February 11, 1999








Securities and Exchange Commission
Filer Support, Edgar
Operation Center, Stop 0-7
6432 General Green Way
Alexandria, VA 22312

Re:     Boston Financial Tax Credit Fund VII, A Limited Partnership
        Report on Form 10-Q for Quarter Ended December 31, 1998
        File No. 0-24584



Gentlemen:

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


Very truly yours,



/s/Stephen Guilmette
Stephen Guilmette
Assistant Controller





TC7-Q3.DOC


<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q



(Mark One)

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

For the quarterly period ended        December 31, 1998
                                --------------------------
                                       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




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

Item 1.   Financial Statements

          Balance Sheets - December 31, 1998 (Unaudited)
               and March 31, 1998                                           1

          Statements of Operations (Unaudited) -
               For the Three and Nine Months Ended December 31, 1998 
               and 1997                                                     2

          Statement of Changes in Partners' Equity (Deficiency)
               (Unaudited) - For the Nine Months Ended December 31, 1998    3

          Statements of Cash Flows (Unaudited) -
               For the Nine Months Ended December 31, 1998 and 1997         4

          Notes to 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                                                                   9

SIGNATURE                                                                   10



<PAGE>


                      BOSTON FINANCIAL TAX CREDIT FUND VII
                             (A Limited Partnership)
                                                          
                                 BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                                December 31,          March 31,
                                                                                    1998                1998
                                                                                  (Unaudited)
Assets                                                                          -------------      -------------
<S>                                                                             <C>                <C>          
Cash and cash equivalents                                                       $     549,521      $     375,168
Marketable securities, at fair value                                                2,877,748          3,106,645
Restricted cash                                                                       262,858            252,555
Investments in Local Limited Partnerships (Note 1)                                 25,769,839         28,387,876
Other assets                                                                           32,398             36,064
                                                                                -------------      -------------
     Total Assets                                                               $  29,492,364      $  32,158,308
                                                                                =============      =============


Liabilities and Partners' Equity
Accounts payable to affiliates                                                  $     304,464      $     309,172
Accounts payable and accrued expenses                                                  62,871             63,932
                                                                                -------------      -------------
     Total Liabilities                                                                367,335            373,104
                                                                                -------------      -------------

Commitments (Note 3)

General, Initial and Investor Limited Partners' Equity                             29,101,539         31,779,079
Net unrealized gains on marketable securities                                          23,490              6,125
                                                                                -------------      -------------
     Total Partners' Equity                                                        29,125,029         31,785,204
                                                                                -------------      -------------
     Total Liabilities and Partners' Equity                                     $  29,492,364      $  32,158,308
                                                                                =============      =============
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
                                (Unaudited)
         For the Three and Nine Months Ended December 31, 1998 and 1997



<TABLE>
<CAPTION>
                                             Three Months Ended                          Nine Months Ended
                                      December 31,         December 31,           December 31,       December 31,
                                          1998                 1997                   1998               1997
                                      -------------        -------------         -------------     -------------

Revenue:
<S>                                    <C>                  <C>                   <C>               <C>         
   Investment                          $    48,427          $    52,132           $    149,594      $    152,227
   Other                                    30,149               28,065                 51,142            52,555
                                       -----------          -----------           ------------      ------------
       Total Revenue                        78,576               80,197                200,736           204,782
                                       -----------          -----------           ------------      ------------

Expenses:
   Asset management fee,
    related party                           72,753               71,097                218,259           213,291
   General and administrative
    (includes reimbursements
    to an affiliate in the amounts
    of $65,970 and $79,105 in
    1998 and 1997, respectively)            86,231               58,386                193,476           169,857
   Amortization                              8,045               11,433                 24,136            34,300
                                       -----------          -----------           ------------      ------------
       Total Expenses                      167,029              140,916                435,871           417,448
                                       -----------          -----------           ------------      ------------

Loss before equity in losses
    of Local Limited Partnerships          (88,453)             (60,719)              (235,135)         (212,666)

Equity in losses of
   Local Limited Partnerships             (774,103)            (913,317)            (2,442,405)       (2,349,506)
                                       -----------          -----------           ------------      ------------

Net Loss                               $  (862,556)         $  (974,036)          $ (2,677,540)     $ (2,562,172)
                                       ===========          ===========           ============      ============


Net Loss allocated:
   To General Partners                 $    (8,625)         $    (9,741)          $    (26,775)     $    (25,622)
   To Limited Partners                    (853,931)            (964,295)            (2,650,765)       (2,536,550)
                                       -----------          -----------           ------------      ------------
                                       $  (862,556)         $  (974,036)          $ (2,677,540)     $ (2,562,172)
                                       ===========          ===========           ============      ============

Net Loss per Limited
   Partnership Unit
   (50,930 Units)                      $    (16.77)         $    (18.93)          $     (52.05)     $     (49.80)
                                       ===========          ===========           ============      ============

</TABLE>

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

<PAGE>
                     BOSTON FINANCIAL TAX CREDIT FUND VII
                          (A Limited Partnership)

              STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
                                   (Unaudited)
                   For the Nine Months Ended December 31, 1998


<TABLE>
<CAPTION>

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

<S>                                <C>             <C>          <C>                 <C>              <C>           
Balance at March 31, 1998          $   (126,530)   $ 5,000      $  31,900,609       $     6,125      $   31,785,204
                                   ------------    -------      -------------       -----------      --------------

Comprehensive Loss:
   Net Loss                             (26,775)         -         (2,650,765)                -          (2,677,540)
   Change in net unrealized
     gains on marketable securities
     available for sale                       -          -                  -            17,365              17,365
                                   ------------    -------      -------------       -----------      --------------
Comprehensive Loss                      (26,775)         -         (2,650,765)           17,365          (2,660,175)
                                   ------------    -------      -------------       -----------      --------------

Balance at December 31, 1998       $   (153,305)   $ 5,000      $  29,249,844       $    23,490      $   29,125,029
                                   ============    =======      =============       ===========      ==============

</TABLE>

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

<PAGE>
                          BOSTON FINANCIAL TAX CREDIT FUND VII
                              (A Limited Partnership)

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
              For the Nine Months Ended December 31, 1998 and 1997


<TABLE>
<CAPTION>

                                                                                      1998              1997
                                                                                  -------------    -------------

<S>                                                                               <C>              <C>           
Net cash used for operating activities                                            $    (225,894)   $    (246,390)
                                                                                  -------------    -------------

Cash flows from investing activities:
    Purchases of marketable securities                                               (1,547,876)      (1,446,141)
    Proceeds from sales and maturities of
       marketable securities                                                          1,796,627        1,660,978
    Restricted cash                                                                           -          (10,007)
    Investments in Local Limited Partnerships                                                 -          (99,191)
    Cash distributions received from Local
       Limited Partnerships                                                             151,496          135,414
                                                                                  -------------    -------------
Net cash provided by investing activities                                               400,247          241,053
                                                                                  -------------    -------------

Net increase (decrease) in cash and cash equivalents                                    174,353           (5,337)

Cash and cash equivalents, beginning of period                                          375,168          373,729
                                                                                  -------------    -------------

Cash and cash equivalents, end of period                                          $     549,521    $     368,392
                                                                                  =============    =============
</TABLE>

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


<PAGE>

                       BOSTON FINANCIAL TAX CREDIT FUND VII
                           (A Limited Partnership)


                                                           
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


The  unaudited  financial  statements  presented  herein  have been  prepared in
accordance  with the  instructions  to Form 10-Q and do not  include  all of the
information  and note  disclosures  required by  generally  accepted  accounting
principles.  These  statements  should be read in conjunction with the financial
statements  and notes  thereto  included with the Fund's 10-K for the year ended
March 31, 1998. In the opinion of management, 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 has elected to report results of the Local Limited
Partnerships on a 90 day lag basis because the Local Limited Partnerships report
their results on a calendar year basis.  Accordingly,  the financial information
of the Local Limited Partnerships that is included in the accompanying financial
statements is as of September 30, 1998 and 1997.

1.   Investments in Local Limited Partnerships

The Fund has acquired interests in nineteen Local Limited Partnerships which own
and operate  multi-family  housing  complexes.  The Fund,  as  Investor  Limited
Partner,  pursuant to the various  Local  Limited  Partnership  Agreements,  has
acquired a 99%  interest,  with the exception of  Springwood,  in which it has a
19.80%  interest,  in the  profits,  losses,  tax  credits  and cash  flows from
operations of each of the Local Limited Partnerships. Upon dissolution, proceeds
will be distributed according to each respective partnership agreement.

The  following is a summary of  Investments  in Local  Limited  Partnerships  at
December 31, 1998:

<TABLE>
<CAPTION>
<S>                                                                                                <C> 
Capital Contributions paid to Local Limited Partnerships
   and purchase price paid to withdrawing partners of         
   Local Limited Partnerships                                                                      $  39,289,152

Cumulative equity in losses of Local Limited Partnerships (excluding cumulative
   unrecognized losses of $408,929)                                                                  (14,033,953)

Cash distributions received from Local Limited Partnerships                                             (590,283)
                                                                                                   -------------

Investments in Local Limited Partnerships before adjustments                                          24,664,916

Excess of investment costs over the underlying net assets acquired:

   Acquisition fees and expenses                                                                       1,252,338

   Accumulated amortization of acquisition fees and expenses                                            (147,415)
                                                                                                   -------------

Investments in Local Limited Partnerships                                                          $  25,769,839
                                                                                                   =============
</TABLE>

The Fund's  share of the net losses of the Local  Limited  Partnerships  for the
nine months  ended  December 31, 1998 is  $2,713,034.  For the nine months ended
December  31,  1998,  the Fund has not  recognized  $270,629 of equity in losses
relating to one Local  Limited  Partnership  where  cumulative  equity in losses
exceeded its total investment in the Local Limited Partnership.




<PAGE>
                    BOSTON FINANCIAL TAX CREDIT FUND VII
                           (A Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS (continued)
                                   (Unaudited)


2.   Effect of Recently Issued Accounting Standard

In June,  1997, the Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting Standards No. 130, "Reporting  Comprehensive  Income". The
Statement,  which is effective  for fiscal years  beginning  after  December 15,
1997,  requires that the Fund display an amount representing total comprehensive
income for the period in its  financial  statements.  The Fund  adopted  the new
standard effective April 1, 1998.

3.   Commitments

At  December  31,  1998,   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  set forth in the Local  Limited  Partnership
Agreements and total approximately $658,000. In addition, the Fund has set aside
$217,000 for future capital contributions to one Local Limited Partnership.

<PAGE>

                     BOSTON FINANCIAL TAX CREDIT FUND VII
                         (A Limited Partnership)
                    
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Liquidity and Capital Resources

At  December  31,  1998,  the Fund had cash and cash  equivalents  of  $549,521,
compared with $375,168 at March 31, 1998. The increase is primarily attributable
to proceeds  from sales and  maturities  of  marketable  securities in excess of
purchases of marketable  securities and cash  distributions  received from Local
Limited  Partnerships.  This  increase  is  partially  offset  by cash  used for
operating activities.

As of December 31, 1998,  approximately  $2,440,000 of marketable securities has
been designated as Reserves by the Managing General  Partner.  The Reserves were
established to be used for working capital of the Fund and contingencies related
to the ownership of Local Limited  Partnership  interests.  Management  believes
that the  interest  income  earned on  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  such  funding
appropriate.

At  December  31,  1998,   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  set forth in the Local  Limited  Partnership
Agreements and total approximately $658,000. In addition, the Fund has set aside
$217,000 for future capital contributions to one Local Limited Partnership.

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 December 31, 1998, 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.

In the  event a Local  Limited  Partnership  encounters  operating  difficulties
requiring  additional  funds,  the Fund  might deem it in its best  interest  to
voluntarily provide such funds in order to protect its investment. No such event
has occurred to date.

Cash Distributions

No cash distributions were made during the nine months ended December 31, 1998.

Results of Operations

The Fund's  results of operations  for the three and nine months ended  December
31, 1998  resulted in a net loss of $862,556 and  $2,677,540,  respectively,  as
compared to a net loss of $974,036 and  $2,562,172 for the same periods in 1997.
The  increase  in net loss is primary  attributable  to an increase in equity in
losses of Local Limited  Partnerships and an increase in general  administrative
expenses.  The  increase  in general  and  administrative  expenses is due to an
increase in  professional  fees in  connection  with the  operation of the fund.
Equity in losses of Local Limited  Partnerships  increased due to an increase in
general operating expenses of the Local Limited  Partnerships,  partially offset
by unrecognized  losses by the Partnership of Local Limited  Partnerships  whose
cumulative equity in losses exceed its total investment in those partnerships.



<PAGE>
                    BOSTON FINANCIAL TAX CREDIT FUND VII
                           (A Limited Partnership)

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


Property Discussions

The Fund is invested in nineteen Local Limited  Partnerships  which own nineteen
properties  located in twelve states and Puerto Rico. Fifteen of the properties,
consisting of 1,574 units,  were new  construction,  and four of the properties,
consisting of 564 units,  were  rehabilitated.  All  properties  have  completed
construction or rehabilitation and initial lease-up.

Most of the nineteen Local Limited Partnerships have stabilized operations.  The
majority  of  these  stabilized   properties  are  operating  at  break-even  or
generating positive operating cash flow.

As  previously  reported,  Grand  Boulevard  Renaissance,  located  in  Chicago,
Illinois,  has been experiencing operating difficulties and is unable to achieve
debt service  coverage.  These  difficulties  are mainly due to poor collections
from tenants. On April 1, 1998, a new management agent was brought in to monitor
property operations and increase tenant  collections.  Occupancy as of September
30, 1998 is 87%. The Managing  General  Partner will be working closely with the
Local General Partner and new management agent to monitor operations.

As previously reported, Los Claveles II, located in Trujillio Alto, Puerto Rico,
continues to experience  operating  difficulties  due to ongoing  capital repair
needs and  management  issues.  In 1996,  an affiliate  of the Managing  General
Partner  of the  Fund  successfully  negotiated  with the  Local  General
Partners,  the lender and the local housing  authority to replace the management
agent for Los Claveles II as well as its neighboring  property,  Los Claveles I.
The new  management  agent assumed  responsibility  for the property in December
1996. In addition, the Managing General Partner was successful in completing the
negotiations with the lender,  resulting in a loan modification for Los Claveles
II. As part of the workout plan, the Local General  Partners agreed to step down
voluntarily and be replaced by an unaffiliated  general partner.  It is expected
that the new General  Partner  will be admitted to Los  Claveles II in the first
quarter of 1999.

Oak  Ridge,  located  in  Macon,   Georgia,  has  been  experiencing   operating
difficulties  due to low occupancy.  Occupancy as of December 31, 1998 is 78%. A
new on-site manager was recently hired to enhance tenant screening and marketing
efforts.  The  Managing  General  Partner  will  be  working  closely  with  the
management  agent and Local General Partner to monitor  property  operations and
marketing efforts.

Woods Lane, located in Rogers,  Arkansas, has been suffering from poor occupancy
due to local  competition.  Occupancy  as of  December  31,  1998 is 72%.  A new
management team was recently hired to step-up the marketing efforts, review rent
concessions, install a resident referral plan and monitor competing rent levels.
In addition,  capital  improvements  have recently been completed  which include
exterior painting,  carpet replacement and landscaping and grounds  improvement.
The Managing  General Partner will closely monitor the new management  agent and
also  review  possible  debt  restructuring.  The  Managing  General  Partner is
currently funding operating deficits.

Impact of Year 2000

The Managing  General Partner has assessed the Fund's exposure to date sensitive
computer software programs that may not be operative  subsequent to 1999 and has
executed a requisite course of action to minimize Year 2000 risk and ensure that
neither  significant  costs nor  disruption of normal  business  operations  are
encountered.  However,  due to the  inherent  uncertainty  that all  systems  of
outside  vendors  or other  companies  on which the Fund  and/or  Local  Limited
Partnerships   rely  will  be  compliant,   the  Fund  remains   susceptible  to
consequences of the Year 2000 issue.

<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 - None

                (b)Reports  on Form 8-K - No  reports  on Form  8-K  were  filed
                   during the quarter ended December 31, 1998.



<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:  February 11, 1999           BOSTON FINANCIAL TAX CREDIT FUND VII,
                                    A LIMITED PARTNERSHIP


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




                                    /s/Randolph G. Hawthorne
                                    -----------------------------
                                    Randolph G. Hawthorne
                                    Managing Director, Vice President and
                                    Chief Operating Officer




<PAGE>