<PAGE>


                                  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, 2001
                                       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]

                       DOCUMENTS INCORPORATED BY REFERENCE
       None





<PAGE>

                      CAUTIONARY STATEMENT FOR PURPOSES OF
                         THE "SAFE HARBOR" PROVISIONS OF
              THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995



WHEN USED IN THIS ANNUAL REPORT ON FORM 10-K, THE WORDS "BELIEVES,"
"ANTICIPATES," "EXPECTS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. STATEMENTS LOOKING FORWARD IN TIME ARE INCLUDED IN
THIS ANNUAL REPORT ON FORM 10-K PURSUANT TO THE "SAFE HARBOR" PROVISION OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH STATEMENTS ARE SUBJECT TO
CERTAIN RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY, INCLUDING, BUT NOT LIMITED TO, THOSE SET FORTH IN "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS."
READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING
STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF.


<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").

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, 2001, the
Partnership had acquired interests in fifteen Local Partnerships and does not
anticipate making any additional investments. As of March 31, 2001,
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 $890,000 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 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.

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 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").

Item 2.  Properties.

The Partnership holds a 98.99% limited partnership interest in fifteen Local
Partnerships as of March 31, 2001. 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 14. Schedule III.

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

Name and Location                               % of Units Occupied  at  May 1,
                                             -----------------------------------
(Number of Units)              Date Acquired    2001   2000  1999   1998   1997
-----------------              -------------    ----   ----  ----   ----   ----

Lincoln Renaissance
Reading, PA (52)               April 1993        96%    98%    90%   98%   100%

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

Mansion Court Associates
Philadelphia, PA (30)          November 1993     90%    97%    97%  100%    93%

Derby Run Associates, L.P.
Hampton, VA (160)              February 1994     98%    89%    82%   71%    94%

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

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

Martha Bryant Manor, L.P.
Los Angeles, CA (77)           September 1994   100%    97%    93%   95%    92%

Colden Oaks
Limited Partnership
Los Angeles, CA (38)           September 1994    97%   100%   100%   92%    95%

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

NLEDC, L.P.
Los Angeles, CA (43)           September 1994   100%   100%    98%   95%    93%

Creative Choice
Homes VI, Ltd.
Miami, FL (102)                September 1994   100%   100%   100%   98%    98%

P&P Homes for the Elderly, L.P.
Los Angeles, CA (107)          September 1994   100%    99%    97%   95%  68%(1)

Clear Horizons
Limited Partnership
Shreveport, LA (84)            December 1994     99%    98%    96%   90%    93%

Neptune Venture, L.P.
Neptune Township, NJ (99)      April 1995       100%    97%    99%   98%   100%

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

(1)  Property in rent-up phase.




<PAGE>



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.

In connection with investments in development-stage Apartment Complexes, the
General Partner generally required that the Local General Partners provide
completion guarantees and/or undertake to repurchase the Partnership's interest
in the Local Partnership if construction or rehabilitation was not completed
substantially on time or on budget ("Development Deficit Guarantees"). The
Development Deficit Guarantees generally also required the Local General Partner
to provide any funds necessary to cover net operating deficits of the Local
Partnership until such time as the Apartment Complex had achieved break-even
operations. The General Partner generally required that the Local General
Partners undertake an obligation to fund operating deficits of the Local
Partnership (up to a stated maximum amount) during a limited period of time
(typically three to five years) following the achievement of break-even
operations ("Operating Deficit Guarantees"). Under the terms of the Development
and Operating Deficit Guarantees, amounts funded have been treated as Operating
Loans which will not bear interest and which will be repaid only out of 50% of
available cash flow or out of available net sale or refinancing proceeds. In
some instances, the Local General Partners are required to undertake an
obligation to comply with a Rent-Up Guaranty Agreement, whereby the Local
General Partner agrees to pay liquidated damages if predetermined occupancy
rates are not achieved. These payments are made without right of repayment. In
cases where the General Partner deems it appropriate, the obligations of a Local
General Partner under the Development Deficit (all of which have expired as of
March 31, 2001), Operating Deficit (all current operating deficits expire within
the next year) and/or Rent-Up Guarantees (all rent-up deficit guarantees have
expired as of March 31, 2001) are secured by letters of credit and/or cash
escrow deposits.

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

Item 3.  Legal Proceedings.

None.

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

None.

                                     PART II

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

As of March 31, 2001, 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 March 31, 2001, the Partnership has approximately 3,416 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, 2001. The Partnership
does not anticipate providing cash distributions to its BACs holders other than
from net refinancing or sales proceeds.

In January 2001, affiliates of Everest Properties, Inc. ("Everest") conducted a
tender offer for up to 1,492.50 BACs. In connection with a prior tender offer
for BACs, an affiliate of the General Partner entered into a standstill
agreement dated as of April 23, 1997 (the "Standstill"), which precluded Everest
from independently soliciting BACs (by tender offer or otherwise). At Everest's
request, the General Partner caused its affiliate to release Everest from the
Standstill for the limited purpose of permitting Everest to make its tender
offer. In connection with such arrangements, Everest agreed to cover all of the
Partnership's expenses with respect to processing the tender offer including
mailing costs, legal fees and other administrative costs incurred by the
Partnership. These reimbursements resulted in aggregate payments to the
Partnership of $65,928 which are reflected as "other income" on the financial
statements for Fiscal Year 2000.


<PAGE>

<TABLE>
<CAPTION>

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.

                                           Year Ended March 31,
OPERATIONS
----------             --------      --------    --------    --------    ---------
                       2001          2000        1999        1998         1997
                       -----------   ----------- ----------- -----------  --------

<S>                    <C>          <C>         <C>         <C>          <C>
Revenues               $8,662,312   $ 8,211,451 $7,932,980  $7,905,546   $ 6,663,351
Operating expenses     (13,480,310)  (13,137,023)(12,665,156)(13,202,649) (10,687,879)
Loss on impairment
  of assets                      0             0          0  (3,925,514)            0
                        ----------    ----------  ---------  ----------     ---------

Loss before             (4,817,998)   (4,925,572)(4,732,176) (9,222,617)   (4,024,528)
  minority interest
Minority interest
  in loss of                11,423        10,908     11,063      10,710         8,916
                          --------     ---------    -------    --------      --------
 subsidiaries

Net loss               $(4,806,575)  $(4,914,664) $(4,721,113) $(9,211,907) $(4,015,612)
                        ==========  ============ ==========  ==========    ==========

Net loss per
  weighted average      $   (80.75)    $  (82.57) $  (79.32)  $ (154.76)    $  (67.46)
  BAC                     =========     =========   ========    ========     =========

</TABLE>
<TABLE>
<CAPTION>


                                                March 31,
FINANCIAL POSITION
------------------     --------      --------    --------    --------    ----------
                       2001          2000        1999        1998         1997
                       -----------   ----------- ----------- -----------  --------

<S>                    <C>           <C>         <C>         <C>          <C>
Total assets           $93,702,404   $96,634,527 $99,844,837 $103,971,047 $112,831,500
                        ==========    ==========  ==========  ===========  ===========

Total liabilities      $73,295,501   $71,338,864 $69,550,289 $ 68,811,891 $68,438,976
                        ==========    ==========  ==========  =========   ===========

Minority interest
                        $  (14,173)    $  68,012  $  152,233  $ 295,728    $  317,189
                         =========      ========   =========   ========     =========

Total partners'        $20,421,076   $25,227,651 $30,142,315 $ 34,863,428 $44,075,335
                        ==========    ==========  ==========  ==========  ==========
  capital

</TABLE>


During the years ended March 31, 2001, 2000 and 1999, respectively, total assets
decreased primarily due to depreciation partially offset by improvements to
property and equipment. During the year ended March 31, 1998, total assets
decreased primarily due to depreciation, loss on impairment of assets and the
repayments of amounts due to Local General Partners and affiliates, partially
offset by improvements to property and equipment. During the year ended March
31, 1997, total assets decreased primarily due to a decrease in cash and cash
equivalents resulting from construction in progress and acquisitions of property
and equipment in excess of net proceeds from mortgage and construction loans and
also the repayments of amounts due to Local General Partners and affiliates.
This decrease in cash and cash equivalents was partially offset by the increase
in construction in progress and acquisitions of property and equipment net of
depreciation. Construction in progress decreased approximately $19,000,000 for
the year ended March 31, 1997. For the year ended March 31, 1997, minority
interest decreased due to distributions received by the Local General Partners.

Cash Distributions
------------------
The Partnership has made no distributions to the BACs holders as of March 31,
2001.


<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, 2001, the Partnership has invested all of the net proceeds in
fifteen Local Partnerships of which approximately $890,000 remains to be paid
(including approximately $631,000 being held in escrow).

