UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

(Mark One)

|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                                    OF 1934

                    For the fiscal year ended March 31, 2006

                                       OR

| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                  ACT OF 1934

           For the transition period from            to
                                         ------------  ------------

                         Commission file number: 0-20057


                      WNC HOUSING TAX CREDIT FUND II, L.P.
             (Exact name of registrant as specified in its charter)

                 California                            33-0391979
                (State or other jurisdiction of       (I.R.S. Employer
               incorporation or organization)         Identification No.)


               17782 Sky Park Circle                    92614-6404
               Irvine, CA                               (Zip Code)
               (Address of principal
               executive offices)

                                 (714) 662-5565
                               (Telephone number)

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

                                      NONE

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

                      UNITS OF LIMITED PARTNERSHIP INTEREST
                                (Title of Class)

<PAGE>

Indicate by check mark if the  registrant is a well-known  seasoned  issuer,  as
defined in Rule 405 of the Securities Act
Yes        No    X
   --------  --------

Indicate  by  check  mark if the  registrant  is not  required  to file  reports
pursuant to Section 13 or Section 15(d) of the Act.
Yes        No    X
   --------  --------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
Yes   X   No
   -------  -------

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
filer and large  accelerated  filer" in Rule 12b-2 of the Exchange  Act.  (Check
one):
Large accelerated filer      Accelerated filer    Non-accelerated filer   X
                       ------                 ----                     -------

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes      No   X
   ------  -------

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|
Indicate by check mark whether the  registrant is an accelerated filer.

Yes       No    X
   -------  --------

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common  equity,  as of
the last business day of the registrant's most recently  completed second fiscal
quarter.
                                  INAPPLICABLE


                       DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K  (e.g.,  Part I,  Part II,  etc.)  into which the  document  is
incorporated:  (1) Any  annual  report  to  security  holders;  (2) Any proxy or
information  statement;  and (3) Any prospectus filed pursuant to Rule 424(b) or
(c) under the  Securities Act of 1933.  The listed  documents  should be clearly
described for identification  purposes (e.g.,  annual report to security holders
for fiscal year ended December 24, 1980).

                                      NONE

                                       2
<PAGE>

PART I

Item 1.  Business

Organization

WNC Housing Tax Credit Fund II, L.P. (the "Partnership") is a California limited
partnership  formed  under the laws of the State of  California  on January  19,
1990. The  Partnership was formed to acquire  limited  partnership  interests or
membership   interests  in  other  limited  partnerships  or  limited  liability
companies  ("Local  Limited   Partnerships")   which  own  multi-family  housing
complexes ("Housing Complexes") that are eligible for Federal low-income housing
("Low Income Housing Tax Credits").

The  general  partner of the  Partnership  is WNC  Financial  Group,  L.P.  (the
"General Partner").  WNC & Associates,  Inc ("Associates") and Wilfred N. Cooper
Sr. are the general  partners of WNC  Financial  Group,  L.P.  The  chairman and
president of  Associates  owns  substantially  all of the  outstanding  stock of
Associates.  The  business of the  Partnership  is conducted  primarily  through
Associates, as the Partnership have no employees of their own.

Pursuant to a  registration  statement  filed with the  Securities  and Exchange
Commission,  on April 27, 1990, the  Partnership  commenced a public offering of
12,000 units of Limited Partnership  Interest ("Units") at a price of $1,000 per
Unit.  The General  Partner  concluded the sale of Units on December 31, 1992. A
total of 7,000 Units representing $7,000,000 had been sold. Holders of Units are
referred to herein as "Limited Partners."

The Partnership  shall continue in full force and effect until December 31, 2045
unless  terminated prior to that date pursuant to the Partnership  Agreement (as
defined below) or law.

Description of Business

The  Partnership's  principal  business  objective  is to  provide  its  Limited
Partners  with Low Income  Housing  Tax  Credits.  The  Partnership's  principal
business  consists of investing as a limited partner or  non-managing  member in
Local  Limited  Partnerships  each of which  owns and  operates  a  multi-family
housing  complex  (the  "Housing  Complexes")  which  qualify for the Low Income
Housing Tax Credits. In general,  under Section 42 of the Internal Revenue Code,
an owner of low-income housing can receive the Low Income Housing Tax Credits to
be used to reduce Federal taxes  otherwise due in each year of a ten-year credit
period. In general,  under Section 17058 of the California  Revenue and Taxation
Code,  an owner of  low-income  housing can receive  the  California  Low Income
Housing Tax Credit to be used against  California  taxes  otherwise  due in each
year of a  four-year  period.  Each  Housing  Complex  is  subject  to a 15 year
compliance period (the "Compliance Period"),  and under state law may have to be
maintained as low income housing for 30 or more years.

In general,  in order to avoid recapture of Low Income Housing Tax Credits,  the
Partnership  does not  expect  that it will  dispose of its  interests  in Local
Limited Partnerships ("Local Limited Partnership Interests") or approve the sale
by any Local Limited  Partnership of its Housing Complex prior to the end of the
applicable  Compliance  Period.  Because  of  (i)  the  nature  of  the  Housing
Complexes,  (ii) the  difficulty of predicting  the resale market for low-income
housing,  and (iii) the ability of government lenders to disapprove of transfer,
it is not  possible  at this time to  predict  whether  the  liquidation  of the
Partnership's assets and the disposition of the proceeds,  if any, in accordance
with the Partnership's Agreement of Limited Partnership,  dated January 19, 1990
(the "Partnership  Agreement"),  will be accomplished promptly at the end of the
Compliance Period. If a Local Limited  Partnership is unable to sell its Housing
Complex,  it is  anticipated  that the local  general  partner  ("Local  General
Partner")  will either  continue to operate  such  Housing  Complex or take such
other actions as the Local General  Partner  believes to be in the best interest
of the Local Limited Partnership.  Notwithstanding the preceding,  circumstances
beyond the  control of the General  Partner or the Local  General  Partners  may
occur during the  Compliance  Period,  which would  require the  Partnership  to
approve the disposition of a Housing Complex prior to the end thereof,  possibly
resulting in recapture of Low Income Housing Tax Credits.

                                       3
<PAGE>

The Partnership  invested in twenty-seven  Local Limited  Partnerships,  none of
which had been sold or otherwise  disposed as of March 31,  2006.  Each of these
Local  Limited  Partnerships  owns a Housing  Complex  that was eligible for the
Federal Low Income Housing Tax Credit.  Certain Local Limited  Partnerships  may
also benefit from government programs promoting low- or moderate-income housing.

Certain Risks and Uncertainties

Item 1A.  Risk Factors

Set forth below are the principal risks the Partnership believes are material to
the Limited Partners. The Partnership and the Local Limited Partnerships operate
in a continually changing business environment and, therefore,  new risks emerge
from time to time. This section contains some forward-looking statements. For an
explanation of the qualifications and limitations on forward-looking statements,
see Item 7.

(a)       Risks  arising  from  the Internal  Revenue Code rules  governing  Low
          Income Housing Tax Credits

     Unless a bond is posted or a Treasury  Direct Account is  established,  Low
Income Housing Tax Credits may be recaptured if Housing  Complexes are not owned
and operated for 15 years.  Housing  Complexes must comply with Internal Revenue
Code  Section 42 for the  15-year  Compliance  Period.  Low Income  Housing  Tax
Credits will be recaptured with interest to the extent that a Housing Complex is
not rented as low  income  housing  or in some  other way does not  satisfy  the
requirements of Internal  Revenue Code Section 42 during the Compliance  Period.
For  example,  unless  a  bond  is  posted  or  a  Treasury  Direct  Account  is
established, recapture with interest would occur if:

     o    a Local  Limited  Partnership  disposed  of its  interest in a Housing
          Complex during the Compliance Period, or
     o    the   Partnership   disposed  of  its  interest  in  a  Local  Limited
          Partnership during the Compliance Period.

For these purposes, disposition includes transfer by way of foreclosure.

It will be up to the Partnership to determine  whether to post a bond.  There is
no obligation under the agreements with the Local Limited  Partnerships that the
Local Limited Partnerships must do so.

There can be no assurance that recapture will not occur.  If it does,  recapture
will be a portion of all credits taken in prior years for that Housing  Complex,
plus   interest.   During  the  first  11  years  of  the   Compliance   Period,
non-compliance  results  in  one-third  of the  credits up to that point for the
particular Housing Complex being recaptured, plus interest. Between years 12 and
15, the recapture is phased out ratably.

     Sales of Housing  Complexes after 15 years are subject to limitations which
may impact a Local Limited  Partnership's  ability to sell its Housing  Complex.
Each  Local  Limited  Partnership   executes  an  extended  low  income  housing
commitment with the state in which the Housing Complex is located.  The extended
low income housing  commitment states the number of years that the Local Limited
Partnership  and any  subsequent  owners  must rent the  Housing  Complex as low
income housing. Under Federal law, the commitment must be for at least 30 years.
The commitment,  actually agreed to, may be significantly  longer than 30 years.
In prioritizing  applicants for Low Income Housing Tax Credits, most states give
additional  points for commitment  periods in excess of 30 years. On any sale of
the Housing  Complex during the commitment  period,  the purchaser would have to
agree to  continue  to rent the  Housing  Complex as low income  housing for the
duration of the  commitment  period.  This  requirement  reduces  the  potential
market, and possibly the sales price, for the Housing  Complexes.  The sale of a
Housing  Complex  may be subject to other  restrictions.  For  example,  Federal
lenders or subsidizers may have the right to approve or disapprove a purchase of
a Housing Complex.  Accordingly,  there can be no assurance that a Local Limited
Partnership will be able to sell its Housing Complex.  Even if it does so, there
can be no assurance that any  significant  amount of cash will be distributed to
the Limited Partners.  As a result, a material portion of the Low Income Housing
Tax  Credits  may  represent  a return of the money  originally  invested in the
Partnership.

                                       4
<PAGE>

(b)  Risks  related to  investment  in Local  Limited  Partnerships  and Housing
     Complexes

     Because the  Partnership has few  investments,  each investment will have a
great impact on the  Partnership's  results of  operations.  Any single  Housing
Complex  experiencing  poor  operating  performance,   impairment  of  value  or
recapture of Low Income Housing Tax Credits will have a significant  impact upon
the Partnership as a whole.

     The failure to pay mortgage debt could result in a forced sale of a Housing
Complex. Each Local Limited Partnership  leverages the Partnership's  investment
therein by incurring mortgage debt. A Local Limited Partnership's revenues could
be less than its debt payments and taxes and other  operating  costs. If so, the
Local  Limited  Partnership  would have to use working  capital  reserves,  seek
additional  funds, or suffer a forced sale of its Housing  Complex,  which could
include a  foreclosure.  The same results  could occur if  government  subsidies
ceased. Foreclosure would result in a loss of the Partnership's capital invested
in the Housing  Complex.  Foreclosure  could also  result in a recapture  of Low
Income  Housing Tax Credits and a loss of Low Income Housing Tax Credits for the
year  in  which   the   foreclosure   occurs.   If  the   Housing   Complex   is
highly-leveraged,  a relatively  slight  decrease in the rental  revenues  could
adversely affect the Local Limited Partnership's ability to pay its debt service
requirements.  Mortgage  debt may be  repayable in a  self-amortizing  series of
equal  installments  or with a large balloon  final  payment.  Balloon  payments
maturing  prior to the end of the  anticipated  holding  period for the  Housing
Complex create the risk of a forced sale if the debt cannot be refinanced. There
can be no assurance that additional funds will be available to any Local Limited
Partnership if needed on acceptable terms or at all.

     The Partnership  does not control the Local Limited  Partnerships  and must
rely on the Local General  Partners.  The Local  General  Partners will make all
management  decisions  for  the  Local  Limited  Partnerships  and  the  Housing
Complexes. The Partnership has very limited rights with respect to management of
the Local Limited Partnerships. The Partnership will not be able to exercise any
control  with  respect  to Local  Limited  Partnership  business  decisions  and
operations.  Consequently,  the  success of the  Partnership  will depend on the
abilities of the Local General Partners.

     Projects  subsidized by other government programs are subject to additional
rules which may make it difficult to operate and sell Housing Complexes. Some or
all of the Housing  Complexes  receive or may receive  government  financing  or
operating subsidies in addition to Low Income Housing Tax Credits. The following
are risks associated with such subsidy programs:

     o    Obtaining tenants for the Housing  Complexes.  Government  regulations
          limit the  types of  people  who can rent  subsidized  housing.  These
          regulations may make it more difficult to rent the  residential  units
          in the Housing Complexes.
     o    Obtaining  rent  increases.  In many cases rents can only be increased
          with the prior approval of the  subsidizing  agency.
     o    Limitations  on cash  distributions.  The  amount  of cash that may be
          distributed to owners of subsidized Housing Complexes is less than the
          amount  that could be earned by the owners of  non-subsidized  Housing
          Complexes.
     o    Limitations on sale or refinancing of the Housing  Complexes.  A Local
          Limited  Partnership  may be unable to sell its Housing  Complex or to
          refinance  its  mortgage  loan  without  the  prior  approval  of  the
          subsidizer.   The   subsidizer  may  withhold  such  approval  in  the
          discretion of the  subsidizer.  Approval may be subject to conditions,
          including  the condition  that the purchaser  continues to operate the
          property as affordable  housing for terms which could be as long as 30
          years or more. In addition, any prepayment of a mortgage may result in
          the assessment of a prepayment penalty.
     o    Limitations  on transfers of interests in Local Limited  Partnerships.
          The  Partnership may be unable to sell its interest in a Local Limited
          Partnership  without  the  prior  approval  of  the  subsidizer.   The
          subsidizer  may  withhold  such  approval  in  the  discretion  of the
          subsidizer. Approval may be subject to conditions.
     o    Limitations  on removal and admission of Local General  Partners.  The
          Partnership  may be unable to remove a Local  General  Partner  from a
          Local Limited  Partnership  except for cause, such as the violation of
          the rules of the subsidizer. Regulations may prohibit the removal of a
          Local General  Partner or permit  removal only with the prior approval
          of the  subsidizer.  Regulations  may  also  require  approval  of the

                                       5
<PAGE>
          admission of a successor  Local General Partner even upon the death or
          other disability of a Local General Partner.
     o    Limitations  on subsidy  payments.  Subsidy  payments  may be fixed in
          amount and subject to annual  legislative  appropriations.  The rental
          revenues  of  a  Housing  Complex,  when  combined  with  the  maximum
          committed subsidy,  may be insufficient to meet obligations.  Congress
          or the state legislature,  as the case may be, may fail to appropriate
          or increase  the  necessary  subsidy.  In those  events,  the mortgage
          lender  could  foreclose  on the  Housing  Complex  unless  a  workout
          arrangement could be negotiated.
     o    Possible changes in applicable regulations. Legislation may be enacted
          which adversely revises provisions of outstanding mortgage loans. Such
          legislation has been enacted in the past.
     o    Limited Partners may not receive  distributions  if Housing  Complexes
          are sold. There is no assurance that Limited Partners will receive any
          cash  distributions from the sale or refinancing of a Housing Complex.
          The price at which a Housing Complex is sold may not be high enough to
          pay the mortgage and other  expenses  which must be paid at such time.
          If that happens,  a Limited  Partner's return may be derived only from
          the Low Income Housing Tax Credits and tax losses.

     Uninsured  casualties  could  result in  losses  and  recapture.  There are
casualties  which are either  uninsurable or not economically  insurable.  These
include earthquakes,  floods, wars and losses relating to hazardous materials or
environmental  matters.  If a Housing Complex experienced an uninsured casualty,
the Partnership could lose both its invested capital and anticipated  profits in
such  property.  Even if the casualty  were an insured  loss,  the Local Limited
Partnership  might be unable to rebuild  the  destroyed  property.  A portion of
prior tax credits  could be  recaptured  and future tax credits could be lost if
the Housing  Complex were not restored  within a reasonable  period of time. And
liability judgments against the Local Limited Partnership could exceed available
insurance  proceeds  or  otherwise  materially  and  adversely  affect the Local
Limited Partnership.  The cost of liability and casualty insurance has increased
in recent years.  Casualty insurance has become more difficult to obtain and may
require large deductible amounts.

     Housing  complexes without financing or operating subsidies may be unable
to pay operating  expenses.  If a Local Limited  Partnership  were unable to pay
operating expenses, one result could be a forced sale of its Housing Complex. If
a forced sale occurs during the first 15 years of a Housing  Complex,  a partial
recapture of Low Income Housing Tax Credits could occur. In this regard, some of
the Local Limited Partnerships may own Housing Complexes which have no subsidies
other than Low Income Housing Tax Credits.  Those Housing  Complexes do not have
the benefit of below-market-interest-rate financing or operating subsidies which
often are  important to the  feasibility  of low income  housing.  Those Housing
Complexes  rely  solely  on rents to pay  expenses.  However,  in order  for any
Housing  Complex to be  eligible  for Low Income  Housing Tax  Credits,  it must
restrict the rent which may be charged to tenants.  Over time, the expenses of a
Housing Complex will increase.  If a Local Limited  Partnership  cannot increase
its rents, it may be unable to pay increased operating expenses.

     The Partnership's  investment  protection policies will be worthless if the
net worth of the Local  General  Partners  is not  sufficient  to satisfy  their
obligations.  There is a risk that the Local General  Partners will be unable to
perform their financial obligations to the Partnership.  The General Partner has
not established a minimum net worth  requirement for the Local General Partners.
Rather,  each Local General  Partner  demonstrates a net worth which the General
Partner believes is appropriate under the circumstances. The assets of the Local
General  Partners are likely to consist  primarily  of real estate  holdings and
similar  assets.  The fair market value of these types of assets is difficult to
estimate.  These  types of assets  cannot be readily  liquidated  to satisfy the
financial  guarantees and commitments  which the Local General  Partners make to
the Partnership.  Moreover,  other creditors may have claims on these assets. No
escrow  accounts or other  security  arrangements  will be established to ensure
performance  of a Local  General  Partner's  obligations.  The cost to enforce a
Local General Partner's obligations may be high. If a Local General Partner does
not satisfy its obligations  the  Partnership may have no remedy,  or the remedy
may be limited to removing the Local General  Partner as general  partner of the
Local Limited Partnership.

     Fluctuating  economic  conditions can reduce the value of real estate.  Any
investment  in real  estate  is  subject  to  risks  from  fluctuating  economic
conditions.  These  conditions  can  adversely  affect the  ability to realize a
profit or even to recover invested capital. Among these conditions are:

     o    the general and local job market,
     o    the availability and cost of mortgage financing,

                                       6
<PAGE>
     o    monetary inflation,
     o    tax, environmental, land use and zoning policies,
     o    the supply of and demand for similar properties,
     o    neighborhood conditions,
     o    the availability and cost of utilities and water.

(c)  Tax risks other than those relating to tax credits

In addition to the risks pertaining specifically to tax credits, there are other
Federal income tax risks.  Additional  Federal income tax risks  associated with
the  ownership  of Units and the  operations  of the  Partnership  and the Local
Limited Partnerships include, but are not limited to, the following:

          No  opinion of counsel  as to  certain  matters.  No legal  opinion is
          obtained regarding matters:

     o    the determination of which depends on future factual circumstances,
     o    which are peculiar to individual Limited Partners, or
     o    which are not customarily the subject of an opinion.

The more significant of these matters include:

     o    allocating purchase price among components of a property, particularly
          as between  buildings and fixtures,  the cost of which is depreciable,
          and the underlying land, the cost of which is not depreciable,
     o    characterizing  expenses and payments made to or by the Partnership or
          a Local Limited Partnership,
     o    identifying  the  portion of the costs of any  Housing  Complex  which
          qualify for historic and other tax credits,
     o    applying to any specific  Limited Partner the limitation on the use of
          tax  credits and tax  losses.  Limited  Partners  must  determine  for
          themselves  the  extent  to  which  they can use tax  credits  and tax
          losses, and
     o    the application of the alternative minimum tax to any specific Limited
          Partner,  or the  calculation  of the  alternative  minimum tax by any
          Limited  Partner.  The  alternative  minimum tax could  reduce the tax
          benefits from an investment in the Partnership.

There can be no assurance,  therefore,  that the IRS will not challenge  some of
the tax positions  adopted by the  Partnership.  The courts could sustain an IRS
challenge. An IRS challenge,  if successful,  could have a detrimental effect on
the Partnership's ability to realize its investment objectives.

          Passive  activity  rules  will  limit  deduction  of the Partnership's
losses  andimpose  tax on interest  income.  The  Internal  Revenue Code imposes
limits on the ability of most investors to claim losses from investments in real
estate. An individual may claim these so-called passive losses only as an offset
to income from  investments in real estate or rental  activities.  An individual
may not claim passive losses as an offset against other types of income, such as
salaries,  wages,  dividends and interest.  These  passive  activity  rules will
restrict the ability of most Limited Partners to use losses from the Partnership
as an offset of non-passive income.

          The  Partnership  may earn interest  income on its reserves and loans.
The passive  activity  rules  generally  will  categorize  interest as portfolio
income,  and not passive  income.  Passive losses cannot be used as an offset to
portfolio  income.  Consequently,  a Limited  Partner could pay tax liability on
portfolio income from the Partnership.

          At  risk rules might  limit  deduction  of the  Partnership's  losses.
If a significant  portion of the financing  used to purchase  Housing  Complexes
does not consist of qualified  nonrecourse  financing,  the "at risk" rules will
limit a Limited Partner's ability to claim Partnership  losses to the amount the
Limited Partner invests in the Partnership.  The "at risk" rules of the Internal
Revenue Code generally limit a Limited Partner's  ability to deduct  Partnership
losses to the sum of:

     o    the amount of cash the Limited Partner invests in the Partnership, and
     o    the  Limited  Partner's  share of  Partnership  qualified  nonrecourse
          financing.
                                       7
<PAGE>
Qualified  nonrecourse  financing is non-convertible,  nonrecourse debt which is
borrowed  from a  government,  or  with  exceptions,  any  person  actively  and
regularly engaged in the business of lending money.

     Tax  liability  on sale of  Housing  Complex or Local  Limited  Partnership
Interest  may  exceed the cash  available  from the sale.  When a Local  Limited
Partnership  sells a Housing  Complex it will recognize gain. Such gain is equal
to the difference between:

     o    the sales  proceeds  plus the  amount of  indebtedness  secured by the
          Housing Complex, and
     o    the adjusted basis for the Housing  Complex.  The adjusted basis for a
          Housing Complex is its original cost, plus capital expenditures, minus
          depreciation.

Similarly, when the Partnership sells an interest in a Local Limited Partnership
the  Partnership  will  recognize  gain.  Such  gain is equal to the  difference
between:

     o    the  sales  proceeds  plus the  Partnership's  share of the  amount of
          indebtedness secured by the Housing Complex, and
     o    the  adjusted  basis  for the  interest.  The  adjusted  basis  for an
          interest  in a Local  Limited  Partnership  is the amount paid for the
          interest,  plus income allocations and cash  distributions,  less loss
          allocations.

Accordingly,  gain will be increased by the depreciation deductions taken during
the holding period for the Housing  Complex.  In some cases,  a Limited  Partner
could have a tax liability from a sale greater than the cash  distributed to the
Limited Partner from the sale.

     Alternative  minimum tax  liability  could reduce a Limited  Partner's  tax
benefits. If a Limited Partner pays alternative minimum tax, the Limited Partner
could suffer a reduction in benefits from an investment in the Partnership.  The
application of the alternative  minimum tax is personal to each Limited Partner.
Tax credits may not be utilized to reduce alternative minimum tax liability.

     IRS  could  audit  the  returns  of  the  Partnership,  the  Local  Limited
Partnerships  or the Limited  Partners.  The IRS can audit the  Partnership or a
Local Limited  Partnership  at the entity level with regard to issues  affecting
the  entity.  The IRS does not have to audit  each  Limited  Partner in order to
challenge a position taken by the  Partnership  or a Local Limited  Partnership.
Similarly,  only  one  judicial  proceeding  can  be  filed  to  contest  an IRS
determination.  A contest  by the  Partnership  of any IRS  determination  might
result in high legal fees.

     An audit of the  Partnership  or a Local  Limited  Partnership  also  could
result in an audit of a Limited  Partner.  An audit of a Limited  Partner's  tax
returns  could  result in  adjustments  both to items  that are  related  to the
Partnership and to unrelated  items.  The Limited Partner could then be required
to file amended tax returns and pay additional tax plus interest and penalties.

     A successful IRS challenge to tax allocations of the Partnership or a Local
Limited  Partnership  would  reduce the tax  benefits  of an  investment  in the
Partnership.  Under the Internal  Revenue  Code, a  partnership's  allocation of
income, gains, deductions, losses and tax credits must have substantial economic
effect.   Substantial  economic  effect  is  a  highly-technical   concept.  The
fundamental  principle is two-fold.  If a partner will benefit economically from
an item of  partnership  income or gain,  that item must be  allocated to him so
that he bears the correlative tax burden.  Conversely,  if a partner will suffer
economically  from an item of partnership  deduction or loss,  that item must be
allocated  to  him  so  that  he  bears  the  correlative  tax  benefit.   If  a
partnership's  allocations do not have  substantial  economic  effect,  then the
partnership's tax items are allocated in accordance with each partner's interest
in the  partnership.  The  IRS  might  challenge  the  allocations  made  by the
Partnership:

     o    between the Limited Partners and the General Partner,
     o    among the Limited Partners, or
     o    between the Partnership and a Local General Partner.

                                       8
<PAGE>
If any allocations were successfully  challenged,  a greater share of the income
or gain or a lesser share of the losses or tax credits might be allocated to the
Limited  Partners.  This  would  increase  the tax  liability  or reduce the tax
benefits to the Limited Partners.

     Tax  liabilities  could  arise in later years of the  Partnership.  After a
period  of  years  following  commencement  of  operations  by a  Local  Limited
Partnership,  the Local Limited  Partnership  may generate  profits  rather than
losses.  A Limited Partner would have tax liability on his share of such profits
unless he could offset the income with:

     o    unused passive losses from the Partnership or other investments, or
     o    current passive losses from other investments.

In such circumstances, the Limited Partner would not receive a cash distribution
from the Partnership with which to pay any tax liability.

     IRS challenge to tax treatment of expenditures could reduce losses. The IRS
may  contend  that  fees and  payments  of the  Partnership  or a Local  Limited
Partnership:

     o    should be deductible over a longer period of time or in a later year,
     o    are excessive and may not be capitalized or deducted in full,
     o    should be capitalized and not deducted, or
     o    may not be included as part of the basis for computing tax credits.

Any such contention by the IRS could adversely impact, among other things:

     o    the  eligible  basis of a Housing  Complex  used to compute Low Income
          Housing Tax Credits,
     o    the adjusted basis of a Housing Complex used to compute depreciation,
     o    the correct deduction of fees,
     o    the  amortization of organization  and offering  expenses and start-up
          expenditures.

If the IRS were successful in any such  contention,  the anticipated tax credits
and losses of the Partnership would be reduced, perhaps substantially.

     Changes  in tax law  might  reduce  the  value of Low  Income  Housing  Tax
Credits.  Although all Low Income Housing Tax Credits are allocated to a Housing
Complex at commencement of the 10-year credit period,  there can be no assurance
that  future   legislation  may  not  adversely  affect  an  investment  in  the
Partnership. For example, legislation could reduce or eliminate the value of Low
Income  Housing Tax Credits.  In this regard,  before 1986,  the  principal  tax
benefit of an investment in low income housing was tax losses.  These tax losses
generally  were  used to reduce  an  investor's  income  from all  sources  on a
dollar-for-dollar basis. Investments in low income housing were made in reliance
on the availability of such tax benefits.  However,  tax legislation  enacted in
1986 severely curtailed deduction of such losses.

     New administrative or judicial  interpretations of the law might reduce the
value of tax  credits.  Many of the  provisions  of the  Internal  Revenue  Code
related  to low  income  housing  and  real  estate  investments  have  not been
interpreted by the IRS in regulations,  rulings or public  announcements,  or by
the courts.  In the future,  these provisions may be interpreted or clarified by
the IRS or the  courts  in a manner  adverse  to the  Partnership  or the  Local
Limited Partnerships.  The IRS constantly reviews the Federal tax rules, and can
revise its  interpretations  of established  concepts.  Any such revisions could
reduce  or  eliminate  tax  benefits   associated  with  an  investment  in  the
Partnership.

     State income tax laws may adversely affect the Limited Partners.  A Limited
Partner  may be  required  to file  income tax returns and be subject to tax and
withholding  in each  state or local  taxing  jurisdiction  in which:  a Housing
Complex is located,  the Partnership or a Local Limited  Partnership  engages in
business  activities,  or the Limited Partner is a resident.  Corporate  Limited
Partners may be required to pay state franchise taxes.

                                       9
<PAGE>

     The tax treatment of particular  items under state or local income tax laws
may vary  materially  from the  Federal  income  tax  treatment  of such  items.
Nonetheless,  many of the Federal income tax risks associated with an investment
in the  Partnership  may also apply  under  state or local  income tax law.  The
Partnership may be required to withhold state taxes from distributions or income
allocations to Limited Partners in some instances.

(d)  Risks related to the Partnership and the Partnership Agreement

     The  Partnership may be unable to timely provide  financial  reports to the
Limited   Partners  which  would  adversely  affect  their  ability  to  monitor
Partnership  operations.  Each  Local  General  Partner  is  required  to retain
independent  public  accountants  and to  report  financial  information  to the
Partnership  in a timely  manner.  There cannot be any assurance  that the Local
General Partners will satisfy these  obligations.  If not, the Partnership would
be unable to provide to the Limited  Partners in a timely  manner its  financial
statements and other reports. That would impact the Limited Partners' ability to
monitor  Partnership  operations.  The Partnership's  failure to meet its filing
requirements  under  the  Securities  Exchange  Act of  1934  could  reduce  the
liquidity  for  the  Units  due  to the  unavailability  of  public  information
concerning the  Partnership.  The failure to file could also result in sanctions
imposed by the SEC. Any defense  mounted by the  Partnership in the face of such
sanctions could entail legal and other fees, which would diminish cash reserves.

     Lack of liquidity of  investment.  It is unlikely that a public market will
develop for the purchase and sale of Units.  Accordingly,  Limited  Partners may
not be able to sell their Units promptly or at a reasonable price.  Units should
be considered as a long-term  investment  because the Partnership is unlikely to
sell any Local Limited Partnership Interests for at least 15 years. Units cannot
be transferred to tax-exempt or foreign entities, or through a secondary market.
The General Partner can deny  effectiveness  of a transfer if necessary to avoid
adverse  tax  consequences  from the  transfer.  The  General  Partner  does not
anticipate that any Units will be redeemed by the Partnership.

     The Limited Partners will not control the Partnership and must rely totally
on the General Partner.  The General Partner will make all management  decisions
for the Partnership.  Management  decisions include exercising powers granted to
the Partnership by a Local Limited  Partnership.  Limited Partners have no right
or power to take part in Partnership management.

Individual  Limited Partners will have no recourse if they disagree with actions
authorized  by a vote of the  majority.  The  Partnership  Agreement  grants  to
Limited Partners owning more than 50% of the Units the right to:

     o    remove the General Partner and elect a replacement general partner,
     o    amend the Partnership Agreement,
     o    terminate the Partnership.

Accordingly, a majority-in-interest of the Limited Partners could cause any such
events to occur,  even if Limited  Partners owning 49% of the Units opposed such
action.

     Limitations  on liability of the General  Partner to the  Partnership.  The
ability of Limited  Partners to sue the General Partner  and its  affiliates  is
subject to limitations.  The Partnership  Agreement  limits the liability of the
General Partner and its affiliates to the Limited  Partners. The General Partner
and its  affiliates  will not be  liable  to the Limited  Partners  for acts and
omissions:  performed  or omitted in good faith,  and  performed or omitted in a
manner which the General Partner  reasonably  believed to be within the scope of
its authority and in the best  interest of the Limited  Partners,  provided such
conduct did not constitute negligence or misconduct.

Therefore,  Limited  Partners may be less able to sue the General Partner and it
affiliates  than would be the case if such  provisions  were not included in the
Partnership Agreement.

     Payment of fees to the General  Partner  and its  affiliates  reduces  cash
available for investment in Local Limited Partnerships.  The General Partner and
its affiliates perform many services for the Partnership. They are paid fees for
these services,  which reduce the amount of the cash available for investment in
Local Limited Partnerships. Accordingly, an investor investing directly in a low
income  housing  apartment  complex  would have a greater  amount  available for
investment  than  an  investor  investing  in low  income  housing  through  the
Partnership.
                                       10
<PAGE>

     Associates and its  affiliates are serving as the general  partners of many
other  partnerships.  Depending on their corporate area of  responsibility,  the
officers of Associates initially devote approximately 5% to 50% of their time to
the Partnership.  These individuals spend significantly less time devoted to the
Partnership after the investment of the  Partnership's  capital in Local Limited
Partnerships.

     The  interests of Limited  Partners may conflict  with the interests of the
General Partner and its  affiliates.  The General Partner and its affiliates are
committed to the  management  of more than 100 other limited  partnerships  that
have investments  similar to those of the  Partnership.  The General Partner and
its affiliates receive substantial compensation from the Partnership.

     Anticipated  future and existing cash resources of the  Partnership are not
sufficient   to  pay  existing   liabilities   of  the   Partnership.   However,
substantially all of the existing  liabilities of the Partnership are payable to
the General  Partner and/or its  affiliates.  Though the amounts  payable to the
General Partner and/or its affiliates are contractually  currently payable,  the
Partnership  anticipates that the General Partner and/or its affiliates will not
require the payment of these contractual  obligations until capital reserves are
in excess of the aggregate of then  existing  contractual  obligations  and then
anticipated future foreseeable  obligations of the Partnership.  The Partnership
would be adversely  affected  should the General  Partner  and/or its affiliates
demand current  payment of the existing  contractual  obligations and or suspend
services for this or any other reason.

Item 1B.  Unresolved Staff Comments

NONE

Exit Strategy

The IRS  Compliance  Period for  low-income  housing  tax credit  properties  is
generally  15  years  following   construction  or  rehabilitation   completion.
Associates was one of the first in the industry to offer syndicated investments
in Low Income Housing Tax Credits.  The initial  programs are  completing  their
compliance periods.

With that in mind,  the General  Partner is continuing its review of the Housing
Complexes,  with special emphasis on the more mature properties such as any that
have  satisfied  the IRS  compliance  requirements.  The review  considers  many
factors,  including  extended  use  requirements  (such as those due to mortgage
restrictions  or state  compliance  agreements),  the  condition  of the Housing
Complex,  and the tax  consequences to the Limited Partners from the sale of the
Housing Complex.

Upon  identifying  those  Housing  Complexes  with the highest  potential  for a
successful sale, refinancing or syndication,  the Partnership expects to proceed
with  efforts to  liquidate  them.  The  objective  is to  maximize  the Limited
Partners'  return  wherever   possible  and,   ultimately,   to  wind  down  the
Partnership.  Local Limited Partnership interests may be disposed of any time by
the  General  Partner  in its  discretion.  As of March  31,  2006,  no  Housing
Complexes have been selected for disposition.  While  liquidation of the Housing
Complexes that have met their compliance periods continues to be evaluated,  the
dissolution  of the  Partnership  was not  imminent  as of  March  31,  2006 and
therefore the Partnership continues to be accounted for as a going concern.

The  proceeds  from the  disposition  of any of the  Local  Limited  Partnership
properties  will be used  first  to pay  debts  and  other  obligations  per the
respective Local Limted Partnership Agreement.  Any remaining proceeds will then
be paid to the  Partnership.  The sale of a Housing  Complex  may be  subject to
other restrictions and obligations.  Accordingly, there can be no assurance that
a Local Limited  Partnership will be able to sell it's Housing Complex.  Even if
it does so, there can be no assurance that any significant  amounts of cash will
be distributed to the Partnership.  Should such distributions occur, the Limited
Partners  will be  entitled  to  receive  distributions  equal to thier  capital
contributions  and their  return on  investment  (as defined on the  Partnership
Agreement) and the General  Partners would then be entitled to receive  proceeds
equal to thier capital contributions from the remainder.  Any additiomal Sale or
refinancing  proceeds  will  be  distributed  95% to the  Limited  Partners  (in
porportion to their respective investments) and 5% to the General Partners.

As of March 31, 2006, 24 of the 27 Housing  Complexes have met their  compliance
requirements.  In the coming  years,  the  Partnership  will have  satisfied the
compliance  phase for each of its  properties  and will begin  preparing for the
next phase - liquidation of the properties.

                                       11

<PAGE>

Item 2.  Properties

Through its investments in Local Limited  Partnerships,  the  Partnership  holds
indirect  ownership  interests in the Housing  Complexes.  The  following  table
reflects the status of the twenty-seven Housing Complexes as of the dates or for
the periods indicated:

                                       12
<PAGE>
<TABLE>
<CAPTION>
                                                          ---------------------------  ---------------------------------------------
                                                              As of March 31, 2006                 As of December 31, 2005
                                                          ---------------------------  ---------------------------------------------
                                                          Partnership's    Amount of                      Estimated       Mortgage
                                                         Total Investment Investment   Number            Aggregate Low   Balances of
   Local Limited                                         in Local Limited  Paid to      of             Income Housing  Local Limited
   Partnership Name    Location   General Partner Name     Partnership      Date       Units  Occupancy Tax Credits (1)  Partnership
------------------------------------------------------------------------------------------------------------------------------------
<S>               <C>           <C>                      <C>          <C>          <C>     <C>         <C>           <C>
Airport Road          Slidell,       Clifford E. Olsen,
Associates, Limited   Louisiana      Olsen Securities
                                     Corporation            $  334,000    $334,000     40         98%   $   695,000      $ 1,424,000

Am-Kent Associates,   Amite &        Olsen Securities
Ltd.                  Kentwood,      Corporation               232,000     232,000     32         97%       585,000        1,096,000
                      Louisiana

Arizona I Limited     Showlow,       Western States
Partnership           Arizona        Housing Corporation
                                     and Joe W. Roberts
                                     Company                   320,000     320,000     42        100%       617,000        1,458,000

Ashland Investment    Ashland,       Ronald D. Bettencourt     300,000     300,000     40        100%       666,000        1,355,000
Group, an Oregon      Oregon
Limited Partnership

Brantley Housing,     Brantley,      Thomas H. Cooksey and
Ltd.                  Alabama        Apartment Developers, Inc 108,000     108,000     19         89%       287,000          561,000

Brian's Village       Mannford,      Robert W. Green and
Apartments, an        Oklahoma       Emerald Development
Oklahoma Limited                     Co., Inc.                 176,000     176,000     28        100%       374,000          741,000
Partnership

Candleridge           Perry,         Eric A Sheldahl            93,000      93,000     23        100%       224,000          574,000
Apartments of Perry,  Iowa
L.P.

