SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   Form 10-KSB

(Mark One)
[X]  ANNUAL REPORT UNDER SECTION 12 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
     1934

                    For the fiscal year ended December 31, 2003

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

              For the transition period from __________ to ___________

                         Commission File Number 0-20610

                        NATIONAL TAX CREDIT INVESTORS II
                 (Name of small business issuer in its charter)

            California                                          93-1017959
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)


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

                                 (864) 239-1000
                            Issuer's telephone number

      Securities registered under Section 12(b) or 12(g) of the Exchange Act:

                                      NONE

           Securities registered under Section 12(g) of the Exchange Act:

                             Local Partnership Units
                                (Title of class)

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

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of the  Partnership's  knowledge  in  definitive  proxy or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year. $1,704,000

State the aggregate  market value of the voting  partnership  interests  held by
non-affiliates  computed  by  reference  to the price at which  the  partnership
interests  were sold,  or the average bid and asked  prices of such  partnership
interests as of December 31, 2003. No market exists for the limited  partnership
interests of the Registrant,  and,  therefore,  no aggregate market value can be
determined.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE

<PAGE>

The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government  regulations.  Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including,  without limitation:  national and local
economic  conditions;  the terms of  governmental  regulations  that  affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates;  financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest;  real estate risks, including variations of real estate values and
the general  economic  climate in local markets and  competition  for tenants in
such markets;  litigation,  including  costs  associated  with  prosecuting  and
defending  claims  and  any  adverse   outcomes,   and  possible   environmental
liabilities.   Readers  should  carefully  review  the  Registrant's   financial
statements and the notes thereto,  as well as the risk factors  described in the
documents  the  Registrant  files  from  time to time  with the  Securities  and
Exchange Commission.

                                     PART I

ITEM 1.     DESCRIPTION OF BUSINESS

National Tax Credit Investors II ("NTCI-II" or the  "Partnership")  is a limited
partnership  formed under the  California  Revised Local  Partnership  Act as of
January  12,  1990.  The  Partnership  was formed to invest  primarily  in other
limited  partnerships  ("Local  Partnerships") which own and operate multifamily
housing  complexes that are eligible for low income  housing  federal income tax
credits (the "Housing Tax Credit").  The general  partner of the  Partnership is
National  Partnership  Investments Corp. (the "General Partner" or "NAPICO"),  a
California corporation. On April 23, 1990, the Partnership offered 100,000 Units
of Limited  Partnership  Interests ("Units") at $1,000 per Unit through a public
offering  managed by Paine  Webber  Incorporated  (the "A Selling  Agent").  The
Partnership  shall  continue in full force and effect  until  December  31, 2030
unless terminated earlier pursuant to the Partnership Agreement or law.

On December 3, 2001, Casden Properties Inc., entered into a merger agreement and
certain other  transaction  documents with  Apartment  Investment and Management
Company  ("AIMCO"),  a publicly traded real estate investment trust, and certain
of its subsidiaries, pursuant to which, on March 11, 2002, AIMCO acquired Casden
Properties, Inc. and its subsidiaries, including 100% of the outstanding capital
stock of NAPICO. Prior to March 11, 2002, Casden Properties, Inc. owned a 95.25%
economic  interest  in  NAPICO,  with the  balance  owned by  Casden  Investment
Corporation ("CIC").  CIC, which is wholly owned by Alan I. Casden, owned 95% of
the voting common stock of NAPICO prior to March 11, 2002.  The special  limited
partner of the  Partnership  ("Special  Limited  Partner")  was  PaineWebber  TC
Partners,  L.P., a Virginia limited partnership.  During the year ended December
31, 2003, the General  Partner  discovered  that the Special Limited Partner was
dissolved prior to 2003.

The  Partnership  offered  for sale up to 100,000  units of limited  partnership
interests  ("Units") at $1,000 per unit  (including  50,000 units subject to the
selling agent's option).  The term of the offering expired on April 22, 1992, at
which date a total of 72,404  units had been sold  amounting to  $72,404,000  in
capital  contributions.   Offering  expenses  of  $9,413,000  were  incurred  in
connection with the sale of such limited partner interests.

In general,  an owner of a low-income housing project is entitled to receive the
Housing Tax Credit in each year of a ten-year period (the "Credit Period").  The
projects  are subject to a minimum  compliance  period of not less than  fifteen
years (the  "Compliance  Period").  Tax  Credits  are  available  to the limited
partners to reduce their federal income taxes.  The ability of a limited partner
to  utilize  such  credits  may be  restricted  by  the  passive  activity  loss
limitation and the general  business tax credit  limitation  rules.  NTCI-II has
made capital  contributions to 37 Local  Partnerships.  The investment in one of
the Local Partnerships was sold and one was foreclosed in 2001, one was sold and
one was  foreclosed in 2002 and one was  foreclosed and one was sold in 2003. As
of December 31, 2003,  the  Partnership  holds limited  partner  interests in 31
Local Partnerships located in 19 states. Each of these Local Partnerships owns a
project  that is  eligible  for the  Housing  Tax  Credit.  Several of the Local
Partnerships  also benefit from  government  programs  promoting low or moderate
income housing.

The  Partnership's  investments in Local  Partnerships  are subject to the risks
incident to the management and ownership of multifamily residential real estate.
Neither  the  Partnership's  investments  nor the  projects  owned by the  Local
Partnerships will be readily marketable,  and there can be no assurance that the
Partnership  will be able to dispose of its  Limited  Partnership  Interests  or
projects at the end of the  Compliance  Period.  The value of the  Partnership's
investments   will  be  subject  to  changes  in  national  and  local  economic
conditions,  including  substantial  unemployment,  which could adversely impact
vacancy levels,  rental payment defaults and operating expenses.  This, in turn,
could  substantially  increase the risk of operating losses for the projects and
the  Partnership.  The  projects  are  subject  to  the  risk  of  loss  through
foreclosure. In addition, each Local Partnership is subject to risks relating to
environmental  hazards  which might be  uninsurable.  Because the  Partnership's
ability to control its operations  will depend on these and other factors beyond
the control of the General Partner and the local general partners,  there can be
no  assurance  that  Partnership  operations  will be  profitable  or  that  the
anticipated Housing Tax Credits will be available to the limited partners.

The projects owned by the Local  Partnerships in which NTCI-II has invested were
developed by the local operating  general partners (the "Local Operating General
Partners")  who  acquired  the sites and applied for  applicable  mortgages  and
subsidies,  if any. NTCI-II became the principal  limited partner in these Local
Partnerships  pursuant to  arm's-length  negotiations  with the Local  Operating
General Partners.  As a limited partner,  NTCI-II's liability for obligations of
the Local Partnership is limited to its investment.  The Local Operating General
Partner  of  the  Local  Partnership  retains   responsibility  for  developing,
constructing,  maintaining,  operating  and managing the Project.  Under certain
circumstances,  an affiliate of NAPICO or NTCI-II may act as the Local Operating
General Partner. An affiliate,  National Tax Credit Inc. II ("NTC-II") is acting
either as a special  limited  partner  or  non-managing  administrative  general
partner (the "Administrative General Partner") of each Local Partnership.

In general, in order to avoid recapture of Housing Tax Credits,  the Partnership
does not expect that it will  dispose of its Limited  Partnership  Interests  or
approve the sale by a Limited  Partnership of any Apartment Complex prior to the
end of the applicable 15-year  Compliance  Period.  Because of (i) the nature of
the Apartment Complexes, (ii) the difficulty of predicting the resale market for
low-income  housing 15 or more years in the future,  and (iii) the  inability of
the  Partnership  to directly  cause the sale of  Apartment  Complexes  by local
general  partners,  but generally only to require such local general partners to
use  their  respective  best  efforts  to find a  purchaser  for  the  Apartment
Complexes, it is not possible at this time to predict whether the liquidation of
substantially  all  of the  Partnership's  assets  and  the  disposition  of the
proceeds,  if any, in accordance with the partnership  agreement will be able to
be  accomplished  promptly  at the  end  of the  15-year  period.  If a  Limited
Partnership is unable to sell an Apartment  Complex,  it is anticipated that the
local general partner will either continue to operate such Apartment  Complex or
take such other actions as the local general partner  believes to be in the best
interest of the  Limited  Partnership.  In  addition,  circumstances  beyond the
control of the General  Partner may occur  during the  Compliance  Period  which
would require the Partnership to approve the disposition of an Apartment Complex
prior to the end of the Compliance Period.

The registrant  has no employees.  Management  and  administrative  services are
provided by the General  Partner.  These services were provided by affiliates of
the General Partner for the year ended December 31, 2003.

During 2003,  the  projects in which  NTCI-II had  invested  were  substantially
rented.  The  following is a schedule of the status as of December 31, 2003,  of
the projects owned by Local Partnerships in which NTCI-II is a limited partner.

              SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
                       IN WHICH NTCI-II HAS AN INVESTMENT
                                DECEMBER 31, 2003
<TABLE>
<CAPTION>

                                                           Units
                                           Financed,    Authorized          Occupancy
                                            Insured     for Rental         Percentage
                                              and       Assistance     for the Year Ended
                                 No. of   Subsidized       Under           December 31
Name and Location                Units       Under       Section 8       2003       2002

Ashville Equity (Westview)
<S>                                 <C>                                   <C>        <C>
  Ashville, OH                      41        --            --            90%        95%
Columbus Junction Park
  Columbus Junction, IA             24        (A)           24            72%        91%
Countryside
  Howell Township, NJ              180        --            --            99%        78%
Edgewood Apartments
  Rogers, AR                       108        --            --           100%        66%
Fourth Street
  Los Angeles, CA                   44        --            --            97%       100%
Germantown Apartments
  Conway, AR                       132        --            --            96%        97%
Great Basin Associates
  Reno, NV                          28        --            --            99%        84%
Grimes Park Apartments
  Grimes, IA                        16        (A)            7            98%       95%
Jamestown Terrace
  Jamestown, CA                     56        (A)           43            94%        99%
Jefferson Meadows
  Apartments
  Detroit, MI                       83        --            --            91%        85%
Kentucky River Apartments
  Winchester, KY                    42        --            --            93%        88%
Lincoln Grove Apartments
  Greensboro, NC                   116        --            --            94%        90%
Meadowlakes Apartments
  Searcy, AR                       108        --            --            98%        90%
Michigan Beach Apartments
  Chicago, IL                      239        --            --            99%        96%
Nickel River
  (Wedgewood) Apartments
  LaCrosse, WI (C)                 105        --            --            95%        95%
Norwalk Park Apartments
  Norwalk, IA                       16        (A)            4            95%        85%
Oakview Apartments
  Spartanburg, SC                  106        (B)           106           98%        89%
Palm Springs View
  Palm Springs, CA                 120        --            --            98%        85%
Pam Apartments
  Pampa, TX                         96        (B)           96            96%        98%

              SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
                   IN WHICH NTCI-II HAS AN INVESTMENT (continued)
                                DECEMBER 31, 2003

                                                           Units
                                          Financed,     Authorized         Occupancy
                                           Insured      for Rental         Percentage
                                             and        Assistance    for the Years Ended
                                No. of    Subsidized       Under          December 31
Name and Location                Units      Under        Section 8       2003      2002

Parkwood Landing
  Huntsville, AL                   204        --            --            88%       98%
Pensacola Affordable
  Pensacola, FL                     56        --            --            96%       95%
Pineview Terrace
  Katy, TX                         120        --            --            83%       98%
Quivera
  Lenexa, KS                       289        --            --            80%       90%
Rancho Del Mar
  Tucson, AZ                       312        --            --            80%       98%
Salem Park Apartments
  Conway, AR                       144        --            --            96%       79%
Sheboygan Apartments
  Sheboygan, WI                     59        --            --            93%       89%
Sitka III
  Sitka, AK                         16       (A)            16            93%       94%
Soldotna (Northwood
  Senior) Apartments
  Soldotna, AK                      23       (A)            23            95%       90%
Torres de Plata II
  Toa Alto, PR                      78       (A)            78           100%       90%
Virginia Park Meadows
  Detroit, MI                       83        --            --            93%       92%
Westbridge Apartments
 W.Columbia, SC                    112       (B)            94            94%       91%

                                 3,156                     491
</TABLE>

(A)   The mortgage is insured by the Federal  Housing  Administration  under the
      provisions of Section 515 of the National Housing Act.

(B)   Section 8 of Title II of the  Housing  and  Community  Development  Act of
      1974.


The following table details the Partnership's ownership percentages of the Local
Partnerships  and the cost of acquisition of such  ownership.  All interests are
limited  partner  interests.  Also  included  is the  total  mortgage  and other
encumbrances on each property for each of the Local  Partnerships as of December
31, 2003.
<TABLE>
<CAPTION>

                                   NTCI II     Original Cost                         Notes
                                 Percentage    of Ownership       Mortgage        Payable and
Name and Location                 Interest       Interest           Notes      Accrued Interest
                                              (in thousands)   (in thousands)   (in thousands)
Ashville Equity (Westview)
<S>                                <C>             <C>              <C>              <C>
  Ashville, OH                     99.00%          $ 956            $ 931            $ --
Columbus Junction Park
  Columbus Junction, IA            99.00%             218              644               --
Countryside
  Howell Township, NJ              99.00%              95            4,242              143
Edgewood Apartments
  Rogers, AR                       99.00%             288            1,591               --
Fourth Street
  Los Angeles, CA                  99.00%           1,575              950               --
Germantown Apartments
  Conway, AR                       99.00%             740            2,282               --
Great Basin Associates
  Reno, NV                          5.00%             460              579               --
Grimes Park Apartments
  Grimes, IA                       99.00%           1,858              455               --
Jamestown Terrace
  Jamestown, CA                    99.00%             183            2,841               --
Jefferson Meadows Apartments
  Detroit, MI                      98.90%              68            3,212               --
Kentucky River Apartments
  Winchester, KY                   99.00%           1,200              885               --
Lincoln Grove Apartments
  Greensboro, NC                   99.00%             840              516            2,069
Meadowlakes Apartments
  Searcy, AR                       99.00%             370            1,229               --
Michigan Beach Apartments
  Chicago, IL                      98.90%           1,575            6,126            3,583
Nickel River (Wedgewood)
  Apartments (A)
  LaCrosse, WI                     18.99%           1,400            1,580               --
Norwalk Park Apartments
  Norwalk, IA                      99.00%             465              424               --
Oakview Apartments
  Spartanburg, SC                  99.00%             288            1,305               --
Palm Springs View
  Palm Springs, CA                 50.49%              57            5,082               --
Pam Apartments
  Pampa, TX                        99.00%             336            1,200               --


                                 NTCI II     Original Cost                          Notes
                               Percentage    of Ownership        Mortgage        Payable and
Name and Location               Interest       Interest           Notes       Accrued Interest
                                            (in thousands)    (in thousands)   (in thousands)
Parkwood Landing
  Huntsville, AL                 99.00%          $ 50            $ 4,168            $ --
Pensacola Affordable
  Pensacola, FL                  99.00%             300            1,250                --
Pineview Terrace
  Katy, TX                       98.99%             132            2,717                --
Quivera
  Lenexa, KS                     99.00%              43            6,525                --
Rancho Del Mar (B)
  Tucson, AZ                     66.40%             216            3,144                --
Salem Park Apartments
  Conway, AR                     99.00%           1,854            2,468                --
Sheboygan Apartments
  Sheboygan, WI                   9.91%             867            1,412                --
Sitka III
  Sitka, AK                      99.00%           1,277            1,157                --
Soldotna (Northwood Senior)
  Apartments
  Soldotna, AK                   99.00%           1,391            1,466                --
Torres de Plata II
  Toa Alto, PR                   99.00%             100            3,039                --
Virginia Park Meadows
  Detroit, MI                    98.90%             248            3,161                --
Westbridge Apartments
  W. Columbia, SC                99.00%             840            2,500                --
                                                $20,290          $69,081           $ 5,795
</TABLE>

(A)   During the year ended December 31, 2002, an impairment  charge of $834,000
      was recognized  with respect to the  investment in one Local  Partnership,
      Wedgewood Commons. In June 2003, the Partnership diluted its investment in
      Wedgewood   Commons  from  99%  to  18.99%.   The   Partnership   realized
      approximately $81,000 from this sale of its interest,  which was less than
      its current investment value. As a result, the investment balance has been
      reduced to the estimated fair value of the investment.

(B)   During the year ended  December  31,  2003,  the  Partnership  diluted its
      investment in the Rancho del Mar Apartments  Limited  Partnership from 99%
      to 66.4%. The proceeds received for this sale of approximately  $1,017,000
      were offset  against  the  Partnership's  investment  balance in the Local
      Partnership.

Although each Local  Partnership  in which the  Partnership  has invested owns a
project which must compete with other projects for tenants,  government mortgage
interest and rent subsidies make it possible for some of the Local  Partnerships
to rent units to  eligible  tenants at below  market  rates.  In  general,  this
insulates these properties from market competition.

ITEM 2.     DESCRIPTION OF PROPERTIES

See  "Item  1.  Description  of  Business"  for the  real  estate  owned  by the
Partnership  through the  ownership  of limited  partnership  interests in Local
Partnerships.

ITEM 3.     LEGAL PROCEEDINGS

On August 27, 1998, two investors holding an aggregate of eight units of limited
partnership  interest  in Real  Estate  Associates  Limited  III (an  affiliated
partnership in which National  Partnership  Investments Corp.  ("NAPICO") is the
General Partner) and two investors holding an aggregate of five units of limited
partnership  interests in Real Estate Associates Limited VI (another  affiliated
partnership in which NAPICO is the General Partner)  commenced an action against
the Partnership,  NAPICO and certain other defendants.  The claims included, but
were not  limited  to,  claims for  breaches  of  fiduciary  duty to the limited
partners of certain  NAPICO-managed  partnerships  and  violations of securities
laws by  making  materially  false  and  misleading  statements  in the  consent
solicitation  statements  sent to the  limited  partners  of  such  partnerships
relating  to  approval  of the  transfer  of  partnership  interests  in limited
partnerships,  owning  certain  of  the  properties,  to  affiliates  of  Casden
Properties,  Inc.,  organized by an affiliate of NAPICO.  On August 4, 1999, one
investor  holding one unit of limited  partnership  interest in Housing Programs
Limited (another affiliated  partnership in which NAPICO is the General Partner)
commenced a virtually  identical  action  against  the  Partnership,  NAPICO and
certain other entities.  The second action was subsumed in the first action, and
was certified as a class action.

On April 29, 2003, the court entered  judgment  against NAPICO and certain other
defendants  in the amount of  approximately  $25.2  million  for  violations  of
securities laws and against NAPICO for approximately  $67.3 million for breaches
of fiduciary  duty, both amounts plus interest of  approximately  $25.6 million,
and for punitive damages against NAPICO in the amount of $2.6 million.

On August 11, 2003,  Apartment  Investment and Management  Company ("AIMCO") and
NAPICO  entered  into  a  Stipulation  of  Settlement   (the   "Stipulation   of
Settlement")  with the  plaintiff  class (the  "Plaintiffs")  and their  counsel
relating  to the  settlement  of the  litigation.  The  principal  terms  of the
Stipulation of Settlement include,  among other things (1) payments in both cash
($29 million) and stock ($19  million) by Alan I. Casden,  on behalf of himself,
NAPICO and other defendants,  to the Plaintiffs,  (2) guaranteed  payments in an
aggregate  amount  of $35  million  ($7  million  per  year for 5  years),  plus
interest,  by NAPICO to the  Plaintiffs,  (3) a release of claims of all parties
associated with the litigation and (4) joint agreement by the parties to request
that a new judgment be entered in the litigation to, among other things, expunge
the judgment originally entered against NAPICO and the other defendants.

In connection with the Stipulation of Settlement, on August 12, 2003, NAPICO and
AIMCO executed a Settlement  Agreement  (the  "Settlement  Agreement")  with the
prior  shareholders  of  Casden  Properties,  Inc.  The  principal  terms of the
Settlement  Agreement  include,   among  other  things,  that  (1)  NAPICO  will
voluntarily  discontinue  the action it  commenced  on May 13, 2003  against the
former  shareholders  of Casden  Properties,  Inc. and other  indemnitors in the
Casden  Merger,  (2) Alan I. Casden and certain  related  entities  will resolve
certain  pending  claims for  indemnification  made by  NAPICO,  AIMCO and their
affiliates,  (3) AIMCO or an  affiliate  will  provide  $25  million  of the $29
million in cash that Alan I. Casden is obligated to provide under the Stipulaton
of Settlement in exchange for 531,915 shares of AIMCO Class A Common Stock owned
by The Casden Company,  and (4) The Casden Company will promise to pay to NAPICO
an  aggregate  amount of $35 million  ($7  million  per year for 5 years),  plus
interest,  on a secured,  nonrecourse  basis.  The Casden Company can prepay its
obligation  set forth in item (4) above in shares of AIMCO Class A Common  Stock
having a value based on the greater of $47 per share or the market value of such
shares at the time of payment.

On December 30, 2003,  the  Stipulation of Settlement  with the plaintiff  class
(the  "Plaintiffs")  and their counsel  relating to the settlement of litigation
against the Registrant,  National Partnership  Investments Corp.  ("NAPICO") and
certain  other  defendants  became  effective in accordance  with its terms.  In
addition,  on  December  30,  2003,  the  Settlement  Agreement  with the  prior
shareholders of Casden  Properties,  Inc.,  NAPICO and Apartment  Investment and
Management Company ("AIMCO") also closed in accordance with its terms.

During 2001, the Partnership and an affiliated  partnership filed a suit against
several  parties for breach of  fiduciary  duties and breach of the  partnership
agreements  of  Quivira  Limited  Partnership,  in  which  the  Partnership  has
invested, and another Limited Partnership in which the affiliated partnership is
invested.   The  property  in  each  respective  Limited  Partnership  had  been
refinanced  during 2001;  however,  the proceeds from the refinancing were being
held within the Quivira Limited Partnership instead of being distributed.

During the year ended December 31, 2002, the Partnership received  approximately
$108,000  from one of the  parties  involved  in this legal  action as part of a
settlement agreement.  Approximately  $1,492,000 of its share of the refinancing
proceeds of Quivira  Limited  Partnership  were received during August 2002. The
Partnership obtained judgments totaling approximately $4,800,000 against certain
defendants in 2002.  During the year ended  December 31, 2003,  the  Partnership
received approximately $1,682,000 from the parties involved in this legal action
as part of a global settlement agreement with the local general partner. As part
of the  settlement  agreement,  the  Partnership  expects to receive  additional
payments from the defendants over the next five years.

One  of the  Local  Limited  Partnerships,  East  Ridge  Apartments,  filed  for
bankruptcy in December 2002 in an effort to  restructure  its debt. The property
was lost to foreclosure in June 2003. The  Partnership's  investment  balance in
this Local  Limited  Partnership  had  previously  been  reduced to zero so this
action has no effect on the Partnership's investment balance on the accompanying
balance sheet.

During the year ended  December 31,  2002,  an  impairment  loss of $790,000 was
recognized with respect to the Partnership's  investment in a Local Partnership,
Michigan  Beach.  The Local  Partnership  reached a settlement  with the City of
Chicago during 2002 to complete  necessary repairs to the exterior facade of the
building.  The total estimated cost to complete this project will be advanced to
Michigan  Beach by the  Partnership.  Since  the  Partnership  has no  remaining
investment  balance in Michigan Beach, and recovery of the advance is uncertain,
the entire amount of the  estimated  cost was  recognized as an impairment  loss
during the year ended  December  31,  2002.  During the year ended  December 31,
2003, an additional  impairment  loss of  approximately  $368,000 was recognized
with respect to the  Partnership's  investment in Michigan  Beach due to revised
estimates of the cost to complete  the repairs  required by the City of Chicago.
During the year ended December 31, 2003, the Partnership advanced Michigan Beach
approximately $504,000 for costs incurred to date. A liability for the remaining
advance to be made to the Local  Partnership  is reflected  on the  accompanying
balance  sheet.  Subsequent  to December  31,  2003,  the  Partnership  advanced
Michigan Beach an additional approximately $669,000.

In addition to the litigation  discussed  above, the General Partner is involved
in various other lawsuits  arising from  transactions  in the ordinary course of
business.  In the opinion of management and the General Partner, the claims will
not result in any material liability to the Partnership.

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No  matters  were  submitted  to a vote  of the  limited  partners  through  the
solicitation of proxies or otherwise during the quarter ended December 31, 2003.

                                     PART II

ITEM 5.  MARKET  FOR  THE   REGISTRANT'S   PARTNERSHIP   INTERESTS  AND  RELATED
         PARTNERSHIP MATTERS

The Limited  Partnership  Interests are not traded on a public exchange but were
sold through a public offering  managed by PaineWebber  Incorporated.  It is not
anticipated that any active public market will develop for the purchase and sale
of any Limited  Partnership  Interests,  therefore  an investor may be unable to
sell or  otherwise  dispose of his or her interest in the  Partnership.  Limited
Partnership Interests may not be transferred but can be assigned only if certain
requirements in the Partnership  Agreement are satisfied.  At December 31, 2003,
there were 3,675  registered  holders of units in NTCI-II.  The  Partnership has
invested in certain  government  assisted  projects under programs which in many
instances  restrict the cash return available to project owners. The Partnership
was  not  designed  to  provide  cash   distributions  to  Limited  Partners  in
circumstances  other than refinancing or disposition of its investments in Local
Partnerships. Distributions have not been made from inception of the Partnership
to December 31, 2003.

AIMCO and its affiliates owned 397.0 limited  partnership units (the "Units") in
the  Partnership  representing  0.55% of the  outstanding  Units at December 31,
2003. It is possible that AIMCO or its affiliates will acquire  additional Units
in exchange  for cash or a  combination  of cash and units in AIMCO  Properties,
L.P., the operating partnership of AIMCO. Pursuant to the Partnership Agreement,
unitholders  holding a majority  of the Units are  entitled  to take action with
respect to a variety of matters that include,  but are not limited to, voting on
certain amendments to the Partnership Agreement and voting to remove the General
Partner.  Although  the General  Partner  owes  fiduciary  duties to the limited
partners of the  Partnership,  the General Partner also owes fiduciary duties to
AIMCO as its sole stockholder.  As a result,  the duties of the General Partner,
as General  Partner,  to the Partnership and its limited  partners may come into
conflict  with  the  duties  of the  General  Partner  to  AIMCO,  as  its  sole
stockholder.

ITEM 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

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

The General  Partner  monitors  developments in the area of legal and regulatory
compliance and is studying new federal laws, including the Sarbanes-Oxley Act of
2002. The Sarbanes-Oxley Act of 2002 mandates or suggests additional  compliance
measures with regard to governance,  disclosure, audit and other areas. In light
of these changes,  the  Partnership  expects that it will incur higher  expenses
related to compliance, including increased legal and audit fees.

Liquidity

Some of the  Properties  in which the  Partnership  has  invested,  through  its
investment in other limited partnerships ("Local Partnerships"),  receive one or
more forms of assistance  from the Federal  Government.  As a result,  the Local
Partnership's  ability to  transfer  funds  either to the  Partnership  or among
themselves  in  the  form  of  cash  distributions,  loans  or  advances  may be
restricted by these government assistance programs. These restrictions, however,
are  not  expected  to  impact  the  Partnership's  ability  to  meet  its  cash
obligations.

Each Partnership  acquisition is analyzed by the General Partner with respect to
its probable impact upon the Partnership's  liquidity position.  In this regard,
the General  Partner takes into account  projected  cash flow generated from the
Local  Partnerships,  the anticipated debt service  requirements of the existing
financing and any restructuring or refinancing of the projects, and the division
of cash flow in excess of debt  service  between the  Partnership  and the local
general partner.

Following  an  acquisition,  adverse  business or financial  developments  could
negatively  impact  cash  flow and the  Partnership's  liquidity  position.  The
General Partner may attempt to obtain operating deficit  guarantees from certain
local general  partners to fund operating  deficits for limited periods of time.
See "Investment  Objectives and Policies - Operating Deficit  Guarantees" in the
Prospectus. In addition, the Local Partnerships are expected to maintain working
capital  reserves  independent  of those  maintained by the  Partnership  to the
extent that (i) the terms of mortgage debt encumbering the projects or the terms
of any  government  assistance  program so  require,  or (ii) the Local  General
Partner  determines  that such  reserves are  necessary or  advisable.  Although
reserves are to be  maintained  at both the  Partnership  and Local  Partnership
levels, if such reserves and other available income, if any, are insufficient to
cover  the  Partnership's  or any Local  Partnership's  operating  expenses  and
liabilities,   it  may  be  necessary  to  accumulate   additional   funds  from
distributions   received  from  Local  Partnerships  which  would  otherwise  be
available  for  distribution  to  the  Limited  Partners,  or to  liquidate  the
Partnership's investment in one or more Local Partnerships.

Reserves  of the  Partnership  and  reserves  of the Local  Partnerships  may be
increased  or  decreased  from time to time by the general  partner or the local
general  partner,  as the case may be,  in order to meet  anticipated  costs and
expenses.  The amount of cash flow  available  for  distribution  and/or sale or
refinancing proceeds, if any, which is available for distribution to the Limited
Partners may be affected accordingly.

Capital Resources

The Partnership raised $72,404,000 from investors by a public offering, the term
of which  expired  on April  22,  1992,  that  was used for the  acquisition  of
investments in Local Partnerships  which own the projects.  NTCI-II made capital
contributions  to 37 Local  Partnerships.  The  investment  in one of the  Local
Partnerships  was sold and one was  foreclosed  upon in each of the years ending
December 31, 2003, 2002 and 2001. As of December 31, 2003, the Partnership holds
limited partner interests in 31 Local Partnerships.

It is not expected that any of the Local  Partnerships  in which the Partnership
invests will generate cash from operations  sufficient to provide  distributions
to the Limited  Partners in any material amount.  Such cash from operations,  if
any,  would first be used to meet  operating  expenses of the  Partnership.  The
Partnership's  investments will not be readily marketable and may be affected by
adverse general economic conditions which, in turn, could substantially increase
the risk of operating  losses for the projects,  the Local  Partnerships and the
Partnership.  These problems may result from a number of factors,  many of which
cannot be controlled by the General Partner.

The  General  Partner  has the  right to  cause  distributions  received  by the
Partnership from the Local  Partnerships  (that would otherwise be available for
distributions  as cash flow) to be dedicated to the increase or replenishment of
reserves at the Partnership  level.  The reserves will generally be available to
satisfy working capital or operating expense needs of the Partnership (including
payment of  partnership  management  fees) and will also be available to pay any
excess  third-party  costs or expenses incurred by the Partnership in connection
with the  administration  of the Partnership,  the preparation of reports to the
Limited Partners and other investor servicing obligations of the Partnership. At
the  discretion  of  the  General   Partner,   reserves  may  be  available  for
contributions to the Local Partnerships.

The  Partnership  does not have the  ability  to  assess  Limited  Partners  for
additional capital contributions to provide capital if needed by the Partnership
or Local Partnerships.  Accordingly, if circumstances arise that cause the Local
Partnerships  to  require  capital  in  addition  to  that  contributed  by  the
Partnership and any equity of the local general partners,  the only sources from
which such capital  needs will be able to be  satisfied  (other than the limited
reserves  available  at the  Partnership  level)  will be (i)  third-party  debt
financing (which may not be available if, as expected, the projects owned by the
Local  Partnerships  are already  substantially  leveraged),  (ii) other  equity
sources (which could adversely  affect the  Partnership's  interest in operating
cash flow and/or  proceeds of sale or  refinancing  of the projects  which would
result in adverse tax consequences to the Limited  Partners),  or (iii) the sale
or disposition  of projects.  There can be no assurance that any of such sources
would be  readily  available  in  sufficient  proportions  to fund  the  capital
requirements of the Local Partnerships.  If such sources are not available,  the
Local  Partnerships would risk foreclosure on their projects if they were unable
to renegotiate  the terms of their first mortgages and any other debt secured by
the  projects,  which would have  significant  adverse tax  consequences  to the
Limited Partners.

Distributions  received from limited  partnerships are recognized as a reduction
of the investment  balance until the investment balance has been reduced to zero
or  to a  negative  amount  equal  to  future  capital  contributions  required.
Subsequent distributions received are recognized as income.

As of December  31,  2003,  the  Partnership  has cash and cash  equivalents  of
approximately $1,541,000. Substantially all of this cash is on deposit primarily
with high credit quality financial institutions, earning interest. This resulted
in the Partnership earning  approximately $11,000 and $13,000 in interest income
for the years  ended  December  31,  2003 and 2002  respectively.  The amount of
interest  income varies with the market rates available on deposits and with the
amount of funds available for investment.  Cash  equivalents can be converted to
cash to meet  obligations  of the  Partnership  as they  rise.  The  Partnership
intends to continue investing available funds in this manner.

Results of Operations

The Partnership was formed to provide various  benefits to its Limited  Partners
as discussed in "Item 1.  Description of Business".  It is not expected that any
of the Local  Partnerships  in which the  Partnership has invested will generate
cash flow  sufficient to provide for  distributions  to Limited  Partners in any
material  amount.  The  Partnership  accounts for its  investments  in the Local
Partnerships on the equity method,  thereby adjusting its investment  balance by
its  proportionate  share of the income or loss of the Local  Partnerships.  The
investments in 21 of the 31 Local  Partnerships  have been reduced to zero as of
December 31, 2003.

In general, in order to avoid recapture of Housing Tax Credits,  the Partnership
does not expect  that it will  dispose  of its Local  Partnership  Interests  or
approve the sale by a Local  Partnership  of any project prior to the end of the
applicable 15-year Compliance Period. Because of (i) the nature of the projects,
(ii) the difficulty of predicting the resale market for low-income housing 15 or
more years in the future, and (iii) the inability of the Partnership to directly
cause the sale of projects by local  general  partners,  but  generally  only to
require such local general partners to use their respective best efforts to find
a purchaser for the projects, it is not possible at this time to predict whether
the  liquidation  of  substantially  all of the  Partnership's  assets  and  the
disposition  of the  proceeds,  if  any,  in  accordance  with  the  partnership
agreement  will be able to be  accomplished  promptly  at the end of the 15-year
period.  If a Local  Partnership is unable to sell a project,  it is anticipated
that the local general  partner will either continue to operate such projects or
take such other actions as the local general partner  believes to be in the best
interest of the Local Partnership. In addition, circumstances beyond the control
of the  General  Partner  may occur  during the  Compliance  Period  which would
require the Partnership to approve the disposition of a project prior to the end
of the Compliance Period.

Except  for  interim   investments  in  highly  liquid  debt  investments,   the
Partnership's  investments  are entirely  interests in other Local  Partnerships
owning projects. Funds temporarily not required for such investments in projects
are invested in these highly liquid debt investments  earning interest income as
reflected in the  statements of  operations.  These interim  investments  can be
easily converted to cash to meet obligations as they arise.

The Partnership,  as a Limited Partner in the Local Partnerships in which it has
invested,  is subject to the risks  incident to the  management and ownership of
improved real estate.  The  Partnership  investments are also subject to adverse
general  economic  conditions,  and  accordingly,  the  status  of the  national
economy,  including  substantial  unemployment and concurrent  inflation,  could
increase vacancy levels, rental payment defaults, and operating expenses,  which
in turn,  could  substantially  increase  the risk of  operating  losses for the
projects.

The  Partnership,  as a limited  partner,  does not  exercise  control  over the
activities and  operations,  including  refinancing or selling  decisions of the
Local Partnerships.  Accordingly, the Partnership accounts for its investment in
the Local Partnerships using the equity method. Thus the individual  investments
are  carried  at cost plus the  Partnership's  share of the Local  Partnership's
profits  less  the  Partnership's  share  of  the  Local  Partnership's  losses,
distributions  and impairment  charges.  However,  since the  Partnership is not
legally  liable  for  the  obligations  of  the  Local  Partnerships,  or is not
otherwise committed to provide additional support to them, it does not recognize
losses  once its  investment  in each of the Local  Partnerships  reaches  zero.
Distributions  from the Local  Partnerships  are accounted for as a reduction of
the  investment  balance  until  the  investment  balance  is  reduced  to zero.
Subsequent  distributions  received are recognized as income in the accompanying
statements  of  operations.  For those  investments  where the  Partnership  has
determined that the carrying value of its investments approximates the estimated
fair value of those investments, the Partnership's policy is to recognize equity
in  income  of the  Local  Partnerships  only  to the  extent  of  distributions
received,  and amortization of acquisition costs from those Local  Partnerships.
During the years ended  December 31, 2003 and 2002, the  Partnership  recognized
equity in loss of approximately $907,000 and $995,000,  respectively, from Local
Partnerships. During the years ended December 31, 2003 and 2002, the Partnership
received  approximately $75,000 and $1,729,000,  respectively,  in distributions
from Local  Partnerships  that were  recognized  as income in the  statements of
operations since the Partnership's investment in the Local Partnerships has been
reduced to zero.

An annual  partnership  management  fee in an amount  equal to 0.5% of  invested
assets,  as  defined in the  Partnership  Agreement,  is payable to the  General
Partner.  The management  fee represents the annual  recurring fee which will be
paid  to the  General  Partner  for its  continuing  management  of  Partnership
affairs.  Management fees were approximately $620,000 and $636,000 for the years
ended December 31, 2003 and 2002, respectively.

Operating  expenses,  exclusive  of the  management  fee,  consist  of legal and
accounting  fees for  services  rendered  to the  Partnership  and  general  and
administrative  expenses.  Legal and accounting fees were approximately $226,000
and $1,844,000 for the years ended December 31, 2003 and 2002, respectively. The
decrease in 2003 is primarily due to legal fees incurred  related to legal cases
as discussed  in "Item 7.  Financial  Statements  - Notes 6 and 8".  General and
administrative  expenses were approximately  $117,000 and $178,000 for the years
ended  December  31, 2003 and 2002,  respectively.  The  decrease in general and
administrative  expenses is primarily due to reduced costs to  communicate  with
investors.

One  of the  Local  Limited  Partnerships,  East  Ridge  Apartments,  filed  for
bankruptcy in December 2002 in an effort to  restructure  its debt. The property
was lost to foreclosure in June 2003. The  Partnership's  investment  balance in
this Local  Limited  Partnership  had  previously  been  reduced to zero so this
action has no effect on the Partnership's investment balance on the accompanying
balance sheet.

During the year ended December 31, 2003, a Local  Partnership,  Villa Real, sold
its investment property. As the Partnership had no investment balance related to
this Local Partnership, the distribution proceeds from the sale of approximately
$793,000 were reported as gain on sale of limited partnership interest.

During the year ended December 31, 2003, the Partnership  diluted its investment
in the Rancho del Mar  Apartments  Limited  Partnership  from 99% to 66.4%.  The
proceeds  received for this  dilution of  approximately  $1,017,000  reduced the
Partnership's investment balance in the Local Partnership.

During the year ended December 31, 2002, an impairment  charge of  approximately
$299,000  was  recognized  at a  Local  Partnership,  Asheville  Equity,  due to
recurring  operating  losses.  The fair value of the assets was  determined  via
analysis of budgeted future net operating  income.  The impairment charge had no
impact on the  Partnership as its investment in Asheville  Equity had previously
been reduced to zero.

Due to operating  deficits,  the Wade Walton Limited  Partnership  which owned a
property in Clarksdale,  Mississippi had been unable to service its mortgage and
the lender commenced foreclosure proceedings.  The Limited Partnership commenced
bankruptcy  proceedings on July 20, 1999 in order to stay the  foreclosure  sale
and  reorganize  under  Chapter 11 of the United  States  Bankruptcy  Code.  The
bankruptcy  court  subsequently  terminated the automatic stay and a foreclosure
sale occurred on May 31, 2002. The Partnership had no investment balance related
to this Limited Partnership.

During 2001, the Partnership and an affiliated  partnership filed a suit against
several  parties for breach of  fiduciary  duties and breach of the  partnership
agreements  of  Quivira  Limited  Partnership,  in  which  the  Partnership  has
invested, and another Limited Partnership in which the affiliated partnership is
invested.   The  property  in  each  respective  Limited  Partnership  had  been
refinanced  during 2001;  however,  the proceeds from the refinancing were being
held by the Quivira Limited Partnership instead of being distributed.

During the year ended December 31, 2002, the Partnership received  approximately
$108,000  from one of the  parties  involved  in this legal  action as part of a
settlement agreement.  Approximately  $1,492,000 of its share of the refinancing
proceeds of Quivira  Limited  Partnership  were received during August 2002. The
Partnership obtained judgments totaling approximately $4,800,000 against certain
defendants in 2002.  During the year ended  December 31, 2003,  the  Partnership
received approximately $1,682,000 from the parties involved in this legal action
as part of a global settlement agreement with the local general partner. As part
of the  settlement  agreement,  the  Partnership  expects to receive  additional
payments from the defendants over the next five years.

During the year ended December 31, 2002, the Partnership  diluted its investment
in the Sheboygan Regency House Limited  Partnership  leaving a 9.91% interest in
this  Local  Partnership.   Total  proceeds  received  in  connection  with  the
transaction  were  $247,000.  After  recognizing  approximately  $105,000  as  a
reduction  of  investment  balance,  the  Partnership's  investment  balance  in
Sheboygan  Regency  House  Limited  Partnership  had been  reduced to zero.  The
remaining  proceeds of  approximately  $142,000 were reported as gain on sale of
limited partnership interest on the accompanying statement of operations.

During the year ended December 31, 2002, the Partnership  sold its investment in
the Cottages of North St. Paul. As the  Partnership  had no  investment  balance
related to this Local  Partnership,  the  proceeds of  approximately  $5,000 and
$1,616,000 that were received during the years ended December 31, 2003 and 2002,
respectively,  were reported as gain on sale of limited partnership  interest on
the accompanying statement of operations.

In  November  2002,  the General  Partner  closed a  transaction  with the Local
General  Partner  of  Pineview  Terrace  for a  dilution  of  the  Partnership's
investment,  giving the Local  General  Partner 100% of the cash flow and 50% of
any  sale  or  refinance   proceeds  in  the  Pineview   Terrace  Local  Limited
Partnership. In return, the Partnership received a distribution of approximately
$500,000  from  the  Local  General  Partner.  Approximately  $237,000  of  this
distribution  was  recognized as income during the year ended December 31, 2002,
while  approximately  $263,000 was  recognized  as a reduction of the  remaining
investment  balance in Pineview  Terrace Limited  Partnership  which reduced the
balance to zero.

During the year ended  December 31, 2002, an  impairment  charge of $834,000 was
recognized  with respect to the investment in one Local  Partnership,  Wedgewood
Commons.  In June 2003,  the  Partnership  diluted its  investment  in Wedgewood
Commons from 99% to 18.99%. The Partnership realized  approximately $82,000 from
this dilution, which reduced the investment value.

During the year ended  December 31,  2002,  an  impairment  loss of $790,000 was
recognized with respect to the Partnership's  investment in a Local Partnership,
Michigan  Beach.  The Local  Partnership  reached a settlement  with the City of
Chicago during 2002 to complete  necessary repairs to the exterior facade of the
building.  The total estimated cost to complete this project will be advanced to
Michigan  Beach by the  Partnership.  Since  the  Partnership  has no  remaining
investment  balance in Michigan Beach, and recovery of the advance is uncertain,
the entire amount of the  estimated  cost was  recognized as an impairment  loss
during the year ended  December  31,  2002.  During the year ended  December 31,
2003, an additional  impairment  loss of  approximately  $368,000 was recognized
with respect to the  Partnership's  investment in Michigan  Beach due to revised
estimates of the cost to complete  the repairs  required by the City of Chicago.
During the year ended December 31, 2003, the Partnership advanced Michigan Beach
approximately $504,000 for costs incurred to date. A liability for the remaining
advance to be made to the Local  Partnership  is reflected  on the  accompanying
balance  sheet.  Subsequent  to December  31,  2003,  the  Partnership  advanced
Michigan Beach an additional approximately $669,000.

During 2001,  the  Partnership  sold its  investment in the  Cottonwood  Limited
Partnership.  Of the  total  proceeds,  approximately  $221,000  was  due to the
Partnership  as of December 31, 2001.  This amount was received  during the year
ended December 31, 2002.

Other

AIMCO and its affiliates owned 397.0 limited  partnership units (the "Units") in
the  Partnership  representing  0.55% of the  outstanding  Units at December 31,
2003. It is possible that AIMCO or its affiliates will acquire  additional Units
in exchange  for cash or a  combination  of cash and units in AIMCO  Properties,
L.P., the operating partnership of AIMCO. Pursuant to the Partnership Agreement,
unitholders  holding a majority  of the Units are  entitled  to take action with
respect to a variety of matters that include,  but are not limited to, voting on
certain amendments to the Partnership Agreement and voting to remove the General
Partner.  Although  the General  Partner  owes  fiduciary  duties to the limited
partners of the  Partnership,  the General Partner also owes fiduciary duties to
AIMCO as its sole stockholder.  As a result,  the duties of the General Partner,
as General  Partner,  to the Partnership and its limited  partners may come into
conflict  with  the  duties  of the  General  Partner  to  AIMCO,  as  its  sole
stockholder.

Recent Accounting Pronouncements

Effective January 1, 2002, the Partnership adopted SFAS No. 144, "Accounting for
the Impairment or Disposal of Long-Lived  Assets",  which established  standards
for the way that public business enterprises report information about long-lived
assets that are either being held for sale or have  already been  disposed of by
sale or other means.  The standard  requires  that results of  operations  for a
long-lived  asset that is being held for sale or has already been disposed of be
reported as a  discontinued  operation  on the  statement  of  operations.  As a
result, the combined statements of operations in Note 2 have been restated as of
January 1, 2002 to reflect  the  operations  of Villa Real and East Ridge  Local
Partnerships  as  loss  from  discontinued  operations  due to  their  sale  and
foreclosure during the year ended December 31, 2003.

In January 2003,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Interpretation  No. 46 ("FIN 46"),  Consolidation of Variable Interest Entities.
FIN 46 requires the  consolidation of entities in which an enterprise  absorbs a
majority of the entity's  expected  losses,  receives a majority of the entity's
expected  residual  returns,  or both, as a result of ownership,  contractual or
other  financial  interests  in the  entity.  Prior to the  issuance  of FIN 46,
entities were generally  consolidated by an enterprise when it had a controlling
financial  interest  through  ownership  of a majority  voting  interest  in the
entity.  FIN 46 applied  immediately to variable interest entities created after
January 31, 2003, and with respect to variable interests held before February 1,
2003, FIN 46 will apply for financial statements filed after December 15, 2004.

The Partnership has not entered into any partnership  investments  subsequent to
January  31,  2003.  The  Partnership  is  in  the  process  of  evaluating  its
investments in unconsolidated  partnerships that may be deemed variable interest
entities under the provisions of FIN 46. The  Partnership has not yet determined
the anticipated  impact of adopting FIN 46 for its  partnership  agreements that
existed as of January 31, 2003. However, FIN 46 may require the consolidation of
the  assets,   liabilities  and  operations  of  certain  of  the  Partnership's
unconsolidated  partnership  investments.  Although  the  Partnership  does  not
believe  the full  adoption  of FIN 46 will  have an impact  on cash  flow,  the
Partnership cannot make any definitive  conclusion on the impact on net earnings
until it completes its evaluation,  including an evaluation of the Partnership's
maximum exposure to loss.

In May 2003,  the FASB issued SFAS 150, which  establishes  standards for how an
issuer   classifies   and   measures   certain   financial    instruments   with
characteristics  of both  liabilities and equity.  The  requirements of SFAS 150
apply  to  the   classification   and  measurement  of  freestanding   financial
instruments.  SFAS 150 is effective  for financial  instruments  entered into or
modified  after May 31, 2003, and otherwise is effective at the beginning of the
first interim period  beginning after June 15, 2003. The Partnership has adopted
SFAS 150 as of July 1, 2003.  Additionally,  in September  2003,  the FASB staff
indicated  that  SFAS 150  also  applies  to the  non-controlling  interests  in
consolidated  finite life partnerships.  However,  on October 29, 2003, the FASB
indefinitely  deferred the provisions of SFAS 150 for finite life  partnerships.
The  adoption  of SFAS 150 did not have a material  impact on the  Partnership's
results of operations taken as a whole.

Critical Accounting Policies and Estimates

A summary of the Partnership's  significant  accounting  policies is included in
"Note 1 - Organization and Summary of Significant  Accounting Policies" which is
included in the financial  statements  in "Item 7.  Financial  Statements".  The
General  Partner  believes that the  consistent  application  of these  policies
enables the  Partnership  to provide  readers of the financial  statements  with
useful and reliable  information about the  Partnership's  operating results and
financial condition.  The preparation of financial statements in conformity with
accounting  principles  generally  accepted in the United  States  requires  the
Partnership to make estimates and  assumptions.  These estimates and assumptions
affect  the  reported  amounts  of  assets  and  liabilities  at the date of the
financial statements as well as reported amounts of revenues and expenses during
the  reporting  period.  Actual  results  could  differ  from  these  estimates.
Judgments  and  assessments  of  uncertainties  are  required  in  applying  the
Partnership's  accounting policies in many areas. The Partnership  believes that
of its  significant  accounting  policies,  the  following  may involve a higher
degree of judgment and complexity.

Method of Accounting for Investments in Limited Partnerships

The  Partnership,  as a limited  partner,  does not  exercise  control  over the
activities and operations,  including  refinancing or selling decisions,  of the
Local Partnerships. Accordingly, the Partnership accounts for its investments in
the Local  Partnerships  using the equity method.  The  Partnership is allocated
profits and losses of the Local Partnerships based upon its respective ownership
percentage  of 5% to 99%.  Distributions  of surplus cash from  operations  from
twelve of the  Local  Partnerships  are  restricted  by the Local  Partnerships'
Regulatory  Agreements  with the United  States  Department of Housing and Urban
Development ("HUD").  These restrictions limit the distribution to a percentage,
generally  less than 10%, of the initial  invested  capital.  The excess surplus
cash is  deposited  into a  residual  receipts  reserve,  of which the  ultimate
realization by the  Partnership  is uncertain as HUD frequently  retains it upon
sale or  dissolution  of the Local  Partnership.  For the other  nineteen  Local
Partnerships  distributions of surplus cash are not restricted. The Partnerships
are allocated profits and losses and receive distributions from refinancings and
sales in accordance with the Local Partnerships'  partnership agreements.  These
agreements   usually  limit  the   Partnerships'   distributions  to  an  amount
substantially less than its ownership percentage in the Local Partnership.

The individual  investments are carried at cost plus the Partnership's  share of
the  Local  Partnership's  profits  less the  Partnership's  share of the  Local
Partnership's  losses,  distributions  and  impairment  charges.  See  "Item  1.
Financial  Statements  -  Note  1 -  Organization  and  Summary  of  Significant
Accounting Policies" for a description of the impairment policy. The Partnership
is not legally liable for the obligations of the Local  Partnerships  and is not
otherwise  committed to provide additional support to them.  Therefore,  it does
not  recognize  losses  once its  investment  in each of the Local  Partnerships
reaches zero.  Distributions  from the Local Partnerships are accounted for as a
reduction of the investment  balance until the investment  balance is reduced to
zero.  When  the  investment  balance  has  been  reduced  to  zero,  subsequent
distributions  received are recognized as income in the accompanying  statements
of operations.

For those  investments  where the  Partnership  has determined that the carrying
value  of its  investments  approximates  the  estimated  fair  value  of  those
investments,  the  Partnership's  policy is to recognize equity in income of the
Local Partnerships only to the extent of distributions received and amortization
of acquisition costs from those Local Partnerships.  Therefore,  the Partnership
limits its recognition of equity earnings to the amount it expects to ultimately
realize.


<PAGE>


ITEM 7.     FINANCIAL STATEMENTS

National Tax Credit Investors II
(a California limited partnership)

LIST OF FINANCIAL STATEMENTS

Report of Ernst & Young, LLP, Independent Auditors

Balance Sheet - December 31, 2003

Statements of Operations - Years ended December 31, 2003 and 2002

Statements of Changes in Partners'  (Deficiency)  Capital - Years ended December
31, 2003 and 2002

Statements of Cash Flows - Years ended December 31, 2003 and 2002

Notes to Financial Statements


<PAGE>


                         Report of Independent Auditors



The Partners
National Tax Credit Investors II

We have audited the accompanying  balance sheet of National Tax Credit Investors
II as of December 31, 2003, and the related statements of operations,  partners'
(deficiency)  capital  and cash  flows for each of the two  years in the  period
ended December 31, 2003. 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 did not audit the financial
statements  of  certain  limited  partnerships,  the  investments  in which  are
reflected in the  accompanying  financial  statements using the equity method of
accounting.  The investments in these limited partnerships  represent 25 percent
of the total assets of the Partnership as of December 31, 2003 and the equity in
the loss of these  limited  partnerships  represent  24 percent of the total net
income of the  Partnership  for the year ended  December 31, 2003.  The investee
information  for these  limited  partnerships  is included in Notes 2 and 7. The
financial  statements  of  these  limited  partnerships  were  audited  by other
auditors whose reports have been furnished to us, and our opinion, insofar as it
relates to the amounts included for these limited partnerships,  is based solely
on the reports of the other auditors.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We  believe  that our audits  and the  reports of other  auditors
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 National Tax Credit  Investors II as of December 31,
2003,  and the results of its  operations and its cash flows for each of the two
years in the period ended  December  31, 2003,  in  conformity  with  accounting
principles generally accepted in the United States.


                                                            /s/Ernst & Young LLP

Greenville, South Carolina
April 20, 2004



<PAGE>




                        NATIONAL TAX CREDIT INVESTORS II

                                  BALANCE SHEET
                                 (in thousands)

                                DECEMBER 31, 2003

<TABLE>
<CAPTION>

                            ASSETS

<S>                                     <C>                                  <C>
Investments in Local Partnerships (Note 2)                                   $ 7,158
Cash and cash equivalents                                                      1,541
       Total Assets                                                          $ 8,699

        LIABILITIES AND PARTNERS' (DEFICIENCY) CAPITAL

Liabilities:
  Accrued liability to a Local Partnership (Notes 2 and 4)                    $ 654

Contingencies (Note 8)

Partners' (Deficiency) Capital:
  General Partners                                               $ (549)
  Limited Partners                                                 8,594       8,045


       Total liabilities and partners' (deficiency) capital                  $ 8,699

                   See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>
                        NATIONAL TAX CREDIT INVESTORS II

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

<TABLE>
<CAPTION>

                                                              Years Ended December 31,
                                                                  2003          2002
Operating income:
<S>                                                               <C>           <C>
  Interest and other income                                       $ 22          $ 41
  Gain on legal settlement (Note 6)                               1,682           108
      Total operating income                                      1,704           149

Operating expenses:
  Management fees - partners (Note 4)                               620           636
  General and administrative (Note 4)                               117           178
  Legal and accounting                                              226         1,844
      Total operating expenses                                      963         2,658

Income (loss) from partnership operations                           741        (2,509)

Impairment loss (Note 2)                                           (368)       (1,624)
Gain on sale of limited partnership interests (Note 2)              798         1,760
Distributions from limited partnerships recognized as
  income (Note 2)                                                    75         1,729
Equity in loss of Local Partnerships and amortization of
  acquisition costs (Note 2)                                       (907)         (995)

Net income (loss)                                                $ 339        $(1,639)

Net income (loss) allocated to general partners (1%)              $ 3          $ (16)
Net income (loss) allocated to limited partners (99%)               336        (1,623)

                                                                 $ 339        $(1,639)

Net income (loss) per limited partnership interest (Note 1)      $ 4.64       $(22.42)

                   See Accompanying Notes to Financial Statements

</TABLE>
<PAGE>

                        NATIONAL TAX CREDIT INVESTORS II

               STATEMENTS OF CHANGES IN PARTNERS'(DEFICIENCY) CAPITAL
                                 (in thousands)
<TABLE>
<CAPTION>

                                                     General        Limited
                                                     Partner        Partners        Total

Partners' (deficiency) capital at
<S>        <C> <C>                                   <C>            <C>            <C>
  December 31, 2001                                  $ (536)        $ 9,881        $ 9,345

Net loss for the year ended December 31, 2002            (16)        (1,623)        (1,639)

Partners' (deficiency) capital at
  December 31, 2002                                     (552)         8,258          7,706

Net income for the year ended December 31, 2003            3            336            339

Partners' (deficiency) capital at
  December 31, 2003                                  $ (549)        $ 8,594        $ 8,045

                   See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

                        NATIONAL TAX CREDIT INVESTORS II

                            STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                    Years Ended December 31,
                                                                        2003          2002
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                    <C>          <C>
  Net income (loss)                                                    $ 339        $(1,639)
  Adjustments to reconcile net income (loss) to net cash used in
    operating activities:
      Gain on sale of partnership interest                               (798)       (1,760)
      Equity in loss of limited partnerships and amortization
        of acquisition costs                                              907           995
      Impairment loss                                                     368         1,624
      Decrease in accounts payable and accrued expenses                  (152)         (203)
      Decrease in accrued fees and expenses due to partners            (1,127)       (1,418)
         Net cash used in operating activities                           (463)       (2,401)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of limited partnership interests                     798         2,084
  Proceeds from dilution of interest in local partnership               1,099            --
  Distributions recognized as a reduction of investment
     balance                                                               60           374
  Decrease (increase) in restricted cash                                  267            (2)
  Advances to limited partnerships                                       (622)         (233)
  Repayment of advances by limited partnerships                             3            --
         Net cash provided by investing activities                      1,605         2,223

CASH FLOWS FROM FINANCING ACTIVITIES:
  Advances from affiliates                                              1,278           200
  Repayment of advances from affiliates                                (1,278)         (200)
         Net cash provided by financing activities                         --            --

NET DECREASE IN CASH AND CASH EQUIVALENTS                               1,142          (178)
CASH AND CASH EQUIVALENTS, beginning of year                              399           577
CASH AND CASH EQUIVALENTS, end of year                                $ 1,541        $ 399

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITY:
  Advances included in accrued liability to a Local Partnership        $ 654         $ 790

                   See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>
                        NATIONAL TAX CREDIT INVESTORS II

                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2003


Note 1 - Organization and Summary of Significant Accounting Policies

Organization

National Tax Credit Investors II ("NTCI II" or the  "Partnership")  is a limited
partnership  formed under the  California  Revised Local  Partnership  Act as of
January  12,  1990.  The  Partnership  was formed to invest  primarily  in other
limited  partnerships  ("Local  Partnerships") which own and operate multifamily
housing  complexes that are eligible for low income  housing  federal income tax
credits (the "Housing Tax Credit").  The general  partner of the  Partnership is
National  Partnership  Investments Corp. (the "General Partner" or "NAPICO"),  a
California corporation. On April 23, 1990, the Partnership offered 100,000 Units
of Limited  Partnership  Interests ("Units") at $1,000 per Unit through a public
offering  managed by Paine  Webber  Incorporated  (the "A Selling  Agent").  The
Partnership  shall  continue in full force and effect until  December,  31, 2030
unless terminated earlier pursuant to the Partnership Agreement or law.

On December 3, 2001, Casden Properties Inc., entered into a merger agreement and
certain other  transaction  documents with  Apartment  Investment and Management
Company,  ("AIMCO"), a publicly traded real estate investment trust, and certain
of its subsidiaries, pursuant to which, on March 11, 2002, AIMCO acquired Casden
Properties, Inc. and its subsidiaries, including 100% of the outstanding capital
stock of NAPICO. Prior to March 11, 2002, Casden Properties, Inc. owned a 95.25%
economic  interest  in  NAPICO,  with the  balance  owned by  Casden  Investment
Corporation ("CIC").  CIC, which is wholly owned by Alan I. Casden, owned 95% of
the voting common stock of NAPICO prior to March 11, 2002.  The special  limited
partner of the  Partnership  ("Special  Limited  Partner")  was  PaineWebber  TC
Partners,  L.P., a Virginia limited partnership.  During the year ended December
31, 2003, the General  Partner  discovered  that the Special Limited Partner was
dissolved  prior to 2003.  It has no  capital  balance  but it's  ownership  and
allocations percentages were allocated to the limited partners.

The General Partner has a one percent  interest in operating  profits and losses
of the  Partnership.  The limited  partners  will be allocated  the remaining 99
percent interest in proportion to their respective investments.

Upon total or partial  liquidation  of the  Partnership  or the  disposition  or
partial  disposition of a project or project  interest and  distribution  of the
proceeds,  the General Partner will be entitled to a property disposition fee as
mentioned  in the  partnership  agreement.  The  limited  partners  will  have a
priority item equal to their invested  capital plus 6 percent priority return as
defined in the partnership  agreement.  This property disposition fee may accrue
but shall not be paid until the limited  partners  have  received  distributions
equal to 100 percent of their capital  contributions plus the 6 percent priority
return.

Basis of Presentation

The  accompanying  financial  statements  have been prepared in conformity  with
accounting principles generally accepted in the United States.

Cash and Cash Equivalents

Cash and cash  equivalents  includes cash on hand and in banks.  The Partnership
has its cash and cash equivalents on deposit in one concentration  account. Such
cash and cash equivalents may be in excess of the FDIC insurance limit.

Method of Accounting for Investment in Local Limited Partnerships

The  investment in limited  partnerships  is accounted for on the equity method.
Acquisition  fees,  selection fees and other costs related to the acquisition of
the projects have been  capitalized  as part of the  investment  account and are
being  amortized by the  straight  line method over the  estimated  lives of the
underlying assets, which is generally 30 years.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Net Income (Loss) Per Limited Partnership Interest

Net income (loss) per limited partnership  interest was computed by dividing the
limited  partners'  share  of  net  income  (loss)  by  the  number  of  limited
partnership  units  outstanding  at the  beginning  of the year.  The  number of
limited  partnership units was 72,404 for both the years ended December 31, 2003
and 2002.

Impairment of Long-Lived Assets

The  Partnership  reviews  long-lived  assets to determine if there has been any
permanent  impairment whenever events or changes in circumstances  indicate that
the  carrying  amount  of the asset  may not be  recoverable.  If the sum of the
expected future cash flows is less than the carrying  amount of the assets,  the
Partnership  recognizes an impairment loss. For the year ended December 31, 2002
impairment  losses of  approximately  $1,624,000 were recognized with respect to
the investments in two Local Partnerships.  For the year ended December 31, 2003
an impairment loss of approximately  $368,000 was recognized with respect to the
investment balance in one Local Partnership.  See "Note 2 - Investments in Local
Partnerships" for further information.

Fair Value of Financial Statements

Statement of Financial Accounting Standards ("SFAS") No. 107, "Disclosures about
Fair Value of Financial  Instruments",  as amended by SFAS No. 110, "Disclosures
about Derivative Financial Instruments and Fair Value of Financial Instruments",
requires  disclosure  of fair value  information  about  financial  instruments,
whether or not recognized in the balance  sheet,  for which it is practicable to
estimate  fair  value.  Fair value is defined in the SFAS as the amount at which
the  instruments  could be exchanged in a current  transaction  between  willing
parties,  other than in a forced or liquidation  sale. The Partnership  believes
that the carrying amounts of its financial  instruments  approximate  their fair
value.

Segment Reporting

SFAS  No.  131,   "Disclosure  about  Segments  of  an  Enterprise  and  Related
Information"  established standards for the way that public business enterprises
report information about operating  segments in annual financial  statements and
requires that those  enterprises  report  selected  information  about operating
segments in interim financial reports. It also establishes standards for related
disclosures about products and services,  geographic areas, and major customers.
As defined in SFAS 131, the Partnership has only one reportable segment.

Recent Accounting Pronouncements

Effective January 1, 2002, the Partnership adopted SFAS No. 144, "Accounting for
the Impairment or Disposal of Long-Lived  Assets",  which established  standards
for the way that public business enterprises report information about long-lived
assets that are either being held for sale or have  already been  disposed of by
sale or other means.  The standard  requires  that results of  operations  for a
long-lived  asset that is being held for sale or has already been disposed of be
reported as a  discontinued  operation  on the  statement  of  operations.  As a
result, the combined statements of operations in Note 2 have been restated as of
January 1, 2002 to reflect  the  operations  of Villa Real and East Ridge  Local
Partnerships  as  loss  from  discontinued  operations  due to  their  sale  and
foreclosure during the year ended December 31, 2003.

In January 2003,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Interpretation  No. 46 ("FIN 46"),  Consolidation of Variable Interest Entities.
FIN 46 requires the  consolidation of entities in which an enterprise  absorbs a
majority of the entity's  expected  losses,  receives a majority of the entity's
expected  residual  returns,  or both, as a result of ownership,  contractual or
other  financial  interests  in the  entity.  Prior to the  issuance  of FIN 46,
entities were generally  consolidated by an enterprise when it had a controlling
financial  interest  through  ownership  of a majority  voting  interest  in the
entity.  FIN 46 applied  immediately to variable interest entities created after
January 31, 2003, and with respect to variable interests held before February 1,
2003, FIN 46 will apply beginning December 15, 2004.

The Partnership has not entered into any partnership  investments  subsequent to
January  31,  2003.  The  Partnership  is  in  the  process  of  evaluating  its
investments in unconsolidated  partnerships that may be deemed variable interest
entities under the provisions of FIN 46. The  Partnership has not yet determined
the anticipated  impact of adopting FIN 46 for its  partnership  agreements that
existed as of January 31, 2003. However, FIN 46 may require the consolidation of
the  assets,   liabilities  and  operations  of  certain  of  the  Partnership's
unconsolidated  partnership  investments.  Although  the  Partnership  does  not
believe  the full  adoption  of FIN 46 will  have an impact  on cash  flow,  the
Partnership cannot make any definitive  conclusion on the impact on net earnings
until it completes its evaluation,  including an evaluation of the Partnership's
maximum exposure to loss.

In May 2003,  the FASB issued SFAS 150, which  establishes  standards for how an
issuer   classifies   and   measures   certain   financial    instruments   with
characteristics  of both  liabilities and equity.  The  requirements of SFAS 150
apply  to  the   classification   and  measurement  of  freestanding   financial
instruments.  SFAS 150 is effective  for financial  instruments  entered into or
modified  after May 31, 2003, and otherwise is effective at the beginning of the
first interim period  beginning after June 15, 2003. The Partnership has adopted
SFAS 150 as of July 1, 2003.  Additionally,  in September  2003,  the FASB staff
indicated  that  SFAS 150  also  applies  to the  non-controlling  interests  in
consolidated  finite life partnerships.  However,  on October 29, 2003, the FASB
indefinitely  deferred the provisions of SFAS 150 for finite life  partnerships.
The  adoption  of SFAS 150 did not have a material  impact on the  Partnership's
results of operations taken as a whole.

Note 2 - Investments in Local Partnerships

As of December 31, 2003 the Partnership holds limited  partnership  interests in
31  Local  Limited  Partnerships  (the  "Local  Partnerships"),  located  in  19
different  states.  As  a  limited  partner  of  the  Local  Partnerships,   the
Partnership  does not have  authority  over  day-to-day  management of the Local
Partnerships  or their  properties  (the  "Apartment  Complexes").  The  general
partners  responsible  for  management  of the Local  Partnerships  (the  "Local
Operating General  Partners") are not affiliated with the General Partner of the
Partnership, except as discussed below.

At December 31, 2003, the Local Partnerships own residential projects consisting
of 3,157 apartment units.

The projects owned by the Local  Partnerships in which NTCI-II has invested were
developed by the local operating  general partners (the "Local Operating General
Partners")  who  acquired  the sites and applied for  applicable  mortgages  and
subsidies,  if any. NTCI-II became the principal  limited partner in these Local
Partnerships  pursuant to  arm's-length  negotiations  with the Local  Operating
General Partners.  As a limited partner,  NTCI-II's liability for obligations of
the Local Partnership is limited to its investment.  The Local Operating General
Partner  of  the  Local  Partnership  retains   responsibility  for  developing,
constructing,  maintaining,  operating  and managing the Project.  Under certain
circumstances,  an affiliate of NAPICO or NTCI-II may act as the Local Operating
General Partner. An affiliate,  National Tax Credit Inc. II ("NTC-II") is acting
either as a special  limited  partner  or  non-managing  administrative  general
partner (the "Administrative General Partner") of each Local Partnership.

The  Partnership,  as a limited  partner,  does not  exercise  control  over the
activities and operations,  including  refinancing or selling decisions,  of the
Local Partnerships. Accordingly, the Partnership accounts for its investments in
the Local  Partnerships  using the equity method.  The  Partnership is allocated
profits and losses of the Local Partnerships based upon its respective ownership
percentage (between 5% and 99%). The Partnership is allocated profits and losses
and receives  distributions  from  refinancings and sales in accordance with the
Local Partnerships'  partnership agreements.  These agreements usually limit the
Partnership's  distributions to an amount  substantially less than its ownership
percentage in the Local Partnership.

The individual  investments are carried at cost plus the Partnership's  share of
the  Local  Partnership's  profits  less the  Partnership's  share of the  Local
Partnership's  losses,  distributions  and  impairment  charges.  See  "Note 1 -
Organization and Summary of Significant  Accounting  Policies" for a description
of the  impairment  policy.  The  Partnership  is not  legally  liable  for  the
obligations of the Local Partnerships and is not otherwise  committed to provide
additional  support to them.  Therefore,  it does not recognize  losses once its
investment in each of the Local  Partnerships  reaches zero.  Distributions from
the Local  Partnerships  are  accounted  for as a  reduction  of the  investment
balance until the  investment  balance is reduced to zero.  When the  investment
balance  has  been  reduced  to  zero,  subsequent  distributions  received  are
recognized as income in the accompanying statements of operations.

For those  investments  where the  Partnership  has determined that the carrying
value  of its  investments  approximates  the  estimated  fair  value  of  those
investments,  the  Partnership's  policy is to recognize equity in income of the
Local Partnerships only to the extent of distributions received and amortization
of acquisition costs from those Local Partnerships.  Therefore,  the Partnership
limits its recognition of equity earnings to the amount it expects to ultimately
realize.

