<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

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

                   For the Fiscal Year Ended DECEMBER 31, 2000

                             Commission File Number
                                     0-20610

                        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]


<PAGE>   2


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.

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. 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
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.


<PAGE>   3


During 2000, the Apartment Complexes in which NTCI-II had invested were
substantially rented.

The following is a schedule of the status as of December 31, 2000, 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, 2000

<TABLE>
<CAPTION>
                                                                           Units Occupied
                                                                           as a Percentage
                                                                           of Total Units
                                              No. of         Units          Available for
Name & Location                                Units        Occupied         Occupancy
---------------                               ------        --------      ---------------
<S>                                           <C>           <C>           <C>
Ashville Equity (Westview)
  Ashville, OH                                   41             24             59%
Columbus Junction Park
  Columbus Junction, IA                          24             16             67%
Cottages of North St. Paul (Elderly)
  North St. Paul, MN                             94             94            100%
Cottonwood Park
  Colorado Springs, CO                           90             87             97%
Countryside
  Howell Township, NJ                           180            171             95%
East Ridge Apartments
  St. Clair, MO                                  48             37             77%
Edgewood Apartments
  Rogers, AR                                    108            108            100%
Fourth Street
  Los Angeles, CA                                44             41             93%
Germantown Apartments
  Conway, AR                                    132            128             97%
Great Basin Associates
  Reno, NV                                       28             24             86%
Grimes Park Apartments
  Grimes, IA                                     16             13             81%
Jamestown Terrace
  Jamestown, CA                                  56             55             98%
Jefferson Meadows Apartments
  Detroit, MI                                    83             79             95%
Kentucky River Apartments
  Winchester, KY                                 42             40             95%
Lincoln Grove Apartments
  Greensboro, NC                                116            113             97%
Meadowlakes Apartments
  Searcy, AR                                    108             99             92%
Michigan Beach Apartments
  Chicago, IL                                   240            218             91%
Nickel River (Wedgewood) Apartments
  LaCrosse, WI                                  105             70             67%
Norwalk Park Apartments
  Norwalk, IA                                    16             16            100%
</TABLE>


<PAGE>   4


            SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
                 IN WHICH NTCI-II HAS AN INVESTMENT (CONTINUED)
                                DECEMBER 31, 2000

<TABLE>
<CAPTION>
                                                                           Units Occupied
                                                                           as a Percentage
                                                                           of Total Units
                                              No. of         Units          Available for
Name & Location                                Units        Occupied         Occupancy
---------------                               ------        --------      ---------------
<S>                                           <C>           <C>           <C>
Oakview Apartments
  Spartanburg, SC                                 106            105             99%
Palm Springs View
  Palm Springs, CA                                120            120            100%
Pam Apartments
  Pampa, TX                                        96             94             98%
Paramount Apartments
  Maple Heights, OH                                99             62             63%
Parkwood Landing
  Huntsville, AL                                  204            193             95%
Pensacola Affordable
  Pensacola, FL                                    56             52             93%
Pineview Terrace
  Katy, TX                                        120             92             77%
Quivera
 Lenexa, KS                                       289            253             88%
Rancho Del Mar
  Tucson, AZ                                      312            255             82%
Salem Park Apartments
  Conway, AR                                      144            130             90%
Sheboygan Apartments
  Sheboygan, WI                                    59             50             85%
Sitka III
  Sitka, AK                                        16             11             69%
Soldotna (Northwood Senior) Apartments
  Soldotna, AK                                     23             23            100%
Torres de Plata II
  Toa Alto, PR                                     78             78            100%
Villa Real
  Santa Fe, NM                                    120            113             94%
Virginia Park Meadows
  Detroit, MI                                      83             78             94%
Wade Walton Apartments
  Clarksdale, MI                                  108             94             87%
Westbridge Apartments
  W. Columbia, SC                                 112            107             96%
                                                -----          -----            ---
                                                3,716          3,343             90%
                                                =====          =====            ===
</TABLE>


<PAGE>   5



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, 2000, 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 local partnership is exploring various alternatives to
satisfy its indebtedness. The Partnership has no investment balance related to
this Local Partnership.

The Wade Walton Local Partnership commenced proceedings under Chapter 11 of the
United States Bankruptcy Code on July 20, 1999. The local partnership has filed
a reorganization plan which proposes to pay all creditors in full. Based on a
recent court ruling, the lender is able to proceed with foreclosure against the
property. The Partnership has no investment balance related to this Local
Partnership.

Foreclosure proceedings were commenced against the Ashville Local Partnership
and a receiver was appointed in April 2000. The local partnership negotiated
with the lender to resolve the proceedings and the loan was reinstated. The
Partnership has 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, 2000, there were 3,696 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, 2000.


<PAGE>   6



ITEM 6.       SELECTED FINANCIAL DATA:


<TABLE>
<CAPTION>
                                                            Year Ended December 31,
                                 ----------------------------------------------------------------------------

                                     2000            1999            1998            1997            1996
                                 ------------    ------------    ------------    ------------    ------------
<S>                              <C>             <C>             <C>             <C>             <C>
Interest income                  $     82,717    $     49,340    $     33,049    $     21,559    $     25,136

Operating expenses                  1,074,283       1,063,748       1,080,349       1,060,595       1,037,055

Distributions from limited
   partnerships recognized as
   income                             478,304            --              --              --              --

Equity in loss of limited
   partnerships and
   amortization of
   acquisition costs               (2,451,980)     (3,198,976)     (4,040,526)     (4,222,167)     (4,746,790)

Write-off of Local Partnership           --              --              --              --        (1,117,893)
                                 ------------    ------------    ------------    ------------    ------------

Net loss                         $ (2,965,242)   $ (4,213,384)   $ (5,087,826)   $ (5,261,203)   $ (6,876,602)
                                 ============    ============    ============    ============    ============

Net loss per limited
   limited partnership
   interest                      $        (41)   $        (58)   $        (70)   $        (72)   $        (94)
                                 ============    ============    ============    ============    ============


Total assets                     $ 15,179,691    $ 17,812,372    $ 21,915,847    $ 26,193,937    $ 30,691,137
                                 ============    ============    ============    ============    ============

Investments
   in limited
   partnerships                  $ 14,059,652    $ 16,153,744    $ 21,167,503    $ 25,724,722    $ 30,331,138
                                 ============    ============    ============    ============    ============

Capital contributions
   payable                       $      1,076    $      1,076    $    356,985    $    356,985    $    356,985
                                 ============    ============    ============    ============    ============

Accrued fees and
   expenses due
   to partners                   $  3,717,135    $  3,296,209    $  2,831,597    $  2,066,985    $  1,302,375
                                 ============    ============    ============    ============    ============
</TABLE>


<PAGE>   7


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.
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, 2000, $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


<PAGE>   8


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.


<PAGE>   9


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, 2000, after which point losses are not recognized. The
cumulative amount of unrecognized equity in losses of unconsolidated limited
partnerships is approximately $8,117,000 and $6,004,000 as of December 31, 2000
and 1999, 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.

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.

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, although no foreclosure sale has been
set. The local partnership is exploring various alternatives to satisfy its
indebtedness. 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 commenced a bankruptcy case in order to
reorganize under Chapter 11 of the United States Bankruptcy Code. The Local
Partnership has filed a reorganization plan which proposes to pay all creditors
in full. The Partnership has no investment balance related to this Local
Partnership.

Foreclosure proceedings were commenced against the Ashville Local Partnership
and a receiver was appointed in April 2000. The Local Partnership is in
negotiations with the lender to resolve the proceedings. The Partnership has 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.


<PAGE>   10


                        NATIONAL TAX CREDIT INVESTORS II
                       (a California limited partnership)

                              FINANCIAL STATEMENTS,
                          FINANCIAL STATEMENT SCHEDULES
                  AND REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                             AS OF DECEMBER 31, 2000


<PAGE>   11


                    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, 2000 and 1999, and the
related statements of operations, partners' equity (deficiency) and cash flows
for each of the three years in the period ended December 31, 2000. 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 39 percent and 23 percent of
total assets as of December 31, 2000 and 1999, respectively, and the equity in
loss of these limited partnerships represents 45 percent, 40 percent and 42
percent of the total net loss of the Partnership for the years ended December
31, 2000, 1999 and 1998, 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,
2000 and 1999, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 2000 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.


DELOITTE & TOUCHE LLP

Los Angeles, California
March 28, 2001


<PAGE>   12


                        NATIONAL TAX CREDIT INVESTORS II
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                                 BALANCE SHEETS

                           DECEMBER 31, 2000 AND 1999

                                     ASSETS

<TABLE>
                                                                               2000            1999
                                                                           -----------     -----------
<S>                                                                        <C>             <C>
         INVESTMENTS IN LIMITED PARTNERSHIPS
             (Notes 1 and 2)                                               $14,059,652     $16,153,744

         CASH AND CASH EQUIVALENTS (Note 1)                                    864,951       1,296,513

         OTHER ASSETS                                                             --           120,479

         RESTRICTED CASH (Note 3)                                              255,088         241,636
                                                                           -----------     -----------

                   TOTAL ASSETS                                            $15,179,691     $17,812,372
                                                                           ===========     ===========


                        LIABILITIES AND PARTNERS' EQUITY

         LIABILITIES:
              Accrued fees and expenses due to partners (Note 5)           $ 3,717,135     $ 3,296,209
              Capital contributions payable (Note 4)                             1,076           1,076
              Accounts payable and accrued expenses                             25,513         113,878
                                                                           -----------     -----------
                                                                             3,743,724       3,411,163
                                                                           -----------     -----------

         CONTINGENCIES (Note 7)

         PARTNERS' EQUITY                                                   11,435,967      14,401,209
                                                                           -----------     -----------

                    TOTAL LIABILITIES AND PARTNERS' EQUITY                 $15,179,691     $17,812,372
                                                                           ===========     ===========
</TABLE>


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


<PAGE>   13


                        NATIONAL TAX CREDIT INVESTORS II
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                            STATEMENTS OF OPERATIONS
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998


<TABLE>
<CAPTION>
                                                         2000             1999             1998
                                                      -----------      -----------      -----------
<S>                                                   <C>              <C>              <C>
         INTEREST INCOME                              $    82,717      $    49,340      $    33,049
                                                      -----------      -----------      -----------

         OPERATING EXPENSES:
              Management fees - partners (Note 5)         740,463          764,612          764,612
              General and administrative (Note 5)         138,063           99,723           94,641
              Legal and accounting                        195,757          199,413          221,096
                                                      -----------      -----------      -----------

                       Total operating expenses         1,074,283        1,063,748        1,080,349
                                                      -----------      -----------      -----------

         LOSS FROM PARTNERSHIP OPERATIONS                (991,566)      (1,014,408)      (1,047,300)

         DISTRIBUTIONS FROM LIMITED
               PARTNERSHIPS RECOGNIZED AS
               INCOME (Note 2)                            478,304

         EQUITY IN LOSS OF LIMITED
              PARTNERSHIPS AND AMORTIZATION
              OF ACQUISITION COSTS (Note 2)            (2,451,980)      (3,198,976)      (4,040,526)
                                                      -----------      -----------      -----------

         NET LOSS                                     $(2,965,242)     $(4,213,384)     $(5,087,826)
                                                      ===========      ===========      ===========

         NET LOSS PER LIMITED
              PARTNERSHIP INTEREST (Note 1)           $       (41)     $       (58)     $       (70)
                                                      ===========      ===========      ===========
</TABLE>




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


<PAGE>   14


                        NATIONAL TAX CREDIT INVESTORS II
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                   STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY)
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998


