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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the Fiscal Year Ended December 31, 2001

Commission File Number0-20610

NATIONAL TAX CREDIT INVESTORS II

A California Limited Partnership

I.R.S. Employer Identification No. 93-1017959

9090 Wilshire Boulevard, Suite 201, Beverly Hills, California 90211

Registrants Telephone Number, Including Area Code (310) 278-2191

Securities Registered Pursuant to Section 12(b) or 12(g) of the Act:

NONE

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed with the Commission by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding twelve months (or such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

Yes     [X]          No     [   ]

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

TABLE OF CONTENTS



|           |                                                                                                |  |  |  |  |  |  | 
|---------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I.   
|           | ITEM 1. BUSINESS:                                                                             
|           | ITEM 2. PROPERTIES:                                                                           
|           | ITEM 3. LEGAL PROCEEDINGS:                                                                    
|           | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:                                  
|PART II.  
|           | ITEM 5. MARKET FOR THE REGISTRANTS PARTNERSHIP INTERESTS AND RELATED SECURITY HOLDER MATTERS:
|           | ITEM 6. SELECTED FINANCIAL DATA:                                                              
|           | ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS:
|           | ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|           | ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:                                          
|           | ITEM 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE:  
|PART III. 
|           | ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:                                  
|           | ITEM 11. MANAGEMENT RENUMERATION AND TRANSACTIONS:                                            
|           | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:                      
|           | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:                                      
|           | ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K:                     
|SIGNATURES



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PART I.




ITEM 1. BUSINESS:

National Tax Credit Investors II (NTCI-II or the Partnership) is a limited
partnership formed under the laws of the State of California on January 12,
1990. The Partnership was formed to acquire limited partnership interests in
investee limited partnerships (Local Partnerships) which own multifamily
apartment complexes that are eligible for low-income housing federal income tax
credits (the Housing Tax Credit). 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 PaineWebber Incorporated (the A Selling
Agent).

The general partner of the Partnership is National Partnership Investments
Corp. (NAPICO), a California corporation (the General Partner). The
business of the Partnership is conducted primarily by NAPICO.

Prior to December 30, 1998, NAPICO was a wholly owned subsidiary of Casden
Investment Corporation (CIC), which is wholly owned by Alan I. Casden. On
December 30, 1998, Casden Properties Operating Partnership, L.P. (the
Operating Partnership), a majority owned subsidiary of Casden Properties
Inc., a real estate investment trust organized by Alan I. Casden, purchased a
95.25% economic interest in NAPICO. The current members of NAPICOs Board of
Directors are Charles H. Boxenbaum, Bruce E. Nelson and Alan I. Casden.

On December 3, 2001, Casden Properties Inc., entered into a merger agreement
and certain other transaction documents with Apartment Investment and
Management Company, a Maryland corporation (AIMCO) and certain of its
subsidiaries, pursuant to which, on March 11, 2002, AIMCO acquired Casden
Properties, Inc. and its subsidiaries, including NAPICO.

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 apartment complexes (Apartment Complex) 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, one of which was sold and one was foreclosed in 2001. Each of
these Local Partnerships owns an Apartment Complex 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 Apartment Complexes
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 Local Partnership
Interests or Apartment Complexes 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 Apartment Complexes and the Partnership. The Apartment
Complexes 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 Apartment Complexes 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





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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.





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During 2001, the Apartment Complexes in which NTCI-II had invested were
substantially rented.

The following is a schedule of the status as of December 31, 2001, of the
Apartment Complexes 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, 2001

|                                                       |  |        |     |          |  |               |     |  |  |                 |    |  
|------------------------------------------------------ |  | ------ | --- | -------- |  | ------------- | --- |  |  | --------------- | -- | -
|                                                       |  |        |     |          |  |               |     |  |  | Units Occupied 
|                                                       |  |        |     |          |  |               |     |  |  | as a Percentage
|                                                       |  |        |     |          |  |               |     |  |  | of Total Units 
|                                                       |  | No. of |     | Units    |  | Available for
|Name & Location                                        |  | Units  |     | Occupied |  | Occupancy    
|                                                       |  |        |     |          |  |              
|Ashville Equity (Westview)Ashville, OH                 |  |        | 41  |          |  |               | 35  |  |  |                 | 85 | %
|Columbus Junction ParkColumbus Junction, IA            |  |        | 24  |          |  |               | 21  |  |  |                 | 88 | %
|Cottages of North St. Paul (Elderly)North St. Paul, MN |  |        | 94  |          |  |               | 92  |  |  |                 | 98 | %
|CountrysideHowell Township, NJ                         |  |        | 180 |          |  |               | 177 |  |  |                 | 98 | %
|East Ridge ApartmentsSt. Clair, MO                     |  |        | 48  |          |  |               | 25  |  |  |                 | 52 | %
|Edgewood ApartmentsRogers, AR                          |  |        | 108 |          |  |               | 107 |  |  |                 | 99 | %
|Fourth StreetLos Angeles, CA                           |  |        | 44  |          |  |               | 41  |  |  |                 | 93 | %
|Germantown ApartmentsConway, AR                        |  |        | 132 |          |  |               | 123 |  |  |                 | 93 | %
|Great Basin AssociatesReno, NV                         |  |        | 28  |          |  |               | 26  |  |  |                 | 93 | %
|Grimes Park ApartmentsGrimes, IA                       |  |        | 16  |          |  |               | 14  |  |  |                 | 88 | %
|Jamestown TerraceJamestown, CA                         |  |        | 56  |          |  |               | 55  |  |  |                 | 98 | %
|Jefferson Meadows ApartmentsDetroit, MI                |  |        | 83  |          |  |               | 82  |  |  |                 | 99 | %
|Kentucky River ApartmentsWinchester, KY                |  |        | 42  |          |  |               | 40  |  |  |                 | 95 | %
|Lincoln Grove ApartmentsGreensboro, NC                 |  |        | 116 |          |  |               | 109 |  |  |                 | 94 | %
|Meadowlakes ApartmentsSearcy, AR                       |  |        | 108 |          |  |               | 96  |  |  |                 | 89 | %
|Michigan Beach ApartmentsChicago, IL                   |  |        | 240 |          |  |               | 210 |  |  |                 | 88 | %
|Nickel River (Wedgewood) ApartmentsLaCrosse, WI        |  |        | 105 |          |  |               | 79  |  |  |                 | 75 | %
|Norwalk Park ApartmentsNorwalk, IA                     |  |        | 16  |          |  |               | 15  |  |  |                 | 94 | %





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SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH NTCI-II HAS AN INVESTMENT (Continued)
DECEMBER 31, 2001

|                                                   |  |        |       |          |  |               |       |  |  |                 |     |  
|-------------------------------------------------- |  | ------ | ----- | -------- |  | ------------- | ----- |  |  | --------------- | --- | -
|                                                   |  |        |       |          |  |               |       |  |  | Units Occupied 
|                                                   |  |        |       |          |  |               |       |  |  | as a Percentage
|                                                   |  |        |       |          |  |               |       |  |  | of Total Units 
|                                                   |  | No. of |       | Units    |  | Available for
|Name & Location                                    |  | Units  |       | Occupied |  | Occupancy    
|                                                   |  |        |       |          |  |              
|Oakview ApartmentsSpartanburg, SC                  |  |        | 106   |          |  |               | 104   |  |  |                 | 98  | %
|Palm Springs ViewPalm Springs, CA                  |  |        | 120   |          |  |               | 120   |  |  |                 | 100 | %
|Pam ApartmentsPampa, TX                            |  |        | 96    |          |  |               | 93    |  |  |                 | 97  | %
|Parkwood LandingHuntsville, AL                     |  |        | 204   |          |  |               | 187   |  |  |                 | 92  | %
|Pensacola AffordablePensacola, FL                  |  |        | 56    |          |  |               | 46    |  |  |                 | 82  | %
|Pineview TerraceKaty, TX                           |  |        | 120   |          |  |               | 108   |  |  |                 | 90  | %
|QuiveraLenexa, KS                                  |  |        | 289   |          |  |               | 256   |  |  |                 | 89  | %
|Rancho Del MarTucson, AZ                           |  |        | 312   |          |  |               | 247   |  |  |                 | 79  | %
|Salem Park ApartmentsConway, AR                    |  |        | 144   |          |  |               | 144   |  |  |                 | 100 | %
|Sheboygan ApartmentsSheboygan, WI                  |  |        | 59    |          |  |               | 48    |  |  |                 | 81  | %
|Sitka IIISitka, AK                                 |  |        | 16    |          |  |               | 13    |  |  |                 | 81  | %
|Soldotna (Northwood Senior) ApartmentsSoldotna, AK |  |        | 23    |          |  |               | 23    |  |  |                 | 100 | %
|Torres de Plata IIToa Alto, PR                     |  |        | 78    |          |  |               | 78    |  |  |                 | 100 | %
|Villa RealSanta Fe, NM                             |  |        | 120   |          |  |               | 114   |  |  |                 | 95  | %
|Virginia Park MeadowsDetroit, MI                   |  |        | 83    |          |  |               | 73    |  |  |                 | 88  | %
|Wade Walton ApartmentsClarksdale, MI               |  |        | 108   |          |  |               | 72    |  |  |                 | 67  | %
|Westbridge ApartmentsW. Columbia, SC               |  |        | 112   |          |  |               | 111   |  |  |                 | 99  | %
|                                                   |  |        |       |          |  |               |       |  |  |                 |     |  
|                                                   |  |        | 3,527 |          |  |               | 3,184 |  |  |                 | 90  | %
|                                                   |  |        |       |          |  |               |       |  |  |                 |     |  





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ITEM 2. PROPERTIES:

Through its investment in Local Partnerships, NTCI-II holds interests in
Apartment Complexes. See Item 1 and Schedule for information pertaining to
these Apartment Complexes.




ITEM 3. LEGAL PROCEEDINGS:

As of December 31, 2001, NTCI-IIs General Partner was a plaintiff or a
defendant in several lawsuits. In addition, the Partnership was involved in
the following lawsuits arising from transactions in the ordinary course of
business. In the opinion of management and the General Partner, these claims
will not result in any material liability to the Partnership.

Foreclosure proceedings were commenced against the Paramount Local Partnership
in November 1998 and a receiver was appointed in May 1999. A decree of
foreclosure was entered in January 2000, and the foreclosure sale was completed
in February 2001. The Partnership had no investment balance related to this
Local Partnership.

Due to operating deficits, the Wade Walton Local Partnership which owns a
property in Clarksdale, Mississippi has been unable to service its mortgage and
the lender commenced foreclosure proceedings. The Local Partnership then
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. Substantial improvements have been made to the property and
occupancy is currently at 99%. Although the bankruptcy court has terminated
the automatic stay, the lender has refrained from continuing the foreclosure
proceedings. The Partnership had no investment balance related to this Local
Partnership.




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

Not applicable.




PART II.




ITEM 5. MARKET FOR THE
REGISTRANTS PARTNERSHIP INTERESTS AND RELATED SECURITY
HOLDER                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. Limited Partnership Interests may
not be transferred but can be assigned only if certain requirements in the
Partnership Agreement are satisfied. At December 31, 2001, there were 3,678
registered holders of units in NTCI-II. 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, 2001.





