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, 2005

                                       OR

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


                         COMMISSION FILE NUMBER 0-13782

                      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) 517-3700

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, 2004 was
$4,809,000 based on Limited Partner equity as of such date.

       Registrant's voting and non-voting common equity is not publicly traded.

                       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 November 17, 2003, CharterMac acquired Related Capital Company,  which is the
indirect  parent of RCC Manager LLC, the sole  shareholder of RIAI.  Pursuant to
the  acquisition,  CharterMac  acquired  controlling  interests  in the  General
Partner.  This  acquisition  did not affect the  Partnership  or its  day-to-day
operations,  as the majority of the General  Partner's  management team remained
unchanged.

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,  2005,  the
Partnership had acquired  interests in fifteen Local  Partnerships  and does not
anticipate   making  any   additional   investments.   As  of  March  31,  2005,
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 (including approximately $24,000
being held in escrow) 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.

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.

The Tax  Credits  are  attached  to a Local  Partnership  for the 10 year Credit
Period and are  transferable  with the property  during the entirety of such 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 value to the property on the market.  However,  such value  declines each
year and is not included in the financial  statement carrying amount. The Credit
periods are scheduled to expire at various times through  December 31, 2007 with
respect  to the  Local  Partnerships  depending  upon  when  the  Credit  Period
commenced.

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 the  property
investments  themselves are reduced to estimated fair value (generally using the
discounted cash flow valuation method).  Through March 31, 2005, the Partnership
has recorded  approximately  $3,926,000  as an aggregate  loss on  impairment of
assets or reduction to estimated fair value.

While the value of the  remaining Tax Credits are a factor in  calculating  fair
value,  the expiration of the Credit Period,  in and of itself,  is not the only
factor in determining whether there is an impairment and generally does not have
any adverse impact on the fair value of the Local Partnerships.

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



                                       2
<PAGE>



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").



                                       3
<PAGE>



Item 2.  Properties

The  Partnership  holds a 98.99% limited  partnership  interest in fifteen Local
Partnerships  as of March 31,  2005.  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.

                           Local Partnership Schedule
                           --------------------------

<TABLE>
<CAPTION>

                                                             % of Units Occupied at May 1,
                                                           --------------------------------
          Name and Location               Date Acquired    2005   2004   2003   2002   2001
---------------------------------------   --------------   ----   ----   ----   ----   ----
<S>                                       <C>              <C>    <C>   <C>     <C>    <C>
Lincoln Renaissance
  Reading, PA (52)                            April 1993    98%    97%   100%    98%    96%

United Germano-Millgate
  Limited Partnership
  Chicago, IL (350)                         October 1993    87%    98%    99%    99%    99%

Mansion Court Associates
  Philadelphia, PA (30)                    November 1993    87%    57%    87%    97%    90%

Derby Run Associates, L.P.
  Hampton, VA (160)                        February 1994    98%    91%    96%    98%    98%

Renaissance Plaza `93 Associates , L.P.
  Baltimore, MD (95)                       February 1994    99%    97%    98%   100%   100%

Tasker Village Associates
  Philadelphia, PA (28)                         May 1994   100%    79%   100%   100%    96%

Martha Bryant Manor, L.P.
  Los Angeles, CA (77)                    September 1994    99%    99%   100%    95%   100%

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

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

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

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

P&P Homes for the Elderly, L.P.
  Los Angeles, CA (107)                   September 1994    96%    98%   100%   100%   100%

Clear Horizons Limited Partnership
  Shreveport, LA (84)                      December 1994    96%    95%    99%    95%    99%

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

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.



                                       4
<PAGE>



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

                                     PART II

Item 5. Market for the  Registrant's  Common  Equity,  Related  Security  Holder
Matters and Issuer Purchases of Equity Securities

As of March 31, 2005, 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 11, 2005, the Partnership has approximately  3,446 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, 2005. The Partnership
does not anticipate  providing cash distributions to its BACs holders other than
from net refinancing or sales proceeds.



                                       5
<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                      2005            2004            2003            2002            2001
-----------------------------------------   ------------    ------------    ------------    ------------    ------------
<S>                                         <C>             <C>             <C>             <C>             <C>
Revenues                                    $ 10,073,012    $  9,359,288    $  9,140,057    $  9,013,667    $  8,662,312
Operating expenses                           (14,861,056)    (14,653,886)    (13,685,802)    (13,154,549)    (13,480,310)
                                            ------------    ------------    ------------    ------------    ------------

Loss before minority interest                 (4,788,044)     (5,294,598)     (4,545,745)     (4,140,882)     (4,817,998)
Minority interest in loss of subsidiaries         11,499          16,161          10,959           8,204          11,423
                                            ------------    ------------    ------------    ------------    ------------
 Net loss                                   $ (4,776,545)   $ (5,278,437)   $ (4,534,786)   $ (4,132,678)   $ (4,806,575)
                                            ============    ============    ============    ============    ============

Net loss per weighted average BAC           $     (80.25)   $     (88.68)   $     (76.19)   $     (69.43)   $     (80.75)
                                            ============    ============    ============    ============    ============

</TABLE>
<TABLE>
<CAPTION>

                                                                             March 31,
                                            ----------------------------------------------------------------------------
           FINANCIAL POSITION                   2005            2004            2003            2002            2001
-----------------------------------------   ------------    ------------    ------------    ------------    ------------
<S>                                         <C>             <C>             <C>             <C>             <C>
Total assets                                $ 82,380,900    $ 84,016,822    $ 87,502,402    $ 90,796,504    $ 93,702,404
                                            ============    ============    ============    ============    ============

Total liabilities                           $ 81,233,675    $ 77,992,941    $ 76,092,507    $ 74,604,701    $ 73,295,501
                                            ============    ============    ============    ============    ============

Minority interest                           $   (551,405)   $   (451,294)   $   (343,717)   $    (96,595)   $    (14,173)
                                            ============    ============    ============    ============    ============

Total partners' capital                     $  1,698,630    $  6,475,175    $ 11,753,612    $ 16,288,398    $ 20,421,076
                                            ============    ============    ============    ============    ============

</TABLE>

During the years ended March 31, 2005, 2004, 2003, 2002 and 2001,  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,
2005.



                                       6
<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, 2005, 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, 2005, cash and cash  equivalents of the Partnership
and  its  fifteen  consolidated  Local  Partnerships   increased   approximately
($1,104,000)  due to net proceeds from mortgage  notes of  ($2,162,000)  and net
cash provided by operating  activities of ($116,000) which exceeded  acquisition
of  property  and  equipment  ($548,000),  an  increase  in cash  held in escrow
relating to  investing  activities  ($187,000),  an  increase in deferred  costs
($176,000),  a net decrease in local general partners and affiliates relating to
investing activities ($174,000) and a decrease in capitalization of consolidated
subsidiaries  attributable  to  minority  interest  ($89,000).  Included  in the
adjustments  to  reconcile  the  net  loss to net  cash  provided  by  operating
activities is depreciation and amortization of approximately $3,553,000.

At March 31, 2005, there is a balance of  approximately  $786,000 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, 2005, 2004 and 2003,  amounts received
from operations of the Local Partnerships were approximately  $165,000,  $88,000
and  $71,000,  respectively.  Also  during the year ended  March 31,  2005,  the
Partnership  received  a  distribution  of  approximately  $1,558,000  from  the
refinancing of Derby Run Associates L.P. ("Derby Run").  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  $3,635,000 and $3,339,000 were accrued and unpaid as of March 31,
2005 and 2004, 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.

Total  expenses  for  the  years  ended  March  31,  2005  and  2004,  excluding
depreciation and amortization, interest and general and administrative - related
parties,  totaled $7,214,000 and $7,444,000.  For the years ended March 31, 2005
and 2004,  accounts  payable,  security  deposits  payable and accrued  interest
payable were as follows:

<TABLE>
<CAPTION>

                                                            March 31,
                                                 -------------------------------
                                                     2005                2004
                                                 -----------         -----------
<S>                                              <C>                 <C>
Accounts payable                                 $   720,880         $   796,484
Security deposits payable                            420,694             412,068
Accrued interest payable                          15,226,268          13,698,965
                                                 -----------         -----------

   Total                                         $16,367,842         $14,907,517
                                                 ===========         ===========

</TABLE>

Accounts payable are short term  liabilities  which are expected to be paid from
operating cash flows,  working capital balances at the Local Partnership  level,
local general partner  advances and in certain  circumstances  advances from the
Partnership.  Because the provisions of the secondary loans defer the payment of
accrued interest of the respective Local Partnerships,  the Partnership believes
it (and the applicable Local Partnerships) has sufficient  liquidity and ability
to generate cash and to meet existing and known or reasonably likely future cash
requirements over both the short and long term.

Security  deposits payable are offset by cash held in security  deposits,  which
are included in "Cash held in escrow" on the financial statements.

Accrued interest payable  represents the accrued interest on all mortgage loans,
which  include  primary  and  secondary  loans.  Certain  secondary  loans  have
provisions  such that  interest is accrued but not payable  until a future date.
The  Partnership  anticipates  the payment of accrued  interest on the secondary
loans (which make up the majority of the accrued  interest  payable amount which
have been  accumulating  since the  Partnership's  investment in the  respective
Local  Partnership)  will be made from future  refinancings or sales proceeds of
the  respective  Local  Partnerships.  In  addition,  each  Local  Partnership's
mortgage  notes are  collateralized  by the land and buildings of the respective
Local Partnership, and are without further recourse to the Partnership.

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
downturn in the national  economy.  The Partnership has invested the proceeds of



                                       7
<PAGE>



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 value to the Property on the market.  However,  such value  declines each
year and is not included in the financial statement carrying amount.

Tabular Disclosure of Contractual Obligations
---------------------------------------------
The following  table  summarizes the  Partnership's  commitments as of March 31,
2005 to make future  payments under its debt  agreements  and other  contractual
obligations.

<TABLE>
<CAPTION>

                                               Less than       1 - 3         3 -5        More than
                                   Total        1 Year         Years         Years        5 Years
                                -----------   -----------   -----------   -----------   -----------
<S>                             <C>           <C>           <C>           <C>           <C>
Mortgage notes payable (a)      $59,271,697   $   598,570   $ 1,347,762   $ 1,634,220   $55,691,145
Loans payable to general
   partner and affiliates (b)       238,634       238,634             0             0             0
                                -----------   -----------   -----------   -----------   -----------

                                $59,510,331   $   837,204   $ 1,347,762   $ 1,634,220   $55,691,145
                                ===========   ===========   ===========   ===========   ===========

</TABLE>

(a)  The  mortgage  notes are  payable  in  aggregate  monthly  installments  of
     approximately  $165,000  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.

(b)  See Note 8 (B) in Item 8. Financial Statements and Supplementary Data

Off Balance Sheet Arrangements
------------------------------

The Partnership has no off-balance sheet arrangements.

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) when the property is  considered  to be impaired and the
depreciated cost exceeds estimate fair value.

Through March 31, 2005, the Partnership has recorded approximately $3,926,000 as
an aggregate loss on impairment of assets.

Revenue Recognition
-------------------

Rental income is earned  primarily under standard  residential  operating leases
and is typically  due the first day of each month,  but can vary by property due
to the terms of the tenant leases.  Rental income is recognized  when earned and
charged to tenants' accounts  receivable if not received by the due date. Rental
payments  received in advance of the due date are deferred until earned.  Rental
subsidies  are  recognized  as  rental  income  during  the month in which it is
earned.

Other  revenues are  recorded  when earned and consist of the  following  items:
Interest  income  earned on cash and cash  equivalent  balances and cash held in
escrow balances,  income from forfeited security deposits, late charges, laundry
and vending income and other rental related items.

Other revenues  include the following  amounts at both the Partnership and Local
Partnership level:

<TABLE>
<CAPTION>

                                            2005           2004           2003
                                          --------       --------       --------
<S>                                       <C>            <C>            <C>
Interest                                  $ 45,121       $ 36,944       $ 86,345
Other                                      516,606        139,461        212,298
                                          --------       --------       --------

  Total other revenue                     $561,727       $176,405       $298,643
                                          ========       ========       ========

</TABLE>



                                       8
<PAGE>



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.

New Accounting Pronouncements
-----------------------------

On  December  16,  2004,  the FASB  issued  Statement  of  Financial  Accounting
Standards  ("SFAS") No. 153,  Exchanges of Nonmonetary  Assets - An Amendment of
APB Opinion No. 29 ("SFAS No.  153").  The  amendments  made by SFAS No. 153 are
based on the principle that  exchanges of nonmonetary  assets should be measured
based on the  fair  value  of the  assets  exchanged.  Further,  the  amendments
eliminate the narrow exception for nonmonetary  exchanges of similar  productive
assets and replace it with a broader  exception  for  exchanges  of  nonmonetary
assets that do not have  "commercial  substance."  SFAS No. 153 is effective for
nonmonetary asset exchanges occurring in fiscal periods beginning after June 15,
2005. The Partnership does not believe that the adoption of SFAS No. 153 on June
15, 2005 will have a material effect on the Partnership's consolidated financial
statements.

In January 2003, the Financial  Accounting  Standards Board ("FASB") issued FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
FIN 46 is applicable  immediately for variable  interest  entities created after
January 31, 2003. For variable  interest  entities  created  before  February 1,
2003, the provisions of FIN 46 were applicable no later than December 15, 2003.
 The  Partnership has not created any variable  interest  entities after January
31, 2003. In December 2003 the FASB redeliberated certain proposed modifications
and revised FIN 46 ("FIN 46 (R)").  The revised  provisions  were  applicable no
later than the first reporting  period ending after March 15, 2004. The adoption
of FIN 46 (R) did not have a  material  impact  on the  Partnership's  financial
reporting and disclosures.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with  Characteristics of both Liabilities and Equity".  SFAS No. 150
changes the accounting for certain  financial  instruments  that, under previous
guidance,  could be classified as equity or "mezzanine" equity, by now requiring
those  instruments  to  be  classified  as  liabilities  (  or  assets  in  some
circumstances)  in the  Consolidated  Balance  Sheets.  Further,  SFAS  No.  150
requires  disclosure  regarding the terms of those  instruments  and  settlement
alternatives.  The  guidance in SFAS No. 150  generally  was  effective  for all
financial  instruments  entered  into or modified  after May 31,  2003,  and was
otherwise effective at the beginning of the first interim period beginning after
June 15, 2003. The Partnership has evaluated SFAS No. 150 and determined that it
does  not  have  an  impact  on  the  Partnership's   financial   reporting  and
disclosures.

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

The following is a summary of the results of operations of the  Partnership  for
the years ended March 31,  2005,  2004 and 2003 (the 2004,  2003 and 2002 Fiscal
Years, respectively).

The net  loss for the  2004,  2003 and 2002  Fiscal  Years  totaled  $4,776,545,
$5,278,437 and, $4,534,786, 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
$8,384,145,  $8,746,267 and $8,746,263 of Housing Tax Credits during each of the
2004, 2003 and 2002 tax years, respectively.

2004 vs. 2003
-------------
The  Partnership's  results of  operations  for the 2004 and 2003  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 2004 Fiscal Year as compared to
the 2003 Fiscal Year, primarily due to rental rate increases.

Other  income  increased  approximately  $385,000  for the 2004  Fiscal  Year as
compared to the 2003  Fiscal  Year,  primarily  due to an  insurance  settlement
received at one Local Partnership.

Total expenses, excluding financial, remained consistent with a decrease of less
than 1% for the 2004 Fiscal Year as compared to the 2003 Fiscal Year.

Financial expenses increased  approximately $287,000 for the 2004 Fiscal Year as
compared to the 2003  Fiscal  Year,  primarily  due to a  prepayment  penalty of
$256,000  incurred at one of the Local  Partnerships  as a result of refinancing
their loan (See Item 8, Note 7).

2003 vs. 2002
-------------
The  Partnership's  results of  operations  for the 2003 and 2002  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 2003 Fiscal Year as compared to
the 2002 Fiscal Year primarily due to rental rate increases.

Other  income  decreased  approximately  $122,000  for the 2003  Fiscal  Year as
compared to the 2002 Fiscal Year primarily due to a decrease in interest  earned
on a capital installment at one Local Partnership, a utility refund in the prior
year at a second Local  Partnership  and insurance  claim  proceeds in the prior
year at a third Local Partnership.



                                       9
<PAGE>



Total expenses,  excluding general and  administrative,  repairs and maintenance
and insurance,  remained fairly  consistent with an increase of approximately 2%
for the 2003 Fiscal Year as compared to the 2002 Fiscal Year.

General and administrative  increased approximately $422,000 for the 2003 Fiscal
Year as  compared  to the 2002  Fiscal  Year  primarily  due to an  increase  in
incentive management fees at one Local Partnership and increased office supplies
and tenant programs at a second Local Partnership.

Repairs and  maintenance  increased  approximately  $259,000 for the 2003 Fiscal
Year as compared to the 2002 Fiscal Year primarily due to increased  repairs and
maintenance  payroll  at one  Local  Partnership  and  upgrades  in  appliances,
painting and carpeting at a second Local Partnership.

Insurance increased  approximately  $81,000 for the 2003 Fiscal Year as compared
to the 2002 Fiscal Year  primarily  due to increased  insurance  premiums at the
Local Partnerships.

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

Clear Horizons Limited Partnership
----------------------------------
At December 31, 2004,  Clear Horizons  Limited  Partnership  ("Clear  Horizons")
current  liabilities  exceeded  its current  assets by $227,242.  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, 2004,  is $245,232 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, 2004.

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.  Furthermore,  inflation  generally  does not
impact the fixed long-term financing under which real property  investments were
purchased. 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

Mortgage notes are payable in aggregate monthly installments including principal
and interest at rates varying from 0% to 9.65% per annum.  The Partnership  does
not believe there is a material risk associated with the various  interest rates
associated  with the  mortgage  notes as the  majority of the Local  Partnership
mortgage notes have fixed rates. The Partnership  currently discloses in Item 8,
Note 3 to the financial statements the fair value of the mortgage notes payable.
The Partnership does not have any other market risk sensitive instruments.



                                       10
<PAGE>

<TABLE>
<CAPTION>

Item 8.   Financial Statements and Supplementary Data
                                                                                   Sequential
                                                                                      Page
                                                                                   ----------

<S>       <C>                                                                          <C>
(a) 1.    Consolidated Financial Statements

          Report of Independent Registered Public Accounting Firm                      12

          Consolidated Balance Sheets at March 31, 2005 and 2004                       45

          Consolidated  Statements of  Operations  for the Years Ended March 31,
          2005, 2004 and 2003                                                          46

          Consolidated  Statements of Changes in Partners' Capital (Deficit) for
          the Years Ended March 31, 2005, 2004 and 2003                                47

          Consolidated  Statements  of Cash Flows for the Years  Ended March 31,
          2005, 2004 and 2003                                                          48

          Notes to Consolidated Financial Statements                                   49


</TABLE>



                                       11
<PAGE>



             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             -------------------------------------------------------


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, 2005
and 2004,  and the related  consolidated  statements of  operations,  changes in
partners' capital (deficit),  and cash flows for the years ended March 31, 2005,
2004 and 2003  (the  2004,  2003 and 2002  Fiscal  Years,  respectively).  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits. We did not audit the financial  statements for thirteen (Fiscal 2004
and  2003)  and  twelve  (Fiscal  2002)  subsidiary  partnerships  whose  losses
aggregated  $2,194,709,  $3,685,633 and  $2,808,360 for the 2004,  2003 and 2002
Fiscal  Years,  respectively,  and whose assets  constituted  72% and 73% of the
Partnership's assets at March 31, 2005 and 2004, respectively,  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 the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, 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, 2005 and 2004,  and the results of their
operations  and their cash flows for the years  ended March 31,  2005,  2004 and
2003, in conformity with U.S. generally accepted accounting principles.


Trien Rosenberg Rosenberg
Weinberg Ciullo & Fazzari LLP



New York, New York
June 8, 2005



                                       12
<PAGE>



[Letterhead of REZNICK GROUP, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Lincoln Renaissance

We have audited the  accompanying  balance  sheets of Lincoln  Renaissance as of
December  31,  2004 and 2003,  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 financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of Lincoln  Renaissance  as of
December 31, 2004 and 2003,  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  February  4,  2005,  on  our   consideration  of  Lincoln
Renaissance's  internal control over financial reporting and on our tests of its
compliance with certain provisions of laws,  regulations,  contracts,  and grant
agreements  and other  matters.  The purpose of that  report is to describe  the
scope of our  testing  of  internal  control  over  financial  reporting  and on
compliance and the results of that testing, and not to provide an opinion on the
internal  control over financial  reporting or on compliance.  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 2004  supplemental  information on
pages 27 through 31 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 Group, P.C.
Baltimore, Maryland
February 4, 2005



                                       13
<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,  2003 and 2002,  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 financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of Lincoln  Renaissance  as of
December 31, 2003 and 2002,  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,  2003,  dated  January  30,  2004,  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 30, 2004



                                       14
<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, 2004 and 2003, 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, 2004 and 2003,  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 21, 2005, 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, grants, agreements and other
matters. The purpose of those reports is to describe the scope of our testing of
internal control over financial reporting and compliance and the results of that
testing and not to provide an opinion on the internal  control over reporting or
on  compliance.  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 21, 2005

EIN 36-402506
Engagement Partner:  Paul H. Wieland



                                       15
<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, 2003 and 2002, 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, 2003 and 2002,  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 February 9, 2004, 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
February 9, 2004



                                       16
<PAGE>



[Letterhead of REZNICK GROUP, P.C.]

INDEPENDENT AUDITORS' REPORT


To the Partners
Mansion Court Associates

We have audited the  accompanying  balance sheets of Mansion Court Associates as
of December 31, 2004 and 2003,  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 financial  statements  referred to above present fairly, in
all material respects,  the financial position of Mansion Court Associates as of
December 31, 2004 and 2003,  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
dated January 28, 2005,  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 grant  agreements  and
other  matters.  The  purpose  of that  report is to  describe  the scope of our
testing of internal  control over  financial  reporting and  compliance  and the
results of that testing,  and not to provide an opinion on the internal  control
over financial reporting or on compliance. That report is an integral part of an
audit performed in accordance with Government  Auditing  Standards and should be
considered in assessing 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 2004  supplemental  information on
pages 25 through 28 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 Group, P.C.
Baltimore, Maryland
January 28, 2005



                                       17
<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, 2003 and 2002,  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 financial  statements  referred to above present fairly, in
all material respects,  the financial position of Mansion Court Associates as of
December 31, 2003 and 2002,  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,  2003,  dated  February  6,  2004,  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 6, 2004



                                       18
<PAGE>



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

INDEPENDENT AUDITOR'S REPORT


To the Partners
DERBY RUN ASSOCIATES, L.P.
(A Virginia Limited Partnership)
Virginia Beach, Virginia


We have audited the accompanying balance sheets of DERBY RUN ASSOCIATES, L.P. (A
Virginia Limited  Partnership) as of December 31, 2004 and 2003, and the related
statements of income, 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, 2004 and 2003,  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.

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 6 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
February 4, 2005



                                       19
<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, 2003 and 2002, 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, 2003 and 2002,  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 23, 2004



                                       20
<PAGE>



[Letterhead of REZNICK GROUP, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Tasker Village Associates

We have audited the accompanying  balance sheets of Tasker Village Associates as
of December 31, 2004 and 2003,  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  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 Tasker Village Associates as of
December 31, 2004 and 2003,  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
dated  February  4, 2005,  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 grant  agreements  and other
matters.  The purpose of that report is to describe  the scope of our testing of
internal control over financial reporting and compliance and the results of that
testing,  and not to provide an opinion on the internal  control over  financial
reporting  or on  compliance.  That  report  is an  integral  part  of an  audit
performed  in  accordance  with  Government  Auditing  Standards  and  should be
considered in assessing 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 2004  supplemental  information on
pages 24 through 28 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 Group, P.C.
Baltimore, Maryland
February 4, 2005



                                       21
<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, 2003 and 2002,  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, 2003 and 2002,  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,  2003,  dated  January  16,  2004,  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  29 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 16, 2004



                                       22
<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,
2004 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, 2004 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
January 21, 2005
Carson, California



                                       23
<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,
2003 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, 2003 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 11, 2004
Carson, California



                                       24
<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,
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, 2002 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



                                       25
<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,  2004  and  2003,  and  the  related
statements  of  operations,  changes in partners'  equity and cash flows for the
years then ended.  These  financial  statements  are the  responsibility  of the
Partnership's  management.  My  responsibility is to express an opinion on these
financial statements based on my audits.

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, 2004 and 2003, 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, 2005



                                       26
<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,  2003  and  2002,  and  the  related
statements  of  operations,  changes in partners'  equity and cash flows for the
years then ended.  These  financial  statements  are the  responsibility  of the
Partnership's  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, 2003 and 2002, 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, 2004



                                       27
<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, 2004
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
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, 2004 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 17, 2005
Carson, California



                                       28
<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, 2003
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
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, 2003 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 20, 2004
Carson, California



                                       29
<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, 2002 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



                                       30
<PAGE>



[Letterhead of THORNTON & PACHECO]

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, 2004,  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, 2004, and the results of its operations and
cash  flows  for the year  then  ended in  conformity  with  generally  accepted
accounting principles in the United States of America.

In accordance with  GOVERNMENT  AUDITING  STANDARD,  we have also issued reports
dated  February 11, 2005, on our  consideration  of the  Partnership's  internal
control over financial reporting and on our tests of its compliance with certain
provisions of laws, regulations, contracts, grant agreements, and other matters.
The purpose of those reports is to describe the scope of our testing of internal
control over financial  reporting and compliance and the results of that testing
and not to provide an opinion on the internal  control over financial  reporting
or on  compliance.  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/ Robert Pacheco
Pasadena, California
February 11, 2005



                                       31
<PAGE>



[Letterhead of THORNTON & PACHECO]

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, 2003,  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, 2003, 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 7, 2004, 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/ Thornton & Pacheco
Pasadena, California
February 7, 2004



                                       32
<PAGE>



[Letterhead of THORNTON & PACHECO]

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/ Thornton & Pacheco
Pasadena, California
February 20, 2003



                                       33
<PAGE>



[Letterhead of Habif, Arogeti & Wynne, LLP]

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, 2004,  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,  2004,  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/ Habif, Arogeti & Wynne, LLP
Atlanta, Georgia
March 23, 2005



                                       34
<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, 2003,  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,  2003,  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
May 18, 2004



                                       35
<PAGE>



[Letterhead of BERT D. SAMUELS 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, 2004, and the related  statements of income,  changes in
partners'  equity  and  cash  flows  for the  year  then  ended.  The  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 auditing standards generally accepted 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 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. as
of December 31, 2004,  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/ Bert D. Samuels CPA
Encino, California
February 12, 2005



                                       36
<PAGE>



[Letterhead of BERT D. SAMUELS 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, 2003, and the related  statements of income,  changes in
partners'  equity  and  cash  flows  for the  year  then  ended.  The  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 auditing standards generally accepted 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 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. as
of December 31, 2003,  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/ Bert D. Samuels CPA
Encino, California
February 28, 2004



                                       37
<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



                                       38
<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, 2004, 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,  2004 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, 2004 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  9,  2005  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 5, 2005



                                       39
<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, 2003, 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,  2003 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, 2003 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  9,  2004  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 9, 2004



                                       40
<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



                                       41
<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, 2004 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,  2004 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 26, 2005



                                       42
<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, 2003 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,  2003 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 24, 2004