<TABLE>
<CAPTION>
                                              General           Limited
                                              Partners          Partners           Total
                                            ------------      ------------      ------------
<S>                                         <C>               <C>               <C>
         PARTNERS' EQUITY (DEFICIENCY),
              January 1, 1998               $   (391,900)     $ 24,094,319      $ 23,702,419

              Net loss for 1998                  (50,878)       (5,036,948)       (5,087,826)
                                            ------------      ------------      ------------

         PARTNERS' EQUITY (DEFICIENCY),
              December 31, 1998                 (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
                                            ============      ============      ============
</TABLE>




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


<PAGE>   15

                        NATIONAL TAX CREDIT INVESTORS II
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                            STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998


<TABLE>
<CAPTION>
                                                                                    2000             1999              1998
                                                                                 -----------      -----------      -----------
         CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                              <C>              <C>              <C>
                Net loss                                                         $(2,965,242)     $(4,213,384)     $(5,087,826)
                Adjustments to reconcile net loss to net cash
                   used in operating activities:
                      Equity in loss of limited partnerships
                          and amortization of acquisition costs                    2,451,980        3,198,976        4,040,526
                      Decrease (increase) in other assets                            120,479         (120,479)          30,269
                      (Decrease) increase in accounts payable and
                          accrued expenses                                           (88,366)           1,206           45,124
                       Increase in accrued fees and expenses due to partners         420,926          464,612          764,612
                                                                                 -----------      -----------      -----------

                       Net cash used in operating activities                         (60,223)        (669,069)        (207,295)
                                                                                 -----------      -----------      -----------

         CASH FLOWS FROM INVESTING ACTIVITIES:
                Investments in limited partnerships:
                   Capital (contributions) recoveries                               (507,293)         199,590         (669,677)
                   Decrease in capital contributions payable                            --           (355,909)            --
                   Distributions recognized as a return of capital                   149,406        1,615,193        1,186,370
                   Increase in restricted cash                                       (13,452)          (8,814)         (10,815)
                                                                                 -----------      -----------      -----------

                       Net cash (used in) provided by investing activities          (371,339)       1,450,060          505,878
                                                                                 -----------      -----------      -----------

         NET (DECREASE) INCREASE IN
                CASH AND CASH EQUIVALENTS                                           (431,562)         780,991          298,583

         CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                              1,296,513          515,522          216,939
                                                                                 -----------      -----------      -----------

         CASH AND CASH EQUIVALENTS, END OF YEAR                                  $   864,951      $ 1,296,513      $   515,522
                                                                                 ===========      ===========      ===========
</TABLE>




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


<PAGE>   16

                        NATIONAL TAX CREDIT INVESTORS II
                       (a California limited partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2000


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.

        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.

        Basis of Presentation

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


<PAGE>   17


                        NATIONAL TAX CREDIT INVESTORS II
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 2000


1.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

        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.

        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.
        During 1998, the Partnership recognized an impairment loss of $499,941
        related to certain of the investments in local limited partnerships,
        which has been included in equity in loss of limited partnerships.


<PAGE>   18


                        NATIONAL TAX CREDIT INVESTORS II
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 2000



2.      INVESTMENTS IN LIMITED PARTNERSHIPS

        The Partnership holds limited partnership interests in 37 local
        partnerships (the "Local Partnerships"). 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, 2000, the Local Partnerships own residential projects
        consisting of 3,716 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 four Local Partnerships, in which case it is entitled to .09 percent
        of the operating profits and losses of the Local Partnership.

        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 $8,117,000 and $6,004,000 as of
        December 31, 2000 and 1999, 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.


<PAGE>   19

                        NATIONAL TAX CREDIT INVESTORS II
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 2000


2.      INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

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

<TABLE>
<CAPTION>
                                                                        2000              1999
                                                                    ------------      ------------
<S>                                                                 <C>               <C>
         Investments balance, beginning of year                     $ 16,153,744      $ 21,167,503
         Capital contributions (recoveries)                              507,293          (199,590)
         Equity in loss of limited partnerships                       (2,211,976)       (2,727,055)
         Amortization of capitalized acquisition costs and fees         (240,003)         (471,921)
         Distributions recognized as a return of capital                (149,406)       (1,615,193)
                                                                    ------------      ------------

         Investments balance, end of year                           $ 14,059,652      $ 16,153,744
                                                                    ============      ============
</TABLE>

        The difference between the investment per the accompanying balance
        sheets at December 31, 2000 and 1999, 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 has 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 commenced a bankruptcy case in
        order to reorganize under Chapter 11 of the United States Bankruptcy
        Code. The Local Partnership has filed a reorganization plan which
        proposes to pay all creditors in full. Based on a recent court ruling,
        the lender is able to proceed with foreclosure against the property. The
        Partnership has no investment balance related to this local partnership.


<PAGE>   20


                        NATIONAL TAX CREDIT INVESTORS II
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 2000


2.      INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

        Ashville

        Foreclosure proceedings were commenced against the Ashville Local
        Partnership and a receiver was appointed in April 2000. The Local
        Partnership negotiated with the lender to resolve the proceedings and
        the loan was reinstated. The Partnership has no investment balance
        related to this Local Partnership.

        Selected financial information from the combined financial statements of
        the Local Partnerships at December 31, 2000 and 1999 and for each of the
        three years in the period ended December 31, 2000 is as follows:

                                 Balance Sheets

<TABLE>
<CAPTION>
                                                          2000         1999
                                                        --------     --------
                                                            (in thousands)

<S>                                                     <C>          <C>
         Land and buildings, net                        $104,673     $107,845
                                                        ========     ========

         Total assets                                   $115,295     $119,343
                                                        ========     ========

         Mortgages and construction loans payable
             secured by real property                   $ 87,028     $ 88,305
                                                        ========     ========

         Total liabilities                              $101,294     $101,672
                                                        ========     ========

         Equity of National Tax Credit Investors II     $  2,497     $  6,306
                                                        ========     ========

         Equity of other partners                       $ 11,504     $ 11,365
                                                        ========     ========
</TABLE>


<PAGE>   21

                        NATIONAL TAX CREDIT INVESTORS II
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 2000


2.      INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

                            Statements of Operations

<TABLE>
<CAPTION>

                                                     2000          1999           1998
                                                   --------      --------      --------
                                                               (in thousands)

<S>                                                <C>           <C>           <C>
         Total revenues                            $ 19,863      $ 19,221      $ 18,722
                                                   ========      ========      ========

         Interest expense                          $  6,220      $  6,401      $  7,148
                                                   ========      ========      ========

         Depreciation and amortization             $  4,937      $  5,131      $  5,495
                                                   ========      ========      ========

         Total expenses                            $ 23,316      $ 31,145      $ 23,236
                                                   ========      ========      ========

         Net loss                                  $ (3,453)     $(11,923)     $ (4,514)
                                                   ========      ========      ========

         Net loss allocable to the Partnership     $ (3,128)     $(11,834)     $ (4,064)
                                                   ========      ========      ========
</TABLE>


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


<PAGE>   22


                        NATIONAL TAX CREDIT INVESTORS II
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 2000


2.      INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

<TABLE>
<CAPTION>
                                                          2000           1999         1998
                                                        --------      ---------     --------
                                                                    (in thousands)
<S>                                                     <C>           <C>           <C>
         Total assets                                   $ 11,332      $ 11,734
                                                        ========      ========

         Total liabilities                              $  7,721      $  7,778
                                                        ========      ========

         Equity of National Tax Credit Investors II     $    721      $  1,438
                                                        ========      ========

         Equity of other partners                       $  2,890      $  2,518
                                                        ========      ========

         Total revenue                                  $  1,806      $  1,850      $  1,789
                                                        ========      ========      ========

         Net loss                                       $   (345)     $   (296)     $   (477)
                                                        ========      ========      ========
</TABLE>

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.

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


<PAGE>   23


                        NATIONAL TAX CREDIT INVESTORS II
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 2000


5.      RELATED-PARTY TRANSACTIONS (CONTINUED)

                Special Limited Partner. Partnership management fees in the
                amount of $740,463 were recorded as an expense in 2000, and
                $764,612 in 1999 and 1998. As of December 31, 2000 and 1999,
                management fees in the amount of $3,717,135 and $3,296,209,
                respectively, were due to the General Partner and the Special
                Limited Partner.

                As of December 31, 2000, 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.

        (c)     The Partnership reimburses certain expenses to the General
                Partner. The reimbursement paid to the General Partner was
                $47,129 for the year ended December 31, 2000 and $0 for the
                years ended December 31, 1999 and 1998, and is included in
                general and administrative expenses.

        NTC-II is the Local Operating General Partner in four of the
        Partnership's 37 Local Partnerships. In addition, NTC-II is either a
        special limited partner or non-managing administrative general partner
        in each Local Partnership.


<PAGE>   24


                        NATIONAL TAX CREDIT INVESTORS II
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 2000


5.      RELATED-PARTY TRANSACTIONS (CONTINUED)

        An affiliate of the General Partner is responsible for the on-site
        property management for seven Local Partnerships in 2000 and 1999 and
        four Local Partnerships in 1998 (Note 2). The Local Partnerships paid
        the affiliate property management fees of $163,520, $182,781 and
        $136,296 in 2000, 1999 and 1998, 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. 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.



<PAGE>   25


                        NATIONAL TAX CREDIT INVESTORS II
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 2000


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 $644,000
        between the estimated nine-month equity in loss and the actual 2000 year
        end equity in loss, has been recorded in the fourth quarter.


<PAGE>   26

                    NATIONAL TAX CREDIT INVESTORS II                    SCHEDULE
                 INVESTMENTS IN LIMITED PARTNERSHIPS
             YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998



<TABLE>
<CAPTION>
                                                                   YEAR ENDED DECEMBER 31, 2000
                                     -----------------------------------------------------------------------------------------
                                       BALANCE        CAPITAL       CAPITALIZED                      EQUITY      AMORTIZATION
  LIMITED                             JANUARY 1,   CONTRIBUTIONS    ACQUISITION       CASH           INCOME     OF CAPITALIZED
PARTNERSHIPS                            2000        (RECOVERY)      COSTS/FEES    DISTRIBUTIONS      (LOSS)       ACQ. COSTS
------------                         ------------ -------------     ------------  -------------   -----------   --------------
<S>                                  <C>          <C>               <C>           <C>             <C>           <C>
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)
The Cottages I                                 -                                                                             -
Countryside                            1,428,014                                                     (269,305)         (11,362)
Eastridge Apartments                     396,077        87,278                           (1,645)     (143,083)          (2,987)
Edgewood Apartments                      954,907                                        (18,095)      (87,195)          (5,834)
Fourth Street                          1,370,176                                                     (133,487)          (7,053)
Germantown Apartments                  1,073,110                                        (24,453)      (78,957)          (6,811)
Great Basin Associates                         -        28,517                                        (28,517)               -
Grimes Park Apartments                    32,075         1,800                           (1,158)      (12,293)          (2,116)
Jamestown                                240,401                                                     (110,802)          (3,322)
Jefferson Meadows Apartments              39,455                                                      (39,455)               -
Kentucky River Apartments                855,869         2,500                                        (13,698)          (4,719)
Lincoln Grove                            701,690                                        (20,400)      (78,159)          (4,527)
Meadowlakes Apartments                 1,008,175                                         (1,466)      (47,428)          (5,828)
Michigan Beach Apartments                      -        37,736                                        (37,736)               -
Nickel River (Wedgewood) Apts.           805,659         2,545                                        (97,381)          (7,170)
Norwalk Park Apartments                   21,633         1,800                                        (12,701)          (1,416)
Oakview                                  908,885        15,000                                         68,411           (2,926)
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)
Pineview Terrace                         424,170                                                       33,023           (6,197)
Quivera                                        -
Rancho Del Mar                         3,100,182         1,500                          (57,375)     (111,180)         (16,085)
Salem Park Apartments                    422,672                                        (15,000)      (72,070)          (6,787)
Sheboygan Apartments                     367,850                                                      (90,028)          (3,550)
Sitka III Apartments                           -
Soldotna (Northwood Senior) Apts.        164,262                                         (1,848)      (13,625)          (1,900)
Torres De Plata II                        51,716                                         (6,328)                        (2,580)
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)
                                     -=========== -============     ============  ==============  ============  ===============




                                       YEAR ENDED DECEMBER 31, 2000
                                     --------------------------------
                                       BALANCE           CAPITAL
  LIMITED                            DECEMBER 31,     CONTRIBUTIONS
PARTNERSHIPS                             2000            PAYABLE
------------                         ------------     ---------------
<S>                                  <C>              <C>
Ashville Equity                                       $
Columbus Junction                               -
Cottonwood Park                         1,031,879
The Cottages I                                  -
Countryside                             1,147,347
Eastridge Apartments                      335,640
Edgewood Apartments                       843,783
Fourth Street                           1,229,636
Germantown Apartments                     962,889
Great Basin Associates                          -
Grimes Park Apartments                     18,308
Jamestown                                 126,277
Jefferson Meadows Apartments                    -
Kentucky River Apartments                 839,952
Lincoln Grove                             598,604
Meadowlakes Apartments                    953,453
Michigan Beach Apartments                       -
Nickel River (Wedgewood) Apts.            703,653
Norwalk Park Apartments                     9,316
Oakview                                   989,370
Pam Apartments                                  -
Palm Springs View                               -               1,076
Paramount Apartments                            -
Parkwood Landing                                -
Pensacola Affordable                      108,723
Pineview Terrace                          450,996
Quivera                                         -
Rancho Del Mar                          2,917,042
Salem Park Apartments                     328,815
Sheboygan Apartments                      274,272
Sitka III Apartments                            -
Soldotna (Northwood Senior) Apts.         146,889
Torres De Plata II                         42,808
Villa Real                                      -
Virginia Park Meadows                           -
Wade Walton Apartments                          -
Westbridge Apartments                           -
                                     -------------    ----------------

                                     $  14,059,652    $          1,076
                                     =============    ================
</TABLE>


<PAGE>   27


                    NATIONAL TAX CREDIT INVESTORS II                    SCHEDULE
                 INVESTMENTS IN LIMITED PARTNERSHIPS                 (CONTINUED)
             YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998


<TABLE>
<CAPTION>
                                                                   YEAR ENDED DECEMBER 31, 1999
                                     -----------------------------------------------------------------------------------------
                                       BALANCE        CAPITAL       CAPITALIZED                      EQUITY      AMORTIZATION
  LIMITED                             JANUARY 1,  CONTRIBUTIONS     ACQUISITION       CASH           INCOME     OF CAPITALIZED
PARTNERSHIPS                            1999        (RECOVERY)      COSTS/FEES    DISTRIBUTIONS      (LOSS)       ACQ. COSTS
------------                         ------------ -------------     ------------  -------------   -----------   --------------
<S>                                  <C>          <C>               <C>           <C>             <C>           <C>
Ashville Equity                      $    362,555 $      23,000     $             $               $  (153,541)  $       (5,891)
Columbus Junction                          49,060                                        (1,638)      (17,874)          (1,931)
Cottonwood Park                         1,124,314                                                     (33,035)          (8,012)
The Cottages I                                  -                                                                            -
Countryside                             1,802,706                                       (35,720)     (327,610)         (11,362)
Eastridge Apartments                      471,699                                                     (72,635)          (2,987)
Edgewood Apartments                     1,092,162                                       (18,095)     (113,326)          (5,834)
Fourth Street                           1,508,797                                                    (131,568)          (7,053)
Germantown Apartments                   1,227,404                                       (18,810)     (128,673)          (6,811)
Great Basin Associates                          -        11,139                                       (11,139)               -
Grimes Park Apartments                     47,307                                        (1,158)      (11,958)          (2,116)
Jamestown                                 323,393                                                     (79,670)          (3,322)
Jefferson Meadows Apartments              251,690                                                    (204,661)          (7,574)
Kentucky River Apartments                 874,396                                                     (13,808)          (4,719)
Lincoln Grove                             796,165                                       (20,400)      (69,548)          (4,527)
Meadowlakes Apartments                  1,098,046                                       (16,128)      (67,915)          (5,828)
Michigan Beach Apartments                       -        19,789                                       (19,789)               -
Nickel River (Wedgewood) Apts.            842,914                                        (4,080)      (26,005)          (7,170)
Norwalk Park Apartments                    42,550                                        (1,088)      (18,413)          (1,416)
Oakview                                   784,765                                                     127,046           (2,926)
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)
Pensacola Affordable                      361,887                                       (15,287)      (22,837)          (3,401)
Pineview Terrace                          395,756                                                      34,611           (6,197)
Quivera                                   235,822                                       (27,996)     (196,782)         (11,044)
Rancho Del Mar                          3,408,959                                       (83,000)     (209,693)         (16,084)
Salem Park Apartments                     554,438                                       (11,667)     (113,312)          (6,787)
Sheboygan Apartments                      470,953                                                     (99,553)          (3,550)
Sitka III Apartments                            -                                                                            -
Soldotna (Northwood Senior) Apts.         183,941                                        (1,848)      (15,931)          (1,900)
Torres De Plata II                         60,624                                        (6,328)                        (2,580)
Villa Real                              1,850,135                                    (1,338,500)     (204,623)        (307,012)
Virginia Park Meadows                     238,958                                                    (211,753)          (7,268)
Wade Walton Apartments                          -                                                                            -
Westbridge Apartments                           -                                                                            -
Western (Ellis) Court                           -
                                     ------------ ---------------   ------------  -------------    -----------    ------------