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ITEM 6. SELECTED FINANCIAL DATA:

|                                                                             |  |                         |            |      |  |      |            |      |  |      |            |   |  |   |            |   |  |   |            |  
|---------------------------------------------------------------------------- |  | ----------------------- | ---------- | ---- |  | ---- | ---------- | ---- |  | ---- | ---------- | - |  | - | ---------- | - |  | - | ---------- | -
|                                                                             |  | Year Ended December 31,
|                                                                             |  |                        
|                                                                             |  | 2001                    |            | 2000 |  | 1999 |            | 1998 |  | 1997
|                                                                             |  |                         |            |      |  |      |            |      |  |     
|Interest income                                                              |  | $                       | 34,547     |      |  | $    | 82,717     |      |  | $    | 49,340     |   |  | $ | 33,049     |   |  | $ | 21,559     |  
|Operating expenses                                                           |  |                         | (1,515,304 | )    |  |      | (1,074,283 | )    |  |      | (1,063,748 | ) |  |   | (1,080,349 | ) |  |   | (1,060,595 | )
|Gain on sale of limited
partnership interest                                 |  |                         | 266,320    |      |  |      |            |      |  |      |            |   |  |   |            |   |  |   |            |  
|Distributions from limited
partnerships recognized as
income                 |  |                         | 1,270,324  |      |  |      | 478,304    |      |  |      |           |   |  |   |           |   |  |   |           |  
|Equity in loss of limited
partnerships and
amortization of
acquisition costs |  |                         | (2,146,680 | )    |  |      | (2,451,980 | )    |  |      | (3,198,976 | ) |  |   | (4,040,526 | ) |  |   | (4,222,167 | )
|                                                                             |  |                         |            |      |  |      |            |      |  |      |            |   |  |   |            |   |  |   |            |  
|Net loss                                                                     |  | $                       | (2,090,793 | )    |  | $    | (2,965,242 | )    |  | $    | (4,213,384 | ) |  | $ | (5,087,826 | ) |  | $ | (5,261,203 | )
|                                                                             |  |                         |            |      |  |      |            |      |  |      |            |   |  |   |            |   |  |   |            |  
|Net loss per limited
limited partnership
interest                            |  | $                       | (29        | )    |  | $    | (41        | )    |  | $    | (58        | ) |  | $ | (70        | ) |  | $ | (72        | )
|                                                                             |  |                         |            |      |  |      |            |      |  |      |            |   |  |   |            |   |  |   |            |  
|Total assets                                                                 |  | $                       | 12,245,869 |      |  | $    | 15,179,691 |      |  | $    | 17,812,372 |   |  | $ | 21,915,847 |   |  | $ | 26,193,937 |  
|                                                                             |  |                         |            |      |  |      |            |      |  |      |            |   |  |   |            |   |  |   |            |  
|Investments
in limited
partnerships                                          |  | $                       | 11,184,234 |      |  | $    | 14,059,652 |      |  | $    | 16,153,744 |   |  | $ | 21,167,503 |   |  | $ | 25,724,722 |  
|                                                                             |  |                         |            |      |  |      |            |      |  |      |            |   |  |   |            |   |  |   |            |  
|Capital contributions
payable                                                |  | $                       | 1,076      |      |  | $    | 1,076      |      |  | $    | 1,076      |   |  | $ | 356,985    |   |  | $ | 356,985    |  
|                                                                             |  |                         |            |      |  |      |            |      |  |      |            |   |  |   |            |   |  |   |            |  
|Accrued fees and
expenses due
to partners                                    |  | $                       | 2,546,019  |      |  | $    | 3,717,135  |      |  | $    | 3,296,209  |   |  | $ | 2,831,597  |   |  | $ | 2,066,985  |  
|                                                                             |  |                         |            |      |  |      |            |      |  |      |            |   |  |   |            |   |  |   |            |  





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|        |  |                                                                                       
|------- |  | --------------------------------------------------------------------------------------
|ITEM 7. |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS:

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 Apartment Complexes. The
Partnership holds limited partnership interests in 37 Local Partnerships, one
of which sold and one was foreclosed in 2001. Normally, the capital
contributions to the Local Partnerships are payable in installments, with each
contribution due on a specified date and/or provided that certain conditions
regarding construction operation and financing of the project have been
fulfilled. At December 31, 2001, $1,076 remains outstanding for one Local
Partnership.

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 Apartment Complexes, 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
Apartment Complexes 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 Apartment Complexes which would result in adverse tax
consequences to the Limited Partners), or (iii) the sale or disposition of
Apartment Complexes. 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 Apartment Complexes if they were
unable to renegotiate the terms of their first mortgages and any other debt
secured by the Apartment Complexes, which would have significant adverse tax
consequences to the Limited Partners.

Liquidity

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
Apartment Complex, the anticipated debt service requirements of the existing
financing and any restructuring or refinancing of such Apartment Complex, 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





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capital reserves independent of those maintained by the Partnership to the
extent that (i) the terms of mortgage debt encumbering the Apartment Complexes
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.

Results of Operations

The Partnership was formed to provide various benefits to its Limited Partners
as discussed in Item 1. 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.

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 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 Local
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 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 an Apartment
Complex 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 Apartment Complexes. 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 construction, 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 Apartment Complexes.





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The Partnership accounts for its investments in the local limited partnerships
on the equity method, thereby adjusting its investment balance by its
proportionate share of the income or loss of the Local Partnerships. Equity in
losses of limited partnerships is recognized in the financial statements until
the limited partnership investment account is reduced to a zero balance.
Losses incurred after the limited partnership investment account is reduced to
zero are not recognized. Limited partners are not liable for losses beyond
their contributed capital. The equity in loss of limited partnerships has been
decreasing primarily as a result of the Partnerships investments in certain
local limited partnerships being reduced to zero during the three year period
ended December 31, 2001, after which point losses are not recognized. The
cumulative amount of unrecognized equity in losses of unconsolidated limited
partnerships is approximately $10,592,000 and $8,117,000 as of December 31,
2001 and 2000, respectively.

Distributions received from limited partnerships are recognized as return of
capital 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.

During 2001, the Partnership sold its interest in the Cottonwood Local
Partnership and realized a gain of $266,320 and net proceeds of $1,251,090,
including $221,280 which was collected in 2002.

Operating expenses consist primarily of recurring general and administrative
expenses and professional fees for services rendered to the Partnership. In
addition, an annual partnership management fee in an amount equal to 0.5% of
invested assets is payable to the General Partner and Special Limited Partner.
The management fee represents the annual recurring fee which will be paid to
the General Partner for its continuing management of Partnership affairs. As of
December 31, 2001, the fees and expenses due the General Partner and Special
Limited Partner exceeded the Partnerships cash. The partners, during the
forthcoming year, will not demand payment of amounts due in excess of such cash
or such that the Partnership would not have sufficient operating cash; however,
the Partnership will remain liable for all such amounts.

Foreclosure proceedings were commenced against the Paramount Local Partnership
in November 1998 and a receiver was appointed in May 1999. A decree of
foreclosure was entered in January 2000, and the foreclosure sale was completed
in February 2001. The Partnership has no investment balance related to this
Local Partnership.

Due to operating deficits, the Wade Walton Local Partnership which owns a
property in Clarksdale, Mississippi has been unable to service its mortgage and
the lender commenced foreclosure proceedings. The Local Partnership then
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. Substantial improvements have been made to the property and
occupancy is currently at 99%. Although the bankruptcy court has terminated
the automatic stay, the lender has refrained from continuing the foreclosure
proceedings. The Partnership had no investment balance related to this Local
Partnership.




ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.




ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:

The Financial Statements and Supplementary Data are listed under Item 14.




ITEM 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE:

Not applicable.





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##### Table of Contents



NATIONAL TAX CREDIT INVESTORS II
(a California limited partnership)

FINANCIAL STATEMENTS,
FINANCIAL STATEMENT SCHEDULES
AND REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
AS OF DECEMBER 31, 2001





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##### Table of Contents



REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Partners of
National Tax Credit Investors II
(A California limited partnership)

We have audited the accompanying balance sheets of National Tax Credit
Investors II (a California limited partnership) as of December 31, 2001 and
2000, and the related statements of operations, partners equity (deficiency)
and cash flows for each of the three years in the period ended December 31,
2001. Our audits also included the financial statement schedules listed in the
index in item 14. These financial statements and financial statement schedules
are the responsibility of the management of the Partnership. Our
responsibility is to express an opinion on these financial statements and
financial statement schedules 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 41
percent and 39 percent of total assets as of December 31, 2001 and 2000,
respectively, and the equity in loss of these limited partnerships represents
40 percent, 45 percent and 40 percent of the total net loss of the Partnership
for the years ended December 31, 2001, 2000 and 1999, respectively, and
represent a substantial portion of the investee information in Note 2 and the
financial statement schedules. The financial statements of these investee
limited partnerships were audited by other auditors. Their reports have been
furnished to us and our opinion, insofar as it relates to the amounts included
for those 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 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 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, 2001 and 2000, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2001 in
conformity with accounting principles generally accepted in the United States
of America. Also, in our opinion, based on our audits and the reports of other
auditors, such financial statement schedules, when considered in relation to
the basic financial statements taken as a whole, present fairly in all material
respects the information set forth therein.

/s/     DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP

Los Angeles, California
April 5, 2002





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##### Table of Contents



NATIONAL TAX CREDIT INVESTORS II
(a California limited partnership)

BALANCE SHEETS

DECEMBER 31, 2001 AND 2000

ASSETS

|                                                      |                                                    |              |                                        |           |            |            |            |           |            |            | 
|----------------------------------------------------- | -------------------------------------------------- | ------------ | -------------------------------------- | --------- | ---------- | ---------- | ---------- | --------- | ---------- | ---------- | 
|                                                      |                                                    |              |                                        |           | 2001       |            | 2000      
|                                                      |                                                    |              |                                        |           |            |            |           
|INVESTMENTS IN LIMITED PARTNERSHIPS
(Notes 1 and 2)   |                                                    | $            | 11,184,234                             |           |            | $          | 14,059,652 |          
|CASH AND CASH EQUIVALENTS (Note 1)                    |                                                    |              | 577,097                                |           |            |            | 864,951    |          
|RECEIVABLE FROM SALE OF PARTNERSHIP INTEREST (Note 2) |                                                    |              | 221,280                                |           |            |            |            |          
|RESTRICTED CASH (Note 3)                              |                                                    |              | 263,258                                |           |            |            | 255,088    |          
|                                                      |                                                    |              |                                        |           |            |            |            |          
|                                                      |                                                    | TOTAL ASSETS |                                        | $         | 12,245,869 |            |            | $         | 15,179,691 |           
|                                                      |                                                    |              |                                        |           |            |            |            |          
|LIABILITIES AND PARTNERS EQUITY                     
|LIABILITIES:                                          |                                                    |              |                                        |           |            |            |            |          
|                                                      | Accrued fees and expenses due to partners (Note 5) |              | $                                      | 2,546,019 |            |            | $          | 3,717,135 |           
|                                                      | Capital contributions payable (Note 4)             |              |                                        | 1,076     |            |            |            | 1,076     |           
|                                                      | Accounts payable and accrued expenses              |              |                                        | 353,600   |            |            |            | 25,513    |           
|                                                      |                                                    |              |                                        |           |            |            |            |          
|                                                      |                                                    |              | 2,900,695                              |           |            |            | 3,743,724  |          
|CONTINGENCIES (Note 7)                                |                                                    |              |                                        |           |            |            |            |          
|PARTNERS EQUITY                                      |                                                    |              | 9,345,174                              |           |            |            | 11,435,967 |          
|                                                      |                                                    |              |                                        |           |            |            |            |          
|                                                      |                                                    |              | TOTAL LIABILITIES AND PARTNERS EQUITY |           | $          | 12,245,869 |            |           | $          | 15,179,691 | 
|                                                      |                                                    |              |                                        |           |            |            |            |          

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

2



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##### Table of Contents



NATIONAL TAX CREDIT INVESTORS II
(a California limited partnership)

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

|                                                                                      |                                     |                          |            |         |           |      |            |         |           |   |            |         |           | 
|------------------------------------------------------------------------------------- | ----------------------------------- | ------------------------ | ---------- | ------- | --------- | ---- | ---------- | ------- | --------- | - | ---------- | ------- | --------- | 
|                                                                                      |                                     |                          |            | 2001    |           | 2000 |            | 1999   
|                                                                                      |                                     |                          |            |         |           |      |            |        
|INTEREST INCOME                                                                       |                                     | $                        | 34,547     |         |           | $    | 82,717     |         |           | $ | 49,340     |        
|                                                                                      |                                     |                          |            |         |           |      |            |         |           |   |            |        
|OPERATING EXPENSES:                                                                   |                                     |                          |            |         |           |      |            |         |           |   |            |        
|                                                                                      | Management fees  partners (Note 5) |                          |            | 736,856 |           |      |            | 740,463 |           |   |            | 764,612 |          
|                                                                                      | General and administrative (Note 5) |                          |            | 136,148 |           |      |            | 138,063 |           |   |            | 99,723  |          
|                                                                                      | Legal and accounting                |                          |            | 642,300 |           |      |            | 195,757 |           |   |            | 199,413 |          
|                                                                                      |                                     |                          |            |         |           |      |            |         |           |   |            |        
|                                                                                      |                                     | Total operating expenses |            |         | 1,515,304 |      |            |         | 1,074,283 |   |            |         | 1,063,748 | 
|                                                                                      |                                     |                          |            |         |           |      |            |         |           |   |            |        
|LOSS FROM PARTNERSHIP OPERATIONS                                                      |                                     |                          | (1,480,757 | )       |           |      | (991,566   | )       |           |   | (1,014,408 | )      
|GAIN ON SALE OF LIMITED PARTNERSHIP
INTEREST (Note 2)                                 |                                     |                          | 266,320    |         |           |      |            |         |           |   |            |        
|DISTRIBUTIONS FROM LIMITED
PARTNERSHIPS RECOGNIZED AS
INCOME (Note 2)                 |                                     |                          | 1,270,324  |         |           |      | 478,304    |         |           |   |            |        
|EQUITY IN LOSS OF LIMITED
PARTNERSHIPS AND AMORTIZATION
OF ACQUISITION COSTS (Note 2) |                                     |                          | (2,146,680 | )       |           |      | (2,451,980 | )       |           |   | (3,198,976 | )      
|                                                                                      |                                     |                          |            |         |           |      |            |         |           |   |            |        
|NET LOSS                                                                              |                                     | $                        | (2,090,793 | )       |           | $    | (2,965,242 | )       |           | $ | (4,213,384 | )      
|                                                                                      |                                     |                          |            |         |           |      |            |         |           |   |            |        
|NET LOSS PER LIMITED
PARTNERSHIP INTEREST (Note 1)                                    |                                     | $                        | (29        | )       |           | $    | (41        | )       |           | $ | (58        | )      
|                                                                                      |                                     |                          |            |         |           |      |            |         |           |   |            |        

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

3



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NATIONAL TAX CREDIT INVESTORS II
(a California limited partnership)

STATEMENTS OF PARTNERS EQUITY (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

|                                                 |                   |   |          |         |          |   |            |            |   |   |            |            |  
|------------------------------------------------ | ----------------- | - | -------- | ------- | -------- | - | ---------- | ---------- | - | - | ---------- | ---------- | -
|                                                 |                   |   | General  |         | Limited  |   |            |            |  
|                                                 |                   |   | Partner  |         | Partners |   | Total     
|                                                 |                   |   |          |         |          |   |           
|PARTNERS EQUITY (DEFICIENCY),
January 1, 1999   |                   | $ | (442,778 | )       |          | $ | 19,057,371 |            |   | $ | 18,614,593 |           
|                                                 | Net loss for 1999 |   |          | (42,134 | )        |   |            | (4,171,250 | ) |   |            | (4,213,384 | )
|                                                 |                   |   |          |         |          |   |            |            |   |   |            |           
|PARTNERS EQUITY (DEFICIENCY),
December 31, 1999 |                   |   | (484,912 | )       |          |   | 14,886,121 |            |   |   | 14,401,209 |           
|                                                 | Net loss for 2000 |   |          | (29,652 | )        |   |            | (2,935,590 | ) |   |            | (2,965,242 | )
|                                                 |                   |   |          |         |          |   |            |            |   |   |            |           
|PARTNERS EQUITY (DEFICIENCY),
December 31, 2000 |                   |   | (514,564 | )       |          |   | 11,950,531 |            |   |   | 11,435,967 |           
|                                                 | Net loss for 2001 |   |          | (20,908 | )        |   |            | (2,069,885 | ) |   |            | (2,090,793 | )
|                                                 |                   |   |          |         |          |   |            |            |   |   |            |           
|PARTNERS EQUITY (DEFICIENCY),
December 31, 2001 |                   | $ | (535,472 | )       |          | $ | 9,880,646  |            |   | $ | 9,345,174  |           
|                                                 |                   |   |          |         |          |   |            |            |   |   |            |           

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

4



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##### Table of Contents



NATIONAL TAX CREDIT INVESTORS II
(a California limited partnership)

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

|                                                     |                                                                             |                                                 |                                                                              |                                                     |           |            |           |            |          |           |           |            |           |           |           | 
|---------------------------------------------------- | --------------------------------------------------------------------------- | ----------------------------------------------- | ---------------------------------------------------------------------------- | --------------------------------------------------- | --------- | ---------- | --------- | ---------- | -------- | --------- | --------- | ---------- | --------- | --------- | --------- | 
|                                                     |                                                                             |                                                 |                                                                              |                                                     |           | 2001       |           | 2000       |          | 1999     
|                                                     |                                                                             |                                                 |                                                                              |                                                     |           |            |           |            |          |          
|CASH FLOWS FROM OPERATING ACTIVITIES:                |                                                                             |                                                 |                                                                              |                                                     |           |            |           |            |          |           |           |           
|                                                     | Net loss                                                                    |                                                 | $                                                                            | (2,090,793                                          | )         |            | $         | (2,965,242 | )        |           | $         | (4,213,384 | )        
|                                                     | Adjustments to reconcile net loss to net cash
used in operating activities: |                                                 |                                                                              |                                                     |           |            |           |            |          |           |           |            |          
|                                                     |                                                                             |                                                 | Gain on sale of limited partnership interest                                 |                                                     |           | (266,320   | )         |            |          |           |           |            |           |           |          
|                                                     |                                                                             |                                                 | Equity in loss of limited partnerships
and amortization of acquisition costs |                                                     |           | 2,146,680  |           |            |          | 2,451,980 |           |            |           | 3,198,976 |          
|                                                     |                                                                             |                                                 | Increase (decrease) in other assets                                          |                                                     |           |            |           |            |          | 120,479   |           |            |           | (120,479  | )        
|                                                     |                                                                             |                                                 | Increase (decrease) in accounts payable and
accrued expenses                 |                                                     |           | 328,087    |           |            |          | (88,366   | )         |            |           | 1,206     |          
|                                                     |                                                                             |                                                 | (Decrease) increase in accrued fees and expenses due to partners             |                                                     |           | (1,171,116 | )         |            |          | 420,926   |           |            |           | 464,612   |          
|                                                     |                                                                             |                                                 |                                                                              |                                                     |           |            |           |            |          |           |           |           
|                                                     |                                                                             |                                                 | Net cash used in operating activities                                        |                                                     |           | (1,053,462 | )         |            |          | (60,223   | )         |            |           | (669,069  | )        
|                                                     |                                                                             |                                                 |                                                                              |                                                     |           |            |           |            |          |           |           |           
|CASH FLOWS FROM INVESTING ACTIVITIES:                |                                                                             |                                                 |                                                                              |                                                     |           |            |           |            |          |           |           |           
|                                                     | Investments in limited partnerships:                                        |                                                 |                                                                              |                                                     |           |            |           |            |          |           |           |            |          
|                                                     |                                                                             | Capital (contributions) recoveries              |                                                                              |                                                     | (446,766  | )          |           |            | (507,293 | )         |           |            | 199,590   |          
|                                                     |                                                                             | Proceeds from sale of partnership interest      |                                                                              |                                                     | 1,029,810 |            |           |            |          |           |           |            |           |          
|                                                     |                                                                             | Decrease in capital contributions payable       |                                                                              |                                                     |           |            |           |            |          |           |           |            | (355,909  | )        
|                                                     |                                                                             | Distributions recognized as a return of capital |                                                                              |                                                     | 190,734   |            |           |            | 149,406  |           |           |            | 1,615,193 |          
|                                                     |                                                                             | Increase in restricted cash                     |                                                                              |                                                     | (8,170    | )          |           |            | (13,452  | )         |           |            | (8,814    | )        
|                                                     |                                                                             |                                                 |                                                                              |                                                     |           |            |           |            |          |           |           |           
|                                                     |                                                                             |                                                 |                                                                              | Net cash provided by (used in) investing activities |           |            | 765,608   |            |          |           | (371,339  | )          |           |           | 1,450,060 | 
|                                                     |                                                                             |                                                 |                                                                              |                                                     |           |            |           |            |          |           |           |           
|NET (DECREASE) INCREASE IN
CASH AND CASH EQUIVALENTS |                                                                             |                                                 | (287,854                                                                     | )                                                   |           |            | (431,562  | )          |          |           | 780,991   |           
|CASH AND CASH EQUIVALENTS, beginning of year         |                                                                             |                                                 | 864,951                                                                      |                                                     |           |            | 1,296,513 |            |          |           | 515,522   |           
|                                                     |                                                                             |                                                 |                                                                              |                                                     |           |            |           |            |          |           |           |           
|CASH AND CASH EQUIVALENTS, end of year               |                                                                             | $                                               | 577,097                                                                      |                                                     |           | $          | 864,951   |            |          | $         | 1,296,513 |           
|                                                     |                                                                             |                                                 |                                                                              |                                                     |           |            |           |            |          |           |           |           

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

5



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##### Table of Contents



NATIONAL TAX CREDIT INVESTORS II
(a California limited partnership)

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001



|1. |  | Summary of Significant Accounting Policies
|-- |  | ------------------------------------------

Organization

National Tax Credit Investors II (the Partnership) was formed under the
California Revised Limited Partnership Act and organized on January 12, 1990.
The Partnership was formed to invest primarily in other limited partnerships
which own and operate multifamily housing complexes that are eligible for low
income housing tax credits. The general partner of the Partnership (the
General Partner) is National Partnership Investments Corp., a California
corporation (NAPICO). The special limited partner of the Partnership (the
Special Limited Partner) is PaineWebber TC Partners L.P., a Virginia Limited
Partnership. The business of the Partnership is conducted primarily by
NAPICO.

On December 3, 2001, Casden Properties Inc., entered into a merger agreement
and certain other transaction documents with Apartment Investment and
Management Company, a Maryland corporation (AIMCO) and certain of its
subsidiaries, pursuant to which, on March 11, 2002, AIMCO acquired Casden
Properties Inc. and its subsidiaries, including NAPICO.

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 $9,412,868 were incurred in
connection with the sale of such limited partner interests.

The General Partner has a 1 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.

The Partnership shall continue in full force and effect until December 31,
2030, unless terminated earlier pursuant to the partnership agreement or law.

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.

6



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##### Table of Contents



NATIONAL TAX CREDIT INVESTORS II
(a California limited partnership)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2001



|1. |  | Summary of Significant Accounting Policies (Continued)
|-- |  | ------------------------------------------------------

Basis of Presentation

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

Recent Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards Number (SFAS No.) 141, Business Combinations
and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 was
effective immediately and SFAS 142 will be effective January 2002. The new
standards are not expected to have a significant impact on the Partnerships
financial statements.

Use of Estimates

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

Method of Accounting for Investment in Limited Partnerships

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

Net Loss Per Limited Partnership Interest

Net loss per limited partnership interest was computed by dividing the limited
partners share of net loss by the number of limited partnership interests
outstanding during the year. The number of limited partner interests was
72,404 for all years presented.

7



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##### Table of Contents



NATIONAL TAX CREDIT INVESTORS II
(a California limited partnership)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2001



|1. |  | Summary of Significant Accounting Policies (Continued)
|-- |  | ------------------------------------------------------

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and bank certificates with an
original maturity of three months or less. The Partnership has its cash and
cash equivalents on deposit with high quality financial institutions. Such
cash and cash equivalents are in excess of the FDIC insurance limit.

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. No impairment losses were
recognized during the years ended December 31, 2001, 2000 and 1999.



|2. |  | Investments in Limited Partnerships
|-- |  | -----------------------------------

The Partnership holds limited partnership interests in 35 local partnerships
(the Local Partnerships), located in 23 different states, after selling its
interest in one Local Partnership and a lender foreclosing one Local
Partnership in 2001. 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, 2001, the Local Partnerships own residential projects
consisting of 3,527 apartment units.

The Partnership, as a limited partner, is generally entitled to 50 to 99
percent of the operating profits and losses of the Local Partnerships.
National Tax Credit, Inc. II (NTC-II), an affiliate of the General Partner,
serves either as a special limited partner or non-managing administrative
general partner in each Local Partnership, in which case it receives .01
percent of operating profits and losses of the Local Partnership. In addition,
NTC-II is the Local Operating General Partner of two Local Partnerships, in
which case it is entitled to .09 percent of the operating profits and losses of
the Local Partnership.

8



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##### Table of Contents



NATIONAL TAX CREDIT INVESTORS II
(a California limited partnership)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2001



|2. |  | Investments in Limited Partnerships (Continued)
|-- |  | -----------------------------------------------

The Partnership is generally entitled to receive 50 percent of the net cash
flow generated by the Apartment Complexes, subject to repayment of any loans
made to the Local Partnerships (including loans made by NTC-II or an
affiliate), repayment for funding of development deficit and operating deficit
guarantees by the Local Operating General Partners or their affiliates
(excluding NTC-II and its affiliates), and certain priority payments to the
Local Operating General Partners other than NTC-II or its affiliates.

The Partnerships allocable share of losses from Local Partnerships are
recognized in the financial statements until the related investment account is
reduced to a zero balance. Losses incurred after the investment account is
reduced to zero will not be recognized. The cumulative amount of unrecognized
equity in losses of unconsolidated limited partnerships is approximately
$10,592,000 and $8,117,000 as of December 31, 2001 and 2000, respectively.

Distributions received by the Partnership from the Local Partnerships are
accounted for as a return of capital until the investment balance is reduced to
zero or to a negative amount equal to further capital contributions required.
Subsequent distributions received will be recognized as income.

During 2001, the Partnership sold its interest in the Cottonwood Local
Partnership and realized a gain of $266,320 and net proceeds of $1,251,090,
including $221,280 which was collected in 2002.

The following is a summary of the investments in and advances to Local
Partnerships and reconciliation to the Local Partnerships accounts:

|                                                       |  |      |            |      |  |   |            |  
|------------------------------------------------------ |  | ---- | ---------- | ---- |  | - | ---------- | -
|                                                       |  | 2001 |            | 2000
|                                                       |  |      |            |     
|Investments balance, beginning of year                 |  | $    | 14,059,652 |      |  | $ | 16,153,744 |  
|Capital contributions                                  |  |      | 446,766    |      |  |   | 507,293    |  
|Sale of property                                       |  |      | (984,770   | )    |  |   |           |  
|Equity in loss of limited partnerships                 |  |      | (2,034,235 | )    |  |   | (2,211,976 | )
|Amortization of capitalized acquisition costs and fees |  |      | (112,445   | )    |  |   | (240,003   | )
|Distributions recognized as a return of capital        |  |      | (190,734   | )    |  |   | (149,406   | )
|                                                       |  |      |            |      |  |   |            |  
|Investments balance, end of year                       |  | $    | 11,184,234 |      |  | $ | 14,059,652 |  
|                                                       |  |      |            |      |  |   |            |  

9



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##### Table of Contents



NATIONAL TAX CREDIT INVESTORS II
(a California limited partnership)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2001



|2. |  | Investments in Limited Partnerships (Continued)
|-- |  | -----------------------------------------------

The difference between the investment per the accompanying balance sheets at
December 31, 2001 and 2000, 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.

Paramount

Foreclosure proceedings were commenced against the Paramount Local Partnership
in November 1998 and a receiver was appointed in May 1999. A decree of
foreclosure was entered in January 2000, and the foreclosure sale was completed
in February 2001. The Partnership had no investment balance related to this
Local Partnership.

Wade Walton

Due to operating deficits, the Wade Walton Local Partnership which owns a
property in Clarksdale, Mississippi has been unable to service its mortgage and
the lender commenced foreclosure proceedings. The Local Partnership then
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. Substantial improvements have been made to the property and
occupancy has improved. Although the bankruptcy court has terminated the
automatic stay, the lender has refrained from continuing the foreclosure
proceedings. The Partnership had no investment balance related to this Local
Partnership.

10



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##### Table of Contents



NATIONAL TAX CREDIT INVESTORS II
(a California limited partnership)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2001



|2. |  | Investments in Limited Partnerships (Continued)
|-- |  | -----------------------------------------------

Selected financial information from the combined financial statements of the
Local Partnerships at December 31, 2001 and 2000 and for each of the three
years in the period ended December 31, 2001 is as follows:

Balance Sheets

|                                                                  |  |                |         |      |  |   |         | 
|----------------------------------------------------------------- |  | -------------- | ------- | ---- |  | - | ------- | 
|                                                                  |  | 2001           |         | 2000
|                                                                  |  |                |         |     
|                                                                  |  | (in thousands)
|Land and buildings, net                                           |  | $              | 95,310  |      |  | $ | 104,673 | 
|                                                                  |  |                |         |      |  |   |         | 
|Total assets                                                      |  | $              | 106,411 |      |  | $ | 115,295 | 
|                                                                  |  |                |         |      |  |   |         | 
|Mortgages and construction loans payable
secured by real property |  | $              | 83,683  |      |  | $ | 87,028  | 
|                                                                  |  |                |         |      |  |   |         | 
|Total liabilities                                                 |  | $              | 97,892  |      |  | $ | 101,294 | 
|                                                                  |  |                |         |      |  |   |         | 
|Equity of National Tax Credit Investors II                        |  | $              | 405     |      |  | $ | 2,497   | 
|                                                                  |  |                |         |      |  |   |         | 
|Equity of other partners                                          |  | $              | 8,114   |      |  | $ | 11,504  | 
|                                                                  |  |                |         |      |  |   |         | 

Statements of Operations

|                                      |  |                |        |      |  |      |        |   |  |   |         |  
|------------------------------------- |  | -------------- | ------ | ---- |  | ---- | ------ | - |  | - | ------- | -
|                                      |  | 2001           |        | 2000 |  | 1999
|                                      |  |                |        |      |  |     
|                                      |  | (in thousands)
|Total revenues                        |  | $              | 18,968 |      |  | $    | 19,863 |   |  | $ | 19,221  |  
|                                      |  |                |        |      |  |      |        |   |  |   |         |  
|Interest expense                      |  | $              | 5,488  |      |  | $    | 6,220  |   |  | $ | 6,401   |  
|                                      |  |                |        |      |  |      |        |   |  |   |         |  
|Depreciation and amortization         |  | $              | 4,799  |      |  | $    | 4,937  |   |  | $ | 5,131   |  
|                                      |  |                |        |      |  |      |        |   |  |   |         |  
|Total expenses                        |  | $              | 23,221 |      |  | $    | 23,316 |   |  | $ | 31,145  |  
|                                      |  |                |        |      |  |      |        |   |  |   |         |  
|Net loss                              |  | $              | (4,253 | )    |  | $    | (3,453 | ) |  | $ | (11,923 | )
|                                      |  |                |        |      |  |      |        |   |  |   |         |  
|Net loss allocable to the Partnership |  | $              | (4,088 | )    |  | $    | (3,128 | ) |  | $ | (11,834 | )
|                                      |  |                |        |      |  |      |        |   |  |   |         |  

11



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##### Table of Contents



NATIONAL TAX CREDIT INVESTORS II
(a California limited partnership)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2001



|2. |  | Investments in Limited Partnerships (Continued)
|-- |  | -----------------------------------------------

Included in expenses for 1999 is an impairment loss of $8,190,000 related to
one Local Partnership, in which the Partnership has a zero investment balance.

An affiliate of the General Partner is currently the Local Operating General
Partner in two of the Local Partnerships included above, and another affiliate
receives property management fees of approximately 5 percent of gross revenues
from one of these two Local Partnerships and from three other Local Partnership
(Note 5) in which the affiliate is not the Local Operating General Partner. The
following sets forth the significant combined data for the Local Partnerships
in which an affiliate of the General Partner is the Local Operating General
Partner:

|                                           |  |                |       |      |  |      |        |   |  |   |       |  
|------------------------------------------ |  | -------------- | ----- | ---- |  | ---- | ------ | - |  | - | ----- | -
|                                           |  | 2001           |       | 2000 |  | 1999
|                                           |  |                |       |      |  |     
|                                           |  | (in thousands)
|Total assets                               |  | $              | 6,644 |      |  | $    | 11,332 |   |  |   |       |  
|                                           |  |                |       |      |  |      |        |   |  |   |       |  
|Total liabilities                          |  | $              | 4,266 |      |  | $    | 7,721  |   |  |   |       |  
|                                           |  |                |       |      |  |      |        |   |  |   |       |  
|Equity of National Tax Credit Investors II |  | $              | 2,390 |      |  | $    | 721    |   |  |   |       |  
|                                           |  |                |       |      |  |      |        |   |  |   |       |  
|Equity of other partners                   |  | $              | (12   | )    |  | $    | 2,890  |   |  |   |       |  
|                                           |  |                |       |      |  |      |        |   |  |   |       |  
|Total revenue                              |  | $              | 913   |      |  | $    | 1,806  |   |  | $ | 1,850 |  
|                                           |  |                |       |      |  |      |        |   |  |   |       |  
|Net loss                                   |  | $              | (204  | )    |  | $    | (345   | ) |  | $ | (296  | )
|                                           |  |                |       |      |  |      |        |   |  |   |       |  



|3. |  | Restricted Cash
|-- |  | ---------------

Restricted cash represents funds in escrow to be used, to fund operating
deficits, if any, of one of the Local Partnerships, as defined in the Local
Partnership Agreement.



|4. |  | Capital Contributions Payable
|-- |  | -----------------------------

Capital contributions payable represents amounts which are due at various times
based on conditions specified in the respective Local Partnership agreements.
The capital contributions payable are unsecured and non-interest bearing.
These amounts are generally due upon the Local Partnership achieving certain
operating or financing benchmarks.

12



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##### Table of Contents



NATIONAL TAX CREDIT INVESTORS II
(a California limited partnership)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2001



|5. |  | Related-Party Transactions
|-- |  | --------------------------

Under the terms of the Amended and Restated Agreement of Limited Partnership,
the Partnership is obligated to the General Partner and the Special Limited
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 and Special Limited Partner. Partnership management
fees in the amount of $736,856, $740,463 and $764,612 were recorded as an
expense in 2001, in 2000 and 1999, respectively. As of December 31, 2001
and 2000, management fees in the amount of $2,546,019 and $3,717,135,
respectively, were due to the General Partner and the Special Limited
Partner.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | As of December 31, 2001, the fees and expenses due the General Partner and
Special Limited Partner exceeded the Partnerships cash. The partners,
during the forthcoming year, will not demand payment of amounts due in
excess of such cash or such that the Partnership would not have sufficient
operating cash; however, the Partnership will remain liable for all such
amounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| | (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.

13



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##### Table of Contents



NATIONAL TAX CREDIT INVESTORS II
(a California limited partnership)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2001



|5. |  | Related-Party Transactions (Continued)
|-- |  | --------------------------------------



| | (c) |  | The Partnership reimburses certain expenses to the General Partner. The
reimbursement incurred to the General Partner was $65,255, $47,129 and $0
for the years ended December 31, 2001, 2000 and 1999, respectively, and is
included in general and administrative expenses.
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NTC-II is the Local Operating General Partner in two of the Partnerships 35
Local Partnerships. In addition, NTC-II is either a special limited partner or
non-managing administrative general partner in each Local Partnership.

An affiliate of the General Partner is responsible for the on-site property
management for four Local Partnerships (Note 2). The Local Partnerships paid
the affiliate property management fees of $138,373, $163,520 and $182,781 in
2001, 2000 and 1999, respectively.



|6. |  | Income Taxes
|-- |  | ------------

No provision has been made for income taxes in the accompanying financial
statements since such taxes, if any, are the liability of the individual
partners. The major differences in tax and financial statement losses result
from the use of different bases and depreciation methods for the properties
held by the Local Partnerships. Additional differences in tax and financial
losses arise when financial losses are not recognized after the investment
balance has been reduced to zero or to a negative amount equal to further
capital contributions required.



|7. |  | Contingencies
|-- |  | -------------

NTCI-IIs General Partner is involved in various lawsuits. In addition, the
Partnership is involved in several lawsuits arising from transactions in the
ordinary course of business (Note 2). In the opinion of management and the
General Partner, these claims will not result in any material liability to the
Partnership.



|8. |  | Fair Value of Financial Instruments
|-- |  | -----------------------------------

Statement of Financial Accounting Standards No. 107, Disclosure about Fair
Value of Financial Instruments, requires disclosure of fair value information
about financial instruments, when it is practicable to estimate that value. It
is impracticable to estimate the fair value of the amounts due to partners due
to their related party nature. The carrying amounts of other assets and
liabilities reported on the balance sheets that require such disclosure
approximate fair value due to their short-term maturity.

14



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##### Table of Contents



NATIONAL TAX CREDIT INVESTORS II
(a California limited partnership)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2001



|9. |  | Fourth-Quarter Adjustment
|-- |  | -------------------------

The Partnerships policy is to record its equity in the loss of limited
partnerships on a quarterly basis using estimated financial information
furnished by the various local operating general partners. The equity in loss
reflected in the accompanying annual consolidated financial statements is based
primarily upon audited financial statements of the investee limited
partnerships. The increase, approximately $801,000 between the estimated
nine-month equity in loss and the actual 2001 year end equity in loss, has been
recorded in the fourth quarter.

