SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   Form 10-KSB

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

                    For the fiscal year ended December 31, 2002

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

              For the transition period from __________ to ___________

                         Commission File Number 0-20610

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

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


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

                                 (864) 239-1000
                            Issuer's telephone number

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

                                      NONE

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

                             Local Partnership Units
                                (Title of class)

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

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

State issuer's revenues for its most recent fiscal year. $149,000

State the aggregate  market value of the voting  partnership  interests  held by
non-affiliates  computed  by  reference  to the price at which  the  partnership
interests  were sold,  or the average bid and asked  prices of such  partnership
interests as of December 31, 2002. No market exists for the limited  partnership
interests of the Registrant,  and,  therefore,  no aggregate market value can be
determined.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE


<PAGE>




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

                                     PART I.

ITEM 1.     DESCRIPTION OF BUSINESS

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

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

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

In general,  an owner of a low-income housing project is entitled to receive the
Housing Tax Credit in each year of a ten-year period (the "Credit Period").  The
projects  are subject to a minimum  compliance  period of not less than  fifteen
years (the  "Compliance  Period").  Tax  Credits  are  available  to the limited
partners to reduce their federal income taxes.  The ability of a limited partner
to  utilize  such  credits  may be  restricted  by  the  passive  activity  loss
limitation and the general  business tax credit  limitation  rules.  NTCI-II has
made capital  contributions to 37 Local  Partnerships.  The investment in one of
the Local Partnerships was sold and one was foreclosed in 2001, and one was sold
and one was foreclosed in 2002. As of December 31, 2002, the  Partnership  holds
limited partner interests in 33 Local Partnerships located in 22 states. Each of
these Local  Partnerships  owns a project  that is eligible  for the Housing Tax
Credit.  Several of the Local Partnerships also benefit from government programs
promoting low or moderate income housing.

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

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

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

The registrant  has no employees.  Management  and  administrative  services are
provided by the General  Partner.  These services were provided by affiliates of
the General Partner for the year ended December 31, 2002.


<PAGE>



During 2002,  the  projects in which  NTCI-II had  invested  were  substantially
rented.  The  following is a schedule of the status as of December 31, 2002,  of
the projects owned by Local Partnerships in which NTCI-II is a limited partner.

              SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
                       IN WHICH NTCI-II HAS AN INVESTMENT
                                DECEMBER 31, 2002

<TABLE>
<CAPTION>

                                                         Units
                                         Financed,     Authorized         Occupancy
                                          Insured      for Rental         Percentage
                                            and        Assistance     for the Year Ended
                               No. of   Subsidized       Under           December 31
Name and Location               Units      Under       Section 8        2002      2001

Ashville Equity (Westview)
<S>                                <C>                                   <C>       <C>
  Ashville, OH                     41       --             --            95%       85%
Columbus Junction Park
  Columbus Junction, IA            24       (A)            24            91%       88%
Countryside
  Howell Township, NJ             180       --             --            78%       98%
East Ridge Apartments
  St. Clair, MO (C)                48       --             --            99%       52%
Edgewood Apartments
  Rogers, AR                      108       --             --            66%       99%
Fourth Street
  Los Angeles, CA                  44       --             --           100%       93%
Germantown Apartments
  Conway, AR                      132       --             --            97%       93%
Great Basin Associates
  Reno, NV                         28       --             --            84%       93%
Grimes Park Apartments
  Grimes, IA                       16       (A)            7            95%        88%
Jamestown Terrace
  Jamestown, CA                    56       (A)            43            99%       98%
Jefferson Meadows
  Apartments
  Detroit, MI                      83       --             --            85%       99%
Kentucky River Apartments
  Winchester, KY                   42       --             --            88%       95%
Lincoln Grove Apartments
  Greensboro, NC                  116       --             --            90%       94%
Meadowlakes Apartments
  Searcy, AR                      108       --             --            90%       89%
</TABLE>

<PAGE>


              SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
                   IN WHICH NTCI-II HAS AN INVESTMENT (continued)
                                DECEMBER 31, 2002
<TABLE>
<CAPTION>