                                     $ 21,167,503  $     (199,590)  $          -  $  (1,615,193)   $(2,727,055) $     (471,921)
                                     --========== ===============   ============  =============    ===========    ============




                                      YEAR ENDED DECEMBER 31, 1999
                                     ------------------------------

                                       BALANCE           CAPITAL
  LIMITED                            DECEMBER 31,     CONTRIBUTIONS
PARTNERSHIPS                             1999            PAYABLE
------------                         ------------     -------------
<S>                                  <C>              <C>
Ashville Equity                      $    226,123     $
Columbus Junction                          27,617
Cottonwood Park                         1,083,267
The Cottages I                                  -
Countryside                             1,428,014
Eastridge Apartments                      396,077
Edgewood Apartments                       954,907
Fourth Street                           1,370,176
Germantown Apartments                   1,073,110
Great Basin Associates                          -
Grimes Park Apartments                     32,075
Jamestown                                 240,401
Jefferson Meadows Apartments               39,455
Kentucky River Apartments                 855,869
Lincoln Grove                             701,690
Meadowlakes Apartments                  1,008,175
Michigan Beach Apartments                       -
Nickel River (Wedgewood) Apts.            805,659
Norwalk Park Apartments                    21,633
Oakview                                   908,885
Pam Apartments                                  -
Palm Springs View                               -              1,076
Paramount Apartments                            -
Parkwood Landing                          109,460
Pensacola Affordable                      320,362
Pineview Terrace                          424,170
Quivera                                         -
Rancho Del Mar                          3,100,182
Salem Park Apartments                     422,672
Sheboygan Apartments                      367,850
Sitka III Apartments                            -
Soldotna (Northwood Senior) Apts.         164,262
Torres De Plata II                         51,716
Villa Real                                      -
Virginia Park Meadows                      19,937
Wade Walton Apartments                          -
Westbridge Apartments                           -
Western (Ellis) Court                           -
                                     ------------     -------------

                                     $ 16,153,744     $       1,076
                                     ============     =======-=====
</TABLE>


<PAGE>   28


                    NATIONAL TAX CREDIT INVESTORS II                    SCHEDULE
                 INVESTMENTS IN LIMITED PARTNERSHIPS                 (CONTINUED)
             YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998


<TABLE>
<CAPTION>
                                                                   YEAR ENDED DECEMBER 31, 1998
                                     -----------------------------------------------------------------------------------------
                                       BALANCE                      CAPITALIZED                      EQUITY      AMORTIZATION
  LIMITED                             JANUARY 1,     CAPITAL        ACQUISITION       CASH           INCOME     OF CAPITALIZED
PARTNERSHIPS                            1998      CONTRIBUTIONS      COSTS/FEES    DISTRIBUTIONS      (LOSS)       ACQ. COSTS
------------                         ------------ -------------     ------------  -------------   -----------   --------------
<S>                                  <C>          <C>               <C>           <C>             <C>           <C>
Ashville Equity                      $    413,853 $     101,869     $             $               $  (147,276)  $       (5,891)
Columbus Junction                          52,477                                                      (1,486)          (1,931)
Cottonwood Park                         1,118,398                                                      13,928           (8,012)
The Cottages I                                  -                                                           -                -
Countryside                             2,155,571                                      (133,950)     (207,553)         (11,362)
Eastridge Apartments                      529,585        17,000                                       (71,899)          (2,987)
Edgewood Apartments                     1,265,063                                       (80,250)      (86,817)          (5,834)
Fourth Street                           1,652,546                                                    (136,696)          (7,053)
Germantown Apartments                   1,346,628                                       (39,501)      (72,912)          (6,811)
Great Basin Associates                          -                                                           -                -
Grimes Park Apartments                     58,603                                                      (9,180)          (2,116)
Jamestown                                 385,783                                                     (59,068)          (3,322)
Jefferson Meadows Apartments              489,630                                                    (230,366)          (7,574)
Kentucky River Apartments                 912,289                                                     (33,174)          (4,719)
Lincoln Grove                             905,313                                       (20,400)      (84,221)          (4,527)
Meadowlakes Apartments                  1,179,475                                       (17,594)      (58,007)          (5,828)
Michigan Beach Apartments                       -       549,308                         (23,727)     (525,581)               -
Nickel River (Wedgewood) Apts.            882,426                                                     (32,342)          (7,170)
Norwalk Park Apartments                    62,141                                                     (18,175)          (1,416)
Oakview                                   753,664                                                      34,027           (2,926)
Pam Apartments                            112,633                                       (12,902)      (63,394)          (2,836)
Palm Springs View                         360,155                                                    (350,166)          (9,989)
Paramount Apartments                      412,304                                                    (403,837)          (8,467)
Parkwood Landing                          973,811                                                    (287,422)         (13,783)
Pensacola Affordable                      435,601                                       (47,476)      (22,837)          (3,401)
Pineview Terrace                          439,624                                                     (37,671)          (6,197)
Quivera                                   573,070                                      (177,996)     (148,207)         (11,045)
Rancho Del Mar                          3,664,430                                       (37,500)     (201,887)         (16,084)
Salem Park Apartments                     622,601                                       (12,048)      (49,328)          (6,787)
Sheboygan Apartments                      582,167                                                    (107,664)          (3,550)
Sitka III Apartments                       19,538                                                     (17,634)          (1,904)
Soldotna (Northwood Senior) Apts.         208,878                                        (1,698)      (21,339)          (1,900)
Torres De Plata II                         69,532                                        (6,328)            -           (2,580)
Villa Real                              2,466,601         1,500                        (575,000)      (31,349)         (11,617)
Virginia Park Meadows                     501,471                                                    (255,245)          (7,268)
Wade Walton Apartments                    118,224                                                    (114,851)          (3,373)
Westbridge Apartments                         637                                                       1,611           (2,248)
Western (Ellis) Court                           -
                                     ------------ -------------     ------------  -------------   -----------   --------------
                                     $ 25,724,722 $     669,677     $          -  $  (1,186,370)  $(3,838,018)  $     (202,508)
                                     -=========== =============     ============  =============   ===========   ==============




