SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   Form 10-KSB
(Mark One)
[X]   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934

                    For the fiscal year ended December 31, 2002

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

                For the transition period from _________to _________

                         Commission file number 0-14369

                   SHELTER PROPERTIES VII LIMITED PARTNERSHIP
                 (Name of small business issuer in its charter)

      South Carolina                                           57-0784852
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                           Identification No.)

                          55 Beattie Place, PO Box 1089
                        Greenville, South Carolina 29602
                    (Address of principal executive offices)

                            Issuer's telephone number
                                 (864) 239-1000

           Securities registered under Section 12(b) of the Exchange Act:

                                      None

           Securities registered under Section 12(g) of the Exchange Act:

                      Units of Limited Partnership Interest
                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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___

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of the  Partnership's  knowledge  in  definitive  proxy or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year.  $1,666,000

State the aggregate  market value of the voting  partnership  interests  held by
non-affiliates  computed  by  reference  to the price at which  the  partnership
interests  were sold,  or the average bid and asked  prices of such  partnership
interests as of December 31, 2002. No market exists for the limited  partnership
interests of the Registrant;  and,  therefore,  no aggregate market value can be
determined.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE

<PAGE>


The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government  regulations.  The discussions of the  Registrant's
business  and  results  of  operations,   including  forward-looking  statements
pertaining to such matters,  do not take into account the effects of any changes
to the  Registrant's  business  and results of  operations.  Actual  results may
differ  materially  from those described in the  forward-looking  statements and
will  be  affected  by  a  variety  of  risks  and  factors  including,  without
limitation:  national and local economic  conditions;  the terms of governmental
regulations that affect the Registrant and interpretations of those regulations;
the competitive  environment in which the Registrant operates;  financing risks,
including the risk that cash flows from  operations may be  insufficient to meet
required  payments of  principal  and  interest;  real estate  risks,  including
variations  of real  estate  values and the  general  economic  climate in local
markets and competition for tenants in such markets; and possible  environmental
liabilities.   Readers  should  carefully  review  the  Registrant's   financial
statements and the notes thereto,  as well as the risk factors  described in the
documents  the  Registrant  files  from  time to time  with the  Securities  and
Exchange Commission.

                                     PART I

Item 1.     Description of Business

Shelter  Properties VII (the  "Partnership" or "Registrant")  was organized as a
limited partnership under the laws of the State of South Carolina on October 29,
1984.  The general  partner  responsible  for  management  of the  Partnership's
business is Shelter Realty VII  Corporation,  a South Carolina  corporation (the
"Corporate General  Partner").  The Corporate General Partner is a subsidiary of
Apartment  Investment and Management Company  ("AIMCO"),  a publicly traded real
estate investment trust. The other general partner is AIMCO Properties, L.P., an
affiliate of the Corporate General Partner and AIMCO. The Partnership  Agreement
provides  that the  Partnership  is to  terminate  on  December  31, 2024 unless
terminated prior to such date.

The  Partnership is engaged in the business of operating and holding real estate
properties  for  investment.  The  Partnership  acquired two existing  apartment
properties  and a  newly  constructed  apartment  property  during  1985  in its
acquisition  phase.  The  Partnership  continues to own and operate one of these
properties. See "Item 2. Description of Property".

Commencing  March 18, 1985 the Partnership  offered,  pursuant to a Registration
Statement filed with the Securities and Exchange Commission,  up to 40,000 Units
of Limited Partnership  Interest (the "Units") at a purchase price of $1,000 per
Unit with a minimum  purchase of 5 Units  ($5,000),  or 2 Units  ($2,000) for an
Individual Retirement Account.

The offering  terminated on November 5, 1985. Upon  termination of the offering,
the Partnership had accepted subscriptions for 17,343 Units, including 100 Units
purchased by the Corporate  General  Partner,  for an aggregate of  $17,343,000.
Since its initial  offering,  the Partnership has not received,  nor are limited
partners required to make any additional capital contributions.

The Partnership  has no employees.  Management and  administrative  services are
provided  by the  Corporate  General  Partner  and  by  agents  retained  by the
Corporate  General  Partner.  An affiliate of the Corporate  General Partner has
been providing such property management services.

Risk Factors

The  real  estate  business  in which  the  Partnership  is  engaged  is  highly
competitive.  There are other  residential  properties within the market area of
the Partnership's properties.  The number and quality of competitive properties,
including  those which may be managed by an affiliate  of the  Managing  General
Partner,  in such market area could have a material  effect on the rental market
for the  apartments at the  Partnership's  properties  and the rents that may be
charged  for  such  apartments.  While  the  Managing  General  Partner  and its
affiliates  own and/or  control a significant  number of apartment  units in the
United  States,  such  units  represent  an  insignificant  percentage  of total
apartment units in the United States and competition for apartments is local.

Laws benefiting  disabled persons may result in the Partnership's  incurrence of
unanticipated  expenses.  Under the Americans with  Disabilities Act of 1990, or
ADA,  all places  intended to be used by the public are required to meet certain
Federal  requirements  related to access and use by disabled persons.  Likewise,
the Fair Housing Amendments Act of 1988, or FHAA, requires apartments properties
first occupied after March 13, 1990 to be accessible to the  handicapped.  These
and other  Federal,  state  and  local  laws may  require  modifications  to the
Partnership's   properties,   or  restrict   renovations   of  the   properties.
Noncompliance  with  these laws could  result in the  imposition  of fines or an
award of  damages  to private  litigants  and also  could  result in an order to
correct any  non-complying  feature,  which could result in substantial  capital
expenditures.   Although  the  Corporate   General  Partner  believes  that  the
Partnership's   properties  are   substantially   in  compliance   with  present
requirements,  the Partnership may incur  unanticipated  expenses to comply with
the ADA and the FHAA.

Both  the  income  and  expenses  of  operating  the  properties  owned  by  the
Partnership are subject to factors outside of the Partnership's control, such as
changes in the supply and demand for similar  properties  resulting from various
market  conditions,  increases/decreases  in unemployment or population  shifts,
changes in the availability of permanent mortgage  financing,  changes in zoning
laws,  or changes in patterns or needs of users.  In  addition,  there are risks
inherent in owning and operating residential  properties because such properties
are  susceptible to the impact of economic and other  conditions  outside of the
control of the Partnership.

There have been, and it is possible there may be other, Federal, state and local
legislation  and  regulations   enacted   relating  to  the  protection  of  the
environment.  The Partnership is unable to predict the extent,  if any, to which
such new  legislation  or  regulations  might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.

The Partnership  monitors its properties for evidence of pollutants,  toxins and
other dangerous substances, including the presence of asbestos. In certain cases
environmental  testing has been performed which resulted in no material  adverse
conditions or liabilities.  In no case has the Partnership  received notice that
it is a potentially  responsible party with respect to an environmental clean up
site.

Insurance  coverage is becoming  more  expensive  and  difficult to obtain.  The
current market is characterized by rising premium rates, increasing deductibles,
and more restrictive  coverage  language.  Recent  developments have resulted in
significant  increases in insurance  premiums and have made it more difficult to
obtain certain types of insurance.  As an example,  many insurance  carriers are
excluding  mold-related  risks  from  their  policy  coverages,  or  are  adding
significant restrictions to such coverage.  Continued deterioration in insurance
market  place  conditions  may  have a  negative  effect  on  the  Partnership's
operating results.

A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operation"  included in "Item 6" of this Form
10-KSB.

Item 2.     Description of Property

The following table sets forth the Partnership's investment in a property:

<TABLE>
<CAPTION>

                                   Date of
Property                           Purchase       Type of Ownership           Use

<S>                                <C>   <C>
Governor's Park Apartments         09/30/85  Fee ownership, subject to   Apartment
  Ft. Collins, Colorado                      first and second            188 units
                                             mortgages (1)
</TABLE>

     (1)  Property is held by a Limited Partnership which the Partnership owns a
          99.99% interest in.

During the year ended  December 31, 2001,  the  Partnership  sold Hickory  Ridge
Apartments  to an  unrelated  third  party  for net  proceeds  of  approximately
$11,333,000  after payment of closing costs. The Partnership  realized a gain of
approximately  $4,173,000  as  a  result  of  the  sale.  The  Partnership  used
approximately  $5,990,000 of the net proceeds to repay the mortgage  encumbering
the property. In accordance with Statement of Financial Accounting Standards No.
144, the accompanying  consolidated  statements of operations have been restated
as of January 1, 2001 to reflect the  operations of Hickory Ridge  Apartments as
discontinued operations.

Schedule of Property

Set forth  below for the  Partnership's  property is the gross  carrying  value,
accumulated depreciation,  depreciable life, method of depreciation, and Federal
tax basis as of December 31, 2002.

<TABLE>
<CAPTION>

                            Gross
                           Carrying    Accumulated                          Federal
Property                    Value     Depreciation     Rate     Method     Tax Basis
                               (in thousands)                           (in thousands)
Governor's Park
<S>                        <C>           <C>         <C>                    <C>
  Apartments               $ 8,097       $ 4,297     5-39 yrs     S/L       $ 2,256
</TABLE>

See "Note A" to the consolidated financial statements included in "Item 7" for a
description of the Partnership's depreciation and capitalization policies.


<PAGE>



Schedule of Property Indebtedness

The  following  table  sets  forth  certain  information  relating  to the loans
encumbering the Partnership's property.

<TABLE>
<CAPTION>

                         Principal                                           Principal
                         Balance At      Stated                               Balance
                        December 31,    Interest     Period     Maturity       Due At
Property                    2002          Rate     Amortized      Date        Maturity
                       (in thousands)                                      (in thousands)
Governor's Park
  Apartments
<S>                        <C>           <C>       <C>          <C>   <C>     <C>
  1st mortgage             $6,868        7.12%     240 months   03/01/22      $     0
</TABLE>

On  February  8, 2002,  the  Partnership  refinanced  the  mortgage  encumbering
Governor's  Park. The refinancing  replaced the first mortgage of  approximately
$4,234,000 and the second mortgage of approximately $147,000 with a new mortgage
of $6,990,000. The new mortgage carries a stated interest rate of 7.12% compared
to the 7.83% interest rate on the old mortgages. Principal and interest payments
on the mortgage of approximately  $55,000 are due monthly until the loan matures
in March 2022 at which time the loan is scheduled to be fully  amortized.  Total
capitalized loan costs were approximately $278,000. The Partnership recognized a
loss on the early  extinguishment  of debt of approximately  $241,000 due to the
write-off of unamortized loan costs and debt discount and prepayment penalties.

Schedule of Rental Rates and Occupancy

Average   annual   rental  rates  and  occupancy  for  2002  and  2001  for  the
Partnership's property are as follows:

                                       Average Annual                 Average
                                        Rental Rates                 Occupancy
                                         (per unit)
 Property                           2002           2001           2002      2001

 Governor's Park Apartments       $ 8,702         $ 9,109         92%        92%

As noted under "Item 1.  Description of Business",  the real estate  industry is
highly  competitive.  The Partnership's  property is subject to competition from
other residential apartment complexes in the area. The Corporate General Partner
believes that the property is adequately  insured.  The property is an apartment
complex  which  leases its units for lease terms of one year or less.  No tenant
leases  10% or more of the  available  rental  space.  The  property  is in good
physical  condition,  subject to normal  depreciation  and  deterioration  as is
typical for assets of this type and age.


<PAGE>



Schedule of Real Estate Taxes and Rates

Real estate taxes and rates in 2002 for the property were:

                                            2002            2002
                                           Billing          Rate
                                       (in thousands)

       Governor's Park Apartments           $ 81            8.72%

Capital Improvements

Governor's Park Apartments:  The Partnership completed  approximately $68,000 in
capital expenditures at Governor's Park,  consisting primarily of floor covering
replacements,   appliances,   miniblinds,   and  parking  area  upgrades.  Those
improvements  were funded from  operating  cash and  replacement  reserves.  The
Partnership  is  currently  evaluating  the  capital  improvement  needs  of the
property for the upcoming  year and  currently  expects to budget  approximately
$56,000.  Additional  improvements may be considered during 2003 and will depend
on the physical  condition of the property as well as  replacement  reserves and
anticipated cash flow generated by the property.

Item 3.     Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its Corporate  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purports  to  assert  claims  on  behalf  of a class  of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  which are named as nominal  defendants,  challenging,  among other
things,  the  acquisition  of interests  in certain  Corporate  General  Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities which were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged  into AIMCO.  The  plaintiffs  seek  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
On June 25, 1998, the Corporate General Partner filed a motion seeking dismissal
of the action.  In lieu of responding  to the motion,  the  plaintiffs  filed an
amended complaint.  The Corporate General Partner filed demurrers to the amended
complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December 14, 1999, the Corporate  General Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001,  the  Corporate  General  Partner and its  affiliates  filed a
demurrer to the third amended  complaint.  On May 14, 2001,  the Court heard the
demurrer to the third amended  complaint.  On July 10, 2001, the Court issued an
order  sustaining  defendants'  demurrer on certain  grounds.  On July 20, 2001,
Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
Plaintiffs  filed a fourth amended class and  derivative  action  complaint.  On
September 12, 2001, the Court denied Plaintiffs' motion for reconsideration.  On
October 5, 2001, the Corporate General Partner and affiliated defendants filed a
demurrer to the fourth amended complaint,  which was heard on December 11, 2001.
On February 2, 2002,  the Court served its order  granting in part the demurrer.
The  Court has  dismissed  without  leave to amend  certain  of the  plaintiffs'
claims.  On February 11, 2002,  plaintiffs  filed a motion  seeking to certify a
putative  class  comprised of all  non-affiliated  persons who own or have owned
units  in  the  partnerships.  The  Corporate  General  Partner  and  affiliated
defendants  oppose the motion.  On April 29,  2002,  the Court held a hearing on
plaintiffs' motion for class  certification and took the matter under submission
after further  briefing,  as ordered by the court, was submitted by the parties.
On July 10, 2002,  the Court entered an order vacating the current trial date of
January 13, 2003 (as well as the  pre-trial  and  discovery  cut-off  dates) and
stayed the case in its  entirety  through  November  7, 2002 so that the parties
could have an opportunity to discuss settlement.  On October 30, 2002, the court
entered an order extending the stay in effect through January 10, 2003.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action described below. The Court
has  scheduled  the hearing on  preliminary  approval  for April 4, 2003 and the
hearing on final approval for June 2, 2003.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of  settlement)  and up to $ 1 million toward the cost
of independent  appraisals of the Partnerships'  properties by a Court appointed
appraiser. An affiliate of the Corporate General Partner has also agreed to make
a tender offer to purchase all of the partnership  interests in the Partnerships
within one year of final  approval,  if it is granted,  and to provide  partners
with the  independent  appraisals  at the time of these  tenders.  The  proposed
settlement  also provides for the  limitation  of the allowable  costs which the
Corporate  General  Partner or its affiliates  will charge the  Partnerships  in
connection with this litigation and imposes limits on the class counsel fees and
costs in this  litigation.  If the  Court  grants  preliminary  approval  of the
proposed settlement in March, a notice will be distributed to partners providing
detail on the terms of the proposed settlement.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended  complaint.  The first amended complaint in the Heller action is
brought as a purported  derivative  action,  and asserts  claims for among other
things  breach  of  fiduciary  duty;  unfair  competition;   conversion,  unjust
enrichment;  and judicial  dissolution.  Plaintiffs in the Nuanes action filed a
motion to  consolidate  the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed  without  leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the Corporate  General Partner and affiliated
defendants  moved to strike the first  amended  complaint  in its  entirety  for
violating  the Court's July 10, 2001 order  granting in part and denying in part
defendants'  demurrer in the Nuanes action, or alternatively,  to strike certain
portions of the complaint based on the statute of limitations.  Other defendants
in the action  demurred to the fourth  amended  complaint,  and,  alternatively,
moved to strike the complaint. On December 11, 2001, the court heard argument on
the motions  and took the matters  under  submission.  On February 4, 2002,  the
Court  served  notice of its order  granting  defendants'  motion to strike  the
Heller complaint as a violation of its July 10, 2001 order in the Nuanes action.
On March 27, 2002,  the plaintiffs  filed a notice  appealing the order striking
the  complaint.  Before  completing  briefing on the appeal,  the parties stayed
further proceedings in the appeal pending the Court's review of the terms of the
proposed settlement described above.

The  Corporate  General  Partner  does  not  anticipate  that  any  costs to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.

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

During the quarter ended December 31, 2002, no matter was submitted to a vote of
the Unit holders through the solicitation of proxies or otherwise.

<PAGE>

                                     PART II

Item 5.     Market for the Partnership Equity and Related Partner Matters

The Partnership,  a publicly-held  limited partnership,  offered and sold 17,343
limited  partnership  units  ("Units"),  including  100 Units  purchased  by the
Corporate General Partner for proceeds aggregating $17,343,000.  The Partnership
currently  has 700  holders  of record  owning  an  aggregate  of 17,343  Units.
Affiliates of the Corporate  General Partner owned 10,779 Units or approximately
62.15% at December 31, 2002.  No public  trading  market has  developed  for the
Units, and it is not anticipated that such a market will develop in the future.

The following table sets forth the distributions made by the Partnership for the
years ended December 31, 2002 and 2001.

<TABLE>
<CAPTION>

                                        Per Limited                        Per Limited
                        Year Ended      Partnership       Year Ended       Partnership
                    December 31, 2002       Unit      December 31, 2001       Unit

<S>                        <C>              <C>              <C>             <C>
Operations                 $ --             $ --             $ 86            $ 4.90
Refinancing
  proceeds                 1,850 (1)       106.67             567 (2)          32.69
Sale proceeds
  (3)                        638            36.79            4,809            277.29
                          $2,488          $143.46           $5,462           $314.88
</TABLE>

(1) From the refinancing of Governor's Park Apartments in February 2002.

(2) From the previously undistributed refinancing proceeds of Hickory Ridge.

(3) From the sale of Hickory Ridge Apartments in July 2001.

Future cash  distributions  will depend on the levels of net cash generated from
operations,  the availability of cash reserves, the timing of the debt maturity,
refinancing   and/or  property  sale.  The  Partnership's   cash  available  for
distribution is reviewed on a monthly basis.  There can be no assurance that the
Partnership  will generate  sufficient  funds from  operations,  after  required
capital  expenditures,  to permit any  distributions  to its partners in 2003 or
subsequent   periods.   See  "Item  2.   Description  of  Properties  -  Capital
Improvements"   for  information   relating  to  capital   expenditures  at  the
properties.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 10,779 limited  partnership  units
(the "Units") in the Partnership representing 62.15% of the outstanding units at
December  31,  2002.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire additional units of limited partnership  interest in the
Partnership  in  exchange  for cash or a  combination  of cash and  units in the
operating  partnership  of AIMCO  either  through  private  purchases  or tender
offers. Under the Partnership  Agreement,  unitholders holding a majority of the
Units are  entitled to take action with  respect to a variety of matters,  which
would  include  voting on certain  amendments to the  Partnership  Agreement and
voting to remove the Corporate General Partner.  As a result of its ownership of
62.15% of the  outstanding  Units,  AIMCO is in a position  to control  all such
voting decisions with respect to the Registrant.  Although the Corporate General
Partner owes fiduciary duties to the limited  partners of the  Partnership,  the
Corporate  General  Partner  also  owes  fiduciary  duties  to AIMCO as its sole
stockholder.  As a result,  the  duties of the  Corporate  General  Partner,  as
corporate general partner,  to the Partnership and its limited partners may come
into conflict with the duties of the Corporate  General Partner to AIMCO, as its
sole stockholder.

Item 6.     Management's Discussion and Analysis or Plan of Operation

This item should be read in conjunction with the financial  statements and other
items contained elsewhere in this report.

Results of Operations

The   Partnership's   net  loss  for  the  year  ended  December  31,  2002  was
approximately $119,000 compared to net income of approximately  $4,300,000,  for
the year ended  December 31, 2001. The decrease in net income for the year ended
December  31, 2002 was due to the gain on the sale of Hickory  Ridge  Apartments
recognized in 2001. Effective January 1, 2002, the Partnership adopted Statement
of Financial  Accounting  Standards No. 144,  "Accounting  for the Impairment or
Disposal of Long-Lived  Assets",  which  established  standards for the way that
public business  enterprises report information about long-lived assets that are
either  being held for sale or have  already  been  disposed of by sale or other
means.  The standard  requires that  operations  for a long-lived  asset that is
being  held  for  sale  or  has  already  been  disposed  of  be  reported  as a
discontinued  operation  on  the  statement  of  operations.  As a  result,  the
accompanying  consolidated  statements  of  operations  have been restated as of
January  1, 2001 to  reflect  the  operations  of Hickory  Ridge  Apartments  as
discontinued operations.

On July 16, 2001, the Partnership  sold Hickory Ridge Apartments to an unrelated
third  party for net  proceeds of  approximately  $11,333,000  after  payment of
closing costs. The Partnership realized a gain of approximately  $4,173,000 as a
result of the sale. The  Partnership  used  approximately  $5,990,000 of the net
proceeds to repay the  mortgages  encumbering  the  property.  In addition,  the
Partnership  recorded a loss on early  extinguishment  of debt of  approximately
$7,000 as a result of  unamortized  loan costs being written off. As a result of
the sale,  the  operations  of the  property  are being  shown as  "discontinued
operations"  for the year ended  December 31,  2001.  Included in this amount is
approximately $1,304,000 of revenue generated by the property.

Effective  April  1,  2002,  the  Partnership  adopted  Statement  of  Financial
Accounting  Standards No. 145,  "Recession of FASB  Statements No, 4, 44 and 64.
SFAS No. 4 "Reporting  Gains and Losses from  Extinguishment  of Debt," required
that all gains and losses  from  extinguishment  of debt be  aggregated  and, if
material, classified as an extraordinary item. SFAS No. 145 rescinds SFAS No. 4,
and  accordingly,  gains and losses from  extinguishment  of debt should only be
classified   as   extraordinary   if  they  are  unusual  in  nature  and  occur
infrequently. As a result, the accompanying consolidated statement of operations
have  been  restated  as of  January  1,  2001 to  reflect  the  loss  on  early
extinguishment of debt in "loss from discontinued operations".

