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, 2004

                                       OR

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

                       Commission File Number 33-37704-03

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

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

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

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

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

       None

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

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

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

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

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

     The  approximate  aggregate book value of the voting and non-voting  common
equity held by  non-affiliates  of the  Registrant  as of September 30, 2003 was
$10,057,000, based on Limited Partner equity as of such date.

                       DOCUMENTS INCORPORATED BY REFERENCE
       None


<PAGE>


                                     PART I

Item 1. Business.

General
-------

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

On 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,  2004,  the
Partnership had acquired  interests in fifteen Local  Partnerships  and does not
anticipate   making  any   additional   investments.   As  of  March  31,  2004,
approximately  $47,000,000  (not  including  acquisition  fees of  approximately
$3,502,000) of net proceeds has been invested in fifteen Local  Partnerships  of
which approximately  $282,000 remains to be paid to the Local  Partnerships,  as
certain  benchmarks  such as  occupancy  levels  must be  attained  prior to the
release of such funds.  The  Partnership  does not intend to acquire  additional
properties,  however,  the  Partnership  may be  required  to pay for  potential
purchase price  adjustments  based on tax credit adjustor  clauses.  See Item 2.
Properties, below.

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

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

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

2. Preserve and protect the Partnership's capital.

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

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

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


                                       2
<PAGE>

provided  that the Local  Partnership  satisfies the rent  restriction,  minimum
set-aside and other requirements for recognition of the Tax Credits at all times
during such period.  Once a Local  Partnership  has become eligible to recognize
Tax Credits,  it may lose such eligibility and suffer an event of "recapture" if
its Property  fails to remain in  compliance  with the Tax Credit  requirements.
None of the Local Partnerships in which the Partnership has acquired an interest
has suffered an event of recapture.

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

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

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

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

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


                                       3
<PAGE>



Item 2. Properties.

The  Partnership  holds a 98.99% limited  partnership  interest in fifteen Local
Partnerships  as of March 31,  2004.  Set forth below is a schedule of the Local
Partnerships including certain information concerning their respective Apartment
Complexes (the "Local Partnership  Schedule").  Further  information  concerning
these  Local  Partnerships  and their  properties,  including  any  encumbrances
affecting the properties, may be found in Item 15. Schedule III.
<TABLE>
<CAPTION>

                           Local Partnership Schedule
                           --------------------------
                                                 % of Units Occupied  at  May 1,
Name and Location                               --------------------------------
(Number of Units)              Date Acquired    2004   2003   2002   2001   2000
-----------------              -------------    ----   ----   ----   ----   ----
<S>                            <C>              <C>    <C>    <C>    <C>    <C>
Lincoln Renaissance
Reading, PA (52)               April 1993        97%   100%    98%    96%    98%

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

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

Derby Run Associates, L.P.
Hampton, VA (160)              February 1994     91%    96%    98%    98%    89%

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

Tasker Village Associates
Philadelphia, PA (28)          May 1994          79%   100%   100%    96%    93%

Martha Bryant Manor, L.P.
Los Angeles, CA (77)           September 1994    99%   100%    95%   100%    97%

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

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

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

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

P&P Homes for the
Elderly, L.P.
Los Angeles, CA (107)          September 1994    98%   100%   100%   100%    99%
</TABLE>


                                       4
<PAGE>


<TABLE>
<CAPTION>
                           Local Partnership Schedule
                                   (continued)
                                                     % of Units Occupied  at  May 1,
Name and Location                                    -------------------------------
(Number of Units)                   Date Acquired    2004   2003   2002  2001   2000
-----------------                   -------------    ----   ----   ----  ----   ----
<S>                                 <C>              <C>    <C>    <C>   <C>    <C>
Clear Horizons
Limited Partnership
Shreveport, LA (84)                 December 1994     95%    99%    95%   99%    98%

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

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

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

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

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

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

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

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

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

Item 3. Legal Proceedings.

None.

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

None.



                                       5
<PAGE>



                                     PART II

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

As of March 31, 2004, 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 4, 2004, the Partnership has approximately 3,442 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, 2004. The Partnership
does not anticipate  providing cash distributions to its BACs holders other than
from net refinancing or sales proceeds.



                                       6
<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                         2004            2003            2002            2001            2000
----------                     ------------    ------------    ------------    ------------    ------------
<S>                            <C>             <C>             <C>             <C>             <C>
Revenues                       $  9,359,288    $  9,140,057    $  9,013,667    $  8,662,312    $  8,211,451
Operating expenses              (14,653,886)    (13,685,802)    (13,154,549)    (13,480,310)    (13,137,023)
                               ------------    ------------    ------------    ------------    ------------

Loss before minority
  interest                       (5,294,598)     (4,545,745)     (4,140,882)     (4,817,998)     (4,925,572)
Minority interest in loss of
  subsidiaries                       16,161          10,959           8,204          11,423          10,908
                               ------------    ------------    ------------    ------------    ------------
Net loss                       $ (5,278,437)   $ (4,534,786)   $ (4,132,678)   $ (4,806,575)   $ (4,914,664)
                               ============    ============    ============    ============    ============

Net loss per weighted
  average BAC                  $     (88.68)   $     (76.19)   $     (69.43)   $     (80.75)   $     (82.57)
                               ============    ============    ============    ============    ============
<CAPTION>

                                                                 March 31,
                               ----------------------------------------------------------------------------
FINANCIAL POSITION                 2004            2003            2002            2001            2000
------------------             ------------    ------------    ------------    ------------    ------------
<S>                            <C>             <C>             <C>             <C>             <C>
Total assets                   $ 84,016,822    $ 87,502,402    $ 90,796,504    $ 93,702,404    $ 96,634,527
                               ============    ============    ============    ============    ============

Total liabilities              $ 77,992,941    $ 76,092,507    $ 74,604,701    $ 73,295,501    $ 71,338,864
                               ============    ============    ============    ============    ============

Minority interest              $   (451,294)   $   (343,717)   $    (96,595)   $    (14,173)   $     68,012
                               ============    ============    ============    ============    ============

Total partners' capital        $  6,475,175    $ 11,753,612    $ 16,288,398    $ 20,421,076    $ 25,227,651
                               ============    ============    ============    ============    ============

</TABLE>

During the years ended March 31, 2004, 2003, 2002, 2001 and 2000,  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,
2004.


                                       7
<PAGE>


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

                                                               Quarter Ended
                                    ---------------------------------------------------------------------
OPERATIONS                          June 30,2003    September 30,2003   December 31,2003    March 31,2004
----------                          ------------    -----------------   ----------------    -------------
<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 aver-
  age BAC                           $    (19.59)       $    (16.10)       $    (21.90)       $    (31.09)
                                    ===========        ===========        ===========        ===========

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

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

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

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

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

Net loss per weighted aver-
  age BAC                           $    (17.22)       $    (12.77)       $    (19.75)       $    (26.45)
                                    ===========        ===========        ===========        ===========

</TABLE>

                                       8
<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, 2004, 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, 2004, cash and cash  equivalents of the Partnership
and  its  fifteen  consolidated  Local  Partnerships   decreased   approximately
($276,000)  due  to  the  principal   payments  of  mortgage  notes  ($494,000),
acquisition of property and equipment  ($357,000),  a decrease in capitalization
of consolidated  subsidiaries  attributable to minority interest ($91,000) and a
net  decrease  in due to local  general  partners  and  affiliates  relating  to
investing and financing  activities  ($130,000)  which exceeded cash provided by
operating  activities  ($792,000) and a decrease in cash held in escrow relating
to investing activities  ($3,000).  Included in the adjustments to reconcile the
net loss to cash provided by  operations is  depreciation  and  amortization  of
approximately $3,426,000.