                                      YEAR ENDED DECEMBER 31, 1998
                                     ------------------------------

                                       BALANCE           CAPITAL
  LIMITED                            DECEMBER 31,     CONTRIBUTIONS
PARTNERSHIPS                             1998            PAYABLE
------------                         ------------     -------------
<S>                                  <C>              <C>
Ashville Equity                      $    362,555     $
Columbus Junction                          49,060
Cottonwood Park                         1,124,314
The Cottages I                                  -
Countryside                             1,802,706
Eastridge Apartments                      471,699
Edgewood Apartments                     1,092,162
Fourth Street                           1,508,797
Germantown Apartments                   1,227,404
Great Basin Associates                          -
Grimes Park Apartments                     47,307
Jamestown                                 323,393
Jefferson Meadows Apartments              251,690
Kentucky River Apartments                 874,396
Lincoln Grove                             796,165
Meadowlakes Apartments                  1,098,046
Michigan Beach Apartments                       -
Nickel River (Wedgewood) Apts.            842,914
Norwalk Park Apartments                    42,550
Oakview                                   784,765
Pam Apartments                             33,501
Palm Springs View                               -             1,081
Paramount Apartments                            -
Parkwood Landing                          672,606           355,904
Pensacola Affordable                      361,887
Pineview Terrace                          395,756
Quivera                                   235,822
Rancho Del Mar                          3,408,959
Salem Park Apartments                     554,438
Sheboygan Apartments                      470,953
Sitka III Apartments                            -
Soldotna (Northwood Senior) Apts.         183,941
Torres De Plata II                         60,624
Villa Real                              1,850,135
Virginia Park Meadows                     238,958
Wade Walton Apartments                          -
Westbridge Apartments                           -
Western (Ellis) Court                           -
                                     ------------     -------------
                                     $ 21,167,503     $     356,985
                                     ============     ======-======
</TABLE>



<PAGE>   29


                                                                        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, 2000, 1999 AND 1998



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.


<PAGE>   30


                                                                    SCHEDULE III
                        NATIONAL TAX CREDIT INVESTORS II
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                 OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS
                                DECEMBER 31, 2000



<TABLE>
<CAPTION>
                                                                          BUILDINGS,
                                                                         FURNISHINGS
                                                                        AND EQUIPMENT
                                     NUMBER  OUTSTANDING               AMOUNT CARRIED
                                       OF     MORTGAGE                   AT CLOSE OF                 ACCUMULATED
   PARTNERSHIP/LOCATION              UNITS       LOAN         LAND         PERIOD         TOTAL     DEPRECIATION
----------------------------------------------------------------------------------------------------------------

<S>                                    <C>  <C>           <C>           <C>           <C>           <C>
ASHVILLE EQUITY (WESTVIEW)             41   $   958,258   $   100,000   $ 1,774,617   $ 1,874,617   $  (756,371)
  ASHVILLE, OH
COLUMBUS JUNCTION PARK                 24       650,527        40,000       779,438       819,438      (236,570)
  COLUMBUS JUNCTION, IA
COTTAGES OF NORTH ST. PAUL             94     3,955,000       616,092     5,199,015     5,815,107    (1,479,191)
  NORTH ST. PAUL, MN
COTTONWOOD PARK                        90     1,370,649       194,154     2,637,861     2,832,015      (743,139)
  COLORADO SPRINGS, CO
COUNTRYSIDE PLACE                     180     4,480,355       450,000     8,178,528     8,628,528    (2,771,447)
  HOWELL TOWNSHIP, NJ
EASTRIDGE APARTMENTS                   48     1,234,430        35,210     1,897,802     1,933,012      (397,352)
  ST CLAIR, MO
EDGEWOOD APARTMENTS                   108     1,717,690       157,500     3,893,925     4,051,425    (1,452,736)
  ROGERS, AR
FOURTH STREET                          44     1,011,430       241,979     4,205,938     4,447,917    (1,363,393)
  LOS ANGELES, CA
GERMANTOWN APARTMENTS                 132     2,463,529       210,000     4,588,661     4,798,661    (1,777,384)
  CONWAY, AR
GREAT BASIN ASSOCIATES                 28       621,095       143,000     1,412,503     1,555,503      (401,631)
  RENO, NV
GRIMES PARK APARTMENTS                 16       459,372        50,000       522,194       572,194      (164,900)
  GRIMES, IA
JAMESTOWN TERRACE                      56     2,866,922       298,000     3,491,844     3,789,844      (852,090)
  JAMESTOWN, CA
JEFFERSON MEADOWS                      83     3,070,451        85,500     4,896,437     4,981,937    (1,949,303)
  DETROIT, MI
KENTUCKY RIVER                         42       962,199       149,000     2,004,350     2,153,350      (542,255)
  WINCHESTER, KY
LINCOLN GROVE                         116       641,711       117,853     3,881,068     3,998,921    (1,045,423)
  GREENSBORO, NC
MEADOWLAKES                           108     1,427,421       136,352     3,900,270     4,036,622    (1,458,154)
  SEARCY, AR
MICHIGAN BEACH                        240     9,382,821       791,700     4,105,327     4,897,027      (256,582)
  CHICAGO, IL
NICKEL RIVER (WEDGEWOOD)              105     1,867,005       140,157     3,048,811     3,188,968      (868,724)
  LACROSSE, WI
NORWALK PARK APARTMENTS                16       428,542        50,600       482,876       533,476      (156,460)
  NORWALK, IA
OAKVIEW APARTMENTS                    106     2,055,000        80,800     3,612,188     3,692,988    (1,161,586)
  SPARTANBURG, SC
PALM SPRINGS VIEW                     120     5,194,476       901,137     7,645,424     8,546,561    (2,080,742)
  PALM SPRINGS, CA
PAM APARTMENTS                         96     1,525,000        50,000     2,652,115     2,702,115    (1,527,343)
  PAMPA, TX
PARAMOUNT APARTMENTS                   99     1,785,117        95,200     2,852,701     2,947,901    (1,076,874)
  MAPLE HEIGHTS, OH
PARKWOOD LANDING                      204     4,396,511       720,238     9,226,497     9,946,735    (3,324,868)
  HUNTSVILLE, AL
PENSACOLA AFFORDABLE                   56     1,340,020       251,630     1,845,425     2,097,055      (666,690)
  PENSACOLA, FL
</TABLE>



<PAGE>   31

<TABLE>
<CAPTION>
                                                                          BUILDINGS,
                                                                         FURNISHINGS
                                                                        AND EQUIPMENT
                                     NUMBER  OUTSTANDING               AMOUNT CARRIED
                                       OF     MORTGAGE                   AT CLOSE OF                 ACCUMULATED
   PARTNERSHIP/LOCATION              UNITS       LOAN         LAND         PERIOD         TOTAL     DEPRECIATION
----------------------------------------------------------------------------------------------------------------
<S>                                   <C>     <C>              <C>        <C>           <C>            <C>
PINEVIEW TERRACE                      120     1,626,440        82,264     2,800,002     2,882,266      (846,592)
  KATY, TX
QUIVERA                               289     3,855,170       100,000    12,555,607    12,655,607    (5,112,469)
  LENEXA, TX
RANCHO DEL MAR                        312     3,401,224        74,858     8,009,421     8,084,279    (2,333,609)
  TUCSON, AZ
SALEM PARK APARTMENTS                 144     2,671,459       210,000     4,277,663     4,487,663    (1,841,376)
  CONWAY, AR
SHEBOYGAN                              59     1,340,881        47,200     2,561,520     2,608,720      (997,598)
  SHEBOYGAN, WI
SITKA III                              16     1,164,226        41,868     1,443,772     1,485,640      (545,560)
  SITKA, AK
SOLDOTNA (NORTHWOOD SENIOR)            23     1,475,737        59,248     1,882,543     1,941,791      (472,890)
  SOLDOTNA, AK
TORRES DE PLATA II                     78     3,068,782       158,175     3,834,258     3,992,433    (1,438,250)
  TOA ALTA, PR
VILLA REAL                            120     2,876,959       897,283     6,375,999     7,273,282    (1,952,771)
  SANTA FE, NM
VIRGINIA PARK MEADOWS                  83     3,016,935        78,500     4,896,672     4,975,172    (1,927,938)
  DETROIT, MI
WADE WALTON APARTMENTS                108     4,000,000       102,020     3,957,610     4,059,630    (1,128,251)
  CLARKSDALE, MI
WESTBRIDGE APARTMENTS                 112     2,665,000       201,468     3,064,426     3,265,894      (772,429)
  W. COLUMBIA, SC


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

       TOTAL                        3,716   $87,028,344    $8,158,986 $ 144,395,308  $152,554,294  $(47,880,941)
                                    ============================================================================
</TABLE>


<PAGE>   32


                                                                    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, 2000


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:

<TABLE>
<CAPTION>
                                                  Buildings,
                                                  Furnishings
                                                     And
                                    Land           Equipment          Total
                                -------------    -------------    -------------

<S>                             <C>              <C>              <C>
Balance at January 1, 1998      $   9,542,671    $ 153,572,966    $ 163,115,637

Net additions during the year
ended December 31, 1998                (1,379)         239,734          238,355
                                -------------    -------------    -------------

Balance at December 31, 1998        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 additions 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
                                =============    =============    =============
</TABLE>

<PAGE>   33

                                                                    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, 2000



<TABLE>
<CAPTION>
                                      Buildings,
                                     Furnishings
                                         And
                                      Equipment
                                     -----------

<S>                                  <C>
Accumulated Depreciation:

Balance at January 1, 1998           $36,481,243

Net additions during
the year ended
December 31, 1998                      5,418,007
                                     -----------

Balance at December 31, 1998          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
                                     ===========
</TABLE>


<PAGE>   34


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. 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, 71, 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, 49, 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, 55, 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-


<PAGE>   35


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, 38, 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, 71, 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, 34, 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.


<PAGE>   36


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 $740,463 were
         incurred for the year ended December 31, 2000 and $764,612 were
         incurred for each of the years ended December 31, 1999 and 1998.

(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 paid to the General Partner was $47,129, for the year
         ended December 31, 2000 and $0 for the years ended December 31, 1999
         and 1998, 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 in 2000 and 1999 and
         four local partnerships in 1998. The Local Partnerships paid the
         affiliate property management fees of $163,520, $182,781 and $136,296
         in 2000, 1999 and 1998, 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.


<PAGE>   37


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, 2000 and 1999.

Statements of Operations for the years ended December 31, 2000, 1999 and 1998.

Statements of Partners' Equity (Deficiency) for the years ended December 31,
2000, 1999 and 1998.

Statements of Cash Flows for the years ended December 31, 2000, 1999 and 1998.

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, 2000, 1999 and
1998.

Schedule III - Real Estate and Accumulated Depreciation, December 31, 2000.

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, 2000.


<PAGE>   38


                                   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. BOXENBAUM
-----------------------------------
Charles H. Boxenbaum
Chairman of the Board of Directors
and Chief Executive Officer


/s/ BRUCE E. NELSON
-----------------------------------
Bruce E. Nelson
Director and President


/s/ ALAN I. CASDEN
-----------------------------------
Alan I. Casden
Director


/s/ BRIAN H. SHUMAN
-----------------------------------
Brian H. Shuman
Chief Financial Officer