During the year ended  December 31, 2000, a net casualty  gain of  approximately
$81,000 was recognized at Hickory Ridge Apartments. The casualty gain related to
a fire that  damaged 5 apartment  units in May 2000.  The gain was the result of
insurance proceeds of approximately  $125,000 offset by the write-off of the net
book  value of damaged  units of  approximately  $44,000.  During the year ended
December 31, 2001 an additional  casualty gain of approximately  $18,000 related
to this fire was recorded.  The additional  gain was a result of final insurance
proceeds of  approximately  $18,000 received in February 2001. Since the related
assets  were  written  off during the year ended  December  31,  2000 the entire
proceeds were recognized as a gain, which is included in "Loss from discontinued
operations" at December 31, 2001.

Excluding the  discontinued  operations,  the loss from  operations for the year
ended  December  31,  2002 was  approximately  $119,000  compared  to  income of
approximately  $262,000 for the year ended  December  31, 2001.  The decrease in
income from continuing  operations is due to an increase in total expenses and a
decrease  in  total  revenues.  The  decrease  in  total  revenue  is due to the
decreases in rental  income and other  income.  The decrease in rental income is
due to the decrease in average rental rates at Governor's Park Apartments. Other
income decreased due to a decrease in interest income. Interest income decreased
due to lower cash balances maintained in interest bearing accounts.

Total expenses increased for the year ended December 31, 2002 due to an increase
in interest  expense and the  recognition of a loss on early  extinguishment  of
debt  from  the  refinancing  of  the  mortgage   encumbering   Governor's  Park
Apartments.  Interest  expense  increased  due to the higher  debt  balance as a
result of the refinancing of the mortgage encumbering Governor's Park Apartments
in February 2002.

Included in general and administrative  expense for the years ended December 31,
2002 and 2001 are management  reimbursements to the Corporate General Partner as
allowed under the Partnership Agreement. In addition,  costs associated with the
quarterly and annual  communications  with investors and regulatory agencies and
the annual audit  required by the  Partnership  Agreement  are also  included in
general and administrative expenses.

As part of the ongoing business plan of the Partnership,  the Corporate  General
Partner  monitors the rental market  environment of its  investment  property to
assess the feasibility of increasing rents,  maintaining or increasing occupancy
levels and protecting the Partnership from increases in expense. As part of this
plan, the Corporate General Partner attempts to protect the Partnership from the
burden of  inflation-related  increases  in  expenses  by  increasing  rents and
maintaining a high overall  occupancy  level.  However,  due to changing  market
conditions,  which  can  result  in the use of  rental  concessions  and  rental
reductions to offset softening market conditions, there is no guarantee that the
Corporate General Partner will be able to sustain such a plan.

Liquidity and Capital Resources

At  December  31,  2002,  the  Partnership  had  cash and  cash  equivalents  of
approximately  $115,000 compared to approximately $212,000 at December 31, 2001.
The  decrease  in cash and  cash  equivalents  of  approximately  $97,000  since
December 31, 2001 is due to  approximately  $465,000 and $32,000 of cash used in
financing  and  investing  activities,  respectively,  offset  by  approximately
$400,000  of cash  provided  by  operating  activities.  Cash used in  financing
activities consisted primarily of the repayment of the mortgage note encumbering
Governor's Park Apartments,  the payment of debt  extinguishment and loan costs,
principal payments on the mortgage encumbering  Governor's Park Apartments,  and
distributions  to partners  partially offset by proceeds from the refinancing of
Governor's  Park  Apartments.  Cash used in  investing  activities  consisted of
property improvements and replacements  partially offset by net withdrawals from
restricted  escrows.  The Partnership  invests its working  capital  reserves in
interest bearing accounts.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the  investment  property to  adequately  maintain the
physical  assets and other  operating needs of the registrant and to comply with
Federal,  state,  and local  legal an  regulatory  requirements.  The  Corporate
General  Partner  monitors  developments  in the  area of legal  and  regulatory
compliance and is studying new federal laws, including the Sarbanes-Oxley Act of
2002. The Sarbanes-Oxley Act of 2002 mandates or suggests additional  compliance
measures with regard to governance,  disclosure, audit and other areas. In light
of these changes,  the  Partnership  expects that it will incur higher  expenses
related to compliance, including increased legal and audit fees. The Partnership
is currently  evaluating the capital  improvement  needs of the property for the
upcoming  year.  The  minimum  amount to be  budgeted is expected to be $56,000.
Additional  improvements  may be  considered  and will  depend  on the  physical
condition of the property as well as replacement  reserves and anticipated  cash
flow generated by the property.  The capital  expenditures will be incurred only
if cash is available from  operations and  partnership  reserves.  To the extent
that  such  budgeted  capital  improvements  are  completed,  the  Partnership's
distributable cash flow, if any, may be adversely affected at least in the short
term.

On  February  8, 2002,  the  Partnership  refinanced  the  mortgage  encumbering
Governor's  Park. The refinancing  replaced the first mortgage of  approximately
$4,234,000 and the second mortgage of approximately $147,000 with a new mortgage
of $6,990,000. The new mortgage carries a stated interest rate of 7.12% compared
to the 7.83% interest rate on the old mortgages. Principal and interest payments
on the mortgage of approximately  $55,000 are due monthly until the loan matures
in March of 2022 at which  time  the loan is  scheduled  to be fully  amortized.
Total  capitalized  loan  costs were  approximately  $278,000.  The  Partnership
recognized a loss on the early extinguishment of debt of approximately  $241,000
due to the write-off of unamortized  loan costs and debt discount and prepayment
penalties.


The  Partnership's  assets are thought to be sufficient  for any near term needs
(exclusive  of  capital   improvements)   of  the   Partnership.   The  mortgage
indebtedness of approximately $6,868,000 is being amortized over 240 months with
a maturity date of March 1, 2022 at which time the loan is scheduled to be fully
amortized.

The following table sets forth the distributions made by the Partnership for the
years ended December 31, 2002 and 2001.

<TABLE>
<CAPTION>

                                        Per Limited                        Per Limited
                        Year Ended      Partnership       Year Ended       Partnership
                    December 31, 2002       Unit      December 31, 2001       Unit

<S>                        <C>              <C>              <C>             <C>
Operations                 $ --             $ --             $ 86            $ 4.90
Refinancing
  proceeds                 1,850 (1)       106.67             567 (2)          32.69
Sale proceeds
  (3)                        638            36.79            4,809            277.29
                          $2,488          $143.46           $5,462           $314.88
</TABLE>

(1) From the refinancing of Governor's Park Apartments in February 2002.

(2) From the previously undistributed refinancing proceeds of Hickory Ridge.

(3) From the sale of Hickory Ridge Apartments in July 2001.

Future cash  distributions  will depend on the levels of net cash generated from
operations,  the availability of cash reserves, the timing of the debt maturity,
refinancing   and/or  property  sale.  The  Partnership's   cash  available  for
distribution is reviewed on a monthly basis.  There can be no assurance that the
Partnership  will generate  sufficient  funds from  operations,  after  required
capital  expenditures,  to permit any  distributions  to its partners in 2003 or
subsequent periods.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 10,779 limited  partnership  units
(the "Units") in the Partnership representing 62.15% of the outstanding units at
December  31,  2002.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire additional units of limited partnership  interest in the
Partnership  in  exchange  for cash or a  combination  of cash and  units in the
operating  partnership  of AIMCO  either  through  private  purchases  or tender
offers. Under the Partnership  Agreement,  unitholders holding a majority of the
Units are  entitled to take action with  respect to a variety of matters,  which
would  include  voting on certain  amendments to the  Partnership  Agreement and
voting to remove the Corporate General Partner.  As a result of its ownership of
62.15% of the  outstanding  Units,  AIMCO is in a position  to control  all such
voting decisions with respect to the Registrant.  Although the Corporate General
Partner owes fiduciary duties to the limited  partners of the  Partnership,  the
Corporate  General  Partner  also  owes  fiduciary  duties  to AIMCO as its sole
stockholder.  As a result,  the  duties of the  Corporate  General  Partner,  as
corporate general partner,  to the Partnership and its limited partners may come
into conflict with the duties of the Corporate  General Partner to AIMCO, as its
sole stockholder.

Critical Accounting Policies and Estimates

A summary of the Partnership's  significant  accounting  policies is included in
"Note A - Organization and Significant Accounting Policies" which is included in
the  financial  statements  in "Item 7.  Financial  Statements".  The  Corporate
General  Partner  believes that the  consistent  application  of these  policies
enables the  Partnership  to provide  readers of the financial  statements  with
useful and reliable  information about the  Partnership's  operating results and
financial  condition.  The preparation of consolidated  financial  statements in
conformity with accounting  principles  generally  accepted in the United States
requires the Partnership to make estimates and assumptions.  These estimates and
assumptions affect the reported amounts of assets and liabilities at the date of
the financial  statements  as well as reported  amounts of revenues and expenses
during the reporting  period.  Actual results could differ from these estimates.
Judgments  and  assessments  of  uncertainties  are  required  in  applying  the
Partnership's  accounting  policies in many areas.  The  following may involve a
higher degree of judgment and complexity.

Impairment of Long-Lived Assets

Investment property is recorded at cost, less accumulated  depreciation,  unless
considered  impaired.  If events or  circumstances  indicate  that the  carrying
amount of a property may be impaired, the Partnership will make an assessment of
its recoverability by estimating the undiscounted  future cash flows,  excluding
interest charges, of the property.  If the carrying amount exceeds the aggregate
future cash flows,  the  Partnership  would  recognize an impairment loss to the
extent the carrying amount exceeds the fair value of the property.

Real  property  investments  are  subject  to varying  degrees of risk.  Several
factors  may  adversely  affect  the  economic  performance  and  value  of  the
Partnership's   investment  property.  These  factors  include  changes  in  the
national,  regional and local economic  climate;  local  conditions,  such as an
oversupply  of  multifamily   properties;   competition   from  other  available
multifamily  property  owners and changes in market  rental  rates.  Any adverse
changes in these factors could cause an impairment in the Partnership's assets.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less.
Rental income  attributable to leases is recognized  monthly as it is earned and
the  Partnership  fully  reserves all  balances  outstanding  over 30 days.  The
Partnership will offer rental concessions during  particularly slow months or in
response  to  heavy  competition  from  other  similar  complexes  in the  area.
Concessions are charged to income as incurred.


<PAGE>


Item 7.     Financial Statements

SHELTER PROPERTIES VII LIMITED PARTNERSHIP

LIST OF FINANCIAL STATEMENTS

      Independent Auditors' Report

      Consolidated Balance Sheet - December 31, 2002

      Consolidated Statements of Operations - Years ended December 31, 2002 and
        2001

      Consolidated  Statements of Changes in Partners' (Deficit) Capital - Years
      ended December 31, 2002 and 2001

      Consolidated  Statements of Cash Flows - Years ended December 31, 2002 and
        2001

      Notes to Consolidated Financial Statements



<PAGE>


                 Report of Ernst & Young LLP, Independent Auditors



The Partners
Shelter Properties VII Limited Partnership


We  have  audited  the  accompanying   consolidated  balance  sheet  of  Shelter
Properties  VII Limited  Partnership  as of December 31,  2002,  and the related
consolidated  statements of operations,  changes in partners' (deficit) capital,
and cash flows for each of the two years in the period ended  December 31, 2002.
These  financial   statements  are  the   responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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  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 consolidated financial position of Shelter Properties
VII Limited  Partnership at December 31, 2002, and the  consolidated  results of
its  operations and its cash flows for each of the two years in the period ended
December 31, 2002, in conformity with accounting  principles  generally accepted
in the United States.

As discussed in Note A to the  consolidated  financial  statements,  in 2002 the
Partnership  adopted  Statement  of  Financial  Accounting  Standards  No.  144,
"Accounting  for the  Impairment or Disposal of Long-Lived  Assets" and No. 145,
"Rescission of FASB Statements No. 4, 44 and 64." As a result,  the accompanying
consolidated  financial  statements  for  2001,  referred  to  above,  have been
restated  to conform to the  presentation  adopted  in 2002 in  accordance  with
accounting principles generally accepted in the United States.

                                                            /s/ERNST & YOUNG LLP



Greenville, South Carolina
February 14, 2003


<PAGE>


                     SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                           CONSOLIDATED BALANCE SHEET
                        (in thousands, except unit data)

                                December 31, 2002

<TABLE>
<CAPTION>


Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $  115
   Receivables and deposits                                                      32
   Restricted escrows                                                            40
   Other assets                                                                 276
   Investment properties (Note C and D):
      Land                                                     $  714
      Buildings and personal property                           7,383
                                                                8,097
      Less accumulated depreciation                            (4,297)        3,800
                                                                            $ 4,263

Liabilities and Partners' Deficit

Liabilities
      Accounts payable                                                        $ 6
      Tenant security deposit liabilities                                        31
      Accrued property taxes                                                     87
      Other liabilities                                                         148
      Mortgage note payable (Note C)                                          6,868

Partners' Deficit
   General partners                                            $ (100)
   Limited partners (17,343 units issued and
      outstanding)                                             (2,777)       (2,877)
                                                                            $ 4,263

            See Accompanying Notes to Consolidated Financial Statements
</TABLE>


<PAGE>


                     SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per unit data)


<TABLE>
<CAPTION>

                                                            Years Ended December 31,
                                                              2002            2001
                                                                           (Restated)
Revenues:
<S>                                                          <C>            <C>
  Rental income                                              $ 1,486        $ 1,523
  Other income                                                   180            203
      Total revenues                                           1,666          1,726

Expenses:
  Operating                                                      487            496
  General and administrative                                     261            249
  Depreciation                                                   227            233
  Interest                                                       485            394
  Property taxes                                                  84             92
  Loss on early extinguishment of debt
    (Note C)                                                     241             --
      Total expenses                                           1,785          1,464

(Loss) income from continuing operations                        (119)           262

Loss from discontinued operations                                 --           (135)
Gain on sale of discontinued operations                           --          4,173

      Net (loss) income                                      $ (119)        $ 4,300

Net (loss) income allocated to general partners (1%)          $ (1)           $ 43
Net (loss) income allocated to limited partners (99%)           (118)         4,257

      Net income                                             $ (119)        $ 4,300

Per limited partnership unit:
  (Loss) income from continuing operations                   $ (6.80)       $ 14.95
  Loss from discontinued operations                               --          (7.76)
  Gain on sale of discontinued operations                         --         238.27

      Net (loss) income                                      $ (6.80)       $245.46

Distributions per limited partnership unit                   $143.46        $314.88

            See Accompanying Notes to Consolidated Financial Statements
</TABLE>


<PAGE>


                     SHELTER PROPERTIES VII LIMITED PARTNERSHIP

         CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
                        (in thousands, except unit data)

<TABLE>
<CAPTION>


                                        Limited
                                       Partnership    General     Limited
                                          Units       Partners   Partners     Total

<S>                                       <C>           <C>       <C>        <C>
Original capital contributions            17,343        $ 2       $17,343    $17,345

Partners' (deficit) capital at
  December 31, 2000                       17,343         (141)      1,033        892

Distributions paid to partners                --           (1)     (5,461)    (5,462)

Net income for the year ended
  December 31, 2001                           --           43       4,257      4,300

Partners' deficit at
  December 31, 2001                       17,343          (99)       (171)      (270)

Distributions paid to partners                --           --      (2,488)    (2,488)

Net loss for the year ended
  December 31, 2002                           --           (1)       (118)      (119)

Partners' deficit at
  December 31, 2002                       17,343       $ (100)    $(2,777)   $(2,877)


            See Accompanying Notes to Consolidated Financial Statements
</TABLE>

<PAGE>



                     SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
<TABLE>
<CAPTION>


                                                                    Years Ended December 31,
                                                                       2002          2001
Cash flows from operating activities:
<S>                                                                   <C>          <C>
  Net (loss) income                                                   $ (119)      $ 4,300
  Adjustments to reconcile net (loss) income to net cash
   provided by operating activities:
     Depreciation                                                         227           577
     Amortization of discounts and loan costs                              13            62
     Gain on sale of discontinued operations                               --        (4,173)
     Casualty gain                                                         --           (18)
     Bad debt                                                              --           105
     Loss on early extinguishment of debt                                 241             7
     Change in accounts:
      Receivables and deposits                                             55            10
      Other assets                                                          1            42
      Accounts payable                                                    (13)          (79)
      Tenant security deposits liabilities                                 (4)          (57)
      Accrued taxes                                                       (18)         (121)
      Other liabilities                                                    17            (9)
          Net cash provided by operating activities                       400           646

Cash flows from investing activities:
  Property improvements and replacements                                  (68)         (487)
  Net insurance proceeds                                                   --            18
  Net receipts from restricted escrows                                     36             2
  Net proceeds on sale of investment property                              --        11,333
          Net cash (used in) provided by investing activities             (32)       10,866

Cash flows from financing activities:
  Proceeds from mortgage note payable                                   6,990            --
  Debt extinguishment cost                                               (179)           --
  Payments on mortgage notes payable                                     (129)         (160)
  Repayment of mortgage note payable                                   (4,381)       (5,990)
  Distributions to partners                                            (2,488)       (5,462)
  Advances from affiliate                                                  --           150
  Payments on advances from affiliate                                       --         (150)
  Loan costs paid                                                        (278)          (32)
          Net cash used in financing activities                          (465)      (11,644)

Net decrease in cash and cash equivalents                                 (97)         (132)
Cash and cash equivalents at beginning of year                            212           344

Cash and cash equivalents at end of year                               $ 115        $ 212

Supplemental disclosure of cash flow information:
  Cash paid for interest                                               $ 458        $ 595

            See Accompanying Notes to Consolidated Financial Statements
</TABLE>


<PAGE>


                     SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                     Notes to Consolidated Financial Statements

                                December 31, 2002


Note A - Organization and Significant Accounting Policies

Organization:

Shelter  Properties VII Limited  Partnership (the "Partnership" or "Registrant")
was  organized  as a  limited  partnership  under the laws of the State of South
Carolina on October 29, 1984. The general partner  responsible for management of
the Partnership's  business is Shelter Realty VII Corporation,  a South Carolina
corporation (the "Corporate General Partner").  The Corporate General Partner is
a subsidiary of Apartment  Investment  Management Company ("AIMCO"),  a publicly
traded  real  estate  investment  trust.  The  other  general  partner  is AIMCO
Properties,  L.P., an affiliate of the Corporate  General Partner and AIMCO. The
Partnership  Agreement provides that the Partnership is to terminate on December
31,  2024  unless  terminated  prior to such  date.  The  Partnership  commenced
operations  on August  27,  1985 and  completed  its  acquisition  of  apartment
properties on December 6, 1985.  The  Partnership  owns one  apartment  property
located in Colorado.

Principles of Consolidation:

The  Partnership's   financial  statements  include  all  the  accounts  of  the
Partnership  and its  99.99%  owned  partnership.  The  general  partner  of the
consolidated  partnership is Shelter Realty VII Corporation.  Shelter Realty VII
Corporation  may be  removed by the  Partnership;  therefore,  the  consolidated
partnership is controlled and consolidated by the  Partnership.  All significant
interpartnership transactions have been eliminated.

Use of Estimates:

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Allocation of Cash Distributions:

Cash  distributions by the Partnership are allocated between general and limited
partners in accordance  with the provisions of the  Partnership  Agreement.  The
Partnership  Agreement defines net cash from operations as revenue received less
operating  expenses paid,  adjusted for certain  specified items which primarily
include mortgage  payments on debt,  property  improvements and replacements not
previously reserved,  and the effects of other adjustments to reserves including
reserve  amounts  deemed  necessary by the  Corporate  General  Partner.  In the
following notes to the  consolidated  financial  statements,  whenever "net cash
from operations" is used, it has the aforementioned  meaning. The following is a
reconciliation  of the subtotal in the accompanying  consolidated  statements of
cash flows  captioned  "net cash provided by operating  activities" to "net cash
from operations",  as defined in the Partnership  Agreement.  However, "net cash
from  operations"  should not be considered an  alternative  to net income as an
indicator  of the  Partnership's  operating  performance  or to cash  flows as a
measure of liquidity.

<TABLE>
<CAPTION>

                                                         Years Ended December 31,
                                                             2002          2001
                                                              (in thousands)

Net cash provided by operating activities                   $ 400         $ 646
<S>                                                            <C>          <C>
  Property improvements and replacements                       (68)         (487)
  Payments on mortgage notes payable                          (129)         (160)
  Changes in reserves for net operating liabilities            (38)          109
  Changes in restricted escrows, net                            36             2
  Additional reserves                                         (201)         (110)

   Net cash from operations                                  $ --          $ --
</TABLE>

The Corporate  General Partner reserved  approximately  $201,000 and $110,000 at
December  31, 2002 and 2001,  respectively,  to fund  capital  improvements  and
repairs at its remaining property.

Distributions made from reserves no longer considered necessary by the Corporate
General  Partner are  considered to be additional  net cash from  operations for
allocation purposes.

The Partnership  Agreement  provides that 99% of  distributions of net cash from
operations  are  allocated to the limited  partners  until they receive net cash
from  operations  for such  fiscal  year equal to 7% of their  adjusted  capital
values (as  defined in the  Partnership  Agreement),  at which point the general
partners will be allocated all net cash from operations until they have received
distributions equal to 10% of the aggregate net cash from operations distributed
to partners  for such fiscal  year.  Thereafter,  the general  partners  will be
allocated 10% of any  distributions  of remaining net cash from  operations  for
such fiscal year.

All  distributions of distributable  net proceeds (as defined in the Partnership
Agreement) from property  dispositions and refinancings will be allocated to the
limited  partners  until each limited  partner has received an amount equal to a
cumulative 7% per annum of the average of the limited partners' adjusted capital
value,   less  any  prior   distributions   of  net  cash  from  operations  and
distributable net proceeds, and has also received an amount equal to the limited
partners' adjusted capital value. Thereafter, the general partners receive 1% of
the selling prices of properties sold where they acted as a broker, and then the
limited  partners  will  be  allocated  85% of any  remaining  distributions  of
distributable net proceeds and the general partners will receive 15%.

Allocation of Profits, Gains and Losses:

Profits,  gains, and losses of the Partnership are allocated between general and
limited partners in accordance with the provisions of the Partnership Agreement.

For any fiscal  year,  to the extent  that  profits,  not  including  gains from
property dispositions,  do not exceed distributions of net cash from operations,
such profits are allocated in the same manner as such distributions.