As  of  December  31,  2003,  the  investment  balance  in 21 of  the  31  Local
Partnerships had been reduced to zero.

The  following  is a  summary  of the  investments  in  and  advances  to  Local
Partnerships for the year ended December 31, 2003(in thousands):

Balance, beginning of year                          $ 9,109
Advances to local partnerships                          118
Repayment of advances to local partnerships              (3)
Dilution of interest                                 (1,099)
Equity in losses of limited partnerships               (907)
Distributions recognized as a reduction
  of investment balance                                 (60)
Investments balance, end of year                    $ 7,158

The difference  between the investment  per the  accompanying  balance sheets at
December 31, 2003 and the equity per the Local Partnerships'  combined financial
statements  is due  primarily  to  cumulative  unrecognized  equity in losses of
certain  Local  Partnerships,  costs  capitalized  to  the  investment  account,
cumulative  distributions  recognized as income, the Partnership's  recording of
capital  contributions  payable  to the  Local  Partnerships  in its  investment
balance and recognition of impairment losses.

Selected financial  information from the combined balance sheet and the combined
results of operations of the Local Partnerships at December 31, 2003 and for the
years ended December 31, 2003 and 2002:

                        CONDENSED COMBINED BALANCE SHEET
                        OF THE LOCAL LIMITED PARTNERSHIPS
                                 (in thousands)

                                                             December 31, 2003
Assets:
  Land                                                            $ 6,303
  Buildings and improvements, net of accumulated
    depreciation of approximately $52,275                          70,367
  Other assets                                                      7,945
      Total assets                                                $84,615

Liabilities and Partners' Deficit:
  Liabilities:
    Mortgage notes payable                                        $69,081
    Other liabilities                                              18,283

Partners' Deficit:                                                 (2,749)
  Total liabilities and Partners' Deficit                         $84,615

                    CONDENSED COMBINED RESULTS OF OPERATIONS
                        OF THE LOCAL LIMITED PARTNERSHIPS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                         Years Ended December 31,
                                                           2003             2002
                                                                         (Restated)
<S>                                                      <C>              <C>
Total revenues                                           $17,094          $16,432

Expenses:
  Interest                                                 4,971            4,951
  Depreciation and amortization                            4,294            4,117
  Operating expenses                                      11,097           10,158
    Total expenses                                        20,362           19,226

Loss from continuing operations                           (3,268)          (2,794)
Loss from discontinued operations                             --             (148)

Net loss                                                 $(3,268)         $(2,942)

Net loss allocable to the Partnership                    $(2,893)         $(2,568)
</TABLE>

Effective January 1, 2002, the Partnership adopted SFAS No. 144, "Accounting for
the Impairment or Disposal of Long-Lived  Assets",  which established  standards
for the way that public business enterprises report information about long-lived
assets that are either being held for sale or have  already been  disposed of by
sale or other means.  The standard  requires  that results of  operations  for a
long-lived  asset that is being held for sale or has already been disposed of be
reported as a  discontinued  operation  on the  statement  of  operations.  As a
result, the combined statements of operations in Note 2 have been restated as of
January 1, 2002 to reflect  the  operations  of Villa Real and East Ridge  Local
Partnerships  as  loss  from  discontinued  operations  due to  their  sale  and
foreclosure during the year ended December 31, 2003.

An affiliate of the General  Partner is currently  the Local  Operating  General
Partner  in  certain  of the Local  Partnerships  included  above,  and  another
affiliate receives property  management fees of approximately 5 percent of gross
revenues from certain of the Local Partnerships (See "Note 4 - Transactions with
Affiliated Parties").

During the year ended December 31, 2003, the Partnership  diluted its investment
in the Rancho del Mar  Apartments  Limited  Partnership  from 99% to 66.4%.  The
proceeds  received for this  dilution of  approximately  $1,017,000  reduced the
Partnership's investment balance in the Local Partnership.

One  of the  Local  Limited  Partnerships,  East  Ridge  Apartments,  filed  for
bankruptcy in December 2002 in an effort to  restructure  its debt. The property
was lost to foreclosure in June 2003. The  Partnership's  investment  balance in
this Local  Limited  Partnership  had  previously  been  reduced to zero so this
action had no effect on the Partnership's investment balance on the accompanying
balance sheet.

During the year ended December 31, 2003, a Local  Partnership,  Villa Real, sold
its investment property. As the Partnership had no investment balance related to
this Local Partnership,  the proceeds of approximately $793,000 were reported as
gain on sale of limited partnership interest.

During the year ended December 31, 2002, an impairment  charge of  approximately
$299,000  was  recognized  at a  Local  Partnership,  Asheville  Equity,  due to
recurring  operating  losses.  The fair value of the assets was  determined  via
analysis of budgeted future net operating  income.  The impairment charge had no
impact on the  Partnership as its investment in Asheville  Equity had previously
been reduced to zero.

Due to operating  deficits,  the Wade Walton Limited  Partnership  which owned a
property in Clarksdale,  Mississippi had been unable to service its mortgage and
the lender commenced foreclosure proceedings.  The Limited Partnership commenced
bankruptcy  proceedings on July 20, 1999 in order to stay the  foreclosure  sale
and  reorganize  under  Chapter 11 of the United  States  Bankruptcy  Code.  The
bankruptcy  court  subsequently  terminated the automatic stay and a foreclosure
sale occurred on May 31, 2002. The Partnership had no investment balance related
to this Limited Partnership.

During 2001, the Partnership and an affiliated  partnership filed a suit against
several  parties for breach of  fiduciary  duties and breach of the  partnership
agreements  of  Quivira  Limited  Partnership,  in  which  the  Partnership  has
invested, and another Limited Partnership in which the affiliated partnership is
invested.   The  property  in  each  respective  Limited  Partnership  had  been
refinanced  during 2001;  however,  the proceeds from the refinancing were being
held by the Quivira Limited Partnership instead of being distributed.

During the year ended December 31, 2002, the Partnership received  approximately
$108,000  from one of the  parties  involved  in this legal  action as part of a
settlement agreement.  Approximately  $1,492,000 of its share of the refinancing
proceeds of Quivira  Limited  Partnership  were received during August 2002. The
Partnership obtained judgments totaling approximately $4,800,000 against certain
defendants in 2002.  During the year ended  December 31, 2003,  the  Partnership
received approximately $1,682,000 from the parties involved in this legal action
as part of a global settlement agreement with the local general partner. As part
of the  settlement  agreement,  the  Partnership  expects to receive  additional
payments from the defendants over the next five years.

During the year ended December 31, 2002, the Partnership  diluted its investment
in the Sheboygan Regency House Limited  Partnership  leaving a 9.91% interest in
this  Local  Partnership.   Total  proceeds  received  in  connection  with  the
transaction  were  $247,000.  After  recognizing  approximately  $105,000  as  a
reduction  of  investment  balance,  the  Partnership's  investment  balance  in
Sheboygan  Regency  House  Limited  Partnership  had been  reduced to zero.  The
remaining  proceeds of  approximately  $144,000 were reported as gain on sale of
limited partnership interest on the accompanying statement of operations.

During the year ended December 31, 2002, the Partnership  sold its investment in
the Cottages of North St. Paul. As the  Partnership  had no  investment  balance
related to this Local  Partnership,  the  proceeds of  approximately  $5,000 and
$1,616,000 that were received during the years ended December 31, 2003 and 2002,
respectively,  were reported as gain on sale of limited partnership  interest on
the accompanying statement of operations.

In  November  2002,  the General  Partner  closed a  transaction  with the Local
General  Partner  of  Pineview  Terrace  for a  dilution  of  the  Partnership's
investment,  giving the Local  General  Partner 100% of the cash flow and 50% of
any  sale  or  refinance   proceeds  in  the  Pineview   Terrace  Local  Limited
Partnership.   In  return,  the  General  Partner  received  a  distribution  of
approximately $500,000 from the Local General Partner. Approximately $237,000 of
this  distribution  was  recognized as income during the year ended December 31,
2002,  while  approximately  $263,000  was  recognized  as a  reduction  of  the
remaining  investment  balance in Pineview  Terrace  Limited  Partnership  which
reduced the balance to zero.

During the year ended  December 31, 2002, an  impairment  charge of $834,000 was
recognized  with respect to the investment in one Local  Partnership,  Wedgewood
Commons.  In June 2003,  the  Partnership  diluted its  investment  in Wedgewood
Commons from 99% to 18.99%. The Partnership realized  approximately $81,000 from
this dilution, which reduced the investment value.

During the year ended  December 31,  2002,  an  impairment  loss of $790,000 was
recognized with respect to the Partnership's  investment in a Local Partnership,
Michigan  Beach.  The Local  Partnership  reached a settlement  with the City of
Chicago during 2002 to complete  necessary repairs to the exterior facade of the
building.  The total estimated cost to complete this project will be advanced to
Michigan  Beach by the  Partnership.  Since  the  Partnership  has no  remaining
investment  balance in Michigan Beach, and recovery of the advance is uncertain,
the entire amount of the  estimated  cost was  recognized as an impairment  loss
during the year ended  December  31,  2002.  During the year ended  December 31,
2003, an additional  impairment  loss of  approximately  $368,000 was recognized
with respect to the  Partnership's  investment in Michigan  Beach due to revised
estimates of the cost to complete  the repairs  required by the City of Chicago.
During the year ended December 31, 2003, the Partnership advanced Michigan Beach
approximately $504,000 for costs incurred to date. A liability for the remaining
advance to be made to the Local  Partnership  is reflected  on the  accompanying
balance  sheet.  Subsequent  to December  31,  2003,  the  Partnership  advanced
Michigan Beach an additional approximately $669,000.

During 2001,  the  Partnership  sold its  investment in the  Cottonwood  Limited
Partnership.  Of the  total  proceeds,  approximately  $221,000  was  due to the
Partnership  as of December 31, 2001.  This amount was received  during the year
ended December 31, 2002.

Note 3 - Restricted Cash

Restricted  cash  represented  funds  in  escrow  to be used  to fund  operating
deficits,  if any, of one of the Local  Partnerships,  as defined in the Limited
Partnership  Agreement.  The escrow  requirement  was removed  with the dilution
agreement signed for Rancho Del Mar during the year ended December 31, 2003.

Note 4 - Transactions with Affiliated Parties

Under the terms of its  Partnership  Agreement,  the Partnership is obligated to
the General Partner for the following fees:

(a)  An annual  Partnership  management fee in an amount equal to 0.5 percent of
     invested assets (as defined in the Partnership Agreement) is payable to the
     General  Partner.   For  the  years  ended  December  31,  2003  and  2002,
     partnership  management  fees in the amount of  approximately  $620,000 and
     $636,000, respectively, were recorded as an expense.

(b)  A property  disposition  fee is payable to the General Partner in an amount
     equal  to  the  lesser  of (i)  one-half  of the  competitive  real  estate
     commission  that would  have been  charged by  unaffiliated  third  parties
     providing  comparable  services in the area where the apartment  complex is
     located,  or (ii) 3 percent of the sale price  received in connection  with
     the sale or  disposition  of the  apartment  complex  or local  partnership
     interest, but in no event will the property disposition fee and all amounts
     payable to  unaffiliated  real estate  brokers in connection  with any such
     sale  exceed  in the  aggregate,  the  lesser of the  competitive  rate (as
     described  above) or 6 percent of such sale price.  Receipt of the property
     disposition  fee  will  be  subordinated  to the  distribution  of  sale or
     refinancing  proceeds by the  Partnership  until the limited  partners have
     received  distributions  of sale or  refinancing  proceeds in an  aggregate
     amount  equal  to (i)  their 6  percent  priority  return  for any year not
     theretofore satisfied (as defined in the partnership agreement) and (ii) an
     amount  equal to the  aggregate  adjusted  investment  (as  defined  in the
     partnership  agreement) of the limited  partners.  No disposition fees have
     been paid or accrued.

(c)  The Partnership  reimburses NAPICO for certain expenses. The reimbursements
     to NAPICO  were  approximately  $60,000  and  $63,000  for the years  ended
     December 31, 2003 and 2002,  respectively,  and are included in general and
     administrative expenses.

NTC-II or  another  affiliate  of the  General  Partner  is the Local  Operating
General Partner in ten of the Partnership's 31 Local Partnerships.  In addition,
NTC-II  is  typically  either a special  limited  partner  or an  administrative
general partner in each Local Partnership.

An affiliate of the General Partner is currently  managing four properties owned
by  Local  Partnerships.  The  Local  Partnerships  pay the  affiliate  property
management fees in the amount of five percent of their gross rental revenues and
data processing fees. The amounts paid were approximately  $231,000 and $125,000
for the years ended December 31, 2003 and 2002, respectively.

During the year ended  December  31, 2002,  an affiliate of the General  Partner
advanced approximately $200,000 to the Partnership for operating expenses.  This
advance was  non-interest  bearing and was repaid during the year ended December
31, 2002.

During the year ended  December  31, 2003,  an affiliate of the General  Partner
advanced approximately  $1,278,000 to the Partnership for operating expenses and
advances to Michigan Beach.  This advance bore interest at prime plus 2% and was
repaid during the year ended December 31, 2003. Interest expense during the year
ended December 31, 2003 was approximately $7,000.

AIMCO and its affiliates owned 397.0 limited  partnership units (the "Units") in
the  Partnership  representing  0.55% of the  outstanding  Units at December 31,
2003. It is possible that AIMCO or its affiliates will acquire  additional Units
in exchange  for cash or a  combination  of cash and units in AIMCO  Properties,
L.P., the operating partnership of AIMCO. Pursuant to the Partnership Agreement,
unitholders  holding a majority  of the Units are  entitled  to take action with
respect to a variety of matters that include,  but are not limited to, voting on
certain amendments to the Partnership Agreement and voting to remove the General
Partner.  Although  the General  Partner  owes  fiduciary  duties to the limited
partners of the  Partnership,  the General Partner also owes fiduciary duties to
AIMCO as its sole stockholder.  As a result,  the duties of the General Partner,
as General  Partner,  to the Partnership and its limited  partners may come into
conflict  with  the  duties  of the  General  Partner  to  AIMCO,  as  its  sole
stockholder.

Note 5 - Income Taxes

The  Partnership  is not taxed on its income.  The  partners  are taxed in their
individual  capacities based upon their  distributive share of the Partnership's
taxable  income  or  loss  and are  allowed  the  benefits  to be  derived  from
off-setting  their  distributive  share of the tax losses against taxable income
from other sources  subject to passive loss  limitations.  The taxable income or
loss differs from  amounts  included in the  statements  of  operations  because
different  methods are used in determining the losses of the Local  Partnerships
as  discussed  below.  The tax  loss  is  allocated  to the  partner  groups  in
accordance with Section 704(b) of the Internal Revenue Code and therefore is not
necessarily proportionate to the interest percentage owned.

A reconciliation follows:

                                                  Years Ended December 31,
                                                     2003            2002
                                                       (in thousands)

Net income (loss) per financial statements          $ 339          $(1,639)
  Other                                             (2,714)         (1,561)
  Gain on foreclosure of Partnership interest          190          (2,772)
Loss per tax return                                 (2,185)         (5,972)

Loss per limited partnership interest              $(29.90)        $(81.55)

The following is a reconciliation between the Partnership's reported amounts and
the federal tax basis of net assets:

                                                   December 31, 2003
                                                     (in thousands)
      Net assets as reported                            $ 8,045
      Add (deduct):
        Deferred offering costs                            9,367
        Investment in Partnerships                       (14,382)
        Other                                              6,044
      Net assets - federal tax basis                    $ 9,074

Note 6 - Gain on Legal Settlement

During 2001, the Partnership and an affiliated  partnership filed a suit against
several  parties for breach of  fiduciary  duties and breach of the  partnership
agreements  of  Quivera  Limited  Partnership,  in  which  the  Partnership  has
invested, and another Limited Partnership in which the affiliated partnership is
invested.   The  property  in  each  respective  Limited  Partnership  had  been
refinanced  during 2001;  however,  the proceeds from the refinancing were being
held within the Local Partnerships instead of being distributed.

On June 28, 2002,  the  Partnership  received  approximately  $108,000  from the
judgment  arising from the  conclusions of the lawsuit.  This amount is shown as
gain on legal settlement for the year ended December 31, 2002.

On August 6, 2002,  the  Partnership  received  approximately  $1,492,000 as its
share of the refinancing proceeds of Quivera Limited Partnership. This amount is
reported as distribution from limited  partnerships  recognized as income during
the year ended December 31, 2002 as the Partnership's investment in this Limited
Partnership was zero.

During the year ended December 31, 2003, the Partnership received  approximately
$1,682,000 from the parties involved in this legal action in a global settlement
agreement with the local general  partner in full  satisfaction of the judgment.
This amount is shown as gain on legal settlement for the year ended December 31,
2003.

Note 7 - Real Estate and Accumulated  Depreciation of Local Limited Partnerships
         in which NTCI-II has Invested (in thousands)
<TABLE>
<CAPTION>

                                                  Buildings
                                                     And
                                                   Related
                                                  Personal                 Accumulated
        Description         Encumbrances  Land    Property      Total     Depreciation

<S>                            <C>       <C>        <C>         <C>           <C>
Ashville Equity (Westview)     $ 931     $ 171      $ 647       $ 818         $ 116
Columbus Junction Park            644        40        803         843           304
Countryside Place               4,242       470      8,307       8,777         3,709
Edgewood Apts.                  1,591       158      3,895       4,053         1,859
Fourth Street                     950       242      4,219       4,461         1,826
Germantown Apts.                2,282       210      4,609       4,819         2,258
Great Basin Assoc.                579       143      1,396       1,539           692
Grimes Park Apts.                 455        50        537         587           209
Jamestown Terrace               2,841       298      3,501       3,799         1,131
Jefferson Meadows               3,212        85      4,956       5,041         2,489
Kentucky River                    885       149      2,013       2,162           689
Lincoln Grove                     516       118      3,977       4,095         1,347
Meadowlakes                     1,229       136      3,935       4,071         1,885
Michigan Beach                  6,126       792      5,499       6,291           690
Nickel River (Wedgewood)        1,580       140      3,049       3,189         1,116
Norwalk Park Apts.                424        51        483         534           200
Oakview Apts.                   1,305        81      3,620       3,701         1,523
Palm Springs View Apts.         5,082       901      6,744       7,645         2,656
Pam Apts.                       1,200        50      2,652       2,702         1,883
Parkwood Landing                4,168       720      9,226       9,946         4,331
Pensacola Affordable            1,250       252      1,848       2,100           860
Pineview Terrace                2,717        82      3,241       3,323         1,075
Quivira Place                   6,525       100     13,266      13,366         6,052
Rancho del Mar                  3,144        75      8,101       8,176         3,201
Salem Park Apts.                2,468       204      4,293       4,497         2,283
Sheboygan                       1,412        47      2,575       2,622         1,189
Sitka III (Spruce Grove)        1,157        42      1,476       1,518           704
Soldotna (Northwood Senior)     1,466        59      1,904       1,963           629
Torres de Plata II              3,039       158      3,845       4,003         1,892
Virginia Park Meadows           3,161        78      4,961       5,039         2,478
Westbridge Apts.                2,500       201      3,064       3,265           999
Total                         $69,081    $6,303   $122,642    $128,945       $52,275

</TABLE>

      Reconciliation of real estate

                                                      Years Ended December 31,
                                                         2003           2002
                                                           (in thousands)

Balance at beginning of period                         $135,753       $145,578
Additions (retirements) during the period                 1,172           (374)
Disposals of rental properties                           (7,980)        (9,152)
Impairment losses on rental properties                       --           (299)
Balance at end of period                               $128,945       $135,753

        Reconciliation of accumulated depreciation

                                                      Years Ended December 31,
                                                         2003           2002
                                                           (in thousands)

Balance at beginning of period                          $50,424       $50,268
Depreciation expense for the period                       4,294         4,395
Disposals of rental properties                           (2,443)       (4,239)
Balance at end of period                                $52,275       $50,424

Note 8 - Contingencies

On August 27, 1998, two investors holding an aggregate of eight units of limited
partnership  interest  in Real  Estate  Associates  Limited  III (an  affiliated
partnership in which National  Partnership  Investments Corp.  ("NAPICO") is the
General Partner) and two investors holding an aggregate of five units of limited
partnership  interests in Real Estate Associates Limited VI (another  affiliated
partnership in which NAPICO is the General Partner)  commenced an action against
the Partnership,  NAPICO and certain other defendants.  The claims included, but
were not  limited  to,  claims for  breaches  of  fiduciary  duty to the limited
partners of certain  NAPICO-managed  partnerships  and  violations of securities
laws by  making  materially  false  and  misleading  statements  in the  consent
solicitation  statements  sent to the  limited  partners  of  such  partnerships
relating  to  approval  of the  transfer  of  partnership  interests  in limited
partnerships,  owning  certain  of  the  properties,  to  affiliates  of  Casden
Properties,  Inc.,  organized by an affiliate of NAPICO.  On August 4, 1999, one
investor  holding one unit of limited  partnership  interest in Housing Programs
Limited (another affiliated  partnership in which NAPICO is the General Partner)
commenced a virtually  identical  action  against  the  Partnership,  NAPICO and
certain other entities.  The second action was subsumed in the first action, and
was certified as a class action.

On April 29, 2003, the court entered  judgment  against NAPICO and certain other
defendants  in the amount of  approximately  $25.2  million  for  violations  of
securities laws and against NAPICO for approximately  $67.3 million for breaches
of fiduciary  duty, both amounts plus interest of  approximately  $25.6 million,
and for punitive damages against NAPICO in the amount of $2.6 million.

On August 11, 2003,  Apartment  Investment and Management  Company ("AIMCO") and
NAPICO  entered  into  a  Stipulation  of  Settlement   (the   "Stipulation   of
Settlement")  with the  plaintiff  class (the  "Plaintiffs")  and their  counsel
relating  to the  settlement  of the  litigation.  The  principal  terms  of the
Stipulation of Settlement include,  among other things (1) payments in both cash
($29 million) and stock ($19  million) by Alan I. Casden,  on behalf of himself,
NAPICO and other defendants,  to the Plaintiffs,  (2) guaranteed  payments in an
aggregate  amount  of $35  million  ($7  million  per  year for 5  years),  plus
interest,  by NAPICO to the  Plaintiffs,  (3) a release of claims of all parties
associated with the litigation and (4) joint agreement by the parties to request
that a new judgment be entered in the litigation to, among other things, expunge
the judgment originally entered against NAPICO and the other defendants.

In connection with the Stipulation of Settlement, on August 12, 2003, NAPICO and
AIMCO executed a Settlement  Agreement  (the  "Settlement  Agreement")  with the
prior  shareholders  of  Casden  Properties,  Inc.  The  principal  terms of the
Settlement  Agreement  include,   among  other  things,  that  (1)  NAPICO  will
voluntarily  discontinue  the action it  commenced  on May 13, 2003  against the
former  shareholders  of Casden  Properties,  Inc. and other  indemnitors in the
Casden  Merger,  (2) Alan I. Casden and certain  related  entities  will resolve
certain  pending  claims for  indemnification  made by  NAPICO,  AIMCO and their
affiliates,  (3) AIMCO or an  affiliate  will  provide  $25  million  of the $29
million in cash that Alan I. Casden is obligated to provide under the Stipulaton
of Settlement in exchange for 531,915 shares of AIMCO Class A Common Stock owned
by The Casden Company,  and (4) The Casden Company will promise to pay to NAPICO
an  aggregate  amount of $35 million  ($7  million  per year for 5 years),  plus
interest,  on a secured,  nonrecourse  basis.  The Casden Company can prepay its
obligation  set forth in item (4) above in shares of AIMCO Class A Common  Stock
having a value based on the greater of $47 per share or the market value of such
shares at the time of payment.

On December 30, 2003,  the  Stipulation of Settlement  with the plaintiff  class
(the  "Plaintiffs")  and their counsel  relating to the settlement of litigation
against the Registrant,  National Partnership  Investments Corp.  ("NAPICO") and
certain  other  defendants  became  effective in accordance  with its terms.  In
addition,  on  December  30,  2003,  the  Settlement  Agreement  with the  prior
shareholders of Casden  Properties,  Inc.,  NAPICO and Apartment  Investment and
Management Company ("AIMCO") also closed in accordance with its terms.

During 2001, the Partnership and an affiliated  partnership filed a suit against
several  parties for breach of  fiduciary  duties and breach of the  partnership
agreements  of  Quivira  Limited  Partnership,  in  which  the  Partnership  has
invested, and another Limited Partnership in which the affiliated partnership is
invested.   The  property  in  each  respective  Limited  Partnership  had  been
refinanced  during 2001;  however,  the proceeds from the refinancing were being
held within the Quivira Limited Partnership instead of being distributed.

During the year ended December 31, 2002, the Partnership received  approximately
$108,000  from one of the  parties  involved  in this legal  action as part of a
settlement agreement.  Approximately  $1,492,000 of its share of the refinancing
proceeds of Quivira  Limited  Partnership  were received during August 2002. The
Partnership obtained judgments totaling approximately $4,800,000 against certain
defendants in 2002.  During the year ended  December 31, 2003,  the  Partnership
received approximately $1,682,000 from the parties involved in this legal action
as part of a global settlement agreement with the local general partner. As part
of the  settlement  agreement,  the  Partnership  expects to receive  additional
payments from the defendants over the next five years.

One  of the  Local  Limited  Partnerships,  East  Ridge  Apartments,  filed  for
bankruptcy in December 2002 in an effort to  restructure  its debt. The property
was lost to foreclosure in June 2003. The  Partnership's  investment  balance in
this Local  Limited  Partnership  had  previously  been  reduced to zero so this
action has no effect on the Partnership's investment balance on the accompanying
balance sheet.

During the year ended  December 31,  2002,  an  impairment  loss of $790,000 was
recognized with respect to the Partnership's  investment in a Local Partnership,
Michigan  Beach.  The Local  Partnership  reached a settlement  with the City of
Chicago during 2002 to complete  necessary repairs to the exterior facade of the
building.  The total estimated cost to complete this project will be advanced to
Michigan  Beach by the  Partnership.  Since  the  Partnership  has no  remaining
investment  balance in Michigan Beach, and recovery of the advance is uncertain,
the entire amount of the  estimated  cost was  recognized as an impairment  loss
during the year ended  December  31,  2002.  During the year ended  December 31,
2003, an additional  impairment  loss of  approximately  $368,000 was recognized
with respect to the  Partnership's  investment in Michigan  Beach due to revised
estimates of the cost to complete  the repairs  required by the City of Chicago.
During the year ended December 31, 2003, the Partnership advanced Michigan Beach
approximately $504,000 for costs incurred to date. A liability for the remaining
advance to be made to the Local  Partnership  is reflected  on the  accompanying
balance  sheet.  Subsequent  to December  31,  2003,  the  Partnership  advanced
Michigan Beach an additional approximately $669,000.

In addition to the litigation  discussed  above, the General Partner is involved
in various other lawsuits  arising from  transactions  in the ordinary course of
business.  In the opinion of management and the General Partner, the claims will
not result in any material liability to the Partnership.

Note 9 - Fourth Quarter Adjustment

The Partnership's  policy is to record equity in loss from Local Partnerships on
a quarterly basis, using interim financial information provided by the operating
general  partners of the Local  Partnerships.  For the first  three  quarters of
2003, the equity in loss from Local  Partnerships  was based on these  estimated
amounts.  During  the  fourth  quarter  of 2003,  the  Partnership  recorded  an
adjustment  to the  equity  in loss from  Local  Partnerships  of  approximately
$623,000  due to a  difference  in the  estimated  losses and the actual  losses
incurred by the Local  Partnerships for the year. The actual equity in loss from
Local  Partnerships  for the year  ended  December  31,  2003 was  approximately
$907,000,  as compared to the estimated  equity in loss from Local  Partnerships
for the nine months ended September 30, 2003 of approximately $218,000.

ITEM 8.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURES

None.

ITEM 8A.    CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures.  The Partnership's management,  with the
participation of the principal executive officer and principal financial officer
of the General Partner,  who are the equivalent of the  Partnership's  principal
executive officer and principal financial officer,  respectively,  has evaluated
the  effectiveness of the Partnership's  disclosure  controls and procedures (as
such term is defined  in Rules  13a-15(e)  and  15d-15(e)  under the  Securities
Exchange  Act of 1934,  as amended  (the  "Exchange  Act")) as of the end of the
period covered by this report. Based on such evaluation, the principal executive
officer and  principal  financial  officer of the General  Partner,  who are the
equivalent  of the  Partnership's  principal  executive  officer  and  principal
financial  officer,  respectively,  have  concluded  that, as of the end of such
period, the Partnership's disclosure controls and procedures are effective.

(b) Internal Control Over Financial  Reporting.  There have not been any changes
in the Partnership's  internal control over financial reporting (as such term is
defined in Rules  13a-15(f)  and  15d-15(f)  under the Exchange  Act) during the
fourth quarter of 2003 that have materially  affected,  or are reasonably likely
to  materially  affect,  the  Partnership's   internal  control  over  financial
reporting.

                                    PART III

ITEM 9.     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

National Tax Credit Investors II (the  "Partnership" or the "Registrant") has no
directors.  The general  partner  responsible for conducting the business of the
Partnership is National  Partnership  Investments Corp a California  Corporation
("NAPICO" or the "General Partner").

The names and ages of, as well as the positions and offices held by, the present
directors  and  officers  of NAPICO are set forth  below:  The  General  Partner
manages and  controls  substantially  all of the  Partnership's  affairs and has
general  responsibility  and  ultimate  authority in all matters  affecting  its
business.  There are no family  relationships  between or among any directors or
officers.

Peter K. Kompaniez              59    Director
David R. Robertson              38    President, Chief Executive Officer
                                        and Director
Charles McKinney                52    Senior Vice President and Director
                                        of Asset Management
Jeffrey H. Sussman              38    Senior Vice President, General
                                        Counsel and Secretary
Brian H. Shuman                 41    Senior Vice President and Chief
                                        Financial Officer

Peter K.  Kompaniez  has been Director of the  Corporate  General  Partner since
April 1, 2002. Mr. Kompaniez has been Vice Chairman of the Board of Directors of
AIMCO since July 1994 and was appointed  President in July 1997.  Mr.  Kompaniez
has also  served as Chief  Operating  Officer of NHP  Incorporated  after it was
acquired by AIMCO in  December  1997.  Effective  April 1, 2004,  Mr.  Kompaniez
resigned as  President  of AIMCO.  Mr.  Kompaniez  will  continue in his role as
Director of the Corporate General Partner and Vice Chairman of AIMCO's Board and
will serve AIMCO on a variety of special and  ongoing  projects in an  operating
role.

David R. Robertson has been President, Chief Executive Officer and a Director of
the Corporate  General  Partner since  October 2002.  Mr.  Robertson has been an
Executive  Vice  President  of AIMCO  since  February  2002,  and was  appointed
President and Chief  Executive  Officer of AIMCO  Capital in October  2002.  Mr.
Robertson  is  responsible  for  property   operations,   asset  management  and
transaction   activities   within  AIMCO   Capital's   portfolio  of  affordable
properties,  and for  redevelopment  and  construction  activities  for both the
conventional  and  affordable  property  portfolios.  Since  February  1996, Mr.
Robertson has been Chairman and Chief Executive Officer of Robeks Corporation, a
privately held chain of specialty food stores.

Charles McKinney has been Senior Vice President and Director of Asset Management
of the  Corporate  General  Partner and AIMCO Capital since January 2003 and has
overall responsibility for monitoring the construction, lease-up, operations and
compliance  issues for all  assets  constituting  a part of  AIMCO's  affordable
portfolio.  Mr.  McKinney  joined AIMCO as Vice President of Transactions in the
Affordable  Group  in  June  2002  and  had   responsibility   for  value  added
dispositions  of  affordable  properties  in the  Western  portion of the United
States.  From  September  2000  through  May 2002,  Mr.  McKinney  was  Managing
Underwriter for Real Estate Recovery, Inc. where he was responsible for the real
estate loan underwriting and loan review for the company's  clients.  From March
1998 through August 2000, Mr.  McKinney was the Executive  Managing  Director of
American Capital Advisors, Inc. an investment banking company.

Jeffrey H. Sussman has been Senior Vice President, General Counsel and Secretary
of the Corporate  General  Partner since joining  NAPICO in 1998. Mr. Sussman is
responsible for the legal affairs of NAPICO and its affiliates. Prior to joining
NAPICO in 1998, Mr. Sussman was an associate with the law firm of Rus, Miliband,
Williams & Smith in Irvine,  California.  His  practice  emphasized  real estate
finance  and  insolvency  law and  included  the  representation  of  borrowers,
lenders, and court-appointed  trustees in matters involving apartment complexes,
retail centers and hotels.

Brian H. Shuman has been Senior Vice  President and Chief  Financial  Officer of
the  Corporate  General  Partner  since  joining  NAPICO in 2000.  Mr. Shuman is
responsible  for  the  financial  affairs  of  NAPICO  as  well  as the  limited
partnership  sponsored by it. From 1996 until joining NAPICO in August 2000, Mr.
Shuman was Vice President - Finance for Preferred  Health  Management  Inc., the
largest  provider  of  worker   compensation   diagnostic  imaging  services  in
California formed in 1996, and was responsible for establishing and managing the
accounting, billing, collection, treasury and financial reporting departments.

The board of directors of the Corporate General Partner does not have a separate
audit  committee.  As such,  the board of  directors  of the  Corporate  General
Partner fulfills the functions of an audit committee. The board of directors has
determined  that Brian H. Shuman meets the  requirement  of an "audit  committee
financial expert".

The directors and officers of the Corporate  General Partner with authority over
the Partnership are all employees of subsidiaries of AIMCO.  AIMCO has adopted a
code of ethics that applies to such  directors  and  officers  that is posted on
AIMCO's  website  (www.AIMCO.com).   AIMCO's  website  is  not  incorporated  by
reference to this filing.

ITEM 10.    EXECUTIVE COMPENSATION

Neither  the  director  nor the  officers  received  any  remuneration  from the
Registrant for the year ended December 31, 2003.

ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a)   Security Ownership of Certain Beneficial Owners

      The  General  Partners  own  all of the  outstanding  general  partnership
      interests of NTCI II. Except as noted below,  no person or entity is known
      to own  beneficially  in excess of 5 percent  of the  outstanding  limited
      partnership interests.

         Entity                             Number of Units    Percentage

         AIMCO Properties, L.P.
           (an affiliate of AIMCO)               397.0           0.55%

AIMCO  Properties,  L.P. is  indirectly,  ultimately  controlled  by AIMCO.  Its
business address is 4582 Ulster St. Parkway, Suite 1100, Denver, CO 80237.

(b)   None of the officers or  directors of the General  Partner own directly or
      beneficially any limited partnership interests in NTCI II.

ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Under the terms of its  Partnership  Agreement,  the Partnership is obligated to
the General Partner for the following fees:

(a)  An annual  Partnership  management fee in an amount equal to 0.5 percent of
     invested assets (as defined in the Partnership Agreement) is payable to the
     General  Partner.   For  the  years  ended  December  31,  2003  and  2002,
     partnership  management  fees in the amount of  approximately  $620,000 and
     $636,000, respectively, were recorded as an expense.

(b)  A property  disposition  fee is payable to the General Partner in an amount
     equal  to  the  lesser  of (i)  one-half  of the  competitive  real  estate
     commission  that would  have been  charged by  unaffiliated  third  parties
     providing  comparable  services in the area where the apartment  complex is
     located,  or (ii) 3 percent of the sale price  received in connection  with
     the sale or  disposition  of the  apartment  complex  or local  partnership
     interest, but in no event will the property disposition fee and all amounts
     payable to  unaffiliated  real estate  brokers in connection  with any such
     sale  exceed  in the  aggregate,  the  lesser of the  competitive  rate (as
     described  above) or 6 percent of such sale price.  Receipt of the property
     disposition  fee  will  be  subordinated  to the  distribution  of  sale or
     refinancing  proceeds by the  Partnership  until the limited  partners have
     received  distributions  of sale or  refinancing  proceeds in an  aggregate
     amount  equal  to (i)  their 6  percent  priority  return  for any year not
     theretofore satisfied (as defined in the partnership agreement) and (ii) an
     amount  equal to the  aggregate  adjusted  investment  (as  defined  in the
     partnership  agreement) of the limited  partners.  No disposition fees have
     been paid or accrued.

(c)  The Partnership  reimburses NAPICO for certain expenses. The reimbursements
     to NAPICO  were  approximately  $60,000  and  $63,000  for the years  ended
     December 31, 2003 and 2002,  respectively,  and are included in general and
     administrative expenses.

NTC-II or  another  affiliate  of the  General  Partner  is the Local  Operating
General Partner in ten of the Partnership's 31 Local Partnerships.  In addition,
NTC-II  is  typically  either a special  limited  partner  or an  administrative
general partner in each Local Partnership.

An affiliate of the General Partner is currently  managing four properties owned
by  Local  Partnerships.  The  Local  Partnerships  pay the  affiliate  property
management fees in the amount of five percent of their gross rental revenues and
data processing fees. The amounts paid were approximately  $231,000 and $125,000
for the years ended December 31, 2003 and 2002, respectively.

During the year ended  December  31, 2002,  an affiliate of the General  Partner
advanced approximately $200,000 to the Partnership for operating expenses.  This
advance was  non-interest  bearing and was repaid during the year ended December
31, 2002.

During the year ended  December  31, 2003,  an affiliate of the General  Partner
advanced approximately  $1,278,000 to the Partnership for operating expenses and
advances to Michigan Beach.  This advance bore interest at prime plus 2% and was
repaid during the year ended December 31, 2003. Interest expense during the year
ended December 31, 2003 was approximately $7,000.

AIMCO and its affiliates owned 397.0 limited  partnership units (the "Units") in
the  Partnership  representing  0.55% of the  outstanding  Units at December 31,
2003. It is possible that AIMCO or its affiliates will acquire  additional Units
in exchange  for cash or a  combination  of cash and units in AIMCO  Properties,
L.P., the operating partnership of AIMCO. Pursuant to the Partnership Agreement,
unitholders  holding a majority  of the Units are  entitled  to take action with
respect to a variety of matters that include,  but are not limited to, voting on
certain amendments to the Partnership Agreement and voting to remove the General
Partner.  Although  the General  Partner  owes  fiduciary  duties to the limited
partners of the  Partnership,  the General Partner also owes fiduciary duties to
AIMCO as its sole stockholder.  As a result,  the duties of the General Partner,
as General  Partner,  to the Partnership and its limited  partners may come into
conflict  with  the  duties  of the  General  Partner  to  AIMCO,  as  its  sole
stockholder.

ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K

      a) Exhibits:

            Exhibit 3, Partnership  Agreement (herein  incorporated by reference
            to the Partnership's Form S-11 Registration No. 33-27658)

            Exhibit 31.1, Certification of equivalent of Chief Executive Officer
            pursuant to Securities  Exchange Act Rules  13a-14(a)/15d-14(a),  as
            Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

            Exhibit 31.2, Certification of equivalent of Chief Financial Officer
            pursuant to Securities  Exchange Act Rules  13a-14(a)/15d-14(a),  as
            Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

            Exhibit 32.1,  Certification  Pursuant to 18 U.S.C. Section 1350, as
            Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

            Exhibit 99.1, Independent Auditors' Report for Ashville Equity
            Limited Partnership (Westview)

            Exhibit 99.2, Independent Auditors' Report for Columbus Junction
            Park, Limited Partnership

            Exhibit 99.3, Independent Auditors' Report for Fourth Street
            Apartment Investors

            Exhibit 99.4, Independent Auditors' Report for Grimes Park
            Apartments, L.P.

            Exhibit 99.5, Independent Auditors' Report for Jamestown Terrace

            Exhibit 99.6, Independent Auditors' Report for Jefferson Meadows
            Limited Dividend Housing Assoc.

            Exhibit 99.7, Independent Auditors' Report for Kentucky River
            Apartments, Ltd.

            Exhibit 99.8, Independent Auditors' Report for Wynnefield Lincoln
            Grove Limited Partnership

            Exhibit 99.9, Independent Auditors' Report for Michigan Beach
            Limited Partnership

            Exhibit 99.10, Independent Auditors' Report for Nickel River
            Investment

            Exhibit 99.11, Independent Auditors' Report for Norwalk Park
            Apartments, L. P.

            Exhibit 99.12, Independent Auditors' Report for Palm Springs View
            Apartments, Ltd.

            Exhibit 99.13, Independent Auditors' Report for Pampa Partnership
            Limited

            Exhibit 99.14, Independent Auditors' Report for Huntsville
            Properties Limited Partnership (Parkwood Landing)

            Exhibit 99.15, Independent Auditors' Report for Northwestern
            Partners, Ltd. (Pensacola Affordable)

            Exhibit 99.16, Independent Auditors' Report for Pineview  Terrace I
            Limited Partnership

            Exhibit 99.17, Independent Auditors' Report for Salem Park

            Exhibit 99.18, Independent Auditors' Report for Torres Del Plata II
            Limited Partnership

            Exhibit 99.19, Independent Auditors' Report for Virginia Park
            Meadows Limited Dividend Housing A

            Exhibit 99.20, Independent Auditors' Report for Pen-Hill-Co Limited
            Partnership (Westbridge Apartments)

         b) Reports on Form 8-K filed  during the  quarter  ended  December  31,
            2003:

            Current  Report on Form 8-K dated  November  24, 2003 and filed with
            the  Securities  and  Exchange   Commission  on  November  26,  2003
            disclosing the Stipulation of Settlement  relating to the settlement
            of litigation against NAPICO as the Corporate General Partner of the
            Partnership.

            Current  Report on Form 8-K dated  December  30, 2003 and filed with
            the Securities and Exchange Commission on January 2, 2004 disclosing
            the  Stipulation  of  Settlement   relating  to  the  settlement  of
            litigation  against NAPICO as the Corporate  General  Partner of the
            Partnership.

Item 14.    Principal Accounting Fees and Services

The General Partner has reappointed Ernst & Young LLP as independent auditors to
audit the financial statements of the Partnership for 2004.

Audit  Fees.  The  Partnership   paid  to  Ernst  &  Young  LLP  audit  fees  of
approximately  $44,000  and $28,000  for 2003 and 2002,  respectively,  and paid
Deloitte and Touche LLP approximately $5,000 for 2002.

Tax Fees.  The  Partnership  paid to Ernst & Young LLP fees for tax  services of
approximately $26,000 for both 2003 and 2002.



<PAGE>


                                   SIGNATURES


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


                                    NATIONAL TAX CREDIT INVESTORS II
                                    (a California limited partnership)


                                    By:   National Partnership Investments Corp.
                                          General Partner


                                    By:   /s/David R. Robertson
                                          David R. Robertson
                                          President, Chief Executive Officer
                                          and Director


                                    By:   /s/Brian H. Shuman
                                          Brian H. Shuman
                                          Senior Vice President and
                                          Chief Financial Officer


                                    Date: May 5, 2004


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


/s/Peter K. Kompaniez         Director                      Date: May 5, 2004
Peter K. Kompaniez


/s/David R. Robertson         President, Chief Executive    Date: May 5, 2004
David R. Robertson            Officer and Director


/s/Brian H. Shuman            Senior Vice President and     Date: May 5, 2004
Brian H. Shuman               Chief Financial Officer



<PAGE>


                        NATIONAL TAX CREDIT INVESTORS II
                                  EXHIBIT INDEX

Exhibit     Description of Exhibit

   3        Partnership Agreement (herein incorporated by reference to the
            Partnership's Form S-11 Registration No. 33-27658)

   31.1     Certification  of equivalent of Chief Executive  Officer pursuant to
            Securities  Exchange  Act  Rules  13a-14(a)/15d-14(a),   as  Adopted
            Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

   31.2     Certification  of equivalent of Chief Financial  Officer pursuant to
            Securities  Exchange  Act  Rules  13a-14(a)/15d-14(a),   as  Adopted
            Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

   32.1     Certification  Pursuant  to  18  U.S.C.  Section  1350,  as  Adopted
            Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

   99.1     Independent Auditors' Report for Ashville Equity Limited Partnership
            (Westview)

   99.2     Independent Auditors' Report for Columbus Junction Park, Limited
            Partnership

   99.3     Independent Auditors' Report for Fourth Street Apartment Investors

   99.4     Independent Auditors' Report for Grimes Park Apartments, L.P.

   99.5     Independent Auditors' Report for Jamestown Terrace

   99.6     Independent Auditors' Report for Jefferson Meadows Limited Dividend
            Housing Assoc.

   99.7     Independent Auditors' Report for Kentucky River Apartments, Ltd.

   99.8     Independent Auditors' Report for Wynnefield Lincoln Grove Limited
            Partnership

   99.9     Independent Auditors' Report for Michigan Beach Limited Partnership

   99.10    Independent Auditors' Report for Nickel River Investment

   99.11    Independent Auditors' Report for Norwalk Park Apartments, L. P.

   99.12    Independent Auditors' Report for Palm Springs View Apartments, Ltd.

   99.13    Independent Auditors' Report for Pampa Partnership Limited

   99.14    Independent Auditors' Report for Huntsville Properties Limited
            Partnership (Parkwood Landing)

   99.15    Independent Auditors' Report for Northwestern Partners, Ltd.
            (Pensacola Affordable)

   99.16    Independent Auditors' Report for Pineview Terrace I Limited
            Partnership

   99.17    Independent Auditors' Report for Salem Park

   99.18    Independent Auditors' Report for Torres Del Plata II Limited
            Partnership

   99.19    Independent Auditors' Report for Virginia Park Meadows Limited
            Dividend Housing A

   99.20    Independent Auditors' Report for Pen-Hill-Co Limited Partnership
            (Westbridge Apartments)



<PAGE>



Exhibit 31.1


                                  CERTIFICATION


I, David R. Robertson, certify that:


1.    I have  reviewed  this annual report on Form 10-KSB of National Tax Credit
      Investors II;

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

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

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

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

      (b)   Evaluated the effectiveness of the registrant's  disclosure controls
            and  procedures and presented in this report our  conclusions  about
            the effectiveness of the disclosure  controls and procedures,  as of
            the  end  of the  period  covered  by  this  report  based  on  such
            evaluation; and

      (c)   Disclosed  in this  report any change in the  registrant's  internal
            control  over   financial   reporting   that  occurred   during  the
            registrant's  most recent fiscal  quarter (the  registrant's  fourth
            fiscal  quarter in the case of an annual report) that has materially
            affected,   or  is  reasonably  likely  to  materially  affect,  the
            registrant's internal control over financial reporting; and

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

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely affect the  registrant's  ability to
            record, process, summarize and report financial information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees  who have a  significant  role in the  registrant's
            internal control over financial reporting.

Date:  May 5, 2004

                                /s/David R. Robertson
                                David R. Robertson
                                President   and  Chief   Executive   Officer  of
                                National Partnership Investments Corp.,
                                equivalent  of the chief  executive  officer  of
                                the Partnership


<PAGE>



Exhibit 31.2


                                  CERTIFICATION


I, Brian H. Shuman, certify that:


1.    I have  reviewed  this  quarterly  report on Form 10-QSB of  National  Tax
      Credit Investors II;

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

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

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

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

      (b)   Evaluated the effectiveness of the registrant's  disclosure controls
            and  procedures and presented in this report our  conclusions  about
            the effectiveness of the disclosure  controls and procedures,  as of
            the  end  of the  period  covered  by  this  report  based  on  such
            evaluation; and

      (c)   Disclosed  in this  report any change in the  registrant's  internal
            control  over   financial   reporting   that  occurred   during  the
            registrant's  most recent fiscal  quarter (the  registrant's  fourth
            fiscal  quarter in the case of an annual report) that has materially
            affected,   or  is  reasonably  likely  to  materially  affect,  the
            registrant's internal control over financial reporting; and

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

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely affect the  registrant's  ability to
            record, process, summarize and report financial information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees  who have a  significant  role in the  registrant's
            internal control over financial reporting.

Date:  May 5, 2004

                                /s/Brian H. Shuman
                                Brian H. Shuman
                                Senior  Vice   President  and  Chief   Financial
                                Officer  of  National  Partnership   Investments
                                Corp.,   equivalent   of  the  chief   financial
                                officer of the Partnership


<PAGE>


Exhibit 32.1


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



In  connection  with the Annual  Report on Form  10-KSB of  National  Tax Credit
Investors II (the "Partnership"),  for the year ended December 31, 2003 as filed
with the Securities and Exchange  Commission on the date hereof (the  "Report"),
David R.  Robertson,  as the  equivalent of the chief  executive  officer of the
Partnership,  and Brian H.  Shuman,  as the  equivalent  of the chief  financial
officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350,  as adopted  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of 2002,
that, to the best of his knowledge:

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

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


                                           /s/David R. Robertson
                                    Name:  David R. Robertson
                                    Date:  May 5, 2004


                                           /s/Brian H. Shuman
                                    Name:  Brian H. Shuman
                                    Date:  May 5, 2004


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


<PAGE>


Exhibit 99.1

To the Partners
Ashville Equity Limited Partnership

We have  audited  the  accompanying  balance  sheet of Ashville  Equity  Limited
Partnership  as of December 31, 2003 and the related  statements of  operations,
changes in partners'  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.

We conducted  our audit in  accordance  with U.S.  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 included 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 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 Ashville  Equity  Limited
Partnership  as of December 31, 2003 and the results of its  operations  and its
cash  flows  for the year  ended in  conformity  with  U.S.  generally  accepted
accounting principles.

The  financial  statements  have been  prepared  assuming the  Partnership  will
continue as a going concern. As discussed in Note 6 to the financial statements,
the   Partnership's   recurring  losses  raise   substantial   doubt  about  the
Partnership's  ability to continue as a going concern.  Management's  plans with
regard to these matters are also  described in Note 6. The financial  statements
do not  include  any  adjustments  that might  result  from the  outcome of this
uncertainty.

/s/Altschuler, Melvoin and Glasser LLP
Los Angeles, California
February 18, 2004


<PAGE>


Exhibit 99.2

Independent Auditor's Report

To the Partners
Columbus Junction Park, Limited Partnership
Beverly Hills, California

We have  audited the  accompanying  balance  sheets of Columbus  Junction  Park,
Limited Partnership as of December 31, 2003 and 2002, and the related statements
of income,  partners' (deficit),  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 auditing standards generally accepted
in the  United  States of  America.  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 in
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,  the financial  statements  referred to above present fairly, in
all material respects the financial  position of Columbus Junction Park, Limited
Partnership  as of December 31, 2003 and 2002, and the results of its operations
and its cash  flows for the  years  then  ended in  conformity  with  accounting
principles generally accepted in the United States of America.

/s/McGladrey & Pullen, CPA
Des Moines Iowa
January 15, 2004


<PAGE>


Exhibit 99.3

Independent Auditors' Report


To the Partners
Fourth Street Apartments Investors, A California Limited Partnership


      We have audited the accompanying balance sheets of Fourth Street Apartment
Investors,  A California  Limited  Partnership as of December 31, 2003 and 2002,
and the related  statements of operations,  partners'  equity (deficit) 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 auditing  standards  generally
accepted in the United States of America.  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
text 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, the financial statements referred to above present fairly,
in all material  respects,  the financial  position of Fourth  Street  Apartment
Investors,  a California  Limited  Partnership as of December 31, 2003 and 2002,
and the results of its operations, the changes in partners' equity (deficit) and
its  cash  flows  for the  years  then  ended,  in  conformity  with  accounting
principles generally accepted in the United States of America.


/s/Reznick Fedder & Silverman
Sacramento, California
January 27, 2004



<PAGE>


Exhibit 99.4

Independent Auditor's Report

To the Partners
Grimes Park, Limited Partnership
Beverly Hills, California

We have  audited  the  accompanying  balance  sheets  of  Grimes  Park,  Limited
Partnership  as of December  31, 2003 and 2002,  and the related  statements  of
income,  partners'  (deficit),  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 auditing standards generally accepted
in the  United  States of  America.  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 in
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,  the financial  statements  referred to above present fairly, in
all material respects the financial position of Grimes Park Apartments,  Limited
Partnership  as of December 31, 2003 and 2002, and the results of its operations
and its cash  flows for the  years  then  ended in  conformity  with  accounting
principles generally accepted in the United States of America.

/s/McGladrey & Pullen, LLP, CPA
Des Moines Iowa
January 15, 2004



<PAGE>


Exhibit 99.5

Independent Auditor's Report

To the Partners
Jamestown Terrace, a California Limited Partnership

We have  audited the  accompanying  balance  sheets of Jamestown  Terrace,  Recd
Project No. 04-055-0363605470, as of December 31, 2003 and 2002, and the related
statements of operations, changes in partners' capital (deficit), 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government  Auditing Standards issued by the Comptroller General of
the United States.  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 in 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,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of  JAMESTOWN  TERRACE as of
December 31, 2003 and 2002, and the results of its operations and its cash flows
for the years then ended in  conformity  with  accounting  principles  generally
accepted in the United States of America.

In accordance  with  Government  Accounting  Standards,  we have also issued our
reports  dated  January  19,  2004  on our  consideration  of the  Partnership's
internal  control  and on our tests of its  compliance  with laws,  regulations,
contracts and grants.  These reports are an integral part of the audit performed
in  accordance  with  Government  Auditing  Standards  and  should  be  read  in
conjunction with this report in considering the results of the audit.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental  information on pages 17
through  21 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 audit  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/Rockoff, Harlan, Rasof, Ltd. CPA
Skokie, Illinois
January 19, 2004



<PAGE>


Exhibit 99.6

Independent Auditor's Report



To the Partners
Jefferson Meadows Limited Dividend
Housing Association Limited Partnership

We have audited the  accompanying  balance  sheet of Jefferson  Meadows  Limited
Dividend   Housing   Association   Limited   Partnership  (a  Michigan   limited
partnership),  MSHDA  Development  No. 848, as of December 31, 2003,  2002,  and
2001, and the related statements of income, partners' equity (deficit), 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 auditing standards generally accepted
in the United States of America and Government Auditing Standards, issued by the
Comptroller  General of the United States.  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
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 Jefferson  Meadows  Limited
Dividend Housing Association Limited Partnership,  MSHDA Development No. 848, as
of December 31, 2003, 2002, and 2001, and the results of its operations, changes
in partners' equity  (deficit),  and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  February 6, 2004,  on our  consideration  of  Jefferson  Meadows  Limited
Dividend  Housing  Association  Limited  Partnership's   internal  control  over
financial  reporting and on our tests of its compliance with certain  provisions
of laws, regulations,  contracts,  and grants. The report is an integral part of
an audit performed in accordance with Government  Auditing  Standards and should
be read in  conjunction  with this  report in  considering  the  results  of our
audits.



/s/Plante & Moran, PLLC
East Lansing, Michigan
February 6, 2004


<PAGE>


Exhibit 99.7

Independent Auditors Report

To the Partners
Kentucky River Apartments, Ltd.
A Kentucky Limited Partnership
Winchester, Kentucky

I have audited the  accompanying  balance sheets of Kentucky  River  Apartments,
Ltd., a Kentucky Limited Partnership,  as of December 31, 2003 and 2002, 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.  My  responsibility is to express an opinion on these
financial statements based on my audits.

I conducted the audits in accordance with auditing standards  generally accepted
in the United Sates of America.  Those standards require that I 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. I believe that the audits provide a reasonable basis for
my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Kentucky River Apartments,  Ltd., a
Kentucky  Limited  Partnership as of December 31, 2003 and 2002, and the results
of its  operations  and its cash flows for the years  ended in  conformity  with
accounting principles generally accepting in the United States of America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial  statements taken as a whole. The supplemental  information on pages 9
and 10 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 audit procedures applied in the audit of the basic financial statements and,
in my opinion is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.

/s/Donald W. Causey, CPA, P.C.
Gadsden, Alabama
February 14, 2004


<PAGE>


Exhibit 99.8

Independent Auditors' Report


To the Partners
Wynnefield Lincoln Grove Limited Partnership


      We have audited the accompanying balance sheet of Wynnefield Lincoln Grove
Limited  Partnership  as of December 31,  2003,  and the related  statements  of
operations,  partners'  equity (deficit) 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  auditing  standards  generally
accepted  in the  United  States of  America  and the  standards  applicable  to
financial  audits  contained in  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  statement  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 Wynnefield  Lincoln Grove
Limited  Partnership as of December 31, 2003, and the results of its operations,
the  changes  in  partners'  equity  (deficit)  and cash flows for the year then
ended, in conformity with accounting principles generally accepted in the United
States of America.

      In accordance with Government  Auditing  Standards,  we have also issued a
report dated January 21, 2004 on our  consideration of Wynnefield  Lincoln Grove
Limited Partnership's internal control over financial reporting and our tests of
its  compliance  with certain  provisions  of laws,  regulations,  contracts and
grants. That report is an integral part of an audit performed in accordance with
Government Auditing Standards and should be read in conjunction with this report
in considering the results of our audit.


/s/Reznick Fedder & Silverman
Charlotte, North Carolina
January 21, 2004


<PAGE>


Exhibit 99.9

Independent Auditors' Report

To the Partners
Michigan Beach Limited Partnership

We have  audited  the  accompanying  balance  sheets of Michigan  Beach  Limited
Partnership   (a  limited   partnership),   FHA  Project  No.   071_94030   (the
"Partnership"),  as of December 31, 2003 and 2002 and the related  statements of
operations,  changes in partners'  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 U.S.  generally  accepted  auditing
standards  and  the  standards  applicable  to  financial  audits  contained  in
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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of  Michigan  Beach  Limited
Partnership  as of December 31, 2003 and 2002 and the results of its  operations
and its cash flows for the years then ended in  conformity  with U.S.  generally
accepted accounting principles.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  February  3,  2004 on our  consideration  of the  Partnership's  internal
control and on our tests of its  compliance  with  certain  provisions  of laws,
regulations,  contracts  and grants.  Those  reports are an integral  part of an
audit performed in accordance with Government  Auditing  Standards and should be
read in conjunction with this report in considering the results of our audit.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The  accompanying  additional  financial
data (shown on pages 14 through 16) are  presented for the purpose of additional
analysis and are not a required  part of the basic  financial  statements of the
Partnership.  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/Altschuler, Melvoin and Glasser LLP

Los Angeles, California
February 3, 2004

<PAGE>


Exhibit 99.10

Independent Auditor's Report



To the Partners
Nickel River Investment, A Wisconsin
Limited Partnership


We have audited the  accompanying  balance sheet of Nickel River  Investment,  A
Wisconsin Limited Partnership as of December 31, 2003 and the related statements
of  operations,  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.  The  financial  statements  of  Nickel  River
Investment,  A Wisconsin  Limited  Partnership as of December 31, 2002 and 2001,
were audited by Stienessen  Schlegal & Co., LLC (whose  practice  became part of
Larson,  Allen,  Weishair & CO.,  LLP  effective  November 1, 2003) whose report
dated January 15, 2003, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  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  audit  provides  a
reasonable basis for our opinion.

In our opinion,  the 2003 financial statements referred to above present fairly,
in all material respects,  the financial position of Nickel River Investment,  A
Wisconsin  Limited  Partnership  as of December  31, 2003 and the results of its
operations  and its cash  flows  for the year  then  ended  in  conformity  with
accounting principles generally accepted in the United States of America.



/s/Larson, Allen, Weishair & Co., LLP
Certified Public Accountants
Eau Claire, Wisconsin

March 19, 2004


<PAGE>


Exhibit 99.11

Independent Auditor's Report

To the Partners
Norwalk Park Apartments, Limited Partnership
Beverly Hills, California

We have audited the  accompanying  balance  sheets of Norwalk  Park  Apartments,
Limited Partnership as of December 31, 2003 and 2002, and the related statements
of income,  partners' (deficit),  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 auditing standards generally accepted
in the  United  States of  America.  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,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of Norwalk  Park  Apartments,
Limited  Partnership  as of December  31, 2003 and 2002,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.

/s/McGladrey & Pullen, LLP, CPA
Des Moines Iowa
January 15, 2004




<PAGE>


Exhibit 99.12

Independent Auditors' Report

To the Partners
Palm Springs View Apartments, Ltd.

We have audited the accompanying balance sheets of Palm Springs View Apartments,
Ltd. (a limited partnership),  FHA Project No. 143_94002_PM (the "Partnership"),
as of  December  31,  2003 and 2002 and the related  statements  of  operations,
changes in partners'  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 U.S.  generally  accepted  auditing
standards  and  the  standards  applicable  to  financial  audits  contained  in
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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of Palm Springs View Apartments,
Ltd. as of December 31, 2003 and 2002 and the results of its  operations and its
cash flows for the years then ended in conformity with U.S.  generally  accepted
accounting principles.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  February  14, 2004 on our  consideration  of the  Partnership's  internal
control and on our tests of its  compliance  with  certain  provisions  of laws,
regulations,  contracts  and grants.  Those  reports are an integral  part of an
audit performed in accordance with Government  Auditing  Standards and should be
read in conjunction with this report in considering the results of our audit.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The  accompanying  additional  financial
data (shown on pages 13 through 15) are  presented for the purpose of additional
analysis and are not a required  part of the basic  financial  statements of the
Partnership.  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/Altschuler, Melvoin and Glasser LLP

Los Angeles, California
February 14, 2004




<PAGE>



Exhibit 99.13

January 20, 2004

The Partners
Pampa Partnership Limited
Houston, Texas

We have audited the accompanying  Balance Sheets of Pampa Partnership Limited as
of December 31, 2003 and 2002, and the related Statements of Operations, Changes
in  Partners'  Capital  (Deficit),  and Cash  Flows for each of the years  ended
December  31,  2003,  2001  and  2000.   These  financial   statements  are  the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  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  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 Pampa Partnership Limited as of
December 31, 2003 and 2002 and the results of its  operations and cash flows for
each of the years ended  December 31, 2003,  2001 and 2000, in  conformity  with
accounting principles generally accepted in the United States of America.

/s/Weinstein Spira & Company, P.C.
Houston, Texas



<PAGE>


Exhibit 99.14

                          Independent Auditors' Report

To the Partners
Huntsville Properties, L.P.


We have audited the accompanying balance sheet of HUNTSVILLE PROPERTIES,  L.P.(a
Georgia limited partnership), as of December 31, 2003,and the related statements
of operations,  changes in partners' accumulated deficit, 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 audits.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  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  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 HUNTSVILLE PROPERTIES, L.P., as
of December 31, 2003,  and the results of its  operations,  changes in partners'
accumulated  deficit, and cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

Our audit was made for the purpose of forming an opinion on the basic  financial
statements  taken as a  whole.  The  accompanying  supplemental  information  is
presented for the purpose of  additional  analysis and is not a required part of
the basic financial  statements.  Such information has not been subjected to the
auditing procedures applied in the audit of the basic financial statements,  and
accordingly, we express no opinion on it.

/s/Habif, Arogeti & Wynne LLP
Atlanta, Georgia
February 19, 2004


<PAGE>


Exhibit 99.15

Independent Auditor's Report



Northwestern Partners, Ltd.
c/o Mr. James Reeves
Operating General Partner
730 Bayfront Parkway, Suite 4B
Pensacola, Florida 32501


I  have  audited  the  accompanying  general  purpose  financial  statements  of
Northwestern  Partners,  Ltd. (a Florida limited partnership) as of December 31,
2003, as listed in the Table of Contents.  These  financial  statements  are the
responsibility of the partnership's  management. My responsibility is to express
an opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally  accepted auditing  standards.
Those standards  require that I 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  general  purpose  financial
statement presentation.  I believe that my audit provides a reasonable basis for
my opinion.

In my  opinion,  the  general  purpose  financial  statements  referred to above
present fairly, in all material respects, the financial position of Northwestern
Partners,  Ltd. as of December 31, 2003, and the results of its operations,  the
changes  in  partners'  capital  and cash  flows  for the  years  then  ended in
conformity with generally accepted accounting principles.




/s/Tom E. Brewster
CERTIFIED PUBLIC ACCOUNTANT
Pensacola, Florida
March 25, 2004


<PAGE>



Exhibit 99.16



                          Independent Auditor's Report




To The Partners
Pineview Terrace I, L.P.

We have audited the  accompanying  balance sheets of PINEVIEW TERRACE I, L.P. (a
Texas  Limited  Partnership)  as of December 31, 2003 and 2002,  and the related
statements  of  operations,  partners'  equity/(deficit)  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 auditing standards generally accepted
in the  United  States of  America.  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  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 PINEVIEW TERRACE I, L.P. as of
December 31, 2003 and 2002, and the results of its operations and its cash flows
for the years then ended in  conformity  with  accounting  principles  generally
accepted in the United States of America.

/s/Dickey, Wolf & Humbard, LLC
Dickey, Wolf & Humbard, LLC
Certified Public Accountants

Harrisonville, MO
January 21, 2004

<PAGE>

Exhibit 99.17


                          Independent Auditor's Report


The Partners
Salem Park, A Limited Partnership


We have  audited  the  accompanying  balance  sheets  of Salem  Park,  A Limited
Partnership,  as of December 31, 2003 and 2002,  and the related  statements  of
income,  partners'  capital  and cash  flows for each of the three  years in the
period  ended   December  31,  2003.   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 auditing standards  generally accepted
in the  United  States of  America.  These  standards  require  that we plan and
perform  the audit to obtain  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
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  Salem  Park,  A  Limited
Partnership  as of December 31, 2003 and 2002, and the results of its operations
and its cash  flows for the  years  then  ended in  conformity  with  accounting
principles generally accepted in the United States of America.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basis
financial statements taken as a whole. The supplementary  information  presented
on page  12 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 basic financial statements taken as a whole.


/s/Rick J. Tanneberger, CPA, P.A.
Fayetteville, Arkansas
January 27, 2004



<PAGE>


Exhibit 99.18

                Independent Auditors' Report On Financial Statements



Partners
Torres del Plata II Limited Partnership
San Juan, Puerto Rico


We have audited the  accompanying  balance sheets of Torres del Plata II Limited
Partnership  as of December  31, 2003 and 2002,  and the related  statements  of
operations,  partners'  equity(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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the  United  States,  and  the  US  Department  of  Agriculture,   Farmers  Home
Administration Audit Program Handbook,  issued in December 1989. Those standards
and the audit  program  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 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 Torres del Plata II Limited
Partnership,  as of  December  31,  2003  and  2002,  and  the  results  of  its
operations,  changes in  partners'  equity  (deficiency)  and cash flows for the
years then ended, in conformity with accounting principles generally accepted in
the United States of America.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  January 23, 2004,  on our  consideration  of the  Partnership's  internal
control and on our tests on its  compliance  with  certain  provisions  of laws,
regulations,  contracts,  loan  covenants and  agreements.  Those reports are an
integral  part of an audit  performed in  accordance  with  Government  Auditing
Standards and should be read in conjunction  with this report in considering the
results of our audits.



/s/Torres Llompart, Sanchez Ruiz & Co.

January 23, 2004
License No. 169
San Juan, Puerto Rico


<PAGE>


Exhibit 99.19

                          Independent Auditor's Report



To the Partners
Virginia Park Meadows Limited Dividend
Housing Association Limited Partnership


We have audited the accompanying  balance sheet of Virginia Park Meadows Limited
Dividend   Housing   Association   Limited   Partnership  (a  Michigan   limited
partnership),  MSHDA  Development  No. 849, as of December 31, 2003,  2002,  and
2001, and the related statements of income, partners' equity (deficit), 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 auditing standards generally accepted
in the United States of America and Government Auditing Standards, issued by the
Comptroller  General of the United States.  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
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 Virginia Park Meadows Limited
Dividend Housing Association Limited Partnership,  MSHDA Development No. 849, as
of December 31, 2003, 2002, and 2001, and the results of its operations, changes
in partners' equity  (deficit),  and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.

In accordance with Government Auditing Standards, we have also issued our report
dated  February 6, 2004 on our  consideration  of Virginia Park Meadows  Limited
Dividend  Housing  Association  Limited  Partnership's   internal  control  over
financial  reporting and on our tests of its compliance with certain  provisions
of laws, regulations,  contracts,  and grants. The report is an integral part of
an audit performed in accordance with Government  Auditing  Standards and should
be read in conjunction with this report in considering the results of our audit.

/s/Plante & Moran, PLLC
East Lansing, Michigan
February 6, 2004


<PAGE>


Exhibit 99.20

Independent Auditors' Report



To the Partners
Pen-Hill-Co Limited Partnership
Columbia, South Carolina


We  have  audited  the  accompanying   balance  sheets  of  Pen-Hill-Co  Limited
Partnership,  as of December 31, 2003 and 2002,  and the related  statements  of
income,  change 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 audits.

We conducted our audit in accordance with auditing standards  generally accepted
in the United States of America 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  statement  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  Pen-Hill-Co   Limited
Partnership,  as of  December  31,  2003  and  2002,  and  the  results  of  its
operations,  changes in partners capital and cash flows for the years then ended
in conformity with accounting principles generally accepted in the United States
of America.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated January 26, 2004 on our consideration of Pen-Hill-Co Limited Partnership's
internal  control and on our tests of its compliance with certain  provisions of
laws,  regulations,  contracts and grants. Those reports are an integral part of
an audit performed in accordance with Government  Auditing  Standards and should
be read in conjunction with this report in considering the results of our audit.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial   statements  taken  as  a  whole.   The  accompanying   supplementary
information  is  presented  for  purposes of  additional  analysis  and is not a
required  part of the basic  financial  statements  of the  Pen-Hill-Co  Limited
Partnership.  Such  information  has been  subjected to the auditing  procedures
applied to 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/DuRant, Schraibman & Lindsay
Columbia, South Carolina
January 26, 2004