Candleridge           Runnells,      Eric A. Sheldahl
Apartments of         Iowa                                      58,000      58,000     15        100%       141,000          354,000
Runnells, L.P.
</TABLE>

                                       13
<PAGE>
<TABLE>
<CAPTION>
                                                            ----------------------------- -----------------------------------------
                                                                 As of March 31, 2006                 As of December 31, 2005
                                                            ----------------------------- -----------------------------------------
                                                              Partnership's   Amount of                    Estimated       Mortgage
                                                            Total Investment Investment   Number         Aggregate Low   Balances of
 Local Limited                                              in Local Limited   Paid to     of           Income Housing Local Limited
Partnership Name       Location     General Partner Name        Partnership       Date    Units Occupancy Tax Credits(1) Partnership
------------------------------------------------------------------------------------------------------------------------------------
<S>                 <C>              <C>                       <C>         <C>          <C>    <C>      <C>            <C>
Casa Allegre Limited   Las Vegas,        Western States
Partnership            New Mexico        Housing Corporation,
                                         ABO Corporation and
                                         Alan D. Nofsker           318,000     318,000    42      100%      635,000        1,319,000

Castroville Village,   Castroville,      Doublekaye Corp and
Ltd.                   Texas             Gary L. Kersch            165,000     165,000    40       95%      426,000          908,000

Cherokee Square, L.P.  Rogersville,      Douglas B. Parker and
                       Tennessee         Billy D. Cobb             202,000     202,000    31       94%      418,000          955,000

Divall Midland         Port Washington,  Gary J. DiVall
Associates Limited     Wisconsin
Partnership II                                                     234,000     234,000    32      100%      489,000        1,132,000

Eclectic Housing,      Eclectic,         Thomas H. Cooksey and
Ltd.                   Alabama           Apartment Developers,
                                         Inc.                       74,000      74,000    15      100%      216,000          391,000

Elizabeth Square       Raceland,         Olsen Securities Corp.
Associates, Ltd.       Louisiana                                   356,000     356,000    48      100%      748,000        1,429,000

Emory Capital, L.P.    Emory, Texas      1600 Capital Company,
                                         Inc.                       85,000      85,000    16       88%      175,000          362,000

Emory Manor, L.P.      Emory, Texas      1600 Capital Company,
                                         Inc.                      128,000     128,000    24      100%      206,000          541,000

Idalou Manor, L.P.     Idalou, Texas     1600 Capital Company,
                                         Inc.                      122,000     122,000    24      100%      290,000          606,000

Jefferson Capital,     Jefferson,        1600 Capital Company,
L.P.                   Texas             Inc.                      167,000     167,000    30       93%      269,000          700,000
</TABLE>

                                       14
<PAGE>
<TABLE>
<CAPTION>
                                                      ------------------------------ -----------------------------------------------
                                                           As of March 31, 2006                As of December 31, 2005
                                                      ------------------------------ -----------------------------------------------
                                                          Partnership's    Amount of                     Estimated         Mortgage
                                                        Total Investment  Investment                   Aggregate Low     Balances of
Local Limited                                           in Local Limited   Paid to Number of           Income Housing  Local Limited
Partnership Name       Location     General Partner Name   Partnership      Date    Units   Occupancy  Tax Credits (1)   Partnership
------------------------------------------------------------------------------------------------------------------------------------
<S>                  <C>         <C>                      <C>         <C>          <C>      <C>       <C>            <C>
Jefferson Manor, L.P.  Jefferson,   1600 Capital Company,
                       Texas        Inc.                     179,000       179,000     32        97%       362,000           748,000

Lakeview Limited       Beaver Dam,  Thomas G. Larso
Partnership            Wisconsin    William H. Larson,
                                    and Raymond L.
                                    Tetzlaff                 264,000       264,000     40        90%       528,000         1,214,000

Littlefield Manor,     Littlefield, 1600 Capital Company,
L.P.                   Texas        Inc.                     118,000       118,000     24        96%       280,000           582,000

Perry County Housing,  Uniontown,   Thomas H. Cooksey and
Ltd.                   Alabama      Apartment Developers,
                                    Inc.                      82,000        82,000     15        93%       215,000           429,000

Pine Hill Housing,     Pine Hill,   Thomas H. Cooksey and
Ltd.                   Alabama      Apartment Developers,
                                    Inc.                     105,000       105,000     19        95%       267,000           542,000

Rociada Partners, Ltd. Hereford,    Richard Lee (Rick)
                       Texas        Brown                    154,000       154,000     28       100%       316,000           714,000

Wadley Housing, Ltd.   Wadley,      Thomas H. Cooksey and
                       Alabama      Apartment Developers,
                                    Inc.                      76,000        76,000     15        60%       213,000           430,000

Whitewater Woods       Whitewater,  Thomas G. Larson,
Limited Partnership    Wisconsin    William H. Larson,
                                    and Raymond L.
                                    Tetzlaff                 301,000       301,000     40        80%       603,000         1,270,000

Willcox Investment     Willcox,     John P. Casper
Group, an Arizona      Arizona
Limited Partnership                                          245,000       245,000     30       100%       490,000         1,036,000
                                                         -----------    ----------  -----      -----   -----------       -----------
                                                         $ 4,996,000    $4,996,000    784        95%   $10,735,000       $22,871,000
                                                         ===========    ==========  =====      =====   ===========       ===========
</TABLE>
(1) Represents  aggregate total anticipated Low Income Housing Tax Credits to be
received  over the 10 year credit  period if the Housing  Complexes are retained
and rented in compliance  with credit rules for the 15-year  Compliance  Period.
Substantially  all of the  anticipated  Low Income Housing Tax Credits have been
received from the Local Limited Partnerships.  Accordingly, the Partnership does
not  anticipate  Low Income  Housing Tax Credits being  allocated to the Limited
Partners in the future.

                                       15
<PAGE>

<TABLE>
<CAPTION>
                                 --------------------------------------------------------------------------
                                                   For the Year Ended December 31, 2005
                                 -----------------------------------------    -----------------------------
                                                                                 Low Income Housing Tax
                                                                                  Credits Allocated to
        Partnership Name               Rental Income    Net Income/(Loss)              Partnership
-----------------------------------------------------------------------------------------------------------
<S>                                 <C>                   <C>                           <C>

Airport Road Associates, Limited           $ 207,000            $(32,000)                              99%
Partnership

Am-Kent Associates, Ltd.                     171,000             (55,000)                              99%

Arizona I Limited Partnership                187,000             (19,000)                              99%

Ashland Investment Group, an
Oregon Limited Partnership                   195,000             (44,000)                              99%

Brantley Housing, Ltd.                        75,000             (13,000)                              99%

Brian's Village Apartments, an
Oklahoma Limited Partnership                 127,000              (3,000)                              99%

Candleridge Apartments of
Perry, L.P.                                  126,000             (18,000)                              99%

Candleridge Apartments of
Runnells, L.P.                                98,000              (5,000)                              99%

Casa Allegre Limited Partnership             196,000             (13,000)                              99%

Castroville Village, Ltd.                    178,000             (10,000)                              99%

Cherokee Square, L.P.                        102,000             (22,000)                              99%

Divall Midland Associates
Limited Partnership II                       154,000             (15,000)                              99%

Eclectic Housing, Ltd.                        60,000               2,000                               99%

Elizabeth Square Associates,
Ltd.                                         185,000             (77,000)                              99%

Emory Capital, L.P.                           63,000              (3,000)                              99%

Emory Manor, L.P.                             90,000             (12,000)                              99%

Idalou Manor, L.P.                            97,000             (14,000)                              99%

Jefferson Capital, L.P.                      102,000             (16,000)                              99%

Jefferson Manor, L.P.                        106,000             (12,000)                              99%

Lakeview Limited Partnership                 169,000             (38,000)                              99%

Littlefield Manor, L.P.                       91,000             (15,000)                              99%
</TABLE>
                                       16
<PAGE>
<TABLE>
<CAPTION>
                                 -------------------------------------------------------------------------------------
                                                         For the Year Ended December 31, 2005
                                 -------------------------------------------------------------------------------------
                                                                                        Low Income Housing Tax Credits
   Partnership Name                         Rental Income            Net Income/(Loss)      Allocated to Partnership
---------------------------------------------------------------------------------------   ----------------------------
<S>                                   <C>                          <C>                             <C>
Perry County Housing, Ltd.                         66,000                     (14,000)                            99%

Pine Hill Housing, Ltd.                            69,000                     (17,000)                            99%

Rociada Partners, Ltd.                            157,000                     (19,000)                            99%

Wadley Housing, Ltd.                               59,000                     (14,000)                            99%

Whitewater Woods Limited
Partnership                                       185,000                     (15,000)                            99%

Willcox Investment Group, an
Arizona Limited Partnership                       155,000                     (16,000)                            99%
                                   -----------------------    -------------------------
                                               $3,470,000                   $(529,000)
                                   =======================    =========================
</TABLE>

                                       17
<PAGE>

Item 3.  Legal Proceedings

NONE.

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

NONE.

PART II.

Item 5. Market for Registrant's  Common Equity,  Related Stockholder Matters and
Issuer Purchases of Equity Securities

Item 5a.

(a)  The  Units  are not  traded on a public  exchange  but were sold  through a
     public offering.  It is not anticipated that any public market will develop
     for the  purchase  and sale of any  Units   and none exists.  Units  can be
     assigned  or  otherwise  transferred  only if certain  requirements  in the
     Partnership Agreement are satisfied.

(b)  At March 31,  2006,  there were 535 Limited  Partners  and 14  assignees of
     Units who were not admitted as Limited Partners.

(c)  The Partnership was not designed to provide cash  distributions  to Limited
     Partners in  circumstances  other than  refinancing  or  disposition of its
     investments in Local Limited Partnerships.  Any such distributions would be
     made in accordance with the terms of the Partnership Agreement.

(d)  No securities are authorized for issuance by the  Partnership  under equity
     compensation plans.

(e)  No unregistered  securities  were sold by the  Partnership  during the year
     ended March 31, 2006.

Item 5b. Use of Proceeds

NOT APPLICABLE

Item 5c.  Purchases of Equity Securities by the Issuer and Affiliated Purchasers

NONE

                                       18
<PAGE>

Item 6.  Selected Financial Data

Selected balance sheet information for the Partnership is as follows:
<TABLE>
<CAPTION>
                                                           March 31,
                       --------------------------------------------------------------------------------
                             2006            2005             2004            2003            2002
                         --------------   ------------    -------------   -------------   -------------
<S>                   <C>              <C>              <C>            <C>             <C>
ASSETS
Cash and cash
equivalents            $        83,339  $      83,245   $      101,711  $      113,943  $      127,554
Investments in Local
   Limited
   Partnerships, net                 -              -                -         308,868         418,246
                         --------------   ------------    -------------   -------------   -------------
                       $        83,339  $      83,245   $      101,711  $      422,811  $      545,800
                         ==============   ============    =============   =============   =============
LIABILITIES
Accrued fees and
   expenses due to
   General Partner
   and affiliates      $     2,058,634  $   1,900,629   $    1,758,534  $    1,613,741  $    1,473,564

PARTNERS' DEFICIT          (1,975,295)    (1,817,384)      (1,656,823)     (1,190,930)       (927,764)
                         --------------   ------------    -------------   -------------   -------------
                       $        83,339  $      83,245   $      101,711  $      422,811  $      545,800
                         ==============   ============    =============   =============   =============
</TABLE>

                                       19
<PAGE>
Selected  results of  operations,  cash  flows,  and other  information  for the
Partnership are as follows:
<TABLE>
<CAPTION>
                                                 For the Years Ended
                                                      March 31,
                            --------------------------------------------------------------
                               2006         2005        2004         2003          2002
                            -----------  -----------  ----------   ----------    ---------
<S>                      <C>          <C>          <C>          <C>           <C>
Loss from operations
(Note 1)                  $  (157,911) $  (160,561) $ (426,672)  $ (167,722)   $ (163,302)
Equity in loss from
   Local Limited
   Partnerships                     -            -     (39,221)     (95,444)     (188,049)
                            -----------  -----------  ----------   ---------- ------------
Net loss                  $  (157,911) $  (160,561) $ (465,893)  $ (263,166)   $ (351,351)
                            ===========  ===========  ==========   ==========    =========
Net loss allocated to:
   General Partner        $    (1,579) $    (1,605) $   (4,659)  $   (2,632)   $   (3,514)
                            ===========  ===========  ==========   ==========    =========
   Limited Partners       $  (156,332) $  (158,956) $ (461,234)  $ (260,534)   $ (347,837)
                            ===========  ===========  ==========   ==========   ==========
Net loss per Limited
   Partner unit           $    (22.33) $    (22.71) $   (65.89)  $   (37.22)   $   (49.69)
                            ===========  ===========  ==========   ==========   ===========
Outstanding weighted
   Limited Partner units        7,000        7,000       7,000        7,000         7,000
                            ===========  ===========  ==========   ==========    =========
</TABLE>
Note 1 - Loss from  operations  for the year  ended  March 31,  2004  includes a
charge for impairment losses on investments in limited partnerships of $256,646.
(See Note 2 to the audited financial statements.)
<TABLE>
<CAPTION>
                                               For the Years Ended
                                                    March 31,
                          ---------------------------------------------------------------
                             2006         2005         2004         2003         2002
                          -----------  -----------  -----------   ----------   ----------
<S>                    <C>          <C>          <C>          <C>           <C>
Net cash provided by
 (used in):
   Operating
      activities        $         94 $   (18,466) $   (13,650) $   (15,961)  $  (16,958)
   Investing
      activities                   -           -        1,418        2,350        7,886
                          -----------  -----------  -----------   ----------   ----------
Net change in cash
  and cash equivalents            94     (18,466)     (12,232)     (13,611)      (9,072)

Cash and cash
  equivalents,
  beginning of period         83,245      101,711      113,943      127,554      136,626
                          -----------  -----------  -----------   ----------   ----------
Cash and cash
  equivalents, end of
  period                $     83,339 $     83,245 $    101,711  $   113,943  $   127,554
                          ===========  ===========  ===========   ==========   ==========
</TABLE>

Low Income  Housing  Tax  Credits  per Unit were as follows  for the years ended
December 31:
<TABLE>
<CAPTION>
                             2005         2004          2003             2002              2001
                          -----------  -----------   ------------   ---------------    -------------
<S>                    <C>          <C>           <C>            <C>                <C>
Federal                 $          1 $          6  $          10  $             21   $           54
State                              -            -              -                 -                -
                          -----------  -----------   ------------   ---------------    -------------
Total                   $          1 $          6  $          10  $             21   $           54
                          ===========  ===========   ============   ===============    =============
</TABLE>

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operation
                                       20
<PAGE>
Forward Looking Statements

With the exception of the  discussion  regarding  historical  information,  this
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  and other  discussions  elsewhere in this Form 10-K contain forward
looking statements. Such statements are based on current expectations subject to
uncertainties  and other  factors which may involve known and unknown risks that
could  cause  actual  results  of  operations  to differ  materially  from those
projected or implied. Further, certain forward-looking statements are based upon
assumptions about future events which may not prove to be accurate.

Risks and uncertainties  inherent in forward looking statements include, but are
not  limited  to,  our  future  cash  flows and  ability  to  obtain  sufficient
financing, level of operating expenses, conditions in the Low Income Housing Tax
Credit property market and the economy in general, as well as legal proceedings.
Historical  results are not necessarily  indicative of the operating results for
any future period.

Subsequent  written and oral  forward  looking  statements  attributable  to the
Partnership  or persons  acting on its behalf are  expressly  qualified in their
entirety by  cautionary  statements in this Form 10-K and in other reports filed
with the Securities and Exchange Commission.  The following discussion should be
read in conjunction with the Financial Statements and the Notes thereto included
elsewhere in this filing.

Critical Accounting Policies and Certain Risks and Uncertainties

The  Partnership  believes  that the  following  discussion  addresses  the most
significant  accounting  policies,  which are the most  critical to aid in fully
understanding and evaluating the Partnership's  reported financial results,  and
certain of the Partnership's risks and uncertainties.

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 the  reported  amounts of revenues and expenses
during the reporting  period.  Actual results could materially differ from those
estimates.

Method of Accounting for Investments in Local Limited Partnerships

The Partnership accounts for its investments in Local Limited Partnerships using
the equity method of accounting,  whereby the Partnership adjusts its investment
balance for its share of the Local Limited  Partnerships'  results of operations
and for any  contributions  made and  distributions  received.  The  Partnership
reviews the  carrying  amount of an  individual  investment  in a Local  Limited
Partnership for possible  impairment whenever events or changes in circumstances
indicate that the carrying  amount of such  investment  may not be  recoverable.
Recoverability  of such investment is measured by the estimated value derived by
management,  generally  consisting of the sum of the remaining future Low Income
Housing  Tax  Credits  estimated  to be  allocable  to the  Partnership  and the
estimated  residual value to the Partnership.  If an investment is considered to
be impaired, the Partnership reduces the carrying value of its investment in any
such Local Limited  Partnership.  The  accounting  policies of the Local Limited
Partnerships,  generally,  are  expected  to be  consistent  with  those  of the
Partnership.  Costs incurred by the Partnership in acquiring the investments are
capitalized  as part of the investment  account and are being  amortized over 30
years. (See notes 2 and 3 to the financial statements)

"Equity in losses of Local  Limited  Partnerships"  for each year ended March 31
have been recorded by the Partnership  based on nine months of reported  results
provided by the Local Limited  Partnerships  for each year ended December 31 and
on  three  months  of  results  estimated  by  management  of  the  Partnership.
Management's  estimate  for the  three-month  period is based on  either  actual
unaudited  results  reported by the Local  Limited  Partnerships  or  historical
trends in the operations of the Local Limited Partnerships. In subsequent annual
financial  statements,  upon receiving the actual annual results reported by the
Local Limited  Partnerships,  management reverses its prior estimate and records
the actual results reported by the Local Limited Partnerships.  Equity in losses
from  the  Local  Limited  Partnerships  allocated  to the  Partnership  are not
recognized to the extent that the  investment  balance  would be adjusted  below
zero.  As soon as the  investment  balance  reaches  zero,  amortization  of the
related  costs of acquiring  the  investment  are  accelerated  to the extent of
losses available.
                                       21
<PAGE>
Distributions  received from the Local Limited Partnerships are accounted for as
a  reduction  of  the  investment  balance.  Distributions  received  after  the
investment has reached zero are recognized as distribution  income. If the Local
Limited  Partnerships  report net income in future years,  the Partnership  will
resume applying the equity method only after its share of such net income equals
the share of net losses not  recognized  during the  period(s) the equity method
was suspended.

Income Taxes

No provision for income taxes has been  recorded in the financial  statements as
any  liabilities  and or benefits  for income  taxes flow to the partners of the
Partnership and are their obligations and or benefits.  For income tax purposes,
the Partnership reports on a calendar year basis.

Certain Risks and Uncertainties

See item 1A for discussion of risks regarding the Partnership.

Substantially  all of the Low Income Housing Credits  anticipated to be realized
from the Local Limited Partnerships have been realized. The Partnership does not
anticipate  being  allocated a significant  amount of Low Income Housing Credits
from the Local  Limited  Partnerships  in the  future.  Until the Local  Limited
Partnerships  have completed the 15 year Low Income  Housing  Credit  compliance
period risks exist for potential recapture of prior Low Income Housing Credits.

To date, certain Local Limited Partnerships have incurred significant  operating
losses and have working capital  deficiencies.  In the event these Local Limited
Partnerships continue to incur significant operating losses,  additional capital
contributions  by the  Partnership  and/or  the  Local  General  Partner  may be
required  to sustain  the  operations  of such Local  Limited  Partnerships.  If
additional  capital  contributions  are not made  when  they are  required,  the
Partnership's  investment in certain of such Local Limited Partnerships could be
lost,  and the loss and recapture of the related Low Income  Housing Tax Credits
could occur.

Anticipated  future and  existing  cash  resources  of the  Partnership  are not
sufficient   to  pay  existing   liabilities   of  the   Partnership.   However,
substantially all of the existing  liabilities of the Partnership are payable to
the General  Partner and/or its  affiliates.  Though the amounts  payable to the
General Partner and/or its affiliates are contractually  currently payable,  the
Partnership  anticipates that the General Partner and/or its affiliates will not
require the payment of these contractual  obligations until capital reserves are
in excess of the aggregate of then  existing  contractual  obligations  and then
anticipated future foreseeable  obligations of the Partnership.  The Partnership
would be adversely  affected  should the General  Partner  and/or its affiliates
demand current  payment of the existing  contractual  obligations and or suspend
services for this or any other reason.

Financial Condition

The  Partnership's  assets at March 31, 2006  consisted  primarily of $83,000 in
cash. Liabilities at March 31, 2006 primarily consisted of $2,040,000 of accrued
annual  management fees due to the General Partner and $18,000 advance payables.
(See "Future Contractual Cash Obligations" below.)

Results of Operations

Year  Ended  March  31,  2006  Compared  to  Year  Ended  March  31,  2005.  The
Partnership's  net  loss for the  year  ended  March  31,  2006 was  $(158,000),
reflecting a decrease of $3,000 from the net loss experienced for the year ended
March 31,  2005 of  $(161,000).  The  decrease  in net loss is due to the $3,000
decrease in other expenses,  the $4,000 increase in reporting fee income, $1,000
increase in distribution  income along with the $(5,000)  increase in accounting
fees.

Year  Ended  March  31,  2005  Compared  to  Year  Ended  March  31,  2004.  The
Partnership's  net  loss for the  year  ended  March  31,  2005 was  $(161,000),
reflecting  a decrease of $305,000  from the net loss  experienced  for the year
ended March 31, 2004 of $(466,000). The decrease in net loss is primarily due to
the  decrease in loss from  operations  of $266,000 for the year ended March 31,
2005  compared  to the year ended  March 31,  2004.  The  decrease  in loss from
operations was primarily  caused by a $257,000  decrease in impairment loss. The
impairment loss is due to the fact that the net investment  balance exceeded the
remaining tax credits along with any residual value in two limited  partnerships
for the year  ended  March  31,  2004.  Along  with a  decrease  of  $11,000  in
amortization  offset by a $(2,000)  increase in accounting  and other  operating
expenses.  In addition there was a decrease in the equity in losses from limited
partnerships  which decreased by $39,000 to $0 for the year ended March 31, 2005
from $(39,000) for the year ended March 31, 2004.

                                       22
<PAGE>
This  decrease was a result of the  Partnership  not  recognizing  losses of the
Local  Limited   Partnerships.   The   investments  in  all  the  Local  Limited
Partnerships had reached $0 at March 31, 2004. Since the Partnership's liability
with respect to its  investments is limited,  losses in excess of investment are
not recognized.

Liquidity and Capital Resources

Year Ended  March 31,  2006  Compared  to Year Ended  March 31,  2005.  Net cash
provided during the year ended March 31, 2006 was $100 compared to net cash used
for the year ended March 31, 2005 of  $(18,000).  The  decrease in cash used was
due  primarily  to an increase  in change in accrued  fees and  expenses  due to
general partner and affiliates of approximately  $16,000. The remaining decrease
was due to a $2,000 decrease in net loss.

Year Ended March 31, 2005  Compared to Year Ended March 31, 2004.  Net cash used
during the year ended  March 31, 2005 was  $(18,000),  compared to net cash used
for the year ended March 31, 2004 of  $(12,000).  The  increase in cash used was
due  primarily to an increase in cash used in operating  activities  of $(5,000)
along with a $(1,000) decrease of cash provided by investing activities.

During the years ended March 31, 2006, 2005 and 2004,  accrued  payables,  which
consist  primarily of related party  management fees due to the General Partner,
increased by $158,000, $142,000 and $145,000,  respectively. The General Partner
does not  anticipate  that  these  accrued  fees will be paid until such time as
capital   reserves  are  in  excess  of  future   foreseeable   working  capital
requirements of the Partnership.

The Partnership  expects its future cash flows,  together with its net available
assets at March 31, 2006, to be  sufficient  to meet all  currently  foreseeable
future cash  requirements.  This  excludes  amounts  owed to  Associates  by the
Partnership disclosed below.

Future Contractual Cash Obligations

The following table  summarizes our future  contractual  cash  obligations as of
March 31, 2006:
<TABLE>
<CAPTION>
                                       2007        2008        2009       2010       2011      Thereafter    Total
                                    -----------  ---------   ---------  ---------  ---------   ----------  -----------
<S>                              <C>          <C>         <C>        <C>        <C>         <C>         <C>
Asset Management Fees (1)         $  2,185,209 $  144,902  $  144,902 $  144,902 $  144,902  $ 4,926,668 $  7,691,485
Capital Contributions Payable to
   Local Limited Partnerships                -          -           -          -          -            -            -
                                    -----------  ---------   ---------  ---------  ---------   ----------  -----------
   Total contractual cash
   obligations                    $  2,185,209 $  144,902  $  144,902 $  144,902 $  144,902  $ 4,926,668 $  7,691,485
                                    ===========  =========   =========  =========  =========   ==========  ===========
</TABLE>
(1)  Asset  Management  Fees  are  payable  annually  until  termination  of the
     Partnership, which is to occur no later than 2045. The estimate of the fees
     payable included herein assumes the retention of the Partnership's interest
     in all Housing Complexes until 2045.  Amounts due to the General Partner as
     of March 31,  2006 have  been  included  in the 2007  column.  The  General
     Partner does not anticipate that these fees will be paid until such time as
     capital reserves are in excess of the aggregate of the existing contractual
     obligations  and the  anticipated  future  foreseeable  obligations  of the
     Partnership.


For additional  information regarding asset management fees see Note 3 to
the financial statements included elsewhere herein.

Off-Balance Sheet Arrangements

The Partnership has no off-balance sheet arrangements.

                                       23
<PAGE>
Exit Strategy

See item 1A for information in this regard

Impact of New Accounting Pronouncements

The Partnership adopted FASB  Interpretation No. 46 - Revised,  Consolidation of
Variable  Interest Entities  ("FIN46R").  FIN 46R provides guidance as to when a
company  should  include the assets,  liabilities,  and activities of a variable
interest entity ("VIE") in its financial  statements,  and when a company should
disclose  information  about  its  relationship  with  a VIE.  A VIE is a  legal
structure  used  to  conduct  activities  or  hold  assets,  and a VIE  must  be
consolidated  by a company if it is the  primary  beneficiary  because a primary
beneficiary  absorbs the majority of the entity's expected losses,  the majority
of the expected residual returns, or both.

Under FIN 46R, the Local Limited  Partnerships in which the Partnership  invests
are VIEs.  However,  the Partnership does not consolidate its interests in these
VIE's  under  FIN46R,   as  the   Partnership  is  not  considered  the  primary
beneficiary.  Rather,  the  Partnership  currently  records  the  amount  of the
investment in the Local Limited Housing  Partnerships as an asset in the balance
sheet, and recognizes its share of Local Limited  Partnership  income or loss in
the statement of operations. (See "Method of Accounting for Investments in Local
Limited Partnerships" above.)

The Partnership's balance in its investment in Local Limited Partnerships,  plus
the risk of recapture of Low Income Housing Tax Credits previously recognized on
these  investments,  represents its maximum exposure to loss. The  Partnership's
exposure to loss is mitigated by the condition and financial  performance of the
underlying  Housing  Complexes,  as well as the  strength  of the Local  General
Partners and their guarantee against credit recapture.

In May 2005, the FASB issued Statement of Financial Accounting Standards No. 154
(SFAS 154),  "Accounting  Changes and Error Corrections" which provides guidance
on the  accounting  for and  reporting of accounting  changes and  correction of
errors.  This  statement  changes the  requirements  for the  accounting for and
reporting  of a change in  accounting  principle  and  applies to all  voluntary
changes in  accounting  principle.  It also  applies to changes  required  by an
accounting pronouncement in the unusual instance that the pronouncement does not
include  specific  transition  provisions.   This  statement  is  effective  for
accounting  changes and  corrections  of errors made in fiscal  years  beginning
after December 15, 2005. The  Partnership  does not anticipate a material effect
due to the adoption of this statement.

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk

NOT APPLICABLE

Item 8.  Financial Statements and Supplementary Data

                                       24
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Partners
WNC Housing Tax Credit Fund II, L.P.

     We have audited the  accompanying  balance sheets of WNC Housing Tax Credit
Fund II, L.P. (a California  Limited  Partnership) (the Partnership) as of March
31, 2006 and 2005, and the related  statements of operations,  partners' deficit
and cash flows for the periods  ended March 31, 2006,  2005 and 2004.  Our audit
also included the financial  statement  schedules  listed in Form 10-K, Part IV,
Item 15(a)(2).  These financial statements and the financial statement schedules
are the responsibility of the Partnership's management. Our responsibility is to
express  an  opinion  on these  financial  statements  and  financial  statement
schedules based on our audits.

     We  conducted  our audits in  accordance  with the  standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial statements are free of material  misstatement.  The Partnership is not
required  to have,  nor were we engaged  to  perform,  an audit of its  internal
control over financial reporting.  Our audit included  consideration of internal
control over financial  reporting as a basis for designing audit procedures that
are appropriate in the  circumstances,  but not for the purpose of expressing an
opinion  on  the  effectiveness  of  the  Partnership's  internal  control  over
financial  reporting.  Accordingly,  we express no such  opinion.  An audit also
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial  statements,  assessing the  accounting  principles
used and  significant  estimates made by  management,  as well as evaluating the
overall financial statement  presentation.  We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion,  the financial statements referred to above present fairly,
in all material respects,  the financial position of WNC Housing Tax Credit Fund
II, L.P. (a California  Limited  Partnership) as of March 31, 2006 and 2005, and
the results of its operations and its cash flows for the periods ended March 31,
2006, 2005 and 2004 in conformity with accounting  principles generally accepted
in the United States of America.  Also, in our opinion, such financial statement
schedules,  when considered in relation to the basic financial  statements taken
as a whole,  present fairly in all material respects,  the information set forth
therein.




/s/ Reznick Group, PC
---------------------

Bethesda, Maryland
September 15, 2006

<PAGE>

                      WNC HOUSING TAX CREDIT FUND II, L.P.
                       (A California Limited Partnership)

                                 BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                           March 31,
                                                                 ------------------------------
                                                                     2006             2005
                                                                 --------------   -------------
<S>                                                           <C>              <C>
ASSETS

Cash and cash equivalents                                      $        83,339  $       83,245
Investments in Local Limited  Partnerships,
  net (Notes 2 and 3)                                                        -               -
                                                                 --------------   -------------
                                                               $        83,339  $       83,245
                                                                 ==============   =============
LIABILITIES AND PARTNERS' DEFICIT

Liabilities:
   Accrued fees and expenses due to General Partner and
     affiliates (Note 3)                                       $     2,058,634  $    1,900,629
                                                                 --------------   -------------
Partners' deficit:
    General Partner                                                    (79,295)        (77,716)
    Limited Partners (12,000 units authorized; 7,000 units
     issued and outstanding)                                        (1,896,000)     (1,739,668)
                                                                 --------------   -------------
      Total partners' deficit                                       (1,975,295)     (1,817,384)
                                                                 --------------   -------------
                                                               $        83,339  $       83,245
                                                                 ==============   =============
</TABLE>
                 See accompanying notes to financial statements
                                       26
<PAGE>
                      WNC HOUSING TAX CREDIT FUND II, L.P.
                       (A California Limited Partnership)

                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                         For the Years Ended
                                                              March 31,
                                           ------------------------------------------------
                                               2006              2005             2004
                                           --------------    -------------    -------------
<S>                                     <C>                <C>             <C>
Interest income                          $           401    $         283   $          534
Distribution income                               16,488           15,528           15,589
Reporting fee income                               4,080                -                -
                                           --------------    -------------    -------------
    Total income                                  20,969           15,811           16,123
                                           --------------    -------------    -------------
Operating expenses:
   Amortization (Notes 2 and 3)                        -                -           11,583
   Asset management fees (Note 3)                144,901          144,902          144,902
   Impairment loss (Note 2)                            -                -          256,646
   Accounting fees                                27,042           21,550           19,176
   Other                                           6,937            9,920           10,488
                                           --------------    -------------    -------------
    Total operating expenses                     178,880          176,372          442,795
                                           --------------    -------------    -------------
Loss from operations                            (157,911)        (160,561)        (426,672)

Equity in losses of Local  Limited
  Partnerships (Note 2)                                -                -          (39,221)
                                           --------------    -------------    -------------
Net loss                                 $      (157,911)   $    (160,561)  $     (465,893)
                                           ==============    =============    =============
Net loss allocated to:
   General Partner                       $        (1,579)   $      (1,605)  $       (4,659)
                                           ==============    =============    =============
   Limited Partners                      $      (156,332)   $    (158,956)  $     (461,234)
                                           ==============    =============    =============
Net loss per Partnership unit            $        (22.33)   $      (22.71)  $       (65.89)
                                           ==============    =============    =============
Outstanding weighted
  Partnership units                                7,000            7,000            7,000
                                           ==============    =============    =============
</TABLE>

                 See accompanying notes to financial statements
                                       27
<PAGE>
                      WNC HOUSING TAX CREDIT FUND II, L.P.
                       (A California Limited Partnership)

                         STATEMENTS OF PARTNERS' DEFICIT

                For The Years Ended March 31, 2006, 2005 and 2004
<TABLE>
<CAPTION>
                                                               General             Limited             Total
                                                               Partner             Partners
                                                            ---------------     ---------------    ---------------
<S>                                                      <C>                 <C>                <C>
Partners' deficit at March 31, 2003                       $       (71,452)    $    (1,119,478)   $    (1,190,930)

Net loss                                                           (4,659)           (461,234)          (465,893)
                                                            ---------------     ---------------    ---------------
Partners' deficit at March 31, 2004                               (76,111)         (1,580,712)        (1,656,823)

Net loss                                                           (1,605)           (158,956)          (160,561)
                                                            ---------------     ---------------    ---------------
Partners' deficit at March 31, 2005                               (77,716)         (1,739,668)        (1,817,384)

Net loss                                                           (1,579)           (156,332)          (157,911)
                                                            ---------------     ---------------    ---------------
Partners' deficit at March 31, 2006                       $       (79,295)    $    (1,896,000)   $    (1,975,295)
                                                            ===============     ===============    ===============
</TABLE>

                 See accompanying notes to financial statements
                                       28
<PAGE>
                      WNC HOUSING TAX CREDIT FUND II, L.P.
                       (A California Limited Partnership)

                            STATEMENTS OF CASH FLOWS

                For The Years Ended March 31, 2006, 2005 and 2004
<TABLE>
<CAPTION>
                                                        For the Years Ended March 31
                                               ------------------------------------------------
                                                   2006             2005              2004
                                               -------------    --------------    -------------
<S>                                         <C>              <C>                <C>
Cash flows from operating activities:
   Net loss                                  $     (157,911)  $      (160,561)   $    (465,893)
   Adjustments to reconcile net loss to
     net cash used in operating
     activities:
         Amortization                                     -                 -           11,583
         Equity in losses of Local Limited
          Partnerships                                    -                 -           39,221
         Impairment loss                                  -                 -          256,646
         Increase in accrued fees and
          expenses due to General Partner
          and affiliates                            158,005           142,095          144,793
                                               -------------    --------------    -------------
Net cash provided by (used in) operating
activities                                               94           (18,466)         (13,650)
                                               -------------    --------------    -------------
Cash flows from investing activities:
   Distributions from Local
     Limited Partnerships                                 -                -             1,418
                                               -------------    --------------    -------------
Net increase (decrease) in cash and
  cash equivalents                                       94           (18,466)         (12,232)

Cash and cash equivalents, beginning of
   period                                            83,245           101,711          113,943
                                               -------------    --------------    -------------
Cash and cash equivalents, end of period     $       83,339   $        83,245    $     101,711
                                               =============    ==============    =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
   INFORMATION

     Taxes paid                              $          800   $           800   $          800
                                               =============    ==============    =============
</TABLE>

                 See accompanying notes to financial statements
                                       29
<PAGE>
                      WNC HOUSING TAX CREDIT FUND II, L.P.
                       (A California Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                For The Years Ended March 31, 2006, 2005 and 2004

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------

Organization
------------

WNC Housing Tax Credit Fund II,  L.P.,  a California  Limited  Partnership  (the
"Partnership"),  was formed on January  19,  1990 under the laws of the State of
California.  The  Partnership  was formed to invest  primarily in other  limited
partnerships   (the  "Local  Limited   Partnerships")   which  own  and  operate
multifamily  housing  complexes (the "Housing  Complexes") that are eligible for
Low Income Housing Tax Credits.  The local general  partners (the "Local General
Partners")  of  each  Local  Limited   Partnership  retain   responsibility  for
maintaining, operating and managing the Housing Complex.

The general partner is WNC Financial Group, L.P., a California  partnership (the
"General Partner") of the Partnership. WNC & Associates, Inc. ("Associates") and
Wilfred N. Cooper Sr. are the general partners of WNC Financial Group,  L.P. The
chairman and president of Associates own  substantially  all of the  outstanding
stock of  Associates.  The business of the  Partnership  is conducted  primarily
through Associates, as the General Partner and the Partnership have no employees
of their own.

The Partnership  shall continue in full force and effect until December 31, 2045
unless  terminated  prior to that date pursuant to the partnership  agreement or
law.

The financial  statements  include only activity relating to the business of the
Partnership,  and do not give  effect to any assets that the  partners  may have
outside of their interests in the Partnership, or to any obligations,  including
income taxes, of the partners.

The  Partnership  Agreement  authorized the sale of up to 12,000 units at $1,000
per Unit  ("Units").  The  offering of Units  concluded  on December 31, 1992 at
which time 7,000 Units  representing  subscriptions  in the amount of $7,000,000
had been accepted.  The General  Partner has a 1% interest in operating  profits
and losses,  taxable income and losses,  in cash available for distribution from
the Partnership and tax credits of the Partnership.  The investors (the "Limited
Partners") in the Partnership will be allocated the remaining 99% of these items
in proportion to their respective investments.

Risks and Uncertainties
-----------------------

An investment in the  Partnership  and the  Partnership's  investments  in Local
Limited  Partnerships  and their Housing  Complexes are subject to risks.  These
risks may impact the tax benefits of an investment in the  Partnership,  and the
amount of proceeds  available for distribution to the Limited Partners,  if any,
on liquidation of the Partnership's investments. Some of those risks include the
following:
                                       30
<PAGE>
                      WNC HOUSING TAX CREDIT FUND II, L.P.
                       (A California Limited Partnership)

                     NOTES TO FINANCIAL STATEMENTS-CONTINUED

                For The Years Ended March 31, 2006, 2005 and 2004

NOTE 1 - ORGANIZATION AND  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
--------------------------------------------------------------------------------

The Low Income Housing Tax Credit rules are extremely complicated. Noncompliance
with these  rules  results in the loss of future Low Income  Housing Tax Credits
and the fractional recapture of Low Income Housing Tax Credits already taken. In
most  cases  the  annual  amount  of Low  Income  Housing  Tax  Credits  that an
individual  can use is limited to the tax  liability  due on the  person's  last
$25,000 of taxable income. The Local Limited  Partnerships may be unable to sell
the Housing Complexes at a price which would result in the Partnership realizing
cash   distributions  or  proceeds  from  the  transaction.   Accordingly,   the
Partnership  may be unable to distribute any cash to its Limited  Partners.  Low
Income  Housing Tax Credits may be the only  benefit from an  investment  in the
Partnership.

The Partnership has invested in a limited number of Local Limited  Partnerships.
Such  limited  diversity  means that the  results of  operation  of each  single
Housing  Complex  will have a greater  impact on the  Partnership.  With limited
diversity,   poor   performance   of  one  Housing   Complex  could  impair  the
Partnership's ability to satisfy its investment objectives. Each Housing Complex
is subject to mortgage  indebtedness.  If a Local Limited  Partnership failed to
pay its  mortgage,  it  could  lose  its  Housing  Complex  in  foreclosure.  If
foreclosure  were to occur during the first 15 years,  the loss of any remaining
Low Income  Housing Tax  Credits,  a  fractional  recapture  of prior Low Income
Housing Tax Credits,  and a loss of the Partnership's  investment in the Housing
Complex would occur. The Partnership is a limited partner or non-managing member
of each Local Limited Partnership.  Accordingly,  the Partnership will have very
limited rights with respect to management of the Local Limited Partnerships. The
Partnership  will  rely  totally  on the Local  General  Partners.  Neither  the
Partnership's  investments in Local Limited Partnerships,  nor the Local Limited
Partnerships'  investments in Housing Complexes, are readily marketable.  To the
extent  the  Housing  Complexes  receive   government   financing  or  operating
subsidies,  they  may be  subject  to  one  or  more  of  the  following  risks:
difficulties  in obtaining  tenants for the Housing  Complexes;  difficulties in
obtaining  rent  increases;  limitations on cash  distributions;  limitations on
sales or refinancing of Housing Complexes; limitations on transfers of interests
in Local Limited Partnerships; limitations on removal of Local General Partners;
limitations on subsidy programs; and possible changes in applicable regulations.
Uninsured casualties could result in loss of property and Low Income Housing Tax
Credits and recapture of Low Income Housing Tax Credits  previously  taken.  The
value of real estate is subject to risks from fluctuating  economic  conditions,
including employment rates, inflation,  tax, environmental,  land use and zoning
policies, supply and demand of similar properties,  and neighborhood conditions,
among others.

The  ability of Limited  Partners to claim tax losses  from the  Partnership  is
limited.  The IRS may audit the  Partnership or a Local Limited  Partnership and
challenge the tax treatment of tax items.  The amount of Low Income  Housing Tax
Credits and tax losses allocable to the Limited Partners could be reduced if the
IRS were  successful  in such a  challenge.  The  alternative  minimum tax could
reduce tax benefits from an investment in the  Partnership.  Changes in tax laws
could also impact the tax benefits from an investment in the Partnership  and/or
the value of the Housing Complexes.

Substantially  all of the Low  Income  Housing  Tax  Credits  anticipated  to be
realized from the Local Limited Partnerships have been realized. The Partnership
does not anticipate  being allocated a significant  amount of Low Income Housing
Tax Credits from the Local Limited  Partnerships in the future.  Until the Local
Limited  Partnerships  have  completed the 15 year Low Income Housing Tax Credit
compliance  period  risks  exist for  potential  recapture  of prior Low  Income
Housing Tax Credits.