Any gain from property  dispositions  attributable to the excess, if any, of the
indebtedness relating to a property immediately prior to the disposition of such
property  over  the  Partnership's  adjusted  basis  in the  property  shall  be
allocated to each partner  having a negative  capital  account  balance,  to the
extent of such negative  balance.  The balance of any gain shall be treated on a
cumulative basis as if it constituted an equivalent  amount of distributable net
proceeds  and shall be  allocated  to the  general  partners  to the extent that
general  partners would have received  distributable  net proceeds in connection
therewith; the balance shall be allocated to the limited partners.  However, the
interest  of the general  partners  will be equal to at least 1% of each gain at
all times during the existence of the  Partnership.  Accordingly,  net income as
shown in the statement of operations and changes in partners'  (deficit) capital
for 2002  and  2001 was  allocated  99% to the  limited  partners  and 1% to the
general partners. Net income (loss) per limited partnership unit was computed by
dividing the net income (loss) allocated to the limited partners by 17,343 units
outstanding.

All  losses,  including  losses  attributable  to  property  dispositions,   are
allocated 99% to the limited partners and 1% to the general partners.

Other Reserves:

The Corporate  General  Partner may designate a portion of cash  generated  from
operations as "other  reserves" in  determining  net cash from  operations.  The
Corporate  General  Partner  designated as other reserves an amount equal to the
net liabilities  related to the operations of the apartment  property during the
current fiscal year that are expected to require the use of cash during the next
fiscal  year.  The  decrease in other  reserves  during  2002 was  approximately
$38,000, as compared to an increase of approximately $109,000 during 2001. These
amounts were  determined by considering  changes in the balance of,  receivables
and  deposits,   other  assets,   accounts  payable,  tenant  security  deposits
liabilities,  accrued property taxes due to affiliate and other liabilities.  At
this time,  the Corporate  General  Partner  expects to continue to adjust other
reserves based on the net change in the aforementioned account balances.

Cash and Cash Equivalents:

Cash and cash  equivalents  include cash on hand and in banks. At certain times,
the amount of cash deposited at a bank may exceed the limit on insured deposits.
Cash  balances  include  approximately  $61,000 at  December  31,  2002 that are
maintained by an affiliated  management company on behalf of affiliated entities
in cash concentration accounts.

Restricted Escrows:

Approximately  $40,000 of  replacement  reserves is on deposit with the mortgage
holder, as required by the mortgage agreement.

Investment Property:

Investment  property  consists  of an  apartment  complex and is stated at cost.
Acquisition  fees are  capitalized  as a cost of real  estate.  Expenditures  in
excess of $250 that  maintain an existing  asset which has a useful life of more
than  one  year  are  capitalized  as  capital   replacement   expenditures  and
depreciated  over the  estimated  useful  life of the  asset.  Expenditures  for
ordinary  repairs,  maintenance  and  apartment  turnover  costs are expensed as
incurred.

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144,
"Accounting  for  the  Impairment  or  Disposal  of  Long-Lived   Assets",   the
Partnership  records  impairment  losses on long-lived assets used in operations
when events and circumstances indicate that the assets might be impaired and the
undiscounted  cash flows estimated to be generated by those assets are less than
the carrying  amounts of those assets.  No  adjustments  for impairment of value
were recorded in the years ended December 31, 2002 and 2001.

During 2001, AIMCO, an affiliate of the Corporate General Partner,  commissioned
a project to study process  improvement  ideas to reduce  operating  costs.  The
result of the study led to a re-engineering  of business  processes and eventual
redeployment of personnel and related capital  spending.  The  implementation of
these plans  during  2002,  accounted  for as a change in  accounting  estimate,
resulted in a refinement of the Partnership's  process for capitalizing  certain
direct and  indirect  project  costs  (principally  payroll  related  costs) and
increased capitalization of such costs by approximately $14,000 in 2002 compared
to 2001.

Depreciation:

Depreciation is calculated by the  straight-line  method over the estimated life
of the apartment property and related personal property.  For Federal income tax
purposes, the accelerated cost recovery method is used for real property over 18
years for  additions  after March 15, 1984 and before May 9, 1985,  and 19 years
for additions  after May 8, 1985, and before January 1, 1987. As a result of the
Tax Reform Act of 1986,  for  additions  after  December 31, 1986,  the modified
accelerated  cost recovery method is used for  depreciation of (1) real property
over 27 1/2 years and (2) personal property additions over 5 years.

Loan Costs:

Loan  Costs  of  approximately  $275,000,  net of  accumulated  amortization  of
approximately $10,000, are included in other assets and are being amortized over
the life of the loan.  Amortization  expense was  approximately  $13,000 for the
year ended December 31, 2002 and is included in interest  expense.  Amortization
expense  is  expected  to be  approximately  $14,000  for each of the years 2003
through 2007.

Tenant Security Deposits:

The Partnership  requires security deposits from lessees for the duration of the
lease and such deposits are included in receivables  and deposits.  Deposits are
refunded when the tenant vacates,  provided the tenant has not damaged its space
and is current on rental payments.

Fair Value of Financial Instruments:

SFAS No.  107,  "Disclosures  about Fair  Value of  Financial  Instruments",  as
amended by SFAS No. 119, "Disclosures about Derivative Financial Instruments and
Fair  Value  of  Financial  Instruments",  requires  disclosure  of  fair  value
information  about  financial  instruments,  whether  or not  recognized  in the
balance sheet, for which it is practicable to estimate fair value. Fair value is
defined in the SFAS as the amount at which the instruments could be exchanged in
a  current  transaction  between  willing  parties,  other  than in a forced  or
liquidation  sale.  The  Partnership  believes that the carrying  amounts of its
financial  instruments (except for long term debt) approximate their fair values
due to the short  term  maturity  of these  instruments.  The fair  value of the
Partnership's  long term debt, after  discounting the scheduled loan payments to
maturity, approximates its carrying balance.

Leases:

The Partnership generally leases apartment units for twelve-month terms or less.
The Partnership recognizes income as earned on its leases and fully reserves all
balances outstanding over 30 days. In addition,  the Corporate General Partner's
policy is to offer  rental  concessions  during  particularly  slow months or in
response  to  heavy  competition  from  other  similar  complexes  in the  area.
Concessions are charged to rental income as incurred.

Advertising Costs:

The Partnership expenses the costs of advertising as incurred. Advertising costs
of  approximately  $24,000 and $26,000 for the years ended December 31, 2002 and
2001, respectively, were charged to operating expense.

Segment Reporting:

SFAS  No.  131,   "Disclosure  about  Segments  of  an  Enterprise  and  Related
Information"  established standards for the way that public business enterprises
report information about operating  segments in annual financial  statements and
requires that those  enterprises  report  selected  information  about operating
segments in interim financial reports. It also established standards for related
disclosures about products and services,  geographic areas, and major customers.
As defined in SFAS 131, the Partnership has only one reportable segment.

Recent Accounting Pronouncements

In August 2001, the Financial  Accounting  Standards  Board issued SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived  Assets".  SFAS No. 144
provides  accounting  guidance for  financial  accounting  and reporting for the
impairment or disposal of long-lived  assets.  SFAS No. 144 supersedes  SFAS No.
121,  "Accounting  for the  Impairment of Long-Lived  Assets and for  Long-Lived
Assets to be Disposed Of". SFAS No. 144 is effective for fiscal years  beginning
after December 15, 2001. The Partnership  adopted SFAS 144 effective  January 1,
2002. As a result, the accompanying  consolidated  statements of operations have
been  restated as of January 1, 2001 to reflect the  operations of Hickory Ridge
Apartments as discontinued operations.

In April 2002,  the Financial  Accounting  Standards  Board issued SFAS No. 145,
"Recission of FASB Statements No. 4, 44 and 64". SFAS No. 4 "Reporting Gains and
Losses from  Extinguishment  of Debt,"  required  that all gains and losses from
extinguishment  of  debt  be  aggregated  and,  if  material,  classified  as an
extraordinary item. SFAS No. 145 rescinds SFAS No. 4, and accordingly, gains and
losses from extinguishment of debt should only be classified as extraordinary if
they are unusual in nature and occur  infrequently.  SFAS 145 is  effective  for
fiscal years  beginning  after May 15, 2002 with an early adoption  option.  The
Partnership   adopted  SFAS  145  effective  April  1,  2002.  The  accompanying
consolidated statements of operations include a loss on early extinguishments of
debt of  approximately  $241,000,  which is included in operations  for the year
ended December 31, 2002.

Note B - Transactions with Affiliated Parties

The  Partnership  has no employees  and is dependent  on the  Corporate  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
partnership  activities.  The  Partnership  Agreement  provides  for (i) certain
payments to affiliates for services and (ii)  reimbursement  of certain expenses
incurred by affiliates on behalf of the Partnership.

Affiliates of the Corporate  General Partner are entitled to receive 5% of gross
receipts  from the  Partnership's  property for  providing  property  management
services.  The  Partnership  paid to such affiliates  approximately  $84,000 and
$170,000 for the years ended December 31, 2002 and 2001, respectively,  which is
included in operating expenses and discontinued operations.

An  affiliate  of the  Corporate  General  Partner  received  reimbursements  of
accountable  administrative  expenses  amounting to  approximately  $105,000 and
$398,000 for the years ended December 31, 2002 and 2001, respectively,  which is
included  in  general  and  administrative  expenses  and  investment  property.
Included in these amounts are fees related to construction  management  services
provided by an  affiliate  of the  Corporate  General  Partner of  approximately
$265,000 for the year ended December 31, 2001. No  construction  management fees
were paid during 2002. The construction  management  service fees are calculated
based upon a percentage of current year additions to investment properties.

In  accordance  with the  Partnership  Agreement,  an affiliate of the Corporate
General Partner loaned the Partnership  $150,000 to cover operating  expenses at
Hickory Ridge  Apartments.  The entire  balance was repaid during the year ended
December  31,  2001.  Interest  was charged at the prime rate plus 2%.  Interest
expense was  approximately  $2,000 for the year ended  December 31, 2001.  There
were no loans from the General Partner or associated interest expense during the
year ended December 31, 2002.

Beginning in 2001,  the  Partnership  began  insuring its property up to certain
limits through coverage provided by AIMCO which is generally  self-insured for a
portion of losses and  liabilities  related  to workers  compensation,  property
casualty and vehicle liability. The Partnership insures its properties above the
AIMCO  limits  through  insurance  policies  obtained  by  AIMCO  from  insurers
unaffiliated with the Corporate General Partner. During the years ended December
31,  2002 and 2001,  the  Partnership  was  charged by AIMCO and its  affiliates
approximately $25,000 and $50,000, respectively, for insurance coverage and fees
associated with policy claims administration.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 10,779 limited  partnership  units
(the "Units") in the Partnership representing 62.15% of the outstanding units at
December  31,  2002.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire additional units of limited partnership  interest in the
Partnership  in  exchange  for cash or a  combination  of cash and  units in the
operating  partnership  of AIMCO  either  through  private  purchases  or tender
offers. Under the Partnership  Agreement,  unitholders holding a majority of the
Units are  entitled to take action with  respect to a variety of matters,  which
would  include  voting on certain  amendments to the  Partnership  Agreement and
voting to remove the Corporate General Partner.  As a result of its ownership of
62.15% of the  outstanding  Units,  AIMCO is in a position  to control  all such
voting decisions with respect to the Registrant.  Although the Corporate General
Partner owes fiduciary duties to the limited  partners of the  Partnership,  the
Corporate  General  Partner  also  owes  fiduciary  duties  to AIMCO as its sole
stockholder.  As a result,  the  duties of the  Corporate  General  Partner,  as
corporate general partner,  to the Partnership and its limited partners may come
into conflict with the duties of the Corporate  General Partner to AIMCO, as its
sole stockholder.

Note C - Mortgage Notes Payable

The principal terms of mortgage notes payable are as follows:

<TABLE>
<CAPTION>

                         Principal      Monthly                             Principal
                         Balance At     Payment     Stated                   Balance
                        December 31,   Including   Interest   Maturity       Due At
                            2002       Interest      Rate       Date        Maturity
Property                     (in thousands)                              (in thousands)

Governor's Park
  Apartments
<S>                       <C>             <C>       <C>       <C>   <C>       <C>
  1st mortgage            $ 6,868         $ 55      7.12%     03/01/22        $ --
</TABLE>

On  February  8, 2002,  the  Partnership  refinanced  the  mortgage  encumbering
Governor's  Park. The refinancing  replaced the first mortgage of  approximately
$4,234,000 and the second mortgage of approximately $147,000 with a new mortgage
of $6,990,000. The new mortgage carries a stated interest rate of 7.12% compared
to the 7.83% interest rate on the old mortgages. Principal and interest payments
on the mortgage of approximately  $55,000 are due monthly until the loan matures
in March 2022 at which time the loan is scheduled to be fully  amortized.  Total
capitalized loan costs were approximately $278,000. The Partnership recognized a
loss on the early  extinguishment  of debt of approximately  $241,000 due to the
write-off of unamortized loan costs and debt discount and prepayment penalties.

The  mortgage  note  payable  is  nonrecourse  and is  secured  by pledge of the
Partnership's  rental  property  and by  pledge  of  revenues  from  the  rental
property.  Prepayment  penalties  are  required  if  repaid  prior to  maturity.
Further, the property may not be sold subject to existing indebtedness.

Scheduled principal payments of the mortgage note payable subsequent to December
31, 2002 are as follows (in thousands):

                               2003              $ 173
                               2004                 186
                               2005                 199
                               2006                 214
                               2007                 230
                            Thereafter          $ 5,866
                               Total            $ 6,868

Note D - Real Estate and Accumulated Depreciation

                                                Initial Cost
                                               To Partnership
                                               (in thousands)
<TABLE>
<CAPTION>

                                                        Buildings           Cost
                                                       and Related      Capitalized
                                                        Personal       Subsequent to
Description               Encumbrances      Land        Property        Acquisition

Governor's Park
<S>                         <C>             <C>          <C>               <C>
  Apartments                $ 6,868         $ 714        $ 6,496           $ 887
</TABLE>


                          Gross Amount At Which Carried
                              At December 31, 2002
                                 (in thousands)

<TABLE>
<CAPTION>

                           Buildings
                          And Related
                           Personal           Accumulated    Date of      Date    Depreciation
Description        Land    Property    Total  Depreciation Construction Acquired  Life-Years

<S>               <C>       <C>       <C>        <C>           <C>      <C>   <C>    <C>
Governor's Park   $ 714     $7,383    $8,097     $4,297        1983     09/30/85     5-39
</TABLE>

Reconciliation of "Real Estate and Accumulated Depreciation":

                                                  December 31,
                                              2002           2001
                                                 (in thousands)
Real Estate
Balance at beginning of year                $ 8,029        $ 23,624
  Property improvements                           68            427
  Sale of investment property                     --        (16,022)
Balance at end of year                      $ 8,097         $ 8,029

Accumulated Depreciation
Balance at beginning of year                $ 4,070        $ 12,377
  Additions charged to expense                   227            577
  Sale of investment property                     --         (8,884)
Balance at end of year                      $ 4,297         $ 4,070

The  aggregate  cost of investment  property for Federal  income tax purposes at
December  31,  2002  and  2001  is  approximately   $8,641,000  and  $8,572,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at  December  31,  2002 and 2001 is  approximately  $6,385,000  and  $6,059,000,
respectively.

Note E - Income Taxes

The Partnership has received a ruling from the Internal  Revenue Service that it
will  be  classified  as  a  partnership   for  Federal   income  tax  purposes.
Accordingly, no provision for income taxes is made in the consolidated financial
statements of the  Partnership.  Taxable  income or loss of the  Partnership  is
reported in the income tax returns of its partners.

The  following is a  reconciliation  of reported net income and Federal  taxable
income (in thousands, except per unit data):

                                                     2002         2001

Net (loss) income as reported                       $ (119)     $ 4,300
Add (deduct):
   Depreciation differences                            (99)        (166)
   Unearned income                                      12          (16)
   Other                                               (46)         (45)
   Gain on sale of investment property                  --        1,107

Federal taxable (loss) income                       $ (252)     $ 5,180

Federal taxable loss per limited
   partnership unit                                $(14.36)     $295.68

The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):

               Net liabilities as reported           $(2,877)
               Buildings                                 544
               Accumulated depreciation               (2,089)
               Syndication fees                        2,292
               Other                                      98

               Net assets - tax basis                $(2,032)

Note F - Sale of Investment Property

During the year ended  December 31, 2001,  the  Partnership  sold Hickory  Ridge
Apartments  to an  unrelated  third  party  for net  proceeds  of  approximately
$11,333,000  after payment of closing costs. The Partnership  realized a gain of
approximately  $4,173,000  as  a  result  of  the  sale.  The  Partnership  used
approximately  $5,990,000 of the net proceeds to repay the mortgage  encumbering
the   property.   In  addition  the   Partnership   recorded  a  loss  on  early
extinguishment  of debt of approximately  $7,000 as a result of unamortized loan
costs and mortgage  discount being written off. In accordance with SFAS 144, the
accompanying  consolidated  statements  of  operations  have been restated as of
January  1, 2001 to  reflect  the  operations  of Hickory  Ridge  Apartments  as
discontinued operations.  Included in this amount is approximately $1,304,000 of
revenue generated by the property.

Note G - Casualty Gain

During the year ended  December 31, 2000, a net casualty  gain of  approximately
$81,000 was recognized at Hickory Ridge Apartments. The casualty gain related to
a fire that  damaged 5 apartment  units in May 2000.  The gain was the result of
insurance proceeds of approximately  $125,000 offset by the write-off of the net
book  value of damaged  units of  approximately  $44,000.  During the year ended
December 31, 2001 an additional  casualty gain of approximately  $18,000 related
to this fire was recorded.  The additional  gain was a result of final insurance
proceeds of  approximately  $18,000 received in February 2001. Since the related
assets  were  written  off during the year ended  December  31,  2000 the entire
proceeds were recognized as a gain, which is included in "Loss from discontinued
operations" at December 31, 2001.

Note H - Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its Corporate  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purports  to  assert  claims  on  behalf  of a class  of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  which are named as nominal  defendants,  challenging,  among other
things,  the  acquisition  of interests  in certain  Corporate  General  Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities which were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged  into AIMCO.  The  plaintiffs  seek  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
On June 25, 1998, the Corporate General Partner filed a motion seeking dismissal
of the action.  In lieu of responding  to the motion,  the  plaintiffs  filed an
amended complaint.  The Corporate General Partner filed demurrers to the amended
complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December 14, 1999, the Corporate  General Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001,  the  Corporate  General  Partner and its  affiliates  filed a
demurrer to the third amended  complaint.  On May 14, 2001,  the Court heard the
demurrer to the third amended  complaint.  On July 10, 2001, the Court issued an
order  sustaining  defendants'  demurrer on certain  grounds.  On July 20, 2001,
Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
Plaintiffs  filed a fourth amended class and  derivative  action  complaint.  On
September 12, 2001, the Court denied Plaintiffs' motion for reconsideration.  On
October 5, 2001, the Corporate General Partner and affiliated defendants filed a
demurrer to the fourth amended complaint,  which was heard on December 11, 2001.
On February 2, 2002,  the Court served its order  granting in part the demurrer.
The  Court has  dismissed  without  leave to amend  certain  of the  plaintiffs'
claims.  On February 11, 2002,  plaintiffs  filed a motion  seeking to certify a
putative  class  comprised of all  non-affiliated  persons who own or have owned
units  in  the  partnerships.  The  Corporate  General  Partner  and  affiliated
defendants  oppose the motion.  On April 29,  2002,  the Court held a hearing on
plaintiffs' motion for class  certification and took the matter under submission
after further  briefing,  as ordered by the court, was submitted by the parties.
On July 10, 2002,  the Court entered an order vacating the current trial date of
January 13, 2003 (as well as the  pre-trial  and  discovery  cut-off  dates) and
stayed the case in its  entirety  through  November  7, 2002 so that the parties
could have an opportunity to discuss settlement.  On October 30, 2002, the court
entered an order extending the stay in effect through January 10, 2003.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action described below. The Court
has  scheduled  the hearing on  preliminary  approval  for April 4, 2003 and the
hearing on final approval for June 2, 2003.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of  settlement)  and up to $ 1 million toward the cost
of independent  appraisals of the Partnerships'  properties by a Court appointed
appraiser. An affiliate of the Corporate General Partner has also agreed to make
a tender offer to purchase all of the partnership  interests in the Partnerships
within one year of final  approval,  if it is granted,  and to provide  partners
with the  independent  appraisals  at the time of these  tenders.  The  proposed
settlement  also provides for the  limitation  of the allowable  costs which the
Corporate  General  Partner or its affiliates  will charge the  Partnerships  in
connection with this litigation and imposes limits on the class counsel fees and
costs in this  litigation.  If the  Court  grants  preliminary  approval  of the
proposed settlement in March, a notice will be distributed to partners providing
detail on the terms of the proposed settlement.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended  complaint.  The first amended complaint in the Heller action is
brought as a purported  derivative  action,  and asserts  claims for among other
things  breach  of  fiduciary  duty;  unfair  competition;   conversion,  unjust
enrichment;  and judicial  dissolution.  Plaintiffs in the Nuanes action filed a
motion to  consolidate  the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed  without  leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the Corporate  General Partner and affiliated
defendants  moved to strike the first  amended  complaint  in its  entirety  for
violating  the Court's July 10, 2001 order  granting in part and denying in part
defendants'  demurrer in the Nuanes action, or alternatively,  to strike certain
portions of the complaint based on the statute of limitations.  Other defendants
in the action  demurred to the fourth  amended  complaint,  and,  alternatively,
moved to strike the complaint. On December 11, 2001, the court heard argument on
the motions  and took the matters  under  submission.  On February 4, 2002,  the
Court  served  notice of its order  granting  defendants'  motion to strike  the
Heller complaint as a violation of its July 10, 2001 order in the Nuanes action.
On March 27, 2002,  the plaintiffs  filed a notice  appealing the order striking
the  complaint.  Before  completing  briefing on the appeal,  the parties stayed
further proceedings in the appeal pending the Court's review of the terms of the
proposed settlement described above.

The  Corporate  General  Partner  does  not  anticipate  that  any  costs to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.


<PAGE>




Item 8.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
     Financial Disclosure

            None.


