SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   Form 10-KSB

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


                    For the fiscal year ended December 31, 2002


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


                  For the transition period _________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.  $7,840,000

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

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None

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


                                     PART I

Item 1.     Description of Business

Shelter Properties 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 Corporate General Partner is a subsidiary of
Apartment  Investment and Management Company  ("AIMCO"),  a publicly traded real
estate investment trust. The other general partner is AIMCO Properties, L.P., an
affiliate of the Corporate General Partner and AIMCO. The Partnership  Agreement
provides  that the  Partnership  is to  terminate  on  December  31, 2020 unless
terminated prior to such date.

The  Partnership 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 Partnership  continues to own
and operate three of these properties. See "Item 2. Description of Properties".

Commencing February 2, 1981, the Partnership 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 Partnership 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
Partnership  had accepted  subscriptions  for 27,500 Units,  including 100 Units
purchased by the Corporate General Partner, for an aggregate of $27,500,000. The
Partnership invested approximately $21,000,000 of such proceeds in five existing
apartment  properties.  Prior to December 31,  2002,  the  Partnership  sold one
property and lost one property to the lender through foreclosure.

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

Risk Factors

The  real  estate  business  in which  the  Partnership  is  engaged  is  highly
competitive.  There are other  residential  properties within the market area of
the Partnership's properties.  The number and quality of competitive properties,
including  those which may be managed by an affiliate of the  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.

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

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

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

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

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

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

Item 2.     Description of Properties

The following table sets forth the Partnership's investments in properties:

<TABLE>
<CAPTION>

                                 Date of
Properties                       Purchase         Type of Ownership           Use

<S>                              <C>   <C>
Parktown Townhouses              03/01/81    Fee ownership, subject to   Apartment
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  Partnership'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           $15,246      $ 6,555      5-35     S/L       $ 5,335
Raintree Apartments             4,773        3,533      5-38     S/L           777
Signal Pointe Apartments       13,055        9,440      5-37     S/L         2,282

          Totals              $33,074      $19,528                         $ 8,394
</TABLE>

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

Schedule of Property Indebtedness

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

<TABLE>
<CAPTION>

                                Principal
                                Balance At      Stated
                              December 31,     Interest       Period        Maturity
Property (1)                      2002           Rate        Amortized        Date
                             (in thousands)
Parktown Townhouses
<S>                              <C>             <C>          <C>           <C>   <C>
  1st mortgage                   $ 7,441         7.21%        20 yrs        01/01/21

Raintree Apartments
  1st mortgage                     2,915         7.22%        20 yrs        01/01/21

Signal Pointe Apartments
  1st mortgage                     8,467         7.22%        20 yrs        01/01/21

           Total                 $18,823
</TABLE>

(1)   See "Item 7. Financial  Statements - Note B" for information  with respect
      to the  Partnership's  ability  to repay  these  loans and other  specific
      details about these loans.

Rental Rates and Occupancy

Average  annual  rental rate per unit and  occupancy  for 2002 and 2001 for each
property:

                                       Average Annual               Average
                                        Rental Rate                Occupancy
                                         (per unit)

 Properties                          2002         2001          2002        2001

 Parktown Townhouses (1)            $9,320       $9,090         53%          49%
 Raintree Apartments                 6,109        6,414         92%          94%
 Signal Pointe Apartments            7,790        7,733         93%          92%

   (1)      During June 2001, Parktown Townhouses was damaged by severe flooding
            which  affected  certain  areas of Texas.  The property has incurred
            extensive damage as a result of the flooding. As of August 2002, all
            units were  available for  occupancy.  As of December 31, 2002,  253
            units were occupied.

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 2002 for each property were:

                                                2002            2002
                                               Billing        Rate (1)
                                           (in thousands)

       Parktown Townhouses                      $189            3.28%
       Raintree Apartments                        77           39.94%
       Signal Pointe Apartments                  171            1.67%

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

Capital Improvements

Parktown Townhouses

During June 2001,  Parktown  Townhouses incurred extensive damage as a result of
severe  flooding  which affected  certain areas of Texas.  During 2001 and 2002,
insurance proceeds of approximately $10,580,000 have been received which include
approximately  $6,789,000  for mold  remediation,  approximately  $3,305,000 for
building reconstruction, approximately $203,000 for lost rents and approximately
$283,000 for other expenses.  Approximately $1,535,000 and $2,700,000 were spent
on the  reconstruction of the property during 2002 and 2001,  respectively.  Net
book value of  destroyed  assets  written off was  approximately  $884,000.  The
Partnership recognized a casualty gain of approximately $2,421,000 in 2002. Lost
rents  recognized in 2001 totaled  approximately  $1,144,000 with  approximately
$203,000 received and approximately  $941,000 in accounts receivable at December
31, 2002.

As of December 31, 2002, the Partnership has completed approximately  $3,304,000
of capital  improvements  consisting  primarily  of  building  and  parking  lot
improvements,  plumbing  fixtures,  parking lot resurfacing,  appliances and air
conditioning unit  replacements.  These  improvements were funded from operating
cash flow,  insurance proceeds and loans from the Corporate General Partner. The
Partnership  is  currently  evaluating  the  capital  improvement  needs  of the
property for the upcoming  year and  currently  expects to budget  approximately
$93,000.  Additional  improvements may be considered during 2003 and will depend
on the  physical  condition  of the  property as well as  anticipated  cash flow
generated by the property.

Raintree Apartments

As of December 31, 2002, the Partnership has completed approximately $121,000 of
capital  improvements  consisting  primarily  of floor  covering  and  appliance
replacements,  wall coverings,  air  conditioning  unit  replacement,  and water
submetering  enhancement.  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 and currently expects to
budget approximately $53,000.  Additional  improvements may be considered during
2003 and will  depend  on the  physical  condition  of the  property  as well as
anticipated cash flow generated by the property.

Signal Pointe Apartments

As of December 31, 2002, the Partnership has completed approximately $217,000 of
capital improvements consisting primarily of air conditioning unit replacements,
appliances  and  floor  covering  replacements  and  exterior  painting.   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 and  currently  expects to budget  approximately
$110,000.  Additional improvements may be considered during 2003 and will depend
on the  physical  condition  of the  property as well as  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. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its Corporate  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purports  to  assert  claims  on  behalf  of a class  of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  which are named as nominal  defendants,  challenging,  among other
things,  the  acquisition  of interests  in certain  Corporate  General  Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities which were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged  into AIMCO.  The  plaintiffs  seek  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
On June 25, 1998, the Corporate General Partner filed a motion seeking dismissal
of the action.  In lieu of responding  to the motion,  the  plaintiffs  filed an
amended complaint.  The Corporate General Partner filed demurrers to the amended
complaint which were heard February 1999.

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

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

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

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

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

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

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

During the quarter ended December 31, 2002, no matter was submitted to a vote of
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 867 holders of
record  owning an aggregate of 27,500 Units at December 31, 2002.  Affiliates of
the Corporate  General  Partner owned  19,527.50 units or 71.01% at December 31,
2002.  No public  trading  market has  developed  for the  Units,  and it is not
anticipated that such a market will develop in the future.

The following table sets forth the distributions made by the Partnership for the
years ended December 31, 2002 and 2001. See "Item 6. Management's Discussion and
Analysis  or  Plan  of  Operations"   for   information  on  the  allocation  of
distributions between general and limited partners.

<TABLE>
<CAPTION>

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

<S>                    <C>               <C>              <C>               <C>
Operations             $ --              $ --             $1,978            $71.20
</TABLE>

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  cash  available for
distribution is reviewed on a monthly 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 2003 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 19,527.50 limited partnership units
in the Partnership  representing 71.01% of the outstanding units at December 31,
2002. A number of these units were  acquired  pursuant to tender  offers made by
AIMCO or its  affiliates.  It is  possible  that  AIMCO or its  affiliates  will
acquire additional units of limited  partnership  interest in the Partnership in
exchange  for  cash  or a  combination  of  cash  and  units  in  the  operating
partnership of AIMCO either through  private  purchases or tender offers.  Under
the  Partnership  Agreement,  unitholders  holding a  majority  of the Units are
entitled  to take  action  with  respect to a variety of  matters,  which  would
include voting on certain amendments to the Partnership  Agreement and voting to
remove the Corporate General Partner.  As a result of its ownership of 71.01% of
the  outstanding  units,  AIMCO is in a  position  to  control  all such  voting
decisions  with  respect to the  Partnership.  Although  the  Corporate  General
Partner owes fiduciary duties to the limited  partners of the  Partnership,  the
Corporate  General  Partner  also  owes  fiduciary  duties  to AIMCO as its sole
stockholder.  As a result,  the  duties of the  Corporate  General  Partner,  as
corporate general partner,  to the Partnership and its limited partners may come
into conflict with the duties of the Corporate  General Partner to AIMCO, as its
sole stockholder.

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

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

Results of Operations

The  Partnership's  net  income  for  the  year  ended  December  31,  2002  was
approximately  $2,206,000 compared to net income of approximately $1,475,000 for
the  corresponding  period  in 2001.  The  increase  in net  income is due to an
increase in total revenues  partially  offset by an increase in total  expenses.
Total revenues primarily  increased due to the recognition of a casualty gain at
Parktown  Townhouses  and an  increase in other  income  offset by a decrease in
rental   income.   Other   income   increased   due  to   increases  in  utility
reimbursements,  application  fees,  and lease  cancellation  fees at all of the
investment  properties.  Rental income decreased due to lost rents of $1,441,000
recognized  in 2001 at Parktown  Apartments.  No lost rents were  recognized  to
replace  lost rental  income in 2002.  This  decrease  was  partially  offset by
increased rental rates and increased occupancy at Parktown Townhouses.

During June 2001,  Parktown  Townhouses incurred extensive damage as a result of
severe flooding which affected certain areas of Texas. During 2001 and 2002, the
Partnership  received  insurance  proceeds of  approximately  $10,580,000  which
include approximately  $6,789,000 for mold remediation,  approximately  $203,000
for lost rents,  and  approximately  $283,000 for other expenses.  Approximately
$1,535,000  and  $2,700,000  were spent on the  reconstruction  of the  property
during 2002 and 2001,  respectively.  The net book value of the destroyed assets
written off were  approximately  $884,000.  During the year ended  December  31,
2002, the partnership  recognized a casualty gain of  approximately  $2,421,000.
Income for lost rents recognized in 2001 totaled  approximately  $1,144,000 with
approximately   $203,000  received  and   approximately   $941,000  in  accounts
receivable  at December 31, 2002. As a result of the  reconstruction,  interest,
property taxes and certain operating expenses totaling  approximately  $319,000,
$142,000 and $79,000, respectively,  have been capitalized during the year ended
December 31, 2002.

Total  expenses  increased  due to  increases  in  operating,  depreciation  and
interest expense.  Depreciation expense increased as reconstruction of buildings
at Parktown  Townhouses  was completed and put into  service.  Interest  expense
increased  due to the higher  advance  balances  owed to the  Corporate  General
Partner  during 2002.  Operating  expenses  increased due to  capitalization  of
approximately  $540,000  of  expenses  at  Parktowne  Townhouses  in 2002 versus
approximately  $623,000 in 2001 and due to increases in  advertising  expense at
Parktowne Townhouses and Signal Point Apartments.

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

As part of the ongoing business plan of the Partnership,  the Corporate  General
Partner  monitors  the  rental  market  environment  of 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,  2002,  the  Partnership  had  cash and  cash  equivalents  of
approximately  $361,000 compared to approximately $678,000 at December 31, 2001.
Cash and cash  equivalents  decreased  approximately  $317,000 from the previous
year ended December 31, 2001. The decrease is due to approximately $4,421,000 of
cash used in financing activities  partially offset by approximately  $1,857,000
of cash provided by operating  activities and  approximately  $2,247,000 of cash
provided  by  investing  activities.   Cash  provided  by  investing  activities
consisted  of net  insurance  proceeds  received  for the  casualty  at Parktown
Townhouses and net withdrawals  from escrow accounts  maintained by the mortgage
lender partially offset by property improvements and replacements.  Cash used in
financing  activities  consisted  primarily  of  payment  of  principal  on  the
mortgages  encumbering the investment properties and repayments of loans from an
affiliate of the Corporate  General Partner  slightly offset by advances from an
affiliate of the Corporate General Partner.  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 Partnership and to comply with Federal,
state,  and local  legal and  regulatory  requirements.  The  Corporate  General
Partner monitors developments in the area of legal and regulatory compliance and
is studying new federal laws,  including  the  Sarbanes-Oxley  Act of 2002.  The
Sarbanes-Oxley Act of 2002 mandates or suggests  additional  compliance measures
with regard to governance,  disclosure, audit and other areas. In light of these
changes,  the Partnership  expects that it will incur higher expenses related to
compliance,  including  increased  legal  and audit  fees.  The  Partnership  is
currently  evaluating  the capital  improvement  needs of the properties for the
upcoming  year.  The minimum  amount to be budgeted is expected to be  $256,000.
Additional  improvements  may be  considered  and will  depend  on the  physical
condition of the  properties as well as  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.

The  Partnership's  assets are thought to be sufficient  for any near term needs
(exclusive  of  capital   improvements)   of  the   Partnership.   The  mortgage
indebtedness  of  approximately  $18,823,000  is amortized  over 240 months with
maturity  dates of January 1, 2021,  at which time the loans are scheduled to be
fully amortized.

The following table sets forth the distributions made by the Partnership:

<TABLE>
<CAPTION>

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

<S>                    <C>               <C>              <C>               <C>
Operations             $ --              $ --             $1,978            $71.20
</TABLE>

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  cash  available for
distribution is reviewed on a monthly 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 2003 or subsequent periods.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates owned 19,527.50 limited partnership units
in the Partnership  representing 71.01% of the outstanding units at December 31,
2002. A number of these units were  acquired  pursuant to tender  offers made by
AIMCO or its  affiliates.  It is  possible  that  AIMCO or its  affiliates  will
acquire additional units of limited  partnership  interest in the Partnership in
exchange  for  cash  or a  combination  of  cash  and  units  in  the  operating
partnership of AIMCO either through  private  purchases or tender offers.  Under
the  Partnership  Agreement,  unitholders  holding a  majority  of the Units are
entitled  to take  action  with  respect to a variety of  matters,  which  would
include voting on certain amendments to the Partnership  Agreement and voting to
remove the Corporate General Partner.  As a result of its ownership of 71.01% of
the  outstanding  units,  AIMCO is in a  position  to  control  all such  voting
decisions  with  respect to the  Partnership.  Although  the  Corporate  General
Partner owes fiduciary duties to the limited  partners of the  Partnership,  the
Corporate  General  Partner  also  owes  fiduciary  duties  to AIMCO as its sole
stockholder.  As a result,  the  duties of the  Corporate  General  Partner,  as
corporate general partner,  to the Partnership and its limited partners may come
into conflict with the duties of the Corporate  General Partner to AIMCO, as its
sole stockholder.

Critical Accounting Policies and Estimates

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

Impairment of Long-Lived Assets

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

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

Revenue Recognition

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

Item 7.     Financial Statements:

SHELTER PROPERTIES II

LIST OF FINANCIAL STATEMENTS


      Report of Ernst & Young, LLP Independent Auditors

      Balance Sheet - December 31, 2002

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

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

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

      Notes to Financial Statements

                 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,  2002,  and the  related  statements  of  operations,  changes  in
partners' deficit,  and cash flows for each of the two years in the period ended
December 31, 2002.  These  financial  statements are the  responsibility  of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of Shelter  Properties  II at
December 31, 2002, and the results of its operations and its cash flows for each
of the two years in the period  ended  December  31, 2002,  in  conformity  with
accounting principles generally accepted in the United States.


                                                            /s/ERNST & YOUNG LLP


Greenville, South Carolina
February 14, 2003


                              SHELTER PROPERTIES II

                                  BALANCE SHEET
                        (in thousands, except unit data)

                                December 31, 2002

<TABLE>
<CAPTION>


Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $ 361
   Receivables and deposits                                                   1,047
   Restricted escrows                                                           255
   Other assets                                                                 574
   Investment properties (Notes B & E):
      Land                                                    $  1,814
      Buildings and related personal property                   31,260
                                                                33,074
      Less accumulated depreciation                            (19,528)      13,546
                                                                            $15,783

Liabilities and Partners' Deficit
Liabilities
      Accounts payable                                                       $ 133
      Tenant security deposit liabilities                                       188
      Accrued property taxes                                                    189
      Due to affiliates (Note D)                                              3,210
      Other liabilities                                                         262
      Mortgage notes payable (Note B)                                        18,823

Partners' Deficit
   General partners                                            $ (119)
   Limited partners (27,500 units issued and
      outstanding)                                             (6,903)       (7,022)
                                                                            $15,783



                   See Accompanying Notes to Financial Statements
</TABLE>

                              SHELTER PROPERTIES II

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


<TABLE>
<CAPTION>

                                                          Years Ended December 31,
                                                             2002          2001
Revenues:
<S>                                                         <C>           <C>
  Rental income                                             $ 4,948       $ 6,019
  Other income                                                  471           380
  Casualty gain (Note F)                                      2,421            --
      Total revenues                                          7,840         6,399

Expenses:
  Operating                                                   2,546         2,329
  General and administrative                                    243           246
  Depreciation                                                1,056           828
  Interest                                                    1,443         1,193
  Property taxes                                                346           328
      Total expenses                                          5,634         4,924


Net income (Note C)                                         $ 2,206       $ 1,475

Net income allocated to general partners (1%)               $    22       $    15
Net income allocated to limited partners (99%)                2,184         1,460
                                                            $ 2,206       $ 1,475

Net income per limited partnership unit                     $ 79.42       $ 53.09

Distributions per limited partnership unit                  $    --       $ 71.20


                   See Accompanying Notes to Financial Statements
</TABLE>

                              SHELTER PROPERTIES II

                   STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
                        (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 at
  December 31, 2000                       27,500       $ (136)   $ (8,589)   $ (8,725)

Distribution to partners                      --          (20)     (1,958)      (1,978)

Net income for the year ended
  December 31, 2001                           --           15       1,460        1,475

Partners' deficit at
  December 31, 2001                       27,500         (141)     (9,087)      (9,228)

Net income for the year ended
  December 31, 2002                           --           22       2,184        2,206

Partners' deficit at
  December 31, 2002                       27,500       $ (119)   $ (6,903)    $ (7,022)

                   See Accompanying Notes to Financial Statements
</TABLE>

                              SHELTER PROPERTIES II

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

                                                                  Years Ended December 31,
                                                                      2002        2001
Cash flows from operating activities:
<S>                                                                 <C>          <C>
  Net income                                                        $ 2,206      $ 1,475
  Adjustments to reconcile net income to net cash
   provided by (used in) operating activities:
      Depreciation                                                     1,056         828
      Amortization of discounts and loan costs                            28          27
      Casualty gain                                                   (2,421)        (14)
      Change in accounts:
        Receivables and deposits                                       4,572      (8,745)
        Other assets                                                      (2)         (5)
        Accounts payable                                              (3,682)        355
        Tenant security deposit liabilities                               75         (19)
        Accrued property taxes                                           (69)         11
        Due to affiliate                                                  75          11
        Other liabilities                                                 19         (31)
          Net cash provided by (used in) operating activities          1,857      (6,107)

Cash flows from investing activities:
  Property improvements and replacements                              (5,372)     (2,387)
  Net withdrawals from restricted escrows                              3,133         884
  Insurance proceeds received                                          4,486       2,775
          Net cash provided by investing activities                    2,247       1,272

Cash flows from financing activities:
  Payments on mortgage notes payable                                    (489)       (418)
  Advances from affiliate                                              1,533       6,998
  Repayment of advances from affiliate                                (5,465)         --
  Loan costs paid                                                         --         (38)
  Distributions to partners                                               --      (1,978)
          Net cash (used in) provided by financing
            activities                                                (4,421)      4,564

Net decrease in cash and cash equivalents                               (317)       (271)

Cash and cash equivalents at beginning of year                           678         949

Cash and cash equivalents at end of year                             $ 361        $ 678

Supplemental disclosure of cash flow information:
  Cash paid for interest                                            $ 1,707      $ 1,389

Supplemental disclosure of non-cash activity:
  Property improvements and replacements in accounts
   Payable                                                            $ --       $ 1,730
  Insurance proceeds held by mortgage lender                          $ --       $ 3,364
  Repairs to be covered by insurance in accounts payable              $ --       $ 1,656

                   See Accompanying Notes to Financial Statements
</TABLE>

                              SHELTER PROPERTIES II

                          NOTES TO FINANCIAL STATEMENTS

                                December 31, 2002

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 Corporate General Partner is
a  subsidiary  of Apartment  Investment  and  Management  Company  ("AIMCO"),  a
publicly traded real estate investment trust. The other general Partner is AIMCO
Properties,  L.P., an affiliate of the Corporate  General Partner and AIMCO. The
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
accounting   principles   generally  accepted  in  the  United  States  requires
management to make estimates and assumptions that affect the amounts reported in
the financial  statements and  accompanying  notes.  Actual results could differ
from those estimates.

Allocation of Cash  Distributions:  Cash  distributions  by the  Partnership are
allocated between general and limited partners in accordance with the provisions
of the Partnership  Agreement.  The Partnership Agreement 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.  As required by the  Partnership,  the  following  is a
reconciliation  of "Net cash provided by (used in) operating  activities" in the
accompanying statement of cash flow to "Net cash from operations", as defined in
the Partnership  Agreement.  However,  "net cash from operations"  should not be
considered  an  alternative  to net income as an indicator of the  Partnership's
operating performance or to cash flows as a measure of liquidity.

<TABLE>
<CAPTION>

                                                         Years Ended December 31,
                                                             2002          2001
                                                              (in thousands)
Net cash provided by (used in) operating activities         $1,857       $(6,107)
<S>                                                         <C>           <C>
  Property improvements and replacements                    (5,372)       (2,387)
  Payments on mortgage notes payable                          (489)         (418)
  Advances from affiliates for operations                       81           400
  Repayments to affiliates on advances for operations         (420)           --
  Changes in reserves for net operating liabilities           (988)        8,423
  Changes in restricted escrows, net                         3,133           884
  Additional operating reserves                                 --          (795)

      Net cash from operations                            $ (2,198)        $ --
</TABLE>

In 2002, the Corporate General Partner believed it to be in the best interest of
the Partnership to use cash from operations of approximately  $2,198,000 to fund
continuing  capital  improvement  needs in order  for the  properties  to remain
competitive.

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

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

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

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 2002 and 2001 was allocated 99% to the limited
partners and 1% to the general partners. Net income per limited partnership unit
for 2002 and 2001 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 fair value of the  partnership's  debt at the incremental
borrowing rate is $20,415,000.

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 2002 and 2001 were a decrease of  approximately  $988,000 and an increase
of  approximately  $8,423,000,  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: Cash and cash equivalents include cash on hand and in
banks.  At certain times,  the amount of cash deposited at a bank may exceed the
limit on insured  deposits.  Cash  balances  include  approximately  $322,000 at
December 31, 2002 that are  maintained by the affiliated  management  company on
behalf of affiliated entities in cash concentration accounts.

Restricted escrows: At December 31, 2002,  approximately $230,000 was on deposit
with the mortgage holder of Signal Pointe Apartments until the property achieves
certain occupancy  levels.  During 2002,  approximately  $3,364,000 of insurance
proceeds were released by the mortgage holder of Parktowne Townhouses.

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 for
real property over 18 years for additions after March 15, 1984 and before May 9,
1985, and 19 years for additions  after May 8, 1985, and before January 1, 1987.
As a result of the Tax Reform Act of 1986,  for  additions  after  December  31,
1986, the modified  accelerated cost recovery method is used for depreciation of
(1)  real  property  additions  over  27 1/2  years  and (2)  personal  property
additions over 5 years.

Loan Costs: Loan costs of approximately $562,000, less accumulated  amortization
of approximately  $56,000,  are included in other assets and are being amortized
by the straight-line method over the life of the loans. Amortization expense for
the year ended December 31, 2002 was approximately $28,000. Amortization expense
is expected to be approximately $28,000 for each of the years 2003 through 2007.

Tenant  Security  Deposits:  The  Partnership  requires  security  deposits from
lessees  for the  duration  of the  lease  and such  deposits  are  included  in
receivables  and  deposits.  Deposits  are  refunded  when the  tenant  vacates,
provided the tenant has not damaged 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 and fully
reserves all balances  outstanding over thirty days. In addition,  the Corporate
General Partner's policy is to offer rental concessions during particularly slow
months or in response to heavy  competition from other similar  complexes in the
area. Concessions are charged 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.  Expenditures  in excess of $250 that  maintain an existing  asset
which  has a  useful  life of more  than one year  are  capitalized  as  capital
replacement  expenditures  and depreciated over the estimated useful life of the
asset.  Expenditures for ordinary  repairs,  maintenance and apartment  turnover
costs are expensed as incurred.

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

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.

Advertising:  The  Partnership  expenses the costs of  advertising  as incurred.
Advertising expense,  included in operating expenses, was approximately $115,000
and $74,000 for the years ended December 31, 2002 and 2001, respectively.

Recent  Accounting  Pronouncements:  In August 2001,  the  Financial  Accounting
Standards Board issued SFAS No. 144,  "Accounting for the Impairment or Disposal
of Long-Lived  Assets".  SFAS No. 144 provides accounting guidance for financial
accounting  and reporting for the  impairment or disposal of long-lived  assets.
SFAS No.  144  supersedes  SFAS  No.  121,  "Accounting  for the  Impairment  of
Long-Lived  Assets and for Long-Lived Assets to be Disposed Of". SFAS No. 144 is
effective for fiscal years  beginning  after December 15, 2001. The  Partnership
adopted SFAS 144 effective January 1, 2002. Its adoption did not have a material
effect on the financial position or results of operations of the Partnership.

In April 2002,  the Financial  Accounting  Standards  Board issued SFAS No. 145,
"Recission of FASB Statements No. 4, 44 and 64". SFAS No. 4 "Reporting Gains and
Losses from  Extinguishment  of Debt,"  required  that all gains and losses from
extinguishment  of  debt  be  aggregated  and,  if  material,  classified  as an
extraordinary item. SFAS No. 145 rescinds SFAS No. 4, and accordingly, gains and
losses from extinguishment of debt should only be classified as extraordinary if
they are unusual in nature and occur  infrequently.  SFAS 145 is  effective  for
fiscal years  beginning  after May 15, 2002 with early  adoption an option.  The
Partnership  adopted SFAS 145 effective April 1, 2002. Its adoption did not have
a material  effect on the  financial  position or results of  operations  of the
Partnership.

Note B - Mortgage Notes Payable

The principal terms of mortgage notes payable are as follows:

<TABLE>
<CAPTION>

                                Principal        Monthly
                                Balance At       Payment       Stated
                               December 31,     Including     Interest     Maturity
                                   2002          Interest       Rate         Date
                                 (in thousands)
Properties
Parktown Townhouses
<S>                              <C>               <C>         <C>         <C>   <C>
  1st mortgage                   $ 7,441           $ 61        7.21%       01/01/21
Raintree Apartments
  1st mortgage                     2,915              24       7.22%       01/01/21
Signal Pointe Apartments
  1st mortgage                     8,467              70       7.22%       01/01/21

           Total                 $18,823          $ 155
</TABLE>

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 and is
scheduled to be fully amortized at maturity.

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

                               2003              $  525
                               2004                 564
                               2005                 607
                               2006                 652
                               2007                 701
                            Thereafter           15,774
                                                $18,823

Note C - 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):

                                                     2002         2001

Net income as reported                             $ 2,206      $ 1,475
Add (deduct):
   Depreciation differences                            235          117
   Change in prepaid rental                             25           (5)
   Other                                           (2,321) x       (289)

Federal taxable income                              $ 145       $ 1,298

Federal taxable income per limited
   partnership unit                                $ 20.82      $ 46.73


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

                  Net liabilities as reported              $ (7,022)
                     Buildings and land                         809
                     Accumulated depreciation                (5,961)
                     Syndication fees                         3,111
                     Other                                     957
                  Net liabilities - tax basis              $(8,106)

Note D - 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.

During the years ended  December 31, 2002 and 2001,  affiliates of the Corporate
General  Partner were  entitled to receive 5% of gross  receipts from all of the
Partnership's  properties  as  compensation  for providing  property  management
services.  The Partnership  paid to such affiliates  approximately  $270,000 and
$324,000 for the years ended December 31, 2002 and 2001, respectively,  which is
included in operating expenses.

Affiliates  of  the  Corporate   General  Partner   received   reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $900,000 and
$399,000 for the years ended December 31, 2002 and 2001, respectively,  which is
included  in  general  and  administrative  expenses  and  investment  property.
Included in these amounts are fees related to construction  management  services
provided by an  affiliate  of the  Corporate  General  Partner of  approximately
$727,000  and  $223,000  for  the  years  ended  December  31,  2002  and  2001,
respectively. The construction management service

fees are  calculated  based on a  percentage  of current  year  additions to the
investment properties and are being depreciated over 15 years.

In accordance with the Partnership Agreement,  the Corporate General Partner has
loaned the Partnership funds primarily to assist in the  redevelopment  required
at Parktown  Townhouses  due to flood damage as well as the operations of all of
the Partnership's investment properties. During the year ended December 31, 2002
the  Partnership  made  principal  payments  of  approximately  $5,465,000,  and
received new principal  advances of  approximately  $1,533,000.  During the year
ended  December 31, 2001,  the  Partnership  received new principal  advances of
approximately  $6,998,000.  As of  December  31,  2002 the  indebtedness  to the
Corporate  General  Partner  is  approximately  $3,067,000,   including  accrued
interest.  Interest is charged at the prime rate plus 2%.  Interest  expense for
this loan was  approximately  $340,000 and $107,000 for the years ended December
31, 2002 and 2001,  respectively.  The Corporate  General Partner is considering
the  remedies  it  can  pursue,   including   accelerating  repayment  of  these
outstanding loans it has made to the Partnership.

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, 2002,  the level of return to the limited
partners has not been met.

Beginning in 2001, the  Partnership  began insuring its properties up to certain
limits through coverage provided by AIMCO which is generally  self-insured for a
portion of losses and  liabilities  related  to workers  compensation,  property
casualty and vehicle liability. The Partnership insures its properties above the
AIMCO  limits  through  insurance  policies  obtained  by  AIMCO  from  insurers
unaffiliated with the Corporate General Partner. During the years ended December
31,  2002 and 2001,  the  Partnership  was  charged by AIMCO and its  affiliates
approximately  $103,000 and $113,000,  respectively,  for insurance coverage and
fees associated with policy claims administration.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates owned 19,527.50 limited partnership units
in the Partnership  representing 71.01% of the outstanding units at December 31,
2002. A number of these units were  acquired  pursuant to tender  offers made by
AIMCO or its  affiliates.  It is  possible  that  AIMCO or its  affiliates  will
acquire additional units of limited  partnership  interest in the Partnership in
exchange  for  cash  or a  combination  of  cash  and  units  in  the  operating
partnership of AIMCO either through  private  purchases or tender offers.  Under
the  Partnership  Agreement,  unitholders  holding a  majority  of the Units are
entitled  to take  action  with  respect to a variety of  matters,  which  would
include voting on certain amendments to the Partnership  Agreement and voting to
remove the Corporate General Partner.  As a result of its ownership of 71.01% of
the  outstanding  units,  AIMCO is in a  position  to  control  all such  voting
decisions  with  respect to the  Partnership.  Although  the  Corporate  General
Partner owes fiduciary duties to the limited  partners of the  Partnership,  the
Corporate  General  Partner  also  owes  fiduciary  duties  to AIMCO as its sole
stockholder.  As a result,  the  duties of the  Corporate  General  Partner,  as
corporate general partner,  to the Partnership and its limited partners may come
into conflict with the duties of the Corporate  General Partner to AIMCO, as its
sole stockholder.

Note E - Real Estate and Accumulated Depreciation

                                                    Initial Cost
                                                   To Partnership
                                                   (in thousands)

<TABLE>
<CAPTION>

                                                           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              $ 7,441        $ 1,095     $ 5,329        $ 8,821
Raintree Apartments                2,915            184       3,184          1,405
Signal Pointe Apartments           8,467            535       8,062          4,459

          Totals                 $18,823        $ 1,814     $16,575        $14,685
</TABLE>


                     Gross Amount At Which
                            Carried
                     At December 31, 2002
                        (in thousands)
<TABLE>
<CAPTION>

                            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           $ 1,095   $14,151   $15,246   $ 6,555       1969     03/01/81    5-35
Townhouses
Raintree               184     4,589     4,773     3,533     1972-1974  04/30/81    5-38
Apartments
Signal Pointe
  Apartments           535    12,520    13,055     9,440       1970     06/30/81    5-37


      Totals       $ 1,814   $31,260   $33,074  $19,528
</TABLE>

Reconciliation of "real estate and accumulated depreciation":

                                               Years Ended December 31,
                                                   2002         2001
                                                    (in thousands)
Investment Properties
Balance at beginning of year                      $29,435      $27,467
    Property improvements                           3,642        4,117
    Disposals of property                              (3)      (2,149)
Balance at end of year                            $33,074      $29,435

Accumulated Depreciation
Balance at beginning of year                      $18,473      $18,891
    Additions charged to expense                    1,056          828
    Disposals of property                              (1)      (1,246)
Balance at end of year                            $19,528      $18,473


The  aggregate  cost of the real  estate  for  Federal  income tax  purposes  at
December  31,  2002 and 2001,  is  approximately  $33,883,000  and  $34,364,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December 31, 2002 and 2001, is  approximately  $25,489,000  and  $24,669,000,
respectively.

Note F - Casualty Event

During June 2001,  Parktown  Townhouses incurred extensive damage as a result of
severe  flooding  which affected  certain areas of Texas.  During 2001 and 2002,
insurance proceeds of approximately $10,580,000 have been received which include
approximately  $6,789,000 for mold remediation,  approximately $203,000 for lost
rents and approximately $283,000 for other expenses. Net book value of destroyed
assets written off were  approximately  $884,000.  The Partnership  recognized a
casualty gain of approximately  $2,421,000.  Income for lost rents recognized in
2001 totaled  approximately  $1,144,000 with approximately  $203,000 received in
and  approximately  $941,000 in accounts  receivable  at December 31, 2002. As a
result of the  reconstruction,  interest,  property taxes and certain  operating
expenses totaling approximately  $319,000,  $142,000 and $79,000,  respectively,
have been  capitalized  during the year ended  December  31, 2002 as compared to
$353,000, $131,000 and $139,000 during the year ended December 31, 2001.

Note G - Fourth Quarter Adjustment

During 2001, the  Partnership  increased the  accumulated  expenditures  used in
calculating  capitalized interest which resulted in a decrease in fourth quarter
interest expense of approximately $76,000.  Approximately $18,000 and $58,000 is
related to the second and third quarter of 2001, respectively.

Note H - Legal Proceedings

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

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

On July 10, 2002,  the Court entered an order vacating the current trial date of
January 13, 2003 (as well as the  pre-trial  and  discovery  cut-off  dates) and
stayed the case in its  entirety  through  November  7, 2002 so that the parties
could have an opportunity to discuss settlement.  On October 30, 2002, the court
entered an order extending the stay in effect through January 10, 2003.

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

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

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

Before completing briefing on the appeal, the parties stayed further proceedings
in the appeal pending the Court's review of the terms of the proposed settlement
described above.

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

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




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

            None.

                                    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  director 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              45    Executive Vice President and Director

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

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


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

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

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

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

The executive officers and director of the Corporate General Partner fulfill the
obligations  of the Audit  Committee  and  oversee the  Partnership's  financial
reporting process on behalf of the Corporate General Partner. Management has the
primary  responsibility  for the financial  statements and the reporting process
including  the  systems  of  internal  controls.  In  fulfilling  its  oversight
responsibilities,  the executive  officers and director of the 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 accounting  principles
generally accepted in the United States,  their judgments as to the quality, not
just the  acceptability,  of the  Partnership's  accounting  principles and such
other  matters as are required to be discussed  with the Audit  Committee or its
equivalent under auditing standards  generally accepted in the United States. In
addition,  the  Partnership  has  discussed  with the  independent  auditors the
auditors' independence from management and the Partnership including the matters
in the written  disclosures  required by the  Independence  Standards  Board and
considered  the   compatibility   of  non-audit   services  with  the  auditors'
independence.

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

The Corporate  General Partner has reappointed  Ernst & Young LLP as independent
auditors to audit the financial statements of the Partnership for 2003. Fees for
2002 were  audit  services  of  approximately  $43,000  and  non-audit  services
(principally tax-related) of approximately $20,000.

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 Partnership as of December 31,
2002.

           Entity                          Number of Units      Percentage

           Cooper River Properties, LLC        1,958.5             7.12%
             (an affiliate of AIMCO)
           Insignia Properties, LP             9,128.0            33.19%
             (an affiliate of AIMCO)
           AIMCO Properties, LP                8,441.0            30.70%
             (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 4582 S. Ulster St. Parkway, Suite 1100, Denver, Colorado 80237.

No director or officer of the  Corporate  General  Partner  owns any units.  The
Corporate  General  Partner  owns 100  Units  as  required  by the  terms of the
Partnership  Agreement.  AIMCO  Properties,  LP, the other general partner,  has
acquired 8,441 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.

During the years ended  December 31, 2002 and 2001,  affiliates of the Corporate
General  Partner were  entitled to receive 5% of gross  receipts from all of the
Partnership's  properties  as  compensation  for providing  property  management
services.  The Partnership  paid to such affiliates  approximately  $270,000 and
$324,000 for the years ended December 31, 2002 and 2001, respectively,  which is
included in operating expenses.

Affiliates  of  the  Corporate   General  Partner   received   reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $900,000 and
$399,000 for the years ended December 31, 2002 and 2001, respectively,  which is
included  in  general  and  administrative  expenses  and  investment  property.
Included in these amounts are fees related to construction  management  services
provided by an  affiliate  of the  Corporate  General  Partner of  approximately
$727,000  and  $223,000  for  the  years  ended  December  31,  2002  and  2001,
respectively. The construction management service fees are calculated based on a
percentage of current year additions to the investment  properties and are being
depreciated over 15 years.

In accordance with the Partnership Agreement,  the Corporate General Partner has
loaned the Partnership funds primarily to assist in the  redevelopment  required
at Parktown  Townhouses  due to flood damage as well as the operations of all of
the Partnership's investment properties. During the year ended December 31, 2002
the  Partnership  made  principal  payments  of  approximately  $5,465,000,  and
received new principal  advances of  approximately  $1,533,000.  During the year
ended  December 31, 2001,  the  Partnership  received new principal  advances of
approximately  $6,998,000.  As of  December  31,  2002 the  indebtedness  to the
Corporate  General  Partner  is  approximately  $3,067,000,   including  accrued
interest.  Interest is charged at the prime rate plus 2%.  Interest  expense for
this loan was  approximately  $340,000 and $107,000 for the years ended December
31, 2002 and 2001,  respectively.  The Corporate  General Partner is considering
the  remedies  it  can  pursue,   including   accelerating  repayment  of  these
outstanding loans it has made to the Partnership.

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, 2002,  the level of return to the limited
partners has not been met.

Beginning in 2001, the  Partnership  began insuring its properties up to certain
limits through coverage provided by AIMCO which is generally  self-insured for a
portion of losses and  liabilities  related  to workers  compensation,  property
casualty and vehicle liability. The Partnership insures its properties above the
AIMCO  limits  through  insurance  policies  obtained  by  AIMCO  from  insurers
unaffiliated with the Corporate General Partner.  During the year ended December
31,  2002 and 2001,  the  Partnership  was  charged by AIMCO and its  affiliates
approximately  $103,000 and $113,000,  respectively,  for insurance coverage and
fees associated with policy claims administration.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates owned 19,527.50 limited partnership units
in the Partnership  representing 71.01% of the outstanding units at December 31,
2002. A number of these units were  acquired  pursuant to tender  offers made by
AIMCO or its  affiliates.  It is  possible  that  AIMCO or its  affiliates  will
acquire additional units of limited  partnership  interest in the Partnership in
exchange  for  cash  or a  combination  of  cash  and  units  in  the  operating
partnership of AIMCO either through  private  purchases or tender offers.  Under
the  Partnership  Agreement,  unitholders  holding a  majority  of the Units are
entitled  to take  action  with  respect to a variety of  matters,  which  would
include voting on certain amendments to the Partnership  Agreement and voting to
remove the Corporate General Partner.  As a result of its ownership of 71.01% of
the  outstanding  units,  AIMCO is in a  position  to  control  all such  voting
decisions  with  respect to the  Partnership.  Although  the  Corporate  General
Partner owes fiduciary duties to the limited  partners of the  Partnership,  the
Corporate  General  Partner  also  owes  fiduciary  duties  to AIMCO as its sole
stockholder.  As a result,  the  duties of the  Corporate  General  Partner,  as
corporate general partner,  to the Partnership and its limited partners may come
into conflict with the duties of the Corporate  General Partner to AIMCO, as its
sole stockholder.

Item 13.    Exhibits and Reports on Form 8-K

      (a)   Exhibits:

            See Exhibit Index attached.

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

            None.

Item 14.    Controls and Procedures

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


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


                                    Date: March 28, 2003


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


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


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


                                  CERTIFICATION


I, Patrick J. Foye, certify that:


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


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


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


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


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


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


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


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


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


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


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


Date:  March 28, 2003

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

                                  CERTIFICATION


I, Paul J. McAuliffe, certify that:


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


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


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


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


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


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


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


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


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


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


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


Date:  March 28, 2003

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

                                  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,  2001 and  incorporated  herein  by
                        reference.

          99   (a) Prospectus of Registrant  dated February 2, 1981 [included in
               Registration Statement No. 2-69507 of Registrant and incorporated
               herein by reference].

                  (b)   Certification  of  Chief  Executive  Officer  and  Chief
                        Financial Officer.

Exhibit 99


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



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

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

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


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


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


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