June 27, 1997




Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.  20549

       Boston Financial Tax Credit Fund VII, A Limited Partnership
       Annual Report on Form 10-K for the Year Ended March 31, 1997
       File No. 0-24584
     

Gentlemen:

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

Very truly yours,





/s/ Veronica Curioso
Veronica Curioso
Assistant Controller


TC710K-K.95


<PAGE>



                                UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                           Washington, DC 20549

                                  FORM 10-K

                Annual Report Pursuant to Section 13 or 15(d)
                    of the Securities Exchange Act of 1934

For the fiscal year ended                          Commission file number 
   March 31, 1997                                          0-24584

                    BOSTON  FINANCIAL  TAX CREDIT  FUND VII, A
                       LIMITED   PARTNERSHIP   (Exact  name  of
                          registrant as specified in its charter)

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

     101 Arch Street, 16th Floor
        Boston, Massachusetts                               02110-1106
--------------------------------                  ---------------------------
        (Address of Principal                              (Zip Code)
          executive office)

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

Securities registered pursuant to Section 12(b) of the Act:

                                                     Name on each exchange on
          Title of each class                             which registered
-----------------------------------------           -----------------------
                  None                                         None

Securities registered pursuant to Section 12(g) of the Act:

                          UNITS OF LIMITED PARTNERSHIP INTEREST
                                       (Title of Class)
                                            100,000

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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K (Subsection  229.405 of this chapter) is not contained herein,
and will not be contained,  to the best of registrant's knowledge, in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ X ]

State the aggregate sales price of partnership units held by non-affiliates 
of the registrant.
                           $50,930,000 as of March 31, 1997


<PAGE>


-----------------------------------------------------------------------------

------------------------------------------------------------------------------

                                                        
DOCUMENTS  INCORPORATED  BY REFERENCE:  LIST THE FOLLOWING  DOCUMENTS IF  
INCORPORATED  BY REFERENCE AND THE PART OF THE FORM 10-K INTO WHICH THE 
DOCUMENT IS INCORPORATED:  (1) ANY ANNUAL REPORT TO SECURITY HOLDERS:
(2) ANY PROXY OR INFORMATION STATEMENT: AND (3) ANY PROSPECTUS FILED 
PURSUANT TO RULE 424(b) OR (c) UNDER THE SECURITIES ACT OF 1933.

                                                             Part of Report on
                                                               Form 10-K into
                                                             Which the Document
Documents incorporated by reference                          is Incorporated

Report on Form 8-K dated March 18, 1993                      Part I, Item 1

Report on Form 8-K dated June 8, 1993                        Part I, Item 1

Report on Form 8-K dated September 10, 1993                  Part I, Item 1

Report on Form 8-K dated January 14, 1994                    Part I, Item 1

Post-Effective Amendment No. 1-3 to the Form S-11
     Registration Statement, File # 33-52468                 Part I, Item 1

Post-Effective Amendment No. 4 to the Form S-11
     Registration Statement, File # 33-52468                 Part III, Item 12

Prospectus - Sections Entitled:

     "Investment Objectives and Policies -
      Principal Investment Objectives"                       Part I, Item 1

     "Investment Risks"                                      Part I, Item 1

     "Estimated Use of Proceeds"                             Part III, Item 13

     "Management Compensation and Fees"                      Part III, Item 13

     "Profits and Losses for Tax Purposes, Tax
        Credits and Cash Distributions"                      Part III, Item 13







<PAGE>


             BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

              ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 1997


                                 TABLE OF CONTENTS

                                                                     
                                                      Page No.       

PART I

     Item 1      Business                                K-3
     Item 2      Properties                              K-5
     Item 3      Legal Proceedings                       K-11
     Item 4      Submission of Matters to a Vote of
                    Security Holders                     K-11

PART II

     Item 5      Market for the Registrant's Units and
                    Related Security Holder Matters      K-12
     Item 6      Selected Financial Data                 K-13
     Item 7      Management's Discussion and Analysis of
                    Financial Condition and Results of 
                    Operations                           K-14
     Item 8      Financial Statements and Supplementary
                    Data                                 K-16
     Item 9      Changes in and Disagreements with Accountants
                    on Accounting and Financial 
                    Disclosure                           K-16

PART III

     Item 10     Directors and Executive Officers
                    of the Registrant                     K-17
     Item 11     Management Remuneration                  K-18
     Item 12     Security Ownership of Certain Beneficial
                    Owners and Management                 K-18
     Item 13     Certain Relationships and Related 
                    Transactions                          K-19

PART IV

     Item 14     Exhibits, Financial Statement Schedule and
                  Reports on Form 8-K                     K-21

SIGNATURES                                                K-22


<PAGE>


                                PART I

Item 1.  Business

Boston  Financial Tax Credit Fund VII, A Limited  Partnership  (the "Fund") is a
Massachusetts limited partnership formed on September 14, 1992 under the laws of
the   Commonwealth   of   Massachusetts.   The  Fund's   partnership   agreement
("Partnership  Agreement") authorizes the sale of up to 100,000 Units of limited
partnership interest at $1,000 per Unit. On November 30, 1993, the Fund held its
final  investor  closing.  In total,  the Fund received  $50,930,000  of capital
contributions  for 50,930 units.  Such amounts exclude five  unregistered  Units
previously acquired for $5,000 by the Initial Limited Partner, which is also one
of the General Partners. The offering of Units terminated on January 21, 1994.

The  Fund is  engaged  solely  in the  business  of real  estate  investment.  A
presentation of information  about industry segments is not applicable and would
not be material to an understanding of the Fund's business taken as a whole.

The Fund has  invested  and will  invest as a limited  partner in other  limited
partnerships  ("Local Limited  Partnerships")  which own and operate residential
apartment  complexes  ("Properties")  some of which  benefit  from  some form of
federal,  state or  local  assistance  programs  and all of  which  qualify  for
low-income  housing tax credits ("Tax  Credits")  added to the Internal  Revenue
Code (the "Code") by the Tax Reform Act of 1986.   The  investment
objectives  of the Fund include the  following:  (i) to provide  investors  with
annual tax credits which they may use to reduce their federal income taxes; (ii)
to  provide  limited  cash   distributions  from  the  operations  of  apartment
complexes;  and (iii) to  preserve  and  protect  the  Fund's  capital  with the
possibility  of realizing a profit  through the sale or refinancing of apartment
complexes. There cannot be any assurance that the Fund will attain any or all of
these  investment  objectives.  A more detailed  discussion of these  investment
objectives,  along with the risks in achieving them is contained in the sections
of the  Prospectus  entitled  "Investment  Objectives  and  Policies - Principal
Investment  Objectives" and "Investment Risks", which are herein incorporated by
this reference.

Table A on the following  page lists the  properties  owned by the Local Limited
Partnerships  in which the Fund has  invested.  Item 7 of this  Report  contains
other significant  information with respect to such Local Limited  Partnerships.
The terms of the  acquisition  of each Local Limited  Partnership  interest have
been  described  in  a  supplement  to  the  Prospectus  and  collected  in  the
post-effective amendment to the Registration Statement listed in Part IV of this
Report  on  Form  10-K;  such  descriptions  are  incorporated  herein  by  this
reference.


<PAGE>


                                     TABLE A

                              SELECTED LOCAL LIMITED
                               PARTNERSHIP DATA

<TABLE>
<CAPTION>

<S>                                                   <C>                                       <C>
Properties owned by                                                                             Date
Local Limited                                                                                   Interest
Partnerships                                          Location                                  Acquired
----------------------------                          ------------------                        ---------

Oak Ridge                                             Macon, GA                                 12/31/92
Santa Fe Oaks II                                      Gainesville, FL                           12/31/92
Andrews Pointe                                        Burnsville, MN                            04/13/92
Palo Verde II                                         Henderson, NV                             05/19/93
Woods Lane                                            Rogers, AR                                07/30/93
Crafton Place                                         Fayetteville, AR                          07/30/93
Guardian Place                                        Richmond, VA                              10/07/93
Twin Oaks Meadows                                     Lansing, MI                               10/29/93
Sunrise Terrace                                       Madera, CA                                11/24/93
Wynmor                                                Brooklyn Park, MN                         12/22/93
Citrus Glen                                           Orlando, FL                               12/30/93
St. Andrews Pointe                                    Columbia, SC                              01/05/94
Des Moines St. Village                                Des Moines, IA                            01/31/94
Fountain Lakes                                        Benton, AR                                02/02/94
Fairhaven Manor                                       Burlington, WA                            03/08/94
Grand Boulevard                                       Chicago, IL                               08/03/94
Los Claveles II                                       Trujillio Alto, PR                        08/31/94
Harford Commons                                       Baltimore, MD                             02/28/95
Springwood*                                           Tallahassee, FL                           12/15/94
</TABLE>


The Fund's  interest  in profits  and losses of each Local  Limited  Partnership
arising from normal operations is 99%, with the exception of Springwood which is
19.80%.  Profits and losses  arising from sale or refinancing  transactions  are
allocated  in  accordance   with  the  respective   Local  Limited   Partnership
Agreements.

Although the Fund's investments in Local Limited Partnerships are not subject to
seasonal   fluctuations,   the  Fund's   equity  in  losses  of  Local   Limited
Partnerships, to the extent it reflects the operations of individual Properties,
may vary from quarter to quarter  based upon changes in occupancy  and operating
expenses as a result of seasonal factors.
<PAGE>

Each Local Limited  Partnership  has, as its general  partners  ("Local  General
Partners"),  one or more individuals or entities not affiliated with the Fund or
its General Partners. In accordance with the partnership  agreements under which
such entities are organized ("Local Limited Partnership  Agreements"),  the Fund
depends on the Local General  Partners for the  management of each Local Limited
Partnership. As of March 31, 1997, the following Local Limited Partnerships have
a common Local  General  Partner or affiliated  group of Local General  Partners
accounting  for the  specified  percentage  of the original  investment in Local
Limited Partnerships:  (i) Oak Ridge, Santa Fe Oaks Phase II, Springwood and St.
Andrew's Pointe representing  24.26% have Flournoy  Development Company and John
Flournoy as Local General Partners;  (ii) Woods Lane, Crafton Place and Fountain
Lakes  representing  17.27% have  Lindsey  Management  Company as Local  General
Partner.  The Local General Partners of the remaining Local Limited Partnerships
are identified in the  Acquisition  Reports,  which are herein  incorporated  by
reference.

The  Properties  owned  by Local  Limited  Partnerships  in  which  the Fund has
invested are, and will continue to be, subject to competition  from existing and
future  apartment  complexes  in the same  areas.  The  success of the Fund will
depend on many outside factors, most of which are beyond the control of the Fund
and which  cannot be  predicted  at this  time.  Such  factors  include  general
economic  and real estate  market  conditions,  both on a national  basis and in
those areas where the  Properties  are  located,  the  availability  and cost of
borrowed  funds,  real estate tax rates,  operating  expenses,  energy costs and
government  regulations.  In  addition,  other  risks  inherent  in real  estate
investment  may  influence  the  ultimate  success  of the Fund,  including  (i)
possible  reduction  in rental  income  due to an  inability  to  maintain  high
occupancy  levels or adequate  rental levels,  (ii) possible  adverse changes in
general economic  conditions and adverse local  conditions,  such as competitive
over-building,  or a decrease in  employment  or adverse  changes in real estate
laws,  including  building codes, and (iii) the possible future adoption of rent
control  legislation  which would not permit  increased costs to be passed on to
the tenants in the form of rent increases,  or which suppress the ability of the
Local Limited  Partnerships to generate  operating cash flow.  Since some of the
Properties benefit from some form of government assistance,  the Fund is subject
to the risks inherent in that area including decreased  subsidies,  difficulties
in finding  suitable  tenants and obtaining  permission for rent  increases.  In
addition,  any Tax Credits allocated to investors with respect to a Property are
subject to  recapture  to the extent that the  Property  or any portion  thereof
ceases to qualify for the Tax Credits. Other future changes in federal and state
income tax laws affecting real estate  ownership or limited  partnerships  could
have a material and adverse affect on the business of the Fund.

The Fund is managed by Arch Street VII,  Inc., the Managing  General  Partner of
the Fund.  The other  General  Partner of the Fund is Arch  Street  VII  Limited
Partnership.  To economize on direct and indirect payroll costs, the Fund, which
does not have any  employees,  reimburses  The Boston  Financial  Group  Limited
Partnership,  an affiliate  of the General  Partners,  for certain  expenses and
overhead costs. A complete discussion of the management of the Fund is set forth
in Item 10 of this Report.


Item 2.  Properties

The  Fund  owns  limited   partnership   interests  in  nineteen  Local  Limited
Partnerships which own and operate  Properties,  some of which benefit from some
form of federal,  state, or local  assistance  programs and all of which qualify
for the Tax Credits added to the Code by the Tax Reform Act of 1986.  The Fund's
ownership interest in each Local Limited  Partnership is 99%, with the exception
of Springwood, which is 19.80%.

Each of the Local Limited Partnerships has received an allocation of Tax Credits
from the relevant state tax credit agency. In general, the Tax Credit runs for 
ten years from the date the  Property is placed in  service.  The  required 
holding period(the"Compliance  Period")of the Properties is fifteen years.During
these fifteen  years,  the  Properties  must satisfy rent  restrictions,  tenant
<PAGE>
income  limitations  and other  requirements,  as  promulgated  by the  Internal
Revenue  Service,  in order to  maintain  eligibility  for the Tax Credit at all
times during the Compliance Period.  Once a Local Limited Partnership has become
eligible for the Tax Credits,  it may lose such  eligibility and suffer an event
of  recapture  if  its  Property   fails  to  remain  in  compliance   with  the
requirements.  To date, none of the Local Limited  Partnerships have suffered an
event of recapture of Tax Credits.

In  addition,  some of the Local  Limited  Partnerships  have  obtained one or a
combination  of different  types of loans such as: i) below market rate interest
loans; ii) loans provided by a redevelopment agency of the town or city in which
the property is located at favorable  terms;  or iii) loans that have  repayment
terms that are based on a percentage of cash flow.

The schedules on the  following  pages provide  certain key  information  on the
Local Limited Partnership interests acquired by the Fund.


<PAGE>


------------------------------------------------------------------------

------------------------------------------------------------------------
<TABLE>
<CAPTION>
                          
<S>                           <C>               <C>                      <C>                  <C>            <C>          <C>

                                                    Capital Contributions                     Mtge. loans                 Occupancy
Local Limited Partnership     Number            Total Committed          Paid Through         payable at                  at
Property Name                 of                at March 31,             March 31,            December 31,   Type of      March 31,
Property Location             Apt. Units        1997                     1997                 1996           Subsidy*     1997
---------------------------   --------------    -------------------      ----------------     -------------  ------------ ---------

Oak Ridge Apartments,
   a Limited Partnership
Oak Ridge
Macon, GA                         152                 $2,870,245             $2,870,245           $4,150,456   None            80%

Santa Fe Oaks Phase II,
   a Limited Partnership
Santa Fe Oaks II
Gainesville, FL                   129                  2,698,586              2,698,586            3,754,237   None            89%

Andrew's Pointe Limited
   Partnership
Andrew's Pointe
Burnsville, MN                     57                  1,333,800              1,333,800            2,370,604   None           100%

Palo Verde II, a Nevada
   Limited Partnership
Palo Verde II
Henderson, NV                      60                  1,324,801              1,324,801            1,106,082   None           100%

Woods Lane, a Limited
   Partnership
Woods Lane
Rogers, AR                        156                  2,574,180              2,574,180            3,384,986   None            88%

Crafton Place, a Limited
   Partnership
Crafton Place
Fayetteville, AR                   84                  1,365,120              1,365,120            1,692,493   None            75%

</TABLE>


<PAGE>


<TABLE>
<CAPTION>

                                                          Capital Contributions              
<S>                           <C>               <C>                      <C>                  <C>            <C>          <C>
                                                                                              Mtge. loans                 Occupancy
Local Limited Partnership     Number            Total Committed          Paid Through         payable at                  at
Property Name                 of                at March 31,             March 31,            December 31,   Type of      March 31,
Property Location             Apt. Units        1997                     1997                 1996           Subsidy*     1997
---------------------------   --------------    -------------------      ---------------      -------------  ------------ ---------

Guardian Place
   Limited Partnership
Guardian Place
Richmond, VA                      120                  2,174,390              2,174,390            2,988,767   None            98%

Twin Oaks Meadows Limited
   Dividend Housing Association
   Limited Partnership
Twin Oaks Meadows
Lansing, MI                        63                  1,436,401              1,436,401            1,927,258   None            98%

Madera Sunrise Terrace
   Limited Partnership
Sunrise Terrace
Madera, CA                         52                  1,523,196              1,523,196            1,223,697   None            96%

Eden Park Limited
   Partnership
Wynmor
Brooklyn Park, MN                 324                  5,527,758              5,527,758            5,916,767   None            95%

Affordable Citrus Glen
   Limited Partnership
Citrus Glen
Orlando, FL                       176                  4,581,360              4,581,360            5,470,969   None            96%

St. Andrews Pointe Apartments,
   A Limited Partnership
St. Andrews Pointe
Columbia, SC                      150                  3,414,528              3,414,528            4,703,499   None            97%
</TABLE>


<PAGE>


                                                         Capital Contributions
<TABLE>
<CAPTION>
<S>                           <C>               <C>                      <C>                  <C>            <C>           <C>
                                                                                              Mtge. loans                  Occupancy
Local Limited Partnership     Number            Total Committed          Paid Through         payable at                   at
Property Name                 of                at March 31,             March 31,            December 31,   Type of       March 31,
Property Location             Apt. Units        1997                     1997                 1996           Subsidy*      1997
----------------------------  --------------    -------------------      ---------------      -------------  ------------  -------

Des Moines Street Associates
   Limited Partnership
Des Moines St. Village
Des Moines, IA                     42                  1,083,996              1,083,996            1,737,049 Section 8         98%

Fountain Lakes, A Limited
   Partnership
Fountain Lakes
Benton, AR                        180                  2,854,593              2,854,593            4,255,148   None           100%

Fairhaven Manor Limited
   Partnership
Fairhaven Manor
Burlington, WA                     40                  1,232,020              1,232,020              956,585   None           100%

Grand Boulevard Renaissance I
   Limited Partnership
Grand Boulevard Renaissance
Chicago, IL                        30                  1,085,000                868,000            1,913,294 Section 8         97%

Los Claveles, S.E. Limited
   Partnership
Los Claveles II
Trujilio, PR                      180                  1,272,000                698,373            6,553,050 Section 8        95%

BHP/Harford Commons
   Limited Partnership
Harford Commons
Baltimore, MD                      30                  1,187,000              1,009,000            1,745,080  None           100%

</TABLE>

<PAGE>
                                                        Capital Contributions  
<TABLE>
<CAPTION>
<S>                           <C>               <C>                      <C>                  <C>            <C>          <C>
                                                                                              Mtge. loans                 Occupancy
Local Limited Partnership     Number            Total Committed          Paid Through         payable at                  at
Property Name                 of                at March 31,             March 31,            December 31,   Type of      March 31,
Property Location             Apt. Units        1997                     1997                 1996           Subsidy*     1997
--------------------------    --------------    -------------------      ----------------     -------------  ------------ ---------

Springwood Apartments,
   A Limited Partnership
Springwood (1)
Tallahassee, FL                   113                    619,614                619,614           3,966,075  None            97%
                                -----               ------------           ------------         ------------
                                2,138                $40,158,588            $39,189,961         $59,816,096
                                =====                ===========            ===========         ===========
</TABLE>

(1)            Boston Financial Tax Credit Fund VII has a 19.8% interest in 
               Springwood Apartments,  A Limited Partnership.  The mortgage 
               payable represents 100% of the outstanding
               balance.

Section 8      This subsidy,  which is authorized under Section 8 of Title II
               of the Housing and Community  Development Act of 1974, allows 
               qualified low-income tenants to pay 30% of their monthly income 
               as rent with the balance paid by the federal government.





<PAGE>


-------------------------------------------------------------------------------

-------------------------------------------------------------------------------


                                                                              
Two Local Limited Partnerships  invested in by the Fund each represent more than
10% of the total capital  contributions to be made to Local Limited Partnerships
by the Fund. The first is Eden Park Limited  Partnership  which owns Wynmor,  an
existing property located in Brooklyn Park, Minnesota. The property contains 324
apartments in eleven three-story  buildings,  and represents 12.62% of the total
original investment in the Local Limited Partnerships.

Eden Park Limited Partnership has obtained a $6,000,000 first mortgage loan. The
mortgage is payable in monthly  installments  of  principal  and interest in the
amount of $48,922,  based on a 25 year amortization  period and accrues interest
at a rate of 8.65%.  The unpaid  principal  and  interest  is due in one balloon
payment in October of 2020.

The other Local Limited  Partnership which represents more than 10% of the total
capital  contributions  to be made to Local Limited  Partnerships  is Affordable
Citrus Glen Limited  Partnership which owns Citrus Glen Apartments.  Citrus Glen
Apartments,  which is located in Orlando,  Florida,  contains 176 apartments and
represents  11.58%  of  the  total  original  investment  in the  Local  Limited
Partnerships.

Affordable  Citrus Glen Limited  Partnership  (the  "Partnership")  has obtained
permanent  financing in the amount of  $3,848,000  at an interest rate of 9.55%.
The note requires monthly principal and interest payments of $32,497,  amortized
over a 30 year period, with the unpaid principal balance due in full on February
1, 2010.  Additional  financing has been  obtained in the amount of  $1,670,000,
with stated  interest at 9%, from the Florida  Housing  Finance  Agency.  Due to
other claims  against cash flows,  the maximum  effective rate will be 4.5%, the
rate at which  interest is currently  being  accrued.  Repayment is based on the
cash flow of the  Partnership,  beginning  on  January  10,  1995,  with  annual
payments  due each  January  10  through  2009,  at which  time all  outstanding
principal and interest is due. The loan is non-recourse and is collateralized by
a second  mortgage on the  Partnership's  rental  property and an  assignment of
leases, rents, and contract rights.

The duration of the leases for occupancy in the  Properties  described  above is
six to twelve  months.  The Managing  General  Partner  believes the  Properties
described herein are adequately covered by insurance.

Additional  information required under this item, as it pertains to the Fund, is
contained in Items 1, 7 and 8 of this Report.

Item 3.  Legal Proceedings

The Fund is not a party to any pending legal or administrative  proceeding,  and
to the  best  of  its  knowledge,  no  legal  or  administrative  proceeding  is
threatened or contemplated against it.

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

None.


<PAGE>


                                 PART II

Item 5.  Market for the Registrant's Units and Related Security Holder Matters

There is no public  market for the Units,  and it is not expected  that a public
market will develop.  If a Limited Partner  desires to sell Units,  the buyer of
those Units will be required to comply with the minimum  purchase and  retention
requirements and investor suitability standards imposed by applicable federal or
state  securities  laws and the  minimum  purchase  and  retention  requirements
imposed  by the  Fund.  The  price  to be  paid  for the  Units,  as well as the
commissions to be received by any participating broker-dealers,  will be subject
to negotiation by the Limited Partner seeking to sell his Units.  Units will not
be redeemed or repurchased by the Fund.

The  Partnership  Agreement does not impose on the Fund or its General  Partners
any  obligation to obtain  periodic  appraisals of assets or to provide  Limited
Partners with any estimates of the current value of Units.

As of March 31, 1997, there were 2,786 record holders of Units of the Fund.

Cash distributions, when made, are paid annually.  No cash distributions were
      paid during the years ended March 31, 1997, 1996 and 1995.


<PAGE>


Item 6.  Selected Financial Data

The following  table sets forth  selected  financial  information  regarding the
Fund's financial position and operating results. This information should be read
in conjunction with Management's  Discussion and Analysis of Financial Condition
and Results of Operations and the Financial Statements and Notes thereto,  which
are included in Items 7 and 8 of this Report.
<TABLE>
<CAPTION>

<S>                                        <C>              <C>           <C>              <C>               <C>
                                           March 31,        March 31,     March 31,        March 31,         March 31,
                                           1997             1996          1995             1994              1993

Revenue                                    $  400,349       $  257,160    $   333,523      $ 365,312        $   488
Equity in losses of Local Limited
 Partnerships                              (2,967,826)      (2,570,732)    (2,190,648)      (536,848)             -
Net Loss                                   (3,131,087)      (2,870,229)    (2,465,750)      (735,660)       (23,957)
Per Limited Partnership Unit (A)               (60.86)         (55.79)        (47.93)         (21.34)         (3.69)
Cash, cash equivalents and
marketable securities                       3,614,673        4,190,187      7,456,668     19,938,766      4,661,492
Investments in Local Limited
Partnerships, at original cost             39,572,643       39,572,643     39,527,857     24,572,298      1,000,669
Total assets (B)                           35,694,649       38,795,017     41,924,559     44,145,937      5,716,428
Cash Distribution                                   -                -              -              -              -
Other data:
Passive loss (C)                           (3,697,126)      (3,835,484)    (3,604,962)      (822,547)             -
   Per Limited Partnership Unit (C)             (71.87)         (74.56)       (70.07)         (39.28)             -
Portfolio income (C)                          359,903          477,042      1,026,953        415,206              -
Per Limited Partnership Unit (C)                 7.00     9.27      19.96          19.83           -
Net short term capital losses (C)                   -             (610)      (510,142)             -              -
   Per Limited Partnership Unit (C)                 -             (.01)         (9.92)             -              -
Low-Income Housing Tax Credit (C)           7,531,209        7,016,512      4,226,746        750,876              -
Per Limited Partnership Unit (C)               146.39     136.39          82.16    35.86       -
Local Limited Partnership interests
      owned at end of period                       19               19             19              15             2
</TABLE>

(A)    Per  Limited  Partnership  Unit data is based upon  50,930  Units for the
       years ended March 31, 1997,  1996 and 1995 and a weighted  average number
       of units  outstanding  of 34,127 and 6,424 for the year  ended  March 31,
       1994 and the period December 24, 1992 to March 31, 1993, respectively.

(B)    Total assets include the net investments in Local Limited Partnerships.

(C)    Income tax information is as of December 31, the year end of the Fund for
       income tax purposes.  Per Limited  Partnership  Unit data is based on the
       initial investor  closing on March 30, 1993. The per Limited  Partnership
       Unit data for  Limited  Partners  admitted  subsequent  to March 30, 1993
       varies depending on their admission date.



<PAGE>


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

Liquidity and Capital Resources

At March 31, 1997,  the  Partnership  had cash and cash  equivalents of $373,729
compared with $334,845 at March 31, 1996. 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.  These increases are partially offset by investments made
in Local Limited Partnership and cash used for operating activities.

As of March 31, 1997, approximately $2,538,000 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 funding appropriate.

At March 31, 1997, the Fund has committed to make future  capital  contributions
and pay future  purchase price  installments on its investments in Local Limited
Partnerships.  These future  payments are  contingent  upon the  achievement  of
certain  criteria as set forth in the Local Limited  Partnership  Agreements and
total approximately $752,000.  In addition, the  Fund has  set aside $217,000in 
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 March 31, 1997,  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  interests  to
provide such funds,  voluntarily,  in order to protect its  investment.  No such
event has occurred to date.

Cash Distributions

No cash distributions were made in the year ended March 31, 1997.

Results of Operations

1997 versus 1996

The Fund's results of operations for the year ended March 31, 1997 resulted in a
net loss of  $3,131,087  as  compared to a net loss of  $2,870,229  for the same
period  in 1996.  The  increase  in net  loss is  primarily  attributable  to an
increase in equity in losses of Local Limited  Partnerships  partially offset by
an increase in other revenue.  The increase in equity in losses of Local Limited
Partnerships  is due to an increase in the number of Local  Limited  Partnership
interests  which had a full  year of  operations.  This  resulted  in  increased
depreciation,  interest and operating  expenses over total revenue  earned.  The
increase in other revenue is primarily  due to an increase in interest  received
on funds held in escrow for Local Limited  Partnerships for the year ended March
31, 1997.


<PAGE>



1996 versus 1995

The Fund's results of operations for the year ended March 31, 1996 resulted in a
net loss of  $2,870,229  as  compared to a net loss of  $2,465,750  for the same
period in 1995.  The increase is  primarily  attributable  to greater  equity in
losses of Local  Limited  Partnerships  and a  decrease  in  investment  income.
Partially  offsetting these amounts was a decrease in general and administrative
expenses.  Equity in losses of Local Limited Partnerships increased for the year
ended  December 31, 1995 as compared to December 31, 1994, due to an increase in
the  number  of  Local  Limited  Partnership  interests  which  are  now  in the
operational  phase.  The decrease in  investment  income is due to lower average
cash  balances  maintained  by the Fund  during the year ended March 31, 1996 as
compared to March 31, 1995. The decrease in general and administrative  expenses
is due to a decrease in certain Partnership administrative expenses.


Effect of recently issued Accounting Standard

The  Financial  Accounting  Standards  Board has issued  Statement of Accounting
Standards No. 121,  Accounting for the  Impairment of Long-Lived  Assets and for
Long-Lived  Assets to Be  Disposed  Of,  which is  effective  for  fiscal  years
beginning after December 15, 1995. This standard requires that long-lived assets
be reviewed for recoverability.  Impairment losses are recognized when events or
changes in  circumstances  indicate that the carrying amount of an asset may not
be recoverable.  The Fund adopted the new standard for its year ending March 31,
1997, however, it did not have a significant effect on the financial position or
results of operations.

Low-Income Housing Tax Credits

The 1997,  1996 and 1995 Tax Credits per unit were $146.39,  $136.39 and $82.16,
respectively, for investor limited partners. Tax Credits are not available for a
property  until the  property is placed in service and its  apartment  units are
occupied by  qualified  tenants.  In the first year the Tax Credits are claimed,
the  allowable  credit  amount is  determined  using an averaging  convention to
reflect the number of months that apartment units comprising the qualified basis
were occupied by qualified  tenants during the year. To the extent that the full
amount of the annual  credit is not  allocated in the first year,  an additional
credit equal to the difference is available in the 11th taxable year.

As of December 31, 1996, the tax year end of the Local Limited  Partnerships,  
all of the properties have been placed in service and all generated Tax Credits
in 1996.

The Tax Credits per Limited  Partnership  Unit have stabilized at  approximately
$147 per unit,  as  properties  have  reached  completion  and have become fully
leased.  Since the Tax Credits have  stabilized,  the annual amount allocated to
investors is expected to remain the same for about seven  years.  In years eight
through ten, the credits are expected to decrease as Properties reach the end of
the ten year credit period.

Property Discussions

Los   Claveles  II,  located  in  Trujillio  Alto,  Puerto  Rico,  continues to
experience  operating  difficulties  due to  ongoing  capital  repair  needs and
management issues. As previously reported,  most of these difficulties stem from
widespread  water  infiltration  that caused  subsidy  payments to be  suspended
pending  completion of required  property  repairs.  The suspension of Section 8
payments caused large fluctuations in monthly revenue and a subsequent  mortgage
default.  The Partnership  temporarily  cured the default by advancing  $208,000
from the  developer's  escrow.  Recently,  an affiliate of the Managing  General
Partner  of the  Partnership  successfully  negotiated  with the  Local  General
Partners, lender and local housing authority to replace the management agent for
Los  Claveles  II as  well  as its  neighboring  property,  Los  Claveles  I. By
consolidating management, the Managing General Partner feels that it can achieve
greater control over both sites and attain certain  operating  efficiencies that
will benefit bothproperties. The new management agent assumed responsibility for
the property in December 1996 and has  successfully  obtained  Section 8 subsidy
increases.   In  addition,   the  management  agent  will  oversee  the  capital
improvements  program which is under  development and should be implemented this
year. The Local General  Partners have agreed to step down  voluntarily and will
be replaced by an affiliate of the Managing  General  Partner,  once the workout
plan is approved by the lender. The lender continues to indicate its willingness
to work with the General Partners and management agent to improve operations and
cure  defaults.  Although  there appears to be sufficient  resources to turn the
project around, no agreement has been reached with the lender to date.

Inflation and Other Economic Factors

Inflation had no material impact on the operations or financial condition of the
partnership for the years ended March 31, 1997, 1996 and 1995.

Item 8.  Financial Statements and Supplementary Data

Information  required under this Item is submitted as a separate section of this
Report. See Index on page F-1 hereof.


Item 9.  Changes in and Disagreements with Accountants on Accounting and 
          Financial Disclosure

On November  10,  1995,  the firm of Arthur  Andersen  LLP was  dismissed as the
principal accountant to audit the registrant's financial statements.  The report
on the  financial  statements of the  registrant by Arthur  Andersen LLP for the
year ending March 31, 1995 did not contain any adverse  opinion or disclaimer of
opinion,  and was not qualified or modified as to  uncertainty,  audit scope, or
accounting  principles.  The decision to change  accountants was approved by the
Board of Directors of the General Partner of the registrant.

During the year ending  March 31, 1995 and for the  subsequent  interim  period,
April 1, 1995 through November 10, 1995, there were no disagreements with Arthur
Andersen LLP on any matter of  accounting  principles  or  practices,  financial
statement disclosure, or auditing scope or procedure.

The firm of Coopers & Lybrand L.L.P. has been engaged as principal accountant to
audit the registrant's financial statements.



<PAGE>


                                PART III

Item 10.  Directors and Executive Officers of the Registrant

The  Managing  General  Partner  of  the  Fund  is  Arch  Street  VII,  Inc.,  a
Massachusetts  corporation (the "Managing General Partner"), an affiliate of The
Boston Financial Group Limited Partnership ("Boston Financial"), a Massachusetts
limited partnership.

The Managing  General Partner was  incorporated  in September  1992.  William E.
Haynsworth is the Chief  Operating  Officer of the Managing  General Partner and
has  the  primary  responsibility  for  evaluating,  selecting  and  negotiating
investments  for the Fund.  The  Investment  Committee of the  Managing  General
Partner  approved all  investments.  The names and  positions  of the  principal
officers and the directors of the Managing General Partner are set forth below.

     Name                                           Position

Georgia Murray                         President, Managing Director, Treasurer
                                         and Chief Financial Officer
Fred N. Pratt, Jr.                     Managing Director
William E. Haynsworth                  Managing Director and Chief
                                         Operating Officer
Paul F. Coughlan                       Vice President
Peter G. Fallon, Jr.                   Vice President
Randolph G. Hawthorne                  Vice President
A. Harold Howell                       Vice President

The other General Partner of the Fund is Arch Street VII Limited Partnership, 
a Massachusetts limited partnership ("Arch Street VII L.P.") that was organized
in September  1992.  The  managing  general  partner of Arch Street VII L.P. 
is Arch Street VII,  Inc..  The limited  partner of Arch Street VII L.P. is 
Boston Financial.

The  Managing  General  Partner  provides  day-to-day  management  of the  Fund.
Compensation is discussed in Item 11 of this report. Such day-to-day  management
does not include the management of the properties.

The business  experience of each of the persons  listed above is described  
below.  There is no family  relationship  between any of the persons listed in 
this section.

Georgia  Murray,  age 46, is a graduate  of Newton  College of the Sacred  Heart
(B.A.,  1972).  She joined Boston  Financial  Management  Company in 1973 and is
currently a Senior Vice President of Boston Financial. Ms. Murray is a member of
the  Senior  Leadership  Team and Board of  Directors,  and  leads the  Property
Management division.  Previously, she led the company's Institutional Tax Credit
Team and managed Boston Financial's  Investment Real Estate and Asset Management
divisions.  Ms. Murray currently serves as a director of Atlantic Bank and Trust
Company,  President of the Institute for Multi-Family  Housing,  Director of the
Investment Program Association and member of the Direct Investment  Committee of
the  Securities  Industry  Association.  Previously,  she served as the Industry
Advisor to the Management Policy Review Committee of the  Massachusetts  Housing
Finance Agency and as a commissioner of the Boston Public Facilities Department.

Fred N. Pratt,  Jr., age 52, graduated from Tufts University and the Amos Tuck 
School of Business  Administration  at Dartmouth  College.  Mr. Pratt was one of
the original  employees of Boston Financial when it was founded in late 1969.He
currently serves as Boston  Financial's  Chief Executive  Officer and Chairman
of the Board of the General Partner of Boston Financial.

William E. Haynsworth,  age 57, graduated from Dartmouth College and Harvard Law
School.  Mr.  Haynsworth  was Acting  Executive  Director  of the  Massachusetts
Housing Finance Agency,  where he was also General Counsel,  prior to becoming a
Vice President of Boston  Financial in 1977 and a Senior Vice President in 1986.
He has also  served as  Director of  Non-Residential  Development  of the Boston
Redevelopment Authority and as an associate of the law firm of Goodwin,  Procter
& Hoar in Boston.  Mr.  Haynsworth is a member of the firm's  Senior  Leadership
Team and  participates  in the  structuring of real estate  investments  and the
development of new business opportunities.

Paul F. Coughlan,  age 53, is a graduate of Brown  University  (A.B.,  1965) and
served in the United  States Navy before  entering  the  securities  business in
1969. He was employed as an Account Executive by Bache & Company until 1972, and
then by Reynolds  Securities  Inc.  He joined  Boston  Financial  in 1975 and is
currently a Senior Vice President on the Institutional Tax Credit Team.

Peter G.  Fallon,  Jr.,  age 58,  graduated  from the  College of The Holy Cross
(B.S.,  1960) and Babson College  (M.B.A.,  1965). He joined Boston Financial in
1970, shortly after its formation,  and is currently a Senior Vice President and
a member of the  Investment  Real Estate  Division with  responsibility  for the
marketing of the firm's Institutional Tax Credit product.

Randolph G. Hawthorne,  age 47, is a graduate of the Massachusetts  Institute of
Technology (B.S., 1971) and Harvard Graduate School of Business (M.B.A.,  1973).
He joined  Boston  Financial in 1973 and has served as Treasurer and managed the
firm's Investment Real Estate division. He is a Senior Vice President serving on
the  Investment  Acquisitions  Team  with 22 years  of  experience  in  property
acquisitions.  Mr.  Hawthorne has primary  responsibility  for structuring  real
estate investments and developing new business opportunities.  He is a member of
the Investment Committee. He is Chairman of the National Multi -Housing Council,
a past  president  of the National  Housing and  Rehabilitation  Association,  a
member of the  Residential  Development  Council of the Urban Land  Institute as
well as a member of the Advisory Board of the Berkeley Real Estate Center at the
University of California.  A speaker at industry conferences,  he is also on the
Editorial Advisory Board of the Tax Credit Advisor.

A. Harold  Howell,  age 56,  graduated  from  Harvard  College and the Amos Tuck
School of Business  Administration at Dartmouth College. He has been employed by
Boston  Financial  since 1970.  For most of this time, he has been active in the
overall  administration of Boston Financial and its affiliates but has also been
involved in other areas of its business. Mr. Howell has served as head of Boston
Financial's Property Management Division and also as its Chief Financial Officer
and Chief Executive  Officer.  He currently is a Senior Vice President and is in
charge of a program being developed for properties  managed by Boston  Financial
whereby  heads-of-households who want to further their education can enroll in a
program on-site which teaches economic self  sufficiency,  computer and internet
skills,  problem  solving  skills and  related  real-world  skills.  Mr.  Howell
recently  spent a two  year  sabbatical  from  Boston  Financial  as a  Visiting
Professor  at the  Instituto  de Estudios  Superiores  de la  Empresa,  a highly
regarded  International  M.B.A.  Program in Barcelona,  Spain.  While there,  he
taught courses in business strategy and real estate finance.


Item 11.  Management Remuneration

Neither the directors or officers of Arch Street VII,  Inc., nor the partners of
Arch Street VII L.P., nor any other individual with  significant  involvement in
the business of the Fund receives any current or proposed  remuneration from the
Fund.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

No person is known to the Fund to be the beneficial owner of more than 5% of the
outstanding Units.

The equity  securities  registered  by the Fund under  Section  12(g) of the Act
consist  of  100,000  Units,  50,930 of which had been sold to the  public.  The
remaining  Units  were  deregistered  in  Post-Effective  Amendment  No. 4 dated
January 20, 1995 which is herein incorporated by reference.

Holders of Units are  permitted  to vote on matters  affecting  the Fund only in
certain unusual circumstances and do not generally have the right to vote on the
operation or management of the Fund.

Arch Street VII, L.P. owns five (unregistered) Units not included in the Units 
sold to the public.

Except as described in the preceding  paragraph,  neither Arch Street VII, Inc.,
Arch Street VII L.P.,  Boston  Financial,  nor any of their executive  officers,
directors,  partners or affiliates is the beneficial owner of any Units. None of
the  foregoing  persons  possesses a right to acquire  beneficial  ownership  of
Units.

The Fund does not know of any  existing  arrangement  that might at a later date
result in a change in control of the Fund.

Item 13.  Certain Relationships and Related Transaction

The Fund is required to pay certain fees to and  reimburse  certain  expenses of
the Managing General Partner or its affiliates  (including  Boston Financial) in
connection with the organization of the Fund and the offering of Units. The Fund
is also  required to pay certain fees to and reimburse  certain  expenses of the
Managing  General  Partner to its  affiliates  (including  Boston  Financial) in
connection  with  the  administration  of  the  Fund  and  its  acquisition  and
disposition  of  investments  in Local Limited  Partnerships.  In addition,  the
General Partners are entitled to certain Fund  distributions  under the terms of
the  Partnership  Agreement.  Also,  an affiliate of the General  Partners  will
receive  up to  $10,000  from the sale or  refinancing  proceeds  of each  Local
Limited  Partnership,  if it is  still a  limited  partner  at the  time of such
transaction.  All such fees,  expenses and  distributions  paid during the years
ended March 31, 1997,  1996, and 1995 are described below and in the sections of
the Prospectus  entitled "Estimated Use of Proceeds",  "Management  Compensation
and Fees" and  "Profits  and  Losses  for Tax  Purposes,  Tax  Credits  and Cash
Distributions." Such sections are incorporated herein by reference.

The Fund is permitted to enter into  transactions  involving  affiliates  of the
Managing  General  Partner,  subject to certain  limitations  established in the
Partnership Agreement.

Information  required  under this Item is contained  in Note 5 to the  Financial
Statements presented as a separate section of this Report. The affiliates of the
Managing   General   Partner  which  have  received  fee  payments  and  expense
reimbursements from the Fund are as follows:

Organizational fees and expenses and selling expenses

In  accordance  with the  Partnership  Agreement,  the Fund is  required  to pay
certain  fees to and  reimburse  expenses of the  Managing  General  Partner and
others in connection  with the  organization of the Fund and the offering of its
Limited Partnership Units. Commissions, fees and accountable expenses related to
the sale of the Units totaling  $6,304,898 have been charged directly to Limited
Partners'  equity. In connection  therewith,  $4,329,050 of selling expenses and
$1,975,848 of offering expenses incurred on behalf of the Fund have been paid to
an  affiliate  of the Managing  General  Partner.  The Fund is required to pay a
non-accountable expense allowance for marketing expense equal to a maximum of 1%
of Gross  Proceeds.  This  allowance  has not yet been  charged to the Fund.  In
addition, The Fund has paid $50,000 in organization costs to an affiliate of the
Managing  General  Partner.  This cost has been  included in the balance  sheet.
Total  organization and offering expenses  exclusive of selling  commissions and
underwriting  advisory  fees  did not  exceed  5.5% of the  Gross  Proceeds  and
organizational  and  offering  expenses,  inclusive of selling  commissions  and
underwriting advisory fees, did not exceed 15.0% of the Gross Proceeds.
Payments  made and  expenses  reimbursed  during the years ended March 31, 1997,
1996, and 1995 are as follows:
<TABLE>
<CAPTION>

<S>                                               <C>              <C>             <C> 
                                                  1997             1996            1995
                                                  -------------    ------------    -------------

     Organizational fees and expenses             $        -       $  3,583        $7,927

</TABLE>

<PAGE>


Acquisition fees and expenses

In  accordance  with the  Partnership  Agreement,  the Fund is  required  to pay
acquisition fees to and reimburse  acquisition  expenses of the Managing General
Partner or its affiliates for selecting, evaluating,  structuring,  negotiating,
and  closing  the  Partnership's  investments  in  Local  Limited  Partnerships.
Acquisition  fees  totaled  6%  of  the  gross  offering  proceeds.  Acquisition
expenses,  which  include  legal fees and  expenses,  travel and  communications
expenses, costs of appraisals, and accounting fees and expenses, totaled 1.5% of
the gross  offering  proceeds.  Acquisition  fees  totaling  $3,055,800  for the
closing of the Fund's Local Limited Partnership Investments have been paid to an
affiliate  of the  Managing  General  Partner.  Of  this  amount,  approximately
$2,567,000 is included as capital  contributions to Local Limited  Partnerships.
Acquisition expenses totaling $763,950 were incurred and have been reimbursed to
an affiliate of the Managing General Partner.  Payments made (refunds  received)
and expenses reimbursed during the years ended March 31, 1997, 1996 and 1995 are
as follows:
<TABLE>
<CAPTION>

<S>                                               <C>              <C>             <C> 
                                                  1997             1996            1995
                                                  -------------    ------------    -------------

Acquisition fees and expenses                     $  (3,017)       $    57,598     $  554,269

</TABLE>

Asset Management Fees

In  accordance  with the  Partnership  Agreement,  an  affiliate of the Managing
General  Partner  is paid an annual  fee for  services  in  connection  with the
administration of the affairs of the Fund. The affiliate  currently receives the
base amount of .558% (as adjusted by the CPI factor) of Gross Proceeds  annually
as the Asset  Management Fee. Fees earned during the years ended March 31, 1997,
1996 and 1995 are as follows:
<TABLE>
<CAPTION>

<S>                                               <C>              <C>             <C> 
                                                  1997             1996            1995
                                                  -------------    ------------    -------------

Asset Management Fees                             $277,575         $270,264        $263,289

</TABLE>

Salaries and benefits expense reimbursements

An affiliate of the Managing  General  Partner is reimbursed for the cost of the
Fund's salaries and benefits  expenses.  The  reimbursements  are based upon the
size and  complexity of the Fund's  operations.  Reimbursements  paid or accrued
during the years ended March 31, 1997, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>

<S>                                               <C>              <C>             <C> 
                                                  1997             1996            1995
                                                  -------------    ------------    -------------

Salaries and benefits
expense reimbursements                            $115,310         $123,712        $123,669
</TABLE>

Property Management Fees

Upon construction  completion,  in August of 1994,  Lansing  Management  Company
("LMC"),  an affiliate of the Managing  General  Partner,  became the management
agent for Twin Oaks Meadows. The management fee charged to the property is equal
to 5% of the  property  gross  revenues.  Fees charged for the three years ended
March 31, 1997, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
<S>                                             <C>             <C>               <C> 
                                                1997            1996              1995
                                                --------------  --------------    ---------


Property Management Fees                        $    19,215     $      17,388     $    7,245

</TABLE>



<PAGE>


Cash distributions paid to the General Partners

In accordance with the Partnership Agreement,  the General Partners of the Fund,
Arch Street VII,  Inc.  and Arch Street VII Limited  Partnership,  receive 1% of
cash  distributions  made to partners.  To date,  the Fund has not paid any cash
distributions to partners.

Additional  information  concerning  cash  distributions  and other fees paid or
payable to the Managing General Partner and its affiliates and the reimbursement
of expenses paid or payable to Boston  Financial and its  affiliates  during the
years  ended  March  31,  1997,  1996  and  1995 is  presented  in Note 5 to the
Financial Statements.



                                    PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)(1) and (a)(2) Documents filed as a part of this Report

In  response to this  portion of Item 14, the  financial  statements,  financial
statement schedules and the auditors' report relating thereto,  are submitted as
a separate section of this Report. See Index on page F-1 hereof.

The reports of auditors of the Local Limited Partnerships relating to the audits
of the financial statements of such Local Limited Partnerships appear in Exhibit
(28)(1) of this Report.

All other financial statement schedules and exhibits for which provision is made
in  the  applicable  accounting  regulations  of  the  Securities  and  Exchange
Commission are not required under related instructions or are inapplicable,  and
therefore have been omitted.

(a)(3)

(a)(3)(b)  Reports on Form 8-K:
           No  reports on Form 8-K were  filed  during the quarter ended 
               March 31, 1997.

(a)(3)(c)   Exhibits


                                                               
Number and Description in Accordance with                   
  Item 601 of Regulation S-K                                    
  --------------------------                                    

   27.  Financial Data Schedule

   28.  Additional Exhibits

     (a)  28.1 Reports of Other Independent Auditors


(a)(3)(d) None.



<PAGE>


                                 SIGNATURES



Pursuant to the  requirements of Section 13 or 15(d) 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.

      BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

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



     By:   /s/ William E. Haynsworth                             Date:
           William E. Haynsworth,
           Managing Director and
           Chief Operating Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been  signed by the  following  persons  on behalf of the  Managing  General
Partner of the Fund and in the capacities and on the dates indicated:



     By:   /s/ William E. Haynsworth                             Date:
           William E. Haynsworth,
           Managing Director and
           Chief Operating Officer



     By:   /s/ Fred N.Pratt Jr.                                  Date:
           Fred N Pratt, Jr.,
           A Managing Director




















Item 8.  Financial Statements and Supplementary Data

               BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

               ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 1997
                                       INDEX

                                                                    
                                                     Page No.          


Report of Independent Accountants
   For the years ended March 31, 1997 and 1996         F-2
   For the year ended March 31, 1995                   F-3

Financial Statements

   Balance Sheets - March 31, 1997 and 1996            F-4

   Statements of Operations - Years ended
     March 31, 1997, 1996, and 1995                    F-5

   Statements of Changes in Partners' Equity (Deficiency) -
     Years ended March 31, 1997, 1996, and 1995        F-6

   Statements of Cash Flows - Years ended
     March 31, 1997, 1996, and 1995                    F-7

   Notes to Financial Statements                       F-9

Financial Statement Schedule

   Schedule III - Real Estate and Accumulated
     Depreciation                                      F-17


      

      Other  schedules  have been omitted as they are either not required or the
      information required to be presented therein is available elsewhere in the
      financial statements and the accompanying notes and schedules.




<PAGE>


----------------------------------------------------------------------------

----------------------------------------------------------------------------




                     REPORT OF INDEPENDENT ACCOUNTANTS

To the Partners
Boston Financial Tax Credit Fund VII, A Limited Partnership:

We have audited the  accompanying  balance sheets of Boston Financial Tax Credit
Fund VII, A Limited  Partnership  ("the Fund") as of March 31, 1997 and 1996 and
the related statements of operations,  changes in partners' equity  (deficiency)
and cash flows and the financial statement schedule listed in Item 14(a) of this
Report  on Form  10-K,  for the years  ended  March  31,  1997 and  1996.  These
financial statements and the financial statement schedule are the responsibility
of the Fund's  management.  Our responsibility is to express an opinion on these
financial  statements and the financial  statement schedule based on our audits.
As of March 31, 1997 and 1996, 86% and 85%,  respectively,  of total assets, and
for the years  ended  March 31,  1997 and 1996,  100% of the equity in losses of
Local Limited  Partnerships,  reflected in the financial statements of the Fund,
relate to Local  Limited  Partnerships  for which we did not audit the financial
statements.  The financial  statements of these Local Limited  Partnerships were
audited by other  auditors  whose  reports  have been  furnished  to us, and our
opinion,   insofar  as  it  relates  to  those   investments  in  Local  Limited
Partnerships, is based solely on the reports of other auditors.

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

In our  opinion,  based on our audits and the  reports  of other  auditors,  the
financial statements referred to above present fairly, in all material respects,
the  financial  position  of Boston  Financial  Tax  Credit  Fund VII, A Limited
Partnership,  as of March 31, 1997 and 1996,  and the results of its  operations
and its cash flows for the years ended March 31,  1997 and 1996,  in  conformity
with generally accepted accounting principles.  In addition, in our opinion, the
financial  statement schedule  referred to above, when considered in relation to
the  basic  financial  statements  taken as a  whole,  presents  fairly,  in all
material respects, the information required to be included therein.



/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
June 19, 1997


<PAGE>







                       REPORT OF INDEPENDENT ACCOUNTANTS


To the Partners
Boston Financial Tax Credit Fund VII, A Limited Partnership:

We have audited the accompanying statements of operations,  changes in partners'
equity  (deficiency)  and cash flows of Boston  Financial Tax Credit Fund VII, A
Limited  Partnership  ("the  Fund") for the year  ended  March 31,  1995.  These
financial  statements  are the  responsibility  of the  Fund's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our  audits.  We did not audit the  financial  statements  of the Local  Limited
Partnerships  for the year ended March 31, 1995,  the  investments  in which are
recorded  using the  equity  method of  accounting  (see Note 3).  The equity in
losses of these  partnerships  represent 100% of the equity in loss of the Local
Limited  Partnerships  for the  year  ended  March  31,  1995.  Those  financial
statements  were audited by other  auditors whose reports have been furnished to
us, and our opinion, insofar as it relates to those investments in Local Limited
Partnerships, is based solely on the reports of other auditors.

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

In our opinion,  based on our audit and the reports of other auditors,  the
financial statements referred to above present fairly, in all material respects,
the results of its operations and its cash flows of Boston  Financial Tax Credit
Fund VII,  A Limited  Partnership,  as of March 31,  1995,  in  conformity  with
generally accepted accounting principles.






/s/ Arthur Andersen LLP
Arthur Andersen LLP
Boston, Massachusetts
June 16, 1995



<PAGE>


----------------------------------------------------------------------------
             BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
-----------------------------------------------------------------------------

                                         

                                                                              
                                BALANCE SHEETS

                            March 31, 1997 and 1996

<TABLE>
<CAPTION>

<S>                                                                  <C>                  <C> 
                                                                     1997                 1996
                                                                     -------------        ----------

Assets
Cash and cash equivalents                                            $     373,729        $      334,845
Marketable securities, at fair value  (Notes 1 and 3)                    3,240,944             3,855,342
Restricted cash (Note 2)                                                   239,155               227,320
Investments in Local Limited Partnerships (Note 4)                      31,792,098            34,328,400
Organization costs, net of accumulated
   amortization of  $40,833 in 1997 and
   $30,833 in 1996 (Note 2)                                                  9,167                19,167
Other assets                                                                39,556                29,943
                                                                     -------------        --------------
          Total Assets                                               $  35,694,649        $   38,795,017
                                                                     =============        ==============


Liabilities and Partners' Equity
Accounts payable to affiliates (Notes 2 and 5)                       $     304,382          $    212,975
Accrued expenses                                                            34,940                66,417
                                                                     -------------          ------------
          Total Liabilities                                                339,322               279,392
                                                                     -------------          ------------

Commitments (Note 7)

General, Initial and Investor Limited Partners' Equity                  35,405,419            38,536,506
Net unrealized losses on marketable securities                             (50,092)              (20,881)
                                                                     --------------         ------------
          Total Partners' Equity                                        35,355,327            38,515,625
                                                                     -------------          ------------
          Total Liabilities and Partners' Equity                     $  35,694,649          $ 38,795,017
                                                                     =============          ============
</TABLE>

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

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


                          STATEMENTS OF OPERATIONS

               For the Years Ended March 31, 1997, 1996 and 1995

<TABLE>
<CAPTION>

<S>                                                         <C>             <C>               <C> 
                                                            1997            1996              1995
                                                            -----------     -----------       ------
Revenue:
     Investment (Note 3)                                    $    223,158    $    219,674      $    287,872
     Other                                                       177,191          37,486            45,651
                                                            ------------    ------------      ------------
[GRAPHIC OMITTED]                         Total Revenue          400,349         257,160           333,523
                                                            ------------    ------------      ------------

Expenses:
     General and administrative expenses (includes
       reimbursements to an affiliate in the amounts of
       $115,310, $123,712 and $123,669
       in 1997, 1996 and 1995, respectively (Note 5)             240,204         245,641           298,586
     Asset management fees, related party (Note 5)               277,575         270,264           263,289
     Amortization                                                 45,831          40,752            32,275
     Interest (Note 6)                                                 -               -            14,475
                                                           -------------    ------------      ------------
        Total Expenses                                           563,610         556,657           608,625
                                                           -------------    ------------      ------------

Loss before equity in losses of
   Local Limited Partnerships                                   (163,261)       (299,497)         (275,102)

Equity in losses of
   Local Limited Partnerships (Note 4)                        (2,967,826)     (2,570,732)       (2,190,648)
                                                           -------------    ------------      ------------

Net Loss                                                   $  (3,131,087)   $(2,870,229)$     (2,465,750)
                                                           =============    =========== ================

Net Loss allocated
     To General Partners                                   $     (31,311)   $    (28,702)     $    (24,657)
     To Limited Partners                                      (3,099,776)     (2,841,527)       (2,441,093)
                                                           --------------   -------------     ------------
                                                           $  (3,131,087)   $ (2,870,229)     $ (2,465,750)
                                                           ==============   ============      ============

Net Loss per Limited Partnership Unit
     (50,930 Units)                                        $     (60.86)    $     (55.79)     $     (47.93)
                                                           =============    ============      ============

</TABLE>

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

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


                 STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)

                  For the Years Ended March 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>

<S>                                 <C>            <C>          <C>            <C>            <C>
                                                                               Net
                                                   Initial      Investor       Unrealized
                                    General        Limited      Limited        Gains
                                    Partners       Partners     Partners       (Losses)       Total

Balance at March 31, 1994           $  (5,597)     $  5,000     $ 43,884,592   $(163,678)     $ 43,720,317

Less:
   Other issuance expenses                 -              -          (7,927)             -         (7,927)

Net change in net unrealized losses
   on marketable securities
   available for sale                      -              -               -         25,587         25,587

Net Loss                             (24,657)             -      (2,441,093)             -      (2,465,750)
                                   ---------       --------    ------------      ---------     ------------

Balance at March 31, 1995            (30,254)         5,000      41,435,572       (138,091)      41,272,227

Less:
   Other issuance expenses                 -              -          (3,583)             -           (3,583)

Net change in net unrealized losses
   on marketable securities
   available for sale (Note 3)             -              -               -        117,210          117,210

Net Loss                            (28,702)              -     (2,841,527)              -       (2,870,229)
                                   --------        --------    -----------       ---------     ------------

Balance at March 31, 1996            (58,956)         5,000      38,590,462        (20,881)      38,515,625

Net change in net unrealized losses
   on marketable securities
   available for sale (Note 3)             -              -               -        (29,211)         (29,211)

Net Loss                             (31,311)             -      (3,099,776)             -       (3,131,087)
                                   ---------       --------    ------------      ---------     ------------

Balance at March 31, 1997          $ (90,267)      $  5,000    $ 35,490,686      $ (50,092)    $(35,355,327)
                                   =========       ========    ============      =========     ============

</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

                      For the Years Ended March 31, 1997, 1996 and 1995

<TABLE>
<CAPTION>

<S>                                                     <C>                <C>               <C> 
                                                        1997               1996              1995
                                                        --------------     --------------    --------

Cash flows from operating activities:
   Net Loss                                             $   (3,131,087)    $  (2,870,229)    $ (2,465,750)
   Adjustments to reconcile net loss
     to net cash provided by (used for)
     operating activities:
   Equity in losses of Local Limited Partnerships            2,967,826         2,570,732        2,190,648
   Amortization                                                 45,831            40,752           32,275
   Loss on sale of marketable securities                         6,034            47,442          251,095
   Increase (decrease) in cash arising from
    changes in operating assets and liabilities:
     Other assets                                               (9,613)           97,910            6,987
     Accounts payable to affiliates                             91,407           (46,611)         106,539
     Accounts payable and accrued expenses                     (31,477)          (18,250)          21,453
                                                        ---------------    -------------     ------------
Net cash provided by (used for) operating activities           (61,079)         (178,254)         143,247
                                                        --------------     -------------     ------------

Cash flows from investing activities:
   Purchases of marketable securities                       (1,194,741)       (9,964,941)     (27,229,730)
   Proceeds from sales and maturities
     of marketable securities                                1,773,894        11,867,431       39,617,868
   Investments in Local Limited Partnerships                  (663,227)       (2,907,333)     (11,690,591)
   Restricted cash                                             (11,835)         (227,320)               -
   Cash distributions received from Local
     Limited Partnerships                                      192,855            85,078           15,070
   Reimbursement of acquisition expenses                         3,017                 -                -
   Payment of acquisition fees and expenses                          -          (104,056)        (684,868)
                                                        --------------     -------------     ------------
Net cash provided by (used for) investing activities            99,963        (1,251,141)          27,749
                                                        --------------     -------------     ------------

Cash flows from financing activities:
   Payment of issuance expenses                                      -            (4,364)         (39,448)
   Advances from line of credit                                      -                 -        3,893,948
   Repayment of line of credit                                       -                 -       (3,893,948)
                                                        --------------     -------------     ------------
Net cash used for financing activities                               -            (4,364)         (39,448)
                                                        --------------     -------------     ------------

Net increase (decrease) in cash and cash equivalents            38,884        (1,433,759)         131,548

Cash and cash equivalents, beginning of period                 334,845         1,768,604        1,637,056
                                                        --------------     -------------     ------------

Cash and cash equivalents, end of period                $      373,729     $     334,845     $  1,768,604
                                                        ==============     =============     ============

</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 (continued)

                For the Years Ended March 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>


<S>                                                     <C>                <C>               <C> 
                                                        1997               1996              1995
                                                        --------------     --------------    --------

Supplemental disclosure of cash flow activity:
Cash paid for interest                                  $            -    $            -     $     14,475
                                                        ==============    ==============     ============
</TABLE>

Non-cash investing activity:

In 1995,  the  Partnership  issued a note  payable in the amount of  $260,840 in
connection  with  the  acquisition  of a  partial  interest  in a Local  Limited
Partnership. This note was repaid during the year ended March 31, 1996.


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
1.   Organization

Boston  Financial Tax Credit Fund VII, A Limited  Partnership  (the "Fund") is a
Massachusetts   limited  partnership   organized  to  invest  in  other  limited
partnerships  ("Local  Limited  Partnerships")  which own and operate  apartment
complexes  which are expected to be eligible for low income  housing tax credits
which may be applied against the federal income tax liability of an investor.

Arch Street VII, Inc., a Massachusetts corporation ("Arch Street, Inc."), is the
Managing General Partner of the Fund. Arch Street VII Limited Partnership ("Arch
Street  L.P."),  a  Massachusetts  limited  partnership  whose general  partners
consist of Arch Street,  Inc. and an affiliate of Arch Street,  Inc.,  is also a
General  Partner.  Both the  Managing  General  Partner and Arch Street L.P. are
affiliates of The Boston  Financial Group Limited  Partnership,  a Massachusetts
limited partnership ("Boston  Financial").  An affiliate of the General Partners
("SLP  Affiliate")  will be a special  limited  partner  in each  Local  Limited
Partnership  in which  the Fund  invests,  with the  right to  become a  general
partner under certain  circumstances.  The fiscal year of the Fund ends on March
31.

The Partnership  Agreement authorized the sale of up to 100,000 Units of limited
partnership interests ("Units") at $1,000 per Unit. Boston Financial Securities,
Inc., an affiliate of the General  Partners,  received  selling  commissions and
underwriting advisory fees which did not exceed 7.0% and 1.5%, respectively,  of
Gross Proceeds for Units sold by the entity as a soliciting  dealer. On November
30, 1993, the Fund held its final investor closing.  In total, the Fund received
$50,930,000 of capital contributions from investors admitted as Limited Partners
for 50,930 Units.

The Partnership Agreement provides that all cash available for distribution will
be allocated 99% to the Limited Partners and 1% to the General Partners. Sale or
refinancing proceeds generally will be distributed first to the Limited Partners
in an  amount  equal to their  adjusted  capital  contributions,  second  to the
General Partners in an amount equal to their capital contributions, third to the
General  Partners  (after payment of the 6% return as set forth in Section 4.2.3
of the  Partnership  Agreement,  and  of any  accrued  but  unpaid  Subordinated
Disposition  Fee, a fee equal to 1% of the sales price of a property  owned by a
Local Limited  Partnership)  in such amount as is necessary to cause the General
Partners to have received 5% of all  distributions to the Partners,  and lastly,
95% to the Limited Partners and 5% to the General Partners.

Profits and losses for tax  purposes  arising from  general  operations  and tax
credits  generally  will be allocated 99% to the Limited  Partners and 1% to the
General Partners.  However, as set forth in the Partnership  Agreement,  profits
and losses for tax purposes arising from a sale or refinancing generally will be
allocated  among the  Partners  in such  manner as is  necessary  to cause their
respective capital accounts to reflect the amount that would be distributable to
them in accordance with the priorities set forth in the preceding paragraph,  if
all of the Fund's assets were sold for their federal adjusted basis and the Fund
were then liquidated.

All distributions of cash available for distribution or distributions of sale or
refinancing proceeds, and all allocations of profits and losses for tax purposes
from normal  operations and from a sale or refinancing or of tax credits,  which
are  distributed or allocated to the General  Partners,  will be allocated 1% to
Arch Street, Inc. and 99% to Arch Street L.P.

Under the terms of the Partnership  Agreement,  the Fund initially designated 5%
of the Gross Proceeds from the sale of Units as a Reserve for working capital of
the Fund and  contingencies  related to ownership of Local  Limited  Partnership
interests.  The Managing  General  Partner may increase or decrease such amounts
from time to time,  as it deems  appropriate.  At March 31,  1997,  the Managing
General  Partner has  designated  $2,538,000  of  marketable  securities as such
Reserve.




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


------------------------------------------------------------------------------
                     NOTES TO FINANCIAL STATEMENTS (Continued)
------------------------------------------------------------------------------

2.   Significant Accounting Policies

Basis of Presentation

The Fund accounts for its  investments in Local Limited  Partnerships  using the
equity method of accounting because the Fund does not have a majority control of
the major operating and financial policies of the Local Limited  Partnerships in
which it invests.  Under the equity  method,  the investment is carried at cost,
adjusted  for  the  Fund's  share  of  income  or  loss  of  the  Local  Limited
Partnerships,  additional  investments and for cash distributions from the Local
Limited Partnerships. Equity in income or loss of the Local Limited Partnerships
is included  currently in the Fund's  operations.  The Fund has no obligation to
fund  liabilities  of the Local  Limited  Partnerships  beyond  its  investment,
therefore,  a Limited Partnership  Investment will not be carried below zero. To
the extent that equity in losses are incurred when a Local Limited Partnership's
respective investment balance has been reduced to zero, losses will be suspended
to be used against future income.

Excess investment costs over the underlying net assets acquired have arisen from
acquisition fees paid and expenses reimbursed to an affiliate of the Fund. These
fees and  expenses  are  included  in the Fund's  Investments  in Local  Limited
Partnerships  and will be amortized on a straight-line  basis over 35 years once
construction of the properties is completed.

The Fund  recognizes a decline in the carrying  value of its  investment in
Local Limited Partnerships when there is evidence of a non-temporary  decline in
the  recoverable  amount  of the  investment.There  is a  possibility  that  the
estimates  relating to reserves for non-temporary  declines in carrying value of
investments in Local Limited  Partnerships  may be subject to material near term
adjustments.

The  Partnership,  as a limited  partner in the Local Limited  Partnerships,  is
subject to risks  inherent in the  ownership  of  property  which are beyond its
control,  such as  fluctuations  in  occupancy  rates  and  operating  expenses,
variations in rental schedules,  proper maintenance and continued eligibility of
tax  credits.  If the cost of  operating a property  exceeds  the rental  income
earned thereon,  the Partnership may deem it in its best interest to voluntarily
provide funds in order to protect its  investment.  

The General  Partners  have decided 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
about  the Local  Limited  Partnerships  that is  included  in the  accompanying
financial statements is as of December 31, 1996, 1995, and 1994.

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the  reported  amounts  of assets  and  liabilities  and  disclosures  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents  consist of short-term  money market  instruments with
original  maturities  of 90 days or less at  acquisition  and  approximate  fair
value.

Restricted Cash

The Fund has set aside in an escrow account future capital contributions related
to its  investment in one Local  Limited  Partnership.  Interest  earned on this
deposit is payable to the local  general  partner.  At March 31,  1997 and 1996,
$13,897 and $2,008, respectively, of interest is included in accounts payable to
an affiliate.



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


                    NOTES TO FINANCIAL STATEMENTS (Continued)

2.   Significant Accounting Policies (continued)

Marketable Securities

The Fund's  investments  in securities  are  classified as "Available  for Sale"
securities and reported at fair value as reported by the brokerage firm at which
the securities  are held.  Realized gains or losses from the sales of securities
are based on the specific identification method. Unrealized gains and losses are
excluded from earnings and reported as a separate component of partners' equity.

Deferred Fees

Costs incurred in connection with the organization of the Fund,  amounting to 
$50,000,  have been deferred and are being amortized on a straight-line  basis 
over 60 months.

Income Taxes

No provision  for income taxes has been made as the  liability for such taxes is
an obligation of the partners of the Fund.

Reclassifications

Certain  amounts in prior  years  financial  statements  have been  reclassified
herein to conform to current year presentation.

Effect of recently issued Accounting Standard

The  Financial  Accounting  Standards  Board has issued  Statement of Accounting
Standards No. 121,  Accounting for the  Impairment of Long-Lived  Assets and for
Long-Lived  Assets to Be  Disposed  Of,  which is  effective  for  fiscal  years
beginning after December 15, 1995. This standard requires that long-lived assets
be reviewed for recoverability.  Impairment losses are recognized when events or
changes in  circumstances  indicate that the carrying amount of an asset may not
be  recoverable.  The Fund has adopted the new standard for its year ended March
31, 1997, however, it has not had a significant effect on the financial position
or results of operations.



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


                    NOTES TO FINANCIAL STATEMENTS (Continued)

3.   Marketable Securities

A summary of the marketable securities is as follows:
<TABLE>
<CAPTION>

<S>                                       <C>                    <C>          <C>            <C>
                                                                 Gross        Gross
                                                                 Unrealized   Unrealized
                                          Cost                   Gains        Losses         Fair Value
Debt securities issued by
   the US Treasury and other
   US government corporations
   and agencies                           $  2,125,647           $    164     $  (19,591)    $ 2,106,220

Mortgage backed securities                   1,165,389                  -        (30,665)      1,134,724
                                          ------------           --------     ----------     -----------

Marketable securities at
   March 31, 1997                         $  3,291,036           $    164     $  (50,256)    $ 3,240,944
                                          ============           ========     ==========     ===========

Debt securities issued by
   the US Treasury and other
   US government corporations
   and agencies                           $  2,563,670           $      -     $  (10,111)    $ 2,553,559

Mortgage backed securities                   1,312,553                  -        (10,770)      1,301,783
                                          ------------           --------     ----------     -----------

Marketable securities at
   March 31, 1996                         $  3,876,223           $      -     $  (20,881)    $ 3,855,342
                                          ============           ========     ==========     ===========
</TABLE>

The contractual maturities at March 31, 1997 are as follows:
<TABLE>
<CAPTION>
                                                                                              
<S>                                                             <C>                     <C>
                                                                                              Fair
                                                                     Cost                     Value


Due in one year or less                                         $    812,828            $       808,544
Due in one to five years                                           1,312,819                  1,297,676
Mortgage backed securities                                         1,165,389                  1,134,724
                                                                ------------            ---------------
                                                                $  3,291,036            $     3,240,944
                                                                ============            ===============
</TABLE>

Actual maturities may differ from contractual  maturities because some borrowers
have the right to call or prepay obligations. Proceeds from sales and maturities
of securities were approximately $1,774,000, $11,867,000 and $39,618,000 for the
years ended March 31, 1997, 1996 and 1995, respectively.  Included in investment
income are gross  gains of  $1,110,  $46,425  and  $54,186  and gross  losses of
$7,144, $93,867 and $305,281 which were realized on these sales during the years
ended March 31, 1997, 1996 and 1995, respectively.


4.   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
generally  acquired a 99%,  with the  exception  of  Springwood  which is 19.8%,
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.


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


                       NOTES TO FINANCIAL STATEMENTS (Continued)

4.  Investments in Local Limited Partnerships (continued)

The following is a summary of Investments in Local Limited Partnerships at March
31:
<TABLE>
<CAPTION>

<S>                                                                         <C>                   <C> 
                                                                            1997                  1996
                                                                            --------------        ----------
Capital Contributions paid to Local Limited
   Partnerships and purchase price paid to
   withdrawing partners of Local Limited
   Partnerships                                                             $  39,189,961          $  38,526,734

Cumulative equity in losses of Local Limited Partnerships                      (8,266,054)            (5,298,228)

Cash distributions received from Local Limited Partnerships                      (293,003)              (100,148)
                                                                            -------------          -------------

Investments in Local Limited Partnerships before adjustments                   30,630,904             33,128,358

Excess of investment cost over the underlying net assets acquired:

   Acquisition fees and expenses                                                1,252,338              1,255,355

   Accumulated amortization of acquisition fees and expenses                      (91,144)               (55,313)
                                                                            -------------          -------------

Investments in Local Limited Partnerships                                   $  31,792,098          $  34,328,400
                                                                            =============          =============
</TABLE>

Summarized financial information as of December 31, 1996, 1995 and 1994, (due to
the Fund's policy of reporting the  financial  information  of its Local Limited
Partnership  interests  on a 90 day lag  basis) of the  nineteen  Local  Limited
Partnerships in which the Fund was invested as of that date is as follows:

Summarized Balance Sheets - as of December 31,
<TABLE>
<CAPTION>
<S>                                                        <C>                   <C>                  <C> 
                                                           1996                  1995                 1994
                                                           -------------         -------------       ---------

Assets:
   Investment property, net                                $  98,519,189         $103,534,360$         97,417,406
   Current assets                                              3,275,453             3,318,534          3,377,141
   Other assets                                                4,260,927             3,433,261          4,275,247
                                                           -------------         -------------         ----------
              Total Assets                                 $ 106,055,569         $110,286,155$         105,069,794
                                                           =============         ============         =============

Liabilities and Partners' Equity:
   Current liabilities (includes current portion of
     long term debt)                                       $   3,554,946         $   3,181,041         $   5,831,462
   Long-term debt                                             59,302,789            59,422,079            51,450,477
   Other debt                                                  3,475,208             5,152,338             3,577,454
                                                           -------------         -------------         -------------
       Total Liabilities                                      66,332,943            67,755,458            60,859,393

Fund's Equity                                                 30,144,694            32,391,978            30,432,391
Other Partners' Equity                                         9,577,932            10,138,719            13,778,010
                                                           -------------         -------------         -------------
Total Liabilities and Partners' Equity                     $ 106,055,569         $ 110,286,155         $105,069,794
                                                           =============         =============         ============
</TABLE>



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


                      NOTES TO FINANCIAL STATEMENTS (Continued)

4.   Investments in Local Limited Partnerships (continued)

Summarized Statements of Operations-
for the years ended December 31,:
<TABLE>
<CAPTION>
<S>                                                        <C>                   <C>                   <C> 
                                                           1996                  1995                  1994
                                                           -------------         -------------         --------

Rental and other revenue                                   $  12,310,800         $  11,088,736         $  6,379,944
                                                           -------------         -------------         ------------

Expenses:
   Operating                                                   6,189,975             5,393,417            3,523,408
   Interest                                                    5,112,085             4,730,658            2,573,295
   Depreciation and amortization                               4,404,662             3,979,209            2,496,016
                                                           -------------         -------------         ------------
       Total Expenses                                         15,706,722            14,103,284            8,592,719
                                                           -------------         -------------         ------------

Net loss                                                   $  (3,395,922)        $  (3,014,548)        $ (2,212,775)
                                                           =============         =============         ============

Fund's share of net loss                                   $  (2,967,826)        $  (2,570,732)        $ (2,190,648)
                                                           =============         =============         ============
Other Partners' share of net loss                          $    (428,096)        $    (443,816)        $    (22,127)
                                                           =============         =============         ============
</TABLE>


Several of the Local  Limited  Partnerships  in which the Fund has  invested had
either no  operations  or less than a full  period of  operations  for the years
ended  December  31,  1995  and  1994.  Accordingly,  the  combined  results  of
operations are not indicative of the expected results in the future.

The  Partnership's  equity as reflected  by the Local  Limited  Partnerships  of
$30,144,694  differs  from  the  Partnership's   Investments  in  Local  Limited
Partnerships  before adjustment of $30,630,904  principally  because: a) capital
contributions  made by the  Partnership  and held in escrow by the Local Limited
Partnerships  are not  currently  reflected  in the equity of the Local  Limited
Partnerships  and b) capital  contributions  made by the Partnership  during the
quarter  ended  March  31,  1997 are not  reflected  in the  equity of the Local
Limited Partnerships at December 31, 1996.

5.   Transactions with Affiliates

In  accordance  with the  Partnership  Agreement,  the Fund is  required  to pay
certain  fees to and  reimburse  expenses of the  Managing  General  Partner and
others in connection  with the  organization of the Fund and the offering of its
Limited  Partnership  Units.  As  of  March  31,  1997,  commissions,  fees  and
accountable  expenses related to the sale of the Units totaling  $6,304,898 have
been charged  directly to Limited  Partners'  equity.  In connection  therewith,
$4,329,050 of selling expenses and $1,975,848 of offering  expenses  incurred on
behalf  of the Fund  have  been paid to an  affiliate  of the  Managing  General
Partner.  The Fund is required to pay a  non-accountable  expense  allowance for
marketing expense equal to a maximum of 1% of Gross Proceeds; this allowance has
not yet been  charged to the Fund.  In  addition,  the Fund has paid  $50,000 in
organization  costs to an affiliate of the Managing General  Partner.  This cost
has been included in the balance sheet. Total organization and offering expenses
exclusive of selling  commissions and underwriting  advisory fees did not exceed
5.5% of the Gross Proceeds and organizational  and offering expenses,  inclusive
of selling  commissions and underwriting  advisory fees, did not exceed 15.0% of
the Gross Proceeds.

In  accordance  with the  Partnership  Agreement,  the Fund is  required  to pay
acquisition fees to and reimburse  acquisition  expenses of the Managing General
Partner or its affiliates for selecting,  evaluating,  structuring,  negotiating
and closing the Fund's  investments in Local Limited  Partnerships.  Acquisition
fees totaled 6.0% of Gross Proceeds.  Acquisition expenses totaled 1.5% of Gross
Proceeds. Acquisition fees totaling $3,055,800 have been paid to an affiliate of
the  Managing  General  Partner  for the  closing  of the Fund's  Local  Limited
Partnership Investments.


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

                   NOTES TO FINANCIAL STATEMENTS (Continued)

5.  Transactions with Affiliates (continued)

Approximately  $2,567,000 of these fees are classified as capital  contributions
to Local Limited Partnerships in Note 4 to the Financial Statements. Acquisition
expenses  totaling $763,950 have been reimbursed to an affiliate of the Managing
General Partner.

An affiliate of the Managing  General Partner  receives the base amount of .558%
(as  adjusted  by the  CPI  factor)  of  Gross  Proceeds  annually  as an  Asset
Management Fee for  administering the affairs of the Fund. Asset Management Fees
of $277,575,  $270,264 and $263,289 have been included in expenses for the years
ended March 31, 1997, 1996, and 1995, respectively. Included in accounts payable
to affiliates at March 31, 1997 and 1996 is $264,542 and $193,584.

An affiliate of the Managing  General  Partner is reimbursed for the actual cost
of the  Fund's  operating  expenses.  Included  in  general  and  administrative
expenses for the years ended March 31, 1997, 1996 and 1995 is $115,310, $123,712
and $123,669,  respectively, that the Fund has paid or accrued for reimbursement
for  salaries  and  benefits.  The  amounts  payable at March 31,  1997 and 1996
totaled $25,943 and $14,366, respectively.

Upon construction  completion,  in August of 1994,  Lansing  Management  Company
("LMC"),  an affiliate of the Managing  General  Partner,  became the management
agent for Twin Oaks Meadows. The management fee charged to the property is equal
to 5% of the property  gross  revenues.  Included in  operating  expenses of the
summarized income  statements in Note 4 to the financial  statements is $19,215,
$17,388 and $7,245 at December 31, 1996, 1995 and 1994, respectively.

6.   Line of Credit

In September of 1994, the  Partnership  entered into a line of credit  agreement
with a brokerage  firm. The line of credit may have a balance up to $11,000,000.
Under the terms of the agreement,  the line is  collateralized by the marketable
securities  held by the  brokerage  firm.  Interest is  calculated at the London
InterBank  Offering  Rate  (LIBOR)  for the  period  that  the  credit  has been
extended.  During the year ended March 31,  1995,  the Fund  borrowed and repaid
$3,893,948  on the line of credit.  Interest  paid for the year ended  March 31,
1995 totaled $14,475.  There were no borrowings  during the year ended March 31,
1996. The line of credit expired on December 31, 1995.

7.   Commitments

At March 31, 1997, the Fund has committed to make future  capital  contributions
and pay future  purchase price  installments on its investments in Local Limited
Partnerships.  These future  payments are  contingent  upon the  achievement  of
certain  criteria as set forth in the Local Limited  Partnership  Agreements and
total  approximately $752,000.  In  addition, the Fund has set aside $217,000in 
future capital contributions to one Local Limited Partnership.


<PAGE>
 ------------------------------------------------------------------------------
             BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
------------------------------------------------------------------------------
                NOTES TO FINANCIAL STATEMENTS (Continued)

8.   Federal Income Taxes

A  reconciliation  of the loss reported in the  Statements of Operations for the
fiscal  years  ended  March 31,  1997,  1996 and 1995 to the loss  reported  for
federal income tax purposes for the years ended December 31, 1996, 1995 and 1994
are as follows:
<TABLE>
<CAPTION>

<S>                                                         <C>              <C>               <C> 
                                                            1997             1996              1995
                                                            --------------   -------------     --------

Net Loss per Statements of Operations                       $   (3,131,087)  $ (2,870,229)     $ (2,465,750)

   Adjustment to reflect March 31, fiscal year-end
     to December 31 tax year-end                                  (121,888)        71,877          (172,924)

   Adjustment for equity in losses of Local Limited
     Partnerships for (tax) financial reporting
      purposes over equity in losses for
      (financial reporting) tax purposes                           839,370       (601,658)         (352,615)

   Adjustment of amortization for financial reporting
     purposes over (under) amortization for tax purposes            (9,709)        (2,016)            1,614

   Related party expenses not paid at December 31,
     not deductible for tax purposes                               262,410        199,758           156,174

   Related party expenses paid in current year
     but expensed for financial reporting purposes
     in prior year                                                (199,758)      (156,174)         (254,650)

   Income not recognized for financial
     reporting purposes                                                  -           (610)                -
                                                            --------------   ------------      ------------

Net Loss for federal income tax purposes                    $   (2,360,662)   $(3,359,052)     $(3,088,151)
                                                            ==============   ============      ===========
</TABLE>

The  carrying   value  of  the   Partnership's   Investments  in  Local  Limited
Partnerships is approximately  $232,000 greater for financial reporting purposes
than for tax return purposes because,  the equity in losses of the Local Limited
Partnerships  is  approximately   $210,000  greater  for  tax  purposes  due  to
accelerated  tax  depreciation  methods,  offset by cancellation of indebtedness
income  recorded by one Local Limited  Partnership for tax purposes but recorded
as a reduction of property basis for financial reporting purposes.  The carrying
values  of the  Partnership's  other  assets  and  liabilities  is the  same for
financial reporting and tax return purposes.














Boston Financial Tax Credit Fund VII, A Limited Partnership
Schedule III - Real Estate and Accumulated Depreciation
of Property Owned by Local Limited Partnerships
Which Registrant has Invested at March 31, 1997

                                         COST OF INTEREST AT ACQU'N DATE
                                         --------------------------------------
<TABLE>
<CAPTION>
<S>                   <C>     <C>            <C>       <C>            <C>   
                                                                          NET
                                                                      IMPROVEMENTS
                      NUMBER    TOTAL                  BUILDINGS /    CAPITALIZED
                        OF     ENCUM-                  IMPROVEMENTS   SUBSEQUENT TO
DESCRIPTION           UNITS   BRANCES *      LAND      & EQUIPMENT    ACQUISITION

Low and Moderate
   Income Apartment
 Complexes

Oak Ridge Apartments     152  $4,150,456     $727,440       $583,725     $5,703,137
  Macon, GA
Santa Fe Oaks Phase      129   3,754,237      382,394        642,179      5,979,956
II
  Gainesville, FL
Andrew's Pointe           57   2,370,604       95,000      3,430,523         48,537
  Burnsville, MN
Palo Verde II             60   1,106,082      148,858      2,537,261         10,313
  Henderson, NY
Woods Lane               156   3,384,986      312,000      5,817,580         32,148
  Rogers, AR
Crafton Place             84   1,692,493      126,001      3,083,929              0
  Fayetteville, AR
Guardian Place           120   2,988,767      677,786      1,838,034      2,972,628
  Richmond, VA
Twin Oaks Meadows         63   1,927,258            0        720,394      2,529,371
  Lansing, MI
Sunrise Terrace           52   1,223,697      149,959      2,719,607              0
  Madera,CA
Wynmor                   324   5,916,767      324,000      6,553,123      9,067,995
  Brooklyn Park, MN
Citrus Glen              176   5,470,969      500,000        759,632      9,220,251
  Orlando, FL
St. Andrews Pointe       150   4,703,499      491,634      7,349,439        790,326
  Columbia, SC
Des Moines Street         42   1,737,049      300,000      2,223,447        498,317
Village
  Des Moines, IA
Fountain Lakes           180   4,255,148      357,800      4,057,935      2,898,341
  Benton, AR
Fairhaven Manor           40     956,585      176,182      2,043,351          1,168
  Burlington, WA
Grand Boulevard           30   1,913,294       25,580      1,570,044      1,346,267
  Chicago, IL
Los Claveles II          180   6,553,050      335,000      6,842,254         21,516
  Trujilio Alto, PR
Harford Commons           30   1,745,080       28,000      2,680,017         31,387
  Baltimore, MD
Springwood (2)           113   3,966,075      296,280      2,937,028      4,248,155
  Tallahassee, FL


                      --------------------------------------------------------------

               Totals  2,138 $59,816,096   $5,453,914    $58,389,502    $45,399,813
                      ==============================================================
</TABLE>



<PAGE>



                      GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31,          
                                          1996
                    --------------------------------------------------   
<TABLE>
<CAPTION>
<S>                   <C>        <C>                     <C>           <C>   <C>      <C>
                                                                             LIFE ON
                                                                             WHICH
                                 BUILDINGS                                   DEPREC
                                                                             IATION
                                   AND                   ACCUMULATED   DATE  IS       DATE
                                                                             COMPUTED
DESCRIPTION           LAND       IMPROVEMENTS TOTAL      DEPRECIATION  BUILT  (YEARS) ACQUIRED

Low and Moderate
   Income Apartment
Complexes

Oak Ridge             $727,440   $6,286,862   $7,014,302     $916,166  8/93  10 & 30  12/31/92
Apartments
  Macon, GA
Santa Fe Oaks          382,394    6,622,135    7,004,529      926,405  5/93  10 & 30  12/31/92
Phase II
  Gainesville, FL
Andrew's Pointe         95,000    3,479,060    3,574,060      418,237 12/93  7 & 27.5 04/13/92
  Burnsville, MN
Palo Verde II          148,858    2,547,574    2,696,432      292,919 10/93  5 - 27.5 05/19/93
  Henderson, NY
Woods Lane             312,000    5,849,728    6,161,728      762,856  7/93  7 & 27.5 07/30/93
  Rogers, AR
Crafton Place          126,001    3,083,929    3,209,930      412,534  7/93  7 & 27.5 07/30/93
  Fayetteville, AR
Guardian Place         677,786    4,810,662    5,488,448      401,667  8/94   5 - 40  10/07/93
  Richmond, VA
Twin Oaks Meadows      307,264    2,942,501    3,249,765      396,315  8/94  useful   10/29/93
                                                                              lives
  Lansing, MI
Sunrise Terrace        149,959    2,719,607    2,869,566      313,725 11/93  useful   11/24/93
                                                                              lives
  Madera,CA
Wynmor               1,224,989   14,720,129   15,945,118    1,521,932  9/94  7, 15,   12/22/93
                                                                               & 30
  Brooklyn Park, MN
Citrus Glen                 10   10,479,873   10,479,883    1,012,279  9/94  5 - 27.5 12/30/93
  Orlando, FL
St. Andrews Pointe     491,634    8,139,765    8,631,399      733,603  8/94  10 & 30  01/05/94
  Columbia, SC
Des Moines Street      303,451    2,718,313    3,021,764      143,516  4/95  useful   01/31/94
Village                                                                       lives
  Des Moines, IA
Fountain Lakes         357,800    6,956,276    7,314,076      801,082  1/94  7 - 27.5 02/02/94
  Benton, AR
Fairhaven Manor        176,182    2,044,519    2,220,701      180,664  2/94  5 - 7 &  03/08/94
                                                                                40
  Burlington, WA
Grand Boulevard         31,580    2,910,311    2,941,891      156,479  7/95  useful   08/03/94
                                                                              lives
  Chicago, IL
Los Claveles II        335,000    6,863,770    7,198,770      491,978  8/94   8 & 40  08/31/94
  Trujilio Alto, PR
Harford Commons         28,000    2,711,404    2,739,404       94,492 12/95  useful    2/28/95
                                                                              lives
  Baltimore, MD
Springwood (2)         296,280    7,185,183    7,481,463      747,191  8/95  useful   12/31/94
                                                                              lives
  Tallahassee, FL

                    --------------------------------------------------
                       6171628    103071601    109243229     10724040

                   ==================================================
</TABLE>


<PAGE>


(1) Total aggregate cost for Federal Income Tax purposes is $ 110,230,661.

(2) Boston Financial Tax Credit Fund VII has a 20% ownership
interest
      in Springwood Apartments, A Limited
Partnership.

                    * Mortgage notes payable  generally  represent  non-recourse
                      financing  of  low-income  housing  projects  payable with
                      terms of up to 40 years  with  interest  payable  at rates
                      ranging  from  9.75%  to  12%.  The  Partnership  has  not
                      guaranteed any of these mortgage notes payable.
Summary of property owned and accumulated depreciation:
<TABLE>
<CAPTION>

<S>                                                              <C>                                                         
Property Owned December 31, 1996                                 Accumulated Depreciation December 31,
                                                                 1996
------------------------------------------------------------     ---------------------------------------
Balance at beginning of period                 $110,075,465      Balance at beginning of     $6,540,475
                                                                 period
  Additions during period:                                         Additions during
                                                                 period:
                                                                      Depreciation            4,183,565
                                                                                           -------------
     Acquisitions                            0                   Balance at close of        $10,724,040
                                                                 period
                                                                                           =============
     Improvements                      155,579
etc.
                                   ------------
                                                    155,579
  Deductions during period:

Reduction of building basis due to developer
   fee write off                     (987,430)
Disposition of real estate               (385)
                                   ------------
                                                  (987,815)
                                               -------------
Balance at close of period                     $109,243,229
                                               =============



Property Owned December 31, 1995                                 Accumulated Depreciation December 31,
                                                                 1995
------------------------------------------------------------     ---------------------------------------
Balance at beginning of period                 $100,659,642      Balance at beginning of     $2,742,246
                                                                 period
  Additions during period:                                         Additions during
                                                                 period:
                                                                      Depreciation            3,798,229
                                                                                           -------------
     Acquisitions                    8,778,830                   Balance at close of         $6,540,475
                                                                 period
                                                                                           =============
     Improvements                    1,937,926
etc.
                                   ------------
                                                 10,716,756
  Deductions during period:

                                   (1,300,933)
                                   ------------
  Disposition of real estate                    (1,300,933)
                                               -------------
Balance at close of period                     $110,075,465
                                               =============


Property Owned December 31, 1994                                 Accumulated Depreciation December 31,
                                                                 1994
------------------------------------------------------------     ---------------------------------------
Balance at beginning of period                  $43,998,728      Balance at beginning of       $462,061
                                                                 period
  Additions during period:                                         Additions during
                                                                 period:
                                                                      Depreciation            2,280,185
                                                                                           -------------
     Acquisitions                   55,723,485                   Balance at close of         $2,742,246
                                                                 period
                                                                                           =============
     Improvements                      937,429
etc.
                                   ------------
                                                 56,660,914
  Deductions during period:

Disposition of real estate                   0
                                   ------------
                                                          0
                                               -------------
Balance at close of period                     $100,659,642
                                               =============
</TABLE>


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

             Annual Report on form 10-K
           For The Year Ended March 31, 1997
            Reports of Independent Auditors

<PAGE>
[Letterhead]

[LOGO]
KPMG Peat Marwick LLP


           Independent Auditors Report

The Partners
Springwood Apartments,
A Limited Partnership:


We have audited the  accompanying  balance  sheets of Springwood  Apartments,  A
Limited Partnership as of December 31, 1995 and 1994, and the related statements
of loss, partners' capital, and cash flows for the year ended December 31, 1995.
These  financial   statements  are  the   responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of  Springwood  Apartments,  A
Limited  Partnership  as of  December  31,  1995 and 1994 and the results of its
operations and its cash flows for the year ended December 31, 1995 in conformity
with generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP

February 16, 1996
<PAGE>





[Letterhead]

[LOGO]
WOLPOFF & COMPANY, LLP



To the Partners
BHP/Harford Commons Limited Partnership
Baltimore, Maryland

INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS


We have audited the  accompanying  balance sheet of BHP/Harford  Commons Limited
Partnership  (a  development  stage  company) as of December 31,  1995,  and the
related  statements  of partners'  capital and cash flows from  February 1, 1995
(inception)  through  December  31, 1995.  These  financial  statements  are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of BHP/Harford  Commons Limited
Partnership (a development  stage company) as of December 31, 1995, and its cash
flows from February 1, 1995 (inception) through December 31, 1995, in conformity
with generally accepted accounting principles.

/s/ Walpoff & Company, LLP
WOLPOFF & COMPANY, LLP


Baltimore, Maryland
March 29, 1996
<PAGE>



[Letterhead]

[LOGO]
Reznick Fedder & Silverman



To the Partners
BHP/Harford Commons Limited Partnership
Baltimore, Maryland

INDEPENDENT AUDITOR'S REPORT 


We  have  audited   the  accompanying  balance  sheet of  BHP/Harford  Commons
Limited  Partnership  as of December 31,  1996,  and the related  statements  of
profit and loss (on HUD Form No. 92410),  partners'equity and cash flows for the
year then  ended.  These  financial  statements  are the  responsibility  of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of BHP/Harford  Commons Limited
Partnership as of December 31, 1996, and  the results of its operations, changes
in partners' equity and its  cash flows,  in conformity with generally  accepted
accounting principles.

Our  aduit was made for  the   purpose  of  forming  an   opinion  on  the basic
financial statements taken as a whole. The supplemental  information on pages 19
through 31 is  presented  for the purposes of  additional  analysis and is not a
required part of the basic financial  statements and, in our opinion,  is fairly
stated in all material  respects in relation to the basic  financial  statements
taken as a whole.

In accordance with Government Auditing  Standards,  we have also issued a report
dated February 28,1997,  on our  consideration of BHP/Harford Commons Limited 
Partnership's  internal control structure  and on its compliance with specific 
requirements applicable to CDA programs, affirmative fair housing, and laws and
regulations applicable to the financial statements.

/s/Reznick Fedder & Silverman
Federal Employer
Identification Number:
52-1088612


Baltimore, Maryland
February 28, 1997

Audit principal: William T. Riley, Jr.
<PAGE>


[Letterhead]

[LOGO]
KEVANE, PETERSON SOTO & PASARELL


INDEPENDENT AUDITORS' REPORT

To the Partners of
LOS CLAVELES, S.E. LIMITED PARTNERSHIP            HUD Field Office Director
San Juan, Puerto Rico                             San Juan, Puerto Rico


    We have audited the  accompanying  statement  of  financial  position of LOS
CLAVELES,  S.E. LIMITED PARTNERSHIP,  FHA Project No. RQ-46-E-005-019 (a Limited
Partnership)  as of December 31, 1996 and 1995,  and the related  statements  of
loss, changes in partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

     In our opinion,  the financial statements referred to above present fairly,
in all material respects,  the financial position of LOS CLAVELES,  S.E. Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations,
changes  in  partners'  equity and its cash  flows for the year then  ended,  in
conformity with generally accepted accounting principles.

Our audit  were  conducted  for the  purpose  of forming an opinion on the basic
financial  statements taken as a whole.  The supplemental  data included in this
report  (shown  as  Exhibits  A  though  H) are  presented  for the  purpose  of
additional  analysis  and  are  not a  required  part  of  the  basic  financial
statements of HUD Project No. RQ46-E-005-19. Such information has been subjected
to  the  auditing  procedures  applied  in the  audit  of  the  basic  financial
statements,  and in our opinion,  is fairly  stated in all material  respects in
relation to the basic financial statements taken as a whole.
<PAGE>


In accordance with Government Auditing  Standards,  we have also issued a report
dated February 5,1997,  on our  consideration of the projects'  internal control
structure and a report dated February 5, 1997, on its  compliance  with laws and
regulations.

/s/ Kevane, Peterson, Soto & Pasarell


San Juan, Puerto Rico
February 5, 1997,

<PAGE>
[Letterhead]

[LOGO]
KEVANE, PETERSON SOTO & PASARELL


INDEPENDENT AUDITORS' REPORT

To the Partners of
LOS CLAVELES, S.E. LIMITED PARTNERSHIP            HUD Field Office Director
San Juan, Puerto Rico                             San Juan, Puerto Rico


We  have  audited  the  accompanying  statement  of  financial  position  of LOS
CLAVELES,  S.E. LIMITED PARTNERSHIP,  FHA Project No. RQ-46-E-005-019 (a Limited
Partnership)  as of  December  31,  1995,  and the related  statements  of loss,
changes  in  partners'  equity  and cash  flows for the year then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of LOS CLAVELES,  S.E.  Limited
Partnership as of December 31, 1995, and the results of its operations,  changes
in partners'  equity and its cash flows for the year then ended,  in  conformity
with generally accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole.  The supplemental  data included in this
report  (shown  as  Exhibits  A  though  H) are  presented  for the  purpose  of
additional  analysis  and  are  not a  required  part  of  the  basic  financial
statements of HUD Project No. RQ46-E-005-19. Such information has been subjected
to  the  auditing  procedures  applied  in the  audit  of  the  basic  financial
statements,  and in our opinion,  is fairly  stated in all material  respects in
relation to the basic financial statements taken as a whole.

In accordance with Government Auditing  Standards,  we have also issued a report
dated February 9, 1996, on our  consideration of the projects'  internal control
structure and a report dated February 9, 1996, on its  compliance  with laws and
regulations.

/s/ Kevane, Peterson, Soto & Pasarell


San Juan,  Puerto Rico February 9, 1996, except for note 13 which is dated April
8, 1996

<PAGE>





[Letterhead]

[LOGO]
KEVANE, PETERSON SOTO & PASARELL


INDEPENDENT AUDITORS' REPORT

To the Partners of
LOS CLAVELES, S.E. LIMITED PARTNERSHIP


We have audited the  accompanying  balance sheet of LOS CLAVELES,  S.E.  LIMITED
PARTNERSHIP,  (a Delaware Limited  Partnership) as of December 31, 1994, and the
related  statements of loss,  changes in partners' equity and cash flows for the
four month period then ended. These financial  statements are the responsibility
of the Partnership's management.  Our responsibility is to express an opinion on
these financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Los Claveles,  S.E.  Limited
Partnership  as of  December  31,  1994,  and  the  results  of its  operations,
partners'  equity and its cash flows for the four month  period then  ended,  in
conformity with generally accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements  taken as a whole.  The  schedule  of  expense  categories
included as an Exhibit,  is presented for the purpose of additional analysis and
is not a required part of the basic financial  statements.  Such information has
been  subjected  to the  auditing  procedures  applied in the audit of the basic
financial  statements,  and in our  opinion,  is fairly  stated in all  material
respects in relation to the basic financial statements taken as a whole.

/s/ Kevane, Peterson, Soto & Pasarell


San Juan, Puerto Rico
February 2, 1996

<PAGE>


<PAGE>


[Letterhead]

[LOGO]
Haran & Associates Ltd
Certified Public Accountants


INDEPENDENT AUDITORS' REPORT

To the Partners
GRAND BOULEVARD RENAISSANCE I LIMITED PARTNERSHIP
Chicago, Illinois

We have audited the accompanying balance sheet of GRAND BOULEVARD  RENAISSANCE I
LIMITED  PARTNERSHIP,  (a Limited  Partnership) as of December 31, 1996, and the
related statements of profit and loss, changes in partners' equity and statement
of cash  flows for the year  then  ended.  These  financial  statements  are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of GRAND BOULEVARD  RENAISSANCE I
LIMITED  PARTNERSHIP  as of December 31, 1996, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.

The  accompanying  supplementary  information  shown on Page 15 is presented for
purposes  of  additional  analysis  and  is not a  required  part  of the  basic
financial  statements.  Such  information  has been  subjected  to the  auditing
procedures  applied in the audit of the basic financial  statements,  and in our
opinion,  is fairly stated in all material respects in relation to the financial
statements taken as a whole.

/s/ Haran & Associates LTD

HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Employer Identification No. 36-3097692

January 21, 1997
<PAGE>
[Letterhead]

[LOGO]
Haran & Associates Ltd
Certified Public Accountants


INDEPENDENT AUDITORS' REPORT

To the Partners
GRAND BOULEVARD RENAISSANCE I LIMITED PARTNERSHIP
Chicago, Illinois

We have audited the accompanying balance sheet of GRAND BOULEVARD  RENAISSANCE I
LIMITED  PARTNERSHIP,  (a Limited  Partnership) as of December 31, 1995, and the
related statements of profit and loss, changes in partners' equity and statement
of cash  flows for the year  then  ended.  These  financial  statements  are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of GRAND BOULEVARD  RENAISSANCE I
LIMITED  PARTNERSHIP  as of December 31, 1995, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.

The  accompanying  supplementary  information  shown on Page 15 is presented for
purposes  of  additional  analysis  and  is not a  required  part  of the  basic
financial  statements.  Such  information  has been  subjected  to the  auditing
procedures  applied in the audit of the basic financial  statements,  and in our
opinion,  is fairly stated in all material respects in relation to the financial
statements taken as a whole.

/s/ Haran & Associates LTD

HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Employer Identification No. 36-3097692

February 2, 1996

<PAGE>





[Letterhead]

[LOGO]
Haran & Associates Ltd
Certified Public Accountants


INDEPENDENT AUDITORS' REPORT

To the Partners
GRAND BOULEVARD RENAISSANCE I LIMITED PARTNERSHIP
Chicago, Illinois

We have audited the accompanying statement of assets, liabilities, and partners'
equity-income tax basis, of GRAND BOULEVARD  RENAISSANCE I LIMITED  PARTNERSHIP,
as of December 31, 1994,  and the related  statements of  operations-income  tax
basis,  changes  in  partners'  equity-income  tax basis and  statement  of cash
flows-income tax basis for the year then ended.  These financial  statements are
the  responsibility of the Partnership's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audit.

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

As described in the notes to the financial statements,  the Partnership's policy
is to prepare  its  financial  statements  on the basis of  accounting  used for
income tax purposes and are not  intended to be  presented  in  conformity  with
generally accepted accounting principals.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the assets,  liabilities,  and partners' equity of GRAND
BOULEVARD  RENAISSANCE I LIMITED  PARTNERSHIP  as of December 31, 1994,  and its
operations,  changes  in  partners'  equity and its cash flows for the year then
ended,  on the  basis of  accounting  described  in the  notes to the  financial
statements.

/s/ Haran & Associates LTD

HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Employer Identification No. 36-3097692

February 1, 1995




<PAGE>
[Letterhead]

[LOGO]
Hoekstra & Hoekstra
Certified Public Accountants


To the Partners of
Fairhaven Manor Limited Partnership


We have  audited the  accompanying  balance  sheet of  Fairhaven  Manor  Limited
Partnership  as of December  31,  1995,  and the related  statements  of income,
changes  in  partners'  equity  and cash  flows for the year then  ended.  These
financial  statements are the responsibility of the  Organization's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of  Fairhaven  Manor  Limited
Partnership  as of December 31, 1995,  and the results of its operations for the
year then ended in conformity with generally accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The schedule of supplementary information
on page 14 is  presented  for the purpose of  additional  analysis  and is not a
required  part of the basic  financial  statements.  Such  information  has been
subjected to the auditing procedures applied in the audit of the basic financial
statements,  and in our opinion,  is fairly  stated in all material  respects in
relation to the basic financial statements taken as a whole.

/s/ Hoekstra & Hoekstra
Mount Vernon, Washington               Hoekstra & Hoekstra
February 1, 1996                             Certified Public Accountants


<PAGE>
[Letterhead]

[LOGO]
Hoekstra & Hoekstra
Certified Public Accountants


To the Partners of
Fairhaven Manor Limited Partnership


We have  audited the  accompanying  balance  sheet of  Fairhaven  Manor  Limited
Partnership  as of December  31,  1996,  and the related  statements  of income,
changes  in  partners'  equity  and cash  flows for the year then  ended.  These
financial  statements are the responsibility of the  Organization's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of  Fairhaven  Manor  Limited
Partnership  as of December 31, 1996,  and the results of its operations for the
year then ended in conformity with generally accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The schedule of supplementary information
on page 14 is  presented  for the purpose of  additional  analysis  and is not a
required  part of the basic  financial  statements.  Such  information  has been
subjected to the auditing procedures applied in the audit of the basic financial
statements,  and in our opinion,  is fairly  stated in all material  respects in
relation to the basic financial statements taken as a whole.

/s/ Hoekstra & Hoekstra
Mount Vernon, Washington               Hoekstra & Hoekstra
February 2, 1997                             Certified Public Accountants


<PAGE>





[Letterhead]

[LOGO]
Hoekstra & Hoekstra
Certified Public Accountants


To the Partners of
Fairhaven Manor Limited Partnership


We have  audited the  accompanying  balance  sheet of  Fairhaven  Manor  Limited
Partnership  as of December  31,  1994,  and the related  statements  of income,
changes  in  partners'  equity  and cash  flows for the year then  ended.  These
financial  statements are the responsibility of the  Organization's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of  Fairhaven  Manor  Limited
Partnership  as of December 31, 1994,  and the results of its operations for the
year then ended in conformity with generally accepted accounting principles.


/s/ Hoekstra & Hoekstra
Mount Vernon, Washington               Hoekstra & Hoekstra
February 1, 1996                             Certified Public Accountants


<PAGE>


<PAGE>


[Letterhead]

[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report


The Partners
Fountain Lakes, A Limited Partnership


We have audited the  accompanying  balance  sheets of Fountain  Lakes, A Limited
Partnership,  as of December 31, 1996 and 1995,  and the related  statements  of
income,  partners'  capital  and cash  flows for the  years  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of Fountain  Lakes,  A Limited
Partnership  as of December 31, 1996 and 1995, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The supplementary  information on page 11
is presented for the purpose of  additional  analysis and is not a required part
of the basic financial  statements.  Such  information has been subjected to the
auditing procedures applied in the audit of the basic financial statements,  and
in our opinion,  is fairly  stated in all  material  respects in relation to the
basic financial statements taken as a whole.

/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
February 13, 1997
[Letterhead]

[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report


The Partners
Fountain Lakes, A Limited Partnership


We have audited the  accompanying  balance  sheets of Fountain  Lakes, A Limited
Partnership,  as of December 31,  1995,  and the related  statements  of income,
partners'  capital  and cash flows for the years  then  ended.  These  financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of Fountain  Lakes,  A Limited
Partnership  as of December 31, 1995 and 1994, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The supplementary  information on page 11
is presented for the purpose of  additional  analysis and is not a required part
of the basic financial  statements.  Such  information has been subjected to the
auditing procedures applied in the audit of the basic financial statements,  and
in our opinion,  is fairly  stated in all  material  respects in relation to the
basic financial statements taken as a whole.

/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
February 12, 1996

<PAGE>



<PAGE>


[Letterhead]

[LOGO]
VMcHC&S Vroman, McGowen, Hurst, Clark & Smith, P.C.
Certified Public Accountants

INDEPENDENT AUDITOR'S REPORT


To the Partners
Des Moines Street Associates, L.P.
Des Moines, Iowa


We have audited the accompanying balance sheets of Des Moines Street Associates,
L.P., (a limited partnership), as of December 31, 1996 and 1995, and the related
statements of  operations,  partners'  capital and cash flows for the years then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of Des Moines Street Associates,
L.P.,  as of  December  31, 1996 and 1995,  and the  results of its  operations,
changes in its partners' capital and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.

/S/ Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa

January 31, 1997
[Letterhead]

[LOGO]
VMcHC&S Vroman, McGowen, Hurst, Clark & Smith, P.C.
Certified Public Accountants

INDEPENDENT AUDITOR'S REPORT


To the Partners
Des Moines Street Associates, L.P.
Des Moines, Iowa


We have audited the accompanying balance sheets of Des Moines Street Associates,
L.P., (a limited partnership), as of December 31, 1995 and 1994, and the related
statements of  operations,  partners'  capital and cash flows for the years then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of Des Moines Street Associates,
L.P.,  as of  December  31, 1995 and 1994,  and the  results of its  operations,
changes in its partners' capital and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.

/S/ Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa

January 31, 1996
<PAGE>


<PAGE>


[Letterhead]

[LOGO]
KPMG Peat Marwick LLP

Independent Auditor's Report


The Partners
St. Andrews Pointe Apartments,
A Limited Partnership:


We  have  audited  the  accompanying   balance  sheets  of  St.  Andrews  Pointe
Apartments,  A Limited  Partnership,  as of December 31, 1996 and 1995,  and the
related statements of loss,  partners' capital and cash flows for the years then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of St. Andrews Pointe Apartments,
A Limited  Partnership  as of December 31, 1996 and 1995, and the results of its
operations  and its cash  flows for the years then  ended,  in  conformity  with
generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP

February 7, 1997

[Letterhead]

[LOGO]
KPMG Peat Marwick LLP

Independent Auditor's Report


The Partners
St. Andrews Pointe Apartments,
A Limited Partnership:


We  have  audited  the  accompanying   balance  sheets  of  St.  Andrews  Pointe
Apartments,  A Limited  Partnership,  as of December 31, 1995 and 1994,  and the
related statements of loss,  partners' capital and cash flows for the years then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of St. Andrews Pointe Apartments,
A Limited  Partnership  as of December 31, 1995 and 1994, and the results of its
operations  and its cash  flows for the years then  ended,  in  conformity  with
generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP

February 9, 1996

<PAGE>
[Letterhead]

[LOGO]
Deloitte & Touche LLP

INDEPENDENT AUDITORS' REPORT


To the General Partner and Limited Partners of
Affordable/Citrus Glen, Ltd.:


We have audited the accompanying balance sheet of  Affordable/Citrus  Glen, Ltd.
(a Florida  Limited  Partnership)  as of  December  31,  1996,  and the  related
statements  of  operations,  partners'  equity  and cash flows for the year then
ended.  These financial  statements are the  responsibility of the partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Affordable/Citrus Glen, Ltd. (a
Florida  Limited  Partnership)  as of December 31, 1996,  and the results of its
operations  and its cash  flows  for the year then  ended,  in  conformity  with
generally accepted accounting principles.