<PAGE>




                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
     with Section 16(a) of the Exchange Act

The Partnership has no officers or directors.  The Corporate  General Partner is
Shelter Realty VII Corporation.  The names and ages of, as well as the positions
and  offices  held by,  the  present  executive  officers  and  director  of the
Corporate General Partner are set forth below. There are no family relationships
between or among any officers or directors.

Name                        Age    Position

Patrick J. Foye              45    Executive Vice President and Director

Paul J. McAuliffe            46    Executive Vice President and Chief
                                     Financial Officer

Thomas C. Novosel            44    Senior Vice President and Chief Accounting
                                     Officer

Patrick J. Foye has been  Executive Vice President and Director of the Corporate
General  Partner  since October 1, 1998.  Mr. Foye has served as Executive  Vice
President  of AIMCO  since  May 1998,  where he is  responsible  for  continuous
improvement,  acquisitions of partnership securities,  consolidation of minority
interests,  and corporate and other  acquisitions.  Prior to joining AIMCO,  Mr.
Foye was a Merger and  Acquisitions  Partner in the law firm of  Skadden,  Arps,
Slate, Meagher & Flom LLP from 1989 to 1998.

Paul J. McAuliffe has been Executive Vice President and Chief Financial  Officer
of the Corporate  General Partner since April 1, 2002. Mr.  McAuliffe has served
as Executive  Vice  President of AIMCO since  February 1999 and Chief  Financial
Officer of AIMCO since  October 1999.  From May 1996 until he joined AIMCO,  Mr.
McAuliffe was Senior Managing Director of Secured Capital Corp.

Thomas C. Novosel has been Senior Vice President and Chief Accounting Officer of
the Corporate  General  Partner since April 1, 2002.  Mr.  Novosel has served as
Senior Vice  President and Chief  Accounting  Officer of AIMCO since April 2000.
From October 1993 until he joined  AIMCO,  Mr.  Novosel was a partner at Ernst &
Young LLP, where he served as the director of real estate advisory  services for
the  southern  Ohio  Valley  area  offices  but did not work on any  assignments
related to AIMCO or the Partnership.

One or more of the above persons are also directors and/or officers of a general
partner (or general partner of a general partner) of limited  partnerships which
either have a class of  securities  registered  pursuant to Section 12(g) of the
Securities Exchange Act of 1934, or are subject to the reporting requirements of
Section  15(d) of such Act.  Further,  one or more of the above persons are also
directors and/or officers of Apartment Investment and Management Company and the
general  partner  of  AIMCO  Properties,  L.P.,  entities  that  have a class of
securities  registered  pursuant to Section 12(g) of the Securities Exchange Act
of 1934, or are subject to the reporting  requirements of Section 15 (d) of such
Act.

The executive officers and director of the Corporate General Partner fulfill the
obligations  of the Audit  Committee  and  oversee the  Partnership's  financial
reporting process on behalf of the Corporate General Partner. Management has the
primary  responsibility  for the financial  statements and the reporting process
including  the  systems  of  internal  controls.  In  fulfilling  its  oversight
responsibilities,  the executive  officers and director of the Corporate General
Partner reviewed the audited  financial  statements with management  including a
discussion  of the  quality,  not  just  the  acceptability,  of the  accounting
principles,  the  reasonableness  of significant  judgments,  and the clarity of
disclosures in the financial statements.

The executive  officers and director of the Corporate  General Partner  reviewed
with the independent auditors,  who are responsible for expressing an opinion on
the conformity of those audited financial statements with accounting  principles
generally accepted in the United States,  their judgments as to the quality, not
just the  acceptability,  of the  Partnership's  accounting  principles and such
other  matters as are required to be discussed  with the Audit  Committee or its
equivalent under auditing standards  generally accepted in the United States. In
addition,  the  Partnership  has  discussed  with the  independent  auditors the
auditors' independence from management and the Partnership including the matters
in the written  disclosures  required by the  Independence  Standards  Board and
considered  the   compatibility   of  non-audit   services  with  the  auditors'
independence.

The executive  officers and director of the Corporate  General Partner discussed
with the  Partnership's  independent  auditors  the overall  scope and plans for
their audit. In reliance on the reviews and discussions  referred to above,  the
executive  officers and director of the Corporate  General Partner have approved
the  inclusion of the audited  financial  statements  in the Form 10-KSB for the
year  ended  December  31,  2002 for filing  with the  Securities  and  Exchange
Commission.

The Corporate  General Partner has reappointed  Ernst & Young LLP as independent
auditors to audit the financial statements of the Partnership for 2003. Fees for
2002 were  audit  services  of  approximately  $32,000  and  non-audit  services
(principally tax-related) of approximately $15,000.

Item 10.    Executive Compensation

None of the directors and officers of the Corporate General Partner received any
remuneration from the Partnership.

Item 11.    Security Ownership of Certain Beneficial Owners and Management

Except as noted below,  no person or entity was known by the  Partnership  to be
the  beneficial  owner of more than 5% of the Limited  Partnership  Units of the
Partnership as of December 31, 2002.

                Name and Address           Number of Units   Percentage of Total

       Madison River Properties, LLC            2,180               12.57%
         (an affiliate of AIMCO)
       Cooper River Properties, LLC             1,450                8.36%
         (an affiliate of AIMCO)
       AIMCO Properties, L.P.                   6,902               39.80%
         (an affiliate of AIMCO)
       Insignia Properties, LP                    247                1.42%
          (an affiliate of AIMCO)

Insignia  Properties,  LP,  Madison  River  Properties,  LLC  and  Cooper  River
Properties,  LLC are all indirectly  ultimately  owned by AIMCO.  Their business
addresses are 55 Beattie Place, Greenville, SC 29602.

AIMCO  Properties,  L.P. is indirectly  ultimately  owned by AIMCO. Its business
address is Stanford  Place 3, 4582 S. Ulster St.  Parkway,  Suite 1100,  Denver,
Colorado 80237.

No director or officer of the  Corporate  General  Partner  owns any Units.  The
Corporate  General  Partner  owns 100  Units  as  required  by the  terms of the
Partnership  Agreement  governing the Partnership.  AIMCO Properties,  L.P., the
other general partner, owns 6,902 Units.

Item 12.    Certain Relationships and Related Transactions

The  Partnership  has no employees  and is dependent  on the  Corporate  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
partnership  activities.  The  Partnership  Agreement  provides  for (i) certain
payments to affiliates for services and (ii)  reimbursement  of certain expenses
incurred by affiliates on behalf of the Partnership.

Affiliates of the Corporate  General Partner are entitled to receive 5% of gross
receipts  from the  Partnership's  property for  providing  property  management
services.  The  Partnership  paid to such affiliates  approximately  $84,000 and
$170,000 for the years ended December 31, 2002 and 2001, respectively,  which is
included in operating expenses and discontinued operations.

An  affiliate  of the  Corporate  General  Partner  received  reimbursements  of
accountable  administrative  expenses  amounting to  approximately  $105,000 and
$398,000 for the years ended December 31, 2002 and 2001, respectively,  which is
included  in  general  and  administrative  expenses  and  investment  property.
Included in these amounts are fees related to construction  management  services
provided by an  affiliate  of the  Corporate  General  Partner of  approximately
$265,000 for the year ended December 31, 2001. No  construction  management fees
were paid during 2002. The construction  management  service fees are calculated
based upon a percentage of current year additions to investment properties.

In  accordance  with the  Partnership  Agreement,  an affiliate of the Corporate
General Partner loaned the Partnership  $150,000 to cover operating  expenses at
Hickory Ridge  Apartments.  The entire  balance was repaid during the year ended
December  31,  2001.  Interest  was charged at the prime rate plus 2%.  Interest
expense was  approximately  $2,000 for the year ended  December 31, 2001.  There
were no loans from the General Partner or associated interest expense during the
year ended December 31, 2002.

Beginning in 2001,  the  Partnership  began  insuring its property up to certain
limits through coverage provided by AIMCO which is generally  self-insured for a
portion of losses and  liabilities  related  to workers  compensation,  property
casualty and vehicle liability. The Partnership insures its properties above the
AIMCO  limits  through  insurance  policies  obtained  by  AIMCO  from  insurers
unaffiliated with the Corporate General Partner. During the years ended December
31,  2002 and 2001,  the  Partnership  was  charged by AIMCO and its  affiliates
approximately $25,000 and $50,000, respectively, for insurance coverage and fees
associated with policy claims administration.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 10,779 limited  partnership  units
(the "Units") in the Partnership representing 62.15% of the outstanding units at
December  31,  2002.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire additional units of limited partnership  interest in the
Partnership  in  exchange  for cash or a  combination  of cash and  units in the
operating  partnership  of AIMCO  either  through  private  purchases  or tender
offers. Under the Partnership  Agreement,  unitholders holding a majority of the
Units are  entitled to take action with  respect to a variety of matters,  which
would  include  voting on certain  amendments to the  Partnership  Agreement and
voting to remove the Corporate General Partner.  As a result of its ownership of
62.15% of the  outstanding  Units,  AIMCO is in a position  to control  all such
voting decisions with respect to the Registrant.  Although the Corporate General
Partner owes fiduciary duties to the limited  partners of the  Partnership,  the
Corporate  General  Partner  also  owes  fiduciary  duties  to AIMCO as its sole
stockholder.  As a result,  the  duties of the  Corporate  General  Partner,  as
corporate general partner,  to the Partnership and its limited partners may come
into conflict with the duties of the Corporate  General Partner to AIMCO, as its
sole stockholder.


<PAGE>



Item 13.    Exhibits and Reports on Form 8-K

      (a)   Exhibits:

            See Exhibit Index Attached.

      (b) Reports on Form 8-K filed in the fourth quarter of calendar year 2002:

            None.


Item 14.    Controls and Procedures

The principal executive officer and principal financial officer of the Corporate
General Partner, who are the equivalent of the Partnership's principal executive
officer and principal financial officer,  respectively,  have, within 90 days of
the filing  date of this  annual  report,  evaluated  the  effectiveness  of the
Partnership's  disclosure  controls and  procedures  (as defined in Exchange Act
Rules 13a-14(c) and 15d-14(c)) and have determined that such disclosure controls
and  procedures  are  adequate.  There have been no  significant  changes in the
Partnership's  internal  controls or in other  factors that could  significantly
affect the  Partnership's  internal  controls since the date of evaluation.  The
Partnership does not believe any significant deficiencies or material weaknesses
exist in the Partnership's internal controls. Accordingly, no corrective actions
have been taken.


<PAGE>


                                   SIGNATURES



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


                                    SHELTER PROPERTIES VII LIMITED PARTNERSHIP


                                    By:   Shelter Realty VII Corporation
                                          Corporate General Partner


                                    By:   /s/Patrick J. Foye
                                          Patrick J. Foye
                                          Executive Vice President


                                    By:   /s/Thomas C. Novosel
                                          Thomas C. Novosel
                                          Senior Vice President
                                          and Chief Accounting Officer


                                    Date: March 28, 2003


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the Partnership and in the capacities and on the
dates indicated.


/s/Patrick J. Foye            Executive Vice President      Date: March 28, 2003
Patrick J. Foye               and Director


/s/Thomas C. Novosel          Senior Vice President         Date: March 28, 2003
Thomas C. Novosel             and Chief Accounting Officer



<PAGE>




                                  CERTIFICATION


I, Patrick J. Foye, certify that:


1. I have reviewed this annual report on Form 10-KSB of Shelter  Properties  VII
Limited Partnership;


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


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


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


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


      b) Evaluated the effectiveness of the registrant's disclosure controls and
      procedures  as of a date  within 90 days prior to the filing  date of this
      annual report (the "Evaluation Date"); and


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


5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):


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


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


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


Date:  March 28, 2003

                                    /s/Patrick J. Foye
                                    Patrick J. Foye
                                    Executive  Vice  President of Shelter Realty
                                    VII  Corporation,  equivalent  of the  chief
                                    executive officer of the Partnership


<PAGE>



                                  CERTIFICATION


I, Paul J. McAuliffe, certify that:


1. I have reviewed this annual report on Form 10-KSB of Shelter  Properties  VII
Limited Partnership;


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


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


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


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


      b) Evaluated the effectiveness of the registrant's disclosure controls and
      procedures  as of a date  within 90 days prior to the filing  date of this
      annual report (the "Evaluation Date"); and


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


5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):


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


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


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


Date:  March 28, 2003

                                    /s/Paul J. McAuliffe
                                    Paul J. McAuliffe
                                    Executive Vice President and Chief Financial
                                    Officer of Shelter  Realty VII  Corporation,
                                    equivalent of the chief financial officer of
                                    the Partnership


<PAGE>


                                  EXHIBIT INDEX


Exhibit

 3                See Exhibit 4(a)

     4    (a)  Amended  and  Restated   Certificate  and  Agreement  of  Limited
          Partnership.  [included as Exhibit A to the  Prospectus  of Registrant
          dated March 18, 1985  contained  in  Amendment  No. 1 to  Registration
          Statement  No.  2-94604,  of  Registrant  filed  March  18,  1985 (the
          "Prospectus") and incorporated herein by reference].

     (b)  Subscription  Agreements and Signature Pages [Filed with Amendment No.
          1 of Registration Statement No. 2-94604, of Registrant filed March 18,
          1985 and incorporated herein by reference].

     (c)  Wrap around Deed of Trust Note and Deed of Trust and Personal Property
          Security  Agreement  between  Boyle Trust and  Investment  Company and
          Shelter Properties VII to acquire Hickory Ridge Apartments.*

     (d)  Promissory Note and Combination Deed of Trust,  Security Agreement and
          Fixture  Financing  Statement  between  State  Mutual  Life  Assurance
          Company of America and Shelter  Properties  VII to acquire  Governor's
          Park Apartments.*

     *Filed as Exhibit 4(d) and 4(e),  respectively,  to Form 10-K of Registrant
          for year ended December 31, 1987 and incorporated herein by reference.

10(i)             Contracts related to acquisition or sale of properties.

     (a)  Purchase  Agreement dated October 8, 1984 as Amended by Addendum dated
          December 27, 1984 between Boyle Trust and Investment Company,  Trustee
          and U.S.  Shelter  Corporation  to acquire  Hickory Ridge  Apartments.
          [Filed as Exhibit 10(E) to Amendment No. 1 of  Registration  Statement
          No.  2-94604 of the Registrant  filed March 18, 1985 and  incorporated
          herein by reference].

     (b)  Purchase  Agreement  dated  January 14, 1985,  between  NFC/TDM  Joint
          Venture  and U.S.  Shelter  Corporation  to  acquire  Governor's  Park
          Apartments.  [Filed as Exhibit 10(F) to Post-Effective Amendment No. 2
          of Registration Statement No. 2-94604 of the Registrant filed June 27,
          1985 and incorporated herein by reference].

     (c)  Purchase  and Sale  Contract  for  Hickory  Ridge  Apartments  between
          Registrant  and  Harbor  Group  International,  LLC.  Incorporated  by
          reference to Exhibit 10.28 to the Registrant's  Current Report on Form
          8-K dated July 16, 2001.

     (d)  First  Amendment  to Purchase  and Sale  Contract  for  Hickory  Ridge
          Apartments.   Incorporated  by  reference  to  Exhibit  10.29  to  the
          Registrant's Current Report on Form 8-K dated July 16, 2001.

     (e)  Second  Amendment  to Purchase  and Sale  Contract  for Hickory  Ridge
          Apartments.   Incorporated  by  reference  to  Exhibit  10.30  to  the
          Registrant's Current Report on Form 8-K dated July 16, 2001.

     (f)  Reinstatement  and Amendment to Purchase and Sale Contract for Hickory
          Ridge  Apartments.  Incorporated  by reference to Exhibit 10.31 to the
          Registrant's Current Report on Form 8-K dated July 16, 2001.

     10(ii)  Form  of  Management   Agreement  with  U.S.  Shelter   Corporation
          subsequently  assigned to Shelter Management Group, L.P. (now known as
          Insignia  Management  Group,  L.P.).  [Filed with  Amendment  No. 1 of
          Registration Statement, No. 2-94604 of Registrant filed March 18, 1985
          and incorporated herein by reference].

10(iii)           Contracts related to refinancing of debt:

     2.1  Agreement  and Plan of Merger,  dated as of  October  1, 1998,  by and
          between  AIMCO and IPT  [incorporated  by  reference to Exhibit 2.1 of
          IPT's Current Report on Form 8-K, File No.  1-14179,  dated October 1,
          1998].

     (a)  Tennessee Deed of Trust and Security Agreement dated December 28, 1988
          between  Shelter  Properties VII Limited  Partnership and John Hancock
          Mutual Life Insurance Company relating to Hickory Ridge Apartments.*

     (b)  Promissory Note dated December 28, 1988 between Shelter Properties VII
          Limited  Partnership and John Hancock Mutual Life Insurance Company, a
          Massachusetts corporation, relating to Hickory Ridge Apartments. First
          Amendment to Note and  Certification  and Release by Borrower  between
          John Hancock Mutual Life Insurance Company and Shelter  Properties VII
          Limited Partnership and dated July 5, 1992.*

                  *Filed as Exhibits 10(iii) (a) and (b), respectively,  to Form
                  10-KSB for the year ended  December 31, 1992 and  incorporated
                  herein by reference.

       (c)        First Deed of Trust  Note  dated  December  31,  1993  between
                  Governor's  Park   Apartments  VII  Limited   Partnership  and
                  Lexington Mortgage Company, a Virginia  corporation,  relating
                  to Governor's Park.**

       (d)        Second  Deed of Trust Note dated  December  31,  1993  between
                  Governor's  Park   Apartments  VII  Limited   Partnership  and
                  Lexington Mortgage Company, a Virginia  corporation,  relating
                  to Governor's Park.**

       (e)        First Deed of Trust and Security  Agreement between Governor's
                  Park Apartments VII Limited Partnership and Lexington Mortgage
                  Company,  a Virginia  corporation,  securing  Governor's  Park
                  Apartments.**

       (f)        Second Deed of Trust and Security Agreement between Governor's
                  Park Apartments VII Limited Partnership and Lexington Mortgage
                  Company,  a Virginia  corporation,  securing  Governor's  Park
                  Apartments.**

       (g)        First Collateral Assignment of Leases and Rents dated December
                  31,  1993  between  Governor's  Park  Apartments  VII  Limited
                  Partnership  and  Lexington   Mortgage  Company,   a  Virginia
                  corporation, securing Governor's Park Apartments.**

       (h)        Second  Collateral   Assignment  of  Leases  and  Rents  dated
                  December  31, 1993  between  Governor's  Park  Apartments  VII
                  Limited Partnership and Lexington Mortgage Company, a Virginia
                  corporation, securing Governor's Park Apartments.**

                  **Filed as Exhibits 10(iii) (a) through (h) to Form 10-QSB for
                  the quarter ended December 31, 1993 and incorporated herein by
                  reference.

       (i)        Note   Modification   Agreement   and  Amended  and   Restated
                  Promissory  Note both dated February 28, 1994 between  Shelter
                  Properties  VII Limited  Partnership  and John Hancock  Mutual
                  Life   Insurance    Company    relating   to   Hickory   Ridge
                  Apartments.***

       (j)        Modifications to Security  Instruments dated February 28, 1994
                  between  Shelter  Properties VII Limited  Partnership and John
                  Hancock  Mutual  Life  Insurance  Company  relating to Hickory
                  Ridge Apartments.***

                  ***Filed  as  Exhibits  10(iii) (i) through (j) to Form 10-KSB
                  for the year ended December 31, 1993 and  incorporated  herein
                  by reference.

       (k)        Multifamily  Note secured by a Mortgage or Deed of Trust dated
                  February  6, 2002,  between  Governor's  Park  Apartments  VII
                  Limited  Partnership  and ARCS  Commercial  Mortgage Co., L.P.
                  related to Governor's Park Apartments.

21                Subsidiaries of the Registrant

     99   (a)  Prospectus  of  Registrant  dated  March 18,  1985  [included  in
          Registration  Statement No.  2-94604 of Registrant]  and  incorporated
          herein by reference.

       (b)        Agreement  of  Limited   Partnership   for   Governor's   Park
                  Apartments VII Limited  Partnership between Shelter Properties
                  VII GP Limited  Partnership and Shelter Properties VII Limited
                  Partnership entered into September 9, 1993.****

       (c)        Agreement of Limited Partnership for Shelter Properties VII GP
                  Limited  Partnership  between Shelter VII Limited  Partnership
                  and
                  Shelter Realty VII Corporation.****

                  ****Filed  as  Exhibits  28 (a) and (b) to Form  10-QSB  dated
                  December 31, 1993 and incorporated herein by reference.

     (d)  Certification of Chief Executive Officer and Chief Financial Officer


<PAGE>



                                   EXHIBIT 22


                     SHELTER PROPERTIES VII LIMITED PARTNERSHIP


                                 Subsidiary List



                                        State of Incorporation/
         Name of Subsidiary                    Formation                  Date

Governor's Park Apartments VII
  Limited Partnership                       South Carolina                1993

Shelter VII GP Limited Partnership          South Carolina                1993




<PAGE>


Exhibit 99


                          Certification of CEO and CFO
                       Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                   Section 906 of the Sarbanes-Oxley Act of 2002



In connection  with the Annual Report on Form 10-KSB of Shelter  Properties  VII
Limited Partnership (the "Partnership"), for the year ended December 31, 2002 as
filed with the  Securities  and  Exchange  Commission  on the date  hereof  (the
"Report"),  Patrick J. Foye, as the equivalent of the Chief Executive Officer of
the Partnership, and Paul J. McAuliffe, as the equivalent of the Chief Financial
Officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350,  as adopted  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of 2002,
that, to the best of his knowledge:

      (1)   The Report fully complies with the  requirements of Section 13(a) or
            15(d) of the Securities Exchange Act of 1934; and

      (2)   The  information  contained in the Report  fairly  presents,  in all
            material respects, the financial condition and results of operations
            of the Partnership.


                                           /s/Patrick J. Foye
                                    Name:  Patrick J. Foye
                                    Date:  March 28, 2003


                                           /s/Paul J. McAuliffe
                                    Name:  Paul J. McAuliffe
                                    Date:  March 28, 2003


This  certification  accompanies  the  Report  pursuant  to  Section  906 of the
Sarbanes-Oxley  Act of 2002 and shall not,  except to the extent required by the
Sarbanes-Oxley  Act of 2002, be deemed filed by the  Partnership for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended.