FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF
                     THE SECURITIES EXCHANGE ACT OF 1934
                        Quarterly or Transitional Report



                   U.S. 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, 2001


[ ]   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 0-10412


                        NATIONAL PROPERTY INVESTORS 4
      (Exact name of small business issuer as specified in its charter)



         California                                         13-3031722
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                         Identification No.)

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

                                 (864) 239-1000
                           (Issuer's telephone number)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act  during the  preceding  12 months (or for such
shorter period that the Partnership was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. Yes X No___



<PAGE>



                         PART I - FINANCIAL INFORMATION


ITEM 1.     FINANCIAL STATEMENTS

a)

                        NATIONAL PROPERTY INVESTORS 4
                                  BALANCE SHEET
                                   (Unaudited)
                       (in thousands, except unit data)


                               September 30, 2001

<TABLE>
<CAPTION>
Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $ 200
   Receivables and deposits                                                   1,385
   Restricted escrows                                                            50
   Other assets                                                               1,329
   Investment property:
       Land                                                  $ 1,980
       Buildings and related personal property                 26,354
                                                               28,334
       Less accumulated depreciation                          (22,045)        6,289
                                                                            $ 9,253
Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                          $ 40
   Tenant security deposit liabilities                                          394
   Other liabilities                                                            632
   Mortgage note payable                                                     30,400

Partners' Deficit
   General partner                                            $ (367)
   Limited partners (60,005 units
      issued and outstanding)                                 (21,846)      (22,213)
                                                                            $ 9,253


                See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

b)

                        NATIONAL PROPERTY INVESTORS 4
                            STATEMENTS OF OPERATIONS
                                   (Unaudited)
                     (in thousands, except per unit data)

<TABLE>
<CAPTION>

                                              Three Months Ended        Nine Months Ended
                                                September 30,             September 30,
                                              2001         2000         2001         2000
Revenues:
<S>                                          <C>         <C>           <C>          <C>
  Rental income                              $ 1,789     $ 1,746       $ 5,358      $ 5,155
  Other income                                   111         112           277          269
     Total revenues                            1,900       1,858         5,635        5,424

Expenses:
  Operating                                      567         559         1,810        1,691
  General and administrative                      84          94           320          331
  Depreciation                                   306         285           906          847
  Interest                                       438         372         1,183        1,117
  Property taxes                                 150         125           421          393
     Total expenses                            1,545       1,435         4,640        4,379

Income before extraordinary item                 355         423           995        1,045
Extraordinary loss on early
  extinguishment of debt                        (169)         --          (169)          --

Net income                                    $ 186       $ 423         $ 826       $ 1,045

Net income allocated to general
  partner (1%)                                 $ 2         $ 4           $ 8         $ 10
Net income allocated to limited
  partners (99%)                                 184         419           818        1,035

                                              $ 186       $ 423         $ 826       $ 1,045

Net income per limited partnership unit:
  Income before extraordinary loss           $ 5.84       $ 6.98       $ 16.41      $ 17.25
  Extraordinary loss                           (2.78)         --         (2.78)          --

                                             $ 3.06       $ 6.98       $ 13.63      $ 17.25
Distributions per limited partnership
  unit                                       $174.66       $ --        $194.72      $ 24.15

                See Accompanying Notes to Financial Statements
</TABLE>

<PAGE>
c)

                        NATIONAL PROPERTY INVESTORS 4
                  STATEMENT OF CHANGES IN PARTNERS' DEFICIT
                                   (Unaudited)
                       (in thousands, except unit data)

<TABLE>
<CAPTION>

                                     Limited
                                   Partnership   General      Limited
                                      Units      Partner     Partners       Total

<S>                                   <C>          <C>       <C>          <C>
Original capital contributions        60,005       $ 1       $ 30,003     $ 30,004

Partners' deficit at
   December 31, 2000                  60,005      $ (360)    $(10,980)    $(11,340)

Distributions to partners                 --         (15)     (11,684)     (11,699)

Net income for the nine months
   ended September 30, 2001               --           8          818          826

Partners' deficit at
   September 30, 2001                 60,005      $ (367)    $(21,846)    $(22,213)

                See Accompanying Notes to Financial Statements
</TABLE>

<PAGE>

d)

                        NATIONAL PROPERTY INVESTORS 4
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                (in thousands)
<TABLE>
<CAPTION>

                                                                     Nine Months Ended
                                                                       September 30,
                                                                     2001         2000
Cash flows from operating activities:
<S>                                                                  <C>         <C>
  Net income                                                         $ 826       $ 1,045
  Adjustments to reconcile net income to net cash provided by
   operating activities:
     Depreciation                                                       906          847
     Amortization of loan costs                                          56           56
     Extraordinary loss on early extinguishment of debt                 169           --
     Change in accounts:
      Receivables and deposits                                         (587)         (19)
      Other assets                                                     (158)        (161)
      Accounts payable                                                   (7)         (14)
      Tenant security deposit liabilities                               (27)          29
      Other liabilities                                                  23         (173)
        Net cash provided by operating activities                     1,201        1,610

Cash flows from investing activities:
  Property improvements and replacements                               (637)        (321)
  Net withdrawals from restricted escrows                                13          157
        Net cash used in investing activities                          (624)        (164)

Cash flows from financing activities:
  Distributions to partners                                         (11,699)      (2,015)
  Proceeds from refinancing                                          30,400           --
  Loan costs paid                                                      (854)          --
  Repayment of mortgage note payable                                (19,300)          --
        Net cash used in financing activities                        (1,453)      (2,015)

Net decrease in cash and cash equivalents                              (876)        (569)
Cash and cash equivalents at beginning of period                      1,076        1,618
Cash and cash equivalents at end of period                           $ 200       $ 1,049

Supplemental disclosure of cash flow information:
  Cash paid for interest                                            $ 1,067      $ 1,061

At  December  31,  2000,  approximately  $92,000 of  property  improvements  and
replacements  were  included  in accounts  payable and are  included in property
improvements and replacements for the nine months ended September 30, 2001.

Distributions to partners of approximately $551,000 were accrued at December 31,
1999 and paid in January 2000.

                See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>
e)
                        NATIONAL PROPERTY INVESTORS 4
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

Note A - Basis of Presentation

The accompanying unaudited financial statements of National Property Investors 4
(the  "Partnership" or the  "Registrant")  have been prepared in accordance with
generally accepted accounting  principles for interim financial  information and
with  the  instructions  to Form  10-QSB  and Item  310(b)  of  Regulation  S-B.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of NPI Equity Investments, Inc. (the "Managing General Partner"),
all adjustments  (consisting of normal recurring accruals)  considered necessary
for a fair presentation have been included.  Operating results for the three and
nine month periods ended September 30, 2001, are not  necessarily  indicative of
the results that may be expected  for the fiscal year ending  December 31, 2001.
For further information, refer to the financial statements and footnotes thereto
included in the  Partnership's  Annual Report on Form 10-KSB for the fiscal year
ended  December  31,  2000.  The Managing  General  Partner is a  subsidiary  of
Apartment  Investment and Management Company  ("AIMCO"),  a publicly traded real
estate investment trust.

Segment Reporting

Statement of Financial  Accounting Standards ("SFAS") No. 131, "Disclosure about
Segments of an Enterprise and Related Information" established standards for the
way that public business enterprises report information about operating segments
in annual  financial  statements  and  requires  that those  enterprises  report
selected  information about operating segments in interim financial reports.  It
also established  standards for related disclosures about products and services,
geographic  areas,  and  major  customers.  As  defined  in SFAS  No.  131,  the
Partnership  has only one  reportable  segment.  The  Managing  General  Partner
believes that  segment-based  disclosures  will not result in a more  meaningful
presentation than the financial statements as currently presented.

Note B - Transactions with Affiliated Parties

The  Partnership  has no employees  and is  dependent  on the  Managing  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
partnership  activities.  The  Partnership  Agreement  provides  for payments to
affiliates for services and for  reimbursement of certain  expenses  incurred by
affiliates  on  behalf  of the  Partnership.  The  following  transactions  with
affiliates of the Managing  General  Partner were incurred during the nine month
periods ended September 30, 2001 and 2000:

                                                                  2001      2000
                                                                  (in thousands)
 Property management fees (included in operating expenses)        $ 281    $ 270
 Reimbursement for services of affiliates (included in
   investment property and general and administrative and
   operating expenses)                                              159      130
 Partnership management fee (included in general and
   administrative expense)                                           46       30
 Non-accountable reimbursement (included in general
   and administrative expenses)                                     100      100
 Loan costs (included in other assets)                              304       --

Affiliates of the Managing  General  Partner are entitled to receive 5% of gross
receipts  from the  Partnership's  property for  providing  property  management
services.  The Partnership  paid to such affiliates  approximately  $281,000 and
$270,000  for the nine  month  periods  ended  September  30,  2001,  and  2000,
respectively.

Affiliates  of  the  Managing   General  Partner  received   reimbursements   of
accountable  administrative  expenses  amounting to  approximately  $159,000 and
$130,000  for the nine  month  periods  ended  September  30,  2001,  and  2000,
respectively.  Included in these amounts are construction oversight fees paid to
an affiliate of the Managing General Partner of approximately $33,000 and $2,000
for the nine month periods ended September 30, 2001 and 2000, respectively.

For services relating to the  administration of the Partnership and operation of
the Partnership's  property, the Managing General Partner is entitled to receive
payment for non-accountable  expenses up to a maximum of $100,000 per year based
upon the number of Partnership units sold, subject to certain  limitations.  The
Managing  General  Partner  received  payment  for  non-accountable  expenses of
$100,000 during both the nine month periods ended September 30, 2001 and 2000.

In  addition  to the amounts  discussed  above,  as  compensation  for  services
rendered in managing the  Partnership,  the Managing General Partner is entitled
to receive Partnership management fees in conjunction with distributions of cash
from operations,  subject to certain limitations.  During the nine month periods
ended  September  30,  2001  and  2000,   approximately   $46,000  and  $30,000,
respectively, was paid in conjunction with the distributions from operations.

The Partnership paid an affiliate of the Managing General Partner  approximately
$304,000  for loan  costs  associated  with the  refinancing  of the  Village of
Pennbrook Apartments (see "Note D") which were capitalized and included in other
assets on the balance sheet.

The Managing  General  Partner has made available to the  Partnership a $300,000
line of credit. At the present time, the Partnership has no outstanding  amounts
due under this line of credit.  Based on present  plans,  the  Managing  General
Partner does not  anticipate  the need to borrow in the near future.  Other than
cash and cash equivalents,  the line of credit is the Partnership's  only unused
source of liquidity.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 44,822 limited  partnership  units
(the "Units") in the Partnership representing 74.70% of the outstanding Units at
September  30,  2001. 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 make one or more additional offers to acquire additional limited
partnership  interests in the  Partnership  for cash or in exchange for units in
the operating partnership of AIMCO. 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 Managing General  Partner.  As a
result  of its  ownership  of  74.70% of the  outstanding  Units,  AIMCO is in a
position to influence all voting decisions with respect to the Registrant.  When
voting on matters, AIMCO would in all likelihood vote the Units it acquired in a
manner  favorable to the interest of the Managing General Partner because of its
affiliation with the Managing General Partner.  However,  with respect to 26,466
units, Insignia Properties,  LP, an affiliate of AIMCO, is required to vote such
Units: (i) against any increase in compensation  payable to the Managing General
Partner or to affiliates;  and (ii) on all other matters  submitted by it or its
affiliates, in proportion to the votes cast by non-tendering unitholders. Except
for the  foregoing,  no other  limitations  are  imposed  on  AIMCO's,  Insignia
Properties,  L.P.'s or their  affiliates'  ability to influence voting decisions
with respect to the Partnership.

Note C - Distribution to Partners

During the nine months ended  September 30, 2001,  the  Partnership  distributed
approximately $11,699,000  (approximately $11,684,000 to the limited partners or
$194.72 per limited partnership unit). Of this amount,  approximately $1,473,000
(approximately  $1,458,000  to  the  limited  partners  or  $24.30  per  limited
partnership   unit)  was  distributed   from  operations   while   approximately
$10,226,000  ($170.42  per  limited  partnership  unit) was  distributed  to the
limited  partners  from  the net  proceeds  of the  refinancing  of  Village  of
Pennbrook Apartments.

Cash distributions from operations of approximately  $1,464,000 were paid during
the nine months ended September 30, 2000, of which approximately  $1,449,000 was
paid to the limited partners ($24.15 per limited  partnership unit). At December
31,  1999,  a  distribution  payable of  approximately  $551,000  (approximately
$545,000 to the limited  partners  or $9.08 per  limited  partnership  unit) was
accrued and subsequently paid in January 2000.

Note D - Mortgage Refinancing

On August 31,  2001,  the  Partnership  refinanced  the  mortgage  note  payable
encumbering Village of Pennbrook  Apartments.  The refinancing replaced mortgage
indebtedness of $19,300,000 with a new mortgage of $30,400,000. The new mortgage
carries a stated  interest  rate of 7.01%  compared to a stated rate of 7.33% on
the old  mortgage.  Payments of principal  and interst are due monthly until the
loan matures in September  2021 at which time the loan will be fully  amortized.
At the closing,  a repair escrow of $50,000 was  established  and is held by the
lender. Loan costs capitalized for the refinancing were approximately  $854,000,
including  a  $304,000  refinancing  fee paid to an  affiliate  of the  Managing
General Partner pursuant to the Partnership Agreement.  The Partnership recorded
an extraordinary loss on early extinguishment of debt of approximately  $169,000
as a result of unamortized loan costs being written off.

Note E - 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 Managing  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purports  to  assert  claims  on  behalf  of a class  of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  which are named as nominal  defendants,  challenging,  among other
things,  the  acquisition of interests in certain  general  partner  entities by
Insignia  Financial  Group,  Inc.  ("Insignia")  and entities which were, at one
time,  affiliates of Insignia;  past tender offers by the Insignia affiliates to
acquire  limited  partnership  units;  management  of  the  partnerships  by the
Insignia  affiliates;  and the 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 Managing  General  Partner  filed a motion  seeking  dismissal of the
action.  In lieu of responding to the motion,  the  plaintiffs  filed an amended
complaint. The Managing 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 Managing  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  Managing  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 Managing General Partner and affiliated  defendants filed a
demurrer to the fourth amended complaint,  which, together with a demurrer filed
by other  defendants,  is currently  scheduled to be heard on November 15, 2001.
The Court has set the matter for trial in January 2003.

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 Managing  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.  The matters are currently  scheduled to be heard
on November 15, 2001.

Estate of Harry  Schubert v.  National  Property  Investors  4, Civil Action No.
97-09129, Court of Common Pleas of Bucks County, Pennsylvania.  During 1998, the
Plaintiff brought action against the Partnership  alleging that as the result of
carbon monoxide and methane  poisoning due to a malfunctioning  heat unit in the
deceased's   apartment  at  the  Partnership's   property,   the  decedent  lost
consciousness for several hours, suffered respiratory arrest, and suffered other
pains and injuries. The Plaintiff alleges breach of contract,  fraud, violations
of the Unfair Trade Practices and Consumer  Protection Law and negligence.  This
matter is currently in the preliminary stages of discovery.  The Partnership has
filed a motion for summary judgment to have the court dismiss the claims against
the  Partnership,  and this motion is currently  pending  before the court.  The
Partnership intends to vigorously defend this matter.

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

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

<PAGE>
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

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

The Partnership's investment property consists of one apartment complex, Village
of Pennbrook Apartments,  located in Falls Township,  Pennsylvania.  The average
occupancy was 96% for both nine month periods ended September 30, 2001 and 2000.

Results of Operations

The Partnership  realized net income of  approximately  $826,000 and $ 1,045,000
for the nine  months  ended  September  30,  2001 and  2000,  respectively.  The
Partnership realized net income of approximately  $186,000 and $ 423,000 for the
three months ended September 30, 2001 and 2000, respectively. The primary reason
for the decrease in net income for the three and nine months ended September 30,
2001  was  an  extraordinary  loss  on  the  early  extinguishment  of  debt  of
approximately  $169,000  relating to the refinance of the mortgage on Village of
Pennbrook Apartments, as discussed in "Capital Resources and Liquidity".

The Partnership  realized income before the extraordinary  item of approximately
$995,000 and $1,045,000  for the nine months ended  September 30, 2001 and 2000,
respectively, and approximately $355,000 and $423,000 for the three months ended
September  30, 2001 and 2000,  respectively.  The decrease in income  before the
extraordinary  item for the three and nine months  ended  September  30, 2001 is
attributable to an increase in total expenses partially offset by an increase in
total  revenues.  The increase in total expenses is primarily due to an increase
in  operating,  depreciation,  interest and  property  tax expenses  offset by a
decrease in general and  administrative  expenses.  Operating expenses increased
primarily  due to increases in the cost of natural gas and  increased  insurance
rates.  These  increases  were  partially  offset by a decrease  in  maintenance
expense  due to a decrease in  contract  labor and a decrease  in  supplies  and
materials used in routine maintenance  procedures at the property.  Depreciation
expense increased as a result of property  improvements and replacements  placed
into  service  during the past twelve  months  which are now being  depreciated.
Interest  expense  increased due to the refinancing of the mortgage note payable
encumbering  Village of  Pennbrook  Apartments  which  resulted in a larger debt
balance.  Property tax expenses increased for both periods due to the timing and
receipt of the tax bills from the taxing authorities.

General and administrative expenses decreased primarily due to costs during 2000
related to the legal case disclosed in the Registrant's Form 10-QSB. Included in
general and  administrative  expenses are reimbursements to the Managing General
Partner allowed under the Partnership  Agreement  associated with its management
of  the   Partnership.   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.

Total   revenues   increased  due  to  an  increase  in  rental  income  at  the
Partnership's  investment property.  This increase was the result of an increase
in average rental rates while maintaining steady occupancy levels.

As part of the ongoing  business plan of the  Partnership,  the Managing General
Partner  monitors the rental market  environment of its  investment  property to
assess the feasibility of increasing rents,  maintaining or increasing occupancy
levels and protecting  the  Partnership  from increases in expenses.  As part of
this plan, the Managing 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
Managing General Partner will be able to sustain such a plan.

Capital Resources and Liquidity

At  September  30,  2001,  the  Partnership  had cash and  cash  equivalents  of
approximately  $200,000  compared to  approximately  $1,049,000 at September 30,
2000. Cash and cash equivalents decreased  approximately $876,000 since December
31, 2000 due to approximately  $1,453,000 and $624,000 of cash used in financing
and  investing  activities,  respectively,  partially  offset  by  approximately
$1,201,000  of cash  provided by  operating  activities.  Cash used in financing
activities  consisted of  distributions  paid to the partners,  repayment of the
prior  mortgage  loan and  loan  cost  associated  with  the new  mortgage  loan
partially  offset by proceeds from the new mortgage loan. Cash used in investing
activities consisted of property improvements and replacements  partially offset
by net withdrawals  from  restricted  escrows held by the mortgage  lender.  The
Partnership invests its working capital reserves in interest bearing accounts.

The Managing  General Partner has extended to the Partnership a $300,000 line of
credit.  At the present time, the  Partnership  has no  outstanding  amounts due
under this line of credit.  Based on present plans, the Managing General Partner
does not anticipate  the need to borrow in the near future.  Other than cash and
cash equivalents,  the line of credit is the Partnership's only unused source of
liquidity.

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 property 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.  Approximately $3,961,000 has been
budgeted for capital  improvements at Village of Pennbrook during the year 2001,
consisting  primarily of cabinet  enhancements,  floor  covering  and  appliance
replacements,   air   conditioning   units,   and  structural  and  parking  lot
improvements.  During the nine months ended  September 30, 2001, the Partnership
completed  approximately $545,000 of budgeted capital improvements at Village of
Pennbrook  consisting  primarily of air conditioning units,  appliance and floor
covering  replacements,  structural  improvements  and water  heater and cabinet
replacements.  These capital  improvements were funded from operating cash flows
and Partnership  reserves.  Additional  improvements  may be considered and will
depend on the physical condition of the property as well as replacement reserves
and anticipated cash flows generated by the property.  The capital  improvements
will be incurred only if cash is available from  operations or from  partnership
reserves.  To the extent that such budgeted capital  improvements are completed,
the Partnership's  distributable cash flow, if any, may be adversely affected at
least in the short term.

On August 31,  2001,  the  Partnership  refinanced  the  mortgage  note  payable
encumbering Village of Pennbrook  Apartments.  The refinancing replaced mortgage
indebtedness of $19,300,000 with a new mortgage of $30,400,000. The new mortgage
carries a stated  interest  rate of 7.01%  compared to a stated rate of 7.33% on
the old  mortgage.  Payments of principal  and interst are due monthly until the
loan matures in September  2021 at which time the loan will be fully  amortized.
At the closing,  a repair escrow of $50,000 was  established  and is held by the
lender. Loan costs capitalized for the refinancing were approximately  $854,000,
including  a  $304,000  refinancing  fee paid to an  affiliate  of the  Managing
General Partner pursuant to the Partnership Agreement.  The Partnership recorded
an extraordinary loss on early extinguishment of debt of approximately  $169,000
as a result of  unamortized  loan costs being  written  off.  The  Partnership's
current assets are thought to be sufficient for any near-term  needs  (exclusive
of capital improvements) of the Partnership.

During the nine months ended  September 30, 2001,  the  Partnership  distributed
approximately $11,699,000  (approximately $11,684,000 to the limited partners or
$194.72 per limited partnership unit). Of this amount,  approximately $1,473,000
(approximately  $1,458,000  to  the  limited  partners  or  $24.30  per  limited
partnership   unit)  was  distributed   from  operations   while   approximately
$10,226,000  ($170.42  per  limited  partnership  unit) was  distributed  to the
limited  partners  from  the net  proceeds  of the  refinancing  of  Village  of
Pennbrook  Apartments.  Cash  distributions  from  operations  of  approximately
$1,464,000  were paid during the nine months ended  September 30, 2000, of which
approximately  $1,449,000 was paid to the limited  partners  ($24.15 per limited
partnership unit). At December 31, 1999, a distribution payable of approximately
$551,000  (approximately  $545,000 to the limited  partners or $9.08 per limited
partnership  unit) was  accrued  and  subsequently  paid in  January  2000.  The
Partnership's  distribution  policy is reviewed on a monthly basis.  Future cash
distributions  will depend on the levels of net cash generated from  operations,
the  availability  of  cash  reserves,  and the  timing  of the  debt  maturity,
refinancing,  and/or sale of the  property.  There can be no assurance  that the
Partnership  will  generate  sufficient  funds from  operations  after  required
capital improvements to permit further  distributions to its partners during the
remainder of 2001 or subsequent periods.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 44,822 limited  partnership  units
(the "Units") in the Partnership representing 74.70% of the outstanding Units at
September  30,  2001. 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 make one or more additional offers to acquire additional limited
partnership  interests in the  Partnership  for cash or in exchange for units in
the operating partnership of AIMCO. 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 Managing General  Partner.  As a
result  of its  ownership  of  74.70% of the  outstanding  Units,  AIMCO is in a
position to influence all voting decisions with respect to the Registrant.  When
voting on matters, AIMCO would in all likelihood vote the Units it acquired in a
manner  favorable to the interest of the Managing General Partner because of its
affiliation with the Managing General Partner.  However,  with respect to 26,466
units, Insignia Properties,  LP, an affiliate of AIMCO, is required to vote such
Units: (i) against any increase in compensation  payable to the Managing General
Partner or to affiliates;  and (ii) on all other matters  submitted by it or its
affiliates, in proportion to the votes cast by non-tendering unitholders. Except
for the  foregoing,  no other  limitations  are  imposed  on  AIMCO's,  Insignia
Properties,  L.P.'s or their  affiliates'  ability to influence voting decisions
with respect to the Partnership.

<PAGE>
                           PART II - OTHER INFORMATION


ITEM 1.     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 Managing  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purports  to  assert  claims  on  behalf  of a class  of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  which are named as nominal  defendants,  challenging,  among other
things,  the  acquisition of interests in certain  general  partner  entities by
Insignia  Financial  Group,  Inc.  ("Insignia")  and entities which were, at one
time,  affiliates of Insignia;  past tender offers by the Insignia affiliates to
acquire  limited  partnership  units;  management  of  the  partnerships  by the
Insignia  affiliates;  and the 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 Managing  General  Partner  filed a motion  seeking  dismissal of the
action.  In lieu of responding to the motion,  the  plaintiffs  filed an amended
complaint. The Managing 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 Managing  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  Managing  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 Managing General Partner and affiliated  defendants filed a
demurrer to the fourth amended complaint,  which, together with a demurrer filed
by other  defendants,  is currently  scheduled to be heard on November 15, 2001.
The Court has set the matter for trial in January 2003.

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 Managing  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.  The matters are currently  scheduled to be heard
on November 15, 2001.

Estate of Harry  Schubert v.  National  Property  Investors  4, Civil Action No.
97-09129, Court of Common Pleas of Bucks County, Pennsylvania.  During 1998, the
Plaintiff brought action against the Partnership  alleging that as the result of
carbon monoxide and methane  poisoning due to a malfunctioning  heat unit in the
deceased's   apartment  at  the  Partnership's   property,   the  decedent  lost
consciousness for several hours, suffered respiratory arrest, and suffered other
pains and injuries. The Plaintiff alleges breach of contract,  fraud, violations
of the Unfair Trade Practices and Consumer  Protection Law and negligence.  This
matter is currently in the preliminary stages of discovery.  The Partnership has
filed a motion for summary judgment to have the court dismiss the claims against
the  Partnership,  and this motion is currently  pending  before the court.  The
Partnership intends to vigorously defend this matter.

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

<PAGE>
ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            a)    Exhibits:

                  Exhibit 10.7,  Multifamily  Note dated August 30, 2001, by and
                  between National  Property  Investors 4, a California  limited
                  partnership,  and  GMAC  Commercial  Mortgage  Corporation,  a
                  California corporation.

            b)    Reports on Form 8-K:

                  None filed during the quarter ended September 30, 2001.




<PAGE>

                                   SIGNATURES



In accordance with the  requirements of the Exchange Act, the Registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.



                                    NATIONAL PROPERTY INVESTORS 4


                                    By:   NPI EQUITY INVESTMENTS, INC.
                                          Managing General Partner


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


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


                                    Date:

<PAGE>
                                                        FHLMC Loan No. 002772817
                                                 Village of Pennbrook Apartments

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


US $30,400,000.00                                        As of August 30, 2001


      FOR VALUE RECEIVED, the undersigned ("Borrower") jointly and severally (if
more  than  one)  promises  to pay to the  order  of  GMAC  COMMERCIAL  MORTGAGE
CORPORATION, a California corporation,  the principal sum of Thirty Million Four
Hundred  Thousand and 00/100 Dollars (US  $30,400,000.00),  with interest on the
unpaid principal balance at the annual rate of seven and one hundredths  percent
(7.01%).

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

2. Address for Payment. All payments due under this Note shall be payable at 200
Witmer Road, Post Office Box 809, Horsham, Pennsylvania 19044, Attn: Servicing -
Account  Manager,  or such other place as may be designated by written notice to
Borrower from or on behalf of Lender.

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

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

(b)  Consecutive  monthly  installments  of principal and interest,  each in the
amount of Two Hundred  Thirty-Five  Thousand  Eight  Hundred  Seventy-Three  and
39/100 Dollars (US $235,873.39), shall be payable on the first day of each month
beginning  on  October  1,  2001,  until the  entire  unpaid  principal  balance
evidenced by this Note is fully paid.

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

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

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

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

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

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

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

9.    Limits on Personal Liability.

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

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

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

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

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

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

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

10.   Voluntary and Involuntary Prepayments.

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

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

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

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

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

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

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

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

            (ii)  the product obtained by multiplying:

                  (A)   the amount of principal being prepaid,
                  by
                  (B)   the excess (if any)of the Monthly  Note  Rate  over the
                        Assumed Reinvestment Rate,
                  by
                  (C)   the Present Value Factor.

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

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

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

            Assumed  Reinvestment Rate:  one-twelfth (1/12) of the yield rate as
            of the date 5 Business Days before the Prepayment Date, on the 9.25%
            U.S. Treasury Security due February 1, 2016, as reported in The Wall
            Street Journal, expressed as a decimal calculated to five digits. In
            the event that no yield is published on the applicable  date for the
            Treasury Security used to determine the Assumed  Reinvestment  Rate,
            Lender,  in its discretion,  shall select the non-callable  Treasury
            Security  maturing  in  the  same  year  as  the  Treasury  Security
            specified  above with the lowest yield  published in The Wall Street
            Journal as of the applicable  date. If the publication of such yield
            rates in The Wall  Street  Journal is  discontinued  for any reason,
            Lender  shall select a security  with a comparable  rate and term to
            the Treasury  Security  used to determine  the Assumed  Reinvestment
            Rate.  The  selection  of an  alternate  security  pursuant  to this
            Paragraph shall be made in Lender's discretion.

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

                                     [OBJECT OMITTED]

            n = number of months remaining in Yield Maintenance Period

            ARR = Assumed Reinvestment Rate

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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





                    [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


<PAGE>


                                    NATIONAL PROPERTY INVESTORS 4, a California
                                       limited partnership

                                    By:  NPI Equity Investments, Inc., a Florida
                                          corporation, its general partner




                                        By: ______________________
                                           Patti K. Fielding
                                           Senior Vice President


                                   133031722
                                   Borrower's Social Security/Employer ID Number

<PAGE>


PAY TO THE ORDER OF FEDERAL HOME LOAN MORTGAGE  CORPORATION,  WITHOUT  RECOURSE,
THIS ____ DAY OF AUGUST, 2001.

GMAC COMMERCIAL MORTGAGE CORPORATION, a
   California corporation



By:_________________________________
   Robert D. Falese, III
   Vice President


<PAGE>



                                    EXHIBIT A

                        MODIFICATIONS TO MULTIFAMILY NOTE

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

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

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

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

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

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