No trading  market  for the Units  exists or is  expected  to  develop.  Limited
Partners  may be unable to sell  their  Units  except at a  discount  and should
consider their Units to be a long-term  investment.  Individual Limited Partners
will have no recourse if they disagree with actions  authorized by a vote of the
majority of Limited Partners.

Associates has agreed to continue providing  advances  sufficient enough to fund
the operations and working capital requirements of the Partnership through March
31, 2007, if the Partnership were to experience a working capital deficiency.

                                       31
<PAGE>
                      WNC HOUSING TAX CREDIT FUND II, L.P.
                       (A California Limited Partnership)

                     NOTES TO FINANCIAL STATEMENTS-CONTINUED

                For The Years Ended March 31, 2006, 2005 and 2004

NOTE 1 - ORGANIZATION  AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
--------------------------------------------------------------------------------

Anticipated  future and  existing  cash  resources  of the  Partnership  are not
sufficient   to  pay  existing   liabilities   of  the   Partnership.   However,
substantially all of the existing  liabilities of the Partnership are payable to
the General  Partner and/or its  affiliates.  Though the amounts  payable to the
General Partner and/or its affiliates are contractually  currently payable,  the
Partnership  anticipates that the General Partner and/or its affiliates will not
require the payment of these contractual  obligations until capital reserves are
in excess of the aggregate of then  existing  contractual  obligations  and then
anticipated future foreseeable  obligations of the Partnership.  The Partnership
would be adversely  affected  should the General  Partner  and/or its affiliates
demand current  payment of the existing  contractual  obligations and or suspend
services for this or any other reason.

Exit Strategy
-------------

The IRS  Compliance  Period for  low-income  housing  tax credit  properties  is
generally  15  years  following   construction  or  rehabilitation   completion.
Associates was one of the first in the industry to offer syndicated  investments
in Low Income Housing Tax Credits.  The initial  programs are  completing  their
compliance periods.

With that in mind,  the General  Partner is continuing its review of the Housing
Complexes,  with special emphasis on the more mature properties such as any that
have  satisfied  the IRS  compliance  requirements.  The review  considers  many
factors,  including  extended  use  requirements  (such as those due to mortgage
restrictions  or state  compliance  agreements),  the  condition  of the Housing
Complex,  and the tax  consequences to the Limited Partners from the sale of the
Housing Complex.

Upon  identifying  those  Housing  Complexes  with the highest  potential  for a
successful sale, refinancing or syndication,  the Partnership expects to proceed
with  efforts to  liquidate  them.  The  objective  is to  maximize  the Limited
Partners'  return  wherever   possible  and,   ultimately,   to  wind  down  the
Partnership.  Local Limited Partnership interests may be disposed of any time by
the  General  Partner  in its  discretion.  As of March  31,  2006,  no  Housing
Complexes have been selected for disposition.  While  liquidation of the Housing
Complexes that have met their compliance periods continues to be evaluated,  the
dissolution  of the  Partnership  was not  imminent  as of  March  31,  2006 and
therefore the Partnership continues to be accounted for as a going concern.

The  proceeds  from the  disposition  of any of the  Local  Limited  Partnership
properties  will be used  first  to pay  debts  and  other  obligations  per the
respective Local Limted Partnership Agreement.  Any remaining proceeds will then
be paid to the  Partnership.  The sale of a Housing  Complex  may be  subject to
other restrictions and obligations.  Accordingly, there can be no assurance that
a Local Limited  Partnership will be able to sell it's Housing Complex.  Even if
it does so, there can be no assurance that any significant  amounts of cash will
be distributed to the Partnership.  Should such distributions occur, the Limited
Partners  will be  entitled  to  receive  distributions  equal to thier  capital
contributions  and their  return on  investment  (as defined on the  Partnership
Agreement) and the General  Partners would then be entitled to receive  proceeds
equal to thier capital contributions from the remainder.  Any additiomal Sale or
refinancing  proceeds  will  be  distributed  95% to the  Limited  Partners  (in
porportion to their respective investments) and 5% to the General Partners.

As of March 31, 2006, 24 of the 27 Housing  Complexes have met their  compliance
requirements.  In the coming  years,  the  Partnership  will have  satisfied the
compliance  phase for each of its  properties  and will begin  preparing for the
next phase - liquidation of the properties.

Method of Accounting For Investments in Local Limited Partnerships
------------------------------------------------------------------

The Partnership accounts for its investments in Local Limited Partnerships using
the equity method of accounting,  whereby the Partnership adjusts its investment
balance for its share of the Local Limited  Partnerships'  results of operations
and for any  contributions  made and  distributions  received.  The  Partnership
reviews the  carrying  amount of an  individual  investment  in a Local  Limited

                                       32

<PAGE>

                      WNC HOUSING TAX CREDIT FUND II, L.P.
                       (A California Limited Partnership)

                     NOTES TO FINANCIAL STATEMENTS-CONTINUED

               For The Years Ended March 31, 2006, 2005 and 2004

NOTE 1 - ORGANIZATION  AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
-------------------------------------------------------------------------------

Partnership for possible  impairment whenever events or changes in circumstances
indicate that the carrying  amount of such  investment  may not be  recoverable.
Recoverability  of such investment is measured by the estimated value derived by
management,  generally  consisting of the sum of the remaining future Low Income
Housing  Tax  Credits  estimated  to be  allocable  to the  Partnership  and the
estimated  residual value to the Partnership.  If an investment is considered to
be impaired, the Partnership reduces the carrying value of its investment in any
such Local Limited  Partnership.  The  accounting  policies of the Local Limited
Partnerships,  generally,  are  expected  to be  consistent  with  those  of the
Partnership.  Costs incurred by the Partnership in acquiring the investments are
capitalized  as part of the investment  account and are being  amortized over 30
years. (see Notes 2 and 3)

"Equity in losses of Local  Limited  Partnerships"  for each year ended March 31
have been recorded by the Partnership  based on nine months of reported  result
provided by the Local Limited  Partnerships  for each year ended December 31 and
on  three  months  of  results  estimated  by  management  of  the  Partnership.
Management's  estimate  for the  three-month  period is based on  either  actual
unaudited  results  reported by the Local  Limited  Partnerships  or  historical
trends in the operations of the Local Limited Partnerships. In subsequent annual
financial  statements,  upon receiving the actual annual results reported by the
Local Limited  Partnerships,  management reverses its prior estimate and records
the actual results reported by the Local Limited Partnerships.  Equity in losses
from  the  Local  Limited  Partnerships  allocated  to the  Partnership  are not
recognized to the extent that the  investment  balance  would be adjusted  below
zero.  As soon as the  investment  balance  reaches  zero,  amortization  of the
related  costs of acquiring  the  investment  are  accelerated  to the extent of
losses  available  (see Note 3). If the Local  Limited  Partnerships  report net
income in future years,  the Partnership  will resume applying the equity method
only  after its share of such net  income  equals  the share of net  losses  not
recognized during the period(s) the equity method was suspended.

Distributions  received from the Local Limited Partnerships are accounted for as
a  reduction  of  the  investment  balance.  Distributions  received  after  the
investment has reached zero are recognized as distribution income.

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 the  reported  amounts of revenues and expenses
during the reporting  period.  Actual results could materially differ from those
estimates.

Cash and Cash Equivalents
-------------------------

The Partnership considers all highly liquid investments with original maturities
of three months or less when purchased to be cash  equivalents.  As of March 31,
2006 and 2005, the Partnership had no cash equivalents.

Net Loss Per Partnership Unit
-----------------------------

Net loss per Partnership  Unit is calculated  pursuant to Statement of Financial
Accounting  Standards No. 128, Earnings Per Share. Net loss per unit includes no
dilution and is computed by dividing loss  allocated to limited  partners by the
weighted average Partnership Units outstanding during the period. Calculation of
diluted net loss Partnership Unit is not required.

Income Taxes
------------

No provision  for income taxes has been recorded in the  accompanying  financial
statements as any  liabilities  and/or  benefits for income tax purposes flow to
the partners of the Partnership and are their obligations  and/or benefits.  For
income tax purposes, the Partnership reports on a calendar year basis.


                                       33
<PAGE>
                      WNC HOUSING TAX CREDIT FUND II, L.P.
                       (A California Limited Partnership)

                     NOTES TO FINANCIAL STATEMENTS-CONTINUED

               For The Years Ended March 31, 2006, 2005 and 2004

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
--------------------------------------------------------------------------------

Reclassifications
-----------------

Certain reclassifications have been made to the 2005 (which was previously filed
as unaudited)  and 2004  financial  statements  to be  consistent  with the 2006
presentation.

Revenue Recognition
-------------------

The  Partnership  is entitled to receive  reporting  fees from the Local Limited
Partnerships.  The  intent  of  the  reporting  fees  is  to  offset  (in  part)
administrative costs incurred by the Partnership in corresponding with the Local
Limited  Partnerships.  Due to the  uncertainty of the collection of these fees,
the Partnership recognizes reporting fees as collections are made.

Impact of New Accounting Pronouncements
---------------------------------------

The Partnership adopted FASB  Interpretation No. 46 - Revised,  Consolidation of
Variable  Interest Entities  ("FIN46R").  FIN 46R provides guidance as to when a
company  should  include the assets,  liabilities,  and activities of a variable
interest entity ("VIE") in its financial  statements,  and when a company should
disclose  information  about  its  relationship  with  a VIE.  A VIE is a  legal
structure  used  to  conduct  activities  or  hold  assets,  and a VIE  must  be
consolidated  by a company if it is the  primary  beneficiary  because a primary
beneficiary  absorbs the majority of the entity's expected losses,  the majority
of the expected  residual  returns,  or both.

Under FIN 46R, the Local Limited  Partnerships in which the Partnership  invests
are VIEs.  However,  the Partnership does not consolidate its interests in these
VIE's  under  FIN46R,   as  the   Partnership  is  not  considered  the  primary
beneficiary.  Rather,  the  Partnership  currently  records  the  amount  of the
investment in the Local Limited  Partnerships  as an asset in the balance sheet,
and  recognizes  its share of Local  Limited  Partnership  income or loss in the
statement of operations.

The Partnership's balance in its investment in Local Limited Partnerships,  plus
the risk of recapture of Low Income Housing Tax Credits previously recognized on
these  investments,  represents its maximum exposure to loss. The  Partnership's
exposure to loss is mitigated by the condition and financial  performance of the
underlying properties, as well as the strength of the Local General Partners and
their guarantee against credit recapture.

In May 2005, the FASB issued Statement of Financial Accounting Standards No. 154
(SFAS 154),  "Accounting  Changes and Error Corrections" which provides guidance
on the  accounting  for and  reporting of accounting  changes and  correction of
errors.  This  statement  changes the  requirements  for the  accounting for and
reporting  of a change in  accounting  principle  and  applies to all  voluntary
changes in  accounting  principle.  It also  applies to changes  required  by an
accounting pronouncement in the unusual instance that the pronouncement does not
include  specific  transition  provisions.   This  statement  is  effective  for
accounting  changes and  corrections  of errors made in fiscal  years  beginning
after December 15, 2005. The  Partnership  does not anticipate a material effect
due to the adoption of this statement.

NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS
--------------------------------------------------

As of the periods  presented,  the Partnership had acquired limited  partnership
interests  in 27 Local  Limited  Partnerships,  each of which  owns one  Housing
Complex  consisting of an aggregate of 784 apartment units. The respective Local
General  Partners  of the  Local  Limited  Partnerships  manage  the  day-to-day
operations  of the entities.  Significant  Local  Limited  Partnership  business
decisions, as defined, require the approval of the Partnership. The Partnership,
as a limited  partner,  is generally  entitled to 99%, as specified in the Local
Limited  Partnership  agreements,  of the operating profits and losses,  taxable
income and losses and tax credits of the Local Limited Partnerships.

The  Partnership's  investment  in Local  Limited  Partnerships  as shown in the
balance  sheets at March 31,  2006 and 2005 are  approximately  $3,924,000,  and
$3,386,000, respectively, greater than the Partnership's equity at the preceding
December  31 as shown in the  Local  Limited  Partnerships'  combined  financial
statements  presented  below.
                                       34

<PAGE>
                      WNC HOUSING TAX CREDIT FUND II, L.P.
                       (A California Limited Partnership)

                     NOTES TO FINANCIAL STATEMENTS-CONTINUED

                For The Years Ended March 31, 2006, 2005 and 2004

NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, continued
-------------------------------------------------------------

This  difference  is primarily  due to unrecorded  losses,  as discussed  below,
acquisition,  selection  and  other  costs  related  to the  acquisition  of the
investments which have been capitalized in the Partnership's  investment account
and impairment  losses recorded in the  Partnership's  investment  account.  The
Partnership's investment is also lower than the Partnership's equity as shown in
the  Local  Limited  Partnership's  combined  financial  statements  due  to the
estimated  losses  recorded by the  Partnership for the three month period ended
March  31.

A loss in value from a Local Limited  Partnership other than a temporary decline
would be recorded as an impairment loss. Impairment is measured by comparing the
investment  carrying  amount to the sum of the total amount of the remaining Low
Income  Housing Tax  Credits  allocated  to the  Partnership  and the  estimated
residual  value of the  investment.  Accordingly,  the  Partnership  recorded an
impairment  loss of $0, $0, and $256,646  during the years ended March 31, 2006,
2005, and 2004, respectively.

At March 31, 2006 and 2005, the investment accounts  in all of the Local Limited
Partnerships had reached a zero balance.  Consequently, all of the Partnership's
estimate  of its share of losses for the years ended  March 31,  2006,  2005 and
2004 amounting to approximately $503,000,  $612,000 and $600,000,  respectively,
have not been  recognized.  As of March 31,  2006,  the  aggregate  share of net
losses not recognized by the Partnership amounted to $4,256,019.

The following is a summary of the equity method  activity of the  investments in
Local Limited Partnerships for the periods presented:
<TABLE>
<CAPTION>
                                                                           For the Years Ended March 31
                                                                 -------------------------------------------------
                                                                     2006             2005              2004
                                                                 --------------   --------------    --------------
<S>                                                           <C>              <C>               <C>
Investments per balance sheet, beginning of period             $             -  $             -   $        308,868
Equity in losses of  Local Limited Partnerships                              -                -            (39,221)
Impairment loss                                                              -                -           (256,646)
Distributions received from Local Limited Partnerships                       -                -             (1,418)
Amortization of paid acquisition fees and costs                              -                -            (11,583)
                                                                 --------------   --------------    --------------
Investments per balance sheet, end of period                   $             -  $             -   $              -
                                                                 ==============   ==============    ==============
</TABLE>

                                       35
<PAGE>
                      WNC HOUSING TAX CREDIT FUND II, L.P.
                       (A California Limited Partnership)

                     NOTES TO FINANCIAL STATEMENTS-CONTINUED

                For The Years Ended March 31, 2006, 2005 and 2004

NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, continued
-------------------------------------------------------------

The financial  information from the individual financial statements of the Local
Limited Partnerships include rental and interest subsidies. Rental subsidies are
included in total revenues and interest  subsidies are generally  netted against
interest expense.  Approximate combined condensed financial information from the
individual financial statements of the Local Limited Partnerships as of December
31 and for the years then ended is as follows:

                        COMBINED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                     2005               2004
                                                                                ---------------    ----------------
ASSETS
<S>                                                                          <C>                <C>
Buildings and improvements, net of accumulated
   depreciation as of December 31, 2005 and 2004 of
   $13,058,00 and $ 12,232,000,  respectively                                 $     16,559,000   $      17,270,000
Land                                                                                 1,399,000           1,362,000
Other assets                                                                         2,171,000           2,205,000
                                                                                ---------------    ----------------
                                                                              $     20,129,000   $      20,837,000
                                                                                ===============    ================
LIABILITIES

Mortgage loans payable                                                        $     22,871,000   $      23,013,000
Due to related parties                                                                 194,000             159,000
Other liabilities                                                                      398,000             439,000
                                                                                ---------------    ----------------
                                                                                    23,463,000          23,611,000
                                                                                ---------------    ----------------
PARTNERS' CAPITAL (DEFICIT)

WNC Housing Tax Credit Fund II, L.P.                                                (3,924,000)         (3,386,000)
Other partners                                                                         590,000             612,000
                                                                                ---------------    ----------------
                                                                                    (3,334,000)         (2,774,000)
                                                                                ---------------    ----------------
                                                                              $     20,129,000   $      20,837,000
                                                                                ===============    ================
</TABLE>
                                       36
<PAGE>
                      WNC HOUSING TAX CREDIT FUND II, L.P.
                       (A California Limited Partnership)

                     NOTES TO FINANCIAL STATEMENTS-CONTINUED

                For The Years Ended March 31, 2006, 2005 and 2004

NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, continued
-------------------------------------------------------------

                   COMBINED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                 2005               2004                 2003
                                                            ---------------    ----------------    -----------------
<S>                                                      <C>                <C>                 <C>
Revenues
                                                          $      3,582,000   $       3,461,000   $        3,333,000
                                                            ---------------    ----------------    -----------------
Expenses:
   Operating expenses                                            2,659,000           2,615,000            2,437,000
   Interest expense                                                625,000             631,000              642,000
   Depreciation and amortization                                   827,000             831,000              898,000
                                                            ---------------    ----------------    -----------------
         Total expenses                                          4,111,000           4,077,000            3,977,000
                                                            ---------------    ----------------    -----------------
Net loss                                                  $       (529,000)   $       (616,000)   $        (644,000)
                                                            ===============    ================    =================
Net loss allocable to the Partnership                     $       (524,000)   $       (610,000)   $        (638,000)
                                                            ===============    ================    =================
Net loss recorded by the Partnership                      $              -    $              -    $         (39,000)
                                                            ===============    ================    =================
</TABLE>

Certain Local Limited  Partnerships have incurred  significant  operating losses
and/or have  working  capital  deficiencies.  In the event  these Local  Limited
Partnerships continue to incur significant operating losses,  additional capital
contributions  by the  Partnership  and/or  the  Local  General  Partner  may be
required  to sustain  the  operations  of such Local  Limited  Partnerships.  If
additional  capital  contributions  are not made  when  they are  required,  the
Partnership's  investment in certain of such Local Limited Partnerships could be
lost, and the loss and recapture of the related tax credits could occur.

NOTE 3 - RELATED PARTY TRANSACTIONS
-----------------------------------

Under the terms of the  Partnership  Agreement,  the  Partnership has paid or is
obligated to the General Partner or its affiliates for the following items:

     Acquisition  fees of up to 9% of the gross  proceeds from the sale of Units
     as compensation for services rendered in connection with the acquisition of
     Local  Limited  Partnerships.  At the  end of all  periods  presented,  the
     Partnership incurred acquisition fees of $630,000. Accumulated amortization
     of these  capitalized  costs was $630,000 as of March 31, 2006 and 2005. Of
     the accumulated amortization recorded on the balance sheet at March 31, $0,
     $0 and $10,667 of the related  expense was reflected as equity in losses of
     limited  partnerships during the years ended March 31, 2006, 2005 and 2004,
     respectively,  to reduce the  respective net  acquisition  fee component of
     investments in local limited  partnerships  to zero for those Local Limited
     Partnerships which would otherwise be below a zero balance.

     Reimbursement  of costs incurred by the General  Partner or by an affiliate
     of  Associates  in  connection   with  the  acquisition  of  Local  Limited
     Partnerships.  These  reimbursements  have not  exceeded  1.7% of the gross
     proceeds.  As of the end of all  periods  presented,  the  Partnership  had
     incurred   acquisition  costs  of  $10,581  which  have  been  included  in
     investments  in  Local  Limited  Partnerships.  At the  end of all  periods
     presented, accumulated amortization amounted to $10,581.

                                       37
<PAGE>
                      WNC HOUSING TAX CREDIT FUND II, L.P.
                       (A California Limited Partnership)

                     NOTES TO FINANCIAL STATEMENTS-CONTINUED

                For The Years Ended March 31, 2006, 2005 and 2004

NOTE 3 - RELATED PARTY TRANSACTIONS, continued
----------------------------------------------

          An annual  management fee equal to 0.5% of the invested  assets of the
          Local  Limited  Partnerships,  including the  Partnership's  allocable
          share of the mortgages,  for the life of the  Partnership.  Management
          fees of $144,901, $144,902 and $144,902,  respectively,  were incurred
          during the years ended  March 31,  2006,  2005 and 2004,  of which $0,
          $6,250,  and $0 were paid during the years ended March 31, 2006,  2005
          and 2004, respectively.

          The  Partnership  reimburses the General Partner or its affiliates for
          operating  expenses  incurred on behalf of the Partnership.  Operating
          expense  reimbursements  were  approximately  $21,000,   $28,000,  and
          $30,000  during  the years  ended  March  31,  2006,  2005,  and 2004,
          respectively.

          A subordinated  disposition  fee in an amount equal to 1% of the sales
          price of any real estate sold.  Payment of this fee is subordinated to
          the limited  partners who receive a 6% preferred return (as defined in
          the Partnership  Agreement) and is payable only if the General Partner
          or its affiliates render services in the sales effort. No such fee was
          incurred in the three year period ending March 31, 2006.

The accrued fees and expenses due to General  Partner and affiliates  consist of
the following at:
<TABLE>
<CAPTION>
                                                                                    March 31
                                                                        ----------------------------------
                                                                             2006               2005
                                                                        ---------------    ---------------
<S>                                                                  <C>                <C>
Expenses paid by the General Partners
or an affiliate on behalf of the Partnership                          $         18,327   $          5,222

Asset management fee payable                                                 2,040,307          1,895,407
                                                                        ---------------    ---------------
Total                                                                 $      2,058,634   $      1,900,629
                                                                        ===============    ===============
</TABLE>
The General  Partner does not  anticipate  that these  accrued fees will be paid
until such time as  capital  reserves  are in excess of the  future  foreseeable
working capital requirements of the Partnership.

                                       38
<PAGE>
                      WNC HOUSING TAX CREDIT FUND II, L.P.
                       (A California Limited Partnership)

                     NOTES TO FINANCIAL STATEMENTS-CONTINUED

                For The Years Ended March 31, 2006, 2005 and 2004

NOTE 4 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
----------------------------------------------------

The  following  is  a  summary  of  the quarterly operations for the years ended
March 31:
<TABLE>
<CAPTION>
                                           June 30           September 30       December 31           March 31
                                        ---------------     ---------------    ---------------     ---------------
<S>                                  <C>                 <C>                <C>                 <C>
               2006
               ----
Income                                $         6,000    $          4,000   $          2,000    $          9,000

Operating expenses                            (39,000)            (50,000)           (50,000)            (40,000)

Equity in losses of Local Limited
     Partnerships                                   -                   -                  -                   -

Net loss                                      (33,000)            (46,000)           (48,000)            (31,000)

Net Loss available to Limited
     Partners                                 (33,000)            (46,000)           (47,000)            (30,000)

Net Loss per Partnership
     Unit
                                                   (5)                 (7)                (7)                 (4)
               2005
               ----
Income                                $         4,000    $          9,000   $              -    $          3,000

Operating expenses                            (41,000)            (53,000)           (44,000)            (38,000)

Equity in losses of Local Limited
     Partnerships                                   -                   -                  -                   -

Net loss                                      (37,000)            (44,000)           (44,000)            (35,000)

Net Loss available to Limited
     Partners                                 (37,000)            (44,000)           (44,000)            (35,000)

Net Loss per Partnership
     Unit                                          (5)                 (6)                (6)                 (5)
</TABLE>

                                       39
<PAGE>
Item  9.  Changes  in and  Disagreements  With  Accountants  on  Accounting  and
          Financial Disclosure

NONE

Item 9A. Controls and Procedures

(a)  As of the end of the  period  covered  by this  report,  the  Partnership's
     General  Partner,  under the supervision and with the  participation of the
     Chief Executive Officer and Chief Financial Officer of Associates,  carried
     out an evaluation of the  effectiveness  of the  Partnership's  "disclosure
     controls and procedures" as defined in Securities Exchange Act of 1934 Rule
     13a-15 and 15d-15.  Based on that evaluation,  the Chief Executive  Officer
     and Chief Financial Officer have concluded that as of the end of the period
     covered  by  this  report,  the  Partnership's   disclosure   controls  and
     procedures  were adequate and effective in timely alerting them to material
     information  relating  to the  Partnership  required  to be included in the
     Partnership's periodic SEC filings.

(b)  There were no changes in the Partnership's  internal control over financial
     reporting  that  occurred  during the  quarter  ended  March 31,  2006 that
     materially  affected,  or are reasonably likely to materially  affect,  the
     Partnership's internal control over financial reporting.

Item 9B. Other Information

NONE

PART III.

Item 10. Directors and Executive Officers of the Registrant

(a)  Identification of Directors,  (b) Identification of Executive Officers, (c)
     ---------------------------------------------------------------------------
     Identification of Certain Significant Employees,  (d) Family Relationships,
     ---------------------------------------------------------------------------
     and (e) Business Experience
     ---------------------------

The Partnership has no directors,  executives  officers or employees of its own.
The business of the  Partnership  is  conducted  primarily  through  Associates.
Associates  is a  California  corporation  which  was  organized  in  1971.  The
following biographical information is presented for the directors of Associates,
and for the officers and employees of Associates  with principal  responsibility
for the Partnership's affairs.

Wilfred N. Cooper, Sr.         Chairman
Wilfred N. Cooper, Jr.         President and Chief Executive Officer
David N. Shafer, Esq.          Executive Vice President
Michael J. Gaber               Executive Vice President
Sylvester P. Garban            Senior Vice President - Institutional Investments
Thomas J. Riha, CPA            Senior Vice President - Chief Financial Officer
Thomas J. Hollingsworth        Vice President - Asset Management
Gregory S. Hand                Vice President - Acquisitions
Melanie R. Wenk                Vice President - Portfolio Management
Thomas H. Mason                Director of Construction
J. Brad Hurlbut                Director of Syndications
Elizabeth Selby                Director of Development

In addition to Wilfred N. Cooper,  Sr., the directors of Associates  are Wilfred
N. Cooper, Jr., David N. Shafer, and Kay L. Cooper. The principal shareholder of
Associates is a trust established by Wilfred N. Cooper, Sr. and Kay L. Cooper.

Wilfred N.  Cooper,  Sr.,  age 75, is the founder  and  Chairman of the Board of
Directors of Associates,  a Director of WNC Capital  Corporation,  and a general
partner in some of the  partnerships  previously  sponsored by  Associates.  Mr.
Cooper has been actively involved in the affordable housing industry since 1968.
Previously,  during 1970 and 1971,  he was  founder and a principal  of Creative
Equity  Development  Corporation,  a predecessor of Associates,  and of Creative
Equity Corporation, a real estate investment firm.

                                       40
<PAGE>
For 12 years before  that,  Mr.  Cooper was  employed by Rockwell  International
Corporation, last serving as its manager of housing and urban developments where
he  had  responsibility   for  factory-built   housing  evaluation  and  project
management in urban planning and development. He has testified before committees
of the U.S. Senate and the U.S. House of  Representatives  on matters pertaining
to the  affordable  housing  industry.  Mr.  Cooper  is a Life  Director  of the
National  Association of Home Builders,  a National Trustee for NAHB's Political
Action Committee,  and a past Chairman of NAHB's  Multifamily  Council.  He is a
Director  of the  National  Housing  Conference  and a member of NHC's  Board of
Governors,  and a founder and Director of the California Housing Consortium.  He
is the husband of Kay Cooper and the father of Wilfred N. Cooper, Jr. Mr. Cooper
graduated from Pomona College in 1956 with a Bachelor of Arts degree.

Wilfred  N.  Cooper,  Jr.,  age  42,  is  President,  Chief  Executive  Officer,
Secretary,  a Director and a member of the Acquisition  Committee of Associates.
He is President and a Director of, and a registered  principal with, WNC Capital
Corporation, and is a Director and Vice President of WNC Management, Inc. He has
been involved in real estate  investment and acquisition  activities  since 1988
when he  joined  Associates.  Previously,  he  served  as a  Government  Affairs
Assistant with Honda North America in Washington, D.C. Mr. Cooper is a member of
the Editorial  Advisory  Boards of Affordable  Housing Finance and LIHTC Monthly
                                   ---------------------------     -------------
Report,  a  Steering  Member  of  the  Housing  Credit  Group  of  the  National
------
Association  of Home  Builders,  a  member  of the Tax  Policy  Council  for the
National Trust for Historic Preservation,  a member of the Advisory Board of the
New York State  Association for Affordable  Housing,  a member of the Urban Land
Institute  and a member  of TEC  International,  a global  network  of  business
leaders  and chief  executives.  He is the son of  Wilfred  Cooper,  Sr. and Kay
Cooper.  Mr.  Cooper  graduated  from The  American  University  in 1985  with a
Bachelor of Arts degree.

David N. Shafer, age 53, is an Executive Vice President, a Director and a member
of the Acquisition Committee of Associates,  and a Director,  Vice President and
Secretary of WNC Management,  Inc. Mr. Shafer has been active in the real estate
industry  since 1984.  Before  joining  Associates in 1990, he was engaged as an
attorney  in the private  practice  of law with a  specialty  in real estate and
taxation.  Mr. Shafer is a Director and past President of the California Council
of Affordable Housing,  and a member of the State Bar of California.  Mr. Shafer
graduated  from the  University  of  California  at Santa Barbara in 1978 with a
Bachelor of Arts degree, from the New England School of Law in 1983 with a Juris
Doctor  degree  cum  laude and from the  University  of San Diego in 1986 with a
Master of Law degree in Taxation.

Michael  J.  Gaber,  age 39, is an  Executive  Vice  President  -  Oversees  the
Originations,  Acquisitions and Real Estate  Development  Departments,  and is a
member of the  Acquisition  Committee  and the  Commercial  Real Estate Group of
Associates  and a Vice  President  of WNC  Management,  Inc.  Mr. Gaber has been
involved in real estate acquisition,  valuation and investment  activities since
1989 and has been  associated  with  Associates  since  1997.  Prior to  joining
Associates, he was involved in the valuation and classification of major assets,
restructuring  of debt and  analysis of real estate  taxes with H.F.  Ahmanson &
Company,  parent of Home  Savings  of  America.  Mr.  Gaber  graduated  from the
California State University, Fullerton in 1991 with a Bachelor of Science degree
in Business Administration - Finance.

Sylvester  P.  Garban,   age  59,  is  Senior  Vice  President  -  Institutional
Investments  of  Associates   and  a  registered   principal  with  WNC  Capital
Corporation.  Mr. Garban has been involved in real estate investment  activities
since 1978.  Before  joining  Associates  in 1989,  he served as Executive  Vice
President with MRW,  Inc., a real estate  development  and management  firm. Mr.
Garban is a member of the National Association of Affordable Housing Lenders and
the Financial Planning Association.  He graduated from Michigan State University
in 1967 with a Bachelor of Science degree in Business Administration.

Thomas J. Riha, age 50, is Senior Vice President - Chief Financial Officer and a
member of the  Acquisition  Committee  and the  Commercial  Real Estate Group of
Associates and Vice President,  Treasurer and a Director of WNC Management, Inc.
He has been involved in real estate acquisition and investment  activities since
1979.  Before joining  Associates in 1994, Mr. Riha was employed by Trust Realty
Advisor, a real estate acquisition and Management Company,  last serving as Vice
President - Operations.  He is a founding member of the Housing Credit Certified
Professional Board of Governors,  a national professional  certification program
administered  by  the  NAHB  and  the  National  Affordable  Housing  Management
Association. Mr. Riha graduated from the California State University,  Fullerton
in 1977 with a Bachelor of Arts degree cum laude in Business Administration with
a concentration in Accounting and is a Certified Public  Accountant and a member
of the American Institute of Certified Public Accountants.

                                       41
<PAGE>
Thomas J.  Hollingsworth,  CPA, age 54, is Vice President - Asset  Management of
WNC  &  Associates,   Inc.  and  oversees  WNC's  asset  management  group.  Mr.
Hollingsworth  has been  involved in real estate  acquisitions,  operations  and
syndication  of  multifamily  properties  for 25 years.  Prior to joining WNC in
2005,  he  was  the  senior  workout  specialist  at  Key  Corporation   Housing
Management,  Inc.,  a division  of Key Bank.  He has also been  responsible  for
structuring  several tax sheltered  multifamily  acquisitions during his career.
Mr. Hollingsworth  graduated from the University of Utah in 1973 with a Bachelor
of Science degree (cum laude) in Business Administration.

Gregory S. Hand, age 42, is Vice  President -  Acquisitions  and a member of the
Commercial Real Estate Group of Associates.  He is responsible for the oversight
of property  underwriting.  Mr. Hand has been involved in real estate  analysis,
development and management since 1987.  Prior to joining  Associates in 1998, he
was  a  portfolio  asset  manager  with  a  national  tax  credit  sponsor  with
responsibility  for the management of $200 million in assets.  Prior to that, he
was a finance  manager  with The Koll  Company and a financial  analyst with The
Irvine  Company.  Mr. Hand graduated  from Iowa State  University in 1987 with a
Bachelor of Business Administration degree in finance.

Melanie R. Wenk,  CPA,  age 37, is Vice  President  -  Portfolio  Management  of
Associates.  She is  responsible  for overseeing  institutional  and retail fund
portfolio management, including partnership accounting, SEC reporting, quarterly
and  annual  investor  reporting  and  monitoring  investment  returns  for  all
stabilized WNC  institutional  funds.  Prior to joining  Associates in 2003, Ms.
Wenk was associated as a public accountant with BDO Seidman,  LLP. She graduated
from  the  California  Polytechnic  State  University,  Pomona,  in 1999  with a
Bachelor of Science degree in accounting.

Thomas H. Mason,  CPM, age 49, is Director of  Construction  and a member of the
Commercial  Real Estate Group of Associates  and is  responsible  for overseeing
Associates' construction management department. He has 20 years of experience in
the real estate and banking  industries and holds a Certified  Property  Manager
designation  from the  Institute  of Real  Estate  Management.  Prior to joining
Associates  in 1999,  Mr.  Mason  was  responsible  for  managing  assets in the
western-states region for a national  owner/operating company of commercial real
estate.  Prior to  that,  he  served  with  the  FDIC as a  senior  real  estate
specialist.  Mr. Mason  graduated from the University of California,  Santa Cruz
with  a  Bachelor  of  Arts  degree,   and  also  holds  a  Master  of  Business
Administration   degree  in  finance  and  marketing   from  the  University  of
California, Irvine, Graduate School of Management.

J.  Brad  Hurlbut,  age 46,  is  Director  of  Syndications  and a member of the
Commercial Real Estate Group of Associates.  He is responsible for the financial
structuring  of  Associates'  institutional  funds.  Mr. Hurlbut has 20 years of
experience  in  real  estate  investment  and  development.   Prior  to  joining
Associates in 2000, he served as corporate  controller  for Great Western Hotels
Corporation.  Mr. Hurlbut has been an enrolled agent licensed to practice before
the IRS since 1984. He graduated  from the University of Redlands in 1981 with a
Bachelor of Science  degree in business  management  and from  California  State
University, Fullerton in 1985 with a Master of Science degree in taxation.

Elizabeth Selby, age 31, is Director of Development of Associates. Ms. Selby has
been involved in real estate acquisition,  development and valuation  activities
since 1998 and has been associated with Associates  since 2003. Prior to joining
Associates,  she was  involved in the  development  of  affordable  multi-family
housing in New York City with BFC  Construction.  Ms. Selby  graduated  from the
University  of  California,  Berkeley in 1995 with a Bachelor of Arts degree and
from the University of Southern  California in 2001 with a Master of Real Estate
Development degree.

Kay L. Cooper,  age 69, is a Director of  Associates.  Mrs.  Cooper was the sole
proprietor of Agate 108, a manufacturer and retailer of home accessory products,
from 1975 until its sale in 1998. She is the wife of Wilfred Cooper, Sr. and the
mother of Wilfred  Cooper,  Jr. Ms.  Cooper  graduated  from the  University  of
Southern California in 1958 with a Bachelor of Science degree.

(f)  Involvement in Certain Legal Proceedings
     ----------------------------------------

     Two Local Limited  Partnerships  invested in by other  Associates-sponsored
     public limited  partnerships  were unable to meet their obligations as they
     became due,  and each has filed a voluntary  petition  in  bankruptcy.  The
     local general partner of one of them is not affiliated with Associates.

                                       42
<PAGE>
     The original  unaffiliated  local general  partner of the other was removed
     and replaced with a general  partner  wholly-owned  by two of the executive
     officers of WNC identified above.

(g)  Promoters and Control Persons
     -----------------------------

     Inapplicable.

(h)  Audit  Committee  Financial  Expert,  and (i)  Identification  of the Audit
     ---------------------------------------------------------------------------

     Committee
     ---------

     Neither the Partnership nor Associates has an audit committee.

(j)  Changes to Nominating Procedures
     --------------------------------

     Inapplicable.

(k)  Compliance With Section 16(a) of the Exchange Act
     -------------------------------------------------

     None.

(l)  Code of Ethics
     --------------

     Associates  have  adopted  a Code of  Ethics  which  applies  to the  Chief
     Executive  Officer and Chief Financial  Officer of Associates.  The Code of
     Ethics will be provided  without charge to any person who requests it. Such
     requests  should  be  directed  to:  Investor  Relations  at  (714)662-5565
     extension 187.

Item 11.  Executive Compensation

The Partnership has no officers,  employees,  or directors.  However,  under the
terms of the  Partnership  Agreement the Partnership is obligated to the General
Partner or Associates for the following fees:

(a)  Annual Asset  Management Fee. An annual asset  management fee accrues in an
     amount  equal to 0.5% of  invested  assets  (the  sum of the  Partnership's
     Investment in Local  Limited  Partnership  Interests and the  Partnership's
     allocable  share of the  amount of the  mortgage  loans on and other  debts
     related   to,  the   Housing   Complexes   owned  by  such  Local   Limited
     Partnerships).  Fees of $144,901,  $144,902,  and  $144,902,  were incurred
     during the years ended March 31,  2006,  2005 and 2004,  respectively.  The
     Partnership paid the General Partner or its affiliates $0, $6,250 and $0 of
     those  fees  during  the  years  ended  March  31,  2006,  2005  and  2004,
     respectively.

(b)  Subordinated  Disposition Fee. A subordinated  disposition fee in an amount
     equal to 1% of the sale price may be received in  connection  with the sale
     or disposition of a Housing Complex.  Subordinated disposition fees will be
     subordinated  to  the  prior  return  of  the  Limited   Partners'  capital
     contributions  and  payment  of the  Return on  Investment  to the  Limited
     Partners.  "Return  on  Investment"  means an  annual,  cumulative  but not
     compounded,  "return" to the Limited Partners (including Low Income Housing
     Tax Credits) as a class on their adjusted capital contributions  commencing
     for each  Limited  Partner on the last day of the calendar  quarter  during
     which  the  Limited  Partner's  capital  contribution  is  received  by the
     Partnership,  calculated at the  following  rate; 6% for the balance of the
     Partnership's  term.  No such fee was  incurred  in the three  year  period
     ending March 31, 2006.

(c)  Operating Expenses.  The Partnership  reimbursed the General Partner or its
     affiliates for operating  expenses of  approximately  $21,000,  $28,000 and
     $30,000 during the years ended March 31, 2006, 2005 and 2004, respectively.

(d)  Interest  in   Partnership.   The  General   Partner   receive  1%  of  the
     Partnership's  allocated Low Income Housing Tax Credits, which approximated
     $50, $50 and $700 for the General Partners for the tax years ended December
     31, 2005, 2004 and 2003, respectively. The General Partner is also entitled
     to  receive a  percentage  of  Partnership  income or  losses,  and of cash
     distributions.  There were no distributions of cash to the General Partners
     during the years ended March 31, 2006, 2005 and 2004.

                                       43
<PAGE>
Item 12.  Security  Ownership of Certain  Beneficial  Owners and  Management and
          Related Stockholder Matters

(a)  Securities Authorized for Issuance Under Equity Compensation Plans
     ------------------------------------------------------------------

     The  Partnership  has no  compensation  plans under which  interests in the
     Partnership are authorized for issuance.

(b)  Security Ownership of Certain Beneficial Owners
     -----------------------------------------------

     No person is known to the General Partner to own  beneficially in excess of
     5% of the outstanding Units.

(c)  Security Ownership of Management
     --------------------------------

     Neither the General  Partner,  Associates,  its affiliates,  nor any of the
     officers or directors of the General Partner, Associates, or its affiliates
     own directly or beneficially any Units in the Partnership.

(d)  Changes in Control
     ------------------

     The  management  and control of the General  Partner and of Associates  and
     their  affiliates  may be  changed  at any time in  accordance  with  their
     respective organizational documents, without the consent or approval of the
     Limited Partners.  In addition,  the Partnership Agreement provides for the
     admission  of one or more  additional  and  successor  General  Partners in
     certain circumstances.

     First,   with  the   consent   of  any  other   General   Partners   and  a
     majority-in-interest  of the  Limited  Partners,  any  General  Partner may
     designate  one or  more  persons  to be  successor  or  additional  General
     Partners. In addition,  any General Partner may, without the consent of any
     other General Partner or the Limited Partners,  (i) substitute in its stead
     as General  Partner  any  entity  which has,  by merger,  consolidation  or
     otherwise,  acquired  substantially  all  of its  assets,  stock  or  other
     evidence of equity interest and continued its business, or (ii) cause to be
     admitted to the Partnership an additional General Partner or Partners if it
     deems such  admission to be necessary or desirable so that the  Partnership
     will be classified a partnership for Federal income tax purposes.  Finally,
     a  majority-in-interest  of the Limited Partners may at any time remove the
     General Partner of the Partnership and elect a successor General Partner.

Item 13.  Certain Relationships and Related Transactions

The General Partner manages all of the Partnership's  affairs.  The transactions
with  the  General  Partner  are  primarily  in the  form  of  fees  paid by the
Partnership for services rendered to the Partnership, reimbursement of expenses,
and the General Partner's interests in the Partnership,  as discussed in Item 11
and in the notes to the Partnership's financial statements.

Item 14.  Principal Accountant Fees and Services

The  following  is a  summary  of  fees  paid  to  the  Partnership's  principal
independent auditors for the years ended March 31:
<TABLE>
<CAPTION>
                                             2006                2005
                                        ---------------     ---------------
<S>                                  <C>                 <C>
Audit Fees                            $         24,042    $         18,550
Audit-related Fees                                   -                   -
Tax Fees                                         3,000               3,000
All Other Fees                                       -                   -
                                        ---------------     ---------------
TOTAL                                 $         27,042    $         21,550
                                        ===============     ===============
</TABLE>

The  Partnership  has no Audit  Committee.  All audit services and any permitted
non-audit  services  performed  by the  Partnership's  independent  auditors are
preapproved by the General Partner.

                                       44
<PAGE>
PART IV.

Item 15. Exhibits and Financial Statement Schedules

(a)(1)   List of Financial statements included in Part II hereof:
         --------------------------------------------------------

         Balance Sheets, March 31, 2006 and 2005
         Statements  of Operations for the years ended March 31, 2006,
         2005 and 2004
         Statements  of Partners' Deficit for the years ended
         March 31, 2006, 2005 and 2004
         Statements of Cash Flows for the years ended March 31, 2006,
         2005 and 2004
         Notes to Financial Statements

(a)(2)   List of Financial statement schedules included in Part IV hereof:
         -----------------------------------------------------------------

         Schedule III - Real Estate Owned by Local Limited Partnerships

(a)(3)   List of Exhibits.
         -----------------

3.1      Articles  of  incorporation  and  by - laws:  The   registrant  is  not
         incorporated. The Partnership  Agreement  dated as of January 19, 1990,
         filed as Exhibit 28.1  to  Form  10 K for  the year ended December  31,
         1994  is  hereby incorporated herein as exhibit 3.1.

31.1     Certification  of  the Chief Executive  Officer pursuant to Rule 13a-14
         and 15d-14 as  adopted  pursuant to section  302 of the  Sarbanes-Oxley
         Act of 2002. (filed herewith)

31.2     Certification  of the Chief Financial  Officer pursuant to Rule  13a-14
         and 15d-14,  as adopted pursuant to section 302 of  the  Sarbanes-Oxley
         Act of 2002. (filed herewith)

32.1     Section  1350  Certification  of  the  Chief Executive Officer.  (filed
         herewith)

32.2     Section 1350 Certification  of  the  Chief  Financial  Officer.  (filed
         herewith)

99.1     Amended  and  Restated  Agreement  of  Limited  Partnership  of  DiVall
         Midland  Associates  Limited  Partnership  II filed as exhibit 10.1  on
         Form 10-K dated  December  31, 1992 is hereby  incorporated  herein  as
         exhibit 99.1.

99.2     Amended and Restated Agreement of  Limited  Partnership of Airport Road
         Associates,  Limited filed  as exhibit 10.2 on Form 10-K dated December
         31, 1992 is hereby incorporated herein as exhibit 99.2.

99.3     Amended and  Restated  Agreement  of Limited  Partnership  of Arizona I
         Limited  Partnership filed as exhibit 10.3 on Form  10-K dated December
         31, 1992 is hereby incorporated herein as exhibit 99.3.

99.4     Amended and  Restated  Agreement  of  Limited  Partnership  of Cherokee
         Square,  L.P.  filed as exhibit  10.4 on Form  10-K dated  December 31,
         1992 is hereby incorporated herein as exhibit 99.4.

99.5     Amended  and  Restated  Agreement  of  Limited  Partnership  of Ashland
         Investment  Group filed as exhibit 10.5on  Form 10-K dated December 31,
         1992 is hereby incorporated herein as exhibit 99.5.

99.6     Amended  and  Restated  Agreement  of  Limited  Partnership  of Brian's
         Village  Apartments  filed as exhibit  10.6 on Form 10-K dated December
         31, 1992 is hereby incorporated herein as exhibit 99.6.

99.7     Amended  and  Restated  Agreement  of  Limited  Partnership   of  Emory
         Capital,  L.P.  filed as exhibit 10.7 on Form 10-K dated   December 31,
         1992 is hereby incorporated herein as exhibit 99.7.

99.8     Amended and Restated Agreement  of Limited  Partnership of Emory Manor,
         L.P.  filed as exhibit  10.8  on Form 10-K dated  December  31, 1992 is
         hereby incorporated herein as exhibit 99.8.

                                       45
<PAGE>
99.9     Amended and  Restated  Agreement of  Limited  Partnership  of Jefferson
         Capital,  L.P.  filed as exhibit 10.9 on  Form 10-K dated  December 31,
         1992 is hereby incorporated herein as exhibit 99.9.

99.10    Amended and  Restated  Agreement of  Limited  Partnership  of Jefferson
         Manor,  L.P.  filed  as exhibit  10.10 on Form 10-K dated  December 31,
         1992 is hereby incorporated herein as exhibit 99.10.

99.11    Amended and  Restated  Agreement  of   Limited  Partnership  of Rociada
         Partners,  Ltd. filed as exhibit 10.11 on Form 10-K  dated December 31,
         1992 is hereby incorporated herein as exhibit 99.11.

99.12    Amended  and  Restated  Agreement  of   Limited  Partnership  of Wilcox
         Investment  Group filed as exhibit  10.12 on  Form 10-K dated  December
         31, 1992 is hereby incorporated herein as exhibit 99.12.

99.13    Amended and Restated Agreement of  Limited  Partnership of Casa Allegre
         filed as exhibit 10.13 on Form 10-K dated  December 31, 1992  is hereby
         incorporated herein as exhibit 99.13.

99.14    Amended and  Restated  Agreement of Limited  Partnership  of   Lakeview
         Limited Partnership filed as exhibit 10.14 on Form  10-K dated December
         31, 1992 is hereby incorporated herein as exhibit 99.14.

99.15    Amended and Restated  Agreement  of  Limited  Partnership of Whitewater
         Woods  Limited  Partnership  filed as  exhibit 10.15 on Form 10-K dated
         December 31, 1992 is hereby incorporated herein as exhibit 99.15.

99.16    Amended and Restated Agreement  of  Limited  Partnership of Castroville
         Village,  Ltd.  filed as exhibit 10.16 on Form  10-K dated December 31,
         1992 is hereby incorporated herein as exhibit 99.16.

99.17    Amended  and  Restated  Agreement  of  Limited  Partnership  of  Idalou
         Manor,  L.P.  filed as exhibit  10.17 on  Form 10-K dated  December 31,
         1992 is hereby incorporated herein as exhibit 99.17.

99.18    Amended and  Restated Agreement of Limited Partnership  of  Littlefield
         Manor, L.P. filed as exhibit 10.18 on Form 10-K dated December 31, 1992
         is hereby incorporated herein as exhibit 99.18.

99.19    Amended and  Restated  Agreement  of Limited  Partnership  of   Am-Kent
         Associates,  Ltd.  filed as exhibit 10.19 on Form 10-K  dated  December
         31, 1992 is hereby incorporated herein as exhibit 99.19.

99.20    Amended and  Restated  Agreement  of  Limited  Partnership  of Brantley
         Housing,  Ltd.  filed as exhibit 10.20  on Form 10-K dated December 31,
         1992 is hereby incorporated herein as exhibit 99.20.

99.21    Amended and Restated Agreement   of Limited  Partnership of Candleridge
         of Perry,  L.P. filed as exhibit 10.21  on Form 10-K dated December 31,
         1992 is hereby incorporated herein as exhibit 99.21.

99.22    Amended and Restated  Agreement of  Limited  Partnership of Candleridge
         of Runnells,  L.P.  filed as exhibit 10.22  on Form 10-K dated December
         31, 1992 is hereby incorporated herein as exhibit 99.22.

99.23    Amended and Restated Agreement  of  Limited Partnership of Perry County
         Housing,  Ltd.  filed as exhibit  10.23 on Form 10-K dated December 31,
         1992 is hereby incorporated herein as exhibit 99.23.

99.24    Amended and  Restated  Agreement  of  Limited  Partnership  of Eclectic
         Housing,  Ltd.  filed as exhibit 10.24  on Form 10-K dated December 31,
         1992 is hereby incorporated herein as exhibit 99.24.

99.25    Amended and Restated  Agreement  of  Limited  Partnership  of Pine Hill
         Housing,  Ltd.  filed as exhibit 10.25  on Form 10-K dated December 31,
         1992 is hereby incorporated herein as exhibit 99.25.

99.26    Amended  and  Restated  Agreement  of  Limited  Partnership  of  Wadley
         Housing,  Ltd.  filed as exhibit 10.26 on Form 10-K dated  December 31,
         1992 is hereby incorporated herein as exhibit 99.26.

99.27    Amendment  and   Entire  Restatement  of  Articles  of  Partnership  of
         Elizabeth Square  Associates,  Ltd.  filed as exhibit 10.1 on Form 10-K
         dated  December  31,  1994 is  hereby  incorporated  herein as  exhibit
          99.27.
                                       46
<PAGE>
WNC Housing Tax Credit Fund II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2006
<TABLE>
<CAPTION>
                                                ------------------------   ---------------------------------------------------------
                                                   As of March 31, 2006                       As of December 31, 2005
------------------------------------------------------------------------   ---------------------------------------------------------
                                            Total Investment   Amount of   Mortgage Balances
                                            in Local Limited   Investment   of Local Limited       Buildings &  Accumulated Net Book
Partnership Name              Location        Partnerships    Paid to Date    Partnership    Land   Equipment   Depreciation   Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                      <C>                  <C>          <C>           <C>           <C>       <C>           <C>         <C>
Airport Road Associates,
Limited Partnership        Slidell, Louisiana    $334,000      $334,000     $1,424,000     $87,000  $1,771,000  $1,031,000  $827,000

                           Amite & Kentwood,
Am-Kent Associates, Ltd.   Louisiana              232,000       232,000      1,096,000      55,000   1,533,000     814,000   774,000

Arizona I Limited
Partnership                Showlow, Arizona       320,000       320,000      1,458,000     127,000    1,929,000    789,000 1,267,000

Ashland Investment Group,
an Oregon Limited
Partnership                Ashland, Oregon        300,000       300,000      1,355,000      90,000    1,753,000    591,000 1,252,000

Brantley Housing, Ltd.     Brantley, Alabama      108,000       108,000        561,000      26,000      694,000    278,000   442,000

Brian's Village
Apartments, an Oklahoma
Limited Partnership        Mannford, Oklahoma     176,000       176,000        741,000      20,000      973,000    507,000   486,000

Candleridge Apartments of
Perry, L.P.                Perry, Iowa             93,000        93,000        574,000      49,000      795,000    412,000   432,000
</TABLE>

                                       47
<PAGE>
WNC Housing Tax Credit Fund II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2006
<TABLE>
<CAPTION>
                                               ----------------------------  -------------------------------------------------------
                                                   As of March 31, 2006                         As of December 31, 2005
                                               ----------------------------  -------------------------------------------------------
                                                   Total
                                                 Investment  Amount of
                                                  in Local   Investment   Mortgage Balances
                                                  Limited      Paid        of Local Limited       Buildings & Accumulated Net Book
Partnership Name                 Location       Partnerships  to Date       Partnerships     Land   Equipment  Depreciation  Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                     <C>                   <C>           <C>         <C>           <C>          <C>          <C>        <C>
Candleridge Apartments of
Runnells, L.P.             Runnells, Iowa           58,000      58,000        354,000       30,000      497,000    257,000   270,000

Casa Allegre Limited
Partnership                Las Vegas, New Mexico   318,000     318,000      1,319,000       94,000    1,882,000    738,000 1,238,000

Castroville Village, Ltd.  Castroville, Texas      165,000     165,000        908,000       15,000    1,135,000    323,000   828,000

Cherokee Square, L.P.      Rogersville, Tennessee  202,000     202,000        955,000       56,000    1,173,000    613,000   616,000

Divall Midland Associates  Port Washington,        234,000     234,000      1,132,000      102,000    1,483,000    894,000   690,000
Limited Partnership II     Wisconsin

Eclectic Housing, Ltd.     Eclectic, Alabama        74,000      74,000        391,000       53,000      449,000    185,000   317,000

Elizabeth Square
Associates, Ltd.           Raceland, Louisiana     356,000     356,000      1,429,000       35,000    2,028,000  1,002,000 1,061,000
</TABLE>
                                       48
<PAGE>

WNC Housing Tax Credit Fund II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2006
<TABLE>
<CAPTION>
                                      ---------------------------------   ----------------------------------------------------------
                                             As of March 31, 2006                             As of December 31, 2005
                                      ---------------------------------   ----------------------------------------------------------
                                        Total Investment in   Amount of    Mortgage Balances
                                            Local Limited   Investment Paid  of Local Limited      Buildings &  Accumulated Net Book
Partnership Name              Location       Partnerships       to Date        Partnerships   Land   Equipment  Depreciation  Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                   <C>                 <C>               <C>           <C>            <C>       <C>         <C>        <C>
Emory Capital, L.P.        Emory, Texas           85,000         85,000          362,000     16,000   471,000     231,000    256,000

Emory Manor, L.P.          Emory, Texas          128,000        128,000          541,000     26,000   719,000     315,000    430,000

Idalou Manor, L.P.         Idalou, Texas         122,000        122,000          606,000     20,000   758,000     272,000    506,000

Jefferson Capital, L.P.    Jefferson, Texas      167,000        167,000          700,000     42,000   944,000     393,000    593,000

Jefferson Manor, L.P.      Jefferson, Texas      179,000        179,000          748,000     43,000   969,000     417,000    595,000

Lakeview Limited
Partnership                Beaver Dam, Wisconsin 264,000        264,000        1,214,000    125,000 1,464,000     598,000    991,000

Littlefield Manor, L.P.    Littlefield, Texas    118,000        118,000          582,000     20,000   739,000     265,000    494,000

Perry County Housing, Ltd. Uniontown, Alabama     82,000         82,000          429,000     22,000   517,000     209,000    330,000
</TABLE>

                                       49
<PAGE>
WNC Housing Tax Credit Fund II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2006
<TABLE>
<CAPTION>
                                   ------------------------------        -----------------------------------------------------------
                                        As of March 31, 2006                                 As of December 31, 2005
                                   -------------------------------------------------------------------------------------------------
                                                       Amount of   Mortgage
                                     Total Investment Investment  Balances of
                                     in Local Limited   Paid to  Local Limited          Buildings &     Accumulated         Net Book
Partnership Name           Location    Partnerships      Date     Partnerships    Land   Equipment      Depreciation          Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                     <C>          <C>          <C>           <C>         <C>         <C>           <C>               <C>
Pine Hill Housing, Ltd     Pine Hill,    105,000       105,000      542,000     32,000     662,000         263,000           431,000
                           Alabama

Rociada Partners, Ltd.     Hereford,     154,000       154,000      714,000     27,000     894,000         351,000           570,000
                           Texas

Wadley Housing, Ltd.       Wadley,        76,000        76,000      430,000     53,000     486,000         210,000           329,000
                           Alabama

Whitewater Woods Limited   Whitewater,
Partnership                Wisconsin     301,000       301,000    1,270,000     89,000   1,606,000         651,000         1,044,000

Willcox Investment Group,  Willcox,      245,000       245,000    1,036,000     45,000   1,293,000         449,000           890,000
an Arizona Limited         Arizona   -------------- ----------- ------------ ---------  ----------       ---------        ---------
Partnership

                                      $4,996,000    $4,996,000  $22,871,000 $1,399,000 $29,617,000     $13,058,000      $ 17,959,000
                                     ============== =========== ============ ========= ============   =============     ============
</TABLE>

                                       50
<PAGE>

WNC Housing Tax Credit Fund II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2006
<TABLE>
<CAPTION>
                                               -------------------------------------------------------------------------------------
                                                                        For the year ended December 31, 2005
                                               -------------------------------------------------------------------------------------
                                                                                    Year Investment             Estimated Useful
 Partnership Name                                Rental Income     Net Income\(Loss)     Aquired     Status       Life (Years)
------------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>                 <C>                <C>           <C>                <C>
Airport Road Associates, Limited Partnership         $207,000        $(32,000)           1990       Completed               27.5

Am-Kent Associates, Ltd.                              171,000         (55,000)           1991       Completed               27.5

Arizona I Limited Partnership                         187,000         (19,000)           1990       Completed                 35

Ashland Investment Group, an Oregon                   195,000         (44,000)           1990       Completed                 50
Limited Partnership

Brantley Housing, Ltd                                  75,000         (13,000)           1992       Completed                 40

Brian's Village Apartments, an Oklahoma               127,000          (3,000)           1990       Completed                 30
Limited Partnership

Candleridge Apartments of Perry, L.P.                 126,000         (18,000)           1992       Completed               27.5

Candleridge Apartments of Runnells, L.P.               98,000          (5,000)           1992       Completed               27.5

Casa Allegre Limited Partnership                      196,000         (13,000)           1990       Completed                 40

Castroville Village, Ltd.                             178,000         (10,000)           1991       Completed                 50

Cherokee Square, L.P.                                 102,000         (22,000)           1990       Completed                 50

Divall Midland Associates Limited Partnership II      154,000         (15,000)           1990       Completed               27.5

Eclectic Housing, Ltd.                                 60,000           2,000            1992       Completed                 40

Elizabeth Square Associates, Ltd.                     185,000         (77,000)           1994       Completed               27.5

Emory Capital, L.P.                                    63,000          (3,000)           1990       Completed               27.5
</TABLE>

                                       51
<PAGE>

WNC Housing Tax Credit Fund II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2006
<TABLE>
<CAPTION>
                                             ---------------------------------------------------------------------------------------
                                                                        For the year ended December 31, 2005
                                             ---------------------------------------------------------------------------------------
                                                                                         Year Investment            Estimated Useful
  Partnership Name                         Rental Income      Net Income\(Loss)             Acquired      Status      Life (Years)
------------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                      <C>                     <C>            <C>                  <C>
Emory Manor, L.P.                                 90,000               (12,000)                1990       Completed               30

Idalou Manor, L.P.                                97,000               (14,000)                1992       Completed               40

Jefferson Capital, L.P.                          102,000               (16,000)                1990       Completed               50

Jefferson Manor, L.P.                            106,000               (12,000)                1990       Completed               50

Lakeview Limited Partnership                     169,000               (38,000)                1991       Completed               35

Littlefield Manor, L.P.                           91,000               (15,000)                1991       Completed               40

Perry County Housing, Ltd.                        66,000               (14,000)                1992       Completed               40

Pine Hill Housing, Ltd.                           69,000               (17,000)                1992       Completed               40

Rociada Partners, Ltd.                           157,000               (19,000)                1990       Completed               40

Wadley Housing, Ltd.                              59,000               (14,000)                1992       Completed               40

Whitewater Woods Limited Partnership             185,000               (15,000)                1991       Completed               35