For the Fiscal Year ended March 31, 2001, cash and cash equivalents for the
Partnership and its fifteen consolidated Local Partnerships decreased
approximately $16,000. This decrease is primarily due to improvements to
property and equipment ($292,000), principal payments of mortgage notes
($373,000), a decrease in cash held in escrow from investing activities
($266,000), an increase in deferred costs ($4,000) and a decrease in
capitalization of consolidated subsidiaries attributable to minority interest
($71,000) which exceeded cash provided by operating activities ($978,000) and a
net increase in due to local general partners and affiliates relating to
investing and financing activities ($7,000). Included in the adjustments to
reconcile the net loss to cash provided by operating activities is depreciation
and amortization ($3,509,000).

At March 31, 2001, there is a balance of approximately $252,000 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, 2001, 2000 and 1999, respectively,
amounts received from operations of the Local Partnerships were approximately
$68,000, $70,000 and $66,000. 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 $1,751,000 and $1,205,000 were accrued and unpaid as of March 31,
2001 and 2000, 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.

The Partnership has negotiated Operating Deficit Guaranty Agreements with all
Local Partnerships by which the Local General Partners have agreed to fund
operating deficits for a specified period of time. The terms of the Operating
Deficit Guaranty Agreements vary for each Local Partnership, with maximum dollar
amounts to be funded for a specified period of time, generally three years,
commencing on the break-even date. The gross amount of the Operating Deficit
Guarantees aggregates approximately $5,670,000, of which $4,840,000 has expired
as of March 31, 2001. As of March 31, 2001 and 2000, $374,626 and $365,409,
respectively, has been funded under the Operating Deficit Guaranty agreements.
All current Operating Deficit Guarantees expire within the next year. Management
does not expect their expiration to have a material impact on liquidity based on
prior years' fundings.

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 for 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 significant value to the property on the market, which are not included
in the financial statement carrying amount.

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

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

Through March 31, 2001, the Partnership has recorded approximately $3,926,000 as
a loss on impairment of assets.

The following is a summary of the results of operations of the Partnership for
the years ended March 31, 2001, 2000 and 1999 (the 2000, 1999 and 1998 Fiscal
Years, respectively).

The net loss for the 2000, 1999 and 1998 Fiscal Years totaled $4,806,575,
$4,914,664 and $4,721,113, 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
$8,728,115, $8,728,115 and $8,806,766 of Housing Tax Credits during the 2000,
1999 and 1998 tax years, respectively.

2000 vs. 1999
-------------
The Partnership's results of operations for the 2000 and 1999 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 3% for the year ended March 31, 2001 as
compared to 2000 primarily due to rental rate increases.

Other income increased approximately $203,000 for the year ended March 31, 2001
as compared to 2000 primarily due to increased laundry income at one Local
Partnership and administrative fees paid by the offerer to the Partnership in
connection with a tender offer for the Partnership's BACs at the Partnership
level.

Total expenses, excluding operating, remained fairly consistent with an increase
of approximately 1% for the year ended March 31, 2001 as compared to 2000.

Operating increased approximately $199,000 for the year ended March 31, 2001 as
compared to 2000 primarily due to increased electrical and water charges at one
Local Partnership for the year ended March 31, 2001.

1999 vs. 1998
-------------
The Partnership's results of operations for the 1999 and 1998 Fiscal Years
consisted primarily of the results of the Partnership's investment in fifteen
consolidated Local Partnerships. The majority of Local Partnership income
continued 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 year ended March 31, 2000 as
compared to 1999 primarily due to rental rate increases.

Total expenses, excluding repairs and maintenance, taxes and financial interest,
remained fairly consistent with a decrease of approximately 2% for the year
ended March 31, 2000 as compared to 1999.

Repairs and maintenance increased approximately $264,000 for the year ended
March 31, 2000 as compared to 1999 primarily due to interior painting and vinyl
floor replacement at one Local Partnership, tile, carpet and kitchen cabinet
replacement at a second Local Partnership and the hiring of a full time
landscaper along with increased security at a third Local Partnership.

Taxes increased approximately $81,000 for the year ended March 31, 2000 as
compared to 1999 primarily due to property tax exemptions received at one Local
Partnership in the year ended March 31, 1999.

Financial interest increased approximately $297,000 for the year ended March 31,
2000 as compared to 1999 primarily due to a prior period adjustment for
construction interest at one Local Partnership in the year ended March 31, 1999.

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

Clear Horizons Limited Partnership
----------------------------------
At December 31, 2000, Clear Horizons Limited Partnership ("Clear Horizons")
current liabilities exceed its current assets by over $157,000. Although this
condition could raise substantial doubt about Clear Horizons' ability to
continue as a going concern, such doubt is alleviated as follows:

1. Included in current liabilities at December 31, 2000, is $145,402 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, 2000.


Other
-----

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

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

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

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

Not applicable.



<PAGE>


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

         Independent Auditors' Report                                         14

         Consolidated Balance Sheets at March 31, 2001 and 2000               56

         Consolidated Statements of Operations for the Years Ended
         March 31, 2001, 2000 and 1999                                        57

         Consolidated  Statements of Changes in Partners'
         Capital  (Deficit) for the Years Ended
         March 31, 2001,  2000 and 1999                                       58

         Consolidated Statements of Cash Flows for the Years
         Ended March 31, 2001, 2000 and 1999                                  59

         Notes to Consolidated Financial Statements                           61



<PAGE>


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


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


We have audited the consolidated balance sheets of Independence Tax Credit Plus
L.P. II and Subsidiaries (A Delaware Limited Partnership) as of March 31, 2001
and 2000, and the related consolidated statements of operations, changes in
partners' capital (deficit), and cash flows for the years ended March 31, 2001,
2000 and 1999 (the 2000, 1999 and 1998 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 fifteen (Fiscal 2000,
1999 and 1998) subsidiary partnerships whose losses aggregated $4,013,266,
$4,170,745 and $3,860,136 for the 2000, 1999 and 1998 Fiscal Years,
respectively, and whose assets constituted 97% and 96% of the Partnership's
assets at March 31, 2001 and 2000, 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 U.S. generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, based upon our audits and the reports of 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, 2001 and 2000, and the results of their
operations and their cash flows for the years ended March 31, 2001, 2000 and
1999, in conformity with U.S. generally accepted accounting principles.


Trien Rosenberg Rosenberg
Weinberg Ciullo & Fazzari LLP



New York, New York
June 11, 2001



<PAGE>


[Letterhead of Ziner, Kennedy & Lehan LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Lincoln Renaissance

We have audited the accompanying balance sheets of Lincoln Renaissance (a
Pennsylvania Limited Partnership) as of December 31, 2000 and 1999, and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lincoln Renaissance at December
31, 2000 and 1999, and the results of its operations, changes in partners'
equity and its cash flows for the years then ended in conformity with generally
accepted accounting principles.

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



<PAGE>



[Letterhead of Ziner, Kennedy & Lehan LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Lincoln Renaissance

We have audited the accompanying balance sheets of Lincoln Renaissance (a
Pennsylvania Limited Partnership) as of December 31, 1999 and 1998, and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partners and contracted management agent, as well as
evaluating the overall financial statement presentation. We believe that our
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 Lincoln Renaissance at December
31, 1999 and 1998, and the results of its operations, changes in partners'
equity and its cash flows for the years then ended in conformity with generally
accepted accounting principles.

/s/ Ziner, Kennedy & Lehman LLP
Quincy, Massachusetts
January 26, 2000


<PAGE>



[Letterhead of WIELAND & COMPANY, INC.]

INDEPENDENT AUDITOR'S REPORT

To the Partners
United - Germano - Millgate Limited Partnership

We have audited the accompanying balance sheets of United - Germano - Millgate
Limited Partnership (an Illinois limited partnership) as of December 31, 2000
and 1999, and the related statements of operations, partners' equity, and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of United - Germano - Millgate
Limited Partnership as of December 31, 2000 and 1999, and the results of its
operations, changes in partners' equity, and cash flows for the years then ended
in conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards, the Illinois Housing
Development Authority's Financial Reporting and Audit Guidelines for Mortgagors
of Multifamily Housing Developments, and the Consolidated Audit Guide for Audits
of HUD Programs issued by the U.S. Department of Housing and Urban Development,
we have also issued a report dated February 2, 2001, on our consideration of the
internal control of United - Germano - Millgate Limited Partnership, and reports
dated February 2, 2001, on its compliance with specific requirements applicable
to major HUD and IHDA-assisted programs and specific requirements applicable to
Fair Housing and Non-Discrimination.

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

/s/ Wieland & Company, Inc.

Batavia, Illinois
February 2,2001

EIN 36-4025026




<PAGE>



[Letterhead of WIELAND & COMPANY, INC.]

INDEPENDENT AUDITOR'S REPORT

To the Partners
United - Germano - Millgate Limited Partnership

We have audited the accompanying balance sheets of United - Germano - Millgate
Limited Partnership (an Illinois limited partnership) as of December 31, 1999
and 1998, and the related statements of operations, partners' equity, and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of United - Germano - Millgate
Limited Partnership as of December 31, 1999 and 1998, and the results of its
operations, changes in partners' equity, and cash flows for the years then ended
in conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards, the Illinois Housing
Development Authority's Financial Reporting and Audit Guidelines for Mortgagors
of Multifamily Housing Developments, and the Consolidated Audit Guide for Audits
of HUD Programs issued by the U.S. Department of Housing and Urban Development,
we have also issued a report dated February 14, 2000, on our consideration of
the internal control of United - Germano - Millgate Limited Partnership, and
reports dated February 14, 2000, on its compliance with specific requirements
applicable to major HUD and IHDA-assisted programs and specific requirements
applicable to Fair Housing and Non-Discrimination.

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

/s/ Wieland & Company, Inc.
Engagement Partner: Paul H. Wieland
13 South Batavia Avenue
Batavia, Illinois 60510
(630) 761-8199
EIN 36-4025026
February 14, 2000




<PAGE>


[Letterhead of Ziner, Kennedy & Lehan LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Mansion Court Associates

We have audited the accompanying balance sheets of Mansion Court Associates (a
Pennsylvania limited partnership) as of December 31, 2000 and 1999 and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mansion Court Associates at
December 31, 2000 and 1999, and the results of its operations, changes in
partners' equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

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



<PAGE>



[Letterhead of Ziner, Kennedy & Lehan LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Mansion Court Associates

We have audited the accompanying balance sheets of Mansion Court Associates (a
Pennsylvania limited partnership) as of December 31, 1999 and 1998 and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partners and contracted management agent, as well as
evaluating the overall financial statement presentation. We believe that our
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 Mansion Court Associates at
December 31, 1999 and 1998, and the results of its operations, changes in
partners' equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ Ziner, Kennedy & Lehan LLP
Quincy, Massachusetts
January 20, 2000



<PAGE>


[Letterhead of Wall, Einhorn & Chernitzer, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Derby Run Associates, L.P.
  (A Virginia Limited Partnership)
Virginia Beach, Virginia

We have audited the accompanying balance sheets of Derby Run Associates, L.P.,
(A Virginia Limited Partnership) as of December 31, 2000 and 1999, 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 generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, 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, 2000 and 1999, and the results of its operations, changes in
partner's equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

The accompanying supplementary information shown on pages 13-19, 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 financial
statements taken as a whole.

Our audits were conducted for the purposes of forming an opinion on the
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 generally accepted
accounting principles. 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.
CERTIFIED PUBLIC ACCOUNTANTS
Norfolk, Virginia
January 25, 2001


<PAGE>



[Letterhead of Burrus Paul & Turnbull]

INDEPENDENT AUDITORS' REPORT

To the Partners Virginia Housing Development Authority
Derby Run Associates, L.P.
601 S. Belvidere Street
Virginia Beach, Virginia
Richmond, Virginia 23220

We have audited the accompanying balance sheet of Derby Run Associates, L.P.,
Project No. 93-0625-C, as of December 31, 1998, and the related statement of
profit and loss (HUD Form 92410), partners' equity and cash flows for the year
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 audit.

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

In our opinion, the financial statements referred to above present fairly in all
material respects, the financial position of VHDA Project No. 93-0625-C as of
December 31, 1998 and the results of its operations, changes in partner's equity
and cash flows for the year then ended in conformity with generally accepted
accounting principles.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (page 10), is presented for purposes of additional analysis and is
not a required part of the basic financial statements for VHDA Project No.
93-0625-C. 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 financial statements
taken as a whole.

/s/ Burrus Paul & Turnbull
CERTIFIED PUBLIC ACCOUNTANTS
Norfolk, Virginia
January 27, 1999



<PAGE>


[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheet of Renaissance Plaza 93
Associates, L.P. as of December 31, 2000, and the related statements of
operations, partners' equity (deficit) and cash flows for the year then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

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

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 23 through 33
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.

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

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




<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, 1999, and the related statements of
operations, partners' equity (deficit) and cash flows for the year then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Renaissance Plaza 93
Associates, L.P. as of December 31, 1999, and the results of its operations, the
changes in partners' equity (deficit) and cash flows for the year then ended, in
conformity with generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 23 through 33
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.

In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 26,
2000 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 26, 2000




<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, 1998, and the related statements of profit
and loss (on HUD Form No. 92410), changes in partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards
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, 1998, and the results of its operations, the
changes in partners' equity and cash flows for the year then ended, in
conformity with generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 23 through 30
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information, except for that portion marked
"unaudited," on which we express no opinion, 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 21,
1999 on our consideration of Renaissance Plaza 93 Associates, L.P.'s internal
control and on its compliance with requirements applicable to CDA programs, fair
housing and non-discrimination and laws and regulations applicable to the
financial statements.

/s/ Reznick Fedder & Silverman
Audit Principal: Lester A. Kanis
Bethesda, Maryland
Federal Employer Identification Number: 52-1088612
January 21, 1999



<PAGE>


[Letterhead of Ziner, Kennedy & Lehan LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Tasker Village Associates

We have audited the accompanying balance sheets of Tasker Village Associates (a
Pennsylvania limited partnership) as of December 31, 2000 and 1999, and the
related statements of operations, changes in partners' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tasker Village Associates at
December 31, 2000 and 1999, and the results of its operations, changes in
partners' equity, and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

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



<PAGE>



[Letterhead of Ziner, Kennedy & Lehan LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Tasker Village Associates

We have audited the accompanying balance sheet of Tasker Village Associates (a
Pennsylvania limited partnership) as of December 31, 1999 and 1998, and the
related statements of operations, changes in partners' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tasker Village Associates at
December 31, 1999 and 1998, and the results of its operations, changes in
partners' equity, and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ Ziner, Kennedy & Lehan LLP
Quincy, Massachusetts
January 15, 2000




<PAGE>


[Letterhead of Clifford R. Benn]

INDEPENDENT AUDITOR'S REPORT

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

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

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

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

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



<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,
1999 and the related statements of income, changes in partners' capital, and
cash flow for the year then ended. These financial statements are the
responsibility of Martha Bryant Manor, L.P.'s management. My responsibility is
to express an opinion on these financial statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Martha Bryant Manor, L.P. at
December 31, 1999 and the results of its operations and its cash flow for the
year then ended in conformity with generally accepted accounting principles.

/s/ Clifford R. Benn
Carson, California
February 23, 2000



<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,
1998 and the related statements of income, changes in partners' capital, and
cash flow for the year then ended. These financial statements are the
responsibility of Martha Bryant Manor, L.P.'s management. My responsibility is
to express an opinion on these financial statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Martha Bryant Manor, L.P. at
December 31, 1998 and the results of its operations and its cash flow for the
year then ended in conformity with generally accepted accounting principles.

/s/ Clifford R. Benn
Carson, California
February 16, 1999



<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, 2000 and 1999, and the related
statements of operations, changes in partners' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's general partners. 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 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 all
material respects, the financial position of Colden Oaks, a California Limited
Partnership as of December 31, 2000 and 1999, and the results of its operations,
changes in partners' equity and its cash flows for the year then ended in
conformity with generally accepted accounting principles.

/s/ Marvin Mason
Certified Public Accountant
Tarzana, California
March 1, 2001



<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, 1999 and 1998, 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 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 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 all
material respects, the financial position of Colden Oaks, a California Limited
Partnership as of December 31, 1999 and 1998, and the results of its operations,
changes in partners' equity and its cash flows for the year then ended in
conformity with generally accepted accounting principles.

/s/ Marvin Mason
Certified Public Accountant
Encino, California
February 25, 2000



<PAGE>


[Letterhead of Clifford R. Benn]

INDEPENDENT AUDITOR'S REPORT

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

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

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

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

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



<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, 1999
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, 1999 and the results of its operations and its cash flow for the year then
ended in conformity with generally accepted accounting principles.

/s/ Clifford R. Benn, C.P.A.
Carson, California
February 17, 2000




<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, 1998
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, 1998 and the results of its operations and its cash flow for the year then
ended in conformity with generally accepted accounting principles.

/s/ Clifford R. Benn, C.P.A.
Carson, California
February 4, 1999



<PAGE>


[Letterhead of Robert J. Pacheco, CPA]

Independent Auditor's Report

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

We have audited the accompanying balance sheet of NLEDC, L.P., a California
Limited Partnership, as of December 31, 2000, and the related statements of
income, changes in partners' capital, and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

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

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U. S. Department of Housing and
Urban Development, we have also issued reports dated March 30, 2001, on our
consideration of the Partnership's internal control, on its compliance with
specific requirements applicable to nonmajor HUD programs and specific
requirements applicable to Fair Housing and Non-Discrimination. These reports
are an integral part of an audit performed in accordance with Government
Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.

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




<PAGE>



[Letterhead of Robert J. Pacheco, CPA]

Independent Auditor's Report

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

I have audited the accompanying balance sheet of NLEDC, L.P., a California
Limited Partnership, as of December 31, 1999, 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
and Government Auditing Standards issued by the Comptroller General of the
United States. 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 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 NLEDC, L.P., a California Limited
Partnership, at December 31, 1999, 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, I have also issued reports dated March 25, 1999, on my
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 Pacheco
Pasadena, California
March 25, 2000




<PAGE>



[Letterhead of Robert J. Pacheco, CPA]

Independent Auditor's Report

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

I have audited the accompanying balance sheet of NLEDC, L.P., a California
Limited Partnership, as of December 31, 1998, 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
and Government Auditing Standards issued by the Comptroller General of the
United States. 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 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 NLEDC, L.P., a California Limited
Partnership, at December 31, 1998, 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, I have also issued reports dated February 25, 1999, on my
consideration of the Partnership's internal control, on its compliance with
specific requirements applicable to non-major HUD programs and specific
requirements applicable to Fair Housing and Non-Discrimination.

/s/ Robert Pacheco
Pasadena, California
February 25, 1999



<PAGE>



[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Creative Choice Homes VI, Ltd.

We have audited the accompanying balance sheet of Creative Choice Homes VI, Ltd.
as of December 31, 2000, and the related statements of operations, partners'
equity and cash flows for the year then ended. These financial statements are
the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Creative Choice Homes VI, Ltd.
as of December 31, 2000, and the results of its operations, the changes in
partners' equity and cash flows for the year then ended, in conformity with
generally accepted accounting principles.

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



<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, 1999, and the related statements of operations, partners'
equity and cash flows for the year then ended. These financial statements are
the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Creative Choice Homes VI, Ltd.
as of December 31, 1999, and the results of its operations, the changes in
partners' equity and cash flows for the year then ended, in conformity with
generally accepted accounting principles.

/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 11, 2000



<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, 1998, and the related statements of operations, partners'
equity and cash flows for the year then ended. These financial statements are
the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Creative Choice Homes VI, Ltd.
as of December 31, 1998, and the results of its operations, the changes in
partners' equity and cash flows for the year then ended, in conformity with
generally accepted accounting principles.

/s/ Reznick Fedder & Silverman
Bethesda, Maryland
February 5, 1999



<PAGE>


[Letterhead of CHARLES P. BENEDICT, CPA]

Independent Auditor's Report

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

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

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

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

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



<PAGE>



[Letterhead of SUAREZ ACCOUNTANCY CORPORATION]

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, 1999, 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, 1999, and the results of its operations and cash flows for the year
then ended, in conformity with generally accepted accounting principles.

/s/ Suarez Accountancy Corporation
San Pedro, California
February 3, 2000



<PAGE>



[Letterhead of SUAREZ ACCOUNTANCY CORPORATION]

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, 1998, 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, 1998, and the results of its operations and cash flows for the year
then ended, in conformity with generally accepted accounting principles.

/s/ Suarez Accountancy Corporation
San Pedro, California
March 8, 1999



<PAGE>


[Letterhead of COLE, EVANS & PETERSON]

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

Clear Horizons Limited Partnership
Shreveport, Louisiana

We have audited the accompanying balance sheet of Clear Horizons Limited
Partnership, at December 31, 2000, and the related statements of income, capital
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

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

Our audit was made primarily for the purpose of forming an opinion on the basic
financial statements for the year ended December 31, 2000 taken as a whole. The
supplementary Schedules 1 through 6 are presented for purposes of additional
analysis and are not a required part of the basic financial statements. Such
information has been subjected to the audit procedures applied in the audit of
the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U. S. Department of Housing and
Urban Development, we have also issued a report dated February 13, 2001 on our
consideration of Clear Horizons Limited Partnership's internal control, and
reports dated February 13, 2001, on its compliance with laws and regulations,
compliance with specific requirements applicable to Affirmative Fair Housing,
and compliance with specific requirements applicable to major HUD-assisted
programs. Those reports are an integral part of an audit performed in accordance
with Government Auditing Standards and should be read in conjunction with this
report in considering the results of our audit.

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



<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, 1999, 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, 1999 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, 1999 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 9, 2000 on our
consideration of Clear Horizons Limited Partnership's internal control, and
reports dated February 9, 2000, 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.

/s/ Cole, Evans & Peterson
Lead Auditor: Steven W. Hedgepeth
Federal ID No. 72-0506596
Shreveport, Louisiana
February 9, 2000


<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, 1998, 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, 1998 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, 1998 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 12, 1999 on our
consideration of Clear Horizons Limited Partnership's internal control, and
reports dated February 12, 1999, 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.

/s/ Cole, Evans & Peterson
Lead Auditor: Steven W. Hedgepeth
Federal ID No. 72-0506596
Shreveport, Louisiana
February 12, 1999


<PAGE>


[Letterhead of Ziner, Kennedy & Lehan LLP

INDEPENDENT AUDITORS' REPORT

To the Partners of
Neptune Venture, L.P.

We have audited the accompanying balance sheets of Neptune Venture, L.P. (a New
Jersey limited partnership) as of December 31, 2000 and 1999, and the related
statements of operations, changes in partners' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's general partner and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Neptune Venture, L.P. at
December 31, 2000 and 1999, and the results of its operations, changes in
partners' equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

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




<PAGE>



[Letterhead of Ziner, Kennedy & Lehan LLP

INDEPENDENT AUDITORS' REPORT

To the Partners of
Neptune Venture, L.P.

We have audited the accompanying balance sheets of Neptune Venture, L.P. (a New
Jersey limited partnership) as of December 31, 1999 and 1998, and the related
statements of operations, changes in partners' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's general partner and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Neptune Venture, L.P. at
December 31, 1999 and 1998, and the results of its operations, changes in
partners' equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ Ziner, Kennedy & Lehan LLP
Quincy, Massachusetts
January 17, 2000



<PAGE>


[Letterhead of Lawlor, O'Brien & Chervenak, LLC]

INDEPENDENT AUDITORS' REPORT

To the Partners
Affordable Green Associates, L.P.

We have audited the accompanying balance sheet of Affordable Green Associates,
L.P. as of December 31, 2000 and the related statements of operations, changes
in partners' capital, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

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

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



<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, 1999 and the related statements of operations, changes
in partners' capital, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Affordable Green Associates,
L.P. as of December 31, 1999 and the results of its operations, changes in
partners' capital, and its cash flows for the year then ended in conformity with
generally accepted accounting principles.

/s/ Lawlor, O'Brien & Chervenak, LLC
Totowa, New Jersey
February 15, 2000




<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, 1998 and the related statements of operations, changes
in partners' capital, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Affordable Green Associates,
L.P. as of December 31, 1998 and the results of its operations, changes in
partners' capital, and its cash flows for the year then ended in conformity with
generally accepted accounting principles.

/s/ Lawlor, O'Brien & Chervenak, LLC
West Paterson, New Jersey
February 15, 1999



<PAGE>



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


                                     ASSETS

                                                                  March 31,
                                                          ---------------------
                                                             2001         2000
                                                       -------------     -------

Property and equipment net, less accumulated
  depreciation (Notes 2, 4 and 7)                     $88,660,220   $91,850,520
Cash and cash equivalents (Notes 2, 3 and 10)             955,245       971,474
Cash held in escrow (Notes 3 and 5)                     3,159,671     2,823,313
Deferred costs, less accumulated amortization
 (Notes 2 and 6)                                          271,203       293,477
Other assets                                              656,065       695,743
                                                     ------------ -------------

                                                      $93,702,404   $96,634,527
                                                       ==========    ==========

                   LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

Liabilities:
Mortgage notes payable (Note 7)                       $58,380,249   $58,753,322
Accounts payable and other liabilities                  1,624,228     1,427,263
Accrued interest                                        9,169,355     7,759,548
Due to local general partners and affiliates (Note 8)   1,917,650     1,878,270
Due to general partner and affiliates (Note 8)          2,204,019     1,520,461
                                                      -----------   -----------

                                                       73,295,501    71,338,864

Minority interests                                        (14,173)       68,012
                                                     ------------ -------------

Commitments and contingencies (Notes 7, 8 and 10)

Partners' capital (deficit):
Limited partners
  (58,928 BACs issued and outstanding)                 20,740,815    25,499,324
General partner                                          (319,739)     (271,673)
                                                     ------------  ------------

Total partners' capital (deficit)                      20,421,076    25,227,651
                                                       ----------    ----------

Total liabilities and partners' capital (deficit)     $93,702,404   $96,634,527
                                                       ==========    ==========

See accompanying notes to consolidated financial statements.



<PAGE>



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

                              Year Ended March 31,
                                        2001            2000          1999
                                     -------------  -----------   -----------

Revenues

Rental income                          $  8,188,745  $  7,940,677  $  7,641,654
Other income                                473,567       270,774       291,326
                                       ------------ -------------  ------------
                                          8,662,312     8,211,451     7,932,980
                                        -----------  ------------   -----------
Expenses
General and administrative                2,122,880     2,104,328     2,240,191
General and administrative-related parties
  (Note 8)                                  985,786       930,809       932,889
Repairs and maintenance                   1,912,478     1,868,271     1,604,008
Operating                                 1,080,429       881,623       869,450
Taxes                                       777,497       742,492       661,155
Insurance                                   429,540       408,695       434,484
Financial, principally interest           2,663,042     2,616,748     2,319,601
Depreciation and amortization             3,508,658     3,584,057     3,603,378
                                        -----------   -----------   -----------
Total expenses                           13,480,310    13,137,023    12,665,156
                                         ----------    ----------    ----------

Loss before minority interest            (4,817,998)   (4,925,572)   (4,732,176)

Minority interest in loss of subsidiary
  partnerships                               11,423        10,908        11,063
                                        -----------  ------------ -------------

Net loss                               $ (4,806,575)  $(4,914,664) $ (4,721,113)
                                        ===========    ==========-  ===========

Net loss - limited partners            $ (4,758,509)  $(4,865,517) $ (4,673,902)
                                        ===========    ==========   ===========

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

Net loss per BAC                        $     (80.75) $      (82.57)  $  (79.32)
                                          ==========     ========    =========

See accompanying notes to consolidated financial statements.




<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, 1998   $34,863,428   $35,038,743     $(175,315)

Net loss                                     (4,721,113)   (4,673,902)      (47,211)
                                            -----------  ------------     ---------

Partners' capital (deficit)-March 31, 1999   30,142,315    30,364,841      (222,526)

Net loss                                     (4,914,664)   (4,865,517)      (49,147)
                                             ----------    ----------     ---------

Partners' capital (deficit)-March 31, 2000   25,227,651    25,499,324      (271,673)


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

Partners' capital (deficit)-March 31, 2001  $20,421,076   $20,740,815     $(319,739)
                                             ==========    ==========      ========
</TABLE>
See accompanying notes to consolidated financial statements.




<PAGE>


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

                              Year Ended March 31,
                                            2001             2000        1999
                                         ------------     -----------  --------
Cash flows from operating activities:
Net loss                               $ (4,806,575) $ (4,914,664)$  (4,721,113)
                                        -----------   -----------  ------------
Adjustments to reconcile net loss to net cash
  provided by operating activities:
Depreciation and amortization             3,508,658     3,584,057     3,603,378
Minority interest in loss of subsidiary
 partnerships                                 (11,423)  (10,908)      (11,063)
(Increase) decrease in assets:
Cash held in escrow                         (70,294)      (57,052)      190,263
Other assets                                 39,678        61,712      (196,619)
Increase (decrease) in liabilities:
Accounts payable and other liabilities      196,965       123,058      (262,488)
Accrued interest                          1,409,807     1,310,230     1,523,645
Increase in due to local general partners
  and affiliates                             73,945        74,139        90,141
Decrease in due to local general partners
  and affiliates                            (46,492)      (48,671)      (47,614)
Due to general partner and affiliates       683,558       669,041       576,957
                                       ------------  ------------  ------------
Total adjustments                         5,781,402     5,705,606     5,466,600
                                        -----------   -----------   -----------

Net cash provided by operating activities   977,827       790,942       745,487
                                        -----------   -----------  ------------

Cash flows from investing activities:
Improvements to property and equipment     (291,814)     (179,287)     (977,148)
Increase in cash held in escrow            (266,064)     (279,151)      (93,367)
Increase in due to local general partners
  and affiliates                              4,693        53,152        12,721
Decrease in due to local general partners
  and affiliates                                  0       (20,000)   (1,040,768)
                                       -------------   -----------  ------------

Net cash used in investing activities      (553,185)     (425,286)   (2,098,562)
                                         ----------    ----------  ------------

Cash flows from financing activities:
Proceeds from mortgage notes                      0             0       169,689
Principal payments of mortgage notes       (373,073)     (352,280)     (344,461)
Increase in due to local general partners
  and affiliates                              8,434        37,914       178,981
Decrease in due to local general partners
  and affiliates                             (1,200)      (58,008)     (118,405)
Increase in deferred costs                   (4,270)            0             0
Decrease in capitalization of consolidated
  subsidiaries attributable to minority
  interest                                  (70,762)      (73,313)     (132,432)
                                            ---------- ---------- -------------

Net cash used in financing activities      (440,871)     (445,687)     (246,628)
                                          ---------     --------- -------------

Net decrease in cash and cash equivalents   (16,229)      (80,031)   (1,599,703)

Cash and cash equivalents at beginning of year971,474    1,051,505     2,651,208
                                           ----------    ---------   -----------

Cash and cash equivalents at end of year $   955,245   $   971,474  $  1,051,505
                                          ==========    ==========   ===========

Supplemental disclosure of cash flows information:
Cash paid during the year for interest    $1,686,071    $1,281,921  $  1,295,973
                                          =========     =========   ===========

Supplemental disclosures of noncash investing and financing activities:
Property and equipment reclassified to cash
  held in escrow                           $         0    $         0   $ 23,103

See accompanying notes to consolidated financial statements.



<PAGE>


                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

NOTE 1 - General


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

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

The Partnership has interests in fifteen subsidiary partnerships as of March 31,
2001.

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

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

NOTE 2 - Summary of Significant Accounting Policies

a)  Basis of Consolidation

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

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

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

The Partnership's investment in each subsidiary is equal to the respective
subsidiary's partners' equity less minority interest capital, if any. Losses
attributable to minority interest which exceed the minority interests'
investment in a subsidiary partnership have been charged to the Partnership.
Such losses aggregated approximately $30,000, $32,000 and $29,000 for the years
ended March 31, 2001, 2000 and 1999 (the 2000, 1999 and 1998 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, 2001, 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, 2001, the Partnership has recorded a 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 (Note 8).

f)  Loss Contingencies

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

g)  Use of Estimates

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

h)  Recent Pronouncements

In April 1998, the AICPA issued S0P No. 98-5 "Reporting on the Costs of Start-Up
Activities." S0P No. 98-5, which was adopted April 1, 1999, requires that costs
of start-up activities including organizational costs be expensed as incurred.
In addition, at the time of adoption the unamortized balance of any previously
deferred organizational costs must be expensed. This adoption resulted in
$58,524 being fully expensed and included in depreciation and amortization on
the consolidated statements of operations for the year ended March 31, 2000.

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, 2001                 March 31, 2000
                                      ------------------------     ------------------------
                                       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    $25,755,018  $22,618,825    $1,110,000  $  1,110,000
Not practicable                       $32,625,231            *    $57,643,322            *

*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 partnerships.
</TABLE>


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:

                                                                     Estimated
                                             March 31,              Useful Lives
                                      --------------------------
                                       2001              2000           (Years)
                                   -------------   --------------- ------------

Land                               $    6,228,836   $    6,228,836          -
Building and improvements             101,059,452      100,790,755        10-40
Furniture and fixtures                  1,138,814        1,119,217        5-10
                                    -------------    -------------
                                      108,427,102      108,138,808
Less:  Accumulated depreciation       (19,766,882)     (16,288,288)
                                     ------------     ------------

                                    $  88,660,220    $  91,850,520
                                     ============     ============

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, 2001 and
2000, 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, 2001 and 2000, respectively. Such fees
have been included in the cost of property and equipment.

Depreciation expense for the years ended March 31, 2001, 2000 and 1999 amounted
to $3,482,114, $3,452,322 and $3,508,040, respectively.

During Fiscal Years 2000 and 1999, $3,520 and $6,791 of accumulated depreciation
was written off, respectively.

NOTE 5 - Cash Held in Escrow

Cash held in escrow consists of the following:

                                                           March 31,
                                                      ---------------------
                                                        2001           2000
                                                      --------      ---------
Purchase price payments*                               $631,000   $   631,000
Real estate taxes, insurance and other                 1,106,898     1,036,604
Reserve for replacements (Note 7)                      1,421,773     1,155,709
                                                       ---------     ---------

                                                      $3,159,671    $2,823,313
                                                       =========     =========

*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:

                                             March 31,
                                      ----------------------------
                                         2001            2000          Period
                                      ---------       -----------    ----------

Financing costs                          $361,409      $   367,308          *
Other                                      33,703           33,703       various
                                       ----------      -----------
                                          395,112          401,011
Less:  Accumulated amortization          (123,909)        (107,534)
                                        ---------       ----------

                                      $   271,203      $   293,477
                                       ==========       ==========

*Over the life of the related mortgages.


Amortization expense for the years ended March 31, 2001, 2000 and 1999 amounted
to $26,544, $73,211 and $95,338, respectively. During the Fiscal Years 2000 and
1999, $14,552 and $409,561 of deferred costs were written off and $10,169 and
$351,037 of accumulated amortization was written off, respectively.

NOTE 7 - Mortgage Notes Payable

The mortgage notes are payable in aggregate monthly installments of
approximately $148,000 including principal and interest at rates ranging from 0%
to 9.65% per annum, from the year 2003 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 $4,788,548 and $4,987,071 at December 31,
2000 and 1999, 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
------------------                      ------

2001                              $     453,254
2002                                    481,119
2003                                    521,469
2004                                    559,278
2005                                    627,946
Thereafter                           55,737,183
                                     ----------
                                    $58,380,249
                                    ===========

The mortgage agreements require monthly deposits to replacement reserves of
approximately $26,000 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 limited partnerships.

The General Partner and its affiliates perform services for the Partnership. The
costs incurred for the years ended March 31, 2001, 2000 and 1999 are as follows:

A)  Guarantees

The Partnership has negotiated Operating Deficit Guaranty Agreements with all
subsidiary partnerships by which the Local General Partners have agreed to fund
operating deficits for a specified period of time. The terms of the Operating
Deficit Guaranty Agreements vary for each subsidiary partnership, with maximum
dollar amounts to be funded for a specified period of time, generally three
years, commencing on the break-even date. The gross amount of the Operating
Deficit Guarantees aggregates approximately $5,670,000, of which $4,840,000 has
expired at March 31, 2001. As of March 31, 2001 and 2000, $374,626 and $365,409
has been funded under the Operating Deficit Guaranty agreements. Amounts funded
under such agreements are treated as noninterest bearing loans, which will be
repaid only out of 50% of available cash flow or out of available net sale or
refinancing proceeds.

B)  Other Related Party Expenses

The costs incurred to related parties for the years ended March 31, 2001, 2000
and 1999 were as follows:

                                                  Year Ended March 31,
                                          2001          2000           1999
                                         --------     -------       ---------

Partnership management fees (a)            $546,000      $546,000      $546,000
Expense reimbursement (b)                   137,612        97,485       100,678
Local administrative fees (d)                32,500        25,000        33,750
                                           --------      --------      --------
Total general and administrative-
General Partner                             716,112       668,485       680,428
                                            -------       -------       -------
Property management fees incurred to
affiliates of the subsidiary partnerships'
general partners (c)                        269,674       262,324       252,461
                                            -------       -------       -------
Total general and administrative-
related parties                            $985,786      $930,809      $932,889
                                            =======       =======       =======

(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 $1,751,000 and $1,205,000 were accrued and unpaid as of March 31,
2001 and 2000, 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 $297,000
and $184,000 were accrued and unpaid as of March 31, 2001 and 2000,
respectively.

(c) Property management fees incurred by subsidiary partnerships amounted to
$606,572, $578,531 and $602,601 for the years ended March 31, 2001, 2000 and
1999, respectively. Of these fees $269,674, $262,324 and $252,461 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.

C)  Due to Local General Partners and affiliates

Due to Local General Partners and affiliates at March 31, 2001 and 2000 consists
of the following:

                                                           March 31,
                                                 ------------------------------
                                                       2001           2000
                                                   ----------      ---------

Operating deficit advances                           $  144,150  $    144,150
Operating advances                                        5,000         5,000
Development fee payable                                 830,950       830,950
Construction costs payable                              401,365       396,672
Management and other operating advances (*)             536,185       501,498
                                                     ----------    ----------

                                                    $1,917,650    $1,878,270
                                                      =========     =========

(*) Includes loans from Local General Partners and affiliates totaling $78,670
and $70,236, respectively, bearing interest at 11%.

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:

                                                Year Ended December 31,
                                         2000           1999           1998
                                       -----------   -----------    -----------

Financial statement net loss            $(4,806,575)  $(4,914,664)  $(4,721,113)

Differences  between  depreciation
and amortization  expense records for
financial  reporting
purposes and the accelerated costs
recovery system utilized for
income tax purposes
                                          (587,944)      (795,344)     (669,242)

Tax exempt interest income                  (13,926)      (10,340)      (29,980)

Differences  resulting from parent
company having a different
fiscal year for income tax and
financial reporting purposes                 (30,780)      (33,716)      206,171

Excess losses allocated to minority
interest for income tax purposes                        0           0   296,927

Other, including accruals for financial
reporting not deductible for
tax purposes until paid
                                                73,390    304,440    (1,066,170)
                                             ----------    ---------  --------

Net loss as shown on the income
tax return for the calendar year ended     $(5,365,835) $(5,449,624)$(5,983,407)
                                               ==========  ==========  =========

NOTE 10 - Commitments and Contingencies

a)  Subsidiary Partnerships-Other

Clear Horizons Limited Partnership
----------------------------------
At December 31, 2000, Clear Horizons Limited Partnership ("Clear Horizons")
current liabilities exceed its current assets by over $157,000. Although this
condition could raise substantial doubt about Clear Horizons' ability to
continue as a going concern, such doubt is alleviated as follows:

1. Included in current liabilities at December 31, 2000 is $145,402 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, 2000.

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, 2001, uninsured cash and cash
equivalents approximated $809,000.

c)  Letters of Credit

As of December 31, 2000, the subsidiary partnerships were contingently liable on
open letters of credit as follows:

Description                                     Amount
-----------                                     ------

Development contingency                       $  22,400
Pennsylvania Housing Finance Agency              24,000
                                               --------

                                              $  46,400
                                              =========

d)  Other

The Partnership and BACs holders began to recognize Tax Credits with respect to
a Property when the Credit Period for such Property commenced. Because of the
time required for the acquisition, completion and rent-up of Properties, the
amount of Tax Credits per BAC has gradually increased over the first three years
of the Partnership. Housing Tax Credits not recognized in the first three years
will be recognized in the 11th through 13th years. For the 2000, 1999 and 1998
tax years, Housing Tax Credits of $8,728,115, $8,728,115 and $8,806,766 were
generated, respectively.



<PAGE>



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

None

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant.

The Partnership has no directors or executive officers. The Partnership's
affairs are managed and controlled by the General Partner. Certain information
concerning the directors and executive officers of Related Independence
Associates Inc. ("RIAI"), the sole general partner of the General Partner, is
set forth below.

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

Stephen M. Ross                     Director

Michael Brenner                     President and Chief Executive Officer

Alan P. Hirmes                      Senior Vice President

Stuart J. Boesky                    Senior Vice President

Marc D. Schnitzer                   Vice President

Denise L. Kiley                     Vice President

Glenn F. Hopps                      Treasurer

Teresa Wicelinski                   Secretary

STEPHEN M. ROSS, 61, is also President, Director and shareholder of The Related
Realty Group, Inc., the general partner of The Related Companies, L.P. He
graduated from the University of Michigan School of Business Administration with
a Bachelor of Science degree and from Wayne State University School of Law with
a Juris Doctor degree. Mr. Ross then received a Master of Laws degree in
taxation from New York University School of Law. He joined the accounting firm
of Coopers & Lybrand in Detroit as a tax specialist and later moved to New York,
where he worked for two large Wall Street investment banking firms in their real
estate and corporate finance departments. Mr. Ross formed the predecessor of The
Related Companies, L.P. in 1972 to develop, manage, finance and acquire
subsidized and conventional apartment developments. Mr. Ross also serves on the
Board of Trustees of Charter Municipal Mortgage Acceptance Company.

MICHAEL BRENNER, 55, is a Director of Aegis, and is the Executive Vice President
and Chief Financial Officer of TRCLP. Prior to joining TRCLP in 1996, Mr.
Brenner was a partner with Coopers & Lybrand, having served as managing partner
of its Industry Programs and Client Satisfaction initiatives from 1993-1996,
managing partner of the Detroit group of offices from 1986-1993 and Chairman of
its National Real Estate Industry Group from 1984-1986. Mr. Brenner graduated
summa cum laude from the University of Detroit with a Bachelors degree in
Business Administration and from the University of Michigan with a Masters of
Business Administration, with distinction. Mr. Brenner also serves on the Board
of Trustees of Charter Municipal Mortgage Acceptance Company and Aegis Realty,
Inc.

ALAN P. HIRMES,  46, 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 Directors of Aegis Realty,  Inc.
and Charter Municipal Mortgage Acceptance Company.

STUART J. BOESKY, 45, practiced real estate and tax law in New York City with
the law firm of Shipley & Rothstein (which subsequently merged with Strook &
Strook & Lavan LLP) 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 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 Directors of Aegis Realty, Inc., Charter Municipal Mortgage
Acceptance Company and American Mortgage Acceptance Company.

MARC D. SCHNITZER, 40, is responsible both for financial restructurings of real
estate properties and directing Related's acquisitions of properties generating
Housing Tax Credits. Mr. Schnitzer received a Masters of Business Administration
from The Wharton School of the University of Pennsylvania in December 1987
before joining Related in January 1988. From 1983 to January 1986, he was a
financial analyst for the First Boston Corporation in New York. Mr. Schnitzer
graduated summa cum laude with a Bachelor of Science in Business Administration
from the School of Management at Boston University in May 1983.

DENISE L. KILEY,  41, is responsible  for overseeing the due diligence and asset
management of all multifamily  residential  properties invested in RCC sponsored
corporate, public and private equity and debt funds. Prior to joining Related in
1990,  Ms.  Kiley  had  experience  acquiring,   financing  and  asset  managing
multifamily  residential  properties.  From 1981 through 1985 she was an auditor
with Price Waterhouse.  Ms. Kiley holds a Bachelor of Science in Accounting from
Boston College.

GLENN F. HOPPS,  38, 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, 35, 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.

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

                    Name and Address of     Amount and Nature of     Percentage
Title of Class      Beneficial Ownership    Beneficial Ownership       of Class
--------------      --------------------    --------------------      --------

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

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 June 1, 2001, 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.
                                      Amount and Nature of
Name of Beneficial Owner (1)          Beneficial Ownership      Percent of Class
------------------------              --------------------     ----------------

Lehigh Tax Credit Partners, Inc.      4,453.20 (2) (3)                    7.6%

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

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

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

Stephen M. Ross                       -                                     -

Michael Brenner                       -                                     -

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

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

Glenn F. Hopps                        -                                     -

Teresa Wicelinski                     -                                     -

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

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

(2) As set forth in Schedule 13D filed by Lehigh Tax Credit Partners L.L.C.
("Lehigh I") and Lehigh Tax Credit Partners, Inc., (the "Managing Member") on
June 10, 1997 with the Securities and Exchange Commission (the "Commission") and
pursuant to a letter agreement dated November 7, 1997 among the Partnership,
Lehigh I and the Related General Partner (the "Standstill Agreement"), Lehigh I
agreed that, prior to November 7, 2007 (the "Standstill Expiration Date"), it
will not and it will cause certain affiliates (including Lehigh II) not to (i)
acquire, attempt to acquire or make a proposal to acquire, directly or
indirectly, more than 45% (including BACs acquired through all other means) of
the outstanding BACs, (ii) seek to propose to enter into, directly or
indirectly, any merger, consolidation, business combination, sale or acquisition
of assets, liquidation, dissolution or other similar transaction involving the
Partnership, (iii) make, or in any way participate, directly or indirectly, in
any "solicitation" of "proxies" or "consents" (as such terms are used in the
proxy rules of the Commission) to vote any voting securities of the Partnership,
(iv) form, join or otherwise participate in a "group" (within the meaning of
Section 13 (d)(3) of the Securities and Exchange Act of 1934) with respect to
any voting securities of the Partnership, except those affiliates bound by the
Standstill Agreement will not be deemed to have violated it and formed a "group"
solely by acting in accordance with the Standstill Agreement, (v) disclose in
writing to any third party any intention, plan or arrangement inconsistent with
the terms of the Standstill Agreement, or (vi) loan money to, advise, assist or
encourage any person in connection with any action inconsistent with the terms
of the Standstill Agreement. In addition, Lehigh I agreed that until the
Standstill Expiration Date it will not sell any BACs acquired by it unless the
buyer of such BACs agrees to be bound by the Standstill Agreement; provided,
however, Lehigh I may make transfers in the secondary market to any purchaser
which represents that following such sale it will not own three (3%) percent or
more of the BACs outstanding. By the terms of the Standstill Agreement, Lehigh I
also agreed to vote its BACs in the same manner as a majority of all voting BACs
holders; provided, however, Lehigh I is entitled to vote its BACs as it
determines with regard to any proposal (i) to remove the General Partner as a
general partner of the Partnership or (ii) concerning the reduction of any fees,
profits, distributions or allocations for the benefit of the General Partner or
its affiliates. The addresses of each of the Partnership, Lehigh I and the
General Partner is 625 Madison Avenue, New York, New York 10022.

(3) All of such BACs represent BACs owned directly by Lehigh I and Lehigh Tax
Credit Partners II, L.L.C. ("Lehigh II"), for which the Managing Member serves
as managing member. As of June 1, 2001, 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 is 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.



<PAGE>



                                     PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
                                                                     Sequential
                                                                          Page
                                                                      ----------


(a) 1.   Consolidated Financial Statements

         Independent Auditors' Report                                         14

         Consolidated Balance Sheets at March 31, 2001 and 2000               56

         Consolidated Statements of Operations for the Years
         Ended March 31, 2001, 2000 and 1999                                  57

         Consolidated  Statements of Changes in Partners'
         Capital  (Deficit) for the Years Ended March 31, 2001,
         2000 and 1999                                                        58

         Consolidated Statements of Cash Flows for the Years
         Ended March 31, 2001, 2000 and 1999                                  59

         Notes to Consolidated Financial Statements                           61

(a) 2.   Consolidated Financial Statement Schedules

         Independent Auditors' Report                                         81

         Schedule I - Condensed Financial Information of Registrant           82

         Schedule III - Real Estate and Accumulated Depreciation              85

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

(a) 3.   Exhibits

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

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

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

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

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

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

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

         (21)   Subsidiaries of the Registrant                                78

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

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

(b)      Reports on Form 8-K

         No reports on Form 8-K were filed during the quarter.


                                                                 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



<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 13, 2001                By: /s/ Michael Brenner
                                        -------------------
                                        Michael Brenner
                                        President and Chief Executive Officer
                                        (Principal Executive 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
--------------        ------------------------------      ------------------

                             President and Chief Executive
                             Officer (principal executive
/s/ Michael Brenner          officer) of Related Independence
-------------------
Michael Brenner              Associates Inc.                     June 13, 2001




                             Senior Vice President
                             (principal financial officer) of Related
/s/ Alan P. Hirmes           Independence Associates Inc.        June 13, 2001
------------------
Alan P. Hirmes


                             Treasurer (principal accounting
/s/ Glenn F. Hopps           officer) of Related Independence
------------------
Glenn F. Hopps               Associates Inc.                     June 13, 2001



/s/ Stephen M. Ross          Director of Related Independence
-------------------
Stephen M. Ross              Associates Inc.                     June 13, 2001



<PAGE>



                          INDEPENDENT AUDITORS' REPORT



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



In connection with our audits of the consolidated financial statements of
Independence Tax Credit Plus L.P. II and Subsidiaries (A Delaware Limited
Partnership) included in the Form 10-K as presented in our opinion dated June
11, 2001 on page 14, and based on the reports of other auditors, we have also
audited supporting Schedule I for the 2000, 1999 and 1998 Fiscal Years and
Schedule III at March 31, 2001. 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 11, 2001



<PAGE>


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


                            CONDENSED BALANCE SHEETS


                                     ASSETS

                                                            March 31,
                                                  -----------------------------
                                                      2001             2000
                                                  -------------   --------------

Cash and cash equivalents                         $     511,088  $    506,231
Cash held in escrow                                      631,000       631,000
Investment in subsidiary partnerships                 26,134,022    29,230,053
Other assets                                              34,293        34,293
                                                   -------------  ------------

Total assets                                         $27,310,403   $30,401,577
                                                      ==========    ==========



                        LIABILITIES AND PARTNERS' CAPITAL



Due to general partner and affiliates              $  2,034,819  $  1,382,961

Other liabilities                                         5,950         6,440
                                                  ----------------------------

Total liabilities                                     2,040,769     1,389,401

Partners' capital                                     25,269,634    29,012,176
                                                      ----------    ----------

Total liabilities and partners' capital              $27,310,403   $30,401,577
                                                      ==========    ==========

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.



<PAGE>


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







                       CONDENSED STATEMENTS OF OPERATIONS


                              Year Ended March 31,
                                       2001            2000         1999
                                    ------------    ------------  ------------

Revenues

Other income                          $     79,493  $     37,090  $     22,485
                                      -----------   -----------   -----------

Total revenues                              79,493        37,090        22,485
                                       -----------   -----------   -----------

Expenses

Administrative and management               110,380        56,840       158,614
Administrative and management-related parties683,612       643,845       646,678
                                        ----------   -----------   -----------

Total expenses                             793,992       700,685       805,292
                                        ----------   -----------   -----------

Loss from operations                      (714,499)     (663,595)     (782,807)

Equity in loss of subsidiary
 partnerships (*)                        (3,028,043)   (3,933,072)   (3,973,691)
                                        ----------    ----------    ----------

Net loss                               $(3,742,542)  $(4,596,667)  $(4,756,498)
                                         ==========    ==========    ==========

(*) Includes suspended prior year losses in excess of investment in accordance
with equity method of accounting which amounted to $0, $0 and $63,001 for 2001,
2000 and 1999, respectively.





<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

                                                Year Ended March 31,
                                           2001           2000          1999
                                       ------------   ------------   ---------

Cash flows from operating activities:
Net loss                                $(3,742,542)  $(4,596,667)  $(4,756,498)
                                         ----------    ----------=   ----------

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

Equity in loss of subsidiary partnerships  3,028,043     3,933,072     3,973,691

Increase (decrease) in liabilities:

Due to general partners and affiliates      651,858       644,041       526,958
Other liabilities                              (490)      (16,629)       23,069
                                      --------------  ------------- ------------

Total adjustments                         3,679,411     4,560,484     4,523,718
                                         ----------    ----------    ----------

Net cash used in operating activities       (63,131)      (36,183)     (232,780)
                                        -----------   ------------   ----------

Cash flows from investing activities:

Investment in subsidiary partnerships             0             0    (1,026,071)
Increase in other assets                          0        43,815             0
Decrease in cash held in escrow-
  purchase price payments                         0              0      126,620
                                     -----------------------------  -----------

Net cash provided by (used in)
  investing activities                           0        43,815      (899,451)
                                     --------------   -----------   -----------

Net cash provided by financing activities:

Distributions from subsidiary partnerships   67,988        70,438        65,538
                                         ----------    ----------   -----------

Net increase (decrease) in cash and
 cash equivalents                              4,857      78,070    (1,066,693)

Cash and cash equivalents, beginning of year 506,231       428,161     1,494,854
                                         ----------    ----------    ----------

Cash and cash equivalents, end of year  $   511,088   $   506,231   $   428,161
                                         ==========    ==========    ==========



<PAGE>



                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                   Partnership Property Pledged as Collateral
                                 MARCH 31, 2001


<TABLE>

<CAPTION>


                                                                                     Cost Capitalized
                                                          Initial Cost to Partnership   Subsequent to
                                                          --------------------------
                                                                       Buildings and    Acqusition:
           Description                         Encumbrances    Land     Improvements   Improvements
---------------------------------------------  ------------    ----     ------------   ------------


Apartment Complexes
<S>                                            <C>            <C>        <C>              <C>
Lincoln Renaissance
  Reading, PA                                  $  2,553,000    $    0    $5,240,173      $ 236,043
United Germano Millgate Limited Partnership
  Chicago, IL                                     9,901,660   580,000   6,070,477        10,751,260
Mansion Court Associates
  Philadelphia, PA                                1,431,244    19,072   3,224,984           212,351
Derby Run Associates L.P.
  Hampton, VA                                      4,478,761   407,410   3,069,628        4,553,128
Renaissance Plaza Assoc.
  Baltimore, MD                                   6,636,466   684,255   9,840,170         4,421,290
Tasker Village
  Philadelphia, PA                                1,784,881     18,235           0        3,932,223
Martha Bryant Manor, L.P.
  Los Angeles, CA                                 7,703,599     966,577           0      10,607,936
Colden Oaks Limited Partnership
  Los Angeles, CA                                5,440,566       922,790           0      2,050,241
Brynview Terrace Limited Partnership
  Los Angeles, CA                                1,009,446       175,943           0      1,437,542
NLEDC, L.P.
  Los Angeles, CA                                4,303,338       624,000           0     5,884,672
Creative Choice Homes VI Ltd.
  Miami, FL                                      3,561,564       650,072       13,134    5,393,187
P&P Homes for the Elderly, L.P.
  Los Angeles, CA                                6,324,429            0           0      9,913,788
Clear Horizons Limited Partnership
  Shreveport, LA                                 1,040,000      15,304      2,058,729      169,981
Neptune Venture L.P.
  Neptune Township, NJ                                  0        460,631    10,151,873     106,746
Affordable Green Associates L.P.
  New York, NY                                   2,211,295       20,500       3,506,961     35,796
                                            -------------- -------------     -----------   --------


                                              $58,380,249     $5,544,789    $43,176,129  $59,706,184
                                                ==========    =========      ==========   ==========

</TABLE>
<TABLE>
<CAPTION>


                                                                                                                      Life on which
                                                                                                                     Depreciation in
                                                 Gross  Amount at which Carried At Close of Period
                                               --------------------------------------------------  Year of             Latest Income
                                                       Buildings and              Accumulated   Construction/   Date  Statements are
       Description                              Land    Improvements     Total    Depreciation    Renovation  AcquiredComputed(a)(b)
--------------------------------------------    ----    ------------     -----     ------------   ------------  --------  ----------
Apartment Complexes

<S>                                           <C>        <C>              <C>         <C>           <C>        <C>           <C>
Lincoln Renaissance                           $  5,373   $ 5,470,843      $5,476,216  $984,070      1993-94    Apr. 1993     20-40
  Reading, PA
United Germano Millgate Limited Partnership     585,374      16,816,363     17,401,737  5,369,878     1993-94  Oct. 1993     10-25
  Chicago, IL
Mansion Court Associates                         25,095       3,431,312      3,456,407    609,936     1993-94 Nov. 1993     20-40
  Philadelphia, PA
Derby Run Associates L.P.                        409,771       7,620,395      8,030,166  1,389,351   1994-95    Feb. 1994      40
  Hampton, VA
Renaissance Plaza Assoc.                        686,616      14,259,099     14,945,715  2,186,467    1994-95     Feb. 1994     27.5
  Baltimore, MD
Tasker Village                                   20,596       3,929,862      3,950,458    653,308    1994-95     May 1994        40
  Philadelphia, PA
Martha Bryant Manor, L.P.                       968,938      10,605,575     11,574,513  1,700,392    1994-95   Sept. 1994       7.5
  Los Angeles, CA
Colden Oaks Limited Partnership                  925,151       2,047,880      2,973,031    713,117   1994-95   Sept. 1994        31
  Los Angeles, CA
Brynview Terrace Limited Partnership            178,304       1,435,181      1,613,485    235,643    1994-95  Sept. 1994        27.5
  Los Angeles, CA
NLEDC, L.P.                                     626,361       5,882,311      6,508,672  1,020,323    1994-95 Sept. 1994        27.5
  Los Angeles, CA
Creative Choice Homes VI Ltd.                   652,433       5,403,960      6,056,393  1,274,312    1994-95  Sept. 1994        40
  Miami, FL
P&P Homes for the Elderly, L.P.                 642,360       9,271,428      9,913,788  1,080,075    1994-95   Sept. 1994        30
  Los Angeles, CA
Clear Horizons Limited Partnership               17,665       2,226,349      2,244,014    526,676    1994-95   Dec. 1994        27.5
  Shreveport, LA
Neptune Venture L.P.                            462,465      10,256,785     10,719,250  1,316,482    1995-96     Apr. 1995        40
  Neptune Township, NJ
Affordable Green Associates L.P.                 22,334       3,540,923      3,563,257     706,852   1995-96     May 1995        27
  New York, NY                                   --------     ---------   ------------   ----------


                                              $6,228,836    $102,198,266   $108,427,102  $19,766,882
                                              =========     ===========    ===========    ==========

</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.


<PAGE>
<TABLE>
<CAPTION>



                      INDEPENDENCE TAX CREDIT PLUS L.P. II
                                AND SUBSIDIARIES
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                   Partnership Property Pledged as Collateral
                                 MARCH 31, 2001

                                      Cost  of  Property  and Equipment                           Accumulated Deprecitaion
                                    --------------------------------------                 --------------------------------------
                                                                    Year Ended  March 31,
                                   2001             2000               1999            2001               2000              1999
      ----------------------------------------------------------------------------------------------------------------------------



<S>                             <C>               <C>               <C>               <C>               <C>             <C>
Balance at beginning of period  $108,138,808      $107,966,312      $107,012,267      $16,288,288       $12,842,757     $  9,334,717
Additions during period:
Improvements                         296,945           179,287           977,148
Depreciation expense                                                                    3,482,114         3,452,322        3,508,040

Deductions during period:
Dispositions                          (8,651)           (6,791)          (23,103)          (3,520)           (6,791)               0
                               -------------   ---------------   ---------------  ---------------    -------------- ---------------

Balance at close of period      $108,427,102      $108,138,808      $107,966,312     $ 19,766,882       $16,288,288      $12,842,757
                                 ===========       ===========       ===========      ===========        ==========       ==========

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.



</TABLE>