                                       43
<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



                                       44
<PAGE>



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




                                     ASSETS

<TABLE>
<CAPTION>

                                                                          March 31,
                                                                ----------------------------
                                                                    2005            2004
                                                                ------------    ------------
<S>                                                             <C>             <C>
Property and equipment  net, less  accumulated  depreciation
 (Notes 2, 4 and 7)                                             $ 76,531,547    $ 79,455,298
Cash and cash equivalents (Notes 2, 3 and 11)                      1,820,457         716,058
Cash held in escrow (Notes 3 and 5)                                3,199,191       3,041,671
Deferred costs, less accumulated amortization (Notes 2 and 6)        305,553         211,030
Other assets                                                         524,152         592,765
                                                                ------------    ------------

                                                                $ 82,380,900    $ 84,016,822
                                                                ============    ============

                  LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)


Liabilities:
Mortgage notes payable (Note 7)                                 $ 59,271,697    $ 57,109,969
Accounts payable                                                     720,880         796,484
Security deposits payable                                            420,694         412,068
Accrued interest                                                  15,226,268      13,698,965
Due to local general partners and affiliates (Note 8)              1,636,184       1,754,760
Due to general partner and affiliates (Note 8)                     3,957,952       4,220,695
                                                                ------------    ------------

                                                                  81,233,675      77,992,941
                                                                ------------    ------------

Minority interest                                                   (551,405)       (451,294)
                                                                ------------    ------------

Commitments and contingencies (Notes 7, 8 and 11)

Partners' capital (deficit):
Limited partners (58,928 BACs issued and outstanding)              2,205,593       6,934,373
General partner                                                     (506,963)       (459,198)
                                                                ------------    ------------

Total partners' capital (deficit)                                  1,698,630       6,475,175
                                                                ------------    ------------

Total liabilities and partners' capital (deficit)               $ 82,380,900    $ 84,016,822
                                                                ============    ============

</TABLE>

          See accompanying notes to consolidated financial statements.



                                       45
<PAGE>



                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                    Years Ended March 31,
                                                        --------------------------------------------
                                                            2005            2004            2003
                                                        ------------    ------------    ------------
<S>                                                     <C>             <C>             <C>
 Revenues

 Rental income                                          $  9,511,285    $  9,182,883    $  8,841,414
 Other income                                                561,727         176,405         298,643
                                                        ------------    ------------    ------------
                                                          10,073,012       9,359,288       9,140,057
                                                        ------------    ------------    ------------
 Expenses
 General and administrative                                2,503,067       2,702,969       2,280,440
 General and administrative-related parties (Note 8)       1,013,919         991,402         992,455
 Repairs and maintenance                                   2,123,011       2,205,546       1,946,913
 Operating                                                 1,146,968       1,105,217       1,011,399
 Taxes                                                       709,655         733,695         668,743
 Insurance                                                   731,566         696,677         616,132
 Financial, principally interest                           3,079,737       2,792,662       2,650,829
 Depreciation and amortization                             3,553,133       3,425,718       3,518,891
                                                        ------------    ------------    ------------
  Total expenses                                          14,861,056      14,653,886      13,685,802
                                                        ------------    ------------    ------------

 Loss before minority interest                            (4,788,044)     (5,294,598)     (4,545,745)

 Minority interest in loss of subsidiary partnerships         11,499          16,161          10,959
                                                        ------------    ------------    ------------

Net loss                                                $ (4,776,545)   $ (5,278,437)   $ (4,534,786)
                                                        ============    ============    ============

Net loss - limited partners                             $ (4,728,780)   $ (5,225,653)   $ (4,489,438)
                                                        ============    ============    ============

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

Net loss per BAC                                        $     (80.25)   $     (88.68)   $     (76.19)
                                                        ============    ============    ============

</TABLE>


          See accompanying notes to consolidated financial statements.



                                       46
<PAGE>



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

<TABLE>
<CAPTION>

                                                                 Limited         General
                                                   Total         Partners        Partners
                                               ------------    ------------    ------------

<S>                                            <C>             <C>             <C>
Partners' capital (deficit) -- April 1, 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)

Net loss                                         (5,278,437)     (5,225,653)        (52,784)
                                               ------------    ------------    ------------

Partners capital (deficit) - March 31, 2004       6,475,175       6,934,373        (459,198)

Net loss                                         (4,776,545)     (4,728,780)        (47,765)
                                               ------------    ------------    ------------

Partners capital (deficit) - March 31, 2005    $  1,698,630    $  2,205,593    $   (506,963)
                                               ============    ============    ============

</TABLE>

          See accompanying notes to consolidated financial statements.



                                       47
<PAGE>



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

<TABLE>
<CAPTION>

                                                                      Years Ended March 31,
                                                            -----------------------------------------
                                                               2005           2004           2003
                                                            -----------    -----------    -----------
<S>                                                         <C>            <C>            <C>
 Cash flows from operating activities:
 Net loss                                                   $(4,776,545)   $(5,278,437)   $(4,534,786)
                                                            -----------    -----------    -----------
 Adjustments to reconcile net loss to net cash provided
  by operating activities:
 Depreciation and amortization                                3,553,133      3,425,718      3,518,891
 Minority interest in loss of subsidiary
  partnerships                                                  (11,499)       (16,161)       (10,959)
 (Increase) decrease in assets:
 Cash held in escrow                                             29,340        (12,713)       (30,654)
 Other assets                                                    68,613        149,635        (82,455)
 Increase (decrease) in liabilities:
 Accounts payable and other liabilities                         (66,978)      (124,936)       (44,300)
 Accrued interest                                             1,527,303      1,667,842      1,453,193
 Due to local general partners and affiliates                    72,738        272,373         23,862
 Due to local general partners and affiliates                   (17,084)        (4,522)      (181,090)
 Due to general partner and affiliates                         (262,743)       713,388        692,199
                                                            -----------    -----------    -----------
 Total adjustments                                            4,892,823      6,070,624      5,338,687
                                                            -----------    -----------    -----------

 Net cash provided by operating activities                      116,278        792,187        803,901
                                                            -----------    -----------    -----------

 Cash flows from investing activities:
 Improvements to property and equipment                        (548,330)      (356,569)      (487,607)
 (Increase) decrease in cash held in escrow                    (186,860)         3,200         73,813
 Increase in due to local general partners and affiliates        62,399             --        137,141
 Decrease in due to local general partners and affiliates      (236,629)       (38,151)            --
                                                            -----------    -----------    -----------

 Net cash used in investing activities                         (909,420)      (391,520)      (276,653)
                                                            -----------    -----------    -----------

 Cash flows from financing activities:
 Principal payments of mortgage notes                        (4,738,272)      (493,507)      (479,998)
 Proceeds from mortgage notes                                 6,900,000             --             --
 Increase in deferred costs                                    (175,575)            --             --
 Increase in due to local general partners and affiliates            --          7,097         14,940
 Decrease in due to local general partners and affiliates            --        (99,150)      (128,141)
 Decrease in capitalization of consolidated subsidiaries
  attributable to minority interest                             (88,612)       (91,416)      (236,163)
                                                            -----------    -----------    -----------

 Net cash provided by (used in) financing activities          1,897,541       (676,976)      (829,362)
                                                            -----------    -----------    -----------

Net increase (decrease) in cash and cash equivalents          1,104,399       (276,309)      (302,114)

Cash and cash equivalents at beginning of year                  716,058        992,367      1,294,481
                                                            -----------    -----------    -----------

Cash and cash equivalents at end of year                    $ 1,820,457    $   716,058    $   992,367
                                                            ===========    ===========    ===========

Supplemental disclosure of cash flows information:
Cash paid during the year for interest                      $ 1,488,710    $ 1,135,516    $ 1,211,218
                                                            ===========    ===========    ===========

</TABLE>

          See accompanying notes to consolidated financial statements.



                                       48
<PAGE>



                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2005



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 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 November 17, 2003,  CharterMac  acquired RCC, which is the indirect parent of
RCC Manager  LLC, the sole  shareholder  of RIAI.  Pursuant to the  acquisition,
CharterMac  acquired  controlling   interests  in  the  General  Partner.   This
acquisition did not affect the Partnership or its day-to-day operations,  as the
majority of the General Partner's management team remained unchanged.

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,
2005.

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 Accounting

For financial reporting purposes the Partnership's fiscal year ends on March 31.
All  subsidiaries  have  fiscal  years  ending  December  31.  Accounts  of  the
subsidiaries  have been adjusted for  intercompany  transactions  from January 1
through 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 ("GAAP").

b)  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. All  subsidiaries  have fiscal  years ending  December  31.  Accounts of the
subsidiaries  have been adjusted for  intercompany  transactions  from January 1
through 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.

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
attributable  to  minority   interest  which  exceed  the  minority   interests'
investment  in a subsidiary  partnership  have been charged to the  Partnership.
Such losses aggregated  approximately $29,000, $29,000 and $27,000 for the years
ended March 31,  2005,  2004 and 2003 (the 2004,  2003 and 2002  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,  2005,  distributions  to  several  minority
interests have exceeded their investments.

c)  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.



                                       49
<PAGE>



                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2005



d)  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) when the property is  considered  to be impaired and the
depreciated cost exceeds estimated fair value.

Through March 31, 2005, the Partnership has recorded approximately $3,926,000 as
an aggregate loss on impairment of assets.

e)  Revenue Recognition

Rental income is earned  primarily under standard  residential  operating leases
and is typically  due the first day of each month,  but can vary by property due
to the terms of the tenant leases.  Rental income is recognized  when earned and
charged to tenants' accounts  receivable if not received by the due date. Rental
payments  received in advance of the due date are deferred until earned.  Rental
subsidies  are  recognized  as  rental  income  during  the month in which it is
earned.