At March 31, 2004, there is a balance of  approximately  $136,000 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, 2004, 2003 and 2002,  amounts received
from operations of the Local  Partnerships were approximately  $88,000,  $88,000
and $71,000, respectively. Management anticipates receiving distributions in the
future,   although  not  to  a  level   sufficient  to  permit   providing  cash
distributions to BACs holders.

Partnership   management  fees  owed  to  the  General   Partner   amounting  to
approximately  $3,339,000 and $2,793,000 were accrued and unpaid as of March 31,
2004 and 2003, respectively (see Note 8). Without the General Partners' advances
and   continued   accrual   without   payment  of  certain   fees  and   expense
reimbursements,  the  Partnership  will  not  be  in  a  position  to  meet  its
obligations.  The General Partner has continued to advance and allow the accrual
without  payment of these  amounts but is under no  obligation to continue to do
so.

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

Except as  described  above,  management  is not aware of any  trends or events,
commitments or uncertainties,  which have not otherwise been disclosed that will
or are likely to impact  liquidity in a material  way.  Management  believes the
only impact would be from laws that have not yet been adopted.  The portfolio is
diversified by the location of the  properties  around the United States so that
if one  area of the  country  is  experiencing  downturns  in the  economy,  the
remaining Properties in the portfolio may be experiencing upswings.  However the
geographic  diversification  of the portfolio may not protect  against a general
downturn in the national  economy.  The Partnership has invested the proceeds of
its offering in 15 Local Partnerships, all of which fully have their Tax Credits
in place.  The Tax Credits  are  attached  to the  Property  for a period of ten
years,  and are  transferable  with the  Property  during the  remainder  of the
ten-year  period.  If trends in the real estate  market  warranted the sale of a
Property,  the remaining Tax Credits  would  transfer to the new owner;  thereby
adding value to the Property on the market.  However,  such value  declines each
year and is not included in the financial statement carrying amount.



                                       9
<PAGE>



Tabular Disclosure of Contractual Obligations
---------------------------------------------
The following  table  summarizes the  Partnership's  commitments as of March 31,
2004 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)                 $57,109,969   $   559,245   $ 1,259,165   $ 1,458,479   $53,833,080
Loans payable to
  general partner
  and affiliates (b)              238,634       238,634             0             0             0
                              -----------   -----------   -----------   -----------   -----------

                              $57,348,603   $   797,879   $ 1,259,165   $ 1,458,479   $53,833,080
                              ===========   ===========   ===========   ===========   ===========
</TABLE>

(a)  The  mortgage  notes are  payable  in  aggregate  monthly  installments  of
     approximately  $175,000  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).

Through March 31, 2004, the Partnership has recorded approximately $3,926,000 as
an aggregate loss on impairment of assets.

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.


                                       10
<PAGE>



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

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  are applicable no later
than the first reporting period ending after March 15, 2004. The adoption of FIN
46  (R) is not  anticipated  to  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,  2004,  2003 and 2002 (the 2003,  2002 and 2001 Fiscal
Years, respectively).

The net  loss for the  2003,  2002 and 2001  Fiscal  Years  totaled  $5,278,437,
$4,534,786 and $4,132,678, respectively.

The  Partnership and BACs holders began to recognize Tax Credits with respect to
a Property when the Credit Period for such  Property  commenced.  Because of the
time required for the  acquisition,  completion and rent-up of  Properties,  the
amount of Tax Credits per BAC gradually  increased over the first three years of
the  Partnership.  Housing Tax Credits not  recognized  in the first three years
will be recognized  in the 11th through 13th years.  The  Partnership  generated
$8,746,267  of Housing  Tax Credits  during each of the 2003,  2002 and 2001 tax
years, respectively.

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.

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.



                                       11
<PAGE>


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.

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

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

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

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

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

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

Clear Horizons Limited Partnership
----------------------------------
At December 31, 2003,  Clear Horizons  Limited  Partnership  ("Clear  Horizons")
current  liabilities  exceeded  its current  assets by $195,919.  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, 2003,  is $215,190 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, 2003.

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.



                                       12
<PAGE>


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.

The Partnership does not have any market risk sensitive instruments.



                                       13
<PAGE>



Item 8. Financial Statements and Supplementary Data.

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

         Report of Independent Registered Public Accounting Firm          15

         Consolidated Balance Sheets at March 31, 2004 and 2003           52

         Consolidated Statements of Operations for the Years Ended
         March 31, 2004, 2003 and 2002                                    53

         Consolidated  Statements of Changes in Partners'  Capital
         (Deficit) for the Years Ended March 31, 2004,  2003 and
         2002                                                             54

         Consolidated Statements of Cash Flows for the Years Ended
         March 31, 2004, 2003 and 2002                                    55

         Notes to Consolidated Financial Statements                       57



                                       14
<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, 2004
and 2003,  and the related  consolidated  statements of  operations,  changes in
partners' capital (deficit),  and cash flows for the years ended March 31, 2004,
2003  and  2002  (the  2003,  2002 and 2001  Fiscal  Years,  respectively).  The
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits. We did not audit the financial statements for thirteen (Fiscal 2003)
and  twelve  (Fiscal  2002  and  2001)  subsidiary   partnerships  whose  losses
aggregated  $3,685,633,  $2,808,360 and  $2,471,026 for the 2003,  2002 and 2001
Fiscal  Years,   respectively,   and  whose  assets   constituted   68%  of  the
Partnership's assets at March 31, 2004 and 2003, 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, 2004 and 2003,  and the results of their
operations  and their cash flows for the years  ended March 31,  2004,  2003 and
2002, in conformity with U.S. generally accepted accounting principles.


Trien Rosenberg Rosenberg
Weinberg Ciullo & Fazzari LLP



New York, New York
June 17, 2004


                                       15
<PAGE>



[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Lincoln Renaissance

We have audited the  accompanying  balance  sheets of Lincoln  Renaissance as of
December  31,  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


                                       16
<PAGE>



[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Lincoln Renaissance

We have audited the  accompanying  balance  sheets of Lincoln  Renaissance as of
December  31,  2002 and 2001,  and the  related  statements  of profit and loss,
changes in partners'  equity  (deficit) and cash flows for the years then ended.
These  financial   statements  are  the   responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of Lincoln  Renaissance  as of
December 31, 2002 and 2001,  and the results of its  operations,  the changes in
partners'  equity  (deficit)  and its cash  flows for the years then  ended,  in
conformity with accounting principles generally accepted in the United States of
America.

In accordance with Government Auditing Standards, we have also issued our report
for  the  year  ended  December  31,  2002,  dated  January  31,  2003,  on  our
consideration of Lincoln Renaissance's internal control over financial reporting
and on our test of its compliance with certain provisions of laws,  regulations,
contracts and grants.  That report is an integral part of an audit  performed in
accordance with Government  Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 27
through  30 is  presented  for  purposes  of  additional  analysis  and is not a
required  part of the basis  financial  statements.  Such  information  has been
subjected to the auditing procedures applied in the audit of the basis financial
statements  and, in our opinion,  is fairly  stated in all material  respects in
relation to the basic financial statements taken as a whole.


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


                                       17
<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


                                       18
<PAGE>


[Letterhead of WIELAND & COMPANY, INC.]

INDEPENDENT AUDITOR'S REPORT

To the Partners
United - Germano - Millgate Limited Partnership

We have audited the  accompanying  balance sheets of United - Germano - Millgate
Limited Partnership as of December 31, 2002 and 2001, and the related statements
of operations,  partners' equity, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audits in accordance with auditing standards generally accepted
in the United  States of America,  and the  standards  applicable  to  financial
audits  contained in GOVERNMENT  AUDITING  STANDARDS  issued by the  Comptroller
General of the United States, and the Illinois Housing  Development  Authority's
FINANCIAL  REPORTING AND AUDITS GUIDELINES FOR MORTGAGORS OF MULTIFAMILY HOUSING
DEVELOPMENTS.  Those  standards  require  that we plan and  perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of United - Germano - Millgate
Limited  Partnership  as of December  31, 2002 and 2001,  and the results of its
operations, changes in partners' equity, and cash flows for the years then ended
in conformity with accounting principles generally accepted in the United States
of America.

In accordance with GOVERNMENT AUDITING  STANDARDS,  we have also issued a report
dated January 29, 2003, on our consideration of the internal control of United -
Germano - Millgate Limited Partnership,  and on our tests of its compliance with
certain provisions of laws,  regulations,  contracts,  and grants. Those reports
are an  integral  part of an  audit  performed  in  accordance  with  GOVERNMENT
AUDITING  STANDARDS  and  should  be read in  conjunction  with  this  report in
considering the results of our audit.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial   statements  taken  as  a  whole.   The  accompanying   supplementary
information  on pages 11 - 12 is presented for purposes of  additional  analysis
and is not a required part of the basic financial statements of United - Germano
- Millgate  Limited  Partnership.  Such  information  has been  subjected to the
auditing procedures applied in the audit of the basic financial  statements and,
in our opinion,  is fairly  stated in all  material  respects in relation to the
basic financial statements taken as a whole.


/s/ Wieland & Company, Inc.
Batavia, Illinois
January 29, 2003

EIN 36-4025026
Engagement Partner: Paul H.  Wieland


                                       19
<PAGE>



[Letterhead of 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


                                       20
<PAGE>



[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT


To the Partners
Mansion Court Associates

We have audited the  accompanying  balance sheets of Mansion Court Associates as
of December 31, 2002 and 2001, and the related statements of operations, changes
in partners'  equity  (deficit)  and cash flows for the years then ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Mansion Court Associates as of
December 31, 2002 and 2001,  and the results of its  operations,  the changes in
partners'  equity  (deficit)  and its cash  flows for the years then  ended,  in
conformity with accounting principles generally accepted in the United States of
America.

In accordance with Government Auditing Standards, we have also issued our report
for  the  year  ended  December  31,  2002,  dated  February  7,  2003,  on  our
consideration  of Mansion Court  Associates 's internal  control over  financial
reporting  and on our test of its  compliance  with certain  provisions of laws,
regulations,  contracts and grants.  That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 24
through  27 is  presented  for  purposes  of  additional  analysis  and is not a
required  part of the basis  financial  statements.  Such  information  has been
subjected to the auditing procedures applied in the audit of the basis financial
statements  and, in our opinion,  is fairly  stated in all material  respects in
relation to the basic financial statements taken as a whole.

/s/ Reznick Fedder & Silverman
Baltimore, Maryland
February 7, 2003



                                       21
<PAGE>


[Letterhead of 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


                                       22
<PAGE>



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

INDEPENDENT AUDITOR'S REPORT


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


We have audited the accompanying balance sheets of DERBY RUN ASSOCIATES, L.P. (A
Virginia Limited  Partnership) as of December 31, 2002 and 2001, and the related
statements of operations,  partners'  equity,  and cash flows for the years then
ended.  These  financial  statements  are the  responsibility  of the  project's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of DERBY RUN ASSOCIATES,  L.P. as
of December  31, 2002 and 2001,  and the results of its  operations,  changes in
partners'  equity and its cash flows for the years then ended in conformity  and
accounting principles generally accepted in the United States and America.

The accompanying  supplementary information shown on pages 14 - 20, is presented
for  purposes of  additional  analysis  and is not a required  part of the basic
financial  statements.  Such  information  has been  subjected  to the  auditing
procedures  applied in the audits of the basic financial  statements and, in our
opinion,  is fairly  stated in all  material  respects  in relation to the basic
financial statements taken as a whole.

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


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


                                       23
<PAGE>



[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

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

We  have  audited  the  accompanying  balance  sheet  of  Renaissance  Plaza  93
Associates,  L.P.  as of  December  31,  2002,  and the  related  statements  of
operations,  partners'  equity (deficit) and cash flows for the year then ended.
These  financial   statements  are  the   responsibility  of  the  partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material   respects,   the  financial  position  of  Renaissance  Plaza  93
Associates, L.P. as of December 31, 2002, and the results of its operations, the
changes in partners' equity (deficit) and cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.

In accordance with Government  Auditing  Standards and the  "Consolidated  Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 15,
2003 on our  consideration of Renaissance  Plaza 93 Associates,  L.P.'s internal
control and on its  compliance  with  requirements  applicable to  DHCD-assisted
programs and compliance over financial reporting.  Those reports are an integral
part of an audit performed in accordance with Government  Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.

Our audit was made for the purpose of forming an opinion on the basic  financial
statements taken as a whole. The supplemental information on pages 25 through 34
is presented for purposes of  additional  analysis and is not a required part of
the basic  financial  statements.  Such  information  has been  subjected to the
auditing procedures applied in the audit of the basic financial  statements and,
in our opinion,  is fairly  stated in all  material  respects in relation to the
basic financial statements taken as a whole.



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

January 15, 2003


                                       24
<PAGE>



[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

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

We  have  audited  the  accompanying  balance  sheet  of  Renaissance  Plaza  93
Associates,  L.P.  as of  December  31,  2001,  and the  related  statements  of
operations,  partners'  equity (deficit) and cash flows for the year then ended.
These  financial   statements  are  the   responsibility  of  the  partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

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

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

Our audit was made for the purpose of forming an opinion on the basic  financial
statements taken as a whole. The supplemental information on pages 25 through 34
is presented for purposes of  additional  analysis and is not a required part of
the basic  financial  statements.  Such  information  has been  subjected to the
auditing procedures applied in the audit of the basic financial  statements and,
in our opinion,  is fairly  stated in all  material  respects in relation to the
basic financial statements taken as a whole.

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



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



                                       25
<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


                                       26
<PAGE>



[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Tasker Village Associates

We have audited the accompanying  balance sheets of Tasker Village Associates as
of December 31, 2002 and 2001,  and the related  statements  of profit and loss,
changes in partners'  equity  (deficit) and cash flows for the years then ended.
These  financial   statements  are  the   responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Tasker Village Associates as of
December 31, 2002 and 2001,  and the results of its  operations,  the changes in
partners'  equity  (deficit)  and its cash  flows for the years then  ended,  in
conformity with accounting principles generally accepted in the United States of
America.

In accordance with Government Auditing Standards, we have also issued our report
for  the  year  ended  December  31,  2002,  dated  January  17,  2003,  on  our
consideration of Tasker Village's internal control over financial  reporting and
on our test of its  compliance  with certain  provisions  of laws,  regulations,
contracts and grants.  That report is an integral part of an audit  performed in
accordance with Government  Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 25
through 280 is  presented  for  purposes  of  additional  analysis  and is not a
required  part of the basis  financial  statements.  Such  information  has been
subjected to the auditing procedures applied in the audit of the basis financial
statements  and, in our opinion,  is fairly  stated in all material  respects in
relation to the basic financial statements taken as a whole.

/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January 17, 2003


                                       27
<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


                                       28
<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


                                       29
<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,
2001 and the related statements of loss, changes in partners' capital,  and cash
flow for the year then ended. These financial  statements are the responsibility
of Martha Bryant Manor,  L.P.'s  management.  My responsibility is to express an
opinion on these financial statements based on my audit.

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

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


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


                                       30
<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


                                       31
<PAGE>



[Letterhead of MARVIN D. MASON]

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

I have  audited the  accompanying  balance  sheets of Colden  Oaks, a California
Limited  Partnership,  as of  December  31,  2002  and  2001,  and  the  related
statements  of  operations,  changes in partners'  equity and cash flows for the
years then ended.  These  financial  statements  are the  responsibility  of the
Partnership's  general  partners.  My responsibility is to express an opinion on
these financial statements based on my audit.

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

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


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


                                       32
<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


                                       33
<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


                                       34
<PAGE>



[Letterhead of CLIFFORD R. BENN]

INDEPENDENT AUDITOR'S REPORT

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

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

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

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


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


                                       35
<PAGE>



[Letterhead of ROBERT J. PACHECO, CPA]

Independent Auditor's Report

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

We have  audited the  accompanying  balance  sheet of NLEDC,  L.P., a California
Limited  Partnership,  as of December 31, 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/ Robert J. Pacheco, CPA
Pasadena, California
February 7, 2004


                                       36
<PAGE>



[Letterhead of ROBERT J. PACHECO, CPA]

Independent Auditor's Report

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

We have  audited the  accompanying  balance  sheet of NLEDC,  L.P., a California
Limited  Partnership,  as of December 31, 2002,  and the related  statements  of
income,  changes in partners'  capital,  and cash flows for the year then ended.
These  financial   statements  are  the   responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of NLEDC,  L.P., a California
Limited  Partnership,  at December 31, 2002, and the results of its  operations,
changes  in  partners'  capital  and  cash  flows  for the  year  then  ended in
conformity with generally accepted accounting principles.

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


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


                                       37
<PAGE>



[Letterhead of ROBERT J. PACHECO, CPA]

Independent Auditor's Report

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

We have  audited the  accompanying  balance  sheet of NLEDC,  L.P., a California
Limited  Partnership,  as of December 31, 2001,  and the related  statements  of
income,  changes in partners'  capital,  and cash flows for the year then ended.
These  financial   statements  are  the   responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

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

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

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


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


                                       38
<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


                                       39
<PAGE>



[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Creative Choice Homes VI, Ltd.

We have audited the accompanying balance sheet of Creative Choice Homes VI, Ltd.
as of December 31, 2002,  and the related  statements of  operations,  partners'
equity and cash flows for the year then ended.  These  financial  statements are
the  responsibility of the partnership's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Creative Choice Homes VI, Ltd.
as of  December  31,  2002,  and the results of its  operations,  the changes in
partners'  equity and cash flows for the year then  ended,  in  conformity  with
accounting principles generally accepted in the United States of America.

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


                                       40
<PAGE>



[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Creative Choice Homes VI, Ltd.

We have audited the accompanying balance sheet of Creative Choice Homes VI, Ltd.
as of December 31, 2001,  and the related  statements of  operations,  partners'
equity and cash flows for the year then ended.  These  financial  statements are
the  responsibility of the partnership's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Creative Choice Homes VI, Ltd.
as of  December  31,  2001,  and the results of its  operations,  the changes in
partners'  equity and cash flows for the year then  ended,  in  conformity  with
accounting principles generally accepted in the United States of America.

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


                                       41
<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


                                       42
<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


                                       43
<PAGE>



[Letterhead of CHARLES P. BENEDICT, CPA]

Independent Auditor's Report

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

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

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

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


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


                                       44
<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



                                       45
<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


                                       46
<PAGE>



[Letterhead of COLE, EVANS & PETERSON]

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

Clear Horizons Limited Partnership
Shreveport, Louisiana

We have  audited  the  accompanying  balance  sheet  of Clear  Horizons  Limited
Partnership, at December 31, 2001, and the related statements of income, capital
and cash  flows for the year then  ended.  These  financial  statements  are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

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

Our audit was made  primarily for the purpose of forming an opinion on the basic
financial  statements for the year ended December 31, 2001 taken as a whole. The
supplementary  Schedules 1 through 6 are  presented  for purposes of  additional
analysis and are not a required  part of the basic  financial  statements.  Such
information has been subjected to the audit  procedures  applied in the audit of
the basic  financial  statements  and, in our opinion,  is fairly  stated in all
material  respects  in  relation to the basic  financial  statements  taken as a
whole.

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs  issued by the U. S.  Department of Housing and
Urban  Development,  we have also issued a report dated  February 8, 2002 on our
consideration  of Clear Horizons Limited  Partnership's  internal  control,  and
reports dated  February 8, 2002, on its  compliance  with laws and  regulations,
compliance with specific  requirements  applicable to Affirmative  Fair Housing,
and  compliance  with specific  requirements  applicable  to major  HUD-assisted
programs. Those reports are an integral part of an audit performed in accordance
with Government  Auditing  Standards and should be read in conjunction with this
report in considering the results of our audit.


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



                                       47
<PAGE>



[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Neptune Venture, L.P.

We have audited the accompanying  balance sheets of Neptune Venture,  L.P. as of
December 31, 2002 and 2001, and the related statements of operations, changes in
partners'  equity  (deficit)  and cash  flows for the years  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of Neptune  Venture,  L.P. at
December  31,  2002 and 2001,  and the  results  of its  operations,  changes in
partners'  equity  (deficit)  and its cash  flows for the years then  ended,  in
conformity with accounting principles generally accepted in the United States of
America.


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



                                       48
<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


                                       49
<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



                                       50
<PAGE>



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

INDEPENDENT AUDITORS' REPORT

To the Partners
Affordable Green Associates, L.P.

We have audited the accompanying  balance sheet of Affordable Green  Associates,
L.P. as of December 31, 2001 and the related  statements of operations,  changes
in partners'  capital,  and cash flows for the year then ended.  These financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

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


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


                                       51
<PAGE>



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



                                     ASSETS
<TABLE>
<CAPTION>
                                                                            March 31,
                                                                  -----------------------------
                                                                      2004             2003
                                                                  ------------     ------------
<S>                                                               <C>              <C>
Property and equipment net, less accumulated
  depreciation (Notes 2, 4 and 7)                                 $ 79,455,298     $ 82,509,050
Cash and cash equivalents (Notes 2, 3 and 10)                          716,058          992,367
Cash held in escrow (Notes 3 and 5)                                  3,041,671        3,032,158
Deferred costs, less accumulated amortization (Notes 2 and 6)          211,030          226,427
Other assets                                                           592,765          742,400
                                                                  ------------     ------------

                                                                  $ 84,016,822     $ 87,502,402
                                                                  ============     ============

                   LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

Liabilities:
Mortgage notes payable (Note 7)                                   $ 57,109,969     $ 57,603,476
Accounts payable and other liabilities                               1,208,552        1,333,488
Accrued interest                                                    13,698,965       12,031,123
Due to local general partners and affiliates (Note 8)                1,754,760        1,617,113
Due to general partner and affiliates (Note 8)                       4,220,695        3,507,307
                                                                  ------------     ------------

                                                                    77,992,941       76,092,507
                                                                  ------------     ------------
Minority interest                                                     (451,294)        (343,717)
                                                                  ------------     ------------

Commitments and contingencies (Notes 7, 8 and 10)

Partners' capital (deficit):
Limited partners
  (58,928 BACs issued and outstanding)                               6,934,373       12,160,026
General partner                                                       (459,198)        (406,414)
                                                                  ------------     ------------

Total partners' capital (deficit)                                    6,475,175       11,753,612
                                                                  ------------     ------------

Total liabilities and partners' capital (deficit)                 $ 84,016,822     $ 87,502,402
                                                                  ============     ============
</TABLE>

See accompanying notes to consolidated financial statements.


                                       52
<PAGE>



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

<TABLE>
<CAPTION>
                                                           Year Ended March 31,
                                              ----------------------------------------------
                                                  2004             2003             2002
                                              ------------     ------------     ------------
<S>                                           <C>              <C>              <C>
Revenues

Rental income                                 $  9,182,883     $  8,841,414     $  8,519,231
Other income                                       176,405          298,643          494,436
                                              ------------     ------------     ------------
                                                 9,359,288        9,140,057        9,013,667
                                              ------------     ------------     ------------
Expenses
General and administrative                       2,702,969        2,280,440        2,088,577
General and administrative-related parties
  (Note 8)                                         991,402          992,455          969,639
Repairs and maintenance                          2,205,546        1,946,913        1,802,164
Operating                                        1,105,217        1,011,399          954,117
Taxes                                              733,695          668,743          724,587
Insurance                                          696,677          616,132          463,831
Financial, principally interest                  2,792,662        2,650,829        2,650,875
Depreciation and amortization                    3,425,718        3,518,891        3,500,759
                                              ------------     ------------     ------------
Total expenses                                  14,653,886       13,685,802       13,154,549
                                              ------------     ------------     ------------

Loss before minority interest                   (5,294,598)      (4,545,745)      (4,140,882)

Minority interest in loss of subsidiary
  partnerships                                      16,161           10,959            8,204
                                              ------------     ------------     ------------

Net loss                                      $ (5,278,437)    $ (4,534,786)    $ (4,132,678)
                                              ============     ============     ============

Net loss - limited partners                   $ (5,225,653)    $ (4,489,438)    $ (4,091,351)
                                              ============     ============     ============

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

Net loss per BAC                              $     (88.68)    $     (76.19)    $     (69.43)
                                              ============     ============     ============

</TABLE>
See accompanying notes to consolidated financial statements.


                                       53
<PAGE>



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

<TABLE>
<CAPTION>
                                                                   Limited           General
                                                   Total           Partners          Partner
                                                ------------     ------------     ------------
<S>                                             <C>              <C>              <C>
Partners' capital (deficit) -- April 1, 2001    $ 20,421,076     $ 20,740,815     $   (319,739)

Net loss                                          (4,132,678)      (4,091,351)         (41,327)
                                                ------------     ------------     ------------
Partners capital (deficit) -- March 31, 2002      16,288,398       16,649,464         (361,066)

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

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

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

Partners capital (deficit) - March 31, 2004     $  6,475,175     $  6,934,373     $   (459,198)
                                                ============     ============     ============
</TABLE>

See accompanying notes to consolidated financial statements.


                                       54
<PAGE>



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

<TABLE>
<CAPTION>
                                                               Year Ended March 31,
                                                    -------------------------------------------
                                                       2004            2003            2002
                                                    -----------     -----------     -----------
<S>                                                 <C>             <C>             <C>
Cash flows from operating activities:
Net loss                                            $(5,278,437)    $(4,534,786)    $(4,132,678)
                                                    -----------     -----------     -----------
Adjustments to reconcile net loss to net
  cash provided by operating activities:
Depreciation and amortization                         3,425,718       3,518,891       3,500,759
Minority interest in loss of subsidiary
  partnerships                                          (16,161)        (10,959)         (8,204)
(Increase) decrease in assets:
Cash held in escrow                                     (12,713)        (30,654)         12,106
Other assets                                            149,635         (82,455)         (3,880)
Increase (decrease) in liabilities:
Accounts payable and other liabilities                 (124,936)        (44,300)       (246,440)
Accrued interest                                      1,667,842       1,453,193       1,408,575
Increase in due to local general partners
  and affiliates                                        272,373          23,862          20,166
Decrease in due to local general partners
  and affiliates                                         (4,522)       (181,090)       (169,418)
Due to general partner and affiliates                   713,388         692,199         611,089
                                                    -----------     -----------     -----------
Total adjustments                                     6,070,624       5,338,687       5,124,753
                                                    -----------     -----------     -----------

Net cash provided by operating activities               792,187         803,901         992,075
                                                    -----------     -----------     -----------

Cash flows from investing activities:
Improvements to property and equipment                 (356,569)       (487,607)       (336,097)
Decrease in cash held in escrow                           3,200          73,813          72,248
Increase in due to local general partners
  and affiliates                                              0         137,141           1,570
Decrease in due to local general partners
  and affiliates                                        (38,151)              0         (51,364)
                                                    -----------     -----------     -----------

Net cash used in investing activities                  (391,520)       (276,653)       (313,643)
                                                    -----------     -----------     -----------

Cash flows from financing activities:
Principal payments of mortgage notes                   (493,507)       (479,998)       (296,775)
Increase in due to local general partners
  and affiliates                                          7,097          14,940          31,797
Decrease in due to local general partners
  and affiliates                                        (99,150)       (128,141)              0
Decrease in capitalization of consolidated
  subsidiaries attributable to minority interest        (91,416)       (236,163)        (74,218)
                                                    -----------     -----------     -----------

Net cash used in financing activities                  (676,976)       (829,362)       (339,196)
                                                    -----------     -----------     -----------
</TABLE>

                                       55
<PAGE>




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


<TABLE>
<CAPTION>
                                                                Year Ended March 31,
                                                    -------------------------------------------
                                                       2004            2003            2002
                                                    -----------     -----------     -----------
<S>                                                 <C>             <C>             <C>
Net (decrease) increase in cash and cash
  equivalents                                          (276,309)       (302,114)        339,236

Cash and cash equivalents at beginning of year          992,367       1,294,481         955,245
                                                    -----------     -----------     -----------

Cash and cash equivalents at end of year            $   716,058     $   992,367     $ 1,294,481
                                                    ===========     ===========     ===========

Supplemental disclosure of cash flows
  information:
Cash paid during the year for interest              $ 1,135,516     $ 1,211,218     $ 1,217,349
                                                    ===========     ===========     ===========

</TABLE>
See accompanying notes to consolidated financial statements.


                                       56
<PAGE>



                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2004


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,
2004.

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

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


NOTE 2 - Summary of Significant Accounting Policies

a) Basis of Consolidation

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

For financial  reporting purposes,  the Partnership's  fiscal year ends on March
31. 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.


                                       57
<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2004


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, $27,000 and $26,000 for the years
ended March 31,  2004,  2003 and 2002 (the 2003,  2002 and 2001  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,  2004,  distributions  to  several  minority
interests have exceeded their investments.

b) Cash and Cash Equivalents

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

c) Property and Equipment

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

Through  March 31, 2004,  the  Partnership  has  recorded an  aggregate  loss on
impairment of assets of approximately $3,926,000.

d) Income Taxes

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

e) Offering Costs

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

f) Loss Contingencies

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



                                       58
<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2004



g) Use of Estimates

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


NOTE 3 - Fair Value of Financial Instruments

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

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

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

The estimated  fair values of the  Partnership's  mortgage  notes payable are as
follows:
<TABLE>
<CAPTION>
                                            March 31, 2004                March 31, 2003
                                      --------------------------    --------------------------
                                                      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    $ 8,078,570    $ 8,227,133    $20,163,868    $15,987,427
Not practicable                       $49,031,399              *    $37,439,608              *

</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>

                                               March 31,               Estimated
                                   -------------------------------    Useful Lives
                                       2004              2003           (Years)
                                   -------------     -------------    ------------
<S>                                <C>               <C>                 <C>
Land                               $   6,228,836     $   6,228,836        --
Building and improvements            102,072,423       101,718,677       10-40
Furniture and fixtures                 1,299,937         1,297,603       5-10
                                   -------------     -------------
                                     109,601,196       109,245,116
Less:  Accumulated depreciation      (30,145,898)      (26,736,066)
                                   -------------     -------------

                                   $  79,455,298     $  82,509,050
                                   =============     =============
</TABLE>


                                       59
<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2004



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, 2004 and
2003, respectively.

In  connection  with  the  rehabilitation  of  the  properties,  the  subsidiary
partnerships  have incurred  developer's fees of $9,282,042 to the local general
partners  and  affiliates  as of March 31,  2004 and  2003.  Such fees have been
included in the cost of property and equipment.

Depreciation  expense for the years ended March 31, 2004, 2003 and 2002 amounted
to $3,410,321, $3,499,640 and $3,475,234, respectively.

During Fiscal Year 2004, $489 of accumulated  depreciation on assets disposed of
was written off.


NOTE 5 - Cash Held in Escrow

Cash held in escrow consists of the following:
<TABLE>
<CAPTION>
                                                               March 31,
                                                      --------------------------
                                                         2004            2003
                                                      ----------      ----------
<S>                                                   <C>             <C>
Purchase price payments*                              $   23,683      $   23,683
Real estate taxes, insurance and other                 1,138,159       1,125,446
Reserve for replacements (Note 7)                      1,879,829       1,883,029
                                                      ----------      ----------

                                                      $3,041,671      $3,032,158
                                                      ==========      ==========
</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,
                                          ------------------------
                                             2004          2003       Period
                                          ---------     ----------    -------
<S>                                       <C>           <C>           <C>
Financing costs                           $ 361,409     $ 361,409        *
Other                                        33,703        33,703     various
                                          ---------     ----------
                                            395,112        395,112
Less:  Accumulated amortization            (184,082)      (168,685)
                                          ---------     ----------

                                          $ 211,030     $  226,427
                                          =========     ==========
</TABLE>

*Over the life of the related mortgages.


Amortization  expense for the years ended March 31, 2004, 2003 and 2002 amounted
to $15,397, $19,251 and $25,525, respectively.


                                       60
<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2004



NOTE 7 - Mortgage Notes Payable

The  mortgage   notes  are  payable  in  aggregate   monthly   installments   of
approximately $175,000 including principal and interest at rates ranging from 0%
to 9.65%  per  annum,  through  the year  2052.  Each  subsidiary  partnership's
mortgage  note  payable  is  collateralized  by the  land and  buildings  of the
respective  subsidiary  partnership,  the assignment of each certain  subsidiary
partnership's rents and leases, and is without further recourse.

One mortgage  note with a balance of $4,102,647  and  $4,347,411 at December 31,
2003 and 2002,  respectively,  which bears  interest at 7% per annum is eligible
for an interest rate subsidy.  Accordingly, the subsidiary partnership paid only
that portion of the monthly payments that would be required if the interest rate
was 1%. The balance was  subsidized  under  Section 236 of the National  Housing
Act.

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

Fiscal Year Ending                  Amount
------------------                -----------
2004                              $   559,245
2005                                  606,012
2006                                  653,153
2007                                  699,311
2008                                  759,168
Thereafter                         53,833,080
                                   ----------
                                  $57,109,969
                                  ===========

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


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.



                                       61
<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2004



A) Other Related Party Expenses

The costs incurred to related  parties for the years ended March 31, 2004,  2003
and 2002 were as follows:
<TABLE>
<CAPTION>
                                                       Year Ended March 31,
                                                --------------------------------
                                                  2004        2003        2002
                                                --------    --------    --------
<S>                                             <C>         <C>         <C>
Partnership management fees (a)                 $546,000    $546,000    $546,000
Expense reimbursement (b)                        122,835     121,297     110,132
Local administrative fees (d)                     35,000      32,550      32,500
                                                --------    --------    --------
Total general and administrative-
General Partner                                  703,835     699,847     688,632
                                                --------    --------    --------
Property management fees incurred to
affiliates of the subsidiary partnerships'
general partners (c)                             287,567     292,608     281,007
                                                --------    --------    --------
Total general and administrative-
related parties                                 $991,402    $992,455    $969,639
                                                ========    ========    ========
</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  $3,339,000 and $2,793,000 were accrued and unpaid as of March 31,
2004 and 2003, 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  $651,000
and  $528,000   were  accrued  and  unpaid  as  of  March  31,  2004  and  2003,
respectively.

(c) Property  management  fees incurred by subsidiary  partnerships  amounted to
$672,734,  $621,058,  and $621,561 for the years ended March 31, 2004,  2003 and
2002, respectively. Of these fees $287,567, $292,608 and $281,007 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.




                                       62
<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2004



B) Due to Local General Partners and Affiliates

Due to Local General Partners and affiliates at March 31, 2004 and 2003 consists
of the following:
<TABLE>
<CAPTION>
                                                                March 31,
                                                       --------------------------
                                                          2004           2003*
                                                       -----------    -----------
<S>                                                    <C>            <C>
Operating deficit advances                             $         0    $    99,150
Operating advances                                           5,000          5,000
Development fee payable                                    804,941        825,950
Construction costs payable                                 476,570        493,712
Management and other operating advances                    229,615        (38,236)
Loans payable to general partner and affiliates (a)        238,634        231,537
                                                       -----------    -----------

                                                       $ 1,754,760    $ 1,617,113
                                                       ===========    ===========
</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.  During 2003,  Affordable Green borrowed  additional  monies from
     affiliates of a local general partner.  The loans are non-interest  bearing
     and are not expected to be repaid within the next operating cycle.

* Reclassified for comparative purposes.


NOTE 9 - Income Taxes

A reconciliation of the financial  statement net loss to the income tax loss for
the Partnership and its consolidated subsidiaries is as follows:
<TABLE>
<CAPTION>
                                                             Year Ended March 31,
                                                  -------------------------------------------
                                                     2004            2003            2002
                                                  -----------     -----------     -----------
<S>                                               <C>             <C>             <C>
Financial statement net loss                      $(5,278,437)    $(4,534,786)    $(4,132,678)

Differences between depreciation and amortiza-
tion  expense records for financial reporting
purposes and the accelerated costs recovery
system utilized for income tax purposes              (478,109)       (563,731)       (748,215)

Tax exempt interest income                             (2,100)         (3,606)         (8,680)

Differences resulting  from parent  company
having a different fiscal year for income tax
and financial reporting purposes                       12,179           4,309          53,481

Other, including accruals for financial repo-
rting not  deductible  for tax purposes until
paid                                                  585,145         316,434         103,406
                                                  -----------     -----------     -----------

Net loss as shown on the income tax return
for the calendar year ended                       $(5,161,322)    $(4,781,380)    $(4,732,686)
                                                  ===========     ===========     ===========

</TABLE>

                                       63
<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2004



NOTE 10 - Commitments and Contingencies

a) Subsidiary Partnerships-Other

Clear Horizons Limited Partnership
----------------------------------
At December 31, 2003,  Clear Horizons  Limited  Partnership  ("Clear  Horizons")
current  liabilities  exceeded  its current  assets by $195,919.  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, 2003 is $215,190  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, 2003.

b) Uninsured Cash and Cash Equivalents

The Partnership  maintains its cash and cash  equivalents in various banks.  The
accounts  at  each  bank  are  guaranteed  by  the  Federal  Deposit   Insurance
Corporation  up to  $100,000.  At  March  31,  2004,  uninsured  cash  and  cash
equivalents approximated $955,000.

c) Other

The  Partnership and BACs holders began to recognize Tax Credits with respect to
a Property when the Credit Period for such  Property  commenced.  Because of the
time required for the  acquisition,  completion and rent-up of  Properties,  the
amount of Tax Credits per BAC has gradually increased over the first three years
of the Partnership.  Housing Tax Credits not recognized in the first three years
will be recognized  in the 11th through 13th years.  The  Partnership  generated
$8,746,267  of Housing  Tax Credits  during each of the 2003,  2002 and 2001 tax
years, respectively.


                                       64
<PAGE>




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.


                                    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


                                       65
<PAGE>



ALAN P. HIRMES,  49, 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,  48,  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,  43, 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,  44, 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.

GLENN F. HOPPS,  41, 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,  38, joined Related in June 1992, and prior to that date was
employed  by  Friedman,  Alpren  &  Green,  certified  public  accountants.  Ms.
Wicelinski  graduated  from Pace  University  with a Bachelor  of Arts Degree in
Accounting.

Item 11. Executive Compensation.

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




                                       66
<PAGE>



Item 12. Security Ownership of Certain Beneficial Owners and Management.
<TABLE>
<CAPTION>
                     Name and Address of     Amount and Nature of         Percentage
Title of Class       Beneficial Ownership    Beneficial Ownership          of Class
--------------       --------------------    --------------------         ----------
<S>                  <C>                        <C>                             <C>
General Partnership  Related Independence    $1,000 capital contribution     100%
Interest in the      Associates L.P.         -directly owned
Partnership          625 Madison Avenue
                     New York, NY 10022
</TABLE>
Independence  SLP L.P.,  a limited  partnership  whose  general  partner  is the
general  partner of the General Partner of the Partnership and which acts as the
special  limited  partner  of  each  Local  Partnership,  holds  a .01%  limited
partnership  interest  in each Local  Partnership.  See Note 8 to the  Financial
Statements  in  Item 8  above,  which  information  is  incorporated  herein  by
reference thereto.

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 4,  2004,  by (i) each BACs
holder known to the Partnership to be a beneficial  owner of more than 5% of the
BACs,  (ii) each  director and executive  officer of the general  partner of the
General  Partner and (iii) the directors  and executive  officers of the general
partner of the General Partner as a group.  Unless otherwise noted, all BACs are
owned directly with sole voting and dispositive powers.
<TABLE>
<CAPTION>

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

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

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

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

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

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

Glenn F. Hopps                        -                                   -

Teresa Wicelinski                     -                                   -

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

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

(2) As set forth in  Schedule  13D filed by Lehigh  Tax Credit  Partners  L.L.C.
("Lehigh I") and Lehigh Tax Credit  Partners,  Inc., (the "Managing  Member") on
June 10, 1997 with the Securities and Exchange Commission (the "Commission") and
pursuant to a letter  agreement  dated  November 7, 1997 among the  Partnership,
Lehigh I and the 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,



                                       67
<PAGE>

or in any way  participate,  directly or indirectly,  in any  "solicitation"  of
"proxies"  or  "consents"  (as such  terms  are used in the  proxy  rules of the
Commission) to vote any voting securities of the Partnership, (iv) form, join or
otherwise  participate in a "group"  (within the meaning of Section 13 (d)(3) of
the Securities  and Exchange Act of 1934) with respect to any voting  securities
of the Partnership,  except those  affiliates bound by the Standstill  Agreement
will not be deemed to have violated it and formed a "group"  solely by acting in
accordance with the Standstill  Agreement,  (v) disclose in writing to any third
party any  intention,  plan or  arrangement  inconsistent  with the terms of the
Standstill  Agreement,  or (vi) loan money to,  advise,  assist or encourage any
person  in  connection  with  any  action  inconsistent  with  the  terms of the
Standstill  Agreement.  In addition,  Lehigh I agreed that until the  Standstill
Expiration  Date it will not sell any BACs  acquired  by it unless  the 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 4, 2004, 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  (collectively,   "Trien")  for
professional  services rendered for the audit of our annual financial statements
for the years ended March 31, 2004 and 2003 and for the reviews of the financial
statements  included  in the  Partnership's  Quarterly  Reports on Form 10-Q for
those years were $53,400 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   (collectively,   "Weiser")  for  professional  services
rendered  for the  preparation  of our annual tax  returns  for the years  ended
December 31, 2003 and 2002 were $10,800 and $10,500, respectively.

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

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


                                       68
<PAGE>



                                     PART IV

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

                                                                      Sequential
                                                                         Page
                                                                      ----------

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

         Report of Independent Registered Public Accounting Firm          15

         Consolidated Balance Sheets at March 31, 2004 and 2003           52

         Consolidated Statements of Operations for the Years Ended
         March 31, 2004, 2003 and 2002                                    53

         Consolidated  Statements of Changes in Partners'  Capital
         (Deficit) for the Years Ended March 31, 2004,  2003 and
         2002                                                             54

         Consolidated Statements of Cash Flows for the Years Ended
         March 31, 2004, 2003 and 2002 55

         Notes to Consolidated Financial Statements                       57

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

         Report of Independent Registered Public Accounting Firm          76

         Schedule I - Condensed Financial Information of Registrant       77

         Schedule III - Real Estate and Accumulated Depreciation          80

         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  Partne-
         rship of Independence  Tax Credit Plus L.P. II, attached to
         the Prospectus as Exhibit A**

(3C)     Certificate of Limited Partnership of Independence Tax Cre-
         dit 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 Par-
         tnership's acquisition of Local Partnership Interests*

(10D)    Form of Amended and Restated Agreement of Limited Partners-
         hip of Local Partnerships*



                                       69
<PAGE>

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

(21)     Subsidiaries of the Registrant                                   70

(31.1)   Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a).      73

(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).                                           75

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

(b)      Reports on Form 8-K

         No reports on Form 8-K were filed during the quarter ended
         March 31, 2004.

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

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

(d)      Not applicable



                                       70
<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 18, 2004                By: /s/ Alan P. Hirmes
                                        ------------------
                                        Alan P. Hirmes
                                        Director and Senior Vice President
                                        (Chief Executive and Financial Officer)



Date:  June 18, 2004                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:


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


                        Director and Senior Vice President
/s/ Alan P. Hirmes      (chief executive and financial officer)
------------------
Alan P. Hirmes          of Related Independence Associates Inc.    June 18, 2004
                                                                   -------------






                        Treasurer (chief accounting
/s/ Glenn F. Hopps      officer) of Related Independence
------------------
Glenn F. Hopps          Associates Inc.                            June 18, 2004
                                                                   -------------

<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, 2004 of the Partnership;

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

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

     4.   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
          I 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 annual report was 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; and

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

          d)  disclosed  in this annual  report any change in the  Partnership's
          internal  control over financial  reporting  that occurred  during the
          period  ending  March 31,  2004 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

<PAGE>



          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 18, 2004

                                   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, 2004 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 18, 2004



<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 the Form 10-K as presented  in our opinion  dated June
17,  2004 on page 15, and based on the reports of other  auditors,  we have also
audited  supporting  Schedule  I for the 2003,  2002 and 2001  Fiscal  Years and
Schedule  III at March 31, 2004.  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 17, 2004



                                       76
<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,
                                                    ----------------------------
                                                       2004             2003
                                                    -----------      -----------
<S>                                                 <C>              <C>
Cash and cash equivalents                           $   394,494      $   411,989
Cash held in escrow                                      23,683           23,683
Investment in subsidiary partnerships                18,624,424       21,326,577
Other assets                                             33,704           34,293
                                                    -----------      -----------

Total assets                                        $19,076,305      $21,796,542
                                                    ===========      ===========



                        LIABILITIES AND PARTNERS' CAPITAL



Due to general partner and affiliates               $ 3,983,195      $ 3,314,807

Other liabilities                                        12,520            7,359
                                                    -----------      -----------

Total liabilities                                     3,995,715        3,322,166

Partners' capital                                    15,080,590       18,474,376
                                                    -----------      -----------

Total liabilities and partners' capital             $19,076,305      $21,796,542
                                                    ===========      ===========

</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.