15



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##### Table of Contents



NATIONAL TAX CREDIT INVESTORS II
INVESTMENTS IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

SCHEDULE

|                                  |  |                              |            |         |  |          |          |        |  |        |          |              |  |   |            |   |  |   |          |   |  |   |            |  
|--------------------------------- |  | ---------------------------- | ---------- | ------- |  | -------- | -------- | ------ |  | ------ | -------- | ------------ |  | - | ---------- | - |  | - | -------- | - |  | - | ---------- | -
|                                  |  | Year Ended December 31, 2001
|                                  |  |                             
|                                  |  |                              |            |         |  | Capital  |          | Cash   |  | Equity |          | Amort        |  |   |            |  
|                                  |  | BALANCE                      |            | Contri- |  | Distri-  |          | in     |  | of Acq |          | BALANCE     
|LIMITED                           |  | JANUARY 1,                   |            | butions |  | butions  |          | Income |  | Costs/ |          | DECEMBER 31,
|PARTNERSHIPS                      |  | 2001                         |            | (Sale)  |  | Received |          | (Loss) |  | Fees   |          | 2001        
|                                  |  |                              |            |         |  |          |          |        |  |        |          |             
|Ashville Equity                   |  | $                            |           |         |  | $        | 129,880  |        |  | $      |          |              |  | $ | (129,880   | ) |  | $ |         |   |  | $ |           |  
|Columbus Junction                 |  |                              |           |         |  |          | 1,625    |        |  |        |          |              |  |   | (1,625     | ) |  |   |         |   |  |   |           |  
|Cottonwood Park                   |  |                              | 1,031,879  |         |  |          | (984,770 | )      |  |        |          |              |  |   | (39,761    | ) |  |   | (7,348   | ) |  |   |           |  
|The Cottages I                    |  |                              |           |         |  |          |          |        |  |        |          |              |  |   |           |   |  |   |         |   |  |   |           |  
|Countryside                       |  |                              | 1,147,347  |         |  |          |          |        |  |        |          |              |  |   | (73,134    | ) |  |   | (11,361  | ) |  |   | 1,062,852  |  
|Eastridge Apartments              |  |                              | 335,640    |         |  |          | 116,441  |        |  |        |          |              |  |   | (449,094   | ) |  |   | (2,987   | ) |  |   |           |  
|Edgewood Apartments               |  |                              | 843,783    |         |  |          |          |        |  |        | (21,385  | )            |  |   | (106,498   | ) |  |   | (5,834   | ) |  |   | 710,066    |  
|Fourth Street                     |  |                              | 1,229,636  |         |  |          |          |        |  |        |          |              |  |   | (135,004   | ) |  |   | (7,053   | ) |  |   | 1,087,579  |  
|Germantown Apartments             |  |                              | 962,889    |         |  |          |          |        |  |        | (24,453  | )            |  |   | (86,680    | ) |  |   | (6,811   | ) |  |   | 844,945    |  
|Great Basin Associates            |  |                              |           |         |  |          |          |        |  |        |          |              |  |   |           |   |  |   |         |   |  |   |           |  
|Grimes Park Apartments            |  |                              | 18,308     |         |  |          | 1,625    |        |  |        | (1,158   | )            |  |   | (16,661    | ) |  |   | (2,114   | ) |  |   |           |  
|Jamestown                         |  |                              | 126,277    |         |  |          |          |        |  |        |          |              |  |   | (87,015    | ) |  |   | (3,322   | ) |  |   | 35,940     |  
|Jefferson Meadows Apartments      |  |                              |           |         |  |          |          |        |  |        |          |              |  |   |           |   |  |   |         |   |  |   |           |  
|Kentucky River Apartments         |  |                              | 839,952    |         |  |          |          |        |  |        |          |              |  |   | (32,731    | ) |  |   | (4,719   | ) |  |   | 802,502    |  
|Lincoln Grove                     |  |                              | 598,604    |         |  |          |          |        |  |        | (20,400  | )            |  |   | (57,818    | ) |  |   | (4,527   | ) |  |   | 515,859    |  
|Meadowlakes Apartments            |  |                              | 953,453    |         |  |          |          |        |  |        |          |              |  |   | (42,379    | ) |  |   | (5,828   | ) |  |   | 905,246    |  
|Michigan Beach Apartments         |  |                              |           |         |  |          | 84,360   |        |  |        |          |              |  |   | (84,360    | ) |  |   |         |   |  |   |           |  
|Nickel River (Wedgewood) Apts.    |  |                              | 703,653    |         |  |          | 88,626   |        |  |        |          |              |  |   | (39,619    | ) |  |   | (7,170   | ) |  |   | 745,490    |  
|Norwalk Park Apartments           |  |                              | 9,316      |         |  |          | 1,625    |        |  |        | (1,088   | )            |  |   | (8,909     | ) |  |   | (944     | ) |  |   |           |  
|Oakview                           |  |                              | 989,370    |         |  |          | 22,584   |        |  |        |          |              |  |   | 58,865     |   |  |   | (2,926   | ) |  |   | 1,067,893  |  
|Pam Apartments                    |  |                              |           |         |  |          |          |        |  |        |          |              |  |   |           |   |  |   |         |   |  |   |           |  
|Palm Springs View                 |  |                              |           |         |  |          |          |        |  |        |          |              |  |   |           |   |  |   |         |   |  |   |           |  
|Paramount Apartments *            |  |                              |           |         |  |          |          |        |  |        |          |              |  |   |           |   |  |   |         |   |  |   |           |  
|Parkwood Landing                  |  |                              |           |         |  |          |          |        |  |        |          |              |  |   |           |   |  |   |         |   |  |   |           |  
|Pensacola Affordable              |  |                              | 108,723    |         |  |          |          |        |  |        | (5,001   | )            |  |   | (100,888   | ) |  |   | (2,834   | ) |  |   |           |  
|Pineview Terrace                  |  |                              | 450,996    |         |  |          |          |        |  |        | (98,237  | )            |  |   | (41,413    | ) |  |   | (6,197   | ) |  |   | 305,149    |  
|Quivera                           |  |                              |           |         |  |          |          |        |  |        |          |              |  |   |           |   |  |   |         |   |  |   |           |  
|Rancho Del Mar                    |  |                              | 2,917,042  |         |  |          |          |        |  |        |          |              |  |   | (254,281   | ) |  |   | (16,084  | ) |  |   | 2,646,677  |  
|Salem Park Apartments             |  |                              | 328,815    |         |  |          |          |        |  |        | (10,833  | )            |  |   | (148,728   | ) |  |   | (6,787   | ) |  |   | 162,467    |  
|Sheboygan Apartments              |  |                              | 274,272    |         |  |          |          |        |  |        |          |              |  |   | (93,708    | ) |  |   | (3,549   | ) |  |   | 177,015    |  
|Sitka III Apartments              |  |                              |           |         |  |          |          |        |  |        |          |              |  |   |           |   |  |   |         |   |  |   |           |  
|Soldotna (Northwood Senior) Apts. |  |                              | 146,889    |         |  |          |          |        |  |        | (1,851   | )            |  |   | (28,580    | ) |  |   | (1,900   | ) |  |   | 114,558    |  
|Torres De Plata II                |  |                              | 42,808     |         |  |          |          |        |  |        | (6,328   | )            |  |   | (34,334    | ) |  |   | (2,150   | ) |  |   | (4         | )
|Villa Real                        |  |                              |           |         |  |          |          |        |  |        |          |              |  |   |           |   |  |   |         |   |  |   |           |  
|Virginia Park Meadows             |  |                              |           |         |  |          |          |        |  |        |          |              |  |   |           |   |  |   |         |   |  |   |           |  
|Wade Walton Apartments            |  |                              |           |         |  |          |          |        |  |        |          |              |  |   |           |   |  |   |         |   |  |   |           |  
|Westbridge Apartments             |  |                              |           |         |  |          |          |        |  |        |          |              |  |   |           |   |  |   |         |   |  |   |           |  
|                                  |  |                              |            |         |  |          |          |        |  |        |          |              |  |   |            |   |  |   |          |   |  |   |            |  
|                                  |  | $                            | 14,059,652 |         |  | $        | (538,004 | )      |  | $      | (190,734 | )            |  | $ | (2,034,235 | ) |  | $ | (112,445 | ) |  | $ | 11,184,234 |  
|                                  |  |                              |            |         |  |          |          |        |  |        |          |              |  |   |            |   |  |   |          |   |  |   |            |  



---

|* |  | The lender foreclosed against the property in 2001
|- |  | --------------------------------------------------





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##### Table of Contents



NATIONAL TAX CREDIT INVESTORS II
INVESTMENTS IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

SCHEDULE
(Continued)

|                                  |  |                              |            |         |  |          |         |        |  |        |          |              |  |       |            |   |  |   |          |   |  |   |            | 
|--------------------------------- |  | ---------------------------- | ---------- | ------- |  | -------- | ------- | ------ |  | ------ | -------- | ------------ |  | ----- | ---------- | - |  | - | -------- | - |  | - | ---------- | 
|                                  |  | Year Ended December 31, 2000
|                                  |  |                             
|                                  |  |                              |            |         |  |          |         |        |  | Cash   |          | Equity       |  | Amort |            |   |  |  
|                                  |  | BALANCE                      |            | Capital |  | Distri-  |         | in     |  | of Acq |          | BALANCE     
|LIMITED                           |  | JANUARY 1,                   |            | Contri- |  | butions  |         | Income |  | Costs/ |          | DECEMBER 31,
|PARTNERSHIPS                      |  | 2000                         |            | butions |  | Received |         | (Loss) |  | Fees   |          | 2000        
|                                  |  |                              |            |         |  |          |         |        |  |        |          |             
|Ashville Equity                   |  | $                            | 226,123    |         |  | $        | 319,024 |        |  |        |          |              |  |       | (419,727   | ) |  | $ | (125,420 | ) |  |   |            | 
|Columbus Junction                 |  |                              | 27,617     |         |  |          | 1,800   |        |  |        | (1,638   | )            |  |       | (27,779    | ) |  |   |         |   |  |   |           | 
|Cottonwood Park                   |  |                              | 1,083,267  |         |  |          |         |        |  |        |          |              |  |       | (43,376    | ) |  |   | (8,012   | ) |  |   | 1,031,879  | 
|The Cottages I                    |  |                              |           |         |  |          |         |        |  |        |          |              |  |       |            |   |  |   |         |   |  |   |           | 
|Countryside                       |  |                              | 1,428,014  |         |  |          |         |        |  |        |          |              |  |       | (269,305   | ) |  |   | (11,362  | ) |  |   | 1,147,347  | 
|Eastridge Apartments              |  |                              | 396,077    |         |  |          | 87,278  |        |  |        | (1,645   | )            |  |       | (143,083   | ) |  |   | (2,987   | ) |  |   | 335,640    | 
|Edgewood Apartments               |  |                              | 954,907    |         |  |          |         |        |  |        | (18,095  | )            |  |       | (87,195    | ) |  |   | (5,834   | ) |  |   | 843,783    | 
|Fourth Street                     |  |                              | 1,370,176  |         |  |          |         |        |  |        |          |              |  |       | (133,487   | ) |  |   | (7,053   | ) |  |   | 1,229,636  | 
|Germantown Apartments             |  |                              | 1,073,110  |         |  |          |         |        |  |        | (24,453  | )            |  |       | (78,957    | ) |  |   | (6,811   | ) |  |   | 962,889    | 
|Great Basin Associates            |  |                              |           |         |  |          | 28,517  |        |  |        |          |              |  |       | (28,517    | ) |  |   |         |   |  |   |           | 
|Grimes Park Apartments            |  |                              | 32,075     |         |  |          | 1,800   |        |  |        | (1,158   | )            |  |       | (12,293    | ) |  |   | (2,116   | ) |  |   | 18,308     | 
|Jamestown                         |  |                              | 240,401    |         |  |          |         |        |  |        |          |              |  |       | (110,802   | ) |  |   | (3,322   | ) |  |   | 126,277    | 
|Jefferson Meadows Apartments      |  |                              | 39,455     |         |  |          |         |        |  |        |          |              |  |       | (39,455    | ) |  |   |         |   |  |   |           | 
|Kentucky River Apartments         |  |                              | 855,869    |         |  |          | 2,500   |        |  |        |          |              |  |       | (13,698    | ) |  |   | (4,719   | ) |  |   | 839,952    | 
|Lincoln Grove                     |  |                              | 701,690    |         |  |          |         |        |  |        | (20,400  | )            |  |       | (78,159    | ) |  |   | (4,527   | ) |  |   | 598,604    | 
|Meadowlakes Apartments            |  |                              | 1,008,175  |         |  |          |         |        |  |        | (1,466   | )            |  |       | (47,428    | ) |  |   | (5,828   | ) |  |   | 953,453    | 
|Michigan Beach Apartments         |  |                              |           |         |  |          | 37,736  |        |  |        |          |              |  |       | (37,736    | ) |  |   |         |   |  |   |           | 
|Nickel River (Wedgewood) Apts.    |  |                              | 805,659    |         |  |          | 2,545   |        |  |        |          |              |  |       | (97,381    | ) |  |   | (7,170   | ) |  |   | 703,653    | 
|Norwalk Park Apartments           |  |                              | 21,633     |         |  |          | 1,800   |        |  |        |          |              |  |       | (12,701    | ) |  |   | (1,416   | ) |  |   | 9,316      | 
|Oakview                           |  |                              | 908,885    |         |  |          | 15,000  |        |  |        |          |              |  |       | 68,411     |   |  |   | (2,926   | ) |  |   | 989,370    | 
|Pam Apartments                    |  |                              |           |         |  |          |         |        |  |        |          |              |  |       |            |   |  |   |          |   |  |   |           | 
|Palm Springs View                 |  |                              |           |         |  |          | 5,535   |        |  |        |          |              |  |       | (5,535     | ) |  |   |         |   |  |   |           | 
|Paramount Apartments              |  |                              |           |         |  |          | 2,258   |        |  |        |          |              |  |       | (2,258     | ) |  |   |         |   |  |   |           | 
|Parkwood Landing                  |  |                              | 109,460    |         |  |          |         |        |  |        |          |              |  |       | (109,460   | ) |  |   |         |   |  |   |           | 
|Pensacola Affordable              |  |                              | 320,362    |         |  |          |         |        |  |        |          |              |  |       | (208,238   | ) |  |   | (3,401   | ) |  |   | 108,723    | 
|Pineview Terrace                  |  |                              | 424,170    |         |  |          |         |        |  |        |          |              |  |       | 33,023     |   |  |   | (6,197   | ) |  |   | 450,996    | 
|Quivera                           |  |                              |           |         |  |          |         |        |  |        |          |              |  |       |            |   |  |   |          |   |  |   |           | 
|Rancho Del Mar                    |  |                              | 3,100,182  |         |  |          | 1,500   |        |  |        | (57,375  | )            |  |       | (111,180   | ) |  |   | (16,085  | ) |  |   | 2,917,042  | 
|Salem Park Apartments             |  |                              | 422,672    |         |  |          |         |        |  |        | (15,000  | )            |  |       | (72,070    | ) |  |   | (6,787   | ) |  |   | 328,815    | 
|Sheboygan Apartments              |  |                              | 367,850    |         |  |          |         |        |  |        |          |              |  |       | (90,028    | ) |  |   | (3,550   | ) |  |   | 274,272    | 
|Sitka III Apartments              |  |                              |           |         |  |          |         |        |  |        |          |              |  |       |            |   |  |   |          |   |  |   |           | 
|Soldotna (Northwood Senior) Apts. |  |                              | 164,262    |         |  |          |         |        |  |        | (1,848   | )            |  |       | (13,625    | ) |  |   | (1,900   | ) |  |   | 146,889    | 
|Torres De Plata II                |  |                              | 51,716     |         |  |          |         |        |  |        | (6,328   | )            |  |       |            |   |  |   | (2,580   | ) |  |   | 42,808     | 
|Villa Real                        |  |                              |           |         |  |          |         |        |  |        |          |              |  |       |            |   |  |   |          |   |  |   |           | 
|Virginia Park Meadows             |  |                              | 19,937     |         |  |          |         |        |  |        |          |              |  |       | (19,937    | ) |  |   |         |   |  |   |           | 
|Wade Walton Apartments            |  |                              |           |         |  |          |         |        |  |        |          |              |  |       |            |   |  |   |         |   |  |   |           | 
|Westbridge Apartments             |  |                              |           |         |  |          |         |        |  |        |          |              |  |       |            |   |  |   |         |   |  |   |           | 
|                                  |  |                              |            |         |  |          |         |        |  |        |          |              |  |       |            |   |  |   |          |   |  |   |            | 
|                                  |  | $                            | 16,153,744 |         |  | $        | 507,293 |        |  | $      | (149,406 | )            |  | $     | (2,211,976 | ) |  | $ | (240,003 | ) |  | $ | 14,059,652 | 
|                                  |  |                              |            |         |  |          |         |        |  |        |          |              |  |       |            |   |  |   |          |   |  |   |            | 





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##### Table of Contents



NATIONAL TAX CREDIT INVESTORS II
INVESTMENTS IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

SCHEDULE
(Continued)

|                                  |  |                              |            |            |  |          |          |        |  |        |            |              |  |   |            |   |  |   |          |   |  |   |            | 
|--------------------------------- |  | ---------------------------- | ---------- | ---------- |  | -------- | -------- | ------ |  | ------ | ---------- | ------------ |  | - | ---------- | - |  | - | -------- | - |  | - | ---------- | 
|                                  |  | Year Ended December 31, 1999
|                                  |  |                             
|                                  |  |                              |            |            |  | Capital  |          | Cash   |  | Equity |            | Amort        |  |   |            |  
|                                  |  | BALANCE                      |            | Contri-    |  | Distri-  |          | in     |  | of Acq |            | BALANCE     
|LIMITED                           |  | JANUARY 1,                   |            | butions    |  | butions  |          | Income |  | Costs/ |            | DECEMBER 31,
|PARTNERSHIPS                      |  | 1999                         |            | (Recovery) |  | Received |          | (Loss) |  | Fees   |            | 1999        
|                                  |  |                              |            |            |  |          |          |        |  |        |            |             
|Ashville Equity                   |  | $                            | 362,555    |            |  | $        | 23,000   |        |  | $      |            |              |  | $ | (153,541   | ) |  | $ | (5,891   | ) |  | $ | 226,123    | 
|Columbus Junction                 |  |                              | 49,060     |            |  |          |          |        |  |        | (1,638     | )            |  |   | (17,874    | ) |  |   | (1,931   | ) |  |   | 27,617     | 
|Cottonwood Park                   |  |                              | 1,124,314  |            |  |          |          |        |  |        |            |              |  |   | (33,035    | ) |  |   | (8,012   | ) |  |   | 1,083,267  | 
|The Cottages I                    |  |                              |           |            |  |          |          |        |  |        |            |              |  |   |            |   |  |   |         |   |  |   |           | 
|Countryside                       |  |                              | 1,802,706  |            |  |          |          |        |  |        | (35,720    | )            |  |   | (327,610   | ) |  |   | (11,362  | ) |  |   | 1,428,014  | 
|Eastridge Apartments              |  |                              | 471,699    |            |  |          |          |        |  |        |            |              |  |   | (72,635    | ) |  |   | (2,987   | ) |  |   | 396,077    | 
|Edgewood Apartments               |  |                              | 1,092,162  |            |  |          |          |        |  |        | (18,095    | )            |  |   | (113,326   | ) |  |   | (5,834   | ) |  |   | 954,907    | 
|Fourth Street                     |  |                              | 1,508,797  |            |  |          |          |        |  |        |            |              |  |   | (131,568   | ) |  |   | (7,053   | ) |  |   | 1,370,176  | 
|Germantown Apartments             |  |                              | 1,227,404  |            |  |          |          |        |  |        | (18,810    | )            |  |   | (128,673   | ) |  |   | (6,811   | ) |  |   | 1,073,110  | 
|Great Basin Associates            |  |                              |           |            |  |          | 11,139   |        |  |        |            |              |  |   | (11,139    | ) |  |   |         |   |  |   |           | 
|Grimes Park Apartments            |  |                              | 47,307     |            |  |          |          |        |  |        | (1,158     | )            |  |   | (11,958    | ) |  |   | (2,116   | ) |  |   | 32,075     | 
|Jamestown                         |  |                              | 323,393    |            |  |          |          |        |  |        |            |              |  |   | (79,670    | ) |  |   | (3,322   | ) |  |   | 240,401    | 
|Jefferson Meadows Apartments      |  |                              | 251,690    |            |  |          |          |        |  |        |            |              |  |   | (204,661   | ) |  |   | (7,574   | ) |  |   | 39,455     | 
|Kentucky River Apartments         |  |                              | 874,396    |            |  |          |          |        |  |        |            |              |  |   | (13,808    | ) |  |   | (4,719   | ) |  |   | 855,869    | 
|Lincoln Grove                     |  |                              | 796,165    |            |  |          |          |        |  |        | (20,400    | )            |  |   | (69,548    | ) |  |   | (4,527   | ) |  |   | 701,690    | 
|Meadowlakes Apartments            |  |                              | 1,098,046  |            |  |          |          |        |  |        | (16,128    | )            |  |   | (67,915    | ) |  |   | (5,828   | ) |  |   | 1,008,175  | 
|Michigan Beach Apartments         |  |                              |           |            |  |          | 19,789   |        |  |        |            |              |  |   | (19,789    | ) |  |   |         |   |  |   |           | 
|Nickel River (Wedgewood) Apts.    |  |                              | 842,914    |            |  |          |          |        |  |        | (4,080     | )            |  |   | (26,005    | ) |  |   | (7,170   | ) |  |   | 805,659    | 
|Norwalk Park Apartments           |  |                              | 42,550     |            |  |          |          |        |  |        | (1,088     | )            |  |   | (18,413    | ) |  |   | (1,416   | ) |  |   | 21,633     | 
|Oakview                           |  |                              | 784,765    |            |  |          |          |        |  |        |            |              |  |   | 127,046    |   |  |   | (2,926   | ) |  |   | 908,885    | 
|Pam Apartments                    |  |                              | 33,501     |            |  |          |          |        |  |        | (13,450    | )            |  |   | (17,215    | ) |  |   | (2,836   | ) |  |   |           | 
|Palm Springs View                 |  |                              |           |            |  |          |          |        |  |        |            |              |  |   |            |   |  |   |         |   |  |   |           | 
|Paramount Apartments              |  |                              |           |            |  |          | 17,647   |        |  |        |            |              |  |   | (17,647    | ) |  |   |         |   |  |   |           | 
|Parkwood Landing                  |  |                              | 672,606    |            |  |          | (271,165 | )      |  |        |            |              |  |   | (278,198   | ) |  |   | (13,783  | ) |  |   | 109,460    | 
|Pensacola Affordable              |  |                              | 361,887    |            |  |          |          |        |  |        | (15,287    | )            |  |   | (22,837    | ) |  |   | (3,401   | ) |  |   | 320,362    | 
|Pineview Terrace                  |  |                              | 395,756    |            |  |          |          |        |  |        |            |              |  |   | 34,611     |   |  |   | (6,197   | ) |  |   | 424,170    | 
|Quivera                           |  |                              | 235,822    |            |  |          |          |        |  |        | (27,996    | )            |  |   | (196,782   | ) |  |   | (11,044  | ) |  |   |           | 
|Rancho Del Mar                    |  |                              | 3,408,959  |            |  |          |          |        |  |        | (83,000    | )            |  |   | (209,693   | ) |  |   | (16,084  | ) |  |   | 3,100,182  | 
|Salem Park Apartments             |  |                              | 554,438    |            |  |          |          |        |  |        | (11,667    | )            |  |   | (113,312   | ) |  |   | (6,787   | ) |  |   | 422,672    | 
|Sheboygan Apartments              |  |                              | 470,953    |            |  |          |          |        |  |        |            |              |  |   | (99,553    | ) |  |   | (3,550   | ) |  |   | 367,850    | 
|Sitka III Apartments              |  |                              |           |            |  |          |          |        |  |        |            |              |  |   |            |   |  |   |         |   |  |   |           | 
|Soldotna (Northwood Senior) Apts. |  |                              | 183,941    |            |  |          |          |        |  |        | (1,848     | )            |  |   | (15,931    | ) |  |   | (1,900   | ) |  |   | 164,262    | 
|Torres De Plata II                |  |                              | 60,624     |            |  |          |          |        |  |        | (6,328     | )            |  |   |            |   |  |   | (2,580   | ) |  |   | 51,716     | 
|Villa Real                        |  |                              | 1,850,135  |            |  |          |          |        |  |        | (1,338,500 | )            |  |   | (204,623   | ) |  |   | (307,012 | ) |  |   |           | 
|Virginia Park Meadows             |  |                              | 238,958    |            |  |          |          |        |  |        |            |              |  |   | (211,753   | ) |  |   | (7,268   | ) |  |   | 19,937     | 
|Wade Walton Apartments            |  |                              |           |            |  |          |          |        |  |        |            |              |  |   |            |   |  |   |         |   |  |   |           | 
|Westbridge Apartments             |  |                              |           |            |  |          |          |        |  |        |            |              |  |   |            |   |  |   |         |   |  |   |           | 
|                                  |  |                              |            |            |  |          |          |        |  |        |            |              |  |   |            |   |  |   |          |   |  |   |            | 
|                                  |  | $                            | 21,167,503 |            |  | $        | (199,590 | )      |  | $      | (1,615,193 | )            |  | $ | (2,727,055 | ) |  | $ | (471,921 | ) |  | $ | 16,153,744 | 
|                                  |  |                              |            |            |  |          |          |        |  |        |            |              |  |   |            |   |  |   |          |   |  |   |            | 





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##### Table of Contents



SCHEDULE
(Continued)

NATIONAL TAX CREDIT INVESTORS II
INVESTMENTS IN, EQUITY IN EARNINGS OF, AND DISTRIBUTIONS
RECEIVED FROM LIMITED PARTNERSHIPS FOR THE
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999



|NOTES: | 1. |  | Equity in income (loss) represents the Partnerships allocable share
of the net income (loss) from the Local Partnerships for the year. Equity
in loss of the Local Partnerships will be recognized until the investment
balance is reduced to zero or a negative balance equal to further
commitments by the Partnership.
|------ | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      
|       | 2. |  | Cash distributions from the Local Partnerships are
treated as a return of the investment and reduce the investment
balance until such time as the investment is reduced to zero or a
negative balance equal to further commitments by the Partnership.
Distributions subsequently received will be recognized as income.  





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##### Table of Contents



NATIONAL TAX CREDIT INVESTORS II
REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS
DECEMBER 31, 2001

SCHEDULE III

|                                             |  |        |     |             |  |      |           |        |  |                |         |              |  |               |            |             |  |   |            |  |  |   |           | 
|-------------------------------------------- |  | ------ | --- | ----------- |  | ---- | --------- | ------ |  | -------------- | ------- | ------------ |  | ------------- | ---------- | ----------- |  | - | ---------- |  |  | - | --------- | 
|                                             |  |        |     |             |  |      |           |        |  |                |         |              |  | Buildings,    |            |             |  |   |            |  |  |  
|                                             |  |        |     |             |  |      |           |        |  |                |         |              |  | Furnishings   |            |             |  |   |            |  |  |  
|                                             |  |        |     |             |  |      |           |        |  |                |         |              |  | and Equipment |            |             |  |   |            |  |  |  
|                                             |  | Number |     | Outstanding |  |      |           |        |  | Amount Carried |         |              |  |               |            |             |  |  
|                                             |  | of     |     | Mortgage    |  |      |           |        |  | at Close of    |         |              |  |               |            | Accumulated
|Partnership/Location                         |  | Units  |     | Loan        |  | Land |           | Period |  | Total          |         | Depreciation
|                                             |  |        |     |             |  |      |           |        |  |                |         |             
|Ashville Equity (Westview)Ashville, OH       |  |        | 41  |             |  | $    | 958,258   |        |  | $              | 100,000 |              |  | $             | 1,774,617  |             |  | $ | 1,874,617  |  |  | $ | 829,101   | 
|Columbus Junction ParkColumbus Junction, IA  |  |        | 24  |             |  |      | 648,740   |        |  |                | 40,000  |              |  |               | 783,674    |             |  |   | 823,674    |  |  |   | 260,067   | 
|Cottages of North St. PaulNorth St. Paul, MN |  |        | 94  |             |  |      | 3,900,000 |        |  |                | 616,092 |              |  |               | 5,204,538  |             |  |   | 5,820,630  |  |  |   | 1,617,594 | 
|Countryside PlaceHowell Township, NJ         |  |        | 180 |             |  |      | 4,408,211 |        |  |                | 469,500 |              |  |               | 8,263,444  |             |  |   | 8,732,944  |  |  |   | 3,070,135 | 
|Eastridge ApartmentsSt Clair, MO             |  |        | 48  |             |  |      | 954,932   |        |  |                | 35,210  |              |  |               | 553,207    |             |  |   | 588,417    |  |  |   |          | 
|Edgewood ApartmentsRogers, AR                |  |        | 108 |             |  |      | 1,637,094 |        |  |                | 157,500 |              |  |               | 3,893,925  |             |  |   | 4,051,425  |  |  |   | 1,587,786 | 
|Fourth StreetLos Angeles, Ca                 |  |        | 44  |             |  |      | 995,294   |        |  |                | 241,979 |              |  |               | 4,219,238  |             |  |   | 4,461,217  |  |  |   | 1,517,507 | 
|Germantown ApartmentsConway, AR              |  |        | 132 |             |  |      | 2,408,280 |        |  |                | 210,000 |              |  |               | 4,592,063  |             |  |   | 4,802,063  |  |  |   | 1,934,721 | 
|Great Basin AssociatesReno, NV               |  |        | 28  |             |  |      | 621,095   |        |  |                | 143,000 |              |  |               | 1,412,503  |             |  |   | 1,555,503  |  |  |   | 401,631   | 
|Grimes Park ApartmentsGrimes, IA             |  |        | 16  |             |  |      | 458,070   |        |  |                | 50,000  |              |  |               | 522,194    |             |  |   | 572,194    |  |  |   | 181,427   | 
|Jamestown TerraceJamestown, CA               |  |        | 56  |             |  |      | 2,859,277 |        |  |                | 298,000 |              |  |               | 3,491,844  |             |  |   | 3,789,844  |  |  |   | 949,929   | 
|Jefferson MeadowsDetroit, MI                 |  |        | 83  |             |  |      | 3,131,620 |        |  |                | 85,500  |              |  |               | 4,897,762  |             |  |   | 4,983,262  |  |  |   | 2,126,680 | 
|Kentucky RiverWinchester, KY                 |  |        | 42  |             |  |      | 911,721   |        |  |                | 149,000 |              |  |               | 2,004,350  |             |  |   | 2,153,350  |  |  |   | 591,598   | 
|Lincoln GroveGreensboro, NC                  |  |        | 116 |             |  |      | 605,007   |        |  |                | 117,853 |              |  |               | 3,907,600  |             |  |   | 4,025,453  |  |  |   | 1,160,305 | 
|MeadowlakesSearcy, AR                        |  |        | 108 |             |  |      | 1,366,140 |        |  |                | 136,352 |              |  |               | 3,912,423  |             |  |   | 4,048,775  |  |  |   | 1,597,252 | 
|Michigan BeachChicago, IL                    |  |        | 240 |             |  |      | 9,360,544 |        |  |                | 791,700 |              |  |               | 4,560,273  |             |  |   | 5,351,973  |  |  |   | 384,873   | 
|Nickel River (Wedgewood)LaCrosse, WI         |  |        | 105 |             |  |      | 1,802,139 |        |  |                | 140,157 |              |  |               | 3,048,811  |             |  |   | 3,188,968  |  |  |   | 951,921   | 
|Norwalk Park ApartmentsNorwalk, IA           |  |        | 16  |             |  |      | 427,053   |        |  |                | 50,600  |              |  |               | 482,876    |             |  |   | 533,476    |  |  |   | 172,810   | 
|Oakview ApartmentsSpartanburg, SC            |  |        | 106 |             |  |      | 1,825,000 |        |  |                | 80,800  |              |  |               | 3,619,617  |             |  |   | 3,700,417  |  |  |   | 1,282,429 | 
|Palm Springs ViewPalm Springs, CA            |  |        | 120 |             |  |      | 5,122,011 |        |  |                | 901,137 |              |  |               | 6,744,287  |             |  |   | 7,645,424  |  |  |   | 2,272,394 | 
|Pam ApartmentsPampa, TX                      |  |        | 96  |             |  |      | 1,525,000 |        |  |                | 50,000  |              |  |               | 2,652,115  |             |  |   | 2,702,115  |  |  |   | 1,658,659 | 
|Parkwood LandingHuntsville, AL               |  |        | 204 |             |  |      | 4,327,465 |        |  |                | 720,238 |              |  |               | 9,226,496  |             |  |   | 9,946,734  |  |  |   | 3,660,285 | 
|Pensacola AffordablePensacola, FL            |  |        | 56  |             |  |      | 1,340,020 |        |  |                | 251,630 |              |  |               | 1,845,425  |             |  |   | 2,097,055  |  |  |   | 734,632   | 
|Pineview TerraceKaty, TX                     |  |        | 120 |             |  |      | 2,778,978 |        |  |                | 82,264  |              |  |               | 3,143,937  |             |  |   | 3,226,201  |  |  |   | 914,792   | 
|QuiveraLenexa, TX                            |  |        | 289 |             |  |      | 3,855,170 |        |  |                | 100,000 |              |  |               | 12,555,607 |             |  |   | 12,655,607 |  |  |   | 5,630,006 | 





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|                                        |  |        |       |             |  |      |            |        |  |                |           |              |  |               |             |             |  |   |             |  |  |   |            | 
|--------------------------------------- |  | ------ | ----- | ----------- |  | ---- | ---------- | ------ |  | -------------- | --------- | ------------ |  | ------------- | ----------- | ----------- |  | - | ----------- |  |  | - | ---------- | 
|                                        |  |        |       |             |  |      |            |        |  |                |           |              |  | Buildings,    |             |             |  |   |             |  |  |  
|                                        |  |        |       |             |  |      |            |        |  |                |           |              |  | Furnishings   |             |             |  |   |             |  |  |  
|                                        |  |        |       |             |  |      |            |        |  |                |           |              |  | and Equipment |             |             |  |   |             |  |  |  
|                                        |  | Number |       | Outstanding |  |      |            |        |  | Amount Carried |           |              |  |               |             |             |  |  
|                                        |  | of     |       | Mortgage    |  |      |            |        |  | at Close of    |           |              |  |               |             | Accumulated
|Partnership/Location                    |  | Units  |       | Loan        |  | Land |            | Period |  | Total          |           | Depreciation
|                                        |  |        |       |             |  |      |            |        |  |                |           |             
|Rancho del MarTucson, AZ                |  |        | 312   |             |  | $    | 3,322,810  |        |  | $              | 74,858    |              |  | $             | 8,009,421   |             |  | $ | 8,084,279   |  |  | $ | 2,608,302  | 
|Salem Park ApartmentsConway, AR         |  |        | 144   |             |  |      | 2,611,546  |        |  |                | 204,200   |              |  |               | 4,277,663   |             |  |   | 4,481,863   |  |  |   | 1,986,034  | 
|SheboyganSheboygan, WI                  |  |        | 59    |             |  |      | 1,326,772  |        |  |                | 47,200    |              |  |               | 2,566,043   |             |  |   | 2,613,243   |  |  |   | 1,090,955  | 
|Sitka IIISitka, AK                      |  |        | 16    |             |  |      | 1,161,383  |        |  |                | 41,868    |              |  |               | 1,450,307   |             |  |   | 1,492,175   |  |  |   | 597,966    | 
|Soldotna (Northwood Senior)Soldotna, AK |  |        | 23    |             |  |      | 1,472,049  |        |  |                | 59,248    |              |  |               | 1,886,925   |             |  |   | 1,946,173   |  |  |   | 524,763    | 
|Torres de Plata IIToa Alta, PR          |  |        | 78    |             |  |      | 3,059,557  |        |  |                | 158,175   |              |  |               | 3,843,058   |             |  |   | 4,001,233   |  |  |   | 1,580,421  | 
|Villa RealSanta Fe, NM                  |  |        | 120   |             |  |      | 2,805,615  |        |  |                | 897,283   |              |  |               | 6,428,869   |             |  |   | 7,326,152   |  |  |   | 2,183,862  | 
|Virginia Park MeadowsDetroit, MI        |  |        | 83    |             |  |      | 3,081,575  |        |  |                | 78,500    |              |  |               | 4,897,997   |             |  |   | 4,976,497   |  |  |   | 2,110,259  | 
|Wade Walton ApartmentsClarksdale, MI    |  |        | 108   |             |  |      | 4,000,000  |        |  |                | 102,020   |              |  |               | 3,957,610   |             |  |   | 4,059,630   |  |  |   | 1,248,073  | 
|Westbridge ApartmentsW. Columbia, SC    |  |        | 112   |             |  |      | 2,615,000  |        |  |                | 201,468   |              |  |               | 3,064,426   |             |  |   | 3,265,894   |  |  |   | 849,042    | 
|                                        |  |        |       |             |  |      |            |        |  |                |           |              |  |               |             |             |  |   |             |  |  |   |            | 
|TOTAL                                   |  |        | 3,527 |             |  | $    | 83,683,426 |        |  | $              | 7,883,332 |              |  | $             | 137,695,145 |             |  | $ | 145,578,477 |  |  | $ | 50,268,211 | 
|                                        |  |        |       |             |  |      |            |        |  |                |           |              |  |               |             |             |  |   |             |  |  |   |            | 





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##### Table of Contents



SCHEDULE III
(Continued)

NATIONAL TAX CREDIT INVESTORS II
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL PARTNERSHIPS
IN WHICH NTCI-II HAS INVESTMENTS
DECEMBER 31, 2001



|NOTES: | 1. |  | Each local partnership is developing or has developed, owns and operates the
Apartment Complex. Substantially all project costs, including construction period
interest expense, were capitalized by the local partnerships.
|------ | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      
|       | 2. |  | Depreciation is provided for by various methods over the estimated useful lives
of the Apartment Complexes. The estimated composite useful lives of the
buildings are generally from 25 to 40 years.                        
|      
|       | 3. |  | Investments in property and equipment:                                                                                                                                                                                      

|                                                                    |  |      |            |           |  |             |             |   |  |   |             |  
|------------------------------------------------------------------- |  | ---- | ---------- | --------- |  | ----------- | ----------- | - |  | - | ----------- | -
|                                                                    |  |      |            |           |  | Buildings,  |             |   |  |  
|                                                                    |  |      |            |           |  | Furnishings |             |   |  |  
|                                                                    |  |      |            |           |  | And         |             |   |  |  
|                                                                    |  | Land |            | Equipment |  | Total      
|                                                                    |  |      |            |           |  |            
|Balance at January 1, 1999                                          |  | $    | 9,541,292  |           |  | $           | 153,812,700 |   |  | $ | 163,353,992 |  
|Net additions during the year
ended December 31, 1999               |  |      | (1,382,306 | )         |  |             | (9,145,608  | ) |  |   | (10,527,914 | )
|                                                                    |  |      |            |           |  |             |             |   |  |   |             |  
|Balance at December 31, 1999                                        |  |      | 8,158,986  |           |  |             | 144,667,092 |   |  |   | 152,826,078 |  
|Net retirements during the year
ended December 31, 2000             |  |      |           |           |  |             | (271,784    | ) |  |   | (271,784    | )
|                                                                    |  |      |            |           |  |             |             |   |  |   |             |  
|Balance at December 31, 2000                                        |  |      | 8,158,986  |           |  |             | 144,395,308 |   |  |   | 152,554,294 |  
|Sale and foreclosure of properties                                  |  |      | (289,354   | )         |  |             | (5,490,562  | ) |  |   | (5,779,916  | )
|Write-down of property                                              |  |      |            |           |  |             | (928,167    | ) |  |   | (928,167    | )
|Net additions (retirements) during the year
ended December 31, 2001 |  |      | 13,700     |           |  |             | (281,434    | ) |  |   | (267,734    | )
|                                                                    |  |      |            |           |  |             |             |   |  |   |             |  
|Balance at December 31, 2001                                        |  | $    | 7,883,332  |           |  | $           | 137,695,145 |   |  | $ | 145,578,477 |  
|                                                                    |  |      |            |           |  |             |             |   |  |   |             |  





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SCHEDULE III
(Continued)

NATIONAL TAX CREDIT INVESTORS II
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL PARTNERSHIPS
IN WHICH NTCI-II HAS INVESTMENTS
DECEMBER 31, 2001

|                                                      |  |             |            |  
|----------------------------------------------------- |  | ----------- | ---------- | -
|                                                      |  | Buildings, 
|                                                      |  | Furnishings
|                                                      |  | And        
|                                                      |  | Equipment  
|                                                      |  |            
|Accumulated Depreciation:                             |  |             |            |  
|Balance at January 1, 1999                            |  | $           | 41,899,250 |  
|Net additions during the year ended
December 31, 1999 |  |             | 3,081,552  |  
|                                                      |  |             |            |  
|Balance at December 31, 1999                          |  |             | 44,980,802 |  
|Net additions during the year ended
December 31, 2000 |  |             | 2,900,139  |  
|                                                      |  |             |            |  
|Balance at December 31, 2000                          |  |             | 47,880,941 |  
|Sale and foreclosure of properties                    |  |             | (1,820,013 | )
|Net additions during the year ended
December 31, 2001 |  |             | 4,207,283  |  
|                                                      |  |             |            |  
|Balance at December 31, 2001                          |  | $           | 50,268,211 |  
|                                                      |  |             |            |  





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PART III.




ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:

National Tax Credit Investors II (the Partnership) has no directors or
executive officers of its own.

Prior to December 30, 1998, NAPICO was a wholly owned subsidiary of Casden
Investment Corporation (CIC), which is wholly owned by Alan I. Casden. On
December 30, 1998, Casden Properties Operating Partnership, L.P. (the
Operating Partnership), a majority owned subsidiary of Casden Properties
Inc., a real estate investment trust organized by Alan I. Casden, purchased a
95.25% economic interest in NAPICO. On March 11, 2002, NAPICO became a wholly
owned subsidiary of Apartment Investment and Management Company. The
following biographical information is presented for the directors and executive
officers of NAPICO with principal responsibility for the Partnerships affairs.

Charles H. Boxenbaum,72, Chairman of the Board of Directors and Chief
Executive Officer of NAPICO.

Mr. Boxenbaum has been associated with NAPICO since its inception. He has been
active in the real estate industry since 1960, and prior to joining NAPICO was
a real estate broker with the Beverly Hills firm of Carl Rhodes Company. Mr.
Boxenbaum has been a member of the Board of Directors of Casden Properties Inc.
since 1998.

Mr. Boxenbaum has been a guest lecturer at national and state realty
conventions, certified properties exchangers seminars, Los Angeles Town Hall,
National Association of Home Builders, International Council of Shopping
Centers, Society of Conventional Appraisers, California Real Estate
Association, National Institute of Real Estate Brokers, Appraisal Institute,
various mortgage banking seminars, and the North American Property Forum held
in London, England. He is one of the founders and a past director of the First
Los Angeles Bank, organized in November 1974. Since March 1995, Mr. Boxenbaum
has served on the Board of Directors of the National Housing Council. Mr.
Boxenbaum received his Bachelor of Arts degree from the University of Chicago.

Bruce E. Nelson,50, President, Chief Operating Officer and a director of
NAPICO.

Mr. Nelson joined NAPICO in 1980 and became President in February 1989. He is
responsible for the operations of all NAPICO sponsored limited partnerships.
Prior to that he was primarily responsible for the securities aspects of the
publicly offered real estate investment programs. Mr. Nelson is also involved
in the identification, analysis, and negotiation of real estate investments.
Mr. Nelson is a member of the Board of Directors of Casden Properties Inc. and
is a Director of the Affordable Housing Tax Credit Coalition.

From February 1979 to October 1980, Mr. Nelson held the position of Associate
General Counsel at Western Consulting Group, Inc., private residential and
commercial real estate syndicators. Prior to that time, Mr. Nelson was engaged
in the private practice of law in Los Angeles. Mr. Nelson received his
Bachelor of Arts degree from the University of Wisconsin and is a graduate of
the University of Colorado School of Law. He is a member of the State Bar of
California and is a licensed real estate broker in California and Texas.

Alan I. Casden,56, Chairman of the Board of Directors and Chief Executive
Officer of Casden Properties Inc., a director and member of the audit committee
of NAPICO, and chairman of the Executive Committee of NAPICO.

Mr. Casden has been involved in approximately $3 billion of real estate
financings and sales and has been responsible for the development and
construction of more than 12,000 apartment units and 5,000 single-family homes
and condominiums.

Mr. Casden is a member of the American Institute of Certified Public
Accountants and of the California Society of Certified Public Accountants. Mr.
Casden is a member of the advisory board of the National Multi-





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Family Housing Conference, the Multi-Family Housing Council, the Presidents
Council of the California Building Industry Association and the Urban Land
Institute. He also serves on the Board of Trustees of the University of
Southern California. He holds a Bachelor of Science degree and a Masters in
Business Administration degree from the University of Southern California.

Brian H. Shuman, 39, Senior Vice President and Chief Financial Officer.

Mr. Shuman joined NAPICO in 2000, and is responsible for the financial affairs
of NAPICO, as well as the limited partnerships 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. From 1994 to 1996, he was the
Controller for DVI Business Credit Corporation, which provides asset based
lending to a wide range of health concerns. From 1985 to 1994, Mr. Shuman
served in senior management positions, as a director or manager of finance, a
portfolio tax analyst, and a senior accountant/tax consultant. He holds a
Bachelor of Arts degree in economics and accounting from the University of
Maryland. Mr. Shuman is a Certified Public Accountant and is a member of
American Institute of Certified Public Accountants and the California Society
of Public Accountants.

Patricia W. Toy,72, Senior Vice President  Communications and Assistant
Secretary.

Mrs. Toy joined NAPICO in 1977, following her receipt of an MBA from the
Graduate School of Management, UCLA. From 1952 to 1956, Mrs. Toy served as a
U.S. Naval Officer in communications and personnel assignments. She holds a
Bachelor of Arts Degree from the University of Nebraska.

Jeffrey H. Sussman,35, Senior Vice President, General Counsel and Secretary.

Mr. Sussman joined NAPICO in 1998, and is responsible for the legal affairs of
NAPICO and its affiliates. He is also the President of NPEI and a member of the
preliminary investment committee. Prior to joining NAPICO in April 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. Mr. Sussman received a Bachelor of Arts degree from the
University of California, Berkeley and Juris Doctor and Master in Business
Administration degrees from the University of Southern California. He is a
member of the State Bar of California, and holds Series 22, 39 and 63 licenses
issued by the National Association of Securities Dealers, Inc.

NAPICO and several of its officers, directors and affiliates, including Charles
H. Boxenbaum, Bruce E. Nelson and Alan I. Casden, consented to the entry, on
June 25, 1997, of an administrative cease and desist order by the U.S.
Securities and Exchange Commission (the Commission), without admitting or
denying any of the findings made by the Commission. The Commission found that
NAPICO and others had violated certain federal securities laws in connection
with transactions unrelated to the Partnership. The Commissions order did not
impose any cost, burden or penalty on any partnership managed by NAPICO and
does not impact NAPICOs ability to serve as the Partnerships Managing General
Partner.





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ITEM 11. MANAGEMENT RENUMERATION AND TRANSACTIONS:

National Tax Credit Investors II has no officers, employees, or directors.
However, under the terms of the Restated Certificate and Agreement of Limited
Partnership, the Partnership is obligated to the General Partner and Special
Limited Partner for the following fees:



|(a) |  | An annual Partnership management fee in an annual amount equal to 0.5
percent of invested assets (as defined) is payable to the General Partner
and Special Limited Partner. Fees in amount of $736,856, $740,463 and
$764,612 were incurred for the year ended December 31, 2001, 2000 and
1999, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(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 and (ii) an amount equal to the aggregate adjusted
investment (as defined) of the limited partners. No disposition fees have
been paid.
|   
|(c) |  | The Partnership reimburses certain expenses to the General Partner. The
reimbursement incurred to the General Partner was $65,255, $47,129 and $0
for the year ended December 31, 2001, 2000 and 1999, respectively, and is
included in general and administrative expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(d) |  | An affiliate of the General Partner is responsible for the on-site
property management for seven Local Partnerships. The Local Partnerships
paid the affiliate property management fees of $138,373, $163,520 and
$182,781 in 2001, 2000 and 1999, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  




ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:



|(a) |  | Security Ownership of Certain Beneficial Owners                                                                                                                                                          
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | The General Partner owns all of the outstanding general partnership
interests of NTCI-II; no person is known to own beneficially in excess
of 5 percent of the outstanding limited partnership interests.
|   
|(b) |  | None of the officers or directors of the General Partner own directly or
beneficially any limited partnership interests in NTCI-II.                                                                      
|   
|(c) |  | Changes in Control                                                                                                                                                                                       
|   
|    |  | None.                                                                                                                                                                                                    





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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:

The Partnership has no officers, directors, or employees of its own. All of
its affairs are managed by the General Partner, National Partnership
Investments Corp. The transactions with the General Partner are primarily in
the form of fees paid by the Partnership to the General Partner for services
rendered to the Partnership, as discussed in Item 11 and in the notes to the
accompanying financial statements.




ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K:

Financial Statements

Report of Independent Public Accountants.

Balance Sheets as of December 31, 2001 and 2000.

Statements of Operations for the years ended December 31, 2001, 2000 and 1999.

Statements of Partners Equity (Deficiency) for the years ended December 31,
2001, 2000 and 1999.

Statements of Cash Flows for the years ended December 31, 2001, 2000 and 1999.

Notes to Financial Statements.

Financial Statement Schedules
Applicable to the limited partnerships in which NTCI-II has investments:

Schedule  Investments in Limited Partnerships, December 31, 2001, 2000 and
1999.

Schedule III  Real Estate and Accumulated Depreciation, December 31, 2001.

The remaining schedules are omitted because the required information is
included in the financial statements and notes thereto, or they are not
applicable or not required.

Exhibits



|(3)  |  | Articles of incorporation and bylaws: The registrant is not
incorporated. The Partnership Agreement was filed with Form S-11
Registration #33-27658 incorporated herein by reference.                                                      
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(10) |  | Material contracts: The registrant is not party to any material
contracts, other than the Restated Certificate and Agreement of Limited
Partnership dated January 12, 1990, previously filed and which is hereby
incorporated by reference.

Reports on Form 8-K

No reports on Form 8-K were filed during the year ended December 31, 2001.





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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Los
Angeles, State of California.

NATIONAL TAX CREDIT INVESTORS II



|By: |  | NATIONAL PARTNERSHIP INVESTMENTS CORP.
The General Partner
|--- |  | ----------------------------------------------------------





|/s/ CHARLES H. BOXENBAUMCharles H. Boxenbaum
Chairman of the Board of Directors and Chief Executive Officer | 
|----------------------------------------------------------------------------------------------------------- | 





|/s/ BRUCE E. NELSONBruce E. Nelson
Director and President | 
|--------------------------------------------------------- | 





|/s/ ALAN I. CASDENAlan I. Casden
Director | 
|----------------------------------------- | 





|/s/ BRIAN H. SHUMANBrian H. Shuman
Chief Financial Officer | 
|---------------------------------------------------------- |