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November 14, 2006




Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC  20549

Re:    Boston Financial Tax Credit Fund VII, A Limited Partnership
       Report on Form 10-QSB for the Quarter Ended September 30, 2006
       File Number 0-24584


Dear Sir/Madam:


Pursuant to the requirements of section 15(d) of the Securities Exchange Act of
1934, filed herewith a copy of subject report.


Very truly yours,


/s/Stephen Guilmette
Stephen Guilmette
Assistant Controller





TC7-Q2.DOC


<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB


(Mark One)

[ X ]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

For the quarterly period ended                September 30, 2006
                                       -------------------------------------

                                                         OR

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

For the transition period from                     to



                         Commission file number 0-24584

          Boston Financial Tax Credit Fund VII, A Limited Partnership
           (Exact name of registrant as specified in its charter)


   Massachusetts                             04-3166203
---------------------------------       -------------------------------
   (State or other jurisdiction of     (I.R.S. Employer Identification No.)
   incorporation or organization)


   101 Arch Street, Boston, Massachusetts                 02110-1106
---------------------------------------------    -----------------------------
  (Address of principal executive offices)               (Zip Code)


Registrant's telephone number, including area code            (617) 439-3911
                                                            ------------------

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


<PAGE>


           BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>



PART I - FINANCIAL INFORMATION                                                        Page No.
------------------------------                                                        --------

Item 1.   Financial Statements

<S>                                                                                       <C>
          Balance Sheet (Unaudited) - September 30, 2006                                  1

          Statements of Operations (Unaudited) -
               For the Three and Six Months Ended September 30, 2006 and 2005             2

          Statement of Changes in Partners' Equity (Deficiency)
               (Unaudited) - For the Six Months Ended September 30, 2006                  3

          Statements of Cash Flows (Unaudited) -
               For the Six Months Ended September 30, 2006 and 2005                       4

          Notes to the Financial Statements (Unaudited)                                   5

Item 2.   Management's Discussion and Analysis of
               Financial Condition and Results of Operations                              7

PART II - OTHER INFORMATION

Items 1-6                                                                                14

SIGNATURE                                                                                15


CERTIFICATIONS                                                                           16
</TABLE>

<PAGE>


      BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

                                  BALANCE SHEET
                               September 30, 2006
                                   (Unaudited)

<TABLE>
<CAPTION>



Assets

<S>                                                                                               <C>
Cash and cash equivalents                                                                         $       654,473
Restricted cash                                                                                           258,343
Investment securities                                                                                     298,152
Investments in Local Limited Partnerships (Note 1)                                                      3,627,176
Other assets                                                                                                3,916
                                                                                                  ---------------
     Total Assets                                                                                 $     4,842,060
                                                                                                  ===============

Liabilities and Partners' Equity

Due to affiliates                                                                                 $       567,872
Accrued expenses                                                                                           83,325
                                                                                                  ---------------
     Total Liabilities                                                                                    651,197
                                                                                                  ---------------

Commitments (Note 2)

General, Initial and Investor Limited Partners' Equity                                                  4,191,689
Net unrealized losses on marketable securities                                                               (826)
                                                                                                  ---------------
     Total Partners' Equity                                                                             4,190,863
                                                                                                  ---------------
     Total Liabilities and Partners' Equity                                                       $     4,842,060
                                                                                                  ===============


The accompanying notes are an integral part of these financial statements.

</TABLE>


<PAGE>
      BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP


                            STATEMENTS OF OPERATIONS
         For the Three and Six Months Ended September 30, 2006 and 2005
                                   (Unaudited)
<TABLE>
<CAPTION>



                                                         Three Months Ended                          Six Months Ended
                                                  September 30,         September 30,        September 30,         September 30,
                                                      2006                  2005                 2006                  2005
                                                ----------------      ----------------     ----------------     ----------------
Revenue
<S>                                             <C>                   <C>                  <C>                  <C>
   Investment                                   $         11,083      $         10,310     $         22,966     $         17,588
   Other                                                  41,942                30,000               56,942               30,000
                                                ----------------      ----------------     ----------------     ----------------
     Total Revenue                                        53,025                40,310               79,908               47,588
                                                ----------------      ----------------     ----------------     ----------------

Expenses:
   Asset Management Fees, affiliate                       88,362                85,456              176,723              170,912
   Provision for valuation of advances to
     Local Limited Partnerships                              938                   179            1,229,092              200,216
   Provision for valuation of investments
     in Local Limited Partnerships                             -                     -                    -              133,000
   General and administrative
     (includes reimbursement to affiliate
     in the amounts of $69,445 and
     $67,252 for the six months ended
     September 30, 2006 and 2005,
     respectively)                                        64,075                75,041              197,817              153,414
   Amortization                                            4,108                 4,532                8,583               10,778
                                                ----------------      ----------------     ----------------     ----------------
     Total Expenses                                      157,483               165,208            1,612,215              668,320
                                                ----------------      ----------------     ----------------     ----------------

Loss before equity in losses of
   Local Limited Partnerships                           (104,458)             (124,898)          (1,532,307)            (620,732)

Equity in losses of Local Limited
   Partnerships (Note 1)                                (205,766)             (210,091)            (523,947)            (497,892)

Gain on sale of investment in Local
   Limited Partnership                                         -                     -            1,220,353                    -
                                                ----------------      ----------------     ----------------     ----------------

Net Loss                                        $       (310,224)     $       (334,989)    $       (835,901)    $     (1,118,624)
                                                ================      ================     ================     ================

Net Loss allocated:
   General Partners                             $         (3,102)     $         (3,350)    $         (8,359)    $        (11,186)
   Limited Partners                                     (307,122)             (331,639)            (827,542)          (1,107,438)
                                                ----------------      ----------------     ----------------     ----------------
                                                $       (310,224)     $       (334,989)    $       (835,901)    $     (1,118,624)
                                                ================      ================     ================     ================

Net Loss Per Limited Partner
   Unit (50,930) Units                          $          (6.03)     $          (6.51)    $         (16.25)    $        (21.74)
                                                ================      ================     ================     ===============


The accompanying notes are an integral part of these financial statements.
</TABLE>


<PAGE>

      BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

              STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
                   For the Six Months Ended September 30, 2006
                                   (Unaudited)

<TABLE>
<CAPTION>





                                                            Initial           Investor            Net
                                           General          Limited            Limited        Unrealized
                                          Partners          Partner            Partner          Losses            Total

<S>              <C> <C>                 <C>             <C>               <C>               <C>             <C>
Balance at March 31, 2006                $  (394,045)    $     5,000       $    5,416,635    $      (1,381)  $    5,026,209
                                         -----------     -----------       --------------    -------------   --------------

Comprehensive Income (Loss):
  Change in net unrealized
     losses on marketable
     securities available for sale                 -               -                    -             555               555
  Net Loss                                    (8,359)              -             (827,542)              -          (835,901)
                                         -----------     -----------       --------------    ------------    --------------
Comprehensive Income (Loss)                   (8,359)              -             (827,542)            555          (835,346)
                                         -----------     -----------       --------------    ------------    --------------

Balance at September 30, 2006            $  (402,404)    $     5,000       $    4,589,093    $       (826)   $    4,190,863
                                         ===========     ===========       ==============    ============    ==============


The accompanying notes are an integral part of these financial statements.

</TABLE>


<PAGE>

      BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

                            STATEMENTS OF CASH FLOWS
              For the Six Months Ended September 30, 2006 and 2005
                                   (Unaudited)


<TABLE>
<CAPTION>




                                                                              2006                  2005
                                                                          -------------         --------------

<S>                                                                       <C>                    <C>
Net cash provided by (used for) operating activities                      $     (55,394)         $     160,787

Net cash provided by (used for) investing activities                            163,061               (579,808)
                                                                          -------------          -------------

Net increase (decrease) in cash and cash equivalents                            107,667               (419,021)

Cash and cash equivalents, beginning                                            546,806              1,035,163
                                                                          -------------          -------------

Cash and cash equivalents, ending                                         $     654,473          $     616,142
                                                                          =============          =============




The accompanying notes are an integral part of these financial statements.
</TABLE>



<PAGE>


       BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

                       NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)


The unaudited financial statements presented herein have been prepared in
accordance with the instructions to Form 10-QSB and do not include all of the
information and note disclosures required by accounting principles generally
accepted in the United States of America. These statements should be read in
conjunction with the financial statements and notes thereto included with the
Fund's Form 10-KSB for the year ended March 31, 2006. In the opinion of the
Managing General Partner, these financial statements include all adjustments,
consisting only of normal recurring adjustments, necessary to present fairly the
Fund's financial position and results of operations. The results of operations
for the period may not be indicative of the results to be expected for the year.

The Managing General Partner of the Fund has elected to report results of the
Local Limited Partnerships in which the Fund has a limited partnership interest
on a 90 day lag basis because the Local Limited Partnerships report their
results on a calendar year basis. Accordingly, the financial information about
the Local Limited Partnerships that is included in the accompanying financial
statements is as of June 30, 2006 and 2005.

1.   Investments in Local Limited Partnerships

The Fund has limited partnership interests in eighteen Local Limited
Partnerships which were organized for the purpose of owning and operating
multi-family housing complexes, all of which are government-assisted. The Fund's
ownership interest in each Local Limited Partnership is 99%, with the exception
of Springwood Apartments which is 19.8%, Eden Park which is 67%, Fountain Lakes
which is 90%, and Twin Oaks Meadow which is 95.89%. The Fund may have negotiated
or may negotiate options with the Local General Partners to purchase or sell the
Fund's interests in the Local Limited Partnership's at the end of the Compliance
Period at nominal prices. In the event that Local Limited Partnerships are sold
to third parties, or upon dissolution of the Local Limited Partnerships,
proceeds will be distributed according to the terms of each Local Limited
Partnership agreement.

The following is a summary of investments in Local Limited Partnerships at
September 30, 2006:

<TABLE>
<CAPTION>
Capital contributions and advances paid to Local Limited Partnerships and purchase
<S>                                                                                                 <C>
   price paid to withdrawing partners of Local Limited Partnerships                                 $    39,136,076

Cumulative equity in losses of Local Limited Partnerships (excluding cumulative
   unrecognized losses of $11,634,524)                                                                  (28,190,805)

Cumulative cash distributions received from Local Limited Partnerships                                   (2,289,716)
                                                                                                    ---------------

Investments in Local Limited Partnerships before adjustments                                              8,655,555

Excess investment costs over the underlying assets acquired:

   Acquisition fees and expenses                                                                          1,201,009

   Cumulative amortization of acquisition fees and expenses                                                (346,437)
                                                                                                    ---------------

Investments in Local Limited Partnerships before valuation allowance                                      9,510,127

Valuation allowance on investments in Local Limited Partnerships                                         (5,882,951)
                                                                                                    ---------------

Investments in Local Limited Partnerships                                                           $     3,627,176
                                                                                                    ===============
</TABLE>


<PAGE>
      BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP


                  NOTES TO THE FINANCIAL STATEMENTS (continued)
                                   (Unaudited)


1. Investments in Local Limited Partnerships (continued)

The Fund has also recorded a valuation allowance for its investments in certain
Local Limited Partnerships in order to appropriately reflect the estimated net
realizable value of these investments.

The Fund's share of the net losses of the Local Limited Partnerships for the six
months ended September 30, 2006 is $1,498,726. For the six months ended
September 30, 2006, the Fund has not recognized $974,779 of equity in losses
relating to certain Local Limited Partnerships in which cumulative equity in
losses and distributions exceeded its total investments in these Local Limited
Partnerships.

The Partnership's interest in one of its investments in Local Limited
Partnerships was sold during the six months ended September 30, 2006, resulting
in a gain of $1,220,353. However, all of the proceeds attributable to this gain
were utilized by the Local General Partner to offset operating deficits and fund
debt service payments at another one of the Local Limited Partnerships managed
by this same Local General Partner. Consequently, the Fund has recorded an
advance to this Local Limited Partnership and an offsetting provision of
$1,228,154 for the entire amount of proceeds that would have been realized from
the gain.

2.   Commitments

At September 30, 2006, the Fund has committed to make future capital
contributions and pay future purchase price installments on its investments in
Local Limited Partnerships. These future payments are contingent upon the
achievement of certain criteria as set forth in the Local Limited Partnership
agreements and total approximately $206,000. Of this amount, the Fund has set
aside approximately $148,000 in escrow for future capital contributions to one
Local Limited Partnership.

3.   Significant Subsidiaries

The following Local Limited Partnerships invested in by the Fund represents more
than 20% of the Fund's total assets or equity as of September 30, 2006 or 2005
or net losses for the three months ended either September 30, 2006 or 2005. The
following financial information represents the performance of these Local
Limited Partnerships for the three months ended June 30, 2006 and 2005:
<TABLE>
<CAPTION>

Woods Lane                                                                         2006                     2005
----------                                                                    ---------------           --------

<S>                                                                           <C>                       <C>
Revenue                                                                       $           N/A           $     169,539
Net Loss                                                                      $           N/A           $     (80,612)

Santa Fe Oaks

Revenue                                                                       $           N/A           $     145,384
Net Loss                                                                      $           N/A           $    (144,236)

Citrus Glen
Revenue                                                                       $       395,397           $     394,079
Net Income (Loss)                                                             $       (38,310)          $      59,360

Fairhaven Manor

Revenue                                                                       $        84,561           $      88,819
Net Income (Loss)                                                             $       (44,857)          $       8,689


</TABLE>

<PAGE>

      BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Certain matters discussed herein constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. The Fund
intends such forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements and is including this statement for
purposes of complying with these safe harbor provisions. Although the Fund
believes the forward-looking statements are based on reasonable assumptions, the
Fund can give no assurance that its expectations will be attained. Actual
results and timing of certain events could differ materially from those
projected in or contemplated by the forward-looking statements due to a number
of factors, including, without limitation, general economic and real estate
conditions and interest rates.

Critical Accounting Policies

The Fund's accounting polices include those that relate to its recognition of
investments in Local Limited Partnerships using the equity method of accounting.
The Fund's policy is as follows:

The Local Limited Partnerships in which the Fund invests are Variable Interest
Entities ("VIE"s). The Fund is involved with the VIEs as a non-controlling
limited partner equity holder. Because the Fund is not the primary beneficiary
of these VIEs, it accounts for its investments in the Local Limited Partnerships
using the equity method of accounting. As a result of its involvement with the
VIEs, the Fund's exposure to economic and financial statement losses is limited
to its investments in the VIEs ($3,833,083 at September 30, 2006). The Fund may
be subject to additional losses to the extent of any financial support that the
Fund voluntarily provides in the future. Under the equity method, the investment
is carried at cost, adjusted for the Fund's share of net income or loss and for
cash distributions from the Local Limited Partnerships; equity in income or loss
of the Local Limited Partnerships is included currently in the Fund's
operations. Under the equity method, a Local Limited Partnership investment will
not be carried below zero. To the extent that equity in losses are incurred when
the Fund's carrying value of the respective Local Limited Partnership has been
reduced to a zero balance, the losses will be suspended and offset against
future income. Income from Local Limited Partnerships, where cumulative equity
in losses plus cumulative distributions have exceeded the total investment in
Local Limited Partnerships, will not be recorded until all of the related
unrecorded losses have been offset. To the extent that a Local Limited
Partnership with a carrying value of zero distributes cash to the Fund that
distribution is recorded as income on the books of the Fund and is included in
"other revenue" in the accompanying financial statements.

The Fund has implemented policies and practices for assessing
other-than-temporary declines in values of its investments in Local Limited
Partnerships. Periodically, the carrying values of the investments are compared
to their respective fair values. If an other-than-temporary decline in carrying
value exists, a provision to reduce the asset to fair value, as calculated based
primarily on remaining tax benefits, will be recorded in the Fund's financial
statements. Generally, the carrying values of most Local Limited Partnerships
will decline through losses and distributions in amounts sufficient to prevent
other-than-temporary impairment losses. However, the Fund may record similar
impairment losses in the future if the expiration of tax credits outpaces losses
and distributions from any of the Local Limited Partnerships.

Liquidity and Capital Resources

At September 30, 2006, the Fund had cash and cash equivalents of $654,473,
compared with $546,806 at March 31, 2006. The slight increase is primarily
attributable to cash distributions received from Local Limited Partnerships in
excess of cash used for operating activities.

The Managing General Partner initially designated 5% of the Gross Proceeds as
Reserves, as defined in the Partnership Agreement. The Reserves were established
to be used for working capital of the Fund and contingencies related to the
ownership of Local Limited Partnership interests. The Managing General Partner
may increase or decrease such Reserves from time to time, as it deems
appropriate. At September 30, 2006, approximately $895,000 of cash, cash
equivalents and investment securities has been designated as Reserves.


<PAGE>
      BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)


Liquidity and Capital Resources (continued)


To date, professional fees relating to various Property issues totaling
approximately $125,000 have been paid from Reserves. In the event a Local
Limited Partnership encounters operating difficulties requiring additional
funds, the Fund's management might deem it in its best interest to voluntarily
provide such funds in order to protect its investment. As of September 30, 2006,
the Fund has advanced approximately $649,000 to Local Limited Partnerships to
fund operating deficits.

The Managing General Partner believes that the investment income earned on the
Reserves, along with cash distributions received from Local Limited
Partnerships, to the extent available, will be sufficient to fund the Fund's
ongoing operations. Reserves may be used to fund operating deficits, if the
Managing General Partner deems funding appropriate. To date, the Fund has used
approximately $878,000 of Reserves to fund operations. If Reserves are not
adequate to cover the Fund's operations, the Fund will seek other financing
sources including, but not limited to, the deferral of Asset Management Fees
paid to an affiliate of the Managing General Partner or working with Local
Limited Partnerships to increase cash distributions.


At September 30, 2006, the Fund has committed to make future capital
contributions and to pay future purchase price installments on its investments
in Local Limited Partnerships. These future payments are contingent upon the
achievement of certain criteria as set forth in the Local Limited Partnership
Agreements and total approximately $58,000.

Since the Fund invests as a limited partner, the Fund has no contractual duty to
provide additional funds to Local Limited Partnerships beyond its specified
investment. Thus, as of September 30, 2006, the Fund had no contractual or other
obligation to any Local Limited Partnership which had not been paid or provided
for, except as described above.

Cash Distributions

No cash distributions were made to Limited Partners during the six months ended
September 30, 2006.

Results of Operations

Three Month Period

The Fund's results of operations for the three months ended September 30, 2006
resulted in a net loss of $310,224 as compared to a net loss of $334,989 for the
same period in 2005. The decrease in net loss is primarily attributable to an
increase in other income and a decrease in general and administrative expenses.
The increase in other income is primarily due to an increase in distributions
from Local Limited Partnerships with carrying values of zero. The decrease in
general and administrative expenses is due to a reversal of an accrual for
monitoring fees in the current period.



<PAGE>

      BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)


Results of Operations (continued)

Six Month Period

The Fund's results of operations for the six months ended September 30, 2006
resulted in net loss of $835,901 as compared to a net loss of $1,118,624 for the
same period in 2005. The decrease in net loss is primarily attributable to a
decrease in provision for valuation of advances to the Local Limited
Partnerships. After a gain on sale of the Fund's investment in one of the Local
Limited Partnerships offsets a reserve provision recorded when the gain proceeds
were fully advanced to an affiliated Local Limited Partnership, provision for
valuation of advances actually decreased due to advances made to another Local
Limited Partnership in the prior year. In addition, the net loss decrease is
attributable to a decrease in provision for valuation of investments in Local
Limited Partnerships due to the Fund recording an impairment allowance in its
investments in certain Local Limited Partnerships during the prior year. These
decreases in were partially offset by an increase in general administrative
expenses due to increased legal expenses associated with litigation in which the
Partnership is currently involved.

Portfolio Update

The Fund is a Massachusetts limited partnership organized to invest in Local
Limited Partnerships which own and operate apartment complexes that are eligible
for low income housing tax credits which may be applied against the federal
income tax liability of an investor. The Fund's objective are to: (i) provide
investors with annual tax credits which they may use to reduce their federal
income tax liability; ii) provide limited cash distributions from the operations
of apartment complexes and; iii) preserve and protect the Fund's capital. Arch
Street VIII, Inc., a Massachusetts corporation is the Managing General Partner
of the Fund. Arch Street VII Limited Partnership, a Massachusetts limited
partnership, whose general partner consists of Arch Street, Inc., is also a
General Partner. Both the Managing General Partner and Arch Street VII, L.P. are
affiliates of MMA. The fiscal year of the Fund ends on March 31.

As of September 30, 2006, the Fund's investment portfolio consists of limited
partnership interests in eighteen Local Limited Partnerships, each of which owns
and operates a multi-family apartment complex and each of which has generated
Tax Credits. Since inception, the Fund has generated Tax Credits of
approximately $1,485 per Limited Partner Unit. The Managing General Partner
estimates that the Fund will generate an immaterial amount of Tax Credits in
2006, the expected final year of Tax Credits. In the aggregate, actual and
estimated Tax Credits will enable the Fund to meet the objective specified in
the Fund's prospectus.

Properties that receive low income housing Tax Credits must remain in compliance
with rent restriction and set-aside requirements for at least 15 calendar years
from the date the property is placed in service. Failure to do so would result
in the recapture of a portion of the property's Tax Credits. Between 2007 and
continuing through 2009, the Compliance Periods of the eighteen Properties in
which the Fund has an interest will expire. The Managing General Partner has
negotiated agreements that will ultimately dispose of the Fund's interest in
five Local Limited Partnerships. It is unlikely that the disposition of any of
these Local Limited Partnership interests will generate any material cash
distributions to the Fund. One of the Local Limited Partnerships in which the
Fund had an interest was disposed of during the six months ended September 30,
2006.

The Managing General Partner will continue to closely monitor the operations of
the Properties during the Compliance Periods and will formulate disposition
strategies with respect to the Fund's remaining Local Limited Partnership
interests. It is unlikely that the Managing General Partner will be able to
dispose of the Fund's Local Limited Partnership interests concurrently with the
expiration of each Property's Compliance Period. The Fund shall dissolve and its
affairs shall be wound up upon the disposition of the final Local Limited
Partnership interest and other assets of the Fund. Investors will continue to be
Limited Partners, receiving K-1s and quarterly and annual reports, until the
Fund is dissolved.


<PAGE>

      BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)


Portfolio Update (continued)

On or about July 13, 2004, Park G.P., Inc. ("Park") commenced litigation against
Boston Financial Qualified Housing Tax Credits L.P. IV ("QH IV") and its
purported general partners (collectively, the "Defendants") in Clay County,
Missouri, claiming that the Defendants breached QH IV's partnership agreement
and their fiduciary duties owed to Park by, among other things, failing to
permit inspection of certain alleged "books and records" of QH IV. On or about
October 7, 2004, Park sought leave of the court to amend its Petition to include
claims for inspection of the alleged "books and records" against the Fund,
Boston Financial Qualified Housing Limited Partnership, Boston Financial
Qualified Housing Tax Credits L.P. II, Boston Financial Qualified Housing Tax
Credits L.P. III, Boston Financial Qualified Housing Tax Credits L.P. V, Boston
Financial Tax Credit Fund Plus, A Limited Partnership, and their purported
general partners (collectively, the "New Defendants"). On or about October 8,
2004, Park moved the court for entry of a temporary restraining order compelling
the Defendants and the New Defendants to turn over the alleged "books and
records" in conjunction with a transaction Park was proposing entering into. On
October 12, 2004, the court denied Park's request for a temporary restraining
order, and on November 15, 2004 it granted the request to amend the Petition.

In October, 2005, Park again sought leave of the court in the Missouri action to
amend its Petition, claiming that the Defendants were in violation of the
Partnership Agreement by disposing of interests in Local Limited Partnerships
following expiration of the Compliance Period(s) without first obtaining Limited
Partner consent. On or about October 11, 2005, Park moved the court for a
temporary restraining order prohibiting the Defendants from entering into any
agreement to sell, transfer, or otherwise convey any interest in Local Limited
Partnerships. On October 14, 2005, the court denied Park's request for a
temporary restraining order. In December 2005, the court granted Park's request
to amend its Petition to include the alleged claim regarding disposition of
Local Limited Partnership interests. The Defendants and New Defendants have
filed a motion to dismiss the second amended petition. The motion to dismiss has
not yet been decided. The originally scheduled final hearings in August and
October 2006 were adjourned at the request of the parties as discussions
concerning a possible negotiated resolution of the matter are ongoing. If a
settlement is not reached, the final hearing likely will take place in December
2006 or January 2007.

The Defendants and the New Defendants maintain that Park is not entitled to
review the materials requested and/or use the materials in secondary market
transactions because, among other things: (i) they are not "books and records"
of the Defendants and the New Defendants; (ii) Park does not seek to review them
for a proper purpose; and (iii) selective disclosure of the information to Park
would give it an unfair informational advantage in secondary market transactions
and may violate federal and/or state securities laws. The Defendants and New
Defendants accordingly intend on defending against the claims vigorously. The
Defendants and New Defendants have not formed an opinion that an unfavorable
outcome is either probable or remote, and their counsel refrains from expressing
an opinion as to the likely outcome of the case or the range of any loss.

On August 24, 2004, the Fund, Boston Financial Qualified Housing Limited
Partnership, Boston Financial Qualified Housing Tax Credits L.P. II, Boston
Financial Qualified Housing Tax Credits L.P. III, Boston Financial Qualified
Housing Tax Credits L.P. IV, Boston Financial Qualified Housing Tax Credits L.P.
V, Boston Financial Tax Credit Fund Plus, A Limited Partnership, and Boston
Financial Tax Credit Fund VIII, A Limited Partnership (collectively, the
"Partnerships"), and their general partners commenced litigation against Everest
Housing Investors 2, LLC ("Everest 2") and several other Everest-related
entities (collectively, the "Everest Entities") in Massachusetts state court,
seeking a declaratory judgment that certain materials the Everest Entities
sought to inspect are not "books and records" of the Partnerships and that the
Everest Entities are in any case not entitled to inspect said information under
applicable partnership agreements, partnership law or otherwise. On October 7,
2004, the Everest Entities filed an answer and counterclaim against the
Partnerships and their purported general partners, claiming that they breached
applicable partnership agreements, partnership law and their fiduciary duties to
the Everest Entities by failing to make the purported "books and records"
available. On January 12, 2005, the Partnerships and the general

<PAGE>

      BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)


Portfolio Update (continued)

partners moved to amend their complaint to, among other things, add a claim
based on Everest 2's breach of a November 24, 2003 letter agreement which
compelled Everest 2 to keep confidential certain information contemporaneously
disseminated by four of the Partnerships to Everest 2. The Court granted this
Motion. Discovery is continuing in this matter, but no activity has taken place
in recent months as the parties have been discussing whether a negotiated
resolution of the matter is possible.

The Partnerships and their general partners maintain that the Everest Entities
are not entitled to review the materials requested and/or use the materials in
secondary market transactions because, among other things: (i) they are not
"books and records" of the Partnerships; (ii) the Everest Entities do not seek
to review them for a proper purpose; and (iii) selective disclosure of the
information to the Everest Entities would give them an unfair informational
advantage in secondary market transactions and may violate federal and/or state
securities laws. The Partnerships and their general partners have not formed an
opinion that an unfavorable outcome is either probable or remote, and their
counsel refrains from expressing an opinion as to the likely outcome of the case
or the range of any loss.

Property Discussions

A majority of the Properties in which the Fund has an interest have stabilized
operations and operate above breakeven. Some Properties generate cash flow
deficits that the Local General Partners of those Properties fund through
project expense loans, subordinated loans or operating escrows. However, some
Properties have had persistent operating difficulties that could either; (i)
have an adverse impact on the Fund's liquidity; (ii) result in their
foreclosure; or (iii) result in the Managing General Partner deeming it
appropriate for the Fund to dispose of its interest in the Local Limited
Partnership prior to the expiration of the Compliance Period. Also, the Managing
General Partner, in the normal course of the Fund's business, may arrange for
the future disposition of its interest in certain Local Limited Partnerships.
The following Property discussions focus only on such Properties.

As previously reported, Los Claveles II, located in Trujillio Alto, Puerto Rico,
continues to operate at below breakeven due to higher maintenance expenses. The
Property continues to be current on its loan obligations. In addition, a site
visit conducted by a representative of the Managing General Partner in August
2004 indicated the Property is in fair physical shape. The Managing General
Partner, concerned about the Property's long-term viability, signed an agreement
in December 2002 with the Local General Partner whereby the Fund would pay its
remaining capital commitment of $350,000 and release Fund Reserves of
approximately $50,000 in exchange for an exit option that would allow the Fund
to put its interest to the Local General Partner at any time for $10,000. In
addition, the Local General Partner has the right, subsequent to the expiration
of the Compliance Period on December 31, 2008, to call the Fund's interest for a
price of $10,000. As part of the agreement, the Local General Partner is
providing an operating guarantee in the form of a Local General Partner
indemnification of any loss or any recapture of Tax Credits through the end of
the Compliance Period.

As previously reported, Grand Boulevard Renaissance, located in Chicago,
Illinois, continues to experience operating difficulties. Although acceptable
occupancy levels have been achieved throughout the six -month period ending June
30, 2006, working capital and debt service coverage ratios remain below
appropriate levels. In addition, there is significant deferred maintenance and
property management is weak. A site visit by representatives of the Managing
General Partner is scheduled for 2006. Advances from the Local General Partner
and working capital have enabled the Property to remain current on its loan
obligations. In response to prior deficits, during 2001 the Local General
Partner negotiated with the first mortgage lender to reduce the interest rate on
the current first mortgage. In addition, in an effort to further reduce the
Property's debt service burden, in July 2003 the Local Limited Partnership and
the Illinois Housing Development Authority closed on a mortgage restructuring of
the second mortgage that reduced monthly debt service payments until June 1,
2005. As part of the transaction, the management agent agreed to subordinate a
percentage of its management fee to payment of the second mortgage debt service.


<PAGE>

      BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)


Property Discussions (continued)

As previously reported, in an effort to reduce the Fund's risk to chronic
operating difficulties at Wynmor, located in Brooklyn Park, Minnesota, the
Managing General Partner and Local General Partner, on October 1, 2003, entered
into an agreement to transfer a portion of the Fund's interest in the Property's
future Tax Credits (approximately $11 per Unit) and tax losses to the Local
General Partner. In return, the Local General Partner agreed to deposit $500,000
into an escrow to be used to fund current and future operating deficits and to
fund as much as an additional $500,000 to cover future operating deficits. The
Managing General Partner and Local General Partner also have an agreement that
allows for the Managing General Partner to put the Fund's interest to the Local
General Partner for $1 any time after October 1, 2003 and that the Local General
Partner could call the Fund's interest for fair market value any time after
January 2, 2009. The Compliance Period ends for the Property on December 31,
2008.

As previously reported, St. Andrews Pointe, located in Columbia, South Carolina,
continues to suffer primarily from its location; the Property was built in an
area of town that was once thriving but is now considered less desirable. As a
result of the Property Manager's decision to adopt stricter income guidelines in
an effort to reduce the rate of evictions and delinquent tenants, occupancy and
debt service coverage remain below appropriate levels. However, the management
agent is strong and is working diligently to advertise and attract qualified
residents to the Property. Advances from the Local General Partner have enabled
the Property to stay current on its loan obligations. The Managing General
Partner and Local General Partner continue to explore an exit strategy that
would allow for the potential 2007 disposition of the Fund's interest in the
Local Limited Partnership.

As previously reported, the Local General Partner of Twin Oaks Meadows, located
in Lansing, Michigan, with the Fund's consent, obtained soft loan financing in
May 2004 to undertake much needed security improvements to the Property, reduce
payables and fund operating deficits. In return for its consent, the Fund
received a put option that allows the Fund to transfer its interest in the Local
Limited Partnership for a nominal price to the Local General Partner at any time
subsequent to the end of the Property's Compliance Period on December 31, 2009.
Although working capital and debt service levels have not deteriorated further,
both remained below acceptable levels at June 30, 2006. Occupancy improved to
83% as of September 30, 2006.

As previously reported, Des Moines Street Village, located in Des Moines, Iowa,
operated at below breakeven at March, 31, 2006 due to an increase in real estate
taxes. Although the Property operated at above breakeven for the three-month
period ending June 30, 2006, the Managing General Partner expects a return to
below breakeven operations as the recent real estate tax abatement expires. Debt
service coverage and working capital levels are below appropriate levels at June
30, 2006, despite an acceptable occupancy level of 92% as of June 30, 2006.
While the Local General Partner had previously funded deficits and the Property
has remained current on its debt obligations, the Local General Partner
requested and the Managing General Partner approved a reduced rate refinancing
of the Property's first mortgage that occurred in April 2004. As part of this
transaction, the Managing General Partner and the Local General Partner entered
into a put agreement whereby the Fund can transfer its interest in the Local
Limited Partnership for a nominal amount at any time after the expiration of the
Compliance Period on December 31, 2009.

As previously reported, the Managing General Partner entered into an agreement
that would require the Local General Partner to either purchase the Fund's
interest in Sunrise Terrace, located in Madera, California, after the end of the
compliance period on December 31, 2007 based on the appraised value of the
Property or to market the Property for sale.


<PAGE>

      BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)


Property Discussions (continued)

As previously reported, Guardian Place, located in Richmond, Virginia, closed on
a refinancing of its existing debt on July 29, 2005. In addition to an annual
debt service reduction of approximately $49,000, additional loan proceeds were
utilized to retire a second mortgage and provide for a distribution of
refinancing proceeds of $212,461 to the Fund on August 1, 2005. The Managing
General Partner, in accordance with and as permitted by the Partnership
Agreement, retained the entire amount of refinancing proceeds in Reserves. As
part of this transaction, the Managing General Partner and the Local General
Partner entered into an agreement that would allow for a sale at the end of the
Compliance Period on December 31, 2009.

As previously reported, Santa Fe Oaks II, located in Gainesville, Florida
continued to display the effects of the addition of three new properties in the
market area that hindered this aging Property's ability to compete. While
improved demand had increased occupancy to a level of 98% as of May 31, 2006,
working capital and debt service coverage remained at unacceptable levels. As a
result of a prior agreement, the Property was sold on June 30, 2006. In
accordance with the terms of the agreement, net sales proceeds in the amount of
$1,228,154, or $24.11 per Unit, have been retained by the Local General Partner.
This sale is projected to result in 2006 taxable income of approximately
$1,200,000, or $24 per Unit. For financial reporting purposes, the Fund has
recognized a gain that includes the entire amount of proceeds, but has offset
this gain by fully reserving the proceeds advanced to the Local General Partner,
as the Fund has no expectation to recover this cash. The Fund no longer has an
interest in this Local Limited Partnership.

As previously reported, operations at Oak Ridge, located in Macon, Georgia,
continue to suffer primarily due to very low occupancy levels and low rental
rates as of September 30, 2006. The low occupancy levels are generally
attributable to a lack of public transportation near the site and a struggling
economy in the Macon area. The Property's net operating income remains
insufficient to meet debt service payments. Therefore, the Local General Partner
continues to advance the funds necessary for the Property to stay current on its
loan obligations. The Managing General Partner will continue to work closely
with the management agent and Local General Partner to monitor Property
operations. The Managing General Partner and Local General Partner continue to
explore an exit strategy that would allow for a disposal of the Fund's interest
in the Local Limited Partnership.

As previously reported, although operations at Palo Verde II, located in
Henderson, Nevada, remain strong, the former Local General Partner filed for
bankruptcy protection and refused to remit to the Fund its priority cash
distributions, representing a default under the terms of the Local Limited
Partnership Agreement. An affiliate of the Managing General Partner assumed the
Local General Partner interest in September 2001. Since the statute of
limitations on potential litigation involving one of the former Local General
Partners expired in 2005, the Managing General Partner currently expects a 2006
disposal of the Fund's interest in this Local Limited Partnership. Net proceeds,
if any, are inestimable at this time.


<PAGE>


         BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

..


PART II       OTHER INFORMATION

Items 1-5     Not applicable

Item 6        Exhibits and reports on Form 8-K

(a)      Exhibits

31.1     Certification of Principal  Executive Officer and Principal Financial
         Officer pursuant to section 302 of the  Sarbanes-Oxley Act of 2002
32.1     Certification of Principal  Executive  Officer and Principal Financial
         Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002

              (b) Reports on Form 8-K - No reports on Form 8-K were filed during
                  the quarter ended September 30, 2006.



<PAGE>

      BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

                                    SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


DATED:  November 14, 2006              BOSTON FINANCIAL TAX CREDIT FUND VII,
                                       A LIMITED PARTNERSHIP


                                       By:   Arch Street VIII, Inc.,
                                             its Managing General Partner


                                            /s/Gary Mentesana
                                            Gary Mentesana
                                            President
                                            Arch Street VIII, Inc.