                                                          Units
                                         Financed,     Authorized          Occupancy
                                          Insured      for Rental          Percentage
                                            and        Assistance     for the Years Ended
                              No. of     Subsidized       Under           December 31
Name and Location              Units       Under        Section 8       2002        2001

Michigan Beach Apartments
<S>                              <C>                                     <C>         <C>
  Chicago, IL                    240         --            --            96%         88%
Nickel River
  (Wedgewood) Apartments
  LaCrosse, WI (D)               105         --            --            95%         75%
Norwalk Park Apartments
  Norwalk, IA                     16        (A)             4            85%         94%
Oakview Apartments
  Spartanburg, SC                106        (B)            106           89%         98%
Palm Springs View
  Palm Springs, CA               120         --            --            85%        100%
Pam Apartments
  Pampa, TX                       96        (B)            96            98%         97%
Parkwood Landing
  Huntsville, AL                 204         --            --            98%         92%
Pensacol Affordable
  Pensacola, FL                   56         --            --            95%         82%
Pineview Terrace
  Katy, TX                       120         --            --            98%         90%
Quivera
  Lenexa, KS                     289         --            --            90%         89%
Rancho Del Mar
  Tucson, AZ                     312         --            --            98%         79%
Salem Park Apartments
  Conway, AR                     144         --            --            79%        100%
Sheboygan Apartments
  Sheboygan, WI                   59         --            --            89%         81%
Sitka III
  Sitka, AK                       16        (A)            16            94%         81%
Soldotna (Northwood
  Senior) Apartments
  Soldotna, AK                    23        (A)            23            90%        100%
Torres de Plata II
  Toa Alto, PR                    78        (A)            78            90%        100%
Villa Real
  Santa Fe, NM                   120         --            --            97%         95%
Virginia Park Meadows
  Detroit, MI                     83         --            --            92%         88%
Westbridge Apartments
 W.Columbia, SC                  112        (B)            94            91%         99%

                               3,325                      491
</TABLE>

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

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

(C)   The Partnership's  interest in this local limited  partnership was lost to
      foreclosure subsequent to December 31, 2002.

(D)   The Local Partnership sold its property subsequent to December 31, 2002.

The following table details the Partnership's ownership percentages of the Local
Partnerships  and the cost of acquisition of such  ownership.  All interests are
limited  partner  interests.  Also  included  is the  total  mortgage  and other
encumbrances on each property for each of the Local  Partnerships as of December
31, 2002.

<TABLE>
<CAPTION>

                                   NTCI II   Original Cost                     Notes
                                 Percentage   of Ownership    Mortgage      Payable and
Name and Location                 Interest      Interest        Notes    Accrued Interest

Ashville Equity (Westview)
<S>                                <C>         <C>           <C>               <C>
  Ashville, OH                     99.00%      $ 956,250     $ 939,982         $ --
Columbus Junction Park
  Columbus Junction, IA            99.00%        217,500       646,785             --
Countryside
  Howell Township, NJ              99.00%         94,595     4,329,032        143,427
East Ridge Apartments
  St. Clair, MO                    99.00%      1,059,831     1,015,178             --
Edgewood Apartments
  Rogers, AR                       99.00%         288,200    1,637,094             --
Fourth Street
  Los Angeles, CA                  99.00%      1,574,844       977,752             --
Germantown Apartments
  Conway, AR                       99.00%        740,258     2,347,938             --
Great Basin Associates
  Reno, NV                          5.00%        460,400        621,095            --
Grimes Park Apartments
  Grimes, IA                       99.00%      1,857,901       456,646             --
Jamestown Terrace
  Jamestown, CA                    99.00%        183,000     2,850,936             --
Jefferson Meadows Apartments
  Detroit, MI                      98.00%         68,040     3,173,272             --
Kentucky River Apartments
  Winchester, KY                   99.00%      1,200,000       911,721             --
Lincoln Grove Apartments
  Greensboro, NC                   99.00%        840,000       564,694       2,069,083
Meadowlakes Apartments
  Searcy, AR                       99.00%        370,100     1,300,121              --
Michigan Beach Apartments
  Chicago, IL                      98.90%      1,574,844     6,151,602       3,564,528
Nickel River (Wedgewood)
  Apartments
  LaCrosse, WI                     99.00%      1,400,000     1,827,495              --
Norwalk Park Apartments
  Norwalk, IA                      99.00%        464,662       425,428              --
Oakview Apartments
  Spartanburg, SC                  99.00%        288,000     1,575,000              --
Palm Springs View
  Palm Springs, CA                 50.49%         56,725     5,122,010              --
Pam Apartments
  Pampa, TX                        99.00%        336,146     1,315,000              --
</TABLE>


<TABLE>
<CAPTION>

                                 NTCI II   Original Cost                     Notes
                               Percentage   of Ownership    Mortgage      Payable and
Name and Location               Interest      Interest        Notes    Accrued Interest

Parkwood Landing
<S>                              <C>          <C>          <C>               <C>
  Huntsville, AL                 99.00%       $ 50,000     $4,251,491        $ --
Pensacola Affordable
  Pensacola, FL                  99.00%        300,000      1,283,048             --
Pineview Terrace
  Katy, TX                       98.99%        132,083      2,749,173             --
Quivera
  Lenexa, KS                     99.00%         42,641      6,594,568             --
Rancho Del Mar
  Tucson, AZ (A)                 99.00%        215,785      3,237,380             --
Salem Park Apartments
  Conway, AR                     99.00%      1,853,916      2,540,002             --
Sheboygan Apartments
  Sheboygan, WI                  10.90%        867,000      1,411,960             --
Sitka III
  Sitka, AK                      99.00%      1,276,633      1,157,713             --
Soldotna (Northwood Senior)
  Apartments
  Soldotna, AK                   99.00%      1,391,350      1,467,322             --
Torres de Plata II
  Toa Alto, PR                   99.00%         100,420     3,049,491             --
Villa Real
  Santa Fe, NM                    5.85%         131,880     2,727,617             --
Virginia Park Meadows
  Detroit, MI                    98.90%         248,600     3,122,555             --
Westbridge Apartments
  W. Columbia, SC                 99.00         840,000     2,560,000             --
                                            $21,481,604   $74,341,101     $5,777,038
</TABLE>

(A)   Subsequent to December 31, 2002,  the  Partnership  diluted its percentage
      interest in this Local Partnership to 66.4%.

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

ITEM 2.     DESCRIPTION OF PROPERTIES

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

ITEM 3.     LEGAL PROCEEDINGS

On August 27, 1998, two investors holding an aggregate of eight units of limited
partnership  interests  in Real Estate  Associates  Limited  III (an  affiliated
partnership in which NAPICO is the corporate  general partner) and two investors
holding an  aggregate  of five units of limited  partnership  interests  in Real
Estate Associates Limited VI (another affiliated  partnership in which NAPICO is
the corporate general partner) commenced an action in the United States District
Court for the Central District of California against the Partnership, NAPICO and
certain other  defendants.  The complaint  alleged that the defendants  breached
their  fiduciary  duty  to  the  limited  partners  of  certain  NAPICO  managed
partnerships  and  violated  securities  laws by  making  materially  false  and
misleading statements in the consent solicitation statements sent to the limited
partners  of  such  partnerships   relating  to  approval  of  the  transfer  of
partnership interests in limited partnerships, owning certain of the properties,
to affiliates of Casden  Properties  Inc.,  organized by an affiliate of NAPICO.
The plaintiffs  sought  equitable  relief,  as well as compensatory  damages and
litigation  related costs.  On August 4, 1999, one investor  holding one unit of
limited  partnership  interest in Housing Programs  Limited (another  affiliated
partnership  in which  NAPICO is the  corporate  general  partner)  commenced  a
virtually  identical  action in the United States District Court for the Central
District  of  California  against  the  Partnership,  NAPICO and  certain  other
entities.  The second action was subsumed in the first action, and was certified
as a  class  action.  On  August  21,  2001,  plaintiffs  filed  a  supplemental
complaint,  which added new claims,  including a  rescission  of the transfer of
partnership interests and an accounting.

In November 2002, the jury returned  special verdicts against NAPICO and certain
other defendants in the amount of approximately  $25.2 million for violations of
securities laws and against NAPICO for approximately  $67.3 million for breaches
of fiduciary duty. In addition, the jury awarded the plaintiffs punitive damages
against  NAPICO of  approximately  $92.5  million.  On April 29, 2003, the Court
entered  judgment  against NAPICO and certain other  defendants in the amount of
$25.2 million for  violations of  securities  laws and against  NAPICO for $67.3
million for breaches of  fiduciary  duty,  both  amounts plus  interest of $25.6
million, and for punitive damages against NAPICO in the amount of $2.6 million.

On May 30, 2003,  NAPICO and certain other defendants  entered into a memorandum
of  understanding  with the plaintiff  class and their  counsel  relating to the
settlement of the litigation.

On  August  11,  2003,  NAPICO  and  certain  other  defendants  entered  into a
Stipulation of Settlement (the  "Stipulation of Settlement")  with the plaintiff
class (the  "Plaintiffs")  and their counsel  relating to the  settlement of the
litigation.  On August 25, 2003, the court granted  preliminary  approval of the
Stipulation of Settlement. Pursuant to the Stipulation of Settlement, within two
days  after  receiving  the  court's   preliminary   approval  of  the  proposed
settlement, Alan I. Casden, on behalf of himself, NAPICO and other defendants in
the  litigation,  caused $29 million to be deposited  into an escrow account for
the benefit of the Plaintiffs.  The Stipulation of Settlement remains subject to
the final approval of the court, as well as the approval of the Plaintiffs. Upon
final court  approval,  approval by the  Plaintiffs and the lapse of any time to
appeal the court approval of the settlement, the following shall occur:

1.    Alan I. Casden,  on behalf of himself,  NAPICO and other defendants in the
      litigation,  will transfer to an agent for the Plaintiffs shares of common
      stock  ("Class A Common  Stock") of AIMCO owned by certain  affiliates  of
      Alan I. Casden with an aggregate  market value of $19 million,  subject to
      certain transfer restrictions,  or at Alan I. Casden's option, $19 million
      in cash.

2.    NAPICO will issue an aggregate of $35 million in promissory  notes for the
      benefit of the  Plaintiffs.  An aggregate of $7 million of notes are to be
      repaid each year. The notes will bear interest  based on applicable  rates
      of  U.S.  Treasury  bills  with  similar  maturities.  The  notes  will be
      guaranteed by AIMCO Properties, L.P., an affiliate of AIMCO.

3.    The parties to the  Stipulation of Settlement  will release each other and
      related parties from any and all claims associated with the litigation and
      the Plaintiffs'  investment in the  partnerships  that were the subject of
      the litigation.

4.    The $29 million in the escrow  account  established by Alan I. Casden will
      be released to the Plaintiffs.

Pursuant to the Stipulation of Settlement, upon final approval of the settlement
by the court,  the parties shall jointly  request that a new judgment be entered
in the litigation that will, among other things, expunge the judgment originally
entered against NAPICO and the other defendants on April 29, 2003.

On August 12, 2003, in connection with the proposed  settlement  pursuant to the
Stipulation of Settlement, NAPICO and AIMCO executed a Settlement Agreement (the
"Settlement  Agreement") with the prior  shareholders of Casden  Properties Inc.
The principal terms of the Settlement Agreement include:

1.    That NAPICO will  voluntarily  discontinue  the action it commenced on May
      13, 2003 against the former  shareholders  of Casden  Properties  Inc. and
      other  indemnitors in AIMCO's March 2002 acquisition of Casden  Properties
      Inc. (the "Casden Merger").

2.    That Alan I. Casden and certain  related  entities  will  resolve  certain
      pending  claims  for  indemnification  made by  NAