)  $ (4,806,575)  $ (4,914,664) $ (4,721,113)
                       ------------  ------------   ------------   ------------  ------------
Net loss per weighted
  average BAC          $     (76.19) $     (69.43)  $     (80.75)  $     (82.57) $     (79.32)
                       ============  ============   ============   ============  ============

<CAPTION>

                                                 Year Ended March 31,
                       ----------------------------------------------------------------------
FINANCIAL POSITION         2003           2002          2001           2000          1999
------------------     ------------  ------------   ------------   -----------   ------------
<S>                    <C>           <C>            <C>            <C>           <C>
Total assets           $ 87,502,402  $ 90,796,504   $ 93,702,404   $ 96,634,527  $ 99,844,837
                       ============  ============   ============   ============  ============

Total liabilities      $ 76,092,507  $ 74,604,701   $ 73,295,501   $ 71,338,864  $ 69,550,289
                       ============  ============   ============   ============  ============

Minority interest      $   (343,717) $    (96,595)  $    (14,173)  $     68,012  $    152,233
                       ============  ============   ============   ============  ============


Total partners'capital $ 11,753,612  $ 16,288,398   $ 20,421,076   $ 25,227,651  $ 30,142,315
                       ============  ============   ============   ============  ============
</TABLE>

During the years ended March 31, 2003, 2002, 2001, 2000 and 1999,  respectively,
total  assets  decreased  primarily  due to  depreciation  partially  offset  by
improvements to property and equipment.

Cash Distributions
------------------
The  Partnership has made no  distributions  to the BACs holders as of March 31,
2003.


                                       8
<PAGE>

<TABLE>
<CAPTION>
                  Selected Quarterly Financial Data (Unaudited)

                                                         Quarter Ended
                            -----------------------------------------------------------------------
OPERATIONS                  June 30, 2002   September 30, 2002   December 31, 2002   March 31, 2003
----------                  -------------   ------------------   -----------------   --------------
<S>                           <C>               <C>                 <C>                <C>
Revenues                      $ 2,193,120       $ 2,235,515         $ 2,258,692        $ 2,452,730

Operating expenses             (3,221,107)       (2,997,917)         (3,436,025)        (4,030,753)
                              -----------       -----------         -----------        -----------

Loss before minority          $(1,027,987)      $  (762,402)        $(1,177,333)       $(1,578,023)
  interest

Minority interest in loss
  of subsidiaries                   3,048             2,298               1,946              3,667
                              -----------       -----------         -----------        -----------

Net loss                      $(1,024,939)      $  (760,104)        $(1,175,387)       $(1,574,356)
                              ===========       ===========         ===========        ===========

Net loss per weighted
  average BAC                 $    (17.22)      $    (12.77)        $    (19.75)       $    (26.45)
                              ===========       ===========         ===========        ===========

<CAPTION>

                                                         Quarter Ended
                            -----------------------------------------------------------------------
OPERATIONS                  June 30, 2001   September 30, 2001   December 31, 2001   March 31, 2002
----------                  -------------   ------------------   -----------------   --------------
<S>                           <C>               <C>                 <C>                <C>
Revenues                      $ 2,147,369       $ 2,171,907         $ 2,185,549        $ 2,508,842

Operating expenses             (3,264,363)       (3,173,468)         (3,374,088)        (3,342,630)
                              -----------       -----------         -----------        -----------

Loss before minority
  interest                    $(1,116,994)      $(1,001,561)        $(1,188,539)       $  (833,788)

Minority interest in loss           3,538             2,808               2,417               (559)
  of subsidiaries             -----------       -----------         -----------        -----------

Net loss                      $(1,113,456)      $  (998,753)        $(1,186,122)       $  (834,347)
                              ===========       ===========        ===========        ===========

Net loss per weighted
  average BAC                 $    (18.71)      $    (16.78)        $    (19.92)       $    (14.02)
                              ===========       ===========         ===========        ===========
</TABLE>


                                       9
<PAGE>

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations.

Liquidity and Capital Resources
-------------------------------

General
-------

The  Partnership's  primary  source of funds is a working  capital  reserve  and
interest  thereon.  This source of funds is available to meet obligations of the
Partnership.

Through March 31, 2003, the  Partnership has invested all of the net proceeds in
fifteen Local  Partnerships of which  approximately  $282,000 remains to be paid
(including approximately $24,000 being held in escrow).

For the year ended March 31, 2003, cash and cash  equivalents of the Partnership
and  its  fifteen  consolidated  Local  Partnerships   decreased   approximately
($302,000)  due to  repayments  of mortgage  loans  ($480,000),  acquisition  of
property  and  equipment   ($488,000)  and  a  decrease  in   capitalization  of
consolidated  subsidiaries  attributable to minority  interest  ($236,000) which
exceeded cash provided by operating activities ($804,000),  a decrease in escrow
deposits relating to investing activities ($74,000) and a net decrease in due to
local  general  partners  and  affiliates  relating to investing  and  financing
activities  ($24,000).  Included in the adjustments to reconcile the net loss to
cash provided by operations is depreciation  and  amortization of  approximately
$3,519,000.

At March 31, 2003, there is a balance of  approximately  $153,000 in the working
capital  reserve.  The General Partner  believes that these reserves,  plus cash
distributions to be received from the operations of the Local Partnerships, will
be sufficient  (subject to the continued deferral of fees payable to the General
Partner)  to fund  the  Partnership's  ongoing  operations  for the  foreseeable
future.  During the years ended March 31, 2003, 2002 and 2001,  amounts received
from operations of the Local  Partnerships were approximately  $88,000,  $71,000
and $68,000, respectively. Management anticipates receiving distributions in the
future,   although  not  to  a  level   sufficient  to  permit   providing  cash
distributions to BACs holders.

Partnership   management  fees  owed  to  the  General   Partner   amounting  to
approximately  $2,793,000 and $2,247,000 were accrued and unpaid as of March 31,
2003 and 2002, respectively (see Note 8). Without the General Partners' advances
and   continued   accrual   without   payment  of  certain   fees  and   expense
reimbursements,  the  Partnership  will  not  be  in  a  position  to  meet  its
obligations.  The General Partner has continued to advance and allow the accrual
without  payment of these  amounts but is under no  obligation to continue to do
so.

For a discussion of  contingencies  affecting  certain Local  Partnerships,  see
Results of Operations of Certain Local  Partnerships,  below.  Since the maximum
loss the Partnership would be liable for is its net investment in the respective
subsidiary  partnerships,  the resolution of the existing  contingencies  is not
anticipated  to impact  future  results of  operations,  liquidity  or financial
condition in a material way. However,  the Partnership's  loss of its investment
in a Local Partnership will eliminate the ability to generate future Tax Credits
from such Local  Partnership  and may also result in recapture of Tax Credits if
the investment is lost before expiration of the Credit Period.

Except as  described  above,  management  is not aware of any  trends or events,
commitments or uncertainties,  which have not otherwise been disclosed that will
or are likely to impact  liquidity in a material  way.  Management  believes the
only impact would be from laws that have not yet been adopted.  The portfolio is
diversified by the location of the  properties  around the United States so that
if one  area of the  country  is  experiencing  downturns  in the  economy,  the
remaining Properties in the portfolio may be experiencing upswings.  However the
geographic  diversification  of the portfolio may not protect  against a general

                                       10
<PAGE>

downturn in the national  economy.  The Partnership has invested the proceeds of
its offering in 15 Local Partnerships, all of which fully have their Tax Credits
in place.  The Tax Credits  are  attached  to the  Property  for a period of ten
years,  and are  transferable  with the  Property  during the  remainder  of the
ten-year  period.  If trends in the real estate  market  warranted the sale of a
Property,  the remaining Tax Credits  would  transfer to the new owner;  thereby
adding  significant  value to the  Property  on the  market,  which value is not
included in the financial statement carrying amount.

Critical Accounting Policies
----------------------------

The preparation of consolidated financial statements requires management to make
estimates and assumptions.  These estimates and assumptions  affect the reported
amounts  of assets and  liabilities  and  disclosure  of  contingent  assets and
liabilities  at the  date  of the  consolidated  financial  statements  and  the
reported  amounts of revenue and expenses  during the reporting  period.  Actual
results could differ from those estimates. The following is a summary of certain
accounting estimates considered critical by the Partnership.

Property and Equipment
----------------------

Property and  equipment  to be held and used are carried at cost which  includes
the purchase price, acquisition fees and expenses,  construction period interest
and any other costs incurred in acquiring the  properties.  The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods.  Expenditures for repairs and maintenance are charged
to expense as incurred;  major renewals and betterments are capitalized.  At the
time property and  equipment are retired or otherwise  disposed of, the cost and
accumulated   depreciation  are  eliminated  from  the  assets  and  accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings.  The  Partnership  complies  with  Statement of  Financial  Accounting
Standards  (SFAS)  No.  144  "Accounting  for  the  Impairment  or  Disposal  of
Long-Lived  Assets".  A loss on impairment of assets is recorded when management
estimates amounts recoverable through future operations and sale of the property
on an  undiscounted  basis are below  depreciated  cost. At that time,  property
investments  themselves  are reduced to estimated  fair value  (generally  using
discounted cash flows).

Income Taxes
------------

The  Partnership  is not  required to provide  for, or pay,  any federal  income
taxes.  Net income or loss generated by the Partnership is passed through to the
partners and is required to be reported by them. The  Partnership may be subject
to state and local taxes in jurisdictions  in which it operates.  For income tax
purposes, the Partnership has a fiscal year ending December 31.

Results of Operations
---------------------

Property and  equipment  to be held and used are carried at cost which  includes
the purchase price, acquisition fees and expenses,  construction period interest
and any other costs incurred in acquiring the  properties.  The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods.  Expenditures for repairs and maintenance are charged
to expense as incurred;  major renewals and betterments are capitalized.  At the
time property and  equipment are retired or otherwise  disposed of, the cost and
accumulated   depreciation  are  eliminated  from  the  assets  and  accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings.  A loss on impairment of assets is recorded when management  estimates
amounts  recoverable  through  future  operations and sale of the property on an
undiscounted   basis  are  below  depreciated  cost.  At  that  time,   property
investments  themselves  are reduced to estimated  fair value  (generally  using
discounted cash flows).

                                       11
<PAGE>

Through March 31, 2003, the Partnership has recorded approximately $3,926,000 as
an aggregate loss on impairment of assets.

The following is a summary of the results of operations of the  Partnership  for
the years ended March 31,  2003,  2002 and 2001 (the 2002,  2001 and 2000 Fiscal
Years, respectively).

The net  loss for the  2002,  2001 and 2000  Fiscal  Years  totaled  $4,534,786,
$4,132,678 and $4,806,575, respectively.

The  Partnership and BACs holders began to recognize Tax Credits with respect to
a Property when the Credit Period for such  Property  commenced.  Because of the
time required for the  acquisition,  completion and rent-up of  Properties,  the
amount of Tax Credits per BAC gradually  increased over the first three years of
the  Partnership.  Housing Tax Credits not  recognized  in the first three years
will be recognized  in the 11th through 13th years.  The  Partnership  generated
$8,746,267,  $8,746,267  and  $8,728,115 of Housing Tax Credits during the 2002,
2001 and 2000 tax years, respectively.

2002 vs. 2001
-------------
The  Partnership's  results of  operations  for the 2002 and 2001  Fiscal  Years
consisted  primarily of the results of the  Partnership's  investment in fifteen
consolidated  Local  Partnerships.  The  majority  of Local  Partnership  income
continues  to be in the form of rental  income with the  corresponding  expenses
being divided among operations, depreciation and mortgage interest.

Rental income increased approximately 4% for the 2002 Fiscal Year as compared to
the 2001 Fiscal Year primarily due to rental rate increases.

Other income decreased $196,000 for the 2002 Fiscal Year as compared to the 2001
Fiscal Year due to one Local Partnership  receiving a property tax refund in the
2001 Fiscal Year and another Local Partnership  receiving a HUD energy rebate in
the 2001 Fiscal Year.

Total expenses, excluding insurance, remained fairly consistent with an increase
of  approximately  3% for the 2002  Fiscal  Year as  compared to the 2001 Fiscal
Year.

Insurance increased  approximately $152,000 for the 2002 Fiscal year as compared
to the 2001 Fiscal Year  primarily  due to increased  insurance  premiums at the
Local Partnerships.

2001 vs. 2000
-------------
The  Partnership's  results of  operations  for the 2001 and 2000  Fiscal  Years
consisted  primarily of the results of the  Partnership's  investment in fifteen
consolidated  Local  Partnerships.  The  majority  of Local  Partnership  income
continues  to be in the form of rental  income with the  corresponding  expenses
being divided among operations, depreciation and mortgage interest.

Rental income increased approximately 4% for the 2001 Fiscal Year as compared to
the 2000 Fiscal Year primarily due to rental rate increases.

Total expenses, excluding operating,  remained fairly consistent with a decrease
of  approximately  2% for the 2001  Fiscal  Year as  compared to the 2000 Fiscal
Year.

Operating decreased  approximately $126,000 for the 2001 Fiscal Year as compared
to the 2000 Fiscal Year primarily due to decreased  electrical and water charges
at one Local Partnership.

Results of Operations of Certain Local Partnerships
---------------------------------------------------

Clear Horizons Limited Partnership
----------------------------------
At December 31, 2002,  Clear Horizons  Limited  Partnership  ("Clear  Horizons")
current liabilities exceeded its current assets by over $182,000.  Although this

                                       12
<PAGE>

condition  could  raise  substantial  doubt  about  Clear  Horizons'  ability to
continue as a going concern, such doubt is alleviated as follows:

1.  Included in current  liabilities  at December 31, 2002,  is $188,770 owed to
related  parties  who have  advised  Clear  Horizons  that they do not intend to
pursue collection beyond Clear Horizons' ability to pay.

2. The Local  General  Partner of Clear  Horizons  has agreed to fund  operating
deficits up to $250,000.

Accordingly, management believes that Clear Horizons has the ability to continue
as a going concern for at least one year from December 31, 2002.

Other
-----

The Partnership's  investment as a limited partner in the Local  Partnerships is
subject to the risks of potential  losses arising from  management and ownership
of improved real estate.  The Partnership's  investments also could be adversely
affected by poor economic  conditions  generally,  which could increase  vacancy
levels and rental payment defaults and by increased operating  expenses,  any or
all of which could threaten the financing  viability of one or more of the Local
Partnerships.

There also are  substantial  risks  associated  with the  operation of Apartment
Complexes   receiving   government   assistance.   These  include   governmental
regulations  concerning tenant eligibility,  which may make it more difficult to
rent apartments in the complexes;  difficulties in obtaining government approval
for rent  increases;  limitations  on the  percentage  of  income  which low and
moderate-income  tenants may pay as rent; the possibility  that Congress may not
appropriate  funds to enable the Department of Housing and Urban  Development to
make the rental assistance payments it has contracted to make; and that when the
rental  assistance  contracts  expire,  there  may  not  be  market  demand  for
apartments at full market rents in a Local Partnership's Apartment Complex.

The Local  Partnerships  are impacted by inflation  in several  ways.  Inflation
allows for  increases in rental rates  generally to reflect the impact of higher
operating and replacement  costs.  Inflation also affects the Local Partnerships
adversely by increasing operating costs as, for example, for such items as fuel,
utilities and labor.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.


                                       13
<PAGE>

Item 8.  Financial Statements and Supplementary Data.
                                                                      Sequential
                                                                         Page
(a) 1.   Consolidated Financial Statements                            ----------

         Independent Auditors' Report                                     15

         Consolidated Balance Sheets at March 31, 2003 and 2002           58

         Consolidated Statements of Operations for the Years Ended
         March 31, 2003, 2002 and 2001                                    59

         Consolidated  Statements of Changes in Partners' Capital
         (Deficit) for the Years Ended March 31, 2003, 2002 and 2001      60

         Consolidated Statements of Cash Flows for the Years Ended
         March 31, 2003, 2002 and 2001                                    61

         Notes to Consolidated Financial Statements                       63


                                       14
<PAGE>

                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------

To the Partners of
Independence Tax Credit Plus L.P. II and Subsidiaries
(A Delaware Limited Partnership)


We have audited the consolidated  balance sheets of Independence Tax Credit Plus
L.P. II and Subsidiaries (A Delaware  Limited  Partnership) as of March 31, 2003
and 2002,  and the related  consolidated  statements of  operations,  changes in
partners' capital (deficit),  and cash flows for the years ended March 31, 2003,
2002  and  2001  (the  2002,  2001 and 2000  Fiscal  Years,  respectively).  The
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  for twelve (Fiscal 2002
and 2001)  and  fifteen  (Fiscal  2000)  subsidiary  partnerships  whose  losses
aggregated  $2,808,360,  $2,471,026 and  $4,013,266 for the 2002,  2001 and 2000
Fiscal  Years,   respectively,   and  whose  assets   constituted   68%  of  the
Partnership's  assets at March 31, 2003 and 2002,  presented in the accompanying
consolidated financial statements.  The financial statements of these subsidiary
partnerships  were audited by other  auditors  whose  reports  thereon have been
furnished to us and our opinion expressed  herein,  insofar as it relates to the
amounts  included for these  subsidiary  partnerships,  is based solely upon the
reports of the other auditors.

We conducted  our audits in accordance  with U.S.  generally  accepted  auditing
standards. 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, based upon our audits and the reports of the other auditors, the
accompanying consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Independence Tax Credit Plus
L.P. II and  Subsidiaries  at March 31, 2003 and 2002,  and the results of their
operations  and their cash flows for the years  ended March 31,  2003,  2002 and
2001, in conformity with U.S. generally accepted accounting principles.


Trien Rosenberg Rosenberg
Weinberg Ciullo & Fazzari LLP



New York, New York
May 30, 2003


                                       15
<PAGE>


[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Lincoln Renaissance

We have audited the  accompanying  balance  sheets of Lincoln  Renaissance as of
December  31,  2002 and 2001,  and the  related  statements  of profit and loss,
changes in 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 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 2001 financial statements referred to above present fairly,
in all material respects,  the financial  position of Lincoln  Renaissance as of
December 31, 2002 and 2001,  and the results of its  operations,  the changes in
partners'  equity  (deficit)  and its cash  flows for the years 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 our report
for  the  year  ended  December  31,  2002,  dated  January  31,  2003,  on  our
consideration of Lincoln Renaissance's internal control over financial reporting
and on our test of its compliance with certain provisions of laws,  regulations,
contracts and grants.  That report is 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  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 27
through  30 is  presented  for  purposes  of  additional  analysis  and is not a
required  part of the basis  financial  statements.  Such  information  has been
subjected to the auditing procedures applied in the audit of the basis 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/ Reznick Fedder & Silverman
Baltimore, Maryland
January 31, 2003


                                       16
<PAGE>


[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Lincoln Renaissance

We have audited the  accompanying  balance  sheet of Lincoln  Renaissance  as of
December 31, 2001,  and the related  statements  of profit and loss,  changes in
partners'  equity  (deficit)  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 these financial  statements based on
our audit.  The financial  statements of Lincoln  Renaissance for the year ended
December 31, 2000,  were audited by other auditors  whose report,  dated January
16, 2001, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  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 2001 financial statements referred to above present fairly,
in all material respects,  the financial  position of Lincoln  Renaissance as of
December 31, 2001, and the results of its  operations,  the 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 of America.


/s/ Reznick Fedder & Silverman
Baltimore, Maryland
February 1, 2002


                                       17
<PAGE>


[Letterhead of ZINER, KENNEDY & LEHAN LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Lincoln Renaissance

We have  audited  the  accompanying  balance  sheets of Lincoln  Renaissance  (a
Pennsylvania  Limited  Partnership)  as of December  31, 2000 and 1999,  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   general   partners  and   contracted   management   agent.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. 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 the
Partnership's  general  partners and  contracted  management  agent,  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 Lincoln Renaissance at December
31,  2000 and 1999,  and the  results of its  operations,  changes in  partners'
equity and its cash flows for the years then ended in conformity  with generally
accepted accounting principles.


/s/ Ziner, Kennedy & Lehman LLP
Boston, Massachusetts
January 16, 2001


                                       18
<PAGE>


Letterhead of WIELAND & COMPANY, INC.]

INDEPENDENT AUDITOR'S REPORT

To the Partners
United - Germano - Millgate Limited Partnership

We have audited the  accompanying  balance sheets of United - Germano - Millgate
Limited Partnership as of December 31, 2002 and 2001, and the related statements
of operations,  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 audit.

We conducted our audits 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, and the Illinois Housing  Development  Authority's
FINANCIAL  REPORTING AND AUDITS GUIDELINES FOR MORTGAGORS OF MULTIFAMILY HOUSING
DEVELOPMENTS.  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 United - Germano - Millgate
Limited  Partnership  as of December  31, 2002 and 2001,  and the results of its
operations, changes in partners' equity, and cash flows for the years 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 a report
dated January 29, 2003, on our consideration of the internal control of United -
Germano - Millgate Limited Partnership,  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 audits  were  conducted  for the  purpose of forming an opinion on the basic
financial   statements  taken  as  a  whole.   The  accompanying   supplementary
information  on pages 11 - 12 is presented for purposes of  additional  analysis
and is not a required part of the basic financial statements of United - Germano
- Millgate  Limited  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/ Wieland & Company, Inc.
Batavia, Illinois
January 29, 2003

EIN 36-4025026
Engagement Partner: Paul H.  Wieland


                                       19
<PAGE>


Letterhead of WIELAND & COMPANY, INC.]

INDEPENDENT AUDITOR'S REPORT

To the Partners
United - Germano - Millgate Limited Partnership

We have audited the  accompanying  balance sheets of United - Germano - Millgate
Limited  Partnership (an Illinois  limited  partnership) as of December 31, 2001
and 2000, and the related  statements of operations,  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  generally   accepted  auditing
standards,  GOVERNMENT  AUDITING STANDARDS issued by the Comptroller  General of
the United States and the Illinois  Housing  Development  Authority's  FINANCIAL
REPORTING  AND  AUDITS   GUIDELINES  FOR   MORTGAGORS  OF  MULTIFAMILY   HOUSING
DEVELOPMENTS.  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 United - Germano - Millgate
Limited  Partnership  as of December  31, 2001 and 2000,  and the results of its
operations, changes in partners' equity, and cash flows for the years then ended
in conformity with generally accepted accounting principles.

In  accordance  with  GOVERNMENT  AUDITING   STANDARDS,   the  Illinois  Housing
Development  Authority's FINANCIAL REPORTING AND AUDIT GUIDELINES FOR MORTGAGORS
OF MULTIFAMILY HOUSING DEVELOPMENTS, and the CONSOLIDATED AUDIT GUIDE FOR AUDITS
OF HUD PROGRAMS issued by the U.S.  Department of Housing and Urban Development,
we have also issued a report dated  February 11, 2002, on our  consideration  of
the internal  control of United - Germano - Millgate  Limited  Partnership,  and
reports dated  February 11, 2002, on its compliance  with specific  requirements
applicable  to major HUD and  IHDA-assisted  programs and specific  requirements
applicable to Fair Housing and Non-Discrimination.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial   statements  taken  as  a  whole.   The  accompanying   supplementary
information  is  presented  for  purposes of  additional  analysis  and is not a
required part of the basic  financial  statements of United - Germano - Millgate
Limited  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/ Wieland & Company, Inc.
Batavia, Illinois
February 11, 2002

EIN 36-4025026
Engagement Partner: Paul H.  Wieland



                                       20
<PAGE>


[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT


To the Partners
Mansion Court Associates

We have audited the  accompanying  balance sheets of Mansion Court Associates as
of December 31, 2002 and 2001, and the related statements of operations, changes
in 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 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 Mansion Court Associates as of
December 31, 2002 and 2001,  and the results of its  operations,  the changes in
partners'  equity  (deficit)  and its cash  flows for the years 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 our report
for  the  year  ended  December  31,  2002,  dated  February  7,  2003,  on  our
consideration  of Mansion Court  Associates 's internal  control over  financial
reporting  and on our test of its  compliance  with certain  provisions of laws,
regulations,  contracts and grants.  That report is 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  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 24
through  27 is  presented  for  purposes  of  additional  analysis  and is not a
required  part of the basis  financial  statements.  Such  information  has been
subjected to the auditing procedures applied in the audit of the basis 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/ Reznick Fedder & Silverman
Baltimore, Maryland
February 7, 2003


                                       21
<PAGE>


[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT


To the Partners
Mansion Court Associates

We have audited the accompanying balance sheet of Mansion Court Associates as of
December  31,  2001,  and the  related  statements  of  operations,  changes  in
partners'  equity  (deficit)  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 these financial  statements based on
our audit.  The financial  statements of Mansion Court  Associates  for the year
ended  December 31, 2000,  were audited by other  auditors  whose report,  dated
January 27, 2001, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  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 2001 financial statements referred to above present fairly,
in all material respects,  the financial position of Mansion Court Associates as
of  December  31,  2001,  and the  results  of its  operations,  the  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 of
America.


/s/ Reznick Fedder & Silverman
Baltimore, Maryland
February 1, 2002



                                       22
<PAGE>


[Letterhead of ZINER, KENNEDY & LEHAN LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Mansion Court Associates

We have audited the  accompanying  balance sheets of Mansion Court Associates (a
Pennsylvania  limited  partnership)  as of  December  31,  2000 and 1999 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   general   partners  and   contracted   management   agent.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting  principles used and significant  estimates made by the
Partnership's  general  partners and  contracted  management  agent,  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 Mansion Court  Associates at
December  31,  2000 and 1999,  and the  results  of its  operations,  changes in
partners'  equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ Ziner, Kennedy & Lehan LLP
Boston, Massachusetts
January 27, 2001



                                       23
<PAGE>


[Letterhead of WALL, EINHORN & CHERNITZER, P.C.]

INDEPENDENT AUDITOR'S REPORT


To the Partners                          Virginia Housing Development Authority
DERBY RUN ASSOCIATES, L.P.               601 South Belvidere Street
(A Virginia Limited Partnership)         Richmond, Virginia 23320
Virginia Beach, Virginia


We have audited the accompanying balance sheets of DERBY RUN ASSOCIATES, L.P. (A
Virginia Limited  Partnership) as of December 31, 2002 and 2001, and the related
statements of operations,  partners'  equity,  and cash flows for the years then
ended.  These  financial  statements  are the  responsibility  of the  project'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.  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 DERBY RUN ASSOCIATES,  L.P. as
of December  31, 2002 and 2001,  and the results of its  operations,  changes in
partners'  equity and its cash flows for the years then ended in conformity  and
accounting principles generally accepted in the United States and America.

The accompanying  supplementary information shown on pages 14 - 20, 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 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.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements referred to above. The Partnership's management has elected
to disclose certain  information  relating to the low-income housing tax credits
allocated to the Partnership as described in Note 7 to the financial  statements
which are not required to be disclosed in  accordance  with  auditing  standards
generally  accepted in the United States of America.  Such  disclosures have not
been subjected to the auditing procedures applied in the audits of the financial
statements, and accordingly, we express no opinion on them.


/s/ Wall, Einhorn & Chernitzer, P.C.
Norfolk, Virginia
January 20, 2003



                                       24
<PAGE>


[Letterhead of WALL, EINHORN & CHERNITZER, P.C.]

INDEPENDENT AUDITOR'S REPORT


To the Partners                           Virginia Housing Development Authority
DERBY RUN ASSOCIATES, L.P.                601 South Belvidere Street
(A Virginia Limited Partnership)          Richmond, Virginia 23320
Virginia Beach, Virginia


We have audited the accompanying balance sheets of DERBY RUN ASSOCIATES, L.P. (A
Virginia Limited  Partnership) as of December 31, 2001 and 2000, and the related
statements of operations,  partners'  equity,  and cash flows for the years then
ended.  These  financial  statements  are the  responsibility  of the  project'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.  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 DERBY RUN ASSOCIATES,  L.P. as
of December  31, 2001 and 2000,  and the results of its  operations,  changes in
partners'  equity and its cash flows for the years then ended in conformity  and
accounting principles generally accepted in the United States and America.

The accompanying  supplementary information shown on pages 14 - 20, 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 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.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements referred to above. The Partnership's management has elected
to disclose certain  information  relating to the low-income housing tax credits
allocated to the Partnership as described in Note 7 to the financial  statements
which are not required to be disclosed in  accordance  with  auditing  standards
generally  accepted in the United States of America.  Such  disclosures have not
been subjected to the auditing procedures applied in the audits of the financial
statements, and accordingly, we express no opinion on them.


/s/ Wall, Einhorn & Chernitzer, P.C.
Norfolk, Virginia
January 17, 2002


                                       25
<PAGE>



[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Renaissance Plaza 93 Associates, L.P.

We  have  audited  the  accompanying  balance  sheet  of  Renaissance  Plaza  93
Associates,  L.P.  as of  December  31,  2002,  and the  related  statements  of
operations,  partners'  equity (deficit) 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 these  financial
statements based on our audit.

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  Renaissance  Plaza  93
Associates, L.P. as of December 31, 2002, and the results of its operations, the
changes in partners' equity (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 and the  "Consolidated  Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 15,
2003 on our  consideration of Renaissance  Plaza 93 Associates,  L.P.'s internal
control and on its  compliance  with  requirements  applicable to  DHCD-assisted
programs and compliance over financial reporting.  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 made for the purpose of forming an opinion on the basic  financial
statements taken as a whole. The supplemental information on pages 25 through 34
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.



/s/ Reznick Fedder & Silverman
Lead Auditor: James P. Martinko
Bethesda, Maryland
Federal Employer Identification Number: 52-1088612

January 15, 2003



                                       26
<PAGE>

[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Renaissance Plaza 93 Associates, L.P.

We  have  audited  the  accompanying  balance  sheet  of  Renaissance  Plaza  93
Associates,  L.P.  as of  December  31,  2001,  and the  related  statements  of
operations,  partners'  equity (deficit) 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 these  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 for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material   respects,   the  financial  position  of  Renaissance  Plaza  93
Associates, L.P. as of December 31, 2001, and the results of its operations, the
changes in partners' equity (deficit) and cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.

Our audit was made for the purpose of forming an opinion on the basic  financial
statements taken as a whole. The supplemental information on pages 25 through 34
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.

In accordance with Government  Auditing  Standards and the  "Consolidated  Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 31,
2002 on our  consideration of Renaissance  Plaza 93 Associates,  L.P.'s internal
control and on its  compliance  with  requirements  applicable to  DHCD-assisted
programs, and laws and regulations applicable to the financial statements.



/s/ Reznick Fedder & Silverman
Audit Principal: Robert J. Denmark
Bethesda, Maryland
Federal Employer Identification Number: 52-1088612
January 31, 2002



                                       27
<PAGE>



[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Renaissance Plaza 93 Associates, L.P.

We  have  audited  the  accompanying  balance  sheet  of  Renaissance  Plaza  93
Associates,  L.P.  as of  December  31,  2000,  and the  related  statements  of
operations,  partners'  equity (deficit) 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 these  financial
statements based on our audit.

We conducted our audit in accordance with generally  accepted auditing standards
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 for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material   respects,   the  financial  position  of  Renaissance  Plaza  93
Associates, L.P. as of December 31, 2000, and the results of its operations, the
changes in partners' equity (deficit) and cash flows for the year then ended, in
conformity with generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic  financial
statements taken as a whole. The supplemental information on pages 23 through 33
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.

In accordance with Government  Auditing  Standards and the  "Consolidated  Audit
Guide for Audits of HUD  Programs," we have also issued  reports dated  February
12,  2001 on our  consideration  of  Renaissance  Plaza  93  Associates,  L.P.'s
internal  control  and  on  its  compliance  with  requirements   applicable  to
DHCD-assisted  programs,  and laws and  regulations  applicable to the financial
statements.



/s/ Reznick Fedder & Silverman
Audit Principal: Robert J. Denmark
Bethesda, Maryland
Federal Employer Identification Number: 52-1088612
February 12, 2001



                                       28
<PAGE>

[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Tasker Village Associates

We have audited the accompanying  balance sheets of Tasker Village Associates as
of December 31, 2002 and 2001,  and the related  statements  of profit and loss,
changes in 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 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 the 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  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 Tasker Village Associates as of
December 31, 2002 and 2001,  and the results of its  operations,  the changes in
partners'  equity  (deficit)  and its cash  flows for the years 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 our report
for  the  year  ended  December  31,  2002,  dated  January  17,  2003,  on  our
consideration of Tasker Village's internal control over financial  reporting and
on our test of its  compliance  with certain  provisions  of laws,  regulations,
contracts and grants.  That report is 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  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 25
through 280 is  presented  for  purposes  of  additional  analysis  and is not a
required  part of the basis  financial  statements.  Such  information  has been
subjected to the auditing procedures applied in the audit of the basis 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/ Reznick Fedder & Silverman
Baltimore, Maryland
January 17, 2003


                                       29
<PAGE>


[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Tasker Village Associates

We have audited the accompanying  balance sheet of Tasker Village  Associates as
of December 31, 2001, and the related  statements of profit and loss, changes in
partners'  equity  (deficit)  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 these financial  statements based on
our audit.  The financial  statements of Tasker Village  Associates for the year
ended  December 31, 2000,  were audited by other  auditors  whose report,  dated
January 19, 2001, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  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
the 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 2001 financial statements referred to above present fairly,
in all material respects, the financial position of Tasker Village Associates as
of  December  31,  2001,  and the  results  of its  operations,  the  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 of
America.


/s/ Reznick Fedder & Silverman
Baltimore, Maryland
February 8, 2002


                                       30
<PAGE>



[Letterhead of ZINER, KENNEDY & LEHAN LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Tasker Village Associates

We have audited the accompanying  balance sheets of Tasker Village Associates (a
Pennsylvania  limited  partnership)  as of December  31, 2000 and 1999,  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   general  partners  and  contracted  management  agent.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. 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 the
Partnership's  general  partners and  contracted  management  agent,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits 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 Tasker Village Associates at
December  31,  2000 and 1999,  and the  results  of its  operations,  changes in
partners' equity, and its cash flows for the years then ended in conformity with
generally accepted accounting principles.


/s/ Ziner, Kennedy & Lehan LLP
Boston, Massachusetts
January 19, 2001


                                       31
<PAGE>


[Letter of CLIFFORD R. BENN]


INDEPENDENT AUDITOR'S REPORT


General Partner
Martha Bryant Manor, L.P.
Los Angeles, California

I have audited the balance sheet of Martha  Bryant  Manor,  L.P. at December 31,
2002 and the related statements of loss, changes in partners' capital,  and cash
flow for the year then ended. These financial  statements are the responsibility
of Martha Bryant Manor,  L.P.'s  management.  My responsibility is to express an
opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally  accepted  auditing  standards
used in the United States of America.  Those  standards  require that I plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material  misstatements.  An audit include examining on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also include assessing the accounting  principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial statement presentation.  I believe that my audit provides a reasonable
basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material  respects,  the  financial  position of Martha  Bryant  Manor,  L.P. at
December  31, 2001 and the results of its  operations  and its cash flow for the
year then ended in conformity with generally accepted accounting principles used
in the United States of America.


/s/ Clifford R. Benn
February 21, 2003
Carson, California



                                       32
<PAGE>


[Letter of CLIFFORD R. BENN]


INDEPENDENT AUDITOR'S REPORT


General Partner
Martha Bryant Manor, L.P.
Los Angeles, California

I have audited the balance sheet of Martha  Bryant  Manor,  L.P. at December 31,
2001 and the related statements of loss, changes in partners' capital,  and cash
flow for the year then ended. These financial  statements are the responsibility
of Martha Bryant Manor,  L.P.'s  management.  My responsibility is to express an
opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally  accepted auditing  standards.
Those standards  require that I plan and perform the audit to obtain  reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatements.  An audit include examining on a test basis,  evidence supporting
the amounts and disclosures in the financial  statements.  An audit also include
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material  respects,  the  financial  position  of Marth  Bryant  Manor,  L.P. at
December  31, 2001 and the results of its  operations  and its cash flow for the
year then ended in conformity with generally accepted accounting principles.


/s/ Clifford R. Benn
February 26, 2002
Carson, California



                                       33
<PAGE>


[Letterhead of CLIFFORD R. BENN]

INDEPENDENT AUDITOR'S REPORT

General Partner
Martha Bryant Manor, L.P.
Los Angeles, California

I have audited the balance sheet of Martha  Bryant  Manor,  L.P. at December 31,
2000 and the related  statements of income,  changes in partners'  capital,  and
cash  flow  for  the  year  then  ended.  These  financial  statements  are  the
responsibility of Martha Bryant Manor,  L.P.'s management.  My responsibility is
to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally  accepted auditing  standards.
Those standards  require that I 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.
I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material  respects,  the  financial  position of Martha  Bryant  Manor,  L.P. at
December  31, 2000 and the results of its  operations  and its cash flow for the
year then ended in conformity with generally accepted accounting principles.



/s/ Clifford R. Benn
Carson, California
February 13, 2001



                                       34
<PAGE>


[Letterhead of MARVIN D. MASON]

To the Partners of
Colden Oaks, A California Limited Partnership
Los Angeles, California

I have  audited the  accompanying  balance  sheets of Colden  Oaks, a California
Limited  Partnership,  as of  December  31,  2002  and  2001,  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  general  partners.  My responsibility is to express an opinion on
these financial statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in the
material  respects,  the financial position of Colden Oaks, a California Limited
Partnership,  at December 31, 2002 and 2001, and the results of its  operations,
changes  in  partners'  equity  and its cash  flows for the year  then  ended in
conformity with general accepted accounting principles.


/s/ Marvin Mason
Certified Public Accountant
Tarzana, California
February 28, 2003



                                       35
<PAGE>


[Letterhead of MARVIN D. MASON]

To the Partners of
Colden Oaks, A California Limited Partnership
Los Angeles, California

I have  audited the  accompanying  balance  sheets of Colden  Oaks, a California
Limited  Partnership,  as of  December  31,  2001  and  2000,  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  general  partners.  My responsibility is to express an opinion on
these financial statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in the
material  respects,  the financial position of Colden Oaks, a California Limited
Partnership,  at December 31, 2001 and 2000, and the results of its  operations,
changes  in  partners'  equity  and its cash  flows for the year  then  ended in
conformity with general accepted accounting principles.


/s/ Marvin Mason
Certified Public Accountant
Tarzana, California
March 1, 2002


                                       36
<PAGE>


[Letterhead of CLIFFORD R. BENN]

INDEPENDENT AUDITOR'S REPORT

General Partner
Brynview Terrace, L.P.
Los Angeles, California

I have audited the balance sheet of Brynview Terrace,  L.P. at December 31, 2002
and the related  statements of income,  changes in partners'  capital,  and cash
flow for the year then ended. These financial  statements are the responsibility
of Brynview  Terrace,  L.P.'s  management.  My  responsibility  is to express an
opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally  accepted  auditing  standards
used in the United States of America.  Those  standards  require that I 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 include assessing the accounting  principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial statement presentation.  I believe that my audit provides a reasonable
basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects,  the financial position of Brynview Terrace, L.P. at December
31, 2001 and the results of its  operations  and its cash flow for the year then
ended in conformity with generally  accepted  accounting  principles used in the
United States of America.


/s/ Clifford R. Benn
February 21, 2003
Carson, California



                                       37
<PAGE>


[Letterhead of CLIFFORD R. BENN]

INDEPENDENT AUDITOR'S REPORT

General Partner
Brynview Terrace, L.P.
Los Angeles, California

I have audited the balance sheet of Brynview Terrace,  L.P. at December 31, 2001
and the related  statements of income,  changes in partners'  capital,  and cash
flow for the year then ended. These financial  statements are the responsibility
of Brynview  Terrace,  L.P.'s  management.  My  responsibility  is to express an
opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally  accepted auditing  standards.
Those standards  require that I 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 include
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects,  the financial position of Brynview Terrace, L.P. at December
31, 2001 and the results of its  operations  and its cash flow for the year then
ended in conformity with generally accepted accounting principles.


/s/ Clifford R. Benn
February 22, 2002
Carson, California



                                       38
<PAGE>



Letterhead of CLIFFORD R. BENN]

INDEPENDENT AUDITOR'S REPORT

General Partner
Brynview Terrace, L.P.
Los Angeles, California

I have audited the balance sheet of Brynview Terrace,  L.P. at December 31, 2000
and the related  statements of income,  changes in partners'  capital,  and cash
flow for the year then ended. These financial  statements are the responsibility
of Brynview  Terrace,  L.P.'s  management.  My  responsibility  is to express an
opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally  accepted auditing  standards.
Those standards  require that I 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 include
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects,  the financial position of Brynview Terrace, L.P. at December
31, 2000 and the results of its  operations  and its cash flow for the year then
ended in conformity with generally accepted accounting principles.


/s/Clifford R. Benn, C.P.A.
Carson, California
February 6, 2001


                                       39
<PAGE>


[Letterhead of ROBERT J.  PACHECO, CPA]

Independent Auditor's Report

To the Partners of NLEDC, L.P., A California Limited Partnership:

We have  audited the  accompanying  balance  sheet of NLEDC,  L.P., a California
Limited  Partnership,  as of December 31, 2002,  and the related  statements  of
income,  changes in partners'  capital,  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 these  financial
statements based on our audit.

We conducted our audit in accordance with generally  accepted auditing standards
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 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 NLEDC,  L.P., a California
Limited  Partnership,  at December 31, 2002, and the results of its  operations,
changes  in  partners'  capital  and  cash  flows  for the  year  then  ended in
conformity with generally accepted accounting principles.

In accordance  with GOVERNMENT  AUDITING  STANDARDS AND THE  CONSOLIDATED  AUDIT
GUIDE FOR AUDITS OF HUD PROGRAMS  issued by the U. S.  Department of Housing and
Urban  Development,  we have also issued reports dated February 20, 2003, on our
consideration  of the  Partnership's  internal  control,  on its compliance with
specific   requirements   applicable  to  nonmajor  HUD  programs  and  specific
requirements applicable to Fair Housing and Non-Discrimination.


/s/ Robert J. Pacheco, CPA
Pasadena, California
February 20, 2003


                                       40
<PAGE>


[Letterhead of ROBERT J.  PACHECO, CPA]

Independent Auditor's Report

To the Partners of NLEDC, L.P., A California Limited Partnership:

We have  audited the  accompanying  balance  sheet of NLEDC,  L.P., a California
Limited  Partnership,  as of December 31, 2001,  and the related  statements  of
income,  changes in partners'  capital,  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 these  financial
statements based on our audit.

We conducted our audit in accordance with generally  accepted auditing standards
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 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 NLEDC,  L.P., a California
Limited  Partnership,  at December 31, 2000, and the results of its  operations,
changes  in  partners'  capital  and  cash  flows  for the  year  then  ended in
conformity with generally accepted accounting principles.

In accordance  with GOVERNMENT  AUDITING  STANDARDS AND THE  CONSOLIDATED  AUDIT
GUIDE FOR AUDITS OF HUD PROGRAMS  issued by the U. S.  Department of Housing and
Urban  Development,  we have also issued  reports  dated March 11, 2002,  on our
consideration  of the  Partnership's  internal  control,  on its compliance with
specific   requirements   applicable  to  nonmajor  HUD  programs  and  specific
requirements applicable to Fair Housing and Non-Discrimination.


/s/ Robert J. Pacheco, CPA
Pasadena, California
March 11, 2002


                                       41
<PAGE>


[Letterhead of ROBERT J.  PACHECO, CPA]

Independent Auditor's Report

To the Partners of NLEDC, L.P., A California Limited Partnership:

We have  audited the  accompanying  balance  sheet of NLEDC,  L.P., a California
Limited  Partnership,  as of December 31, 2000,  and the related  statements  of
income,  changes in partners'  capital,  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 these  financial
statements based on our audit.

We conducted our audit in accordance with generally  accepted auditing standards
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 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 NLEDC,  L.P., a California
Limited  Partnership,  at December 31, 2000, and the results of its  operations,
changes  in  partners'  capital  and  cash  flows  for the  year  then  ended in
conformity with generally accepted accounting principles.

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs  issued by the U. S.  Department of Housing and
Urban  Development,  we have also issued  reports  dated March 30, 2001,  on our
consideration  of the  Partnership's  internal  control,  on its compliance with
specific   requirements   applicable  to  nonmajor  HUD  programs  and  specific
requirements  applicable to Fair Housing and  Non-Discrimination.  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.

/s/ Robert Pacheco
Pasadena, California
March 30, 2001


                                       42
<PAGE>


[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Creative Choice Homes VI, Ltd.

We have audited the accompanying balance sheet of Creative Choice Homes VI, Ltd.
as of December 31, 2002,  and the related  statements of  operations,  partners'
equity 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 these financial statements based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  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 Creative Choice Homes VI, Ltd.
as of  December  31,  2002,  and the results of its  operations,  the changes in
partners'  equity and cash flows for the year then  ended,  in  conformity  with
accounting principles generally accepted in the United States of America.

/s/ Reznick Fedder & Silverman
Bethesda, Maryland
February 4, 2003

                                       43
<PAGE>


[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Creative Choice Homes VI, Ltd.

We have audited the accompanying balance sheet of Creative Choice Homes VI, Ltd.
as of December 31, 2001,  and the related  statements of  operations,  partners'
equity 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 these financial statements based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  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 Creative Choice Homes VI, Ltd.
as of  December  31,  2001,  and the results of its  operations,  the changes in
partners'  equity and cash flows for the year then  ended,  in  conformity  with
accounting principles generally accepted in the United States of America.

/s/ Reznick Fedder & Silverman
Bethesda, Maryland
February 4, 2002


                                       44
<PAGE>


[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Creative Choice Homes VI, Ltd.

We have audited the accompanying balance sheet of Creative Choice Homes VI, Ltd.
as of December 31, 2000,  and the related  statements of  operations,  partners'
equity 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 these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
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 Creative Choice Homes VI, Ltd.
as of  December  31,  2000,  and the results of its  operations,  the changes in
partners'  equity and cash flows for the year then  ended,  in  conformity  with
generally accepted accounting principles.

/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 31, 2001


                                       45
<PAGE>


[Letterhead of SHENOUDA & ASSOCIATES, LLP]

Independent Auditor's Report

To the Partners
P & P Home for the Elderly, L.P.
Los Angeles, California

We have audited the  accompanying  balance  sheet of P & P Home for the Elderly,
L.P. (A Limited Partnership) as of December 31, 2002, and the related statements
of  operations,  changes  in  partners'  equity and cash flows for the year then
ended.  These financial  statements are the responsibility of the P & P Home for
the Elderly,  L.P.  management.  Our  responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  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 P & P Home for the Elderly,
L.P. as of December 31, 2002,  and the results of its  operations and cash flows
for the year then ended,  in conformity  with  accounting  principles  generally
accepted in the United States of America.


/s/ Shenouda & Associates, LLP
Huntington Beach, California
February 18, 2003



                                       46
<PAGE>


[Letterhead of CHARLES P. BENEDICT, CPA]

Independent Auditor's Report

To the Partners
P & P Home for the Elderly, L.P.
Los Angeles, California

I have  audited the  accompanying  balance  sheet of P & P Home for the Elderly,
L.P. as of December 31, 2001, and the related  statements of income,  changes in
partners'  capital,  and cash  flows for the year then  ended.  These  financial
statements  are  the   responsibility  of  the  Partnership's   management.   My
responsibility  is to express an opinion on these financial  statements based on
my audit.

I conducted my audit in accordance with generally  accepted auditing  standards.
Those standards  require that I 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.
I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of P & P Home for the Elderly, L.P. at
December 31, 2001, and the results of its operations and cash flows for the year
then ended, in conformity with generally accepted accounting principles.


/s/ Charles P. Benedict, CPA
Monrovia, California
February 28, 2002



                                       47
<PAGE>


[Letterhead of CHARLES P. BENEDICT, CPA]

Independent Auditor's Report

To the Partners
P & P Home for the Elderly, L.P.
Los Angeles, California

I have  audited the  accompanying  balance  sheet of P & P Home for the Elderly,
L.P. as of December 31, 2000, and the related  statements of income,  changes in
partners'  capital,  and cash  flows for the year then  ended.  These  financial
statements  are  the   responsibility  of  the  Partnership's   management.   My
responsibility  is to express an opinion on these financial  statements based on
my audit.

I conducted my audit in accordance with generally  accepted auditing  standards.
Those standards  require that I 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.
I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of P & P Home for the Elderly, L.P. at
December 31, 2000, and the results of its operations and cash flows for the year
then ended, in conformity with generally accepted accounting principles.

/s/ Charles P. Benedict, CPA
Castak, California
March 9, 2001



                                       48
<PAGE>



[Letterhead of COLE, EVANS & PETERSON]

INDEPENDENT AUDITORS' REPORT ON THE BASIC FINANCIAL STATEMENTS
AND SUPPLEMENTAL INFORMATION

Clear Horizons Limited Partnership
Shreveport, Louisiana

We have  audited  the  accompanying  balance  sheet  of Clear  Horizons  Limited
Partnership, at December 31, 2002, and the related statements of income, capital
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 these financial statements based on our audit.

We conducted  our audit in  accordance  with U.S.  generally  accepted  auditing
standards 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 for our
opinion.

In our opinion,  the  financial  statements  referred to in the first  paragraph
above present fairly, in all material respects,  the financial position of Clear
Horizons  Limited  Partnership,  at  December  31,  2002 and the  results of its
operations,  changes  in  capital,  and cash  flows for the year  then  ended in
conformity with U.S. generally accepted accounting principles.

Our audit was made  primarily for the purpose of forming an opinion on the basic
financial  statements for the year ended December 31, 2002 taken as a whole. The
supplementary  Schedules 1 through 6 are  presented  for purposes of  additional
analysis and are 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  February  6,  2003  on  our   consideration  of  Clear  Horizons  Limited
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.


/s/ Cole, Evans & Peterson
Shreveport, Louisiana
Federal ID No. 72-0506596
Lead Auditor: Steven W. Hedgepeth
February 6, 2003



                                       49
<PAGE>


[Letterhead of COLE, EVANS & PETERSON]

INDEPENDENT AUDITORS' REPORT ON THE BASIC FINANCIAL STATEMENTS
AND SUPPLEMENTAL INFORMATION

Clear Horizons Limited Partnership
Shreveport, Louisiana

We have  audited  the  accompanying  balance  sheet  of Clear  Horizons  Limited
Partnership, at December 31, 2001, and the related statements of income, capital
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 these financial statements based on our audit.

We conducted our audit in accordance with generally  accepted auditing standards
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 for our
opinion.

In our opinion,  the  financial  statements  referred to in the first  paragraph
above present fairly, in all material respects,  the financial position of Clear
Horizons  Limited  Partnership,  at  December  31,  2001 and the  results of its
operations,  changes  in  capital,  and cash  flows for the year  then  ended in
conformity with generally accepted accounting principles.

Our audit was made  primarily for the purpose of forming an opinion on the basic
financial  statements for the year ended December 31, 2001 taken as a whole. The
supplementary  Schedules 1 through 6 are  presented  for purposes of  additional
analysis and are 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 and the  Consolidated  Audit
Guide for Audits of HUD Programs  issued by the U. S.  Department of Housing and
Urban  Development,  we have also issued a report dated  February 8, 2002 on our
consideration  of Clear Horizons Limited  Partnership's  internal  control,  and
reports dated  February 8, 2002, on its  compliance  with laws and  regulations,
compliance with specific  requirements  applicable to Affirmative  Fair Housing,
and  compliance  with specific  requirements  applicable  to major  HUD-assisted
programs. 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.


/s/ Cole, Evans & Peterson
Shreveport, Louisiana
Federal ID No. 72-0506596
Lead Auditor: Steven W. Hedgepeth
February 8, 2002



                                       50
<PAGE>


[Letterhead of COLE, EVANS & PETERSON]

INDEPENDENT AUDITORS' REPORT ON THE BASIC FINANCIAL STATEMENTS
AND SUPPLEMENTAL INFORMATION

Clear Horizons Limited Partnership
Shreveport, Louisiana

We have  audited  the  accompanying  balance  sheet  of Clear  Horizons  Limited
Partnership, at December 31, 2000, and the related statements of income, capital
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 these financial statements based on our audit.

We conducted our audit in accordance with generally  accepted auditing standards
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 for our
opinion.

In our opinion,  the  financial  statements  referred to in the first  paragraph
above present fairly, in all material respects,  the financial position of Clear
Horizons  Limited  Partnership,  at  December  31,  2000 and the  results of its
operations,  changes  in  capital,  and cash  flows for the year  then  ended in
conformity with generally accepted accounting principles.

Our audit was made  primarily for the purpose of forming an opinion on the basic
financial  statements for the year ended December 31, 2000 taken as a whole. The
supplementary  Schedules 1 through 6 are  presented  for purposes of  additional
analysis and are 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 and the  Consolidated  Audit
Guide for Audits of HUD Programs  issued by the U. S.  Department of Housing and
Urban  Development,  we have also issued a report dated February 13, 2001 on our
consideration  of Clear Horizons Limited  Partnership's  internal  control,  and
reports dated  February 13, 2001, on its compliance  with laws and  regulations,
compliance with specific  requirements  applicable to Affirmative  Fair Housing,
and  compliance  with specific  requirements  applicable  to major  HUD-assisted
programs. 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.

/s/ Cole, Evans & Peterson
Lead Auditor: Steven W. Hedgepeth
Federal ID No. 72-0506596
Shreveport, Louisiana
February 13, 2001



                                       51
<PAGE>


[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Neptune Venture, L.P.

We have audited the accompanying  balance sheets of Neptune Venture,  L.P. as of
December 31, 2002 and 2001, and the related statements of operations, changes in
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.  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 the Partnership's  general partner and contracted
management  agent,  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 Neptune  Venture,  L.P. at
December  31,  2002 and 2001,  and the  results  of its  operations,  changes in
partners'  equity  (deficit)  and its cash  flows for the years then  ended,  in
conformity with accounting principles generally accepted in the United States of
America.


/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January 31, 2003



                                       52
<PAGE>



[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Neptune Venture, L.P.

We have audited the accompanying  balance sheet of Neptune  Venture,  L.P. as of
December  31,  2001,  and the  related  statements  of  operations,  changes  in
partners'  equity  (deficit)  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 these financial  statements based on
our audit. The financial statements of Neptune Venture,  L.P. for the year ended
December 31, 2000,  were audited by other auditors  whose report,  dated January
31, 2001, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  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 the Partnership's  general partner and contracted
management  agent,  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 2001 financial statements referred to above present fairly,
in all material  respects,  the financial  position of Neptune Venture,  L.P. at
December  31,  2001,  and the results of its  operations,  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 of America.


/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January 25, 2002



                                       53
<PAGE>



[Letterhead of ZINER, KENNEDY & LEHAN LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Neptune Venture, L.P.

We have audited the accompanying balance sheets of Neptune Venture,  L.P. (a New
Jersey  limited  partnership)  as of December 31, 2000 and 1999, 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   general   partner   and   contracted   management   agent.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. 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 the
Partnership's  general  partner  and  contracted  management  agent,  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 Neptune  Venture,  L.P. at
December  31,  2000 and 1999,  and the  results  of its  operations,  changes in
partners'  equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.


/s/ Ziner, Kennedy & Lehan LLP
Boston, Massachusetts
January 31, 2001



                                       54
<PAGE>


[Letterhead of LAWLOR, O'BRIEN & CHERVENAK, LLC]

INDEPENDENT AUDITORS' REPORT

To the Partners
Affordable Green Associates, L.P.

We have audited the accompanying  balance sheet of Affordable Green  Associates,
L.P. as of December 31, 2002 and the related  statements of operations,  changes
in partners' (deficit),  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 these financial  statements based on
our audit.

We conducted our audit in accordance with generally  accepted auditing standards
in  the  United  States  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 for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Affordable Green Associates,
L.P. as of  December  31,  2002 and the  results of its  operations,  changes in
partners'  (deficit),  and its cash flows for the year then ended in  conformity
with generally accepted accounting principles in the United States of America.


/s/ Lawlor, O'Brien & Chervenak, LLC
Totowa, New Jersey
February 15, 2003



                                       55
<PAGE>


[Letterhead of LAWLOR, O'BRIEN & CHERVENAK, LLC]

INDEPENDENT AUDITORS' REPORT

To the Partners
Affordable Green Associates, L.P.

We have audited the accompanying  balance sheet of Affordable Green  Associates,
L.P. as of December 31, 2001 and the related  statements of operations,  changes
in partners'  capital,  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 these financial  statements based on
our audit.

We conducted our audit in accordance with generally  accepted auditing standards
in  the  United  States  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 for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Affordable Green Associates,
L.P. as of  December  31,  2001 and the  results of its  operations,  changes in
partners' capital, and its cash flows for the year then ended in conformity with
generally accepted accounting principles in the United States of America.


/s/ Lawlor, O'Brien & Chervenak, LLC
Totowa, New Jersey
February 27, 2002



                                       56
<PAGE>


[Letterhead of LAWLOR, O'BRIEN & CHERVENAK, LLC]

INDEPENDENT AUDITORS' REPORT

To the Partners
Affordable Green Associates, L.P.

We have audited the accompanying  balance sheet of Affordable Green  Associates,
L.P. as of December 31, 2000 and the related  statements of operations,  changes
in partners'  capital,  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 these financial  statements based on
our audit.

We conducted our audit in accordance with generally  accepted auditing standards
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 for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Affordable Green Associates,
L.P. as of  December  31,  2000 and the  results of its  operations,  changes in
partners' capital, and its cash flows for the year then ended in conformity with
generally accepted accounting principles.


/s/ Lawlor, O'Brien & Chervenak, LLC
Totowa, New Jersey
February 14, 2001


                                       57
<PAGE>


                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS


                                     ASSETS
<TABLE>
<CAPTION>
                                                                                  March 31,
                                                                        ----------------------------
                                                                            2003            2002
                                                                        ------------    ------------
<S>                                                                     <C>             <C>
Property and equipment net, less accumulated
  depreciation (Notes 2, 4 and 7)                                       $ 82,509,050    $ 85,521,083
Cash and cash equivalents (Notes 2, 3 and 10)                                992,367       1,294,481
Cash held in escrow (Notes 3 and 5)                                        3,032,158       3,075,317
Deferred costs, less accumulated amortization (Notes 2 and 6)                226,427        245,678
Other assets                                                                 742,400         659,945
                                                                        ------------    ------------

                                                                        $ 87,502,402    $ 90,796,504
                                                                        ============    ============

                   LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

Liabilities:
Mortgage notes payable (Note 7)                                         $ 57,603,476    $ 58,083,474
Accounts payable and other liabilities                                     1,333,488       1,377,788
Accrued interest                                                          12,031,123      10,577,930
Due to local general partners and affiliates (Note 8)                      1,617,113       1,750,401
Due to general partner and affiliates (Note 8)                             3,507,307       2,815,108
                                                                        ------------    ------------

                                                                          76,092,507      74,604,701

Minority interest                                                           (343,717)        (96,595)
                                                                        ------------    ------------

Commitments and contingencies (Notes 7, 8 and 10)

Partners' capital (deficit):
Limited partners
  (58,928 BACs issued and outstanding)                                    12,160,026      16,649,464
General partner                                                             (406,414)       (361,066)
                                                                        ------------    ------------

Total partners' capital (deficit)                                         11,753,612      16,288,398
                                                                        ------------    ------------

Total liabilities and partners' capital (deficit)                       $ 87,502,402    $ 90,796,504
                                                                        ============    ============
</TABLE>

See accompanying notes to consolidated financial statements.



                                       58
<PAGE>


                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                         Year Ended March 31,
                                             --------------------------------------------
                                                 2003            2002            2001
                                             ------------    ------------    ------------
<S>                                          <C>             <C>             <C>
Revenues

Rental income                                $  8,841,414    $  8,519,231    $  8,188,745
Other income                                      298,643         494,436         473,567
                                             ------------    ------------    ------------
                                                9,140,057       9,013,667       8,662,312
                                             ------------    ------------    ------------
Expenses
General and administrative                      2,280,440       2,088,577       2,122,880
General and administrative-related parties
  (Note 8)                                        992,455         969,639         985,786
Repairs and maintenance                         1,946,913       1,802,164       1,912,478
Operating                                       1,011,399         954,117       1,080,429
Taxes                                             668,743         724,587         777,497
Insurance                                         616,132         463,831         429,540
Financial, principally interest                 2,650,829       2,650,875       2,663,042
Depreciation and amortization                   3,518,891       3,500,759       3,508,658
                                             ------------    ------------    ------------
Total expenses                                 13,685,802      13,154,549      13,480,310
                                             ------------    ------------    ------------

Loss before minority interest                  (4,545,745)     (4,140,882)     (4,817,998)

Minority interest in loss of subsidiary
  partnerships                                     10,959           8,204          11,423
                                             ------------    ------------    ------------

Net loss                                     $ (4,534,786)   $ (4,132,678)   $ (4,806,575)
                                             ============    ============    ============

Net loss - limited partners                  $ (4,489,438)   $ (4,091,351)   $ (4,758,509)
                                             ============    ============    ============

Number of BACs outstanding                         58,928          58,928          58,928
                                             ============    ============    ============

Net loss per BAC                             $     (76.19)   $     (69.43)   $     (80.75)
                                             ============    ============    ============
</TABLE>


See accompanying notes to consolidated financial statements.


                                       59
<PAGE>


                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
        CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)

<TABLE>
<CAPTION>
                                                                Limited          General
                                                  Total         Partners         Partner
                                              ------------    ------------    ------------
<S>                                           <C>             <C>             <C>
Partners' capital (deficit)-April 1, 2000     $ 25,227,651    $ 25,499,324    $   (271,673)

Net loss                                        (4,806,575)     (4,758,509)        (48,066)
                                              ------------    ------------    ------------

Partners' capital (deficit)-March 31, 2001      20,421,076      20,740,815        (319,739)

Net loss                                        (4,132,678)     (4,091,351)        (41,327)
                                              ------------    ------------    ------------

Partners capital (deficit) - March 31, 2002     16,288,398      16,649,464        (361,066)

Net loss                                        (4,534,786)     (4,489,438)        (45,348)
                                              ------------    ------------    ------------

Partners capital (deficit) - March 31, 2003   $ 11,753,612    $ 12,160,026    $   (406,414)
                                              ============    ============    ============

</TABLE>

See accompanying notes to consolidated financial statements.


                                       60
<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

<TABLE>
<CAPTION>

                                                                Year Ended March 31,
                                                     -----------------------------------------
                                                         2003           2002            2001
                                                     -----------    -----------    -----------
<S>                                                  <C>            <C>            <C>
Cash flows from operating activities:

Net loss                                             $(4,534,786)   $(4,132,678)   $(4,806,575)
                                                     -----------    -----------    -----------
Adjustments to reconcile net loss to net
  cash provided by operating activities:
Depreciation and amortization                          3,518,891      3,500,759      3,508,658
Minority interest in loss of subsidiary
  partnerships                                           (10,959)        (8,204)       (11,423)
(Increase) decrease in assets:
Cash held in escrow                                      (30,654)        12,106        (70,294)
Other assets                                             (82,455)        (3,880)        39,678
Increase (decrease) in liabilities:
Accounts payable and other liabilities                   (44,300)      (246,440)       196,965
Accrued interest                                       1,453,193      1,408,575      1,409,807
Increase in due to local general partners
  and affiliates                                          23,862         20,166         73,945
Decrease in due to local general partners
  and affiliates                                        (181,090)      (169,418)       (46,492)
Due to general partner and affiliates                    692,199        611,089        683,558
                                                     -----------    -----------    -----------
Total adjustments                                      5,338,687      5,124,753      5,784,402
                                                     -----------    -----------    -----------

Net cash provided by operating activities                803,901        992,075        977,827
                                                     -----------    -----------    -----------

Cash flows from investing activities:
Improvements to property and equipment                  (487,607)      (336,097)      (291,814)
Decrease (increase) in cash held in escrow                73,813         72,248       (266,064)
Increase in due to local general partners
  and affiliates                                         137,141          1,570          4,693
Decrease in due to local general partners
  and affiliates                                               0        (51,364)             0
                                                     -----------    -----------    -----------

Net cash used in investing activities                   (276,653)      (313,643)      (553,185)
                                                     -----------    -----------    -----------

Cash flows from financing activities:
Principal payments of mortgage notes                    (479,998)      (296,775)      (373,073)
Increase in due to local general partners
  and affiliates                                          14,940         31,797          8,434
Decrease in due to local general partners
  and affiliates                                        (128,141)             0         (1,200)
Increase in deferred costs                                     0              0         (4,270)
Decrease in capitalization of consolidated
  subsidiaries attributable to minority interest        (236,163)       (74,218)       (70,762)
                                                     -----------    -----------    -----------

Net cash used in financing activities                   (829,362)      (339,196)      (440,871)
                                                     -----------    -----------    -----------

Net (decrease) increase in cash and cash
  equivalents                                           (302,114)       339,236        (16,229)

Cash and cash equivalents at beginning of year         1,294,481        955,245        971,474
                                                     -----------    -----------    -----------
</TABLE>
                                       61
<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

<TABLE>
<CAPTION>

                                                                Year Ended March 31,
                                                     -----------------------------------------
                                                         2003           2002            2001
                                                     -----------    -----------    -----------
<S>                                                  <C>            <C>            <C>
Cash and cash equivalents at end of year             $   992,367    $ 1,294,481    $   955,245
                                                     ===========    ===========    ===========

Supplemental disclosure of cash flows information:
Cash paid during the year for interest               $ 1,211,218    $ 1,217,349    $ 1,686,071
                                                     ===========    ===========    ===========
</TABLE>

See accompanying notes to consolidated financial statements.



                                       62
<PAGE>


                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003

NOTE 1 - General

Independence  Tax Credit  Plus L.P.  II (a Delaware  limited  partnership)  (the
"Partnership")  was  organized  on February  11, 1992 and  commenced  the public
offering on January 19, 1993. The general  partner of the Partnership is Related
Independence  Associates  L.P., a Delaware  limited  partnership  (the  "General
Partner").

The  Partnership's   business  is  to  invest  in  other  partnerships   ("Local
Partnerships,"  "subsidiaries"  or "subsidiary  partnerships")  owning leveraged
apartment  complexes  that are  eligible for the  low-income  housing tax credit
("Tax Credit")  enacted in the Tax Reform Act of 1986,  some of which  complexes
may also be eligible for the historic rehabilitation tax credit.

The Partnership has interests in fifteen subsidiary partnerships as of March 31,
2003.

The  Partnership  was  authorized  to  issue a total of  100,000  ($100,000,000)
Beneficial  Assignment  Certificates  ("BACs")  which were  registered  with the
Securities and Exchange  Commission for sale to the public.  Each BAC represents
all of the economic and virtually all of the ownership rights  attributable to a
limited  partnership  interest.  The  Partnership  raised a total of $58,928,000
representing 58,928 BACs. The offering was terminated on April 7, 1994.

The  terms of the  Partnership's  Amended  and  Restated  Agreement  of  Limited
Partnership (the "Partnership  Agreement") provide, among other things, that net
profits or losses and distributions of cash flow are, in general,  allocated 99%
to the limited partners and BACs holders and 1% to the general partner.

NOTE 2 - Summary of Significant Accounting Policies

a)  Basis of Consolidation

The consolidated  financial  statements  include the accounts of the Partnership
and fifteen  subsidiary  partnerships  in which the Partnership is the principal
limited partner, with an ownership interest of 98.99%. Through the rights of the
Partnership  and/or an affiliate of the General  Partner,  which affiliate has a
contractual  obligation  to act on behalf  of the  Partnership,  to  remove  the
general  partner of the subsidiary  local  partnerships  and to approve  certain
major  operating  and financial  decisions,  the  Partnership  has a controlling
financial  interest  in the  subsidiary  local  partnerships.  All  intercompany
accounts and transactions with the subsidiary  partnerships have been eliminated
in consolidation.

For financial  reporting purposes,  the Partnership's  fiscal year ends on March
31. The Partnership's fiscal year ends March 31, in order to allow adequate time
for the subsidiaries  financial statements to be prepared and consolidated.  The
books and records of the  Partnership  are  maintained  on the accrual  basis of
accounting,  in accordance with U.S. generally accepted  accounting  principles.
All  subsidiaries  have  fiscal  years  ending  December  31.  Accounts  of  the
subsidiaries  have been adjusted for  intercompany  transactions  from January 1
through March 31.

Increases  (decreases)  in  the  capitalization  of  consolidated   subsidiaries
attributable  to  minority  interest  arises  from cash  contributions  and cash
distributions to the minority interest partners.

The  Partnership's  investment  in each  subsidiary  is equal to the  respective
subsidiary's  partners' equity less minority  interest  capital,  if any. Losses

                                       63
<PAGE>


                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003


attributable  to  minority   interest  which  exceed  the  minority   interests'
investment  in a subsidiary  partnership  have been charged to the  Partnership.
Such losses aggregated  approximately $27,000, $26,000 and $30,000 for the years
ended March 31,  2003,  2002 and 2001 (the 2002,  2001 and 2000  Fiscal  Years),
respectively.  In consolidation,  all subsidiary partnership losses are included
in the  Partnership's  capital  account except for losses  allocated to minority
interest  capital.  As of March 31,  2003,  distributions  to  several  minority
interests have exceeded their investments.

b)  Cash and Cash Equivalents

Cash and cash  equivalents  include cash on hand, cash in banks, and investments
in short-term highly liquid  instruments  purchased with original  maturities of
three months or less.  Cash held in escrow has various use  restrictions  and is
not considered a cash equivalent.

Through  March 31, 2003,  the  Partnership  has  recorded an  aggregate  loss on
impairment of assets of approximately $3,926,000.

c)  Property and Equipment

Property and  equipment  to be held and used are carried at cost which  includes
the purchase price, acquisition fees and expenses,  construction period interest
and any other costs incurred in acquiring the  properties.  The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods.  Expenditures for repairs and maintenance are charged
to expense as incurred;  major renewals and betterments are capitalized.  At the
time property and  equipment are retired or otherwise  disposed of, the cost and
accumulated   depreciation  are  eliminated  from  the  assets  and  accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings.  A loss on impairment of assets is recorded when management  estimates
amounts  recoverable  through  future  operations and sale of the property on an
undiscounted   basis  are  below  depreciated  cost.  At  that  time,   property
investments  themselves  are reduced to estimated  fair value  (generally  using
discounted cash flows).

d)  Income Taxes

The  Partnership  is not  required to provide  for, or pay,  any federal  income
taxes.  Net income or loss generated by the Partnership is passed through to the
partners and is required to be reported by them. The  Partnership may be subject
to state and local taxes in jurisdictions  in which it operates.  For income tax
purposes, the Partnership has a fiscal year ending December 31 (Note 9).

e)  Offering Costs

Costs incurred to sell BACs, including brokerage and the nonaccountable  expense
allowance, are considered selling and offering expenses. These costs are charged
directly to limited partners' capital (Note 8).

                                       64
<PAGE>


                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003


f)  Loss Contingencies

The  Partnership   records  loss  contingencies  as  a  charge  to  income  when
information  becomes available which indicates that it is probable that an asset
has  been  impaired  or a  liability  has  been  incurred  as of the date of the
financial statements and the amount of loss can be reasonably estimated.

g)  Use of Estimates

The  preparation  of financial  statements  in  conformity  with U.S.  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions that affect certain  reported amounts and disclosures.  Accordingly,
actual results could differ from those estimates.

NOTE 3 - Fair Value of Financial Instruments

The following  methods and  assumptions  were used to estimate the fair value of
each  class  of  financial  instruments  (all of which  are held for  nontrading
purposes) for which it is practicable to estimate that value:

Cash  and  Cash  Equivalents  and  Cash  Held  in  Escrow
---------------------------------------------------------
The carrying amount approximates fair value.

Mortgage Notes Payable
----------------------
The fair value of mortgage notes payable is estimated, where practicable,  based
on the borrowing rate currently available for similar loans.

The estimated  fair values of the  Partnership's  mortgage  notes payable are as
follows:
<TABLE>
<CAPTION>
                                           March 31, 2003             March 31, 2002
                                     -------------------------   -------------------------
                                      Carrying                    Carrying
                                       Amount       Fair Value     Amount      Fair Value
                                     -----------   -----------   -----------   -----------
<S>                                  <C>           <C>           <C>           <C>
Mortgage notes payable for
  which it is:
Practicable to estimate fair value   $20,163,868   $15,987,427   $23,204,388   $20,441,975
Not practicable                      $37,439,608             *   $34,879,086             *
</TABLE>

*Management  believes  it is not  practical  to  estimate  the fair value of the
mortgage notes payable because  mortgage  programs with similar  characteristics
are not currently available to the Local Partnerships.

The carrying amount of other financial  instruments that require such disclosure
approximates fair value.

                                       65
<PAGE>


                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 4 - Property and Equipment

The components of property and equipment and their estimated useful lives are as
follows:
<TABLE>
<CAPTION>
                                             March 31,               Estimated
                                  ------------------------------    Useful Lives
                                      2003              2002          (Years)
                                  -------------    -------------    ------------
<S>                               <C>              <C>                  <C>
Land                              $   6,228,836    $   6,228,836          --
Building and improvements           101,718,677      101,368,418        10-40
Furniture and fixtures                1,297,603        1,165,945         5-10
                                  -------------    -------------
                                     109,245,116    108,763,199
Less:  Accumulated depreciation     (26,736,066)     (23,242,116)
                                  -------------    -------------

                                  $  82,509,050    $  85,521,083
                                  =============    =============
</TABLE>

Included in property and equipment is $3,501,977 of acquisition fees paid to the
General  Partner and $867,942 of  acquisition  expenses as of March 31, 2003 and
2002, respectively.

In  connection  with  the  rehabilitation  of  the  properties,  the  subsidiary
partnerships  have incurred  developer's fees of $9,282,042 to the local general
partners  and  affiliates  as of March 31,  2003 and  2002.  Such fees have been
included in the cost of property and equipment.

Depreciation  expense for the years ended March 31, 2003, 2002 and 2001 amounted
to $3,499,640, $3,475,234 and $3,482,114, respectively.

During Fiscal Year 2002,  $5,690 of accumulated  depreciation on assets disposed
of was written off.

NOTE 5 - Cash Held in Escrow

Cash held in escrow consists of the following:
<TABLE>
<CAPTION>
                                                               March 31,
                                                      --------------------------
                                                         2003            2002
                                                      ----------      ----------
<S>                                                   <C>             <C>
Purchase price payments*                              $   23,683      $  244,024
Real estate taxes, insurance and other                 1,125,446       1,094,792
Reserve for replacements (Note 7)                      1,883,029       1,736,501
                                                      ----------      ----------

                                                      $3,032,158      $3,075,317
                                                      ==========      ==========
</TABLE>

*Represents  amounts to be paid to seller upon  completion of  properties  under
construction and upon meeting specified rental achievement criteria.

                                       66
<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 6 - Deferred Costs

The  components  of  deferred  costs and their  periods of  amortization  are as
follows:
<TABLE>
<CAPTION>
                                                  March 31,
                                          ------------------------
                                            2003            2002        Period
                                          ---------      ---------    ----------
<S>                                       <C>            <C>            <C>
Financing costs                           $ 361,409      $ 361,409         *
Other                                        33,703         33,703      various
                                          ---------      ---------
                                            395,112        395,112
Less:  Accumulated amortization            (168,685)      (149,434)
                                          ---------      ---------

                                          $ 226,427      $ 245,678
                                          =========      =========
</TABLE>
*Over the life of the related mortgages.


Amortization  expense for the years ended March 31, 2003, 2002 and 2001 amounted
to $19,251, $25,525 and $26,544, respectively.

NOTE 7 - Mortgage Notes Payable

The  mortgage   notes  are  payable  in  aggregate   monthly   installments   of
approximately $155,000 including principal and interest at rates ranging from 0%
to 9.65%  per  annum,  through  the year  2052.  Each  subsidiary  partnership's
mortgage  note  payable  is  collateralized  by the  land and  buildings  of the
respective  subsidiary  partnership,  the assignment of each certain  subsidiary
partnership's rents and leases, and is without further recourse.

One mortgage  note with a balance of $4,347,411  and  $4,575,674 at December 31,
2002 and 2001,  respectively,  which bears  interest at 7% per annum is eligible
for an interest rate subsidy.  Accordingly, the subsidiary partnership paid only
that portion of the monthly payments that would be required if the interest rate
was 1%. The balance was  subsidized  under  Section 236 of the National  Housing
Act.

Annual principal payment requirements for mortgage notes payable for each of the
next five fiscal years and thereafter are as follows:
<TABLE>
<CAPTION>
Fiscal Year Ending                   Amount
------------------                -----------
<C>                               <C>
2003                              $   521,457
2004                                  559,254
2005                                  606,012
2006                                  653,153
2007                                  646,863
Thereafter                         54,616,737
                                  -----------
                                  $57,603,476
                                  ===========
</TABLE>

The mortgage  agreements  require  monthly  deposits to replacement  reserves of
approximately  $29,000 and monthly  deposits to escrow  accounts for real estate
taxes, hazard insurance and mortgage insurance and other (Note 5).

                                       67
<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 8 - Related Party Transactions

An affiliate  of the General  Partner has a .01%  interest as a special  limited
partner in each of the  subsidiary  partnerships.  An  affiliate  of the General
Partner also has a minority interest in certain local limited partnerships.

A)  Other Related Party Expenses

The costs incurred to related  parties for the years ended March 31, 2003,  2002
and 2001 were as follows:
<TABLE>
<CAPTION>
                                                       Year Ended March 31,
                                                  ------------------------------
                                                    2003       2002       2001
                                                  --------   --------   --------
<S>                                               <C>        <C>        <C>
Partnership management fees (a)                   $546,000   $546,000   $546,000
Expense reimbursement (b)                          121,297    110,132    137,612
Local administrative fees (d)                       32,550     32,500     32,500
                                                  --------   --------   --------
Total general and administrative-
General Partner                                    699,847    688,632    716,112
                                                  --------   --------   --------
Property management fees incurred to
affiliates of the subsidiary partnerships'
general partners (c)                               292,608    281,007    269,674
                                                  --------   --------   --------
Total general and administrative-
related parties                                   $992,455   $969,639   $985,786
                                                  ========   ========   ========
</TABLE>

(a) The General  Partner is entitled to receive a  partnership  management  fee,
after payment of all Partnership expenses,  which together with the annual local
administrative  fees  will not  exceed a maximum  of 0.5% per annum of  invested
assets (as defined in the Partnership Agreement),  for administering the affairs
of  the  Partnership.  Subject  to the  foregoing  limitation,  the  partnership
management fee will be determined by the General  Partner in its sole discretion
based  upon its  review of the  Partnership's  investments.  Unpaid  partnership
management  fees for any  year  will be  accrued  without  interest  and will be
payable from working capital  reserves or to the extent of available funds after
the  Partnership  has made  distributions  to the  limited  partners  of sale or
refinancing  proceeds equal to their original capital  contributions  plus a 10%
priority return thereon (to the extent not  theretofore  paid out of cash flow).
Partnership   management  fees  owed  to  the  General   Partner   amounting  to
approximately  $2,793,000 and $2,247,000 were accrued and unpaid as of March 31,
2003 and 2002, respectively.

(b) The Partnership reimburses the General Partner and its affiliates for actual
Partnership   operating  expenses  incurred  by  the  General  Partner  and  its
affiliates on the  Partnership's  behalf.  The amount of reimbursement  from the
Partnership is limited by the provisions of the Partnership  Agreement.  Another
affiliate of the General Partner  performs asset monitoring for the Partnership.
These   services   include  site  visits  and   evaluations  of  the  subsidiary
partnerships' performance. Expense reimbursements and asset monitoring fees owed
to the General Partner and its affiliates  amounting to  approximately  $528,000
and  $407,000   were  accrued  and  unpaid  as  of  March  31,  2003  and  2002,
respectively.

(c) Property  management  fees incurred by subsidiary  partnerships  amounted to
$621,058,  $621,561 and  $606,572  for the years ended March 31, 2003,  2002 and

                                       68
<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003


2001, respectively. Of these fees $292,608, $281,007 and $269,674 were earned by
affiliates of the Local General Partners.

(d)  Independence  SLP  L.P.,  a  special  limited  partner  of  the  subsidiary
partnerships,  is entitled to receive a local administrative fee of up to $5,000
per year from each subsidiary partnership.

B) Due to Local General Partners and Affiliates

Due to Local General Partners and affiliates at March 31, 2003 and 2002 consists
of the following:
<TABLE>
<CAPTION>
                                                                March 31,
                                                       -------------------------
                                                          2003           2002
                                                       ----------     ----------
<S>                                                    <C>            <C>
Operating deficit advances                             $   99,150     $  144,150
Operating advances                                          5,000          5,000
Development fee payable                                   825,950        825,950
Construction costs payable                                493,712        356,571
Management and other operating advances (*)               193,301        418,730
                                                       ----------     ----------

                                                       $1,617,113     $1,750,401
                                                       ==========     ==========
</TABLE>

(*) Includes loans from Local General  Partners and affiliates at March 31, 2002
totaling $83,141, bearing interest at 11%.

                                       69
<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003


NOTE 9 - Income Taxes

A reconciliation of the financial  statement net loss to the income tax loss for
the Partnership and its consolidated subsidiaries is as follows:
<TABLE>
<CAPTION>
                                                             Year Ended March 31,
                                                  -----------------------------------------
                                                     2003           2002            2001
                                                  -----------    -----------    -----------
<S>                                               <C>            <C>            <C>
Financial statement net loss                      $(4,534,786)   $(4,132,678)   $(4,806,575)

Differences between depreciation and amor-
tization  expense records for financial report-
ing purposes and the accelerated costs recov-
ery system utilized for income tax purposes          (563,731)      (748,215)      (587,944)

Tax exempt interest income                             (3,606)        (8,680)       (13,926)

Differences resulting from parent company
having a different fiscal year for income tax
and financial reporting purposes                        4,309         53,481        (30,780)

Other, including accruals for financial report-
ing not deductible for tax purposes until paid        316,434        103,406         73,390
                                                  -----------    -----------    -----------

Net loss as shown on the income tax return
for the calendar year ended                       $(4,781,380)   $(4,732,686)   $(5,365,835)
                                                  ===========    ===========    ===========
</TABLE>

NOTE 10 - Commitments and Contingencies

a) Subsidiary Partnerships-Other

Clear Horizons Limited Partnership
----------------------------------
At December 31, 2002,  Clear Horizons  Limited  Partnership  ("Clear  Horizons")
current liabilities exceeded its current assets by over $182,000.  Although this
condition  could  raise  substantial  doubt  about  Clear  Horizons'  ability to
continue as a going concern, such doubt is alleviated as follows:

1.  Included in current  liabilities  at December  31, 2002 is $188,770  owed to
related  parties  who have  advised  Clear  Horizons  that they do not intend to
pursue collection beyond Clear Horizons' ability to pay.

2. The Local  General  Partner of Clear  Horizons  has agreed to fund  operating
deficits up to $250,000.

Accordingly, management believes that Clear Horizons has the ability to continue
as a going concern for at least one year from December 31, 2002.


                                       70
<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2003


b)  Uninsured Cash and Cash Equivalents

The Partnership  maintains its cash and cash  equivalents in various banks.  The
accounts  at  each  bank  are  guaranteed  by  the  Federal  Deposit   Insurance
Corporation  up to  $100,000.  At  March  31,  2003,  uninsured  cash  and  cash
equivalents approximated $899,000.

c)  Other

The  Partnership and BACs holders began to recognize Tax Credits with respect to
a Property when the Credit Period for such  Property  commenced.  Because of the
time required for the  acquisition,  completion and rent-up of  Properties,  the
amount of Tax Credits per BAC has gradually increased over the first three years
of the Partnership.  Housing Tax Credits not recognized in the first three years
will be recognized in the 11th through 13th years.  For the 2002,  2001 and 2000
tax years,  Housing Tax Credits of $8,746,267,  $8,746,267  and $8,728,115  were
generated, respectively.


                                       71
<PAGE>

Item  9.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure.

None

                                    PART III

Item 10. Directors and Executive Officers of the Registrant.

The  Partnership  has no  directors  or executive  officers.  The  Partnership's
affairs are managed and controlled by the General Partner.

In December 2002, Charter Municipal Mortgage Acceptance Company  ("CharterMac"),
which is also managed by an affiliate of Related  Capital  Company,  announced a
proposed  acquisition of Related  Capital  Company,  an affiliate of the General
Partner.   Pursuant  to  the  proposed  acquisition,   CharterMac  will  acquire
controlling  interest  in the  general  partner  of the  General  Partner.  This
acquisition  is not  anticipated  to affect the  Partnership  or its  day-to-day
operations as management of the General Partner will not change.

Certain  information  concerning the directors and executive officers of Related
Independence  Associates Inc. ("RIAI"),  the sole general partner of the General
Partner,  is set forth below. The General Partner is also the general partner of
Independence Tax Credit Plus L.P.

Name                                Position
----                                --------

Stephen M. Ross                     Director

Michael Brenner                     President and Chief Executive Officer

Alan P. Hirmes                      Senior Vice President

Stuart J. Boesky                    Senior Vice President

Marc D. Schnitzer                   Vice President

Denise L. Kiley                     Vice President

Glenn F. Hopps                      Treasurer

Teresa Wicelinski                   Secretary

STEPHEN M. ROSS,  63, is the  President,  a Director  and a  shareholder  of The
Related Realty Group, Inc., the general partner of The Related  Companies,  L.P.
("TRCLP").  He  graduated  from the  University  of Michigan  School of Business
Administration with a Bachelor of Science degree and from Wayne State University
School of Law with a Juris  Doctor  degree.  Mr. Ross then  received a Master of
Laws degree in taxation  from New York  University  School of Law. He joined the
accounting  firm of Coopers & Lybrand in Detroit as a tax  specialist  and later
moved to New York, where he worked for two large Wall Street investment  banking
firms in their real estate and corporate  finance  departments.  Mr. Ross formed
the  predecessor  of TRCLP  in 1972 to  develop,  manage,  finance  and  acquire
subsidized and conventional apartment developments.  Mr. Ross also serves on the
Board of Trustees of Charter Municipal Mortgage Acceptance Company.

MICHAEL BRENNER, 57, is the Executive Vice President and Chief Financial Officer
of TRCLP. Prior to joining TRCLP in 1996, Mr. Brenner was a partner with Coopers
& Lybrand, having served as managing partner of its Industry Programs and Client

                                       72
<PAGE>

Satisfaction  initiatives from 1993-1996,  managing partner of the Detroit group
of offices from  1986-1993  and Chairman of its  National  Real Estate  Industry
Group from 1984-1986.  Mr. Brenner graduated summa cum laude from the University
of Detroit  with a  Bachelors  degree in  Business  Administration  and from the
University  of  Michigan  with  a  Masters  of  Business  Administration,   with
distinction.  Mr.  Brenner  also  serves on the  Board of  Trustees  of  Charter
Municipal Mortgage Acceptance Company.

ALAN P. HIRMES,  48, has been a Certified  Public  Accountant  in New York since
1978.  Prior to joining  Related in October  1983,  Mr.  Hirmes was  employed by
Weiner & Co., Certified Public Accountants.  Mr. Hirmes is also a Vice President
of Capital. Mr. Hirmes graduated from Hofstra University with a Bachelor of Arts
degree.  Mr.  Hirmes also  serves on the Board of Trustees of Charter  Municipal
Mortgage Acceptance Company and American Mortgage Acceptance Company.

STUART J. BOESKY,  47,  practiced  real estate and tax law in New York City with
the law firm of Shipley & Rothstein from 1984 until February 1986 when he joined
Capital.  From 1983 to 1984 Mr. Boesky practiced law with the Boston law firm of
Kaye Fialkow Richard & Rothstein (which subsequently merged with Strook & Strook
& Lavan LLP) and from 1978 to 1980 was a consultant  specializing in real estate
at the  accounting  firm of  Laventhol  & Horwath.  Mr.  Boesky  graduated  from
Michigan  State  University  with a Bachelor of Arts degree and from Wayne State
School of Law with a Juris  Doctor  degree.  He then  received  a Master of Laws
degree in Taxation from Boston  University School of Law. Mr. Boesky also serves
on the Board of Trustees of Charter Municipal  Mortgage  Acceptance  Company and
American Mortgage Acceptance Company.

MARC D. SCHNITZER,  42, is responsible both for financial restructurings of real
estate properties and directing Related's  acquisitions of properties generating
Housing Tax Credits. Mr. Schnitzer received a Masters of Business Administration
from The Wharton  School of the  University  of  Pennsylvania  in December  1987
before  joining  Related in January  1988.  From 1983 to January  1986, he was a
financial  analyst for the First Boston  Corporation in New York. Mr.  Schnitzer
graduated summa cum laude with a Bachelor of Science in Business  Administration
from the School of Management at Boston University in May 1983.

DENISE L. KILEY,  43, is responsible  for overseeing the due diligence and asset
management of all multifamily  residential  properties invested in RCC sponsored
corporate, public and private equity and debt funds. Prior to joining Related in
1990,  Ms.  Kiley  had  experience  acquiring,   financing  and  asset  managing
multifamily  residential  properties.  From 1981 through 1985 she was an auditor
with Price Waterhouse.  Ms. Kiley holds a Bachelor of Science in Accounting from
Boston College.

GLENN F. HOPPS,  40, was employed prior to joining Related in December,  1990 by
Marks Shron & Company and Weissbarth,  Altman and Michaelson,  certified  public
accountants. Mr. Hopps graduated from New York State University at Albany with a
Bachelor of Science Degree in Accounting.

TERESA  WICELINSKI,  37, joined Related in June 1992, and prior to that date was
employed  by  Friedman,  Alpren  &  Green,  certified  public  accountants.  Ms.
Wicelinski  graduated  from Pace  University  with a Bachelor  of Arts Degree in
Accounting.

Item 11.  Executive Compensation.

The  Partnership has no officers or directors.  The Partnership  does not pay or
accrue  any fees,  salaries  or other  forms of  compensation  to  directors  or
officers of the General Partner for their services.  However, under the terms of
the Partnership Agreement, the Partnership has entered into certain arrangements
with the General Partner and its affiliates,  which provide for  compensation to

                                       73
<PAGE>

be paid to the General Partner and its  affiliates.  Such  arrangements  include
(but are not limited to)  agreements  to pay  nonrecurring  Acquisition  Fees, a
nonaccountable   Acquisition   Expense  allowance  and  an  accountable  expense
reimbursement.  In addition,  the General  Partner is entitled to a subordinated
interest in Cash from Sales or Financings  and a 1% interest in Net Income,  Net
Loss,  Distributions  of Adjusted  Cash from  Operations  and Cash from Sales or
Financings.  Certain  directors  and  officers  of the General  Partner  receive
compensation from the General Partner and its affiliates for services  performed
for various  affiliated  entities which may include  services  performed for the
Partnership.  The maximum annual partnership  management fee paid to the General
Partner is 0.5% of invested  assets.  See Note 8 to the Financial  Statements in
Item 8 above, which is incorporated herein by reference.

Tabular information concerning salaries, bonuses and other types of compensation
payable to executive  officers has not been included in this annual  report.  As
noted  above,  the  Partnership  has  no  executive  officers.   The  levels  of
compensation  payable to the General Partner and/or its affiliates is limited by
the terms of the Partnership  Agreement and may not be increased  therefrom on a
discretionary basis.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

<TABLE>
<CAPTION>

                      Name and Address of    Amount and Nature of           Percentage
Title of Class        Beneficial Ownership   Beneficial Ownership            of Class
--------------        --------------------   --------------------          ------------
<S>                   <C>                    <C>                              <C>
General Partnership   Related Independence   $1,000 capital contribution      100%
Interest in the       Associates L.P.        -directly owned
Partnership           625 Madison Avenue
                      New York, NY 10022
</TABLE>

Independence  SLP L.P.,  a limited  partnership  whose  general  partner  is the
general  partner of the General Partner of the Partnership and which acts as the
special  limited  partner  of  each  Local  Partnership,  holds  a .01%  limited
partnership  interest  in each Local  Partnership.  See Note 8 to the  Financial
Statements  in  Item 8  above,  which  information  is  incorporated  herein  by
reference thereto.

                                       74
<PAGE>

Except as set forth  below,  no  person  is known by the  Partnership  to be the
beneficial  owner  of more  than 5% of the  Limited  Partnership  Interests  and
neither the General Partner nor any director or executive officer of the General
Partner owns any Limited Partnership  Interests.  The following table sets forth
the number of BACs  beneficially  owned,  as of June 2,  2003,  by (i) each BACs
holder known to the Partnership to be a beneficial  owner of more than 5% of the
BACs,  (ii) each  director and executive  officer of the general  partner of the
General  Partner and (iii) the directors  and executive  officers of the general
partner of the General Partner as a group.  Unless otherwise noted, all BACs are
owned directly with sole voting and dispositive powers.
<TABLE>
<CAPTION>
                                      Amount and Nature of
Name of Beneficial Owner (1)          Beneficial Ownership      Percent of Class
---------------------------           --------------------      ----------------
<S>                                   <C>                            <C>
Lehigh Tax Credit Partners, Inc.      4,453.20 (2) (3)               7.6%

J. Michael Fried                      4,453.20 (2) (3) (4)           7.6%

Alan P. Hirmes                        4,453.20 (2) (3) (4)           7.6%

Stuart J. Boesky                      4,453.20 (2) (3) (4)           7.6%

Stephen M. Ross                       -                                -

Michael Brenner                       -                                -

Marc D. Schnitzer                     4,453.20 (2) (3) (4)           7.6%

Denise L. Kiley                       4,453.20 (2) (3) (4)           7.6%

Glenn F. Hopps                        -                                -

Teresa Wicelinski                     -                                -

All directors and executive officers  4,453.20 (2) (3) (4)           7.6%
of the general partner of the
Related General Partner as a group
(ten persons)
</TABLE>

(1) The address for each of the persons in the table is 625 Madison Avenue,  New
York, New York 10022.

(2) As set forth in  Schedule  13D filed by Lehigh  Tax Credit  Partners  L.L.C.
("Lehigh I") and Lehigh Tax Credit  Partners,  Inc., (the "Managing  Member") on
June 10, 1997 with the Securities and Exchange Commission (the "Commission") and
pursuant to a letter  agreement  dated  November 7, 1997 among the  Partnership,
Lehigh I and the Related General Partner (the "Standstill Agreement"),  Lehigh I
agreed that, prior to November 7, 2007 (the "Standstill  Expiration  Date"),  it
will not and it will cause certain  affiliates  (including Lehigh II) not to (i)
acquire,  attempt  to  acquire  or  make a  proposal  to  acquire,  directly  or
indirectly,  more than 45% (including BACs acquired  through all other means) of
the  outstanding  BACs,  (ii)  seek  to  propose  to  enter  into,  directly  or
indirectly, any merger, consolidation, business combination, sale or acquisition
of assets,  liquidation,  dissolution or other similar transaction involving the
Partnership,  (iii) make, or in any way participate,  directly or indirectly, in
any  "solicitation"  of "proxies" or  "consents"  (as such terms are used in the
proxy rules of the Commission) to vote any voting securities of the Partnership,
(iv) form,  join or otherwise  participate  in a "group"  (within the meaning of
Section 13 (d)(3) of the  Securities  and  Exchange Act of 1934) with respect to
any voting  securities of the Partnership,  except those affiliates bound by the
Standstill Agreement will not be deemed to have violated it and formed a "group"
solely by acting in accordance  with the Standstill  Agreement,  (v) disclose in
writing to any third party any intention,  plan or arrangement inconsistent with
the terms of the Standstill Agreement,  or (vi) loan money to, advise, assist or
encourage any person in connection with any action  inconsistent  with the terms
of the  Standstill  Agreement.  In  addition,  Lehigh I agreed  that  until  the
Standstill  Expiration  Date it will not sell any BACs acquired by it unless the

                                       75
<PAGE>

buyer of such BACs  agrees to be bound by the  Standstill  Agreement;  provided,
however,  Lehigh I may make  transfers in the secondary  market to any purchaser
which  represents that following such sale it will not own three (3%) percent or
more of the BACs outstanding. By the terms of the Standstill Agreement, Lehigh I
also agreed to vote its BACs in the same manner as a majority of all voting BACs
holders;  provided,  however,  Lehigh  I is  entitled  to  vote  its  BACs as it
determines  with regard to any proposal  (i) to remove the General  Partner as a
general partner of the Partnership or (ii) concerning the reduction of any fees,
profits,  distributions or allocations for the benefit of the General Partner or
its  affiliates.  The  addresses  of each of the  Partnership,  Lehigh I and the
General Partner is 625 Madison Avenue, New York, New York 10022.

(3) All of such BACs  represent  BACs owned  directly by Lehigh I and Lehigh Tax
Credit  Partners II, L.L.C.  ("Lehigh II"), for which the Managing Member serves
as managing member.  As of June 2, 2003,  Lehigh I held 2,213.60 BACs and Lehigh
II held 2,239.60 BACs.

(4) Each such party serves as a director and  executive  officer of the Managing
Member and owns an equity interest therein except J. Michael Fried who owns only
an economic interest.

Item 13.  Certain Relationships and Related Transactions.

The  Partnership  has and will continue to have certain  relationships  with the
General Partner and its  affiliates,  as discussed in Item 11 and also Note 8 to
the  Financial  Statements  in Item 8 above,  which are  incorporated  herein by
reference  thereto.  However,  there have been no direct financial  transactions
between the Partnership and the directors and officers of the General Partner.

Item 14.  Controls and Procedures

The  Principal  Executive  Officer and  Principal  Financial  Officer of Related
Independence   Associates  Inc.   ("RIAI"),   the  general  partner  of  Related
Independence  Associates  L.P.,  the general  partner of the  Partnership,  have
evaluated the Partnership's  disclosure  controls and procedures relating to the
Partnership's annual report on Form 10-K for the period ending March 31, 2003 as
filed with the Securities and Exchange  Commission and have judged such controls
and procedures to be effective as of March 31, 2003 (the "Evaluation Date").

There have been no  significant  changes in the  internal  controls  or in other
factors  that could  significantly  affect  internal  controls  relating  to the
Partnership since the Evaluation Date.

                                       76
<PAGE>

                                     PART IV

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

                                                                      Sequential
                                                                         Page
                                                                      ----------
(a) 1.   Consolidated Financial Statements
         ---------------------------------

         Independent Auditors' Report                                     15

         Consolidated Balance Sheets at March 31, 2003 and 2002           58

         Consolidated Statements of Operations for the Years Ended
         March 31, 2003, 2002 and 2001                                    59

         Consolidated Statements of Changes in Partners' Capital
         (Deficit) for the Years Ended March  31, 2003, 2002 and 2001     60

         Consolidated Statements of Cash Flows for the Years Ended
         March 31, 2003, 2002 and 2001                                    61

         Notes to Consolidated Financial Statements                       63

(a) 2.   Consolidated Financial Statement Schedules
         ------------------------------------------

         Independent Auditors' Report                                     88

         Schedule I - Condensed Financial Information of Registrant       89

         Schedule III - Real Estate and Accumulated Depreciation          92

         All other  schedules have been omitted because they are not
         required or because the required information is contained in
         the financial statements or notes thereto.

(a) 3.   Exhibits
         --------

(3A)     Agreement of Limited Partnership of Independence Tax Credit
         Plus L.P. II as adopted on February 11, 1992*

(3B)     Form of Amended and Restated  Agreement of Limited Partnership
         of Independence Tax Credit Plus L.P. II, attached to the
         Prospectus as Exhibit A**

(3C)     Certificate of Limited Partnership of Independence Tax Credit
         Plus L.P. II as filed on February 11, 1992*

(10A)    Form of Subscription Agreement attached to the Prospectus as
         Exhibit B**

(10B)    Escrow Agreement between Independence Tax Credit Plus L.P. II
         and Bankers Trust Company*

(10C)    Form of Purchase and Sales Agreement pertaining to the
         Partnership's acquisition of Local Partnership Interests*

                                       77
<PAGE>

Item 15. Exhibits,  Financial  Statement  Schedules,  and  Reports  on Form  8-K
         (continued)

                                                                      Sequential
                                                                         Page
                                                                      ----------
(10D)    Form of Amended and Restated Agreement of Limited
         Partnership of Local Partnerships*

(21)     Subsidiaries of the Registrant                                   79

(99.1)   Certification  Pursuant to 18 U.S.C. Section 1350,
         as adopted pursuant to Section 906 of the Sarbanes-Oxley
         Act of 2002.                                                     86

(99.2)   Certification  Pursuant to 18 U.S.C. Section 1350, as
         adopted pursuant to Section 906 of the Sarbanes-Oxley Act
         of 2002.                                                         87

         *Incorporated  herein as an exhibit by reference to
         exhibits filed with Post-Effective  Amendment No. 4 to the
         Registration  Statement on Form S-11 (Registration No.
         33-37704)

         **Incorporated herein as an exhibit by reference to
         exhibits filed with Post-Effective  Amendment No. 8 to
         the  Registration  Statement on Form S-11 (Registration No.
         33-37704)

(b)      Reports on Form 8-K
         -------------------

         No reports on Form 8-K were filed during the quarter ended
         March 31, 2003.


                                       78
<PAGE>


Item 15. Exhibits,  Financial  Statement  Schedules,  and  Reports  on Form  8-K
         (continued).

                                                                   Jurisdiction
(c)      Subsidiaries of the Registrant (Exhibit 21)             of Organization
         ------------------------------                          ---------------

         Lincoln Renaissance                                            PA
         United Germano - Millgate Limited Partnership                  IL
         Mansion Court Associates                                       PA
         Derby Run Associates, L.P.                                     VA
         Renaissance Plaza '93 Associates, L.P.                         MD
         Tasker Village Associates                                      PA
         Martha Bryant Manor, L.P.                                      CA
         Colden Oaks Limited Partnership                                CA
         Brynview Terrace, L.P.                                         CA
         NLEDC, L.P.                                                    CA
         Creative Choice Homes VI, Ltd.                                 FL
         P & P Homes for the Elderly, L.P.                              CA
         Clear Horizons Limited Partnership                             LA
         Neptune Venture, L.P.                                          NJ
         Affordable Green Associates L.P.                               NY

(d)      Not applicable


                                       79
<PAGE>


                                   SIGNATURES
                                   ----------

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                      ------------------------------------
                                  (Registrant)



                               By:  RELATED INDEPENDENCE ASSOCIATES L.P.,
                                    General Partner


                               By:  RELATED INDEPENDENCE ASSOCIATES INC.,
                                    General Partner



Date:  June 10, 2003                By: /s/ Michael Brenner
                                        ------------------
                                        Michael Brenner
                                        President and Chief
                                        Executive Officer
                                        (Principal Executive Officer)

                                       80
<PAGE>


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated:


    Signature                           Title                           Date
--------------------         --------------------------------      -------------

                             President and Chief Executive
/s/ Michael Brenner          Officer (principal executive
-------------------          officer) of Related Independence
Michael Brenner              Associates Inc.                       June 10, 2003



/s/ Alan P. Hirmes           Senior Vice President
------------------           (principal financial officer) of
Alan P. Hirmes               Related Independence Associates Inc.  June 10, 2003




/s/ Glenn F. Hopps           Treasurer (principal accounting
------------------           officer)of Related Independence
Glenn F. Hopps               Associates Inc.                       June 10, 2003




/s/ Stephen M. Ross          Director of Related Independence
-------------------          Associates Inc.                       June 10, 2003
Stephen M. Ross


                                       81
<PAGE>

                                  CERTIFICATION



I,  Michael  Brenner,   Principal  Executive  Officer  of  Related  Independence
Associates Inc. ("RIAI") the general partner of Related Independence  Associates
L.P.  the  General  Partner  of  Independence  Tax  Credit  Plus  L.P.  II  (the
"Partnership"), hereby certify that:

     1.   I have  reviewed  this annual  report on Form 10-K for the year ending
          March 31, 2003 of the Partnership;

     2.   Based on my knowledge,  this annual report does not contain any untrue
          statement  of a  material  fact  or  omit to  state  a  material  fact
          necessary  in  order  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 annual report;

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

     4.   The Partnership's  other certifying officers and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange Act Rules 13a-14 and 15-d-14) for the  Partnership
          and have:

          a) designed  such  disclosure  controls and  procedures to ensure that
          material  information  relating  to  the  Partnership,  including  its
          consolidated subsidiaries,  is made known to me by others within those
          entities,  particularly  during the period in which this annual report
          was being prepared;

          b)  evaluated  the  effectiveness  of  the  Partnership's   disclosure
          controls and procedures as of March 31, 2003 (the "Evaluation  Date");
          and


                                       82
<PAGE>

          c)  presented  in  this  annual  report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

     5.   The  Partnership's  other  certifying  officers and I have  disclosed,
          based on my most recent evaluation,  to the Partnership's auditors and
          to the board of directors of RIAI:

          a) all significant deficiencies in the design or operation of internal
          controls which could  adversely  affect the  Partnership's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the Partnership's  auditors any material  weaknesses in
          internal controls; and

          b) any fraud,  whether or not material,  that  involves  management or
          other  employees  who  have a  significant  role in the  Partnership's
          internal controls; and

     6.   The  Partnership's  other certifying  officers and I have indicated in
          this annual report  whether or not there were  significant  changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.



                           By: /s/ Michael Brenner
                               -------------------
                               Michael Brenner
                               Principal Executive Officer
                               June 10, 2003


                                       83
<PAGE>


                                  CERTIFICATION


I,  Alan  P.  Hirmes,   Principal  Financial  Officer  of  Related  Independence
Associates Inc. ("RIAI") the general partner of Related Independence  Associates
L.P.  the  General  Partner  of  Independence  Tax  Credit  Plus  L.P.  II  (the
"Partnership"), hereby certify that:

     1.   I have  reviewed  this annual  report on Form 10-K for the year ending
          March 31, 2003 of the Partnership;

     2.   Based on my knowledge,  this annual report does not contain any untrue
          statement  of a  material  fact  or  omit to  state  a  material  fact
          necessary  in  order  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 annual report;

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

     4.   The Partnership's  other certifying officers and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange Act Rules 13a-14 and 15-d-14) for the  Partnership
          and have:

          a) designed  such  disclosure  controls and  procedures to ensure that
          material  information  relating  to  the  Partnership,  including  its
          consolidated subsidiaries,  is made known to me by others within those
          entities,  particularly  during the period in which this annual report
          was being prepared;

          b)  evaluated  the  effectiveness  of  the  Partnership's   disclosure
          controls and procedures as of March 31, 2003 (the "Evaluation  Date");
          and

                                       84
<PAGE>

          c)  presented  in  this  annual  report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

     5.   The  Partnership's  other  certifying  officers and I have  disclosed,
          based on my most recent evaluation,  to the Partnership's auditors and
          to the board of directors of RIAI:

          a) all significant deficiencies in the design or operation of internal
          controls which could  adversely  affect the  Partnership's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the Partnership's  auditors any material  weaknesses in
          internal controls; and

          b) any fraud,  whether or not material,  that  involves  management or
          other  employees  who  have a  significant  role in the  Partnership's
          internal controls; and

     6.   The  Partnership's  other certifying  officers and I have indicated in
          this annual report  whether or not there were  significant  changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.



                           By: /s/ Alan P. Hirmes
                               ------------------
                               Alan P. Hirmes
                               Principal Financial Officer
                               June 10, 2003


                                       85
<PAGE>

                                                                    Exhibit 99.1


                            CERTIFICATION 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 of  Independence  Tax Credit Plus L.P. II
(the  "Partnership")  on Form 10-K for the year  ending  March 31, 2003 as filed
with the Securities and Exchange  Commission on the date hereof (the  "Report"),
I,  Michael  Brenner,   Principal  Executive  Officer  of  Related  Independence
Associates Inc. the general partner of Related Independence Associates L.P., the
General Partner of the Partnership, certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


       (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 result of  operations of the
Partnership.



By:  /s/ Michael Brenner
     -------------------
     Michael Brenner
     Principal Executive Officer
     June 10, 2003


                                       86
<PAGE>

                                                                    Exhibit 99.2


                            CERTIFICATION 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 of  Independence  Tax Credit Plus L.P. II
(the  "Partnership")  on Form 10-K for the year  ending  March 31, 2003 as filed
with the Securities and Exchange  Commission on the date hereof (the  "Report"),
I,  Alan  P.  Hirmes,   Principal  Financial  Officer  of  Related  Independence
Associates Inc. the general partner of Related Independence Associates L.P., the
General Partner of the Partnership, certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


       (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 result of  operations of the
Partnership.



By:  /s/ Alan P. Hirmes
     ------------------
     Alan P. Hirmes
     Principal Financial Officer
     June 10, 2003


                                       87
<PAGE>

                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------


To the Partners of
Independence Tax Credit Plus L.P. II and Subsidiaries
(A Delaware Limited Partnership)



In  connection  with our  audits of the  consolidated  financial  statements  of
Independence  Tax Credit  Plus L.P.  II and  Subsidiaries  (A  Delaware  Limited
Partnership) included in the Form 10-K as presented in our opinion dated May 30,
2003 on page 15,  and  based on the  reports  of other  auditors,  we have  also
audited  supporting  Schedule  I for the 2002,  2001 and 2000  Fiscal  Years and
Schedule  III at March 31, 2003.  In our opinion,  and based upon the reports of
the other auditors,  these consolidated  schedules present fairly,  when read in
conjunction with the related consolidated  financial  statements,  the financial
data required to be set forth therein.


Trien Rosenberg Rosenberg
Weinberg Ciullo & Fazzari LLP

New York, New York
May 30, 2003


                                       88
<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                   SCHEDULE I
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT
              (NOT INCLUDING CONSOLIDATED SUBSIDIARY PARTNERSHIPS)


                            CONDENSED BALANCE SHEETS


                                     ASSETS
<TABLE>
<CAPTION>
                                                                    March 31,
                                                            -------------------------
                                                                2003         2002
                                                            -----------   -----------

<S>                                                         <C>           <C>
Cash and cash equivalents                                   $   411,989   $   418,105
Cash held in escrow                                              23,683       244,024
Investment in subsidiary partnerships                        21,326,577    23,815,525
Other assets                                                     34,293        34,293
                                                            -----------   -----------

Total assets                                                $21,796,542   $24,511,947
                                                            ===========   ===========



                        LIABILITIES AND PARTNERS' CAPITAL



Due to general partner and affiliates                       $ 3,314,807   $ 2,637,308

Other liabilities                                                 7,359         5,957
                                                            -----------   -----------

Total liabilities                                             3,322,166     2,643,265

Partners' capital                                            18,474,376    21,868,682
                                                            -----------   -----------

Total liabilities and partners' capital                     $21,796,542   $24,511,947
                                                            ===========   ===========
</TABLE>


Investments  in  subsidiary  partnerships  are recorded in  accordance  with the
equity method of accounting, wherein the investments are not reduced below zero.
Accordingly,  partners'  capital on the  consolidated  balance sheet will differ
from partners' capital shown above.


                                       89
<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                   SCHEDULE I
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT
              (NOT INCLUDING CONSOLIDATED SUBSIDIARY PARTNERSHIPS)


                       CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                           Year Ended March 31,
                                                -----------------------------------------
                                                   2003           2002            2001
                                                -----------    -----------    -----------
<S>                                             <C>            <C>            <C>
Revenues

Other income                                    $     3,531    $     8,258    $    79,493
                                                -----------    -----------    -----------

Total revenues                                        3,531          8,258         79,493
                                                -----------    -----------    -----------

Expenses

Administrative and management                       108,838        118,912        110,380
Administrative and management-related parties       667,297        656,132        683,612
                                                -----------    -----------    -----------

Total expenses                                      776,135        775,044        793,992
                                                -----------    -----------    -----------

Loss from operations                               (772,604)      (766,786)      (714,499)

Equity in loss of subsidiary partnerships        (2,621,702)    (2,634,166)    (3,028,043)
                                                -----------    -----------    -----------

Net loss                                        $(3,394,306)   $(3,400,952)   $(3,742,542)
                                                ===========    ===========    ===========
</TABLE>

                                       90
<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                   SCHEDULE I
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
              (NOT INCLUDING CONSOLIDATED SUBSIDIARY PARTNERSHIPS)


                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                           Year Ended March 31,
                                                -----------------------------------------
                                                   2003           2002            2001
                                                -----------    -----------    -----------
<S>                                             <C>            <C>            <C>
Cash flows from operating activities:
Net loss                                        $(3,394,306)   $(3,400,952)   $(3,742,542)
                                                -----------    -----------    -----------

Adjustments to reconcile net loss to net cash
  used in operating activities:

Equity in loss of subsidiary partnerships         2,621,702      2,634,166      3,028,043

Increase (decrease) in liabilities:

Due to general partners and affiliates              677,499        602,489        651,858
Other liabilities                                     1,402              7           (490)
                                                -----------    -----------    -----------

Total adjustments                                 3,300,603      3,236,662      3,679,411
                                                -----------    -----------    -----------

Net cash used in operating activities               (93,703)      (164,290)       (63,131)
                                                -----------    -----------    -----------

Cash flows from investing activities:

Investment in subsidiary partnerships              (220,341)      (386,976)             0
Decrease in cash held in escrow -
  purchase price adjustments                        220,341        386,976              0
                                                -----------    -----------    -----------

Net cash used in investing activities                     0              0              0
                                                -----------    -----------    -----------

Net cash provided by financing activities:

Distributions from subsidiary partnerships           87,587         71,307         67,988
                                                -----------    -----------    -----------

Net (decrease) increase in cash and cash
  equivalents                                        (6,116)       (92,983)         4,857

Cash and cash equivalents, beginning of year        418,105        511,088        506,231
                                                -----------    -----------    -----------

Cash and cash equivalents, end of year          $   411,989    $   418,105    $   511,088
                                                ===========    ===========    ===========
</TABLE>

                                       91
<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                   Partnership Property Pledged as Collateral
                                 MARCH 31, 2003
<TABLE>
<CAPTION>
                                                          Initial Cost to Partnership      Cost Capitalized
                                                         -----------------------------      Subsequent to
                                                                         Buildings and       Acquisition:
Description                              Encumbrances        Land        Improvements        Improvements
----------------------------------       ------------    ------------    -------------     ----------------
<S>                                      <C>             <C>             <C>                 <C>
Apartment Complexes
Lincoln Renaissance
  Reading, PA                            $  2,553,000    $          0    $   5,240,173       $    238,372
United Germano Millgate Limited
  Partnership
  Chicago, IL                               9,460,523         580,000        6,070,477         11,170,830
Mansion Court Associates
  Philadelphia, PA                          1,505,862          19,072        3,224,984            230,564
Derby Run Associates L.P.
  Hampton, VA                               4,381,821         407,410        3,069,628          4,555,191
Renaissance Plaza Assoc.
  Baltimore, MD                             6,674,033         684,255        9,840,170          4,421,290
Tasker Village
  Philadelphia, PA                          1,784,881          18,235                0          3,933,102
Martha Bryant Manor, L.P.
  Los Angeles, CA                           7,663,680         966,577                0         10,627,311
Colden Oaks Limited Partnership
  Los Angeles, CA                           5,441,125         922,790                0          2,084,798
Brynview Terrace Limited Partnership
  Los Angeles, CA                           1,003,879         175,943                0          1,440,554
NLEDC, L.P.
  Los Angeles, CA                           4,279,714         624,000                0          5,884,672
Creative Choice Homes VI Ltd.
  Miami, FL                                 3,483,505         650,072           13,134          5,593,277
P&P Homes for the Elderly, L.P.
  Los Angeles, CA                           6,296,831               0                0          9,952,588
Clear Horizons Limited Partnership
  Shreveport, LA                              880,000          15,304        2,058,729            211,175
Neptune Venture L.P.
  Neptune Township, NJ                              0         460,631       10,151,873            140,994
Affordable Green Associates L.P.
  New York, NY                              2,194,622          20,500        3,506,961             39,480

                                         ------------    ------------    -------------       ------------

                                         $ 57,603,476    $  5,544,789    $  43,176,129       $60,524,198
                                         ============    ============    =============       ============
<CAPTION>

                                         Gross Amount at which Carried At Close of Period
                                         ------------------------------------------------
                                                         Buildings and                    Accumulated
Description                                  Land        Improvements        Total        Depreciation
----------------------------------       ------------    -------------    ------------    ------------
<S>                                      <C>             <C>              <C>             <C>
Apartment Complexes
Lincoln Renaissance
  Reading, PA                            $      5,373    $   5,473,172    $  5,478,545    $  1,275,479
United Germano Millgate Limited
  Partnership
  Chicago, IL                                 585,374       17,235,933      17,821,307       7,129,635
Mansion Court Associates
  Philadelphia, PA                             25,095        3,449,525       3,474,620         791,764
Derby Run Associates L.P.
  Hampton, VA                                 409,771        7,622,458       8,032,229       1,785,654
Renaissance Plaza Assoc.
  Baltimore, MD                               686,616       14,259,099      14,945,715       2,926,363
Tasker Village
  Philadelphia, PA                             20,596        3,930,741       3,951,337         854,936
Martha Bryant Manor, L.P.
  Los Angeles, CA                             968,938       10,624,950      11,593,888       2,492,388
Colden Oaks Limited Partnership
  Los Angeles, CA                             925,151        2,082,437       3,007,588         873,599
Brynview Terrace Limited Partnership
  Los Angeles, CA                             178,304        1,438,193       1,616,497         342,126
NLEDC, L.P.
  Los Angeles, CA                             626,361        5,882,311       6,508,672       1,448,321
Creative Choice Homes VI Ltd.
  Miami, FL                                   652,433        5,604,050       6,256,483       1,562,882
P&P Homes for the Elderly, L.P.
  Los Angeles, CA                             642,360        9,310,228       9,952,588       1,713,235
Clear Horizons Limited Partnership
  Shreveport, LA                               17,665        2,267,543       2,285,208         727,003
Neptune Venture L.P.
  Neptune Township, NJ                        462,465       10,291,033      10,753,498       1,841,150
Affordable Green Associates L.P.
  New York, NY                                 22,334        3,544,607       3,566,941         971,531

                                         ------------    -------------    ------------    ------------

                                         $  6,228,836    $ 103,016,280    $109,245,116    $ 26,736,066
                                         ============    =============    ============    ============

<CAPTION>

                                                                           Life on which
                                                                          Depreciation in
                                           Year of                         Latest Income
                                         Construction/        Date         Statement is
Description                               Renovation        Acquired       Computed(a)(b)
----------------------------------       -------------    ------------    ---------------
<S>                                         <C>             <C>                <C>
Apartment Complexes
Lincoln Renaissance
  Reading, PA                               1993-94         Apr. 1993          20-40
United Germano Millgate Limited
  Partnership
  Chicago, IL                               1993-94         Oct. 1993          10-25
Mansion Court Associates
  Philadelphia, PA                          1993-94         Nov. 1993          20-40
Derby Run Associates L.P.
  Hampton, VA                               1994-95         Feb. 1994          40
Renaissance Plaza Assoc.
  Baltimore, MD                             1994-95         Feb. 1994          27.5
Tasker Village
  Philadelphia, PA                          1994-95         May 1994           40
Martha Bryant Manor, L.P.
  Los Angeles, CA                           1994-95         Sept. 1994         27.5
Colden Oaks Limited Partnership
  Los Angeles, CA                           1994-95         Sept. 1994         31
Brynview Terrace Limited Partnership
  Los Angeles, CA                           1994-95         Sept. 1994         27.5
NLEDC, L.P.
  Los Angeles, CA                           1994-95         Sept. 1994         27.5
Creative Choice Homes VI Ltd.
  Miami, FL                                 1994-95         Sept. 1994         40
P&P Homes for the Elderly, L.P.
  Los Angeles, CA                           1994-95         Sept. 1994         30
Clear Horizons Limited Partnership
  Shreveport, LA                            1994-95         Dec. 1994          27.5
Neptune Venture L.P.
  Neptune Township, NJ                      1995-96         Apr. 1995          40
Affordable Green Associates L.P.
  New York, NY                              1995-96         May 1995           27


</TABLE>

(a)  Depreciation is computed using primarily the straight-line  method over the
     estimated useful lives determined by the Partnership date of acquisition.
(b)  Personal property is depreciated primarily by the straight-line method over
     the estimated useful lives ranging from 5 to 10 years.

                                       92
<PAGE>


                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                   Partnership Property Pledged as Collateral
                                 MARCH 31, 2003
<TABLE>
<CAPTION>
                                          Cost of Property and Equipment                        Accumulated Depreciation
                                 -----------------------------------------------    -----------------------------------------------
                                                                          Year Ended March 31,
                                 --------------------------------------------------------------------------------------------------
                                      2003             2002             2001             2003            2002              2001
                                 -------------    -------------    -------------    -------------    -------------    -------------
<S>                              <C>              <C>              <C>              <C>              <C>              <C>
Balance at beginning of period   $ 108,763,199    $ 108,427,102    $ 108,138,808    $  23,242,116    $  19,766,882    $  16,288,288
Additions during period:
Improvements                           490,218          336,097          296,945
Depreciation expense                                                                    3,499,640        3,475,234        3,482,114

Deductions during period:
Dispositions                            (8,301)               0           (8,651)          (5,690)               0           (3,520)
                                 -------------    -------------    -------------    -------------    -------------    -------------

Balance at close of period       $ 109,245,116    $ 108,763,199    $ 108,427,102    $  26,736,066    $  23,242,116    $  19,766,882
                                 =============    =============    =============    =============    =============    =============
</TABLE>

At the time the Local Partnerships were acquired by Independence Tax Credit Plus
II Limited  Partnership,  the entire  purchase  price paid by  Independence  Tax
Credit Plus II Limited  Partnership was pushed down to the Local Partnerships as
property and equipment with an offsetting credit to capital.  Since the projects
were in the construction phase at the time of acquisition,  the capital accounts
were  insignificant  at the time of purchase.  Therefore,  there are no material
differences between the original cost basis for tax and GAAP.


<PAGE>