Willcox Investment Group, an Arizona             155,000               (16,000)                1990       Completed               50
Limited Partnership                       ---------------    -------------------
                                        $      3,470,000   $          (529,000)
                                          ===============    ===================
</TABLE>
                                       52
<PAGE>
WNC Housing Tax Credit Fund II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2005
<TABLE>
<CAPTION>
                                                   -----------------------------   -------------------------------------------------
                                                        As of March 31, 2005                       As of December 31, 2004
--------------------------------------------------------------------------------   -------------------------------------------------
                                                       Total
                                                    Investment in    Amount of    Mortgage Balances
                                                    Local Limited Investment Paid  of Local Limited Property & Accumulated  Net Book
Partnership Name                Location            Partnerships     to Date        Partnership      Equipment Depreciation  Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                       <C>                   <C>             <C>          <C>              <C>             <C>          <C>
Airport Road Associates,
Limited Partnership        Slidell, Louisiana         $ 334,000   $ 334,000      $ 1,429,000       $1,858,000     $966,000  $893,000

Am-Kent Associates, Ltd.   Amite & Kentwood,            232,000     232,000        1,100,000        1,588,000      759,000   829,000
                           Louisiana

Arizona I Limited
Partnership                Showlow, Arizona             320,000     320,000        1,463,000        1,985,000      734,000 1,251,000

Ashland Investment Group,
an Oregon Limited
Partnership                Ashland, Oregon              300,000     300,000        1,360,000        1,843,000      555,000 1,288,000

Brantley Housing, Ltd.     Brantley, Alabama            108,000     108,000          564,000          720,000      259,000   461,000

Brian's Village
Apartments, an Oklahoma
Limited Partnership        Mannford, Oklahoma           176,000     176,000          744,000          993,000      475,000   518,000

Candleridge Apartments of
Perry, L.P.                Perry, Iowa                   93,000      93,000          578,000          836,000      380,000   457,000
</TABLE>

                                       53
<PAGE>
WNC Housing Tax Credit Fund II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2005
<TABLE>
<CAPTION>
                                                  -----------------------------   --------------------------------------------------
                                                      As of March 31, 2005                   As of December 31, 2004
-------------------------------------------------------------------------------   --------------------------------------------------
                                                       Total
                                                      Investment
                                                       in Local     Amount of    Mortgage Balances
                                                        Limited  Investment Paid of Local Limited Property &  Accumulated   Net Book
Partnership Name              Location               Partnerships    to Date       Partnerships   Equipment  Depreciation    Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                       <C>                     <C>            <C>          <C>          <C>            <C>           <C>
Candleridge Apartments of
Runnells, L.P.             Runnells, Iowa                 58,000     58,000       358,000        525,000      237,000        288,000

Casa Allegre Limited
Partnership                Las Vegas, New Mexico         318,000    318,000     1,333,000      1,954,000      684,000      1,270,000

Castroville Village, Ltd.  Castroville, Texas            165,000    165,000       917,000      1,151,000      301,000        850,000

Cherokee Square, L.P.      Rogersville, Tennessee        202,000    202,000       959,000      1,229,000      581,000        648,000

Divall Midland Associates
Limited Partnership II     Port Washington, Wisconsin    234,000    234,000     1,136,000      1,577,000      842,000        735,000

Eclectic Housing, Ltd.     Eclectic, Alabama              74,000     74,000       395,000        502,000      174,000        328,000

Elizabeth Square
Associates, Ltd.           Raceland, Louisiana           356,000    356,000     1,437,000      2,063,000      929,000      1,134,000
</TABLE>

                                       54
<PAGE>

WNC Housing Tax Credit Fund II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2005
<TABLE>
<CAPTION>
                                            ----------------------------------  ----------------------------------------------------
                                                   As of March 31, 2005                        As of December 31, 2004
                                            ----------------------------------  ----------------------------------------------------
                                                     Total
                                                   Investment
                                                    in Local        Amount of    Mortgage Balances
                                                     Limited     Investment Paid  of Local Limited  Property &  Accumulated Net Book
Partnership Name                 Location          Partnerships       to Date       Partnerships     Equipment  Depreciation   Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                   <C>                       <C>             <C>             <C>             <C>          <C>           <C>
Emory Capital, L.P.        Emory, Texas                85,000          85,000          363,000      487,000       221,000    266,000

Emory Manor, L.P.          Emory, Texas               128,000         128,000          543,000      746,000       302,000    443,000

Idalou Manor, L.P.         Idalou, Texas              122,000         122,000          609,000      777,000       252,000    526,000

Jefferson Capital, L.P.    Jefferson, Texas           167,000         167,000          703,000      963,000       377,000    585,000

Jefferson Manor, L.P.      Jefferson, Texas           179,000         179,000          751,000    1,008,000       401,000    607,000

Lakeview Limited
Partnership                Beaver Dam, Wisconsin      264,000         264,000        1,219,000    1,589,000       560,000  1,029,000

Littlefield Manor, L.P.    Littlefield, Texas         118,000         118,000          584,000      749,000       246,000    503,000

Perry County Housing, Ltd. Uniontown, Alabama          82,000          82,000          431,000      539,000       193,000    345,000
</TABLE>
                                       55
<PAGE>
WNC Housing Tax Credit Fund II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2005
<TABLE>
<CAPTION>
                                             --------------------------------- -----------------------------------------------------
                                                    As of March 31, 2005                        As of December 31, 2004
                                             ---------------------------------------------------------------------------------------
                                             Total Investment  Amount of      Mortgage Balances
                                             in Local Limited Investment Paid   of Local Limited Property &  Accumulated    Net Book
Partnership Name              Location         Partnerships      to Date         Partnerships    Equipment  Depreciation      Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                    <C>                     <C>             <C>              <C>          <C>          <C>            <C>
Pine Hill Housing, Ltd     Pine Hill, Alabama       105,000           105,000       546,000       688,000     245,000        443,000

Rociada Partners, Ltd.     Hereford, Texas          154,000           154,000       717,000       921,000     329,000        592,000

Wadley Housing, Ltd.       Wadley, Alabama           76,000            76,000       432,000       539,000     195,000        344,000

Whitewater Woods Limited
Partnership                Whitewater, Wisconsin    301,000           301,000     1,302,000     1,695,000     610,000      1,085,000

Willcox Investment Group,
an Arizona Limited
Partnership                Willcox, Arizona         245,000           245,000     1,040,000     1,338,000     422,000        916,000
                                               ----------------  --------------  -----------   ----------   -----------  -----------
                                             $    4,996,000     $   4,996,000   $23,013,000  $ 30,863,000 $12,229,000    $18,634,000
                                               ================  ==============  ===========   =========== ============= ===========
</TABLE>
                                       56
<PAGE>
WNC Housing Tax Credit Fund II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2005
<TABLE>
<CAPTION>
                                                          --------------------------------------------------------------------------
                                                                              For the year ended December 31, 2004
                                                          --------------------------------------------------------------------------
                                                                                             Year Investment        Estimated Useful
Partnership Name                                          Rental Income    Net Income\(Loss)    Acquired     Status   Life (Years)
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>             <C>              <C>         <C>             <C>
Airport Road Associates, Limited Partnership                 $  198,000        $  (84,000)        1990       Completed          27.5

Am-Kent Associates, Ltd.                                        172,000           (48,000)        1991       Completed          27.5

Arizona I Limited Partnership                                   164,000           (55,000)        1990       Completed            35

Ashland Investment Group, an Oregon Limited Partnership         184,000           (43,000)        1990       Completed            50

Brantley Housing, Ltd.                                           75,000           (14,000)        1992       Completed            40

Brian's Village Apartments, an Oklahoma Limited Partnership     107,000           (34,000)        1990       Completed            30

Candleridge Apartments of Perry, L.P.                           128,000           (13,000)        1992       Completed          27.5

Candleridge Apartments of Runnells, L.P.                         96,000           (11,000)        1992       Completed          27.5

Casa Allegre Limited Partnership                                196,000            (9,000)        1990       Completed            40

Castroville Village, Ltd.                                       179,000           (11,000)        1991       Completed            50

Cherokee Square, L.P.                                            97,000           (31,000)        1990       Completed            50

Divall Midland Associates Limited Partnership II                145,000           (51,000)        1990       Completed          27.5

Eclectic Housing, Ltd.                                           60,000             6,000         1992       Completed            40

Elizabeth Square Associates, Ltd.                               184,000           (62,000)        1994       Completed          27.5

Emory Capital, L.P.                                              59,000            (6,000)        1990       Completed          27.5
</TABLE>
                                       57
<PAGE>

WNC Housing Tax Credit Fund II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2005
<TABLE>
<CAPTION>
                                     -----------------------------------------------------------------------------------------------
                                                                 For the year ended December 31, 2004
                                     -----------------------------------------------------------------------------------------------
                                                                        Year Investment                 Estimated Useful
Partnership Name                Rental Income      Net Income\(Loss)        Acquired      Status         Life (Years)
------------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                    <C>                 <C>          <C>                <C>
Emory Manor, L.P.                      87,000               (15,000)          1990       Completed                 30

Idalou Manor, L.P.                     97,000                (2,000)          1992       Completed                 40

Jefferson Capital, L.P.               106,000                (2,000)          1990       Completed                 50

Jefferson Manor, L.P.                 105,000                 1,000           1990       Completed                 50

Lakeview Limited Partnership          165,000               (10,000)          1991       Completed                 35

Littlefield Manor, L.P.                91,000                (2,000)          1991       Completed                 40

Perry County Housing, Ltd.             60,000                (8,000)          1992       Completed                 40

Pine Hill Housing, Ltd.                73,000               (29,000)          1992       Completed                 40

Rociada Partners, Ltd.                158,000               (20,000)          1990       Completed                 40

Wadley Housing, Ltd.                   55,000                (9,000)          1992       Completed                 40

Whitewater Woods Limited              187,000               (43,000)          1991       Completed                 35
Partnership

Willcox Investment Group,             154,000               (11,000)          1990       Completed                 50
an Arizona Limited Partnership     ----------             ----------
                                   $3,382,000             $(616,000)
                                   ==========             ==========
</TABLE>

                                       58
<PAGE>

WNC Housing Tax Credit Fund II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2004
<TABLE>
<CAPTION>
                                               -----------------------------  ------------------------------------------------------
                                                    As of March 31, 2004                      As of December 31, 2003
----------------------------------------------------------------------------  ------------------------------------------------------
                                                                               Mortgage
                                            Total Investment    Amount of     Balances of                                        Net
                                           in Local Limited  Investment Paid Local Limited    Property &     Accumulated        Book
Partnership Name                   Location   Partnerships       to Date       Partnerships    Equipment     Depreciation      Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>           <C>           <C>          <C>             <C>             <C>           <C>
Airport Road Associates, Limited    Slidell,     $ 334,000     $  334,000    $  1,433,000    $ 1,858,000      $902,000     $ 956,000
Partnership                         Louisiana

                                    Amite &
                                    Kentwood,
Am-Kent Associates, Ltd.            Louisiana      232,000        232,000       1,104,000      1,588,000       703,000       885,000

Arizona I Limited Partnership       Showlow,       320,000        320,000       1,468,000      1,993,000       682,000     1,311,000
                                    Arizona

Ashland Investment Group,           Ashland,
an Oregon LimitedPartnership        Oregon         300,000        300,000       1,365,000      1,844,000       520,000     1,324,000

Brantley Housing, Ltd.              Brantley,      108,000        108,000         566,000        719,000       239,000       480,000
                                    Alabama

Brian's Village Apartments,         Mannford,
an Oklahoma Limited                 Oklahoma       176,000        176,000         747,000        974,000       444,000       530,000
Partnership

Candleridge Apartments of           Perry, Iowa     93,000         93,000         581,000        823,000       348,000       475,000
Perry, L.P.

Candleridge Apartments of           Runnells,       58,000         58,000         362,000        515,000       218,000       297,000
Runnells, L.P.                      Iowa

Casa Allegre Limited                Las Vegas,     318,000        318,000       1,346,000      1,941,000       631,000     1,310,000
Partnership                         New Mexico
</TABLE>

                                       59
<PAGE>

WNC Housing Tax Credit Fund II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2004
<TABLE>
<CAPTION>
                                               --------------------------------  ---------------------------------------------------
                                                      As of March 31, 2004                        As of December 31, 2003
-------------------------------------------------------------------------------  ---------------------------------------------------
                                                                                   Mortgage
                                                Total Investment    Amount of     Balances of
                                               in Local Limited Investment Paid  Local Limited    Property &   Accumulated  Net Book
Partnership Name                  Location       Partnerships       to Date      Partnerships      Equipment   Depreciation   Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>                 <C>             <C>              <C>            <C>           <C>         <C>
Castroville Village, Ltd.         Castroville,      165,000         165,000             925,000    1,150,000    278,000      872,000
                                  Texas

                                  Rogersville,
Cherokee Square, L.P.             Tennessee         202,000         202,000             964,000    1,227,000    549,000      678,000

                                  Port
Divall Midland Associates         Washington,
Limited  Partnership II           Wisconsin         234,000         234,000           1,141,000    1,570,000    784,000      786,000

                                  Eclectic,
Eclectic Housing, Ltd.            Alabama            74,000          74,000             399,000      500,000    164,000      336,000

Elizabeth Square                  Raceland,
Associates, Ltd.                  Louisiana         356,000         356,000           1,445,000    2,062,000    855,000    1,207,000


Emory Capital, L.P.               Emory, Texas       85,000          85,000             364,000      487,000    211,000      276,000

Emory Manor, L.P.                 Emory, Texas      128,000         128,000             545,000      744,000    290,000      454,000

Idalou Manor, L.P.                Idalou, Texas     122,000         122,000             611,000      778,000    233,000      545,000

                                  Jefferson,
Jefferson Capital, L.P.           Texas             167,000         167,000             705,000      963,000    362,000      601,000
</TABLE>
                                       60
<PAGE>

WNC Housing Tax Credit Fund II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2004
<TABLE>
<CAPTION>
                                               --------------------------------  ---------------------------------------------------
                                                       As of March 31, 2004                        As of December 31, 2003
-------------------------------------------------------------------------------  ---------------------------------------------------
                                                Total Investment     Amount of   Mortgage Balances
                                               in Local Limited  Investment Paid of Local Limited  Property &   Accumulated Net Book
Partnership Name                  Location        Partnerships        to Date     Partnerships      Equipment   Depreciation  Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                 <C>           <C>           <C>          <C>              <C>           <C>
Jefferson Manor, L.P.               Jefferson,
                                    Texas            179,000        179,000       753,000      1,008,000        385,000      623,000

Lakeview Limited Partnership        Beaver Dam,      264,000        264,000     1,223,000      1,589,000        523,000    1,066,000
                                    Wisconsin

Littlefield Manor, L.P.             Littlefield,     118,000        118,000       586,000        749,000        226,000      523,000
                                    Texas

Perry County Housing, Ltd.          Uniontown,        82,000         82,000       433,000        531,000        178,000      353,000
                                    Alabama

Pine Hill Housing, Ltd.             Pine Hill,       105,000        105,000       549,000        688,000        226,000      462,000
                                    Alabama

Rociada Partners, Ltd.              Hereford,        154,000        154,000       720,000        921,000        306,000      615,000
                                    Texas

Wadley Housing, Ltd.                Wadley,           76,000         76,000       433,000        534,000        179,000      355,000
                                    Alabama

Whitewater Woods Limited            Whitewater,      301,000        301,000     1,279,000      1,692,000        568,000    1,124,000
Partnership                         Wisconsin

Willcox Investment Group,           Willcox,
an Arizona Limited Partnership      Arizona          245,000        245,000     1,045,000      1,338,000        396,000      942,000
                                               -------------    -----------   -----------   ------------    -----------  -----------
                                               $   4,996,000    $ 4,996,000   $23,092,000   $ 30,786,000    $11,400,000  $19,386,000
                                               =============    ===========   ===========   ============    ===========  ===========
</TABLE>

                                       61
<PAGE>
WNC Housing Tax Credit Fund II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2004
<TABLE>
<CAPTION>
                                             ---------------------------------------------------------------------------------------
                                                                      For the year ended December 31, 2003
                                             ---------------------------------------------------------------------------------------
                                                                                     Year Investment                Estimated Useful
Partnership Name                             Rental Income     Net Income\(Loss)        Acquired       Status        Life (Years)
------------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                  <C>                  <C>           <C>               <C>
Airport Road Associates, Limited                 $ 180,000        $  (40,000)             1990       Completed               27.5

Am-Kent Associates, Ltd.                           166,000           (37,000)             1991       Completed               27.5

Arizona I Limited Partnership                      134,000           (72,000)             1990       Completed                 35

Ashland Investment Group, an Oregon                173,000           (37,000)             1990       Completed                 50
Limited Partnership

Brantley Housing, Ltd.                              65,000           (11,000)             1992       Completed                 40

Brian's Village Apartments, an                     107,000           (30,000)             1990       Completed                 30
Oklahoma Limited Partnership

Candleridge Apartments of Perry, L.P.              125,000           (10,000)             1992       Completed               27.5

Candleridge Apartments of Runnells, L.P.            91,000            (8,000)             1992       Completed               27.5

Casa Allegre Limited Partnership                   198,000             6,000              1990       Completed                 40

Castroville Village, Ltd.                          179,000           (21,000)             1991       Completed                 50

Cherokee Square, L.P.                               91,000           (39,000)             1990       Completed                 50

Divall Midland Associates Limited                  153,000          (104,000)             1990       Completed               27.5
Partnership II

Eclectic Housing, Ltd.                              54,000             1,000              1992       Completed                 40

Elizabeth Square Associates, Ltd.                  182,000           (56,000)             1994       Completed               27.5
</TABLE>

                                       62
<PAGE>
WNC Housing Tax Credit Fund II, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2004
<TABLE>
<CAPTION>
                                     -----------------------------------------------------------------------------------------------
                                                                For the year ended December 31, 2003
                                     -----------------------------------------------------------------------------------------------
                                                                           Year Investment               Estimated Useful
 Partnership Name                   Rental Income   Net Income\(Loss)          Acquired       Status       Life (Years)
------------------------------------------------------------------------------------------------------------------------------------
<S>                           <C>                     <C>                  <C>          <C>                 <C>
Emory Capital, L.P.                        63,000             (3,000)            1990       Completed               27.5

Emory Manor, L.P.                          87,000             (9,000)            1990       Completed                 30

Idalou Manor, L.P.                         89,000            (19,000)            1990       Completed                 40

Jefferson Capital, L.P.                   108,000             10,000             1990       Completed                 50

Jefferson Manor, L.P.                     106,000             (1,000)            1990       Completed                 50

Lakeview Limited Partnership              165,000            (24,000)            1991       Completed                 35

Littlefield Manor, L.P.                    83,000            (15,000)            1991       Completed                 40

Perry County Housing, Ltd.                 62,000              2,000             1992       Completed                 40

Pine Hill Housing, Ltd.                    71,000             (6,000)            1992       Completed                 40

Rociada Partners, Ltd.                     147,000            (33,000)            1990       Completed                 40

Wadley Housing, Ltd.                       54,000             (9,000)            1992       Completed                 40

Whitewater Woods Limited Partnership      184,000            (52,000)            1991       Completed                 35

Willcox Investment Group, an Arizona      134,000            (27,000)            1990       Completed                 50
Limited Partnership                   --------------    ---------------
                                  $     3,251,000       $   (644,000)
                                      ==============    ================
</TABLE>

                                       63
<PAGE>
                                   SIGNATURES

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

WNC HOUSING TAX CREDIT FUND II, L.P.

By:     WNC & Associates, Inc.,
        General Partner




By:     /s/ Wilfred N. Cooper, Jr.
        --------------------------
        Wilfred N. Cooper, Jr.,
        President of WNC & Associates, Inc.

Date:  October 9, 2006

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.



By:     /s/ Wilfred N. Cooper, Jr.
        --------------------------
        Wilfred N. Cooper, Jr.,
        Chief Executive  Officer,  President  and  Director of WNC & Associates,
        Inc. (chief executive officer)

Date:  October 9, 2006




By:     /s/ Thomas J. Riha
        ------------------
        Thomas J. Riha,
        Senior  Vice-President - Chief Financial  Officer  of WNC & Associates,
        Inc. (chief financial officer and principal accounting officer)

Date:  October 9, 2006




By:     /s/ Wilfred N. Cooper, Sr.
        --------------------------
        Wilfred N. Cooper, Sr.,
        Chairman of the Board of WNC & Associates, Inc.

Date:  October 9, 2006




By:     /s/ David N. Shafer
        -------------------
        David N Shafer,
        Director of WNC & Associates, Inc.

Date:  October 9, 2006


                                       64