FORM 10-KSB--Annual or Transitional Report Under
                                SECTION 13 OR 15(d)
                                   Form 10-KSB

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
     1934 [No Fee Required]

                    For the fiscal year ended December 31, 2000


[ ]  TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934 [No Fee Required]

                  For the transition period _________to _________

                         Commission file number 0-10256

                               SHELTER PROPERTIES II
                   (Name of small business issuer in its charter)

      South Carolina                                             57-0709233
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

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

                                 (864) 239-1000
                            Issuer's telephone number

           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 of 1934 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  Registrant'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.  $6,446,000

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, 2000. 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>

                                     PART I

Item 1.     Description of Business

Shelter Properties II (the "Registrant" or the "Partnership") was organized as a
limited partnership under the laws of the State of South Carolina on October 10,
1980.  The general  partner  responsible  for  management  of the  Partnership's
business is Shelter Realty II  Corporation,  a South Carolina  corporation  (the
"Corporate General Partner").  The only other general partner of the Partnership
was N. Barton Tuck,  Jr. Mr. Tuck was not an affiliate of the Corporate  General
Partner  and  was  effectively  prohibited  by  the  Partnership's   partnership
agreement (the "Partnership  Agreement") from participating in the management of
the Partnership.  In June 1999, Mr. Tuck's general  partnership  interest in the
Registrant was purchased by AIMCO Properties,  LP, an affiliate of the Corporate
General  Partner.  The  Corporate  General  Partner is a subsidiary of Apartment
Investment and Management Company ("AIMCO").  The Partnership Agreement provides
that the  Partnership  is to terminate  on December  31, 2020 unless  terminated
prior to such date.

The  Registrant  is engaged in the business of operating and holding real estate
properties for investment. In 1981, during its acquisition phase, the Registrant
acquired five existing apartment properties. The Registrant continues to own and
operate three of these properties. See "Item 2. Description of Properties".

Commencing February 2, 1981, the Registrant offered,  pursuant to a Registration
Statement filed with the Securities and Exchange Commission,  up to 27,400 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 1.5 Units ($1,500) for an
Individual  Retirement  Account.  An additional  100 Units were purchased by the
Corporate General Partner.  Since its offering, the Registrant has not received,
nor are limited partners required to make, additional capital contributions.

The offering terminated on April 30, 1981. Upon termination of the offering, the
Registrant  had accepted  subscriptions  for 27,500  Units,  including 100 Units
purchased by the Corporate General Partner, for an aggregate of $27,500,000. The
Registrant invested approximately  $21,000,000 of such proceeds in five existing
apartment  properties.  Prior to December 31,  2000,  the  Partnership  sold one
property and lost one property to the lender through foreclosure.

The Registrant  has no employees.  Management  and  administrative  services are
provided  by the  Corporate  General  Partner  and  by  agents  retained  by the
Corporate General Partner.

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  Corporate  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  Corporate  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 the  apartments  is
local.

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.

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.

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.

Transfer of Control

Pursuant  to a series  of  transactions  which  closed  on  October  1, 1998 and
February 26, 1999,  Insignia  Financial  Group,  Inc.  ("Insignia") and Insignia
Properties  Trust merged into AIMCO,  a publicly  traded real estate  investment
trust, with AIMCO being the surviving  corporation (the "Insignia Merger"). As a
result, AIMCO acquired 100% ownership interest in the Corporate General Partner.
The Corporate  General Partner does not believe that this transaction has had or
will have a material effect on the affairs and operations of the Partnership.

Item 2.     Description of Properties

The following table sets forth the Registrant's investments in properties:
<TABLE>
<CAPTION>

                                  Date of
Properties                       Purchase         Type of Ownership           Use

Parktown Townhouses              03/01/81    Fee ownership, subject to   Apartment
<S>                                                                      <C>
Deer Park, Texas                             first mortgage              309 units

Raintree Apartments              04/30/81    Fee ownership, subject to   Apartment
Anderson, South Carolina                     first mortgage              176 units

Signal Pointe Apartments         06/30/81    Fee ownership, subject to   Apartment
Winter Park, Florida                         first mortgage              368 units
</TABLE>

Schedule of Properties

Set forth below for each of the  Registrant's  properties is the gross  carrying
value, accumulated depreciation,  depreciable life, method of depreciation,  and
Federal tax basis.
<TABLE>
<CAPTION>

                               Gross
                             Carrying    Accumulated                       Federal
Properties                     Value     Depreciation   Rate   Method     Tax Basis
                                  (in thousands)                        (in thousands)

<S>                           <C>          <C>          <C>                <C>
Parktown Townhouses           $10,586      $ 7,172      5-35     S/L       $ 3,362
Raintree Apartments             4,443        3,172      5-38     S/L           668
Signal Pointe Apartments       12,438        8,547      5-37     S/L         2,353

          Totals              $27,467      $18,891                         $ 6,383
</TABLE>

See  "Note  A" to the  financial  statements  included  in  "Item  7.  Financial
Statements" for a description of the Partnership's depreciation policy.

Schedule of Property Indebtedness

The  following  table  sets  forth  certain  information  relating  to the loans
encumbering the Registrant's properties.
<TABLE>
<CAPTION>

                                Principal
                                Balance At     Stated
                              December 31,     Interest       Period        Maturity
Property (2)                      2000           Rate      Amortized (1)      Date
                             (in thousands)
Parktown Townhouses
<S>                              <C>             <C>          <C>           <C>   <C>
  1st mortgage                   $ 7,800         7.21%        20 yrs        01/01/21

Raintree Apartments
  1st mortgage                     3,055         7.22%        20 yrs        01/01/21

Signal Pointe Apartments
  1st mortgage                     8,875         7.22%        20 yrs        01/01/21

           Total                 $19,730
</TABLE>

(1)   No balloon payment due at maturity.

(2)   See "Item 7. Financial Statements, Note C" for information with respect to
      the  Registrant's  ability to repay these loans and other specific details
      about these loans.

On December 15, 2000,  the  Partnership  refinanced  the  mortgages  encumbering
Parktown  Townhouses.   The  refinancing  replaced  first  and  second  mortgage
indebtedness of approximately $2,910,000 with a new mortgage of $7,800,000.  The
mortgage was refinanced at a rate of 7.21% compared to a prior rate of 7.60% and
matures on January 1, 2021.  Capitalized loan costs incurred for the refinancing
were approximately  $206,000. The Partnership wrote off approximately $95,000 in
unamortized  loan costs and mortgage  discount and paid prepayment  penalties of
approximately   $105,000   resulting   in  an   extraordinary   loss  on   early
extinguishment of debt of approximately $200,000.

On December 15,  2000,  the  Partnership  refinanced  the  mortgage  encumbering
Raintree  Apartments.   The  refinancing  replaced  first  and  second  mortgage
indebtedness of approximately $1,292,000 with a new mortgage of $3,055,000.  The
mortgage was  refinanced at a rate of 7.22%  compared to the prior rate of 7.60%
and  matures  on  January  1, 2021.  Capitalized  loan  costs  incurred  for the
refinancing were approximately  $74,000. The Partnership wrote off approximately
$45,000 in  unamortized  loan costs and mortgage  discount  and paid  prepayment
penalties of approximately  $46,000 resulting in an extraordinary  loss on early
extinguishment of debt of approximately $91,000.

On December 15, 2000, the Partnership refinanced the mortgage encumbering Signal
Pointe   Apartments.   The  refinancing   replaced  first  and  second  mortgage
indebtedness of approximately $3,857,000 with a new mortgage of $8,875,000.  The
mortgage was  refinanced at a rate of 7.22%  compared to the prior rate of 7.60%
and  matures  on  January  1, 2021.  Capitalized  loan  costs  incurred  for the
refinancing were approximately $244,000. The Partnership wrote off approximately
$117,000 in  unamortized  loan costs and mortgage  discount and paid  prepayment
penalties of approximately  $141,000 resulting in an extraordinary loss on early
extinguishment of debt of approximately $258,000.

Rental Rates and Occupancy

Average  annual  rental rates per unit and  occupancy for 2000 and 1999 for each
property:

                                     Average Annual                 Average
                                      Rental Rate                  Occupancy
                                       (per unit)

 Properties                       2000           1999           2000        1999

 Parktown Townhouses             $8,852         $8,487          95%          94%
 Raintree Apartments              6,106          5,828          94%          96%
 Signal Pointe Apartments         7,378          6,926          95%          95%

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

Real Estate Taxes and Rates

Real estate taxes and rates in 2000 for each property were:

                                                2000            2000
                                               Billing        Rate (1)
                                           (in thousands)

       Parktown Townhouses                      $194            3.16%
       Raintree Apartments                        76           39.76%
       Signal Pointe Apartments                  163            1.77%

(1)   The  rates  are  based  on the  local  authority's  assessed  value of the
      investment properties.

Capital Improvements

Parktown Townhouses

As of December 31, 2000, the Partnership has completed approximately $236,000 of
capital  improvements   consisting  primarily  of  structural  and  parking  lot
improvements,  appliances and floor covering  replacement  and air  conditioning
unit  improvements.  These  improvements  were  funded  from  the  Partnership's
reserves and operating  cash flow. 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 $275 per unit or $84,975.  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.

Raintree Apartments

As of December 31, 2000, the Partnership has completed approximately $110,000 of
capital  improvements  consisting  primarily  of floor  covering  and  appliance
replacement,  roof replacement,  major landscaping, and structural improvements.
These  improvements were funded from the Partnership's  operating cash flow. 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 $275 per unit or $48,400.  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.

Signal Pointe Apartments

As of December 31, 2000, the Partnership has completed approximately $175,000 of
capital  improvements   consisting   primarily  of  structural   upgrades,   air
conditioning unit replacement,  appliances and floor covering  replacement,  and
submetering  equipment.  These  improvements  were funded from the Partnership's
operating  cash flow.  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 $275 per unit or $101,200. 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 additional  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 Registrant's distributable cash flow, if
any, may be adversely affected at least in the short term.

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. 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 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 Insignia  Merger.  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.  The Corporate General Partner does not
anticipate  that  costs  associated  with  this  case  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, 2000, no matter was submitted to a vote of
Unit holders through the solicitation of proxies or otherwise.

                                     PART II

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

The Partnership,  a publicly-held  limited partnership,  offered and sold 27,400
limited partnership units aggregating $27,400,000.  An additional 100 units were
purchased by the Corporate  General Partner.  The Partnership had 904 holders of
record  owning an aggregate of 27,500 Units at December 31, 2000.  Affiliates of
the Corporate  General  Partner owned  18,960.3 units or 68.947% at December 31,
2000.  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, 1999 and 2000 and subsequent to December 31, 2000. See
"Item  6.  Management's  Discussion  and  Analysis  or Plan of  Operations"  for
information  on the  allocation  of  distributions  between  general and limited
partners.

                                                   Distributions
                                                               Per Limited
                                        Aggregate           Partnership Unit
                                     (in thousands)

       01/01/99 - 12/31/99             $   300 (1)               $ 10.80
       01/01/00 - 12/31/00              11,671 (2)                423.78
     Subsequent to 12/31/00              1,512 (1)                 54.76

(1)   Distribution was made from cash from operations.

(2)   Distributions totaling  approximately  $1,697,000 were made from cash from
      operations  and  approximately   $9,974,000  were  made  from  refinancing
      proceeds from all three investment properties.

Future cash  distributions  will depend on the levels of net cash generated from
operations, the availability of cash reserves and the timing of debt maturities,
refinancings,  and/or property sales. The Partnership's  distribution  policy is
reviewed on a quarterly  basis.  There can be no  assurance,  however,  that the
Partnership  will  generate  sufficient  funds from  operations  after  required
capital expenditures to permit distributions to its partners in the year 2001 or
subsequent   periods.   See  "Item  2.   Description  of  Properties  -  Capital
Improvements" for information  relating to anticipated  capital  expenditures at
the properties.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates owned 18,960.3 limited  partnership units
in the Partnership representing 68.947% of the outstanding units at December 31,
2000. 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 limited partnership  interests in the Partnership for cash or
in exchange  for units in the  operating  partnership  of AIMCO  either  through
private  purchases or tender offers.  In this regard, on February 8, 2001, AIMCO
Properties, L.P., commenced a tender offer to acquire all of the Units not owned
by  affiliates  of AIMCO for a purchase  price of $588.00 per Unit.  Pursuant to
this  offer,  AIMCO  acquired an  additional  100 units  resulting  in its total
ownership being increased to 19,060.3 units or 69.312% of the total  outstanding
units. 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  without   limitation,   voting  on  certain  amendments  to  the
Partnership  Agreement and voting to remove the Corporate General Partner.  As a
result of its  ownership  of 69.312%  of the  outstanding  units,  AIMCO is in a
position to influence all voting decisions with respect to the Registrant.  When
voting on matters, AIMCO would in all likelihood vote the Units it acquired in a
manner  favorable to the interest of the Corporate  General  Partner  because of
their affiliation with the Corporate General Partner.

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

The  matters  discussed  in this Form  10-KSB  contain  certain  forward-looking
statements  and  involve  risks and  uncertainties  (including  changing  market
conditions, competitive and regulatory matters, etc.) detailed in the disclosure
contained  in this Form 10-KSB and the other  filings  with the  Securities  and
Exchange  Commission made by the Registrant from time to time. The discussion of
the Registrant's business and results of operations,  including  forward-looking
statements  pertaining to such matter, does not take into account the effects of
any changes to the Registrant's business and results of operation.  Accordingly,
actual   results   could  differ   materially   from  those   projected  in  the
forward-looking  statements as a result of a number of factors,  including those
identified herein.

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

Results of Operations

The  Partnership  realized net income for the year ended  December 31, 2000,  of
approximately  $763,000 compared to approximately  $1,140,000 for the year ended
December  31,  1999.   (See  "Note  D"  of  the  financial   statements   for  a
reconciliation  of these amounts to the  Registrant's  federal taxable  income.)
During  the  year  ended  December  31,  2000,  the  Partnership  recognized  an
extraordinary loss on the early extinguishment of debt of approximately $549,000
(see discussion  below).  The Partnership  realized income before  extraordinary
item of  approximately  $1,312,000 for the year ended December 31, 2000 compared
to  approximately  $1,140,000 for the year ended December 31, 1999. The increase
in income  before  extraordinary  item was due to an increase in total  revenues
partially offset by an increase in total expenses.  Total revenues increased due
to increased rental income and other income.  Rental income increased  primarily
due to increased average annual rental rates at all the Partnership's properties
partially  offset by a decrease  in  occupancy  at  Raintree  Apartments  and an
increase in concessions at all three of the investment properties.  Other income
increased  primarily due to increased interest income due to higher average cash
balances  held  in  interest   bearing   accounts  and  an  increase  in  tenant
reimbursements.

Total expenses for the year ended  December 31, 2000 increased  primarily due to
an increase in operating,  depreciation, and general and administrative expenses
partially offset by a decrease in interest expense.  Operating expense increased
primarily  due to  increases  in employee  compensation,  bonuses,  and employee
benefits at all three of the  Partnership's  properties and, to a lesser extent,
an  increase  in  advertising  at Signal  Pointe  Apartments.  Offsetting  these
increases was a decrease in maintenance expenses. Maintenance expenses decreased
due to a decrease in contract  decorating and interior building  improvements at
all three of the Partnership's properties.

Depreciation  expense  increased  primarily  due to  property  improvements  and
replacements completed during 2000. General and administrative expense increased
primarily due to an increase in the cost of services  included in the management
reimbursements to the Corporate General Partner as allowed under the Partnership
Agreement.  Also  included  in general  and  administrative  expenses  are costs
associated  with the  quarterly  and annual  communications  with  investors and
regulatory agencies and the annual audit required by the Partnership  Agreement.
Interest expense decreased  primarily due to the normal principal payments prior
to the refinancing of all of the investment properties in December 2000.

As part of the ongoing  business plan of the Registrant,  the Corporate  General
Partner  monitors  the  rental  market  environment  of each  of its  investment
properties  to assess  the  feasibility  of  increasing  rents,  maintaining  or
increasing  occupancy  levels and protecting the  Partnership  from increases in
expenses.  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,  2000,  the  Partnership  had  cash and  cash  equivalents  of
approximately  $949,000  compared to  approximately  $1,327,000  at December 31,
1999.  Cash and  cash  equivalents  decreased  approximately  $378,000  from the
Partnership's  previous  year ended  December 31,  1999.  The decrease is due to
approximately  $1,149,000 of cash used in investing activities and approximately
$1,111,000   of  cash  used  in  financing   activities   partially   offset  by
approximately $1,882,000 of cash provided by operating activities.  Cash used in
investing activities consisted of property improvements and replacements and net
deposits to escrow  accounts  maintained  by the mortgage  lender.  Cash used in
financing  activities  consisted  primarily of distributions to partners and the
repayment of principal of the mortgages  encumbering the investment  properties,
as well as payments of principal on the  mortgages  encumbering  the  investment
properties,  debt  extinguishment  costs, and loan costs,  largely offset by the
proceeds  received from  refinancing  the mortgages  encumbering  the investment
properties.   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  properties  to  adequately  maintain the physical
assets and other  operating  needs of the Registrant and to comply with Federal,
state, and local legal and regulatory requirements. 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 $275 per unit or  $234,575.
Additional  improvements  may be  considered  and will  depend  on the  physical
condition of the properties as well as replacement reserves and anticipated cash
flow  generated  by the  properties.  To the extent that such  budgeted  capital
improvements are completed,  the Registrant's  distributable  cash flow, if any,
may be adversely affected at least in the short term.

On December 15, 2000,  the  Partnership  refinanced  the  mortgages  encumbering
Parktown  Townhouses.   The  refinancing  replaced  first  and  second  mortgage
indebtedness of approximately $2,910,000 with a new mortgage of $7,800,000.  The
mortgage was refinanced at a rate of 7.21% compared to a prior rate of 7.60% and
matures on January 1, 2021.  Capitalized loan costs incurred for the refinancing
were approximately  $206,000. The Partnership wrote off approximately $95,000 in
unamortized  loan costs and mortgage  discount and paid prepayment  penalties of
approximately   $105,000   resulting   in  an   extraordinary   loss  on   early
extinguishment of debt of approximately $200,000.

On December 15,  2000,  the  Partnership  refinanced  the  mortgage  encumbering
Raintree  Apartments.   The  refinancing  replaced  first  and  second  mortgage
indebtedness of approximately $1,292,000 with a new mortgage of $3,055,000.  The
mortgage was  refinanced at a rate of 7.22%  compared to the prior rate of 7.60%
and  matures  on  January  1, 2021.  Capitalized  loan  costs  incurred  for the
refinancing were approximately  $74,000. The Partnership wrote off approximately
$45,000 in  unamortized  loan costs and mortgage  discount  and paid  prepayment
penalties of approximately  $46,000 resulting in an extraordinary  loss on early
extinguishment of debt of approximately $91,000.

On December 15, 2000, the Partnership refinanced the mortgage encumbering Signal
Pointe   Apartments.   The  refinancing   replaced  first  and  second  mortgage
indebtedness of approximately $3,857,000 with a new mortgage of $8,875,000.  The
mortgage was  refinanced at a rate of 7.22%  compared to the prior rate of 7.60%
and  matures  on  January  1, 2021.  Capitalized  loan  costs  incurred  for the
refinancing were approximately $244,000. The Partnership wrote off approximately
$117,000 in  unamortized  loan costs and mortgage  discount and paid  prepayment
penalties of approximately  $141,000 resulting in an extraordinary loss on early
extinguishment of debt of approximately $258,000.

The  Registrant's  current assets are thought to be sufficient for any near term
needs  (exclusive  of capital  improvements)  of the  Registrant.  The  mortgage
indebtedness  of  approximately  $19,730,000 is amortized  over 240 months.  The
Corporate  General  Partner will attempt to refinance such  indebtedness  and/or
sell the properties  prior to such maturity  date. If the  properties  cannot be
refinanced or sold for a sufficient  amount, the Registrant may risk losing such
properties through foreclosure.

During the year ended December 31, 2000, the Partnership paid cash distributions
of approximately $11,671,000  (approximately $11,654,000 to the limited partners
or $423.78 per limited partnership unit). These distributions  consisted of cash
from operations of  approximately  $1,697,000  (approximately  $1,680,000 to the
limited  partners  or $61.09 per limited  partnership  unit) and  proceeds  from
refinancings  of  approximately  $9,974,000  (approximately  $9,974,000  to  the
limited  partners  or $362.69  per  limited  partnership  unit).  Subsequent  to
December 31, 2000, the Partnership distributed  approximately  $1,512,000 to the
partners  (approximately  $1,506,000  to limited  partners or $54.76 per limited
partnership unit) from operations.  During the year ended December 31, 1999, the
Partnership   paid   cash   distributions    totaling   approximately   $300,000
(approximately   $297,000  to  the  limited   partners  or  $10.80  per  limited
partnership  unit).  Future cash  distributions will depend on the levels of net
cash generated from operations, the availability of cash reserves and the timing
of debt  maturities,  refinancings,  and/or  property sales.  The  Partnership's
distribution policy is reviewed on a quarterly basis. There can be no assurance,
however,  that the Partnership  will generate  sufficient  funds from operations
after required capital  expenditures to permit  distributions to its partners in
the year 2001 or subsequent  periods.  See "Item 2.  Description of Properties -
Capital   Improvements"   for  information   relating  to  anticipated   capital
expenditures at the properties.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates owned 18,960.3 limited  partnership units
in the Partnership representing 68.947% of the outstanding units at December 31,
2000. 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 limited partnership  interests in the Partnership for cash or
in exchange  for units in the  operating  partnership  of AIMCO  either  through
private  purchases or tender offers.  In this regard, on February 8, 2001, AIMCO
Properties, L.P., commenced a tender offer to acquire all of the Units not owned
by  affiliates  of AIMCO for a purchase  price of $588.00 per Unit.  Pursuant to
this  offer,  AIMCO  acquired an  additional  100 units  resulting  in its total
ownership being increased to 19,060.3 units or 69.312% of the total  outstanding
units. 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  without   limitation,   voting  on  certain  amendments  to  the
Partnership  Agreement and voting to remove the Corporate General Partner.  As a
result of its  ownership  of 69.312%  of the  outstanding  units,  AIMCO is in a
position to influence all voting decisions with respect to the Registrant.  When
voting on matters, AIMCO would in all likelihood vote the Units it acquired in a
manner  favorable to the interest of the Corporate  General  Partner  because of
their affiliation with the Corporate General Partner.
<PAGE>
Item 7.     Financial Statements:

SHELTER PROPERTIES II

LIST OF FINANCIAL STATEMENTS

      Report of Ernst & Young, LLP Independent Auditors

      Balance Sheet - December 31, 2000

      Statements of Operations - Years ended December 31, 2000 and 1999

      Statements  of  Changes  in  Partners'  (Deficit)  Capital  - Years  ended
      December 31, 2000 and 1999

      Statements of Cash Flows - Years ended December 31, 2000 and 1999

      Notes to Financial Statements


<PAGE>


                 Report of Ernst & Young LLP, Independent Auditors



The Partners
Shelter Properties II


We have audited the  accompanying  balance sheet of Shelter  Properties II as of
December  31,  2000,  and the  related  statements  of  operations,  changes  in
partners'  (deficit)  capital,  and cash  flows for each of the two years in the
period  ended   December  31,  2000.   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  financial  position of Shelter  Properties  II at
December 31, 2000, and the results of its operations and its cash flows for each
of the two years in the period  ended  December  31, 2000,  in  conformity  with
accounting principles generally accepted in the United States.


                                                            /s/ERNST & YOUNG LLP


Greenville, South Carolina
March 15, 2001
<PAGE>

                              SHELTER PROPERTIES II

                                  BALANCE SHEET
                          (in thousands, except unit data)

                                December 31, 2000

<TABLE>
<CAPTION>


Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $  949
   Receivables and deposits                                                     847
   Restricted escrows                                                           908
   Other assets                                                                 584
   Investment properties (Notes C & F):
      Land                                                    $ 1,814
      Buildings and related personal property                   25,653
                                                                27,467
      Less accumulated depreciation                            (18,891)       8,576
                                                                            $11,864

Liabilities and Partners' Deficit
Liabilities
      Accounts payable                                                       $  148
      Tenant security deposit liabilities                                       132
      Accrued property taxes                                                    247
      Other liabilities                                                         332
      Mortgage notes payable (Note C)                                        19,730

Partners' Deficit
   General partners                                            $ (136)
   Limited partners (27,500 units issued and
      outstanding)                                             (8,589)       (8,725)
                                                                            $11,864
</TABLE>

                 See Accompanying Notes to Financial Statements
<PAGE>

                              SHELTER PROPERTIES II

                            STATEMENTS OF OPERATIONS
                          (in thousands, except unit data)

<TABLE>
<CAPTION>


                                                          Years Ended December 31,
                                                             2000          1999
Revenues:
<S>                                                         <C>           <C>
  Rental income                                             $ 6,092       $ 5,785
  Other income                                                  354           259
      Total revenues                                          6,446         6,044

Expenses:
  Operating                                                   2,658         2,515
  General and administrative                                    298           233
  Depreciation                                                1,007           954
  Interest                                                      744           772
  Property taxes                                                427           430
      Total expenses                                          5,134         4,904

Income before extraordinary item                              1,312         1,140
Extraordinary loss on early extinguishment of debt
  (Note C)                                                     (549)           --

Net income (Note D)                                          $  763       $ 1,140

Net income allocated to general partners (1%)                $    8       $    11
Net income allocated to limited partners (99%)                  755         1,129
                                                             $  763       $ 1,140
Per limited partnership unit:
  Income before extraordinary item                          $ 47.23       $ 41.05
  Extraordinary loss on early extinguishment of debt         (19.76)           --

Net income                                                  $ 27.47       $ 41.05

Distributions per limited partnership unit                  $423.78       $ 10.80
</TABLE>

                 See Accompanying Notes to Financial Statements
<PAGE>

                              SHELTER PROPERTIES II

                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            27,500       $    2     $ 27,500    $ 27,502

Partners' (deficit) capital at
  December 31, 1998                       27,500       $ (135)    $  1,478     $ 1,343

Distribution to partners                      --           (3)        (297)        (300)

Net income for the year ended
  December 31, 1999                           --           11        1,129        1,140

Partners' (deficit) capital at
  December 31, 1999                       27,500         (127)       2,310        2,183

Distribution to partners                      --          (17)     (11,654)     (11,671)

Net income for the year ended
  December 31, 2000                           --            8          755          763

Partners' deficit at
  December 31, 2000                       27,500       $ (136)   $  (8,589)    $ (8,725)
</TABLE>

                 See Accompanying Notes to Financial Statements

<PAGE>

                              SHELTER PROPERTIES II

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

                                                             Years Ended December 31,
                                                                 2000         1999
Cash flows from operating activities:
<S>                                                              <C>         <C>
  Net income                                                     $  763      $ 1,140
  Adjustments to reconcile net income to net
   cash provided by operating activities:
      Depreciation                                                1,007          954
      Amortization of discounts and loan costs                      109          100
      Casualty gain                                                  --          (59)
      Extraordinary loss on early extinguishment of debt            549           --
      Change in accounts:
        Receivables and deposits                                   (478)         (35)
        Other assets                                                 (2)         (40)
        Accounts payable                                             10           84
        Tenant security deposit liabilities                         (18)          16
        Accrued property taxes                                       52          (41)
        Other liabilities                                          (110)         223
          Net cash provided by operating activities               1,882        2,342

Cash flows from investing activities:
  Property improvements and replacements                           (626)      (1,703)
  Net (deposits to) withdrawals from restricted escrows            (523)         599
  Insurance proceeds received                                        --          113
          Net cash used in investing activities                  (1,149)        (991)

Cash flows from financing activities:
  Payments on mortgage notes payable                               (295)        (300)
  Repayments of mortgage notes payable                           (8,059)          --
  Proceeds from mortgage notes payable                           19,730           --
  Debt extinguishment costs                                        (292)          --
  Loan costs paid                                                  (524)          --
  Distributions to partners                                     (11,671)        (300)
          Net cash used in financing activities                  (1,111)        (600)

Net (decrease) increase in cash and cash equivalents               (378)         751

Cash and cash equivalents at beginning of period                  1,327          576

Cash and cash equivalents at end of period                      $   949      $ 1,327

Supplemental disclosure of cash flow information:
  Cash paid for interest                                        $   687      $   647

Supplemental disclosure of non-cash activity:
  Property improvements and replacements in accounts
   payable                                                      $   105      $    55
</TABLE>

                 See Accompanying Notes to Financial Statements
<PAGE>

                              SHELTER PROPERTIES II

                          NOTES TO FINANCIAL STATEMENTS

                                December 31, 2000


Note A - Organization and Significant Accounting Policies

Organization:  Shelter  Properties II (the  "Partnership" or  "Registrant")  was
organized as a limited partnership under the laws of the State of South Carolina
on October 10, 1980.  The general  partner  responsible  for  management  of the
Partnership's  business  is  Shelter  Realty II  Corporation,  a South  Carolina
corporation (the "Corporate General Partner"). The only other general partner of
the  Partnership  was N. Barton  Tuck,  Jr. Mr. Tuck was not an affiliate of the
Corporate  General Partner and was effectively  prohibited by the  Partnership's
partnership  agreement (the "Partnership  Agreement") from  participating in the
management of the  Partnership.  In June 1999,  Mr. Tuck's  general  partnership
interest in the Registrant was purchased by AIMCO Properties, L.P., an affiliate
of the Corporate General Partner.  The Corporate General Partner is a subsidiary
of Apartment Investment and Management Company ("AIMCO") (see "Note B - Transfer
of Control").  The directors and officers of the Corporate  General Partner also
serve as executive  officers of AIMCO. The Partnership  Agreement  provides that
the Partnership is to terminate on December 31, 2020 unless  terminated prior to
such date. The Partnership  commenced operations on March 1, 1981, and completed
its  acquisition  of  apartment  properties  on June 30, 1981.  The  Partnership
operates three apartment properties located in the South and Southeast.

Use of Estimates:  The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles 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 provides that net cash
from operations  means 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  financial
statements,  whenever  "net cash  provided by  operations"  is used,  it has the
aforementioned meaning. The following is a reconciliation of the subtotal on the
accompanying  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.

                                                        Years Ended December 31,
                                                            2000          1999
                                                              (in thousands)
Net cash provided by operating activities                  $ 1,882      $ 2,342
  Property improvements and replacements                      (626)      (1,703)
  Payments on mortgage notes payable                          (295)        (300)
  Changes in reserves for net operating liabilities            546         (207)
  Changes in restricted escrows, net                          (523)         599
  Additional operating reserves                                528         (731)

      Net cash from operations                             $ 1,512      $    --


In 1999, the Corporate General Partner believed it to be in the best interest of
the  Partnership to reserve an additional  $731,000 to fund  continuing  capital
improvement needs in order for the properties to remain competitive.

During the year ended December 31, 2000, the Partnership paid cash distributions
of approximately $11,671,000  (approximately $11,654,000 to the limited partners
or $423.78 per limited partnership unit). These distributions  consisted of cash
from operations of  approximately  $1,697,000  (approximately  $1,680,000 to the
limited  partners  or $61.09 per limited  partnership  unit) and  proceeds  from
refinancings  of  approximately  $9,974,000  (approximately  $9,974,000  to  the
limited  partners  or $362.69  per  limited  partnership  unit).  Subsequent  to
December 31, 2000, the Partnership distributed  approximately  $1,512,000 to the
partners  (approximately  $1,506,000  to limited  partners or $54.76 per limited
partnership unit) from operations.  During the year ended December 31, 1999, the
Partnership   paid   cash   distributions    totaling   approximately   $300,000
(approximately   $297,000  to  the  limited   partners  or  $10.80  per  limited
partnership unit).

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%.

Prior to December 15, 2000,  distributions were restricted by the requirement to
deposit net  operating  income  into a reserve  account  until such  account was
funded in an  amount  equal to a minimum  of $400 and a  maximum  of $1,000  per
apartment unit for all three  properties.  With the refinancing of the mortgages
encumbering  each of the  properties  (see "Note C - Mortgage Notes Payable" for
further  discussion),  this  requirement  is no longer in effect.  As the actual
release of the reserve  account  occurred  subsequent to December 31, 2000,  the
reserve balance of approximately  $884,000 is included in restricted  escrows on
the accompanying balance sheet.

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.

Profits, not including gain from property dispositions, are allocated as if they
were distributions of net cash from operations.

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.

All  losses,  including  losses  attributable  to  property  dispositions,   are
allocated  99%  to  the  limited  partners  and  1%  to  the  general  partners.
Accordingly,  net income as shown in the statements of operations and changes in
partners'  (deficit) capital for 2000 and 1999 were allocated 99% to the limited
partners and 1% to the general partners. Net income per limited partnership unit
for 2000 and 1999 was  computed as 99% of net income  divided by 27,500  average
units outstanding.

Fair Value of Financial Instruments: Statement of Financial Accounting Standards
("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  amount of its
financial  instruments (except for long term debt) approximates their fair value
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.

Other Reserves:  The general  partners may designate a portion of cash generated
from operations as "other  reserves" in determining net cash used in operations.
Per the Partnership Agreement, the general partners designated as other reserves
an  amount  equal  to the  net  liabilities  related  to the  operations  of the
apartment properties during the current fiscal year that are expected to require
the use of cash  during the next  fiscal  year.  The  changes in other  reserves
during 2000 and 1999 were an increase of  approximately  $546,000 and a decrease
of  approximately  $207,000,  respectively,  which  amounts were  determined  by
considering  changes in the balances of receivables and deposits,  other assets,
accounts   payable,   tenant  security   deposits,   accrued  taxes,  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:  Includes cash on hand and in banks and money market
accounts.  At certain  times,  the amount of cash deposited at a bank may exceed
the limit on insured deposits.  Cash balances include approximately  $647,000 at
December 31, 2000 that are  maintained by the affiliated  management  company on
behalf of affiliated entities in cash concentration accounts.

Escrows  for  Taxes:  Escrows  maintained  for the  payment  of taxes,  totaling
$303,000 at December 31, 2000, are included in receivables  and deposits and are
held by the Partnership.

Depreciation:  Depreciation  is  provided by the  straight-line  method over the
estimated lives of the apartment  properties and related personal property.  For
Federal income tax purposes,  the  accelerated  cost recovery method is used (1)
for real property over 15 years for additions  prior to March 16, 1984, 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, and (2) for personal
property over 5 years for additions prior to 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
additions over 27 1/2 years and (2) personal property additions over 5 years.

Loan Costs: Loan costs of approximately $524,000, less accumulated  amortization
of approximately $1,000, are included in other assets and are being amortized on
a straight-line basis over the life of the loans.

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 the unit and is current on rental payments.

Leases: The Partnership  generally leases apartment units for twelve-month terms
or less. The Partnership recognizes income as earned on its leases. 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  against  rental  income  as
incurred.

Investment   Properties:   Investment  properties  consist  of  three  apartment
complexes and are stated at cost.  Acquisition fees are capitalized as a cost of
real estate. In accordance with SFAS No. 121,  "Accounting for the Impairment of
Long-Lived  Assets and for Long-Lived Assets to Be Disposed Of", 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.  Costs of apartment  properties that have
been  permanently  impaired  have  been  written  down to  appraised  value.  No
adjustments  for  impairment of value were recorded in the years ended  December
31, 2000 or 1999.

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 establishes  standards
for related disclosures about products and services, geographic areas, and major
customers.  As defined in SFAS No. 131, the  Partnership has only one reportable
segment.  The Corporate General Partner believes that segment-based  disclosures
will not result in a more meaningful  presentation than the financial statements
as currently presented.

Advertising:  The  Partnership  expenses the costs of  advertising  as incurred.
Advertising expense,  included in operating expenses,  was approximately $83,000
and $63,000 for the years ended December 31, 2000 and 1999, respectively.

Note B - Transfer of Control

Pursuant  to a series  of  transactions  which  closed  on  October  1, 1998 and
February 26, 1999,  Insignia  Financial  Group,  Inc.  ("Insignia") and Insignia
Properties  Trust merged into AIMCO,  a publicly  traded real estate  investment
trust, with AIMCO being the surviving  corporation (the "Insignia Merger"). As a
result, AIMCO acquired 100% ownership interest in the Corporate General Partner.
The Corporate  General Partner does not believe that this transaction has had or
will have a material effect on the affairs and operations of the Partnership.

Note C - Mortgage Notes Payable

The principle terms of mortgage notes payable are as follows:
<TABLE>
<CAPTION>

                                Principal        Monthly
                                Balance At       Payment       Stated
                               December 31,     Including     Interest     Maturity
                                   2000          Interest       Rate         Date
                                     (in thousands)
Properties

Parktown Townhouses
<S>                              <C>               <C>         <C>         <C>   <C>
  1st mortgage                   $ 7,800           $  61       7.21%       01/01/21
Raintree Apartments
  1st mortgage                     3,055              24       7.22%       01/01/21
Signal Pointe Apartments
  1st mortgage                     8,875              70       7.22%       01/01/21

           Total                 $19,730          $ 155
</TABLE>

On December 15, 2000,  the  Partnership  refinanced  the  mortgages  encumbering
Parktown  Townhouses.   The  refinancing  replaced  first  and  second  mortgage
indebtedness of approximately $2,910,000 with a new mortgage of $7,800,000.  The
mortgage was refinanced at a rate of 7.21% compared to a prior rate of 7.60% and
matures on January 1, 2021.  Capitalized loan costs incurred for the refinancing
were approximately  $206,000. The Partnership wrote off approximately $95,000 in
unamortized  loan costs and mortgage  discount and paid prepayment  penalties of
approximately   $105,000   resulting   in  an   extraordinary   loss  on   early
extinguishment of debt of approximately $200,000.

On December 15,  2000,  the  Partnership  refinanced  the  mortgage  encumbering
Raintree  Apartments.   The  refinancing  replaced  first  and  second  mortgage
indebtedness of approximately $1,292,000 with a new mortgage of $3,055,000.  The
mortgage was  refinanced at a rate of 7.22%  compared to the prior rate of 7.60%
and  matures  on  January  1, 2021.  Capitalized  loan  costs  incurred  for the
refinancing were approximately  $74,000. The Partnership wrote off approximately
$45,000 in  unamortized  loan costs and mortgage  discount  and paid  prepayment
penalties of approximately  $46,000 resulting in an extraordinary  loss on early
extinguishment of debt of approximately $91,000.

On December 15, 2000, the Partnership refinanced the mortgage encumbering Signal
Pointe   Apartments.   The  refinancing   replaced  first  and  second  mortgage
indebtedness of approximately $3,857,000 with a new mortgage of $8,875,000.  The
mortgage was  refinanced at a rate of 7.22%  compared to the prior rate of 7.60%
and  matures  on  January  1, 2021.  Capitalized  loan  costs  incurred  for the
refinancing were approximately $244,000. The Partnership wrote off approximately
$117,000 in  unamortized  loan costs and mortgage  discount and paid  prepayment
penalties of approximately  $141,000 resulting in an extraordinary loss on early
extinguishment of debt of approximately $258,000.

The  mortgage  notes  payable are  nonrecourse  and are secured by pledge of the
respective  apartment  properties  and by pledge of revenues from the respective
apartment properties.  Prepayment penalties are incurred if the notes are repaid
prior to maturity.  Further,  the properties may not be sold subject to existing
indebtedness.  The principal  balance is being amortized over 240 months with no
balloon payments due at maturity.

Scheduled  principal  payments  of the  mortgage  notes  payable  subsequent  to
December 31, 2000 are as follows (in thousands):

                               2001             $   418
                               2002                 489
                               2003                 525
                               2004                 564
                               2005                 607
                            Thereafter           17,127
                                                $19,730

Note D - 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 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 (dollar amounts in thousands, except per unit data):

                                                     2000         1999

Net income as reported                              $  763      $ 1,140
Add (deduct):
   Depreciation differences                            272          480
   Change in prepaid rental                              2           61
   Other                                                45          (70)

Federal taxable income                             $ 1,082      $ 1,611

Federal taxable income per limited
   partnership unit                                $ 38.94      $ 57.98

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              $(8,725)
                     Buildings and land                      2,875
                     Accumulated depreciation               (5,068)
                     Syndication fees                        3,111
                     Other                                     236
                  Net liabilities - tax basis              $(7,571)

Note E - 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) payments to
affiliates for services and (ii)  reimbursement of certain expenses  incurred by
affiliates on behalf of the Partnership.  Balances and other  transactions  with
affiliates of the  Corporate  General  Partner for the years ended  December 31,
2000 and 1999 are as follows:

                                                         2000       1999
                                                         (in thousands)
Property management fees (included in operating
  expenses)                                             $ 320      $ 303
Reimbursement for services of affiliates
  (included in operating expense, general and
  administrative expense, and investment
  properties)                                             253        163
Due to general partners (included in other
  liabilities)                                             58         58

During the years ended  December 31, 2000 and 1999,  affiliates of the Corporate
General  Partner were  entitled to receive 5% of gross  receipts from all of the
Registrant's  properties  as  compensation  for  providing  property  management
services.  The Partnership  paid to such affiliates  approximately  $320,000 and
$303,000 for the years ended December 31, 2000 and 1999, respectively.

Affiliates  of  the  Corporate   General  Partner   received   reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $253,000 and
$163,000 for the years ended December 31, 2000 and 1999, respectively.

During  1983,  a payable to the general  partners of  approximately  $58,000 was
accrued for sales  commissions  earned.  Pursuant to the Partnership  Agreement,
this liability cannot be paid until certain levels of return are received by the
limited  partners.  As of December 31, 2000,  the level of return to the limited
partners has not been met.

On September 26, 1997, an affiliate of the Corporate  General Partner  purchased
Lehman Brothers' Class "D" subordinated bonds of SASCO 1992-M1.  These bonds are
secured  by 55  multi-family  apartment  mortgage  loan  pairs  held  in  Trust,
including Parktown Townhouses, Raintree Apartments, and Signal Pointe Apartments
owned by the Partnership.  Since the refinancing of the Partnership's investment
properties in December 2000, these bonds are no longer secured by the investment
properties.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates owned 18,960.3 limited  partnership units
in the Partnership representing 68.947% of the outstanding units at December 31,
2000. 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 limited partnership  interests in the Partnership for cash or
in exchange  for units in the  operating  partnership  of AIMCO  either  through
private  purchases or tender offers.  In this regard, on February 8, 2001, AIMCO
Properties, L.P., commenced a tender offer to acquire all of the Units not owned
by  affiliates  of AIMCO for a purchase  price of $588.00 per Unit.  Pursuant to
this  offer,  AIMCO  acquired an  additional  100 units  resulting  in its total
ownership being increased to 19,060.3 units or 69.312% of the total  outstanding
units. 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  without   limitation,   voting  on  certain  amendments  to  the
Partnership  Agreement and voting to remove the Corporate General Partner.  As a
result of its  ownership  of 69.312%  of the  outstanding  units,  AIMCO is in a
position to influence all voting decisions with respect to the Registrant.  When
voting on matters, AIMCO would in all likelihood vote the Units it acquired in a
manner  favorable to the interest of the Corporate  General  Partner  because of
their affiliation with the Corporate General Partner.

Note F - Real Estate and Accumulated Depreciation
<TABLE>
<CAPTION>

                                                    Initial Cost
                                                   To Partnership
                                                   (in thousands)

                                                           Buildings      Net Costs
                                                          and Related    Capitalized
                                                            Personal    Subsequent to
Description                    Encumbrances       Land      Property     Acquisition
                              (in thousands)                            (in thousands)

<S>                              <C>            <C>         <C>            <C>
Parktown Townhouses              $ 7,800        $ 1,095     $ 5,329        $ 4,162
Raintree Apartments                3,055            184       3,184          1,075
Signal Pointe Apartments           8,875            535       8,062          3,841

          Totals                 $19,730        $ 1,814     $16,575        $ 9,078
</TABLE>

<TABLE>
<CAPTION>

                     Gross Amount At Which
                            Carried
                      At December 31, 2000
                         (in thousands)

                              Buildings
                              And Related
                               Personal             Accumulated       Date of      Date     Depreciable
Description            Land   Properties   Total    Depreciation    Construction  Acquired   Life-Years
                                                   (in thousands)
<S>                  <C>       <C>       <C>          <C>               <C>       <C>   <C>     <C>
Parktown Townhouses  $ 1,095   $ 9,491   $10,586      $ 7,172           1969      03/01/81      5-35
Raintree Apartments      184     4,259     4,443        3,172         1972-1974   04/30/81      5-38
Signal Pointe
  Apartments             535    11,903    12,438        8,547           1970      06/30/81      5-37

      Totals         $ 1,814   $25,653   $27,467      $18,891
</TABLE>

Reconciliation of "Real Estate and Accumulated Depreciation":

                                               Years Ended December 31,
                                                   2000         1999
                                                    (in thousands)
Investment Properties
Balance at beginning of year                      $26,946      $25,318
    Property improvements                             521        1,758
    Disposals of property                              --         (130)
Balance at end of year                            $27,467      $26,946

Accumulated Depreciation
Balance at beginning of year                      $17,884      $17,006
    Additions charged to expense                    1,007          954
    Disposals of property                              --          (76)
Balance at end of year                            $18,891      $17,884

The  aggregate  cost of the real  estate  for  Federal  income tax  purposes  at
December  31,  2000 and 1999,  is  approximately  $30,342,000  and  $29,673,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December 31, 2000 and 1999, is  approximately  $23,959,000  and  $23,253,000,
respectively.

Note G - 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. 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 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 Insignia  Merger.  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.  The Corporate General Partner does not
anticipate  that  costs  associated  with  this  case  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 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

Shelter  Properties II (the  "Partnership" or  "Registrant")  has no officers or
directors.  The names and ages of, as well as the positions and offices held by,
the  executive  officers and  directors of Shelter  Realty II  Corporation  (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          43    Executive Vice President and Director

     Martha L. Long           41    Senior Vice President and Controller

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.  Prior to  joining  AIMCO,  Mr.  Foye was a
partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1989 to
1998 and was  Corporate  Partner of the  firm's  Brussels,  Budapest  and Moscow
offices from 1992  through  1994.  Mr. Foye is also Deputy  Chairman of the Long
Island  Power   Authority  and  serves  as  a  member  of  the  New  York  State
Privatization  Council.  He received a B.A. from Fordham College and a J.D. from
Fordham University Law School.

Martha L. Long has been Senior Vice  President  and  Controller of the Corporate
General  Partner since October 1998 as a result of the  acquisition  of Insignia
Financial  Group,  Inc. As of February 2001, Ms. Long was also appointed head of
the service  business for AIMCO.  From June 1994 until January 1997, she was the
Controller for Insignia, and was promoted to Senior Vice President - Finance and
Controller in January 1997,  retaining that title until October 1999.  From 1988
to June 1994,  Ms. Long was Senior Vice  President and  Controller for The First
Savings Bank, FSB in Greenville, South Carolina.

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 Managing  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 generally  accepted
accounting  principles,  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
generally  accepted  auditing  standards.   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 has approved
the  inclusion of the audited  financial  statements  in the Form 10-KSB for the
year  ended  December  31,  2000 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 the current
fiscal  year.  Fees for the last  fiscal  year were  annual  audit  services  of
approximately  $43,000  and  non-audit  services  (principally  tax-related)  of
approximately $21,000.

Item 10.    Executive Compensation

No  directors  and  officers  of the  Corporate  General  Partner  received  any
remuneration from the Registrant.

Item 11.    Security Ownership of Certain Beneficial Owners and Management

Except as noted below,  no person was known to be the  beneficial  owner of more
than 5% of the Limited  Partnership  Units of the  Registrant as of December 31,
2000.

           Entity                          Number of Units      Percentage

           Cooper River Properties, LLC        1,958.8            7.123%
             (an affiliate of AIMCO)
           Insignia Properties LP              9,128.0           33.193%
             (an affiliate of AIMCO)
           AIMCO Properties LP                 7,873.5           28.631%
             (an affiliate of AIMCO)

Cooper  River  Properties,   LLC  and  Insignia  Properties  LP  are  indirectly
ultimately  owned  by  AIMCO.  Their  business  address  is  55  Beattie  Place,
Greenville, South Carolina 29602.

AIMCO Properties LP is indirectly  ultimately  controlled by AIMCO. Its business
address is 2000 South Colorado Boulevard, Denver, Colorado 80222.

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.  AIMCO  Properties  LP, the other general  partner,  has
acquired 7,873.5 units as the result of one or more tender offers.

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) payments to
affiliates for services and (ii)  reimbursement of certain expenses  incurred by
affiliates on behalf of the Partnership.  Balances and other  transactions  with
affiliates of the  Corporate  General  Partner for the years ended  December 31,
2000 and 1999 are as follows:


                                                         2000       1999
                                                         (in thousands)

Property management fees                                $ 320      $ 303
Reimbursement for services of affiliates                  253        163
Due to general partners                                    58         58


During the years ended  December 31, 2000 and 1999,  affiliates of the Corporate
General  Partner were  entitled to receive 5% of gross  receipts from all of the
Registrant's  properties  as  compensation  for  providing  property  management
services.  The Partnership  paid to such affiliates  approximately  $320,000 and
$303,000 for the years ended December 31, 2000 and 1999, respectively.

Affiliates  of  the  Corporate   General  Partner   received   reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $253,000 and
$163,000 for the years ended December 31, 2000 and 1999, respectively.

During  1983,  a payable to the general  partners of  approximately  $58,000 was
accrued for sales  commissions  earned.  Pursuant to the Partnership  Agreement,
this liability cannot be paid until certain levels of return are received by the
limited  partners.  As of December 31, 2000,  the level of return to the limited
partners has not been met.

On September 26, 1997, an affiliate of the Corporate  General Partner  purchased
Lehman Brothers' Class "D" subordinated bonds of SASCO 1992-M1.  These bonds are
secured  by 55  multi-family  apartment  mortgage  loan  pairs  held  in  Trust,
including Parktown Townhouses, Raintree Apartments, and Signal Pointe Apartments
owned by the Partnership.  Since the refinancing of the Partnership's investment
properties in December 2000, these bonds are no longer secured by the investment
properties.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates owned 18,960.3 limited  partnership units
in the Partnership representing 68.947% of the outstanding units at December 31,
2000. 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 limited partnership  interests in the Partnership for cash or
in exchange  for units in the  operating  partnership  of AIMCO  either  through
private  purchases or tender offers.  In this regard, on February 8, 2001, AIMCO
Properties, L.P., commenced a tender offer to acquire all of the Units not owned
by  affiliates  of AIMCO for a purchase  price of $588.00 per Unit.  Pursuant to
this  offer,  AIMCO  acquired an  additional  100 units  resulting  in its total
ownership being increased to 19,060.3 units or 69.312% of the total  outstanding
units. 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  without   limitation,   voting  on  certain  amendments  to  the
Partnership  Agreement and voting to remove the Corporate General Partner.  As a
result of its  ownership  of 69.312%  of the  outstanding  units,  AIMCO is in a
position to influence all voting decisions with respect to the Registrant.  When
voting on matters, AIMCO would in all likelihood vote the Units it acquired in a
manner  favorable to the interest of the Corporate  General  Partner  because of
their affiliation with the Corporate General Partner.

Item 13.  Exhibits and Reports on Form 8-K

      (a) Exhibits:

          Exhibit 10(iii)(g), Multifamily Note dated December 15, 2000, by and
          between  Registrant and Reilly Mortgage Group, Inc.,  for  Parktown
          Townhouses Apartments.

          Exhibit 10(iii)(h), Multifamily Note dated December 15, 2000, by and
          between  Registrant and Reilly  Mortgage Group, Inc.,  for  Raintree
          Apartments.

          Exhibit 10(iii)(i), Multifamily Note dated December 15, 2000, by and
          between  Registrant and Reilly Mortgage Group,Inc.,for Signal Pointe
          Apartments.

      (b) Reports on Form 8-K filed in the fourth quarter of calendar year 2000:

          None.


<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 II LIMITED PARTNERSHIP


                                    By:   Shelter Realty II Corporation
                                          Corporate General Partner


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


                                    By:   /s/Martha L. Long
                                          Martha L. Long
                                          Senior Vice President
                                          and Controller


                                    Date:


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


/s/Patrick J. Foye      Executive Vice President      Date:
Patrick J. Foye         and Director


/s/Martha L. Long       Senior Vice President         Date:
Martha L. Long          and Controller

<PAGE>

                                  EXHIBIT INDEX


Exhibit

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  filed  with
     Registrant's Current Report on Form 8-K dated October 1, 1998.

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  February 2,
     1981 contained in Amendment No. 1 to Registration  Statement No. 2-69507 of
     Registrant  filed  February  2, 1981 (the  "Prospectus")  and  incorporated
     herein by reference].

     (b) Subscription Agreements and Signature Pages [Filed with Amendment No. 1
     of  Registration  Statement No.  2-69507,  of Registrant  and  incorporated
     herein by reference].

     (c) Promissory  Note and Deed of Trust between Joe A.  McDermott,  Inc. and
     the  Mischer  Corporation  and New York  Life  Insurance  Company.  General
     Warranty Deed between  Parktown Realty,  N.V. and Shelter  Properties II to
     acquire Parktown Apartments.*

     (d) Mortgage Note and Mortgage Deed between  Mutual  Benefit Life Insurance
     Company and Foxcroft Investors,  Limited.  Purchase Money Note and Purchase
     Money Mortgage and Security Agreement between Foxcroft  Investors,  Limited
     and Shelter Properties II to acquire Squire One Apartments.*

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

     (e) Mortgage Note between  William C. Dailey and Fidelity  Federal  Savings
     and Loan  Association and Promissory Note between William C. Dailey and The
     Prudential  Insurance Company (filed as Exhibit 12(E) to Amendment No. 1 to
     Registration  Statement No.  2-69507 of  Registrant  filed January 1981 and
     incorporated herein by reference).  Modification and Assumption of Mortgage
     between   American   Federal  Savings  and  Loan  Association  and  Shelter
     Properties II to acquire Raintree Apartments (filed as Exhibit 4(e) to Form
     10-K of Registrant for year ended December 31, 1988 and incorporated herein
     by reference).

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

     (a) Purchase  Agreement dated December 31, 1980,  between Hubris,  Inc. and
     U.S. Shelter Corporation to purchase Parktown Townhouse.**

     (b) Purchase Agreement dated January 5, 1981, between Twin City Apartments,
     Inc. and U.S. Shelter Corporation to purchase The Village Apartments.**

     (c)  Purchase  Agreement  dated  January 2, 1981 between  Carolina  Housing
     Partners and U.S. Shelter Corporation to purchase Raintree Apartments.**

     **Filed as Exhibits 12(b), 12(c), and 12(d), respectively, to Amendment No.
     1 of  Registration  Statement No.  2-69507 of Registrant  filed February 2,
     1981 and incorporated herein by reference.

     (d)  Purchase  Agreement  dated May 28, 1981  between  Foxcroft  Investors,
     Limited and Shelter Properties II to purchase Squire One Apartments. [Filed
     with Form 8-K of Registrant dated June 8, 1981 and  incorporated  herein by
     reference.]

     (e) Sales Agreement  dated December 30, 1983 between Shelter  Properties II
     and  Security  Investors,  Ltd.-II to sell  Cambridge  Station  Apartments.
     [Filed with Form 10-K of  Registrant  for year ended  December 31, 1983 and
     incorporated herein by reference.]

(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 to  Registration
     Statement,   No.  2-69507,   of  Registrant  and  incorporated   herein  by
     reference].

(iii) Contracts related to refinancing of debt:

     (a) First Mortgage and Security  Agreements  dated October 28, 1992 between
     Shelter Properties II Limited Partnership and Joseph Philip Forte (Trustee)
     and First Commonwealth Realty Credit Corporation,  a Virginia  Corporation,
     securing the following  properties:  Raintree,  Parktown/Center  Court, and
     Squire One.***

     (b) Second Mortgage and Security  Agreements dated October 28, 1992 between
     Shelter Properties II Limited Partnership and Joseph Philip Forte (Trustee)
     and First Commonwealth Realty Credit Corporation,  a Virginia  Corporation,
     securing the following  properties:  Raintree,  Parktown/Center  Court, and
     Squire One.***

     (c) First  Assignments  of Leases and Rents dated  October 28, 1992 between
     Shelter Properties II Limited Partnership and Joseph Philip Forte (Trustee)
     and First Commonwealth Realty Credit Corporation,  a Virginia  Corporation,
     securing the following  properties:  Raintree,  Parktown/Center  Court, and
     Squire One.***

     (d) Second  Assignments  of Leases and Rents dated October 28, 1992 between
     Shelter Properties II Limited Partnership and Joseph Philip Forte (Trustee)
     and First Commonwealth Realty Credit Corporation,  a Virginia  Corporation,
     securing the following  properties:  Raintree,  Parktown/Center  Court, and
     Squire One.***

     (e) First  Deeds of Trust Notes dated  October  28,  1992  between  Shelter
     Properties  II Limited  Partnership  and First  Commonwealth  Realty Credit
     Corporation,    relating   to   the   following    properties:    Raintree,
     Parktown/Center Court, and Squire One.***

     (f) Second  Deeds of Trust Notes dated  October  28, 1992  between  Shelter
     Properties  II Limited  Partnership  and First  Commonwealth  Realty Credit
     Corporation,    relating   to   the   following    properties:    Raintree,
     Parktown/Center Court, and Squire One.***

     ***Filed as Exhibit 10(iii) (a) through (f),  respectively,  to Form 10-KSB
     of Registrant for the year ended December 31, 1992 and incorporated  herein
     by reference.

     (g) Multifamily Note dated December 15, 2000, by and between Registrant and
     Reilly Mortgage Group, Inc., for Parktown Townhouses Apartments.****

     (h) Multifamily Note dated December 15, 2000, by and between Registrant and
     Reilly Mortgage Group, Inc., for Raintree Apartments.****

     (i) Multifamily Note dated December 15, 2000, by and between Registrant and
     Reilly Mortgage Group, Inc., for Signal Pointe Apartments.****

     ****Filed as Exhibit 10(iii) (g) through (i), respectively,  to Form 10-KSB
     of Registrant for the year ended December 31, 2000 and incorporated  herein
     by reference.

99   Prospectus of Registrant  dated February 2, 1981 [included in  Registration
     Statement No. 2-69507 of Registrant and incorporated herein by reference].
<PAGE>
                                                              Exhibit 10(iii)(g)

                                                        FHLMC Loan No. 002733501
                                                (Parktown Townhouses Apartments)

                                MULTIFAMILY NOTE
                         (TEXAS - REVISION DATE 11-01-2000)


US $7,800,000.00                                       As of December 15, 2000


      FOR VALUE RECEIVED, the undersigned ("Borrower") jointly and severally (if
more than one) promises to pay to the order of REILLY  MORTGAGE  GROUP,  INC., a
District of Columbia  corporation,  the  principal  sum of Seven  Million  Eight
Hundred  Thousand and no/100  Dollars (US  $7,800,000.00),  with interest on the
unpaid  principal  balance  at the  annual  rate of Seven  and Two  Hundred  Ten
Thousandths percent (7.210%).

1. Defined  Terms.  As used in this Note, (i) the term "Lender" means the holder
of this Note, and (ii) the term "Indebtedness"  means the principal of, interest
on,  and any other  amounts  due at any time  under,  this  Note,  the  Security
Instrument  or any other Loan  Document,  including  prepayment  premiums,  late
charges,  default interest, and advances to protect the security of the Security
Instrument under Section 12 of the Security  Instrument.  "Event of Default" and
other  capitalized  terms  used but not  defined  in this  Note  shall  have the
meanings given to such terms in the Security Instrument.

2.  Address for  Payment.  All  payments due under this Note shall be payable at
2000 Corporate Ridge, Suite 925, McLean,  Virginia 22102, or such other place as
may be designated by written notice to Borrower from or on behalf of Lender.

3.  Payment of Principal and Interest. Principal  and interest  shall be paid as
follows:

(a) Unless  disbursement of principal is made by Lender to Borrower on the first
day of the month,  interest for the period beginning on the date of disbursement
and ending on and including the last day of the month in which such disbursement
is made  shall be  payable  simultaneously  with  the  execution  of this  Note.
Interest  under  this Note  shall be  computed  on the  basis of a 360-day  year
consisting of twelve 30-day months.

(b)  Consecutive  monthly  installments  of principal and interest,  each in the
amount  of Sixty  One  Thousand  Four  Hundred  Sixty  and  43/100  Dollars  (US
$61,460.43),  shall be  payable  on the first  day of each  month  beginning  on
February 1, 2001,  until the entire unpaid principal  balance  evidenced by this
Note is fully paid.

(c) Any accrued interest remaining past due for 30 days or more may, at Lender's
discretion,  be added to and become  part of the unpaid  principal  balance  and
shall  bear  interest  at the  rate or rates  specified  in this  Note,  and any
reference below to "accrued  interest" shall refer to accrued interest which has
not become part of the unpaid  principal  balance.  Any remaining  principal and
interest  shall be due and payable on January 1, 2021 or on any earlier  date on
which the unpaid  principal  balance of this Note  becomes due and  payable,  by
acceleration or otherwise (the "Maturity  Date").  The unpaid principal  balance
shall  continue to bear interest after the Maturity Date at the Default Rate set
forth in this Note until and including the date on which it is paid in full.

(d) Any regularly  scheduled monthly  installment of principal and interest that
is  received  by Lender  before  the date it is due shall be deemed to have been
received on the due date solely for the purpose of calculating interest due.

4.  Application of Payments.  If at any time Lender  receives,  from Borrower or
otherwise,  any amount  applicable  to the  Indebtedness  which is less than all
amounts due and payable at such time,  Lender may apply that  payment to amounts
then due and  payable in any manner and in any order  determined  by Lender,  in
Lender's  discretion.  Borrower  agrees that neither  Lender's  acceptance  of a
payment  from  Borrower in an amount that is less than all amounts  then due and
payable nor Lender's  application of such payment shall  constitute or be deemed
to  constitute  either  a  waiver  of  the  unpaid  amounts  or  an  accord  and
satisfaction.

5. Security.  The Indebtedness is secured,  among other things, by a multifamily
mortgage, deed to secure debt or deed of trust dated as of the date of this Note
(the "Security  Instrument"),  and reference is made to the Security  Instrument
for other rights of Lender as to collateral for the Indebtedness.

6.  Acceleration.  If an Event of Default has  occurred and is  continuing,  the
entire unpaid principal  balance,  any accrued interest,  the prepayment premium
payable under  Paragraph  10, if any, and all other  amounts  payable under this
Note and any other Loan  Document  shall at once become due and payable,  at the
option of Lender,  without  any prior  notice to  Borrower  (except if notice is
required by applicable  law,  then after such notice).  Lender may exercise this
option to accelerate regardless of any prior forbearance.

7. Late  Charge.  If any  monthly  amount  payable  under this Note or under the
Security  Instrument or any other Loan Document is not received by Lender within
ten (10) days after the amount is due (unless  applicable  law requires a longer
period of time before a late  charge may be imposed,  in which event such longer
period shall be  substituted),  Borrower  shall pay to Lender,  immediately  and
without  demand by Lender,  a late  charge  equal to five  percent  (5%) of such
amount  (unless  applicable  law requires a lesser  amount be charged,  in which
event such lesser amount shall be substituted).  Borrower  acknowledges that its
failure to make timely payments will cause Lender to incur  additional  expenses
in servicing and processing  the loan  evidenced by this Note (the "Loan"),  and
that it is extremely  difficult and  impractical to determine  those  additional
expenses.  Borrower  agrees  that  the  late  charge  payable  pursuant  to this
Paragraph  represents a fair and  reasonable  estimate,  taking into account all
circumstances  existing  on the date of this Note,  of the  additional  expenses
Lender will incur by reason of such late payment.  The late charge is payable in
addition  to,  and not in lieu of, any  interest  payable  at the  Default  Rate
pursuant to Paragraph 8.

8. Default Rate. So long as (a) any monthly  installment under this Note remains
past due for thirty  (30) days or more,  or (b) any other  Event of Default  has
occurred and is continuing,  interest under this Note shall accrue on the unpaid
principal  balance from the earlier of the due date of the first unpaid  monthly
installment or the occurrence of such other Event of Default, as applicable,  at
a rate (the "Default  Rate") equal to the lesser of four (4)  percentage  points
above  the rate  stated  in the first  paragraph  of this  Note and the  maximum
interest rate which may be collected from Borrower under  applicable law. If the
unpaid  principal  balance and all accrued  interest are not paid in full on the
Maturity Date, the unpaid principal  balance and all accrued interest shall bear
interest from the Maturity Date at the Default Rate.  Borrower also acknowledges
that its failure to make timely  payments will cause Lender to incur  additional
expenses in servicing and  processing the Loan,  that,  during the time that any
monthly  installment  under this Note is  delinquent  for more than  thirty (30)
days,  Lender will incur  additional costs and expenses arising from its loss of
the use of the money due and from the adverse impact on Lender's ability to meet
its other  obligations and to take advantage of other investment  opportunities,
and that it is extremely difficult and impractical to determine those additional
costs and expenses.  Borrower also  acknowledges  that, during the time that any
monthly installment under this Note is delinquent for more than thirty (30) days
or any other Event of Default has occurred and is  continuing,  Lender's risk of
nonpayment of this Note will be  materially  increased and Lender is entitled to
be compensated for such increased risk. Borrower agrees that the increase in the
rate of interest  payable under this Note to the Default Rate  represents a fair
and reasonable estimate,  taking into account all circumstances  existing on the
date of this Note,  of the  additional  costs and expenses  Lender will incur by
reason of the  Borrower's  delinquent  payment and the  additional  compensation
Lender is entitled to receive for the increased  risks of nonpayment  associated
with a delinquent loan.

9.    Limits on Personal Liability.

(a) Except as otherwise  provided in this  Paragraph 9,  Borrower  shall have no
personal  liability  under this Note, the Security  Instrument or any other Loan
Document for the repayment of the  Indebtedness  or for the  performance  of any
other  obligations  of Borrower  under the Loan  Documents,  and  Lender's  only
recourse for the  satisfaction of the  Indebtedness  and the performance of such
obligations  shall be Lender's  exercise of its rights and remedies with respect
to the Mortgaged  Property and any other  collateral  held by Lender as security
for the Indebtedness. This limitation on Borrower's liability shall not limit or
impair  Lender's  enforcement  of  its  rights  against  any  guarantor  of  the
Indebtedness or any guarantor of any obligations of Borrower.

(b) Borrower shall be personally liable to Lender for the repayment of a portion
of the Indebtedness equal to zero percent (0%) of the original principal balance
of this Note,  plus any other amounts for which Borrower has personal  liability
under this Paragraph 9.

(c) In addition to Borrower's  personal liability under Paragraph 9(b), Borrower
shall be personally  liable to Lender for the repayment of a further  portion of
the  Indebtedness  equal to any loss or damage suffered by Lender as a result of
(1) failure of  Borrower to pay to Lender upon demand  after an Event of Default
all  Rents to which  Lender  is  entitled  under  Section  3(a) of the  Security
Instrument  and the amount of all security  deposits  collected by Borrower from
tenants  then in  residence;  (2)  failure of  Borrower  to apply all  insurance
proceeds and condemnation  proceeds as required by the Security  Instrument;  or
(3)  failure of Borrower to comply  with  Section  14(d) or (e) of the  Security
Instrument relating to the delivery of books and records, statements,  schedules
and reports.

(d) For purposes of determining  Borrower's  personal  liability under Paragraph
9(b) and Paragraph  9(c), all payments made by Borrower or any guarantor of this
Note with respect to the  Indebtedness  and all amounts  received by Lender from
the  enforcement  of its rights under the Security  Instrument  shall be applied
first to the  portion of the  Indebtedness  for which  Borrower  has no personal
liability.

(e) Borrower shall become  personally  liable to Lender for the repayment of all
of the  Indebtedness  upon the  occurrence  of any of the  following  Events  of
Default: (1) Borrower's acquisition of any property or operation of any business
not  permitted  by  Section  33 of  the  Security  Instrument;  (2)  a  Transfer
(including,  but not  limited  to,  a lien or  encumbrance)  that is an Event of
Default  under  Section  21 of the  Security  Instrument,  other than a Transfer
consisting  solely of the  involuntary  removal or  involuntary  withdrawal of a
general  partner in a limited  partnership  or a manager in a limited  liability
company; or (3) fraud or written material  misrepresentation  by Borrower or any
officer,  director,  partner,  member or employee of Borrower in connection with
the  application  for or  creation  of the  Indebtedness  or any request for any
action or consent by Lender.

(f) In addition to any personal  liability for the Indebtedness,  Borrower shall
be  personally  liable to Lender for (1) the  performance  of all of  Borrower's
obligations   under  Section  18  of  the  Security   Instrument   (relating  to
environmental  matters);  (2) the costs of any audit under  Section 14(d) of the
Security  Instrument;  and (3) any  costs  and  expenses  incurred  by Lender in
connection  with the  collection of any amount for which  Borrower is personally
liable under this  Paragraph  9,  including  fees and out of pocket  expenses of
attorneys and expert witnesses and the costs of conducting any independent audit
of Borrower's  books and records to determine the amount for which  Borrower has
personal liability.

(g) To the extent that Borrower has personal  liability  under this Paragraph 9,
Lender may exercise its rights  against  Borrower  personally  without regard to
whether  Lender has exercised any rights  against the Mortgaged  Property or any
other  security,  or pursued any rights  against any  guarantor,  or pursued any
other rights available to Lender under this Note, the Security  Instrument,  any
other Loan  Document or  applicable  law. For purposes of this  Paragraph 9, the
term "Mortgaged Property" shall not include any funds that (1) have been applied
by Borrower as required or  permitted by the  Security  Instrument  prior to the
occurrence  of an  Event of  Default  or (2)  Borrower  was  unable  to apply as
required  or  permitted  by the  Security  Instrument  because of a  bankruptcy,
receivership, or similar judicial proceeding. To the fullest extent permitted by
applicable  law, in any action to enforce  Borrower's  personal  liability under
this  Paragraph  9,  Borrower  waives  any  right  to set off the  value  of the
Mortgaged Property against such personal liability.

10.   Voluntary and Involuntary Prepayments.

(a) A prepayment premium shall be payable in connection with any prepayment (any
receipt by Lender of  principal,  other than  principal  required  to be paid in
monthly installments pursuant to Paragraph 3(b), prior to the scheduled Maturity
Date set forth in Paragraph 3(c)) under this Note as provided below:

(1) Borrower may voluntarily  prepay all of the unpaid principal balance of this
Note on a Business Day  designated as the date for such  prepayment in a written
notice from  Borrower to Lender given at least 30 days prior to the date of such
prepayment.  Such prepayment shall be made by paying (A) the amount of principal
being prepaid,  (B) all accrued  interest,  (C) all other sums due Lender at the
time of such prepayment,  and (D) the prepayment premium calculated  pursuant to
Paragraph  10(c).  For all  purposes  including  the  accrual of  interest,  any
prepayment received by Lender on any day other than the last calendar day of the
month  shall be deemed to have been  received on the last  calendar  day of such
month.  For purposes of this Note,  a "Business  Day" means any day other than a
Saturday,  Sunday  or any other  day on which  Lender is not open for  business.
Unless expressly provided for in the Loan Documents, Borrower shall not have the
option to  voluntarily  prepay  less than all of the unpaid  principal  balance.
However,  if a partial  prepayment  is provided for in the Loan  Documents or is
accepted by Lender in  Lender's  discretion,  a  prepayment  premium  calculated
pursuant to Paragraph 10(c) shall be due and payable by Borrower.

(2) Upon  Lender's  exercise  of any  right of  acceleration  under  this  Note,
Borrower shall pay to Lender, in addition to the entire unpaid principal balance
of this  Note  outstanding  at the  time of the  acceleration,  (A) all  accrued
interest  and  all  other  sums  due  Lender,  and (B)  the  prepayment  premium
calculated pursuant to Paragraph 10(c).

(3) Any  application  by  Lender  of any  collateral  or other  security  to the
repayment of any portion of the unpaid  principal  balance of this Note prior to
the  Maturity  Date and in the absence of  acceleration  shall be deemed to be a
partial prepayment by Borrower, requiring the payment to Lender by Borrower of a
prepayment premium.

(b)  Notwithstanding  the provisions of Paragraph  10(a), no prepayment  premium
shall be payable with respect to (A) any prepayment  made during the period from
one  hundred  eighty  (180)  days  before  the  scheduled  Maturity  Date to the
scheduled  Maturity  Date,  or (B) any  prepayment  occurring as a result of the
application of any insurance  proceeds or condemnation  award under the Security
Instrument.

(c) Any prepayment premium payable under this Note shall be computed as follows:

(1) If the prepayment is made between the date of this Note and the date that is
180 months after the first day of the first calendar month following the date of
this Note (the "Yield  Maintenance  Period"),  the  prepayment  premium shall be
whichever is the greater of subparagraphs (i) and (ii) below:

            (i)   1.0% of the unpaid principal balance of this Note; or

            (ii)  the product obtained by multiplying:

                  (A)   the amount of principal being prepaid,

                  by

                  (B)   the  excess (if any) of the Monthly Note  Rate  over the
                        Assumed Reinvestment Rate,

                  by

                  (C)   the Present Value Factor.

            For purposes of subparagraph  (ii), the following  definitions shall
            apply:

            Monthly Note Rate: one-twelfth (1/12) of the annual interest rate of
            this Note, expressed as a decimal calculated to five digits.

            Prepayment Date: in the case of a voluntary prepayment,  the date on
            which the  prepayment  is made;  in the case of the  application  by
            Lender of  collateral  or  security  to a portion  of the  principal
            balance,  the date of such  application;  and in any other case, the
            date on which Lender  accelerates  the unpaid  principal  balance of
            this Note.

            Assumed  Reinvestment Rate:  one-twelfth (1/12) of the yield rate as
            of the date 5 Business  Days  before  the  Prepayment  Date,  on the
            9.250% U.S.  Treasury  Security due February 1, 2016, as reported in
            The Wall Street Journal,  expressed as a decimal  calculated to five
            digits.  In the event that no yield is published  on the  applicable
            date  for the  Treasury  Security  used  to  determine  the  Assumed
            Reinvestment  Rate,  Lender,  in its  discretion,  shall  select the
            non-callable  Treasury  Security  maturing  in the same  year as the
            Treasury Security specified above with the lowest yield published in
            The  Wall  Street  Journal  as  of  the  applicable   date.  If  the
            publication  of such  yield  rates in The  Wall  Street  Journal  is
            discontinued  for any reason,  Lender shall select a security with a
            comparable rate and term to the Treasury  Security used to determine
            the  Assumed  Reinvestment  Rate.  The  selection  of  an  alternate
            security  pursuant  to this  Paragraph  shall  be  made in  Lender's
            discretion.

            Present Value Factor: the factor that discounts to present value the
            costs  resulting  to Lender from the  difference  in interest  rates
            during the months remaining in the Yield Maintenance  Period,  using
            the Assumed  Reinvestment  Rate as the discount  rate,  with monthly
            compounding, expressed numerically as follows:

                                     [OBJECT OMITTED]

            n = number of months remaining in Yield Maintenance Period

            ARR = Assumed Reinvestment Rate

(2) If the  prepayment  is made after the  expiration  of the Yield  Maintenance
Period  but  before  the  period  set forth in  Paragraph  10(b)(A)  above,  the
prepayment premium shall be 1.0% of the unpaid principal balance of this Note.

(d) Any  permitted  or  required  prepayment  of less than the unpaid  principal
balance of this Note shall not extend or postpone the due date of any subsequent
monthly  installments or change the amount of such  installments,  unless Lender
agrees otherwise in writing.

(e) Borrower  recognizes that any prepayment of the unpaid principal  balance of
this Note,  whether  voluntary or  involuntary  or  resulting  from a default by
Borrower,  will result in Lender's incurring loss, including  reinvestment loss,
additional expense and frustration or impairment of Lender's ability to meet its
commitments  to third  parties.  Borrower  agrees to pay to Lender  upon  demand
damages  for the  detriment  caused by any  prepayment,  and  agrees  that it is
extremely  difficult  and  impractical  to ascertain the extent of such damages.
Borrower  therefore  acknowledges  and agrees that the  formula for  calculating
prepayment  premiums set forth in this Note represents a reasonable  estimate of
the damages Lender will incur because of a prepayment.

(f) Borrower further acknowledges that the prepayment premium provisions of this
Note are a material part of the  consideration  for the Loan,  and  acknowledges
that the terms of this Note are in other  respects more favorable to Borrower as
a  result  of the  Borrower's  voluntary  agreement  to the  prepayment  premium
provisions.

11.  Costs and  Expenses.  To the  fullest  extent  allowed by  applicable  law,
Borrower  shall pay all expenses  and costs,  including  fees and  out-of-pocket
expenses  of  attorneys  (including  Lender's  in-house  attorneys)  and  expert
witnesses  and  costs of  investigation,  incurred  by Lender as a result of any
default under this Note or in connection  with efforts to collect any amount due
under  this  Note,  or to  enforce  the  provisions  of any of  the  other  Loan
Documents,  including those incurred in post-judgment  collection efforts and in
any  bankruptcy  proceeding  (including any action for relief from the automatic
stay of any  bankruptcy  proceeding)  or  judicial or  non-judicial  foreclosure
proceeding.

12.  Forbearance.  Any  forbearance  by Lender in exercising any right or remedy
under  this  Note,  the  Security  Instrument,  or any other  Loan  Document  or
otherwise  afforded by applicable  law, shall not be a waiver of or preclude the
exercise of that or any other right or remedy.  The  acceptance by Lender of any
payment after the due date of such  payment,  or in an amount which is less than
the required payment,  shall not be a waiver of Lender's right to require prompt
payment  when due of all other  payments or to exercise any right or remedy with
respect to any  failure to make  prompt  payment.  Enforcement  by Lender of any
security for  Borrower's  obligations  under this Note shall not  constitute  an
election by Lender of remedies so as to preclude the exercise of any other right
or remedy available to Lender.

13.  Waivers.  Presentment,  demand,  notice  of  dishonor,  protest,  notice of
acceleration,  notice of intent to demand or  accelerate  payment  or  maturity,
presentment  for  payment,  notice  of  nonpayment,   grace,  and  diligence  in
collecting  the  Indebtedness  are  waived by  Borrower  and all  endorsers  and
guarantors of this Note and all other third party obligors.

14. Loan Charges. Borrower and Lender intend at all times to comply with the law
of the State of Texas  governing the maximum rate or amount of interest  payable
on or in connection with this Note and the  Indebtedness  (or applicable  United
States federal law to the extent that it permits Lender to contract for, charge,
take,  reserve or receive a greater amount of interest than under Texas law). If
the applicable law is ever  judicially  interpreted so as to render usurious any
amount payable under this Note or under any other Loan  Document,  or contracted
for, charged,  taken, reserved or received with respect to the Indebtedness,  or
of  acceleration  of the maturity of this Note, or if any prepayment by Borrower
results in Borrower  having paid any interest in excess of that permitted by any
applicable  law,  then  Borrower  and Lender  expressly  intend  that all excess
amounts  collected  by Lender  shall be applied  to reduce the unpaid  principal
balance  of this Note (or,  if this  Note has been or would  thereby  be paid in
full,  shall be refunded to  Borrower),  and the  provisions  of this Note,  the
Security  Instrument  and any other Loan Documents  immediately  shall be deemed
reformed  and the amounts  thereafter  collectible  under this Note or any other
Loan  Document  reduced,  without  the  necessity  of the  execution  of any new
documents,  so as to comply  with any  applicable  law,  but so as to permit the
recovery of the fullest  amount  otherwise  payable under this Note or any other
Loan  Document.  The  right to  accelerate  the  maturity  of this Note does not
include the right to accelerate any interest which has not otherwise  accrued on
the date of such  acceleration,  and  Lender  does not  intend  to  collect  any
unearned  interest in the event of  acceleration.  All sums paid or agreed to be
paid to Lender for the use,  forbearance or detention of the Indebtedness shall,
to the extent permitted by any applicable law, be amortized, prorated, allocated
and spread throughout the full term of the Indebtedness until payment in full so
that the rate or amount of  interest  on  account of the  Indebtedness  does not
exceed the applicable usury ceiling.  Notwithstanding any provision contained in
this Note,  the Security  Instrument or any other Loan Document that permits the
compounding of interest,  including any provision by which any accrued  interest
is added to the principal amount of this Note, the total amount of interest that
Borrower is  obligated  to pay and Lender is entitled to receive with respect to
the  Indebtedness  shall not  exceed the amount  calculated  on a simple  (i.e.,
noncompounded)  interest basis at the maximum rate on principal amounts actually
advanced  to or for the  account of  Borrower,  including  all current and prior
advances and any advances made pursuant to the Security Instrument or other Loan
Documents  (such as for the  payment of taxes,  insurance  premiums  and similar
expenses or costs).

15.  Commercial  Purpose.  Borrower  represents  that the  Indebtedness is being
incurred  by  Borrower  solely for the  purpose  of  carrying  on a business  or
commercial enterprise,  and not for personal, family, household, or agricultural
purposes.

16.  Counting  of  Days.  Except  where  otherwise  specifically  provided,  any
reference in this Note to a period of "days" means  calendar  days, not Business
Days.

17. Governing Law. This Note shall be governed by the law of the jurisdiction in
which the Land is located.

18.  Captions.  The captions of the paragraphs of this Note are for  convenience
only and shall be disregarded in construing this Note.

19.   Notices;   Written   Modifications.   All   notices,   demands  and  other
communications  required or permitted to be given by Lender to Borrower pursuant
to this  Note  shall be given in  accordance  with  Section  31 of the  Security
Instrument.  Any  modification  or amendment  to this Note shall be  ineffective
unless  in  writing  signed  by  the  party  sought  to  be  charged  with  such
modification or amendment;  provided,  however,  that in the event of a Transfer
under  the  terms  of  the  Security  Instrument,  any  or  some  or  all of the
Modification  to Multifamily  Note may be modified or rendered void by Lender at
Lender's option by notice to Borrower/transferee.

20. Consent to  Jurisdiction  and Venue.  Borrower  agrees that any  controversy
arising under or in relation to this Note shall be litigated  exclusively in the
jurisdiction  in which the Land is located (the  "Property  Jurisdiction").  The
state and federal  courts and  authorities  with  jurisdiction  in the  Property
Jurisdiction  shall have exclusive  jurisdiction  over all  controversies  which
shall arise under or in relation to this Note. Borrower  irrevocably consents to
service,  jurisdiction,  and venue of such  courts for any such  litigation  and
waives  any other  venue to which it might be  entitled  by virtue of  domicile,
habitual residence or otherwise.

21. WAIVER OF TRIAL BY JURY.  BORROWER AND LENDER EACH (A) AGREES NOT TO ELECT A
TRIAL  BY JURY  WITH  RESPECT  TO ANY  ISSUE  ARISING  OUT OF  THIS  NOTE OR THE
RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OF RIGHT
BY A JURY AND (B) WAIVES  ANY RIGHT TO TRIAL BY JURY WITH  RESPECT TO SUCH ISSUE
TO THE EXTENT THAT ANY SUCH RIGHT  EXISTS NOW OR IN THE  FUTURE.  THIS WAIVER OF
RIGHT  TO  TRIAL  BY JURY IS  SEPARATELY  GIVEN  BY EACH  PARTY,  KNOWINGLY  AND
VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

      ATTACHED EXHIBIT.  The following Exhibit is attached to this Note:

            -----
              X       Exhibit A     Modifications to Multifamily Note
            -----

      IN WITNESS WHEREOF, Borrower has signed and delivered this Note under seal
or has  caused  this  Note to be signed  and  delivered  under  seal by its duly
authorized representative. Borrower intends that this Note shall be deemed to be
signed and delivered as a sealed instrument.
<PAGE>


                                    SHELTER PROPERTIES II LIMITED PARTNERSHIP, a
                                       South Carolina limited partnership

                                    By:   Shelter Realty II Corporation, a South
                                          Carolina corporation,d/b/a in Texas as
                                          South Carolina Shelter Realty II
                                          Corporation, its General Partner



                                          By: ___________________________
                                              Patti K. Fielding
                                              Senior Vice President


                                   57-0709233
                                   Borrower's Social Security/Employer ID Number

<PAGE>


PAY TO THE ORDER OF FEDERAL HOME LOAN MORTGAGE  CORPORATION,  WITHOUT  RECOURSE,
THIS _____ DAY OF DECEMBER, 2000.


REILLY MORTGAGE GROUP, INC., a District
   of Columbia corporation



By:_________________________________
   Brenda R. Dutrow
   Assistant Vice President



<PAGE>


                                    EXHIBIT A

                        MODIFICATIONS TO MULTIFAMILY NOTE

1.    The first sentence of Paragraph 8 of the Note  ("Default  Rate") is hereby
      deleted and replaced with the following:

            So long as (a) any monthly  installment under this Note remains past
            due for more than thirty (30) days or (b) any other event of Default
            has  occurred  and is  continuing,  interest  under  this Note shall
            accrue on the unpaid  principal  balance from the earlier of the due
            date of the first unpaid  monthly  installment  or the occurrence of
            such other Event of Default, as applicable,  at a rate (the "Default
            Rate")  equal to the lesser of (1) the maximum  interest  rate which
            may be  collected  from  Borrower  under  applicable  law or (2) the
            greater of (i) three  percent (3%) above the  Interest  Rate or (ii)
            four percent  (4.0%) above the  then-prevailing  Prime Rate. As used
            herein,  the term  "Prime  Rate"  shall  mean  the rate of  interest
            announced by The Wall Street Journal from time to time as the "Prime
            Rate".

2.   Paragraph 9(c)of the Note is amended to add the following subparagraph (4):

     (4)  failure by Borrower to pay the amount of the water and sewer  charges,
          taxes,  fire,  hazard  or  other  insurance  premiums,  ground  rents,
          assessments  or other  charges  in  accordance  with the  terms of the
          Security Instrument.

3.    Paragraph 19 is modified by deleting:  "; provided,  however,  that in the
      event of a Transfer  under the terms of the  Security  Instrument,  any or
      some or all of the  Modifications  to Multifamily  Note may be modified or
      rendered   void   by   Lender   at   Lender's    option   by   notice   to
      Borrower/transferee" in the last sentence of the Paragraph;  and by adding
      the following new sentence:

            The  Modifications  to Multifamily  Note set forth in this Exhibit A
            shall be null and void  unless  title to the  Mortgaged  Property is
            vested in an entity whose  Controlling  Interest(s)  are directly or
            indirectly  held by AIMCO  REIT or AIMCO OP. The  capitalized  terms
            used in this paragraph are defined in the Security Instrument.

<PAGE>
                                                              Exhibit 10(iii)(h)

                                                        FHLMC Loan No. 002689588
                                                           (Raintree Apartments)

                                MULTIFAMILY NOTE
                      (MULTISTATE - REVISION DATE 11-01-2000)


US $3,055,000.00                                       As of December 15, 2000


      FOR VALUE RECEIVED, the undersigned ("Borrower") jointly and severally (if
more than one) promises to pay to the order of REILLY  MORTGAGE  GROUP,  INC., a
District of Columbia corporation,  the principal sum of Three Million Fifty-Five
Thousand  and 00/100  Dollars (US  $3,055,000.00),  with  interest on the unpaid
principal balance at the annual rate of Seven and Two Hundred Twenty Thousandths
percent (7.220%).

1. Defined Terms.  As used in this Note, (i) the term "Lender" means the holder
of this Note, and (ii) the term "Indebtedness"  means the principal of, interest
on,  and any other  amounts  due at any time  under,  this  Note,  the  Security
Instrument  or any other Loan  Document,  including  prepayment  premiums,  late
charges,  default interest, and advances to protect the security of the Security
Instrument under Section 12 of the Security  Instrument.  "Event of Default" and
other  capitalized  terms  used but not  defined  in this  Note  shall  have the
meanings given to such terms in the Security Instrument.

2.  Address for  Payment.  All payments due under this Note shall be payable at
2000 Corporate Ridge, Suite 925, McLean,  Virginia 22102, or such other place as
may be designated by written notice to Borrower from or on behalf of Lender.

3. Payment of Principal  and Interest. Principal  and interest  shall be paid as
follows:

(a) Unless  disbursement of principal is made by Lender to Borrower on the first
day of the month,  interest for the period beginning on the date of disbursement
and ending on and including the last day of the month in which such disbursement
is made  shall be  payable  simultaneously  with  the  execution  of this  Note.
Interest  under  this Note  shall be  computed  on the  basis of a 360-day  year
consisting of twelve 30-day months.

(b)  Consecutive  monthly  installments  of principal and interest,  each in the
amount of Twenty Four Thousand Ninety Dollars and 49/100 (US $24,090.49),  shall
be payable on the first day of each month  beginning on February 1, 2001,  until
the entire unpaid principal balance evidenced by this Note is fully paid.

(c) Any accrued interest remaining past due for 30 days or more may, at Lender's
discretion,  be added to and become  part of the unpaid  principal  balance  and
shall  bear  interest  at the  rate or rates  specified  in this  Note,  and any
reference below to "accrued  interest" shall refer to accrued interest which has
not become part of the unpaid  principal  balance.  Any remaining  principal and
interest  shall be due and payable on January 1, 2021 or on any earlier  date on
which the unpaid  principal  balance of this Note  becomes due and  payable,  by
acceleration or otherwise (the "Maturity  Date").  The unpaid principal  balance
shall  continue to bear interest after the Maturity Date at the Default Rate set
forth in this Note until and including the date on which it is paid in full.

(d) Any regularly  scheduled monthly  installment of principal and interest that
is  received  by Lender  before  the date it is due shall be deemed to have been
received on the due date solely for the purpose of calculating interest due.

4.  Application of Payments.  If at any time Lender receives,  from Borrower or
otherwise,  any amount  applicable  to the  Indebtedness  which is less than all
amounts due and payable at such time,  Lender may apply that  payment to amounts
then due and  payable in any manner and in any order  determined  by Lender,  in
Lender's  discretion.  Borrower  agrees that neither  Lender's  acceptance  of a
payment  from  Borrower in an amount that is less than all amounts  then due and
payable nor Lender's  application of such payment shall  constitute or be deemed
to  constitute  either  a  waiver  of  the  unpaid  amounts  or  an  accord  and
satisfaction.

5. Security.  The Indebtedness is secured, among other things, by a multifamily
mortgage, deed to secure debt or deed of trust dated as of the date of this Note
(the "Security  Instrument"),  and reference is made to the Security  Instrument
for other rights of Lender as to collateral for the Indebtedness.
27.  Acceleration.  If an Event of Default has occurred and is  continuing,  the
entire unpaid principal  balance,  any accrued interest,  the prepayment premium
payable under  Paragraph  10, if any, and all other  amounts  payable under this
Note and any other Loan  Document  shall at once become due and payable,  at the
option of Lender,  without  any prior  notice to  Borrower  (except if notice is
required by applicable  law,  then after such notice).  Lender may exercise this
option to accelerate regardless of any prior forbearance.

6. Late  Charge.  If any monthly  amount  payable  under this Note or under the
Security  Instrument or any other Loan Document is not received by Lender within
ten (10) days after the amount is due (unless  applicable  law requires a longer
period of time before a late  charge may be imposed,  in which event such longer
period shall be  substituted),  Borrower  shall pay to Lender,  immediately  and
without  demand by Lender,  a late  charge  equal to five  percent  (5%) of such
amount  (unless  applicable  law requires a lesser  amount be charged,  in which
event such lesser amount shall be substituted).  Borrower  acknowledges that its
failure to make timely payments will cause Lender to incur  additional  expenses
in servicing and processing  the loan  evidenced by this Note (the "Loan"),  and
that it is extremely  difficult and  impractical to determine  those  additional
expenses.  Borrower  agrees  that  the  late  charge  payable  pursuant  to this
Paragraph  represents a fair and  reasonable  estimate,  taking into account all
circumstances  existing  on the date of this Note,  of the  additional  expenses
Lender will incur by reason of such late payment.  The late charge is payable in
addition  to,  and not in lieu of, any  interest  payable  at the  Default  Rate
pursuant to Paragraph 8.

7. Default Rate. So long as (a) any monthly installment under this Note remains
past due for thirty  (30) days or more,  or (b) any other  Event of Default  has
occurred and is continuing,  interest under this Note shall accrue on the unpaid
principal  balance from the earlier of the due date of the first unpaid  monthly
installment or the occurrence of such other Event of Default, as applicable,  at
a rate (the "Default  Rate") equal to the lesser of four (4)  percentage  points
above  the rate  stated  in the first  paragraph  of this  Note and the  maximum
interest rate which may be collected from Borrower under  applicable law. If the
unpaid  principal  balance and all accrued  interest are not paid in full on the
Maturity Date, the unpaid principal  balance and all accrued interest shall bear
interest from the Maturity Date at the Default Rate.  Borrower also acknowledges
that its failure to make timely  payments will cause Lender to incur  additional
expenses in servicing and  processing the Loan,  that,  during the time that any
monthly  installment  under this Note is  delinquent  for more than  thirty (30)
days,  Lender will incur  additional costs and expenses arising from its loss of
the use of the money due and from the adverse impact on Lender's ability to meet
its other  obligations and to take advantage of other investment  opportunities,
and that it is extremely difficult and impractical to determine those additional
costs and expenses.  Borrower also  acknowledges  that, during the time that any
monthly installment under this Note is delinquent for more than thirty (30) days
or any other Event of Default has occurred and is  continuing,  Lender's risk of
nonpayment of this Note will be  materially  increased and Lender is entitled to
be compensated for such increased risk. Borrower agrees that the increase in the
rate of interest  payable under this Note to the Default Rate  represents a fair
and reasonable estimate,  taking into account all circumstances  existing on the
date of this Note,  of the  additional  costs and expenses  Lender will incur by
reason of the  Borrower's  delinquent  payment and the  additional  compensation
Lender is entitled to receive for the increased  risks of nonpayment  associated
with a delinquent loan.

8.   Limits on Personal Liability.

(a) Except as otherwise  provided in this  Paragraph 9,  Borrower  shall have no
personal  liability  under this Note, the Security  Instrument or any other Loan
Document for the repayment of the  Indebtedness  or for the  performance  of any
other  obligations  of Borrower  under the Loan  Documents,  and  Lender's  only
recourse for the  satisfaction of the  Indebtedness  and the performance of such
obligations  shall be Lender's  exercise of its rights and remedies with respect
to the Mortgaged  Property and any other  collateral  held by Lender as security
for the Indebtedness. This limitation on Borrower's liability shall not limit or
impair  Lender's  enforcement  of  its  rights  against  any  guarantor  of  the
Indebtedness or any guarantor of any obligations of Borrower.

(b) Borrower shall be personally liable to Lender for the repayment of a portion
of the Indebtedness equal to zero percent (0%) of the original principal balance
of this Note,  plus any other amounts for which Borrower has personal  liability
under this Paragraph 9.

(c) In addition to Borrower's  personal liability under Paragraph 9(b), Borrower
shall be personally  liable to Lender for the repayment of a further  portion of
the  Indebtedness  equal to any loss or damage suffered by Lender as a result of
(1) failure of  Borrower to pay to Lender upon demand  after an Event of Default
all  Rents to which  Lender  is  entitled  under  Section  3(a) of the  Security
Instrument  and the amount of all security  deposits  collected by Borrower from
tenants  then in  residence;  (2)  failure of  Borrower  to apply all  insurance
proceeds and condemnation  proceeds as required by the Security  Instrument;  or
(3)  failure of Borrower to comply  with  Section  14(d) or (e) of the  Security
Instrument relating to the delivery of books and records, statements,  schedules
and reports.

(d) For purposes of determining  Borrower's  personal  liability under Paragraph
9(b) and Paragraph  9(c), all payments made by Borrower or any guarantor of this
Note with respect to the  Indebtedness  and all amounts  received by Lender from
the  enforcement  of its rights under the Security  Instrument  shall be applied
first to the  portion of the  Indebtedness  for which  Borrower  has no personal
liability.

(e) Borrower shall become  personally  liable to Lender for the repayment of all
of the  Indebtedness  upon the  occurrence  of any of the  following  Events  of
Default: (1) Borrower's acquisition of any property or operation of any business
not  permitted  by  Section  33 of  the  Security  Instrument;  (2)  a  Transfer
(including,  but not  limited  to,  a lien or  encumbrance)  that is an Event of
Default  under  Section  21 of the  Security  Instrument,  other than a Transfer
consisting  solely of the  involuntary  removal or  involuntary  withdrawal of a
general  partner in a limited  partnership  or a manager in a limited  liability
company; or (3) fraud or written material  misrepresentation  by Borrower or any
officer,  director,  partner,  member or employee of Borrower in connection with
the  application  for or  creation  of the  Indebtedness  or any request for any
action or consent by Lender.

(f) In addition to any personal  liability for the Indebtedness,  Borrower shall
be  personally  liable to Lender for (1) the  performance  of all of  Borrower's
obligations   under  Section  18  of  the  Security   Instrument   (relating  to
environmental  matters);  (2) the costs of any audit under  Section 14(d) of the
Security  Instrument;  and (3) any  costs  and  expenses  incurred  by Lender in
connection  with the  collection of any amount for which  Borrower is personally
liable under this  Paragraph  9,  including  fees and out of pocket  expenses of
attorneys and expert witnesses and the costs of conducting any independent audit
of Borrower's  books and records to determine the amount for which  Borrower has
personal liability.

(g) To the extent that Borrower has personal  liability  under this Paragraph 9,
Lender may exercise its rights  against  Borrower  personally  without regard to
whether  Lender has exercised any rights  against the Mortgaged  Property or any
other  security,  or pursued any rights  against any  guarantor,  or pursued any
other rights available to Lender under this Note, the Security  Instrument,  any
other Loan  Document or  applicable  law. For purposes of this  Paragraph 9, the
term "Mortgaged Property" shall not include any funds that (1) have been applied
by Borrower as required or  permitted by the  Security  Instrument  prior to the
occurrence  of an  Event of  Default  or (2)  Borrower  was  unable  to apply as
required  or  permitted  by the  Security  Instrument  because of a  bankruptcy,
receivership, or similar judicial proceeding. To the fullest extent permitted by
applicable  law, in any action to enforce  Borrower's  personal  liability under
this  Paragraph  9,  Borrower  waives  any  right  to set off the  value  of the
Mortgaged Property against such personal liability.

9.   Voluntary and Involuntary Prepayments.

(a) A prepayment premium shall be payable in connection with any prepayment (any
receipt by Lender of  principal,  other than  principal  required  to be paid in
monthly installments pursuant to Paragraph 3(b), prior to the scheduled Maturity
Date set forth in Paragraph 3(c)) under this Note as provided below:

(1) Borrower may voluntarily  prepay all of the unpaid principal balance of this
Note on a Business Day  designated as the date for such  prepayment in a written
notice from  Borrower to Lender given at least 30 days prior to the date of such
prepayment.  Such prepayment shall be made by paying (A) the amount of principal
being prepaid,  (B) all accrued  interest,  (C) all other sums due Lender at the
time of such prepayment,  and (D) the prepayment premium calculated  pursuant to
Paragraph  10(c).  For all  purposes  including  the  accrual of  interest,  any
prepayment received by Lender on any day other than the last calendar day of the
month  shall be deemed to have been  received on the last  calendar  day of such
month.  For purposes of this Note,  a "Business  Day" means any day other than a
Saturday,  Sunday  or any other  day on which  Lender is not open for  business.
Unless expressly provided for in the Loan Documents, Borrower shall not have the
option to  voluntarily  prepay  less than all of the unpaid  principal  balance.
However,  if a partial  prepayment  is provided for in the Loan  Documents or is
accepted by Lender in  Lender's  discretion,  a  prepayment  premium  calculated
pursuant to Paragraph 10(c) shall be due and payable by Borrower.

(2) Upon  Lender's  exercise  of any  right of  acceleration  under  this  Note,
Borrower shall pay to Lender, in addition to the entire unpaid principal balance
of this  Note  outstanding  at the  time of the  acceleration,  (A) all  accrued
interest  and  all  other  sums  due  Lender,  and (B)  the  prepayment  premium
calculated pursuant to Paragraph 10(c).

(3) Any  application  by  Lender  of any  collateral  or other  security  to the
repayment of any portion of the unpaid  principal  balance of this Note prior to
the  Maturity  Date and in the absence of  acceleration  shall be deemed to be a
partial prepayment by Borrower, requiring the payment to Lender by Borrower of a
prepayment premium.

(b)  Notwithstanding  the provisions of Paragraph  10(a), no prepayment  premium
shall be payable with respect to (A) any prepayment  made during the period from
one  hundred  eighty  (180)  days  before  the  scheduled  Maturity  Date to the
scheduled  Maturity  Date,  or (B) any  prepayment  occurring as a result of the
application of any insurance  proceeds or condemnation  award under the Security
Instrument.

(c) Any prepayment premium payable under this Note shall be computed as follows:

            (1) If the  prepayment is made between the date of this Note and the
date  that is 180  months  after  the  first  day of the  first  calendar  month
following the date of this Note (the "Yield Maintenance Period"), the prepayment
premium shall be whichever is the greater of subparagraphs (i) and (ii) below:

            (i)   1.0% of the unpaid principal balance of this Note; or

            (ii)  the product obtained by multiplying:

                  (A)   the amount of principal being prepaid,

                  by

                  (B)   the excess (if  any) of the Monthly Note  Rate  over the
                        Assumed Reinvestment Rate,

                  by

                  (C)   the Present Value Factor.

            For purposes of subparagraph  (ii), the following  definitions shall
            apply:

            Monthly Note Rate: one-twelfth (1/12) of the annual interest rate of
            this Note, expressed as a decimal calculated to five digits.

            Prepayment Date: in the case of a voluntary prepayment,  the date on
            which the  prepayment  is made;  in the case of the  application  by
            Lender of  collateral  or  security  to a portion  of the  principal
            balance,  the date of such  application;  and in any other case, the
            date on which Lender  accelerates  the unpaid  principal  balance of
            this Note.

            Assumed  Reinvestment Rate:  one-twelfth (1/12) of the yield rate as
            of the date 5 Business  Days  before  the  Prepayment  Date,  on the
            9.250% U.S.  Treasury  Security due February 1, 2016, as reported in
            The Wall Street Journal,  expressed as a decimal  calculated to five
            digits.  In the event that no yield is published  on the  applicable
            date  for the  Treasury  Security  used  to  determine  the  Assumed
            Reinvestment  Rate,  Lender,  in its  discretion,  shall  select the
            non-callable  Treasury  Security  maturing  in the same  year as the
            Treasury Security specified above with the lowest yield published in
            The  Wall  Street  Journal  as  of  the  applicable   date.  If  the
            publication  of such  yield  rates in The  Wall  Street  Journal  is
            discontinued  for any reason,  Lender shall select a security with a
            comparable rate and term to the Treasury  Security used to determine
            the  Assumed  Reinvestment  Rate.  The  selection  of  an  alternate
            security  pursuant  to this  Paragraph  shall  be  made in  Lender's
            discretion.

            Present Value Factor: the factor that discounts to present value the
            costs  resulting  to Lender from the  difference  in interest  rates
            during the months remaining in the Yield Maintenance  Period,  using
            the Assumed  Reinvestment  Rate as the discount  rate,  with monthly
            compounding, expressed numerically as follows:

                                     [OBJECT OMITTED]

            n = number of months remaining in Yield Maintenance Period

            ARR = Assumed Reinvestment Rate

            (2) If the  prepayment  is made  after the  expiration  of the Yield
Maintenance  Period but before the period set forth in Paragraph 10(b)(A) above,
the  prepayment  premium shall be 1.0% of the unpaid  principal  balance of this
Note.

(d) Any  permitted  or  required  prepayment  of less than the unpaid  principal
balance of this Note shall not extend or postpone the due date of any subsequent
monthly  installments or change the amount of such  installments,  unless Lender
agrees otherwise in writing.

(e) Borrower  recognizes that any prepayment of the unpaid principal  balance of
this Note,  whether  voluntary or  involuntary  or  resulting  from a default by
Borrower,  will result in Lender's incurring loss, including  reinvestment loss,
additional expense and frustration or impairment of Lender's ability to meet its
commitments  to third  parties.  Borrower  agrees to pay to Lender  upon  demand
damages  for the  detriment  caused by any  prepayment,  and  agrees  that it is
extremely  difficult  and  impractical  to ascertain the extent of such damages.
Borrower  therefore  acknowledges  and agrees that the  formula for  calculating
prepayment  premiums set forth in this Note represents a reasonable  estimate of
the damages Lender will incur because of a prepayment.

(f) Borrower further acknowledges that the prepayment premium provisions of this
Note are a material part of the  consideration  for the Loan,  and  acknowledges
that the terms of this Note are in other  respects more favorable to Borrower as
a  result  of the  Borrower's  voluntary  agreement  to the  prepayment  premium
provisions.

10.  Costs and  Expenses.  To the  fullest  extent  allowed by  applicable  law,
Borrower  shall pay all expenses  and costs,  including  fees and  out-of-pocket
expenses  of  attorneys  (including  Lender's  in-house  attorneys)  and  expert
witnesses  and  costs of  investigation,  incurred  by Lender as a result of any
default under this Note or in connection  with efforts to collect any amount due
under  this  Note,  or to  enforce  the  provisions  of any of  the  other  Loan
Documents,  including those incurred in post-judgment  collection efforts and in
any  bankruptcy  proceeding  (including any action for relief from the automatic
stay of any  bankruptcy  proceeding)  or  judicial or  non-judicial  foreclosure
proceeding.

11.  Forbearance.  Any  forbearance  by Lender in exercising any right or remedy
under  this  Note,  the  Security  Instrument,  or any other  Loan  Document  or
otherwise  afforded by applicable  law, shall not be a waiver of or preclude the
exercise of that or any other right or remedy.  The  acceptance by Lender of any
payment after the due date of such  payment,  or in an amount which is less than
the required payment,  shall not be a waiver of Lender's right to require prompt
payment  when due of all other  payments or to exercise any right or remedy with
respect to any  failure to make  prompt  payment.  Enforcement  by Lender of any
security for  Borrower's  obligations  under this Note shall not  constitute  an
election by Lender of remedies so as to preclude the exercise of any other right
or remedy available to Lender.

12.  Waivers.  Presentment,  demand,  notice  of  dishonor,  protest,  notice of
acceleration,  notice of intent to demand or  accelerate  payment  or  maturity,
presentment  for  payment,  notice  of  nonpayment,   grace,  and  diligence  in
collecting  the  Indebtedness  are  waived by  Borrower  and all  endorsers  and
guarantors of this Note and all other third party obligors.

13. Loan Charges. Neither this Note nor any of the other Loan Documents shall be
construed  to create a contract for the use,  forbearance  or detention of money
requiring  payment of interest at a rate greater than the maximum  interest rate
permitted to be charged under applicable law. If any applicable law limiting the
amount of interest or other charges  permitted to be collected  from Borrower in
connection  with the Loan is  interpreted  so that any  interest or other charge
provided for in any Loan  Document,  whether  considered  separately or together
with other charges  provided for in any other Loan Document,  violates that law,
and Borrower is entitled to the benefit of that law,  that interest or charge is
hereby reduced to the extent necessary to eliminate that violation. The amounts,
if any,  previously  paid to Lender in excess of the permitted  amounts shall be
applied by Lender to reduce the unpaid  principal  balance of this Note. For the
purpose  of  determining  whether  any  applicable  law  limiting  the amount of
interest or other  charges  permitted  to be  collected  from  Borrower has been
violated,  all  Indebtedness  that  constitutes  interest,  as well as all other
charges made in connection with the Indebtedness that constitute interest, shall
be deemed to be allocated  and spread  ratably over the stated term of the Note.
Unless otherwise required by applicable law, such allocation and spreading shall
be  effected  in such a manner  that the rate of interest so computed is uniform
throughout the stated term of the Note.

14.  Commercial  Purpose.  Borrower  represents  that the  Indebtedness is being
incurred  by  Borrower  solely for the  purpose  of  carrying  on a business  or
commercial enterprise,  and not for personal,  family, household or agricultural
purposes.

15.  Counting  of  Days.  Except  where  otherwise  specifically  provided,  any
reference in this Note to a period of "days" means  calendar  days, not Business
Days.

16. Governing Law. This Note shall be governed by the law of the jurisdiction in
which the Land is located.

17.  Captions.  The captions of the paragraphs of this Note are for  convenience
only and shall be disregarded in construing this Note.

18.   Notices;   Written   Modifications.   All   notices,   demands  and  other
communications  required or permitted to be given by Lender to Borrower pursuant
to this  Note  shall be given in  accordance  with  Section  31 of the  Security
Instrument.  Any  modification  or amendment  to this Note shall be  ineffective
unless  in  writing  signed  by  the  party  sought  to  be  charged  with  such
modification or amendment;  provided,  however,  that in the event of a Transfer
under  the  terms  of  the  Security  Instrument,  any  or  some  or  all of the
Modification  to Multifamily  Note may be modified or rendered void by Lender at
Lender's option by notice to Borrower/transferee.

19. Consent to  Jurisdiction  and Venue.  Borrower  agrees that any  controversy
arising under or in relation to this Note shall be litigated  exclusively in the
jurisdiction  in which the Land is located (the  "Property  Jurisdiction").  The
state and federal  courts and  authorities  with  jurisdiction  in the  Property
Jurisdiction  shall have exclusive  jurisdiction  over all  controversies  which
shall arise under or in relation to this Note. Borrower  irrevocably consents to
service,  jurisdiction,  and venue of such  courts for any such  litigation  and
waives  any other  venue to which it might be  entitled  by virtue of  domicile,
habitual residence or otherwise.

20. WAIVER OF TRIAL BY JURY.  BORROWER AND LENDER EACH (A) AGREES NOT TO ELECT A
TRIAL  BY JURY  WITH  RESPECT  TO ANY  ISSUE  ARISING  OUT OF  THIS  NOTE OR THE
RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OF RIGHT
BY A JURY AND (B) WAIVES  ANY RIGHT TO TRIAL BY JURY WITH  RESPECT TO SUCH ISSUE
TO THE EXTENT THAT ANY SUCH RIGHT  EXISTS NOW OR IN THE  FUTURE.  THIS WAIVER OF
RIGHT  TO  TRIAL  BY JURY IS  SEPARATELY  GIVEN  BY EACH  PARTY,  KNOWINGLY  AND
VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

      ATTACHED EXHIBIT.  The following Exhibit is attached to this Note:

            -----
              X       Exhibit A     Modifications to Multifamily Note
            -----

      IN WITNESS WHEREOF, Borrower has signed and delivered this Note under seal
or has  caused  this  Note to be signed  and  delivered  under  seal by its duly
authorized representative. Borrower intends that this Note shall be deemed to be
signed and delivered as a sealed instrument.

<PAGE>

                                    SHELTER PROPERTIES II LIMITED PARTNERSHIP, a
                                    South Carolina limited partnership

                                    By:Shelter Realty II Corporation, a South
                                       Carolina corporation, its General Partner

                                          By: ___________________________
                                              Patti K. Fielding
                                              Senior Vice President


                                   57-0709233
                                   Borrower's Social Security/Employer ID Number


<PAGE>

PAY TO THE ORDER OF FEDERAL HOME LOAN MORTGAGE  CORPORATION,  WITHOUT  RECOURSE,
THIS ___ DAY OF DECEMBER, 2000.

REILLY MORTGAGE GROUP, INC., a District
   of Columbia corporation



By:_________________________________
   Brenda R. Dutrow
   Assistant Vice President


<PAGE>


                                    EXHIBIT A

                        MODIFICATIONS TO MULTIFAMILY NOTE


1.    The first sentence of Paragraph 8 of the Note  ("Default  Rate") is hereby
      deleted and replaced with the following:

            So long as (a) any monthly  installment under this Note remains past
            due for more than thirty (30) days or (b) any other event of Default
            has  occurred  and is  continuing,  interest  under  this Note shall
            accrue on the unpaid  principal  balance from the earlier of the due
            date of the first unpaid  monthly  installment  or the occurrence of
            such other Event of Default, as applicable,  at a rate (the "Default
            Rate")  equal to the lesser of (1) the maximum  interest  rate which
            may be  collected  from  Borrower  under  applicable  law or (2) the
            greater of (i) three  percent (3%) above the  Interest  Rate or (ii)
            four percent  (4.0%) above the  then-prevailing  Prime Rate. As used
            herein,  the term  "Prime  Rate"  shall  mean  the rate of  interest
            announced by The Wall Street Journal from time to time as the "Prime
            Rate".

2.  Paragraph 9(c) of the Note is amended to add the following subparagraph (4):

     (5)  failure by Borrower to pay the amount of the water and sewer  charges,
          taxes,  fire,  hazard  or  other  insurance  premiums,  ground  rents,
          assessments  or other  charges  in  accordance  with the  terms of the
          Security Instrument.

3.    Paragraph 19 is modified by deleting:  "; provided,  however,  that in the
      event of a Transfer  under the terms of the  Security  Instrument,  any or
      some or all of the  Modifications  to Multifamily  Note may be modified or
      rendered   void   by   Lender   at   Lender's    option   by   notice   to
      Borrower/transferee" in the last sentence of the Paragraph;  and by adding
      the following new sentence:

            The  Modifications  to Multifamily  Note set forth in this Exhibit A
            shall be null and void  unless  title to the  Mortgaged  Property is
            vested in an entity whose  Controlling  Interest(s)  are directly or
            indirectly  held by AIMCO  REIT or AIMCO OP. The  capitalized  terms
            used in this paragraph are defined in the Security Instrument.

<PAGE>
                                                              Exhibit 10(iii)(i)

                                    EXHIBIT C

                                                        FHLMC Loan No. 002689820
                                                      (Signal Pointe Apartments)

                                MULTIFAMILY NOTE
                      (MULTISTATE - REVISION DATE 11-01-2000)


US $8,875,000.00                                       As of December 15, 2000


      FOR VALUE RECEIVED, the undersigned ("Borrower") jointly and severally (if
more than one) promises to pay to the order of REILLY  MORTGAGE  GROUP,  INC., a
District of Columbia  corporation,  the  principal  sum of Eight  Million  Eight
Hundred  Seventy-Five  Thousand  and 00/100  Dollars  (US  $8,875,000.00),  with
interest  on the unpaid  principal  balance at the annual  rate of Seven and Two
Hundred Twenty Thousandths percent (7.220%)

1. Defined Terms.  As used in this Note, (i) the term "Lender" means the holder
of this Note, and (ii) the term "Indebtedness"  means the principal of, interest
on,  and any other  amounts  due at any time  under,  this  Note,  the  Security
Instrument  or any other Loan  Document,  including  prepayment  premiums,  late
charges,  default interest, and advances to protect the security of the Security
Instrument under Section 12 of the Security  Instrument.  "Event of Default" and
other  capitalized  terms  used but not  defined  in this  Note  shall  have the
meanings given to such terms in the Security Instrument.

2.  Address for  Payment.  All payments due under this Note shall be payable at
2000 Corporate Ridge, Suite 925, McLean,  Virginia 22102, or such other place as
may be designated by written notice to Borrower from or on behalf of Lender.

3.   Payment of Principal and Interest. Principal and interest  shall be paid as
follows:

(a) Unless  disbursement of principal is made by Lender to Borrower on the first
day of the month,  interest for the period beginning on the date of disbursement
and ending on and including the last day of the month in which such disbursement
is made  shall be  payable  simultaneously  with  the  execution  of this  Note.
Interest  under  this Note  shall be  computed  on the  basis of a 360-day  year
consisting of twelve 30-day months.

(b)  Consecutive  monthly  installments  of principal and interest,  each in the
 amount of Sixty Nine Thousand Nine Hundred  Eighty Four and 64/100  Dollars (US
 $69,984.64),  shall be  payable  on the first day of each  month  beginning  on
 February 1, 2001, until the entire unpaid principal  balance  evidenced by this
 Note is fully paid.

(c) Any accrued interest remaining past due for 30 days or more may, at Lender's
discretion,  be added to and become  part of the unpaid  principal  balance  and
shall  bear  interest  at the  rate or rates  specified  in this  Note,  and any
reference below to "accrued  interest" shall refer to accrued interest which has
not become part of the unpaid  principal  balance.  Any remaining  principal and
interest  shall be due and payable on January 1, 2021 or on any earlier  date on
which the unpaid  principal  balance of this Note  becomes due and  payable,  by
acceleration or otherwise (the "Maturity  Date").  The unpaid principal  balance
shall  continue to bear interest after the Maturity Date at the Default Rate set
forth in this Note until and including the date on which it is paid in full.

(d) Any regularly  scheduled monthly  installment of principal and interest that
is  received  by Lender  before  the date it is due shall be deemed to have been
received on the due date solely for the purpose of calculating interest due.

4.  Application of Payments.  If at any time Lender receives,  from Borrower or
otherwise,  any amount  applicable  to the  Indebtedness  which is less than all
amounts due and payable at such time,  Lender may apply that  payment to amounts
then due and  payable in any manner and in any order  determined  by Lender,  in
Lender's  discretion.  Borrower  agrees that neither  Lender's  acceptance  of a
payment  from  Borrower in an amount that is less than all amounts  then due and
payable nor Lender's  application of such payment shall  constitute or be deemed
to  constitute  either  a  waiver  of  the  unpaid  amounts  or  an  accord  and
satisfaction.

5. Security.  The Indebtedness is secured, among other things, by a multifamily
mortgage, deed to secure debt or deed of trust dated as of the date of this Note
(the "Security  Instrument"),  and reference is made to the Security  Instrument
for other rights of Lender as to collateral for the Indebtedness.

6.  Acceleration.  If an Event of Default has occurred and is  continuing,  the
entire unpaid principal  balance,  any accrued interest,  the prepayment premium
payable under  Paragraph  10, if any, and all other  amounts  payable under this
Note and any other Loan  Document  shall at once become due and payable,  at the
option of Lender,  without  any prior  notice to  Borrower  (except if notice is
required by applicable  law,  then after such notice).  Lender may exercise this
option to accelerate regardless of any prior forbearance.

7. Late  Charge.  If any monthly  amount  payable  under this Note or under the
Security  Instrument or any other Loan Document is not received by Lender within
ten (10) days after the amount is due (unless  applicable  law requires a longer
period of time before a late  charge may be imposed,  in which event such longer
period shall be  substituted),  Borrower  shall pay to Lender,  immediately  and
without  demand by Lender,  a late  charge  equal to five  percent  (5%) of such
amount  (unless  applicable  law requires a lesser  amount be charged,  in which
event such lesser amount shall be substituted).  Borrower  acknowledges that its
failure to make timely payments will cause Lender to incur  additional  expenses
in servicing and processing  the loan  evidenced by this Note (the "Loan"),  and
that it is extremely  difficult and  impractical to determine  those  additional
expenses.  Borrower  agrees  that  the  late  charge  payable  pursuant  to this
Paragraph  represents a fair and  reasonable  estimate,  taking into account all
circumstances  existing  on the date of this Note,  of the  additional  expenses
Lender will incur by reason of such late payment.  The late charge is payable in
addition  to,  and not in lieu of, any  interest  payable  at the  Default  Rate
pursuant to Paragraph 8.

8. Default Rate. So long as (a) any monthly installment under this Note remains
past due for thirty  (30) days or more,  or (b) any other  Event of Default  has
occurred and is continuing,  interest under this Note shall accrue on the unpaid
principal  balance from the earlier of the due date of the first unpaid  monthly
installment or the occurrence of such other Event of Default, as applicable,  at
a rate (the "Default  Rate") equal to the lesser of four (4)  percentage  points
above  the rate  stated  in the first  paragraph  of this  Note and the  maximum
interest rate which may be collected from Borrower under  applicable law. If the
unpaid  principal  balance and all accrued  interest are not paid in full on the
Maturity Date, the unpaid principal  balance and all accrued interest shall bear
interest from the Maturity Date at the Default Rate.  Borrower also acknowledges
that its failure to make timely  payments will cause Lender to incur  additional
expenses in servicing and  processing the Loan,  that,  during the time that any
monthly  installment  under this Note is  delinquent  for more than  thirty (30)
days,  Lender will incur  additional costs and expenses arising from its loss of
the use of the money due and from the adverse impact on Lender's ability to meet
its other  obligations and to take advantage of other investment  opportunities,
and that it is extremely difficult and impractical to determine those additional
costs and expenses.  Borrower also  acknowledges  that, during the time that any
monthly installment under this Note is delinquent for more than thirty (30) days
or any other Event of Default has occurred and is  continuing,  Lender's risk of
nonpayment of this Note will be  materially  increased and Lender is entitled to
be compensated for such increased risk. Borrower agrees that the increase in the
rate of interest  payable under this Note to the Default Rate  represents a fair
and reasonable estimate,  taking into account all circumstances  existing on the
date of this Note,  of the  additional  costs and expenses  Lender will incur by
reason of the  Borrower's  delinquent  payment and the  additional  compensation
Lender is entitled to receive for the increased  risks of nonpayment  associated
with a delinquent loan.

9.   Limits on Personal Liability.

(a) Except as otherwise  provided in this  Paragraph 9,  Borrower  shall have no
personal  liability  under this Note, the Security  Instrument or any other Loan
Document for the repayment of the  Indebtedness  or for the  performance  of any
other  obligations  of Borrower  under the Loan  Documents,  and  Lender's  only
recourse for the  satisfaction of the  Indebtedness  and the performance of such
obligations  shall be Lender's  exercise of its rights and remedies with respect
to the Mortgaged  Property and any other  collateral  held by Lender as security
for the Indebtedness. This limitation on Borrower's liability shall not limit or
impair  Lender's  enforcement  of  its  rights  against  any  guarantor  of  the
Indebtedness or any guarantor of any obligations of Borrower.

(b) Borrower shall be personally liable to Lender for the repayment of a portion
of the Indebtedness equal to zero percent (0%) of the original principal balance
of this Note,  plus any other amounts for which Borrower has personal  liability
under this Paragraph 9.

(c) In addition to Borrower's  personal liability under Paragraph 9(b), Borrower
shall be personally  liable to Lender for the repayment of a further  portion of
the  Indebtedness  equal to any loss or damage suffered by Lender as a result of
(1) failure of  Borrower to pay to Lender upon demand  after an Event of Default
all  Rents to which  Lender  is  entitled  under  Section  3(a) of the  Security
Instrument  and the amount of all security  deposits  collected by Borrower from
tenants  then in  residence;  (2)  failure of  Borrower  to apply all  insurance
proceeds and condemnation  proceeds as required by the Security  Instrument;  or
(3)  failure of Borrower to comply  with  Section  14(d) or (e) of the  Security
Instrument relating to the delivery of books and records, statements,  schedules
and reports.

(d) For purposes of determining  Borrower's  personal  liability under Paragraph
9(b) and Paragraph  9(c), all payments made by Borrower or any guarantor of this
Note with respect to the  Indebtedness  and all amounts  received by Lender from
the  enforcement  of its rights under the Security  Instrument  shall be applied
first to the  portion of the  Indebtedness  for which  Borrower  has no personal
liability.

(e) Borrower shall become  personally  liable to Lender for the repayment of all
of the  Indebtedness  upon the  occurrence  of any of the  following  Events  of
Default: (1) Borrower's acquisition of any property or operation of any business
not  permitted  by  Section  33 of  the  Security  Instrument;  (2)  a  Transfer
(including,  but not  limited  to,  a lien or  encumbrance)  that is an Event of
Default  under  Section  21 of the  Security  Instrument,  other than a Transfer
consisting  solely of the  involuntary  removal or  involuntary  withdrawal of a
general  partner in a limited  partnership  or a manager in a limited  liability
company; or (3) fraud or written material  misrepresentation  by Borrower or any
officer,  director,  partner,  member or employee of Borrower in connection with
the  application  for or  creation  of the  Indebtedness  or any request for any
action or consent by Lender.

(f) In addition to any personal  liability for the Indebtedness,  Borrower shall
be  personally  liable to Lender for (1) the  performance  of all of  Borrower's
obligations   under  Section  18  of  the  Security   Instrument   (relating  to
environmental  matters);  (2) the costs of any audit under  Section 14(d) of the
Security  Instrument;  and (3) any  costs  and  expenses  incurred  by Lender in
connection  with the  collection of any amount for which  Borrower is personally
liable under this  Paragraph  9,  including  fees and out of pocket  expenses of
attorneys and expert witnesses and the costs of conducting any independent audit
of Borrower's  books and records to determine the amount for which  Borrower has
personal liability.

(g) To the extent that Borrower has personal  liability  under this Paragraph 9,
Lender may exercise its rights  against  Borrower  personally  without regard to
whether  Lender has exercised any rights  against the Mortgaged  Property or any
other  security,  or pursued any rights  against any  guarantor,  or pursued any
other rights available to Lender under this Note, the Security  Instrument,  any
other Loan  Document or  applicable  law. For purposes of this  Paragraph 9, the
term "Mortgaged Property" shall not include any funds that (1) have been applied
by Borrower as required or  permitted by the  Security  Instrument  prior to the
occurrence  of an  Event of  Default  or (2)  Borrower  was  unable  to apply as
required  or  permitted  by the  Security  Instrument  because of a  bankruptcy,
receivership, or similar judicial proceeding. To the fullest extent permitted by
applicable  law, in any action to enforce  Borrower's  personal  liability under
this  Paragraph  9,  Borrower  waives  any  right  to set off the  value  of the
Mortgaged Property against such personal liability.

10.   Voluntary and Involuntary Prepayments.

(a) A prepayment premium shall be payable in connection with any prepayment (any
receipt by Lender of  principal,  other than  principal  required  to be paid in
monthly installments pursuant to Paragraph 3(b), prior to the scheduled Maturity
Date set forth in Paragraph 3(c)) under this Note as provided below:

(1) Borrower may voluntarily  prepay all of the unpaid principal balance of this
Note on a Business Day  designated as the date for such  prepayment in a written
notice from  Borrower to Lender given at least 30 days prior to the date of such
prepayment.  Such prepayment shall be made by paying (A) the amount of principal
being prepaid,  (B) all accrued  interest,  (C) all other sums due Lender at the
time of such prepayment,  and (D) the prepayment premium calculated  pursuant to
Paragraph  10(c).  For all  purposes  including  the  accrual of  interest,  any
prepayment received by Lender on any day other than the last calendar day of the
month  shall be deemed to have been  received on the last  calendar  day of such
month.  For purposes of this Note,  a "Business  Day" means any day other than a
Saturday,  Sunday  or any other  day on which  Lender is not open for  business.
Unless expressly provided for in the Loan Documents, Borrower shall not have the
option to  voluntarily  prepay  less than all of the unpaid  principal  balance.
However,  if a partial  prepayment  is provided for in the Loan  Documents or is
accepted by Lender in  Lender's  discretion,  a  prepayment  premium  calculated
pursuant to Paragraph 10(c) shall be due and payable by Borrower.

(2) Upon  Lender's  exercise  of any  right of  acceleration  under  this  Note,
Borrower shall pay to Lender, in addition to the entire unpaid principal balance
of this  Note  outstanding  at the  time of the  acceleration,  (A) all  accrued
interest  and  all  other  sums  due  Lender,  and (B)  the  prepayment  premium
calculated pursuant to Paragraph 10(c).

(3) Any  application  by  Lender  of any  collateral  or other  security  to the
repayment of any portion of the unpaid  principal  balance of this Note prior to
the  Maturity  Date and in the absence of  acceleration  shall be deemed to be a
partial prepayment by Borrower, requiring the payment to Lender by Borrower of a
prepayment premium.

(b)  Notwithstanding  the provisions of Paragraph  10(a), no prepayment  premium
shall be payable with respect to (A) any prepayment  made during the period from
one  hundred  eighty  (180)  days  before  the  scheduled  Maturity  Date to the
scheduled  Maturity  Date,  or (B) any  prepayment  occurring as a result of the
application of any insurance  proceeds or condemnation  award under the Security
Instrument.

(c) Any prepayment premium payable under this Note shall be computed as follows:

            (1) If the  prepayment is made between the date of this Note and the
date  that is 180  months  after  the  first  day of the  first  calendar  month
following the date of this Note (the "Yield Maintenance Period"), the prepayment
premium shall be whichever is the greater of subparagraphs (i) and (ii) below:

            (i)   1.0% of the unpaid principal balance of this Note; or

            (ii)  the product obtained by multiplying:

                  (A)   the amount of principal being prepaid,

                  by

                  (B)   the excess (if  any) of the Monthly  Note Rate over the
                        Assumed Reinvestment Rate,

                  by

                  (C)   the Present Value Factor.

            For purposes of subparagraph  (ii), the following  definitions shall
            apply:

            Monthly Note Rate: one-twelfth (1/12) of the annual interest rate of
            this Note, expressed as a decimal calculated to five digits.

            Prepayment Date: in the case of a voluntary prepayment,  the date on
            which the  prepayment  is made;  in the case of the  application  by
            Lender of  collateral  or  security  to a portion  of the  principal
            balance,  the date of such  application;  and in any other case, the
            date on which Lender  accelerates  the unpaid  principal  balance of
            this Note.

            Assumed  Reinvestment Rate:  one-twelfth (1/12) of the yield rate as
            of the date 5 Business  Days  before  the  Prepayment  Date,  on the
            9.250%.  Treasury  Security due February 1, 2016, as reported in The
            Wall  Street  Journal,  expressed  as a decimal  calculated  to five
            digits.  In the event that no yield is published  on the  applicable
            date  for the  Treasury  Security  used  to  determine  the  Assumed
            Reinvestment  Rate,  Lender,  in its  discretion,  shall  select the
            non-callable  Treasury  Security  maturing  in the same  year as the
            Treasury Security specified above with the lowest yield published in
            The  Wall  Street  Journal  as  of  the  applicable   date.  If  the
            publication  of such  yield  rates in The  Wall  Street  Journal  is
            discontinued  for any reason,  Lender shall select a security with a
            comparable rate and term to the Treasury  Security used to determine
            the  Assumed  Reinvestment  Rate.  The  selection  of  an  alternate
            security  pursuant  to this  Paragraph  shall  be  made in  Lender's
            discretion.

            Present Value Factor: the factor that discounts to present value the
            costs  resulting  to Lender from the  difference  in interest  rates
            during the months remaining in the Yield Maintenance  Period,  using
            the Assumed  Reinvestment  Rate as the discount  rate,  with monthly
            compounding, expressed numerically as follows:

                                     [OBJECT OMITTED]

            n = number of months remaining in Yield Maintenance Period

            ARR = Assumed Reinvestment Rate

            (2) If the  prepayment  is made  after the  expiration  of the Yield
Maintenance  Period but before the period set forth in Paragraph 10(b)(A) above,
the  prepayment  premium shall be 1.0% of the unpaid  principal  balance of this
Note.

(d) Any  permitted  or  required  prepayment  of less than the unpaid  principal
balance of this Note shall not extend or postpone the due date of any subsequent
monthly  installments or change the amount of such  installments,  unless Lender
agrees otherwise in writing.

(e) Borrower  recognizes that any prepayment of the unpaid principal  balance of
this Note,  whether  voluntary or  involuntary  or  resulting  from a default by
Borrower,  will result in Lender's incurring loss, including  reinvestment loss,
additional expense and frustration or impairment of Lender's ability to meet its
commitments  to third  parties.  Borrower  agrees to pay to Lender  upon  demand
damages  for the  detriment  caused by any  prepayment,  and  agrees  that it is
extremely  difficult  and  impractical  to ascertain the extent of such damages.
Borrower  therefore  acknowledges  and agrees that the  formula for  calculating
prepayment  premiums set forth in this Note represents a reasonable  estimate of
the damages Lender will incur because of a prepayment.

(f) Borrower further acknowledges that the prepayment premium provisions of this
Note are a material part of the  consideration  for the Loan,  and  acknowledges
that the terms of this Note are in other  respects more favorable to Borrower as
a  result  of the  Borrower's  voluntary  agreement  to the  prepayment  premium
provisions.

11.  Costs and  Expenses.  To the  fullest  extent  allowed by  applicable  law,
Borrower  shall pay all expenses  and costs,  including  fees and  out-of-pocket
expenses  of  attorneys  (including  Lender's  in-house  attorneys)  and  expert
witnesses  and  costs of  investigation,  incurred  by Lender as a result of any
default under this Note or in connection  with efforts to collect any amount due
under  this  Note,  or to  enforce  the  provisions  of any of  the  other  Loan
Documents,  including those incurred in post-judgment  collection efforts and in
any  bankruptcy  proceeding  (including any action for relief from the automatic
stay of any  bankruptcy  proceeding)  or  judicial or  non-judicial  foreclosure
proceeding.

12.  Forbearance.  Any  forbearance  by Lender in exercising any right or remedy
under  this  Note,  the  Security  Instrument,  or any other  Loan  Document  or
otherwise  afforded by applicable  law, shall not be a waiver of or preclude the
exercise of that or any other right or remedy.  The  acceptance by Lender of any
payment after the due date of such  payment,  or in an amount which is less than
the required payment,  shall not be a waiver of Lender's right to require prompt
payment  when due of all other  payments or to exercise any right or remedy with
respect to any  failure to make  prompt  payment.  Enforcement  by Lender of any
security for  Borrower's  obligations  under this Note shall not  constitute  an
election by Lender of remedies so as to preclude the exercise of any other right
or remedy available to Lender.

13.  Waivers.  Presentment,  demand,  notice  of  dishonor,  protest,  notice of
acceleration,  notice of intent to demand or  accelerate  payment  or  maturity,
presentment  for  payment,  notice  of  nonpayment,   grace,  and  diligence  in
collecting  the  Indebtedness  are  waived by  Borrower  and all  endorsers  and
guarantors of this Note and all other third party obligors.

14. Loan Charges. Neither this Note nor any of the other Loan Documents shall be
construed  to create a contract for the use,  forbearance  or detention of money
requiring  payment of interest at a rate greater than the maximum  interest rate
permitted to be charged under applicable law. If any applicable law limiting the
amount of interest or other charges  permitted to be collected  from Borrower in
connection  with the Loan is  interpreted  so that any  interest or other charge
provided for in any Loan  Document,  whether  considered  separately or together
with other charges  provided for in any other Loan Document,  violates that law,
and Borrower is entitled to the benefit of that law,  that interest or charge is
hereby reduced to the extent necessary to eliminate that violation. The amounts,
if any,  previously  paid to Lender in excess of the permitted  amounts shall be
applied by Lender to reduce the unpaid  principal  balance of this Note. For the
purpose  of  determining  whether  any  applicable  law  limiting  the amount of
interest or other  charges  permitted  to be  collected  from  Borrower has been
violated,  all  Indebtedness  that  constitutes  interest,  as well as all other
charges made in connection with the Indebtedness that constitute interest, shall
be deemed to be allocated  and spread  ratably over the stated term of the Note.
Unless otherwise required by applicable law, such allocation and spreading shall
be  effected  in such a manner  that the rate of interest so computed is uniform
throughout the stated term of the Note.

15.  Commercial  Purpose.  Borrower  represents  that the  Indebtedness is being
incurred  by  Borrower  solely for the  purpose  of  carrying  on a business  or
commercial enterprise,  and not for personal,  family, household or agricultural
purposes.

16.  Counting  of  Days.  Except  where  otherwise  specifically  provided,  any
reference in this Note to a period of "days" means  calendar  days, not Business
Days.

17. Governing Law. This Note shall be governed by the law of the jurisdiction in
which the Land is located.

18.  Captions.  The captions of the paragraphs of this Note are for  convenience
only and shall be disregarded in construing this Note.

19.   Notices;   Written   Modifications.   All   notices,   demands  and  other
communications  required or permitted to be given by Lender to Borrower pursuant
to this  Note  shall be given in  accordance  with  Section  31 of the  Security
Instrument.  Any  modification  or amendment  to this Note shall be  ineffective
unless  in  writing  signed  by  the  party  sought  to  be  charged  with  such
modification or amendment;  provided,  however,  that in the event of a Transfer
under  the  terms  of  the  Security  Instrument,  any  or  some  or  all of the
Modification  to Multifamily  Note may be modified or rendered void by Lender at
Lender's option by notice to Borrower/transferee.

20. Consent to  Jurisdiction  and Venue.  Borrower  agrees that any  controversy
arising under or in relation to this Note shall be litigated  exclusively in the
jurisdiction  in which the Land is located (the  "Property  Jurisdiction").  The
state and federal  courts and  authorities  with  jurisdiction  in the  Property
Jurisdiction  shall have exclusive  jurisdiction  over all  controversies  which
shall arise under or in relation to this Note. Borrower  irrevocably consents to
service,  jurisdiction,  and venue of such  courts for any such  litigation  and
waives  any other  venue to which it might be  entitled  by virtue of  domicile,
habitual residence or otherwise.

21. WAIVER OF TRIAL BY JURY.  BORROWER AND LENDER EACH (A) AGREES NOT TO ELECT A
TRIAL  BY JURY  WITH  RESPECT  TO ANY  ISSUE  ARISING  OUT OF  THIS  NOTE OR THE
RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OF RIGHT
BY A JURY AND (B) WAIVES  ANY RIGHT TO TRIAL BY JURY WITH  RESPECT TO SUCH ISSUE
TO THE EXTENT THAT ANY SUCH RIGHT  EXISTS NOW OR IN THE  FUTURE.  THIS WAIVER OF
RIGHT  TO  TRIAL  BY JURY IS  SEPARATELY  GIVEN  BY EACH  PARTY,  KNOWINGLY  AND
VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

      ATTACHED EXHIBIT.  The following Exhibit is attached to this Note:

            -----
              X       Exhibit A     Modifications to Multifamily Note
            -----

      IN WITNESS WHEREOF, Borrower has signed and delivered this Note under seal
or has  caused  this  Note to be signed  and  delivered  under  seal by its duly
authorized representative. Borrower intends that this Note shall be deemed to be
signed and delivered as a sealed instrument.


                   [REMAINDER OF PAGEN INTENTIONALLY LEFT BLANK]



<PAGE>


                                    SHELTER PROPERTIES II LIMITED PARTNERSHIP, a
                                    South Carolina limited partnership

                                    By:Shelter Realty II Corporation, a South
                                       Carolina corporation, d/b/a in Florida as
                                       Shelter Realty II Corporation of South
                                       Carolina, its General Partner

                                       By:
                                              Patti K. Fielding
                                              Senior Vice President


                                   57-0709233
                                   Borrower's Social Security/Employer ID Number

<PAGE>


FEDERAL HOME LOAN  MORTGAGE  CORPORATION,  WITHOUT  RECOURSE,  THIS _____ DAY OF
____________, 200__.

REILLY MORTGAGE GROUP, INC., a District
   of Columbia corporation



By:_________________________________
   Brenda R. Dutrow
   Assistant Vice President


<PAGE>


                                    EXHIBIT A

                        MODIFICATIONS TO MULTIFAMILY NOTE


1.    The first sentence of Paragraph 8 of the Note  ("Default  Rate") is hereby
      deleted and replaced with the following:

            So long as (a) any monthly  installment under this Note remains past
            due for more than thirty (30) days or (b) any other event of Default
            has  occurred  and is  continuing,  interest  under  this Note shall
            accrue on the unpaid  principal  balance from the earlier of the due
            date of the first unpaid  monthly  installment  or the occurrence of
            such other Event of Default, as applicable,  at a rate (the "Default
            Rate")  equal to the lesser of (1) the maximum  interest  rate which
            may be  collected  from  Borrower  under  applicable  law or (2) the
            greater of (i) three  percent (3%) above the  Interest  Rate or (ii)
            four percent  (4.0%) above the  then-prevailing  Prime Rate. As used
            herein,  the term  "Prime  Rate"  shall  mean  the rate of  interest
            announced by The Wall Street Journal from time to time as the "Prime
            Rate".

2.    Paragraph 9(c)of the Note is amended to add the following subparagraph(4):

     (6)  failure by Borrower to pay the amount of the water and sewer  charges,
          taxes,  fire,  hazard  or  other  insurance  premiums,  ground  rents,
          assessments  or other  charges  in  accordance  with the  terms of the
          Security Instrument.

3.    Paragraph 19 is modified by deleting:  "; provided,  however,  that in the
      event of a Transfer  under the terms of the  Security  Instrument,  any or
      some or all of the  Modifications  to Multifamily  Note may be modified or
      rendered   void   by   Lender   at   Lender's    option   by   notice   to
      Borrower/transferee" in the last sentence of the Paragraph;  and by adding
      the following new sentence:

The  Modifications to Multifamily Note set forth in this Exhibit A shall be null
and void unless  title to the  Mortgaged  Property is vested in an entity  whose
Controlling  Interest(s)  are directly or indirectly held by AIMCO REIT or AIMCO
OP. The  capitalized  terms used in this  paragraph  are defined in the Security
Instrument.