/s/ Deloitte & Touche LLP

January 24, 1997

<PAGE>

[Letterhead]

[LOGO]
Deloitte & Touche LLP

INDEPENDENT AUDITORS' REPORT


To the General Partner and Limited Partners of
Affordable/Citrus Glen, Ltd.:


We have audited the accompanying balance sheet of  Affordable/Citrus  Glen, Ltd.
(a Florida  Limited  Partnership)  as of  December  31,  1995,  and the  related
statements  of  operations,  partners'  equity  and cash flows for the year then
ended.  These financial  statements are the  responsibility of the partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Affordable/Citrus Glen, Ltd. (a
Florida  Limited  Partnership)  as of December 31, 1995,  and the results of its
operations  and its cash  flows  for the year then  ended,  in  conformity  with
generally accepted accounting principles.

/s/ Deloitte & Touche LLP

February 2, 1996

<PAGE>


[Letterhead]

[LOGO]
Deloitte & Touche LLP

INDEPENDENT AUDITORS' REPORT


To the General Partner and Limited Partners of
Affordable/Citrus Glen, Ltd.:


We have audited the accompanying balance sheet of  Affordable/Citrus  Glen, Ltd.
(a Florida  Limited  Partnership)  as of  December  31,  1994,  and the  related
statements  of  operations,  partners'  equity  and cash flows for the year then
ended.  These financial  statements are the  responsibility of the partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Affordable/Citrus Glen, Ltd. (a
Florida  Limited  Partnership)  as of December 31, 1994,  and the results of its
operations  and its cash  flows  for the year  then  ended  in  conformity  with
generally accepted accounting principles.

/s/ Deloitte & Touche LLP

February 10, 1995

<PAGE>


    
[Letterhead]

[LOGO]
MAHONEY
ULBRICH
CHRISTIANSEN
RUSS P.A.


To the Partners
Eden Park Limited Partnership
Saint Paul, Minnesota


INDEPENDENT AUDITOR'S REPORT


We have audited the accompanying balance sheets of Eden Park Limited Partnership
as of December  31, 1996 and 1995,  and the related  statements  of  operations,
partners'  capital  and cash flows for the years  then  ended.  These  financial
statements  are  the  responsibility  of  the  partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Eden Park Limited  Partnership
as of December 31, 1996 and 1995, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted  accounting
principles.

/s/Mahoney Ulbrich
Christiansen Russ P.A.

Saint Paul, Minnesota
January 24, 1997

[Letterhead]

[LOGO]
MAHONEY
ULBRICH
CHRISTIANSEN
RUSS P.A.


To the Partners
Eden Park Limited Partnership
Saint Paul, Minnesota


INDEPENDENT AUDITOR'S REPORT


We have audited the accompanying balance sheets of Eden Park Limited Partnership
as of December  31, 1995 and 1994,  and the related  statements  of  operations,
partners'  capital  and cash flows for the years  then  ended.  These  financial
statements  are  the  responsibility  of  the  partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Eden Park Limited  Partnership
as of December 31, 1995 and 1994, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted  accounting
principles.

/s/Mahoney Ulbrich
Christiansen Russ P.A.

Saint Paul, Minnesota
February 8, 1996

<PAGE>
[Letterhead]

[LOGO]
NOVOGRADAC
& COMPANY

REPORT OF INDEPENDENT AUDITORS

To the Partners of
Madera Sunrise Terrace Limited Partnership


We have  audited  the  accompanying  balance  sheets of Madera  Sunrise  Terrace
Limited Partnership as of December 31, 1996 and 1995, and the related statements
of  operations,  changes in partners'  capital and cash flows for the years then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Madera Sunrise Terrace Limited
Partnership  as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.

/s/Novogradac & Company LLP
January 25, 1997



<PAGE>


[Letterhead]

[LOGO]
NOVOGRADAC
& COMPANY


To the General Partner of
Madera Sunrise Terrace Limited Partnership


INDEPENDENT AUDITOR'S REPORT


We have  audited  the  accompanying  balance  sheets of Madera  Sunrise  Terrace
Limited Partnership as of December 31, 1995 and 1994, and the related statements
of  operations,  changes in partners'  capital and cash flows for the years then
ended.  These financial  statements are the  responsibility of the partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Madera Sunrise Terrace Limited
Partnership  as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.

/s/Novogradac & Company LLP
January 29, 1996

<PAGE>



<PAGE>


[Letterhead]

[LOGO]
Kirschner Hutton Perlin, P.C.
Certified Public Accountants


Independent Auditors Report
January 30, 1996

Partners
Twin Oaks Meadows Limited Dividend Housing
Association Limited Partnership


We have audited the  accompanying  balance  sheet of Twin Oaks  Meadows  Limited
Dividend Housing Association Limited  Partnership,  MSHDA Project No. 915, as of
December  31,  1996 and 1995,  and the  related  statements  of profit and loss,
partners'  equity  and cash  flows for the years  then  ended.  These  financial
statements  are  the  responsibility  of  the  Organization's   management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of Twin Oaks  Meadows  Limited
Dividend  Housing  Association  Limited  Partnership as of December 31, 1996 and
1995,  and the results of its  operations  and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January 22,  1997,  on our  consideration  of Twin Oaks  Meadows  Limited
Dividend Housing  Association Limited  Partnership's  internal control structure
and  a  report  dated  January  22,  1997,  on  its  compliance  with  laws  and
regulations.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying  additional  information
on (pages 15 to 18) is presented for the purposes of additional  analysis and is
not a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements,  and in our opinion,  is fairly  stated in all material  respects in
relation to the basic financial statements taken as a whole.

/s/Kirschner Hutton Perlin, P.C.
[Letterhead]

[LOGO]
Kirschner Hutton Perlin, P.C.
Certified Public Accountants


Independent Auditors Report
                                                              January 30, 1996

Partners
Twin Oaks Meadows Limited Dividend Housing
Association Limited Partnership


We have audited the  accompanying  balance  sheet of Twin Oaks  Meadows  Limited
Dividend Housing Association Limited  Partnership,  MSHDA Project No. 915, as of
December  31,  1995 and 1994,  and the  related  statements  of profit and loss,
partners'  equity  and cash  flows for the years  then  ended.  These  financial
statements  are  the  responsibility  of  the  Organization's   management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of Twin Oaks  Meadows  Limited
Dividend  Housing  Association  Limited  Partnership as of December 31, 1995 and
1994,  and the results of its  operations  and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January 30,  1996,  on our  consideration  of Twin Oaks  Meadows  Limited
Dividend Housing  Association Limited  Partnership's  internal control structure
and  a  report  dated  January  30,  1996,  on  its  compliance  with  laws  and
regulations.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying  additional  information
on (pages 14 to 17) is presented for the purposes of additional  analysis and is
not a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements,  and in our opinion,  is fairly  stated in all material  respects in
relation to the basic financial statements taken as a whole.

/s/Kirschner Hutton Perlin, P.C.

<PAGE>
[Letterhead]

[LOGO]
ERNST & YOUNG LLP

Report of Independent Auditors

The Partners
Guardian Place Limited Partnership


We have  audited  the  accompanying  balance  sheets of Guardian  Place  Limited
Partnership  as of December  31, 1996 and 1995,  and the related  statements  of
operations,  changes  in  partners'  capital  and cash  flows for the years then
ended.  These financial  statements are the  responsibility of the partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of  Guardian  Place  Limited
Partnership  as of December 31, 1996 and 1995, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/Ernst & Young LLP
January 27, 1997

<PAGE>


[Letterhead]

[LOGO]
ERNST & YOUNG LLP

Report of Independent Auditors

The Partners
Guardian Place Limited Partnership


We have  audited  the  accompanying  balance  sheets of Guardian  Place  Limited
Partnership  as of December  31, 1995 and 1994,  and the related  statements  of
operations,  changes  in  partners'  capital  and cash  flows for the years then
ended.  These financial  statements are the  responsibility of the partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of  Guardian  Place  Limited
Partnership  as of December 31, 1995 and 1994, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/Ernst & Young LLP
January 31, 1996

<PAGE>


<PAGE>


[Letterhead]

[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report


The Partners
Woods Lane, A Limited Partnership


We have  audited  the  accompanying  balance  sheets  of Woods  Lane,  A Limited
Partnership,  as of December 31, 1996 and 1995,  and the related  statements  of
income,  partners'  capital  and cash  flows for the  years  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of  Woods  Lane,  A  Limited
Partnership  as of December 31, 1996 and 1995, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The supplementary  information on page 11
is presented for the purpose of  additional  analysis and is not a required part
of the basic financial  statements.  Such  information has been subjected to the
auditing procedures applied in the audit of the basic financial statements,  and
in our opinion,  is fairly  stated in all  material  respects in relation to the
basic financial statements taken as a whole.

/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
January 27, 1997
[Letterhead]

[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report


The Partners
Woods Lane, A Limited Partnership


We have  audited  the  accompanying  balance  sheets  of Woods  Lane,  A Limited
Partnership,  as of December 31, 1995 and 1994,  and the related  statements  of
income,  partners'  capital  and cash  flows for the  years  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of  Woods  Lane,  A  Limited
Partnership  as of December 31, 1995 and 1994, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The supplementary  information on page 11
is presented for the purpose of  additional  analysis and is not a required part
of the basic financial  statements.  Such  information has been subjected to the
auditing procedures applied in the audit of the basic financial statements,  and
in our opinion,  is fairly  stated in all  material  respects in relation to the
basic financial statements taken as a whole.

/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
February 12, 1996

<PAGE>



<PAGE>


[Letterhead]

[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report


The Partners
Crafton Place, A Limited Partnership


We have audited the  accompanying  balance  sheets of Crafton  Place,  A Limited
Partnership,  as of December 31, 1996 and 1995,  and the related  statements  of
income,  partners'  capital  and cash  flows for the  years  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of Crafton  Place,  A Limited
Partnership  as of December 31, 1996 and 1995, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The supplementary  information on page 11
is presented for the purpose of  additional  analysis and is not a required part
of the basic financial  statements.  Such  information has been subjected to the
auditing procedures applied in the audit of the basic financial statements,  and
in our opinion,  is fairly  stated in all  material  respects in relation to the
basic financial statements taken as a whole.

/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
February 5, 1997
[Letterhead]

[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report


The Partners
Crafton Place, A Limited Partnership


We have audited the  accompanying  balance  sheets of Crafton  Place,  A Limited
Partnership,  as of December 31, 1995 and 1994,  and the related  statements  of
income,  partners'  capital  and cash  flows for the  years  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of Crafton  Place,  A Limited
Partnership  as of December 31, 1995 and 1994, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The supplementary  information on page 11
is presented for the purpose of  additional  analysis and is not a required part
of the basic financial  statements.  Such  information has been subjected to the
auditing procedures applied in the audit of the basic financial statements,  and
in our opinion,  is fairly  stated in all  material  respects in relation to the
basic financial statements taken as a whole.

/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
February 10, 1996

<PAGE>
[Letterhead]

[LOGO]
Brotemarkle & Sadd
Certified Public Accountants

February 19, 1997

Palo Verde II 
A Nevada Limited Partnership
Bakersfield, California


We have  audited  the  accompanying  balance  sheets of Palo  Verde II, A Nevada
Limited  Partnership  (Palo Verde II or the Partnership) as of December 31, 1996
and  the  related   statements  of  operations,   partners' capital (deficiency)
and  cash  flows for the  year  then  ended. These financial statements are the 
responsibility of the Partnership's management. Our responsibility is to express
an  opinion  on  these  financial  statements based on our audit.  The financial
statements of Palo  Verde II as  of  December  31, 1995, were  audited by  other
auditors  whose  report dated February 8, 1996, expressed an unqualified opinion
on those statements.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Palo Verde II as of December
31,  1996 and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.

/s/Brotemarkle & Sadd



<PAGE>


[Letterhead]

[LOGO]
ERNST & YOUNG LLP

Report of Independent Auditors

To the Partners
Palo Verde II, A Nevada Limited Partnership


We have  audited  the  accompanying  balance  sheets of Palo  Verde II, A Nevada
Limited  Partnership  (Palo Verde II or the Partnership) as of December 31, 1995
and  1994,  and  the  related   statements  of  operations,   partners'  capital
(deficiency) and cash flows for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Palo Verde II as of December
31, 1995 and 1994,  and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.

/s/Ernst & Young LLP
February 8, 1996

<PAGE>


<PAGE>


[Letterhead]

[LOGO]
BERC
& FOX LIMITED
Certified Public Accountants


Independent Auditors' Report

To the Partners,
Andrew's Pointe Limited Partnership


We have  audited the  accompanying  balance  sheets of ANDREW'S  POINTE  LIMITED
PARTNERSHIP (a Minnesota Limited  Partnership) as of December 31, 1996 and 1995,
and the related  statements of operations,  partners'  equity and cash flows for
the years then ended.  These financial  statements are the responsibility of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of Andrew's  Pointe  Limited
Partnership  as of December 31, 1996 and 1995, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/Berc & Fox Limited

MINNEAPOLIS, MINNESOTA
January 23, 1997
[Letterhead]

[LOGO]
BERC
& FOX LIMITED
Certified Public Accountants


Independent Auditors' Report

To the Partners,
Andrew's Pointe Limited Partnership


We have  audited the  accompanying  balance  sheets of ANDREW'S  POINTE  LIMITED
PARTNERSHIP (a Minnesota Limited  Partnership) as of December 31, 1995 and 1994,
and the related  statements of operations,  partners'  equity and cash flows for
the years then ended.  These financial  statements are the responsibility of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of Andrew's  Pointe  Limited
Partnership  as of December 31, 1995 and 1994, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/Berc & Fox Limited

MINNEAPOLIS, MINNESOTA

FEBRUARY 8, 1996
<PAGE>


<PAGE>


[Letterhead]

[LOGO]
KPMG Peat Marwick LLP


Independent Auditors' Report

The Partners
Santa Fe Oaks Phase II, A Limited Partnership:


We have  audited the  accompanying  balance  sheets of Santa Fe Oaks Phase II, A
Limited Partnership as of December 31, 1996 and 1995, and the related statements
of loss,  partners'  capital  and cash  flows for the years  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of Santa Fe Oaks Phase II, A
Limited  Partnership  as of December  31, 1996 and 1995,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.

/s/KPMG PEAT MARWICK LLP

FEBRUARY 14, 1997
[Letterhead]

[LOGO]
KPMG Peat Marwick LLP


Independent Auditors' Report

The Partners
Santa Fe Oaks Phase II, A Limited Partnership:


We have  audited the  accompanying  balance  sheets of Santa Fe Oaks Phase II, A
Limited Partnership as of December 31, 1995 and 1994, and the related statements
of loss,  partners'  capital  and cash  flows for the years  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of Santa Fe Oaks Phase II, A
Limited  Partnership  as of December  31, 1995 and 1994,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.

/s/KPMG PEAT MARWICK LLP

FEBRUARY 9, 1996
<PAGE>


<PAGE>


[Letterhead]

[LOGO]
KPMG Peat Marwick LLP


Independent Auditors' Report

The Partners
Oak Ridge Apartments, A Limited Partnership:


We have  audited the  accompanying  balance  sheets of Oak Ridge  Apartments,  A
Limited  Partnership,  as of  December  31,  1996  and  1995,  and  the  related
statements of loss,  partners' capital, and cash flows for the years then ended.
These  financial   statements  are  the   responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Oak Ridge Apartments, A Limited
Partnership  as of December 31, 1996 and 1995, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/KPMG PEAT MARWICK LLP

FEBRUARY 3, 1997
[Letterhead]

[LOGO]
KPMG Peat Marwick LLP


Independent Auditors' Report

The Partners
Oak Ridge Apartments, A Limited Partnership:


We have  audited the  accompanying  balance  sheets of Oak Ridge  Apartments,  A
Limited  Partnership,  as of  December  31,  1995  and  1994,  and  the  related
statements of loss,  partners' capital, and cash flows for the years then ended.
These  financial   statements  are  the   responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Oak Ridge Apartments, A Limited
Partnership  as of December 31, 1995 and 1994, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/KPMG PEAT MARWICK LLP

FEBRUARY 9, 1996
<PAGE>