Other  revenues are  recorded  when earned and consist of the  following  items:
Interest  income  earned on cash and cash  equivalent  balances and cash held in
escrow balances,  income from forfeited security deposits, late charges, laundry
and vending income and other rental related items.

Other revenues  include the following  amounts at both the Partnership and Local
Partnership level:

<TABLE>
<CAPTION>

                                                    Year Ended March 31,
                                          --------------------------------------
                                            2005           2004           2003
                                          --------       --------       --------
<S>                                       <C>            <C>            <C>
Interest                                  $ 45,121       $ 36,944       $ 86,345
Other                                      516,606        139,461        212,298
                                          --------       --------       --------

   Total other revenue                    $561,727       $176,405       $298,643
                                          ========       ========       ========

</TABLE>

f)  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).

g)  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.

h)  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.

i)  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.

j)  New Accounting Pronouncements

On  December  16,  2004,  the FASB  issued  Statement  of  Financial  Accounting
Standards  ("SFAS") No. 153,  Exchanges of Nonmonetary  Assets - An Amendment of
APB Opinion No. 29 ("SFAS No.  153").  The  amendments  made by SFAS No. 153 are
based on the principle that  exchanges of nonmonetary  assets should be measured
based on the  fair  value  of the  assets  exchanged.  Further,  the  amendments
eliminate the narrow exception for nonmonetary  exchanges of similar  productive
assets and replace it with a broader  exception  for  exchanges  of  nonmonetary
assets that do not have  "commercial  substance."  SFAS No. 153 is effective for
nonmonetary asset exchanges occurring in fiscal periods beginning after June 15,
2005. The Partnership does not believe that the adoption of SFAS No. 153 on June



                                       50
<PAGE>



                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2005



15, 2005 will have a material effect on the Partnership's consolidated financial
statements.

In January 2003, the Financial  Accounting  Standards Board ("FASB") issued FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
FIN 46 is applicable  immediately for variable  interest  entities created after
January 31, 2003. For variable  interest  entities  created  before  February 1,
2003, the provisions of FIN 46 were applicable no later than December 15, 2003.
 The  Partnership has not created any variable  interest  entities after January
31, 2003. In December 2003 the FASB redeliberated certain proposed modifications
and revised FIN 46 ("FIN 46 (R)").  The revised  provisions  were  applicable no
later than the first reporting  period ending after March 15, 2004. The adoption
of FIN 46 (R) did not have a  material  impact  on the  Partnership's  financial
reporting and disclosures.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with  Characteristics of both Liabilities and Equity".  SFAS No. 150
changes the accounting for certain  financial  instruments  that, under previous
guidance,  could be classified as equity or "mezzanine" equity, by now requiring
those  instruments  to  be  classified  as  liabilities  (  or  assets  in  some
circumstances)  in the  Consolidated  Balance  Sheets.  Further,  SFAS  No.  150
requires  disclosure  regarding the terms of those  instruments  and  settlement
alternatives.  The  guidance in SFAS No. 150  generally  was  effective  for all
financial  instruments  entered  into or modified  after May 31,  2003,  and was
otherwise effective at the beginning of the first interim period beginning after
June 15, 2003. The Partnership has evaluated SFAS No. 150 and determined that it
does  not  have  an  impact  on  the  Partnership's   financial   reporting  and
disclosures.


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, 2005              March 31, 2004
                                          -------------------------   -------------------------
                                            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        $13,114,579   $13,228,806   $ 8,078,570   $ 8,227,133
Not practicable                           $46,157,118             *   $49,031,399             *

</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.


NOTE 4 - Property and Equipment

The components of property and equipment and their estimated useful lives are as
follows:

<TABLE>
<CAPTION>

                                                                    Estimated
                                             March 31,               Useful
                                  ------------------------------      Lives
                                      2005             2004          (Years)
                                  -------------    -------------    ---------
<S>                               <C>              <C>               <C>
Land                              $   6,228,836    $   6,228,836
Building and improvements           102,488,853      102,072,423       --
Furniture and fixtures                1,346,433        1,299,937      10-40
                                  -------------    ------------
                                    110,064,122      109,601,196       5-10

Less:  Accumulated depreciation     (33,532,575)     (30,145,898)
                                  -------------    ------------

                                  $  76,531,547    $ 79,455,298
                                  =============    ============

</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, 2005 and
2004, respectively.



                                       51
<PAGE>



                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2005



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,  2005 and  2004.  Such fees have been
included in the cost of property and equipment.

Depreciation  expense for the years ended March 31, 2005, 2004 and 2003 amounted
to $3,472,081, $3,410,321 and $3,499,640,  respectively.  Additionally,  $85,404
and $489 of accumulated  depreciation on dispositions was written-off during the
years ended March 31, 2005 and 2004, respectively.


NOTE 5 - Cash Held in Escrow

Cash held in escrow consists of the following:

<TABLE>
<CAPTION>

                                                               March 31,
                                                      --------------------------
                                                         2005            2004
                                                      ----------      ----------
<S>                                                   <C>             <C>
Purchase price payments*                              $   23,683      $   23,683
Real estate taxes, insurance and other                 1,108,819       1,138,159
Reserve for replacements (Note 7)                      2,066,689       1,879,829
                                                      ----------      ----------

                                                      $3,199,191      $3,041,671
                                                      ==========      ==========

</TABLE>

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


NOTE 6 - Deferred Costs

The  components  of  deferred  costs and their  periods of  amortization  are as
follows:

<TABLE>
<CAPTION>

                                                March 31,
                                        -----------------------
                                          2005          2004        Period
                                        ---------     ---------     -------
<S>                                     <C>           <C>           <C>
Financing costs                         $ 443,065     $ 361,409       *
Other                                      33,703        33,703     various
                                        ---------     ---------
                                          476,768       395,112
Less:  Accumulated amortization          (171,215)     (184,082)
                                        ---------     ---------

                                        $ 305,553     $ 211,030
                                        =========     =========

</TABLE>

*Over the life of the related mortgages.


Amortization  expense for the years ended March 31, 2005, 2004 and 2003 amounted
to  $81,052,  $15,397  and  $19,251,   respectively.  In  addition,  $93,919  of
accumulation amortization was written off during the year ended March 31, 2005.


NOTE 7 - Mortgage Notes Payable

The  mortgage   notes  are  payable  in  aggregate   monthly   installments   of
approximately $165,000 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 $3,840,189  and  $4,102,647 at December 31,
2004 and 2003,  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.

During the year ended March 31, 2005,  Derby Run Associate  L.P.'s ("Derby Run")
mortgage note payable of  $4,325,898  was  refinanced  and paid in full with the
proceeds from a new mortgage note payable of  $6,900,000.  The new mortgage note
payable is secured by the property and a deed of trust on the real estate and is
due in monthly installments of $37,464 including interest at 5.1%.



                                       52
<PAGE>



                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2005



Annual principal payment requirements for mortgage notes payable for each of the
next five fiscal years and thereafter are as follows:

Fiscal Year Ending                 Amount
------------------              ------------

2005                            $    598,570
2006                                 651,925
2007                                 695,837
2008                                 751,699
2009                                 882,521
Thereafter                        55,691,145
                                ------------
                                $ 59,271,697
                                ============

Accrued  interest  payable  as of March  31,  2005  and  2004 was  approximately
$15,226,000  and  $13,699,000,  respectively.  Interest  accrues on all mortgage
loans,  which include primary and secondary loans.  Certain secondary loans have
provisions  such that  interest is accrued but not payable  until a future date.
The  Partnership  anticipates  the payment of accrued  interest on the secondary
loans (which make up the majority of the accrued  interest  payable amount which
have been  accumulating  since the  Partnership's  investment in the  respective
Local  Partnership)  will be made from future  refinancings or sales proceeds of
the respective Local Partnerships.

The mortgage  agreements  require  monthly  deposits to replacement  reserves of
approximately  $30,000 and monthly  deposits to escrow  accounts for real estate
taxes, hazard insurance and mortgage insurance and other (Note 5).


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 partnerships.

A)  Other Related Party Expenses

The costs incurred to related  parties for the years ended March 31, 2005,  2004
and 2003 were as follows:

<TABLE>
<CAPTION>

                                                                Years Ended March 31,
                                                       ------------------------------------
                                                          2005         2004         2003
                                                       ----------   ----------   ----------
<S>                                                    <C>          <C>          <C>
Partnership management fees (a)                        $  546,000   $  546,000   $  546,000
Expense reimbursement (b)                                 137,585      122,835      121,297
Local administrative fees (d)                              35,000       35,000       32,550
                                                       ----------   ----------   ----------
Total general and administrative - General Partner        718,585      703,835      699,847

                                                       ----------   ----------   ----------
Property management fees incurred to affiliates of
   the subsidiary partnerships' general partners (c)      295,334      287,567      292,608
                                                       ----------   ----------   ----------
                                                       ----------   ----------   ----------
Total general and administrative - related parties     $1,013,919   $  991,402   $  992,455
                                                       ==========   ==========   ==========

</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  $3,635,000 and $3,339,000 were accrued and unpaid as of March 31,
2005 and 2004, 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 $65,000 and
$651,000 were accrued and unpaid as of March 31, 2005 and 2004, respectively.

(c) Property  management  fees incurred by subsidiary  partnerships  amounted to
$681,903,  $672,734 and  $621,058  for the years ended March 31, 2005,  2004 and
2003, respectively. Of these fees $295,334, $287,567 and $292,608 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.



                                       53
<PAGE>



                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2005



B) Due to Local General Partners and Affiliates

Due to Local General Partners and affiliates at March 31, 2005 and 2004 consists
of the following:

<TABLE>
<CAPTION>

                                                                March 31,
                                                         -----------------------
                                                            2005         2004
                                                         ----------   ----------
<S>                                                      <C>          <C>
Operating advances                                       $    5,000   $    5,000
Development fee payable                                     467,750      804,941
Construction costs payable                                  639,531      476,570
Management and other operating advances                     285,269      229,615
Loans payable to general partner and affiliates (a)         238,634      238,634
                                                         ----------   ----------

                                                         $1,636,184   $1,754,760
                                                         ==========   ==========

</TABLE>

(a)  Affordable Green Associates, L.P. ("Affordable Green") borrowed monies from
     affiliates  of the Local  General  Partners  while the  building  was being
     constructed.  Interest  was  accrued  at rates  from 8% to 11%  during  the
     construction  period.  The loans are now due on  demand  and do not  accrue
     interest.

The Partnership has negotiated  Operating  Deficit Guaranty  Agreements with the
Local General  Partners or affiliates of the Local General  Partner by which the
Local  General  Partners  or their  affiliates  have  agreed  to fund  operating
deficits  for a specified  period of time.  The terms of the  Operating  Deficit
Guaranty Agreement vary for each Local Partnership,  with maximum dollar amounts
to be funded for a specified period of time,  generally three years,  commencing
on the break-even date.

Amounts funded under the Operating  Deficit  Guaranty  Agreements are treated as
non-interest  bearing loans,  which will be paid only out of available cash flow
or out of  available  net sale or  refinancing  proceeds.  As of March 31, 2005,
approximately  $375,000 has been advanced under the Operating  Deficit  Guaranty
Agreements all of which has been repaid.  If amounts  remained unpaid under such
agreements,  they would be  reflected  under "Due to local  general  partner and
affiliates" on our financial statements.


NOTE 9 - Taxable Net Loss

A reconciliation of the financial statement net loss to the taxable net loss for
the Partnership and its consolidated subsidiaries is as follows:

<TABLE>
<CAPTION>

                                                                           Years Ended March 31,
                                                                 -----------------------------------------
                                                                    2005           2004           2003
                                                                 -----------    -----------    -----------
<S>                                                              <C>            <C>            <C>
Financial statement net loss                                     $(4,776,545)   $(5,278,437)   $(4,534,786)

Differences between depreciation and amortization expense
  records for financial reporting purposes and the accelerated
  costs recovery system utilized for income tax purposes            (439,502)      (478,109)      (563,731)

Tax exempt interest income                                            (3,100)        (2,100)        (3,606)

Differences resulting from parent company having a different
  fiscal year for income tax and financial reporting purposes         (6,903)        12,179          4,309

Other, including accruals for financial reporting not
  deductible for tax purposes until paid                            (213,642)       585,145        316,434
                                                                 -----------    -----------    -----------

Net loss as shown on the income tax return for the calendar
  year ended                                                     $(5,439,692)   $(5,161,322)   $(4,781,380)
                                                                 ===========    ===========    ===========

</TABLE>



                                       54
<PAGE>



                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2005



NOTE 10 - Selected Quarterly Financial Data (Unaudited)

The following table summarizes the Partnership's quarterly results of operations
for the years ended March 31, 2005 and 2004.

<TABLE>
<CAPTION>

                                                                 Quarter Ended
                                            --------------------------------------------------------

                                              June 30,    September 30,   December 31,    March 31,
                OPERATION S                     2004           2004           2004          2005
-----------------------------------------   -----------    -----------    -----------    -----------
<S>                                         <C>            <C>            <C>            <C>
Revenues                                    $ 2,379,119    $ 2,390,384    $ 2,146,953    $ 3,156,556

Operating expenses                           (3,479,976)    (3,442,970)    (3,714,100)    (4,224,010)
                                            -----------    -----------    -----------    -----------

Loss before minority interest                (1,100,857)    (1,052,586)    (1,567,147)    (1,067,454)

Minority interest in loss of subsidiaries         2,649          3,519          2,620          2,711
                                            -----------    -----------    -----------    -----------

Net loss                                    $(1,098,208)   $(1,049,067)   $(1,564,527)   $(1,064,743)
                                            ===========    ===========    ===========    ===========

Net loss per weighted average BAC           $    (18.45)   $    (17.62)   $    (26.28)   $    (17.89)
                                            ===========    ===========    ===========    ===========

</TABLE>
<TABLE>
<CAPTION>
                                                                 Quarter Ended
                                            --------------------------------------------------------

                                              June 30,     September30    December 31,    March 31,
               OPERATIONS                       2003           2003           2003          2004
-----------------------------------------   -----------    -----------    -----------    -----------
<S>                                         <C>            <C>            <C>            <C>
Revenues                                    $ 2,304,932    $ 2,328,028    $ 2,329,337    $ 2,396,991

Operating expenses                           (3,474,590)    (3,290,185)    (3,636,652)    (4,252,459)
                                            -----------    -----------    -----------    -----------

Loss before minority interest                (1,169,658)      (962,157)    (1,307,315)    (1,855,468)

Minority interest in loss of subsidiaries         3,507          3,863          3,592          5,199
                                            -----------    -----------    -----------    -----------

Net loss                                    $(1,166,151)   $  (958,294)   $(1,303,723)   $(1,850,269)
                                            ===========    ===========    ===========    ===========

Net loss per weighted
  average BAC                               $    (19.59)   $    (16.10)   $    (21.90)   $    (31.09)
                                            ===========    ===========    ===========    ===========

</TABLE>

NOTE 11 - Commitments and Contingencies

a) Subsidiary Partnerships-Other

Clear Horizons Limited Partnership
----------------------------------
At December 31, 2004,  Clear Horizons  Limited  Partnership  ("Clear  Horizons")
current  liabilities  exceeded  its current  assets by $227,242.  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, 2004 is $245,232  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, 2004.



                                       55
<PAGE>



                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2005



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,  2005,  uninsured  cash  and  cash
equivalents approximated $1,400,000.

c)  Cash Distributions

Cash distributions from the Local Partnerships to the Partnership are restricted
by the provisions of the  respective  Local  Partnership  agreements and or HUD.
Such cash distributions are typically made from surplus cash flow.

d)  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 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
$8,384,145,  $8,746,267 and $8,746,263 of Housing Tax Credits during each of the
2004, 2003 and 2002 tax years, respectively.


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

None

Item 9A.  Controls and Procedures

(a)  EVALUATION  OF  DISCLOSURE  CONTROLS AND  PROCEDURES.  The Chief  Executive
Officer and Chief Financial Officer of Related Independence Associates L.P., the
general  partner of the  Partnership,  has  evaluated the  effectiveness  of the
Partnership's  disclosure  controls and  procedures  (as such term is defined in
Rules  13a-15(e) and  15d-15(e)  under the  Securities  Exchange Act of 1934, as
amended  ("Exchange  Act") as of the end of the period  covered by this  report.
Based on such evaluation, such officer has concluded that, as of the end of such
period, the Partnership's disclosure controls and procedures are effective.

(b) INTERNAL CONTROL OVER FINANCIAL  REPORTING.  There have not been any changes
in the Partnership's internal control over financial reporting during the fiscal
year to  which  this  report  relates  that  have  materially  affected,  or are
reasonably likely to materially affect, the Partnership's  internal control over
financial reporting.



                                       56
<PAGE>



                                    PART III


Item 10.  Directors and Executive Officers of the Registrant

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

On November 17, 2003,  CharterMac  acquired RCC, which is the indirect parent of
RCC Manager  LLC, the sole  shareholder  of RIAI.  Pursuant to the  acquisition,
CharterMac acquired controlling interests in the General Partner. Alan P. Hirmes
replaced Stephen M. Ross as Director of RIAI effective April 1, 2004 as a result
of this  acquisition.  This  acquisition  did not affect the  Partnership or its
day-to-day  operations as the majority of the General Partner's  management team
remained  unchanged.  The  Partnership has not adopted a separate code of ethics
because the Partnership  has no directors or executive  officers.  However,  the
parent company of RCC, which controls the General Partner, has adopted a code of
ethics. See http://www.chartermac.com.

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

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


Alan P. Hirmes                             Director  and  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

(*) On February 25, 2005,  Ms. Kiley  announced  her  retirement as Chief Credit
    Officer and trustee of CharterMac,  the indirect  parent of RCC Manager LLC,
    the sole shareholder of RIAI. Upon her retirement, she will also resign from
    her position as Vice President of RIAI.

ALAN P. HIRMES,  50, 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  CharterMac  and
American Mortgage Acceptance Company ("AMAC").

STUART J. BOESKY,  49,  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 CharterMac and AMAC.

MARC D. SCHNITZER,  44, 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.  Mr.  Schnitzer
also serves on the Board of Trustees of CharterMac.

DENISE L. KILEY,  45, 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. Ms. Kiley also serves on the Board of Trustees of CharterMac. As
noted above, Ms. Kiley is retiring from CharterMac.

GLENN F. HOPPS,  42, 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,  39, 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.



                                       57
<PAGE>



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
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 and
Related Security Holder Matters

<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                     100%
Interest in the Partnership       Associates L.P.           contribution -
                                  625 Madison Avenue        directly owned
                                  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.

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 May 11,  2005,  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   Percent
                 Name of Beneficial Owner (1                 Beneficial Ownership  of Class
-----------------------------------------------------------  --------------------  --------
<S>                                                          <C>                     <C>
Lehigh Tax Credit Partners, Inc.                             4,453.20 (2)(3)         7.6%

                                                             4,453.20 (2)(3)(4)      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%
Marc D. Schnitzer
                                                             4,453.20 (2)(3)(4)      7.6%
Denise L. Kiley (*)

Glenn F. Hopps                                                       -                 -

Teresa Wicelinski                                                    -                 -

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

</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 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



                                       58
<PAGE>



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 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 May 11, 2005,  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.  Principal Accountant Fees and Services

Audit Fees
----------
The  aggregate  fees billed by Trien  Rosenberg  Rosenberg  Weinberg  Ciullo and
Fazzari LLP and their respective  affiliates for professional  services rendered
for the audit of our annual  financial  statements for the years ended March 31,
2005 and 2004 and for the reviews of the  financial  statements  included in the
Partnership's  Quarterly  Reports on Form 10-Q for those years were  $56,200 and
$53,400, respectively.

Audit - Related Fees
--------------------
None

Tax Fees
--------
The aggregate fees billed by Weiser LLP (formerly, Rubin and Katz LLP) and their
respective  affiliates for professional services rendered for the preparation of
our annual tax  returns  for the years  ended  December  31,  2004 and 2003 were
$11,500 and $10,800, respectively.

All Other Fees
--------------
None

The Partnership is not required to have, and does not have, a stand-alone  audit
committee.



                                       59
<PAGE>



                                     PART IV

<TABLE>
<CAPTION>

Item 15.       Exhibits and Financial Statement Schedules
                                                                                    Sequential
                                                                                       Page
                                                                                    ----------

<S>            <C>                                                                      <C>
(a) 1.         Consolidated Financial Statements
               ---------------------------------

               Report of Independent Registered Public Accounting Firm                  12

               Consolidated Balance Sheets at March 31, 2005 and 2004                   45

               Consolidated  Statements of Operations  for the Years Ended March
               31, 2005, 2004 and 2003                                                  46

               Consolidated Statements of Changes in Partners' Capital (Deficit)
               for the Years Ended March 31, 2005, 2004 and 2003                        47

               Consolidated  Statements  of Cash Flows for the Years Ended March
               31, 2005, 2004 and 2003                                                  48

               Notes to Consolidated Financial Statements                               49

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

               Report of Independent Registered Public Accounting Firm                  66

               Schedule I - Condensed Financial Information of Registrant               67

               Schedule III - Real Estate and Accumulated Depreciation                  70

               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*

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

(21)           Subsidiaries of the Registrant                                           61

(31.1)         Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a)               64

(32.1)         Certification  Pursuant  to  Rule 13a-14(b) or Rule 15d-14(b) and
               Section  1350  of  Title 18  of the United States Code (18 U.S.C.
               1350)                                                                    65

               * 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)

</TABLE>



                                       60
<PAGE>



Item 15.       Exhibits and Financial Statement Schedules (continued)


                                                                  Jurisdiction
                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



                                       61
<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 15, 2005                 By:  /s/ Alan P. Hirmes
      -------------                      ------------------
                                         Alan P. Hirmes
                                         Director and Senior Vice President
                                         (Chief Executive and Financial Officer)


Date: June 15, 2005                 By:  /s/ Glenn F. Hopps
      -------------                      ------------------
                                         Glenn F. Hopps
                                         Treasurer
                                         (Chief Accounting Officer)



<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:

<TABLE>
<CAPTION>

    Signature                                         Title                                        Date
------------------         ------------------------------------------------------------    --------------
<S>                        <C>                                                             <C>
/s/ Alan P. Hirmes         Director and Senior Vice President (chief executive and
------------------         financial officer) of Related Independence Associates Inc.      June 15, 2005
Alan P. Hirmes                                                                             -------------

/s/ Glenn F. Hopps         Treasurer (chief accounting officer) of Related Independence
------------------         Associates Inc.                                                 June 15, 2005
Glenn F. Hopps                                                                             -------------

</TABLE>


<PAGE>



                                                                    Exhibit 31.1


                         CERTIFICATION PURSUANT TO RULE
                           13A-14(A) OR RULE 15D-14(A)


I, Alan P.  Hirmes,  Chief  Executive  Officer  and Chief  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 period ending
         March 31, 2005 of the Partnership;

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

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

     4.  I am responsible for establishing and maintaining  disclosure  controls
         and  procedures  (as  defined  in  Exchange  Act  Rules  13a-15(e)  and
         15d-15(e)) and internal control over financial reporting (as defined in
         Exchange Act Rules  13a-15(f) and  15d-15(f)) for the  Partnership  and
         have:

         a) designed such  disclosure  controls and  procedures,  or caused such
         disclosure   controls  and   procedures   to  be  designed,   under  my
         supervision,  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 report is being prepared;

         b) designed such internal control over financial  reporting,  or caused
         such internal control over financial  reporting to be designed under my
         supervision,  to provide reasonable assurance regarding the reliability
         of financial reporting and the preparation of financial  statements for
         external  purposes in accordance  with  generally  accepted  accounting
         principles;

         c) evaluated the effectiveness of the Partnership's disclosure controls
         and procedures  and presented in this report my  conclusions  about the
         effectiveness of the disclosure controls and procedures,  as of the end
         of the period covered by this report based on such evaluation;

         d)  disclosed in this report any change in the  Partnership's  internal
         control over financial reporting that occurred during the Partnership's
         fourth fiscal  quarter that has materially  affected,  or is reasonably
         likely to materially  affect,  the Partnership's  internal control over
         financial reporting; and

     5.  I have  disclosed,  based  on my most  recent  evaluation  of  internal
         control over financial reporting,  to the Partnership's auditors and to
         the boards of directors of the General Partners:

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

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



         Date: June 15, 2005
               -------------
                                                By:  /s/ Alan P. Hirmes
                                                     ------------------
                                                     Alan P. Hirmes
                                                     Chief Executive Officer and
                                                     Chief Financial Officer



<PAGE>



                                                                    Exhibit 32.1


                             CERTIFICATION PURSUANT
                       TO RULE 13A-14(B) OR RULE 15D-14(B)
                          AND SECTION 1350 OF TITLE 18
                   OF THE UNITED STATES CODE (18 U.S.C. 1350)


In  connection  with the Annual Report of  Independence  Tax Credit Plus L.P. II
(the  "Partnership")  on Form 10-K for the period ending March 31, 2005 as filed
with the  Securities  and  Exchange  Commission  ("SEC") on the date hereof (the
"Report"),  I, Alan P.  Hirmes,  Chief  Executive  Officer  and Chief  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.

A signed  original of this  written  statement  required by Section 906 has been
provided  to the  Partnership  and  will  be  retained  by the  Partnership  and
furnished to the SEC or its staff upon request.



By:  /s/ Alan P. Hirmes
     ------------------
     Alan P. Hirmes
     Chief Executive Officer and
     Chief Financial Officer
     June 15, 2005



<PAGE>



            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            -------------------------------------------------------



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 this Form 10-K as presented in our opinion  dated June
8, 2005 on page 12,  and based on the  reports of other  auditors,  we have also
audited  supporting  Schedule  I for the 2004,  2003 and 2002  Fiscal  Years and
Schedule  III at March 31, 2005.  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
June 8, 2005



                                       66
<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,
                                                           --------------------------
                                                               2005           2004
                                                           ------------   -----------
<S>                                                         <C>           <C>
Cash and cash equivalents                                   $ 1,044,867   $   394,494
Cash held in escrow                                              23,683        23,683
Investment in subsidiary partnerships                        15,459,113    18,624,424
Other assets                                                     35,333        33,704
                                                            -----------   -----------

Total assets                                                $16,562,996   $19,076,305
                                                            ===========   ===========


                        LIABILITIES AND PARTNERS' CAPITAL


Due to general partner and affiliates                       $ 3,692,952   $ 3,983,195

Other liabilities                                                10,907        12,520
                                                            -----------   -----------

Total liabilities                                             3,703,859     3,995,715

Partners' capital                                            12,859,137    15,080,590
                                                            -----------   -----------

Total liabilities and partners' capital                     $16,562,996   $19,076,305
                                                            ===========   ===========

</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.



                                       67
<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>

                                                          Years Ended March 31,
                                                -----------------------------------------
                                                    2005           2004           2003
                                                -----------    -----------    -----------
<S>                                             <C>            <C>            <C>
Revenues

Other income                                    $     7,990    $     1,775    $     3,531
                                                -----------    -----------    -----------

Expenses

Administrative and management                       103,129        112,406        108,838
Administrative and management-related parties       683,585        668,835        667,297
                                                -----------    -----------    -----------

Total expenses                                      786,714        781,241        776,135
                                                -----------    -----------    -----------

Loss from operations                               (778,724)      (779,466)      (772,604)

Equity in loss of subsidiary partnerships        (1,442,729)    (2,614,320)    (2,621,702)
                                                -----------    -----------    -----------

Net loss                                        $(2,221,453)   $(3,393,786)   $(3,394,306)
                                                ===========    ===========    ===========

</TABLE>



                                       68
<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>


                                                                          Years Ended March 31,
                                                               -----------------------------------------
                                                                  2005           2004           2003
                                                               -----------    -----------    -----------
<S>                                                            <C>            <C>            <C>
Cash flows from operating activities:
Net loss                                                       $(2,221,453)   $(3,393,786)   $(3,394,306)
                                                               -----------    -----------    -----------

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

Equity in loss of subsidiary partnerships                        1,442,729      2,614,320      2,621,702

(Increase) decrease in assets:

Other assets                                                        (1,629)           589              0

Increase (decrease) in liabilities:

Due to general partners and affiliates                            (290,243)       668,388        677,499
Other liabilities                                                   (1,613)         5,161          1,402
                                                               -----------    -----------    -----------

Total adjustments                                                1,149,244      3,288,458      3,300,603
                                                               -----------    -----------    -----------

Net cash used in operating activities                           (1,072,209)      (105,328)       (93,703)
                                                               -----------    -----------    -----------

Cash flows from investing activities:

Investment in subsidiary partnerships                                    0              0       (220,341)

Decrease in cash held in escrow - purchase price adjustments             0              0        220,341
                                                               -----------    -----------    -----------

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

Net cash from financing activities:

Distributions from subsidiary partnerships                       1,722,582         87,833         87,587
                                                               -----------    -----------    -----------

Net increase (decrease) in cash and cash equivalents               650,373        (17,495)        (6,116)

Cash and cash equivalents, beginning of year                       394,494        411,989        418,105
                                                               -----------    -----------    -----------

Cash and cash equivalents, end of year                         $ 1,044,867    $   394,494    $   411,989
                                                               ===========    ===========    ===========

</TABLE>



                                       69
<PAGE>




                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                   Partnership Property Pledged as Collateral
                                 MARCH 31, 2005

<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

United Germano Millgate Limited Partnership
  Chicago, IL                                    $  8,953,301      $    580,000      $  6,070,477      $ 11,462,340
Lincoln Renaissance
  Reading, PA                                       2,553,000                 0         5,240,173           238,372
Mansion Court Associates
  Philadelphia, PA                                  1,505,862            19,072         3,224,984           230,564
Derby Run Associates L.P.
  Hampton, VA                                       6,900,000           407,410         3,069,628         4,854,831
Renaissance Plaza Assoc
  Baltimore, MD                                     6,656,615           684,255         9,840,170         4,421,290
Tasker Village
  Philadelphia, PA                                  1,784,881            18,235                 0         3,935,436
Martha Bryant Manor, L.P.
  Los Angeles, CA                                   7,616,374           966,577                 0        10,721,312
Colden Oaks Limited Partnership
  Los Angeles, CA                                   5,407,137           922,790                 0         2,090,771
Brynview Terrace Limited Partnership
  Los Angeles, CA                                     997,422           175,943                 0         1,448,016
NLEDC, L.P.
  Los Angeles, CA                                   4,255,685           624,000                 0         5,884,672
Creative Choice Homes VI Ltd.
  Miami, FL                                         3,507,732           650,072            13,134         5,593,277
P&P Homes for the Elderly, L.P.
  Los Angeles, CA                                   6,263,857                 0                 0        10,008,044
Clear Horizons Limited Partnership
  Shreveport, LA                                      695,000            15,304         2,058,729           226,889
Neptune Venture L.P.
  Neptune Township, NJ                                      0           460,631        10,151,873           183,809
Affordable Green Associates L.P.
  New York, NY                                      2,174,831            20,500         3,506,961            43,581
                                                 ------------      ------------      ------------      ------------

                                                 $ 59,271,697      $  5,544,789      $ 43,176,129      $ 61,343,204
                                                 ============      ============      ============      ============


<CAPTION>

                                                 Gross Amount at which Carried at Close of Period
                                                 ------------------------------------------------


                                                                   Buildings and
                Description                          Land          Improvements         Total
-------------------------------------------      ------------      ------------      ------------
<S>                                              <C>               <C>               <C>
Apartment Complexes

United Germano Millgate Limited Partnership
  Chicago, IL                                    $    585,374      $ 17,527,443      $ 18,112,817
Lincoln Renaissance
  Reading, PA                                           5,373         5,473,172         5,478,545
Mansion Court Associates
  Philadelphia, PA                                     25,095         3,449,525         3,474,620
Derby Run Associates L.P.
  Hampton, VA                                         409,771         7,922,098         8,331,869
Renaissance Plaza Assoc
  Baltimore, MD                                       686,616        14,259,099        14,945,715
Tasker Village
  Philadelphia, PA                                     20,596         3,933,075         3,953,671
Martha Bryant Manor, L.P.
  Los Angeles, CA                                     968,938        10,718,951        11,687,889
Colden Oaks Limited Partnership
  Los Angeles, CA                                     925,151         2,088,410         3,013,561
Brynview Terrace Limited Partnership
  Los Angeles, CA                                     178,304         1,445,655         1,623,959
NLEDC, L.P.
  Los Angeles, CA                                     626,361         5,882,311         6,508,672
Creative Choice Homes VI Ltd.
  Miami, FL                                           652,433         5,604,050         6,256,483
P&P Homes for the Elderly, L.P.
  Los Angeles, CA                                     642,360         9,365,684        10,008,044
Clear Horizons Limited Partnership
  Shreveport, LA                                       17,665         2,283,257         2,300,922
Neptune Venture L.P.
  Neptune Township, NJ                                462,465        10,333,848        10,796,313
Affordable Green Associates L.P.
  New York, NY                                         22,334         3,548,708         3,571,042
                                                 ------------      ------------      ------------

                                                 $  6,228,836      $103,835,286      $110,064,122
                                                 ============      ============      ============


<CAPTION>


                                                                                              Life on which
                                                                                             Depreciation in
                                                                  Years of                    Latest Income
                                                 Accumulated    Construction/      Date       Statements is
                Description                      Depreciation    Renovation      Acquired    Computed (a)(b)
-------------------------------------------      ------------    -----------    ----------   ---------------
<S>                                              <C>               <C>  <C>           <C>         <C>
Apartment Complexes

United Germano Millgate Limited Partnership
  Chicago, IL                                    $  8,777,007      1993-94       Oct. 1993        10-25
Lincoln Renaissance
  Reading, PA                                       1,560,810      1993-94       Apr. 1993        20-40
Mansion Court Associates
  Philadelphia, PA                                    973,683      1993-94       Nov. 1993        20-40
Derby Run Associates L.P.
  Hampton, VA                                       2,076,627      1994-95       Feb. 1994           40
Renaissance Plaza Assoc
  Baltimore, MD                                     3,666,259      1994-95       Feb. 1994         27.5
Tasker Village
  Philadelphia, PA                                  1,055,965      1994-95        May 1994           40
Martha Bryant Manor, L.P.
  Los Angeles, CA                                   3,306,269      1994-95      Sept. 1994         27.5
Colden Oaks Limited Partnership
  Los Angeles, CA                                   1,035,275      1994-95      Sept. 1994           31
Brynview Terrace Limited Partnership
  Los Angeles, CA                                     449,805      1994-95      Sept. 1994         27.5
NLEDC, L.P.
  Los Angeles, CA                                   1,876,319      1994-95      Sept. 1994         27.5
Creative Choice Homes VI Ltd.
  Miami, FL                                         1,852,137      1994-95      Sept. 1994           40
P&P Homes for the Elderly, L.P.
  Los Angeles, CA                                   2,359,640      1994-95      Sept. 1994           30
Clear Horizons Limited Partnership
  Shreveport, LA                                      930,203      1994-95       Dec. 1994         27.5
Neptune Venture L.P.
  Neptune Township, NJ                              2,375,209      1995-96       Apr. 1995           40
Affordable Green Associates L.P.
  New York, NY                                      1,237,367      1995-96        May 1995           27
                                                 ------------

                                                 $ 33,532,575
                                                 ============

</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.



                                       70
<PAGE>



                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                   Partnership Property Pledged as Collateral
                                 MARCH 31, 2005
                                   (continued)


<TABLE>
<CAPTION>


                                         Cost of Property and Equipment                          Accumulated Depreciation
                                 -----------------------------------------------     ----------------------------------------------
                                                                        Years Ended March 31,
                                 --------------------------------------------------------------------------------------------------
                                     2005              2004            2003             2005             2004             2003
                                 -------------    -------------    -------------    -------------    -------------    -------------
<S>                              <C>              <C>              <C>              <C>              <C>              <C>
Balance at beginning of period   $ 109,601,196    $ 109,245,116    $ 108,763,199    $  30,145,898    $  26,736,066    $  23,242,116
Additions during period:
Improvements                           548,330          356,569          490,218
Depreciation expense                                                                    3,472,081        3,410,321        3,499,640

Deductions during period:
Dispositions                           (85,404)            (489)          (8,301)         (85,404)            (489)          (5,690)
                                 -------------    -------------    -------------    -------------    -------------    -------------

Balance at close of period       $ 110,064,122    $ 109,601,196    $ 109,245,116    $  33,532,575    $  30,145,898    $  26,736,066
                                 =============    =============    =============    =============    =============    =============

</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.



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