                                       77
<PAGE>



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


                       CONDENSED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                             Year Ended March 31,
                                                 -------------------------------------------
                                                    2004            2003            2002
                                                 -----------     -----------     -----------
<S>                                              <C>             <C>             <C>
Revenues

Other income                                     $     1,775     $     3,531     $     8,258
                                                 -----------     -----------     -----------

Expenses

Administrative and management                        112,406         108,838         118,912
Administrative and management-related parties        668,835         667,297         656,132
                                                 -----------     -----------     -----------

Total expenses                                       781,241         776,135         775,044
                                                 -----------     -----------     -----------

Loss from operations                                (779,466)       (772,604)       (766,786)

Equity in loss of subsidiary partnerships         (2,614,320)     (2,621,702)     (2,634,166)
                                                 -----------     -----------     -----------

Net loss                                         $(3,393,786)    $(3,394,306)    $(3,400,952)
                                                 ===========     ===========     ===========
</TABLE>


                                       78
<PAGE>



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


                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                             Year Ended March 31,
                                                 -------------------------------------------
                                                    2004            2003            2002
                                                 -----------     -----------     -----------
<S>                                              <C>             <C>             <C>
Cash flows from operating activities:
Net loss                                         $(3,393,786)    $(3,394,306)    $(3,400,952)
                                                 -----------     -----------     -----------

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

Equity in loss of subsidiary partnerships          2,614,320       2,621,702       2,634,166

(Increase) decrease in assets:

Other assets                                             589               0               0

Increase (decrease) in liabilities:

Due to general partners and affiliates               668,388         677,499         602,489
Other liabilities                                      5,161           1,402               7
                                                 -----------     -----------     -----------

Total adjustments                                  3,288,458       3,300,603       3,236,662
                                                 -----------     -----------     -----------

Net cash used in operating activities               (105,328)        (93,703)       (164,290)
                                                 -----------     -----------     -----------

Cash flows from investing activities:

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

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

Net cash provided by financing activities:

Distributions from subsidiary partnerships            87,833          87,587          71,307
                                                 -----------     -----------     -----------

Net decrease in cash and cash equivalents            (17,495)         (6,116)        (92,983)

Cash and cash equivalents, beginning of year         411,989         418,105         511,088
                                                 -----------     -----------     -----------

Cash and cash equivalents, end of year           $   394,494     $   411,989     $   418,105
                                                 ===========     ===========     ===========
</TABLE>


                                       79
<PAGE>




                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                   Partnership Property Pledged as Collateral
                                 MARCH 31, 2004
<TABLE>
<CAPTION>





                                                           Initial Cost to Partnership    Cost Capitalized
                                                          -----------------------------    Subsequent to
                                                                          Buildings and     Acquisition:
            Description                  Encumbrances         Land         Improvements     Improvements
------------------------------------     ------------     ------------     ------------     ------------
<S>                                      <C>              <C>              <C>              <C>
Apartment Complexes
Lincoln Renaissance
  Reading, PA                            $  2,553,000     $          0     $  5,240,173     $    238,372
United Germano Millgate Limited
  Partnership
  Chicago, IL                               9,215,759          580,000        6,070,477       11,361,065
Mansion Court Associates
  Philadelphia, PA                          1,505,862           19,072        3,224,984          230,564
Derby Run Associates L.P.
  Hampton, VA                               4,325,898          407,410        3,069,628        4,555,191
Renaissance Plaza Assoc
  Baltimore, MD                             6,665,765          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                           7,641,030          966,577                0       10,702,055
Colden Oaks Limited Partnership
  Los Angeles, CA                           5,424,835          922,790                0        2,090,771
Brynview Terrace Limited Partnership
  Los Angeles, CA                           1,000,770          175,943                0        1,448,016
NLEDC, L.P.
  Los Angeles, CA                           4,269,283          624,000                0        5,884,672
Creative Choice Homes VI Ltd.
  Miami, FL                                 3,466,656          650,072           13,134        5,593,277
P&P Homes for the Elderly, L.P.
  Los Angeles, CA                           6,281,077                0                0       10,002,384
Clear Horizons Limited Partnership
  Shreveport, LA                              790,000           15,304        2,058,729          226,889
Neptune Venture L.P.
  Neptune Township, NJ                              0          460,631       10,151,873          146,716
Affordable Green Associates L.P.
  New York, NY                              2,185,153           20,500        3,506,961           43,580
                                         ------------     ------------     ------------     ------------

                                         $ 57,109,969     $  5,544,789     $ 43,176,129     $ 60,880,278
                                         ============     ============     ============     ============

<CAPTION>


                                         Gross Amount at which Carried at Close of Period
                                         ------------------------------------------------
                                                         Buildings and                      Accumulated
            Description                      Land         Improvements        Total         Depreciation
------------------------------------     ------------     ------------     ------------     ------------
<S>                                      <C>              <C>              <C>              <C>
Apartment Complexes
Lincoln Renaissance
  Reading, PA                            $      5,373     $  5,473,172     $  5,478,545     $  1,421,207
United Germano Millgate Limited
  Partnership
  Chicago, IL                                 585,374       17,426,168       18,011,542        7,954,014
Mansion Court Associates
  Philadelphia, PA                             25,095        3,449,525        3,474,620          883,431
Derby Run Associates L.P.
  Hampton, VA                                 409,771        7,622,458        8,032,229        1,969,104
Renaissance Plaza Assoc
  Baltimore, MD                               686,616       14,259,099       14,945,715        3,296,311
Tasker Village
  Philadelphia, PA                             20,596        3,933,075        3,953,671          955,347
Martha Bryant Manor, L.P.
  Los Angeles, CA                             968,938       10,699,694       11,668,632        2,896,461
Colden Oaks Limited Partnership
  Los Angeles, CA                             925,151        2,088,410        3,013,561          954,437
Brynview Terrace Limited Partnership
  Los Angeles, CA                             178,304        1,445,655        1,623,959          395,626
NLEDC, L.P.
  Los Angeles, CA                             626,361        5,882,311        6,508,672        1,662,320
Creative Choice Homes VI Ltd.
  Miami, FL                                   652,433        5,604,050        6,256,483        1,716,990
P&P Homes for the Elderly, L.P.
  Los Angeles, CA                             642,360        9,360,024       10,002,384        2,033,665
Clear Horizons Limited Partnership
  Shreveport, LA                               17,665        2,283,257        2,300,922          830,347
Neptune Venture L.P.
  Neptune Township, NJ                        462,465       10,296,755       10,759,220        2,071,606
Affordable Green Associates L.P.
  New York, NY                                 22,334        3,548,707        3,571,041        1,105,032
                                         ------------     ------------     ------------     ------------

                                         $  6,228,836     $103,372,360     $109,601,196     $ 30,145,898
                                         ============     ============     ============     ============

<CAPTION>

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

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


                                       80
<PAGE>




                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                   Partnership Property Pledged as Collateral
                                 MARCH 31, 2004


<TABLE>
<CAPTION>
                                         Cost of Property and Equipment                       Accumulated Depreciation
                                 -----------------------------------------------   -----------------------------------------------
                                                                       Year Ended March 31,
                                 -------------------------------------------------------------------------------------------------
                                     2004             2003             2002            2004             2003             2002
                                 -------------    -------------    -------------   -------------    -------------    -------------
<S>                              <C>              <C>              <C>             <C>              <C>              <C>
Balance at beginning of period   $ 109,245,116    $ 108,763,199    $ 108,427,102   $  26,736,066    $  23,242,116    $  19,766,882
Additions during period:
Improvements                           356,569          490,218          336,097
Depreciation expense                                                                   3,410,321        3,499,640        3,475,234

Deductions during period:
Dispositions                              (489)          (8,301)               0            (489)          (5,690)               0
                                 -------------    -------------    -------------   -------------    -------------    -------------

Balance at close of period       $ 109,601,196    $ 109,245,116    $ 108,763,199   $  30,145,898    $  26,736,066    $  23,242,116
                                 =============    =============    =============   =============    =============    =============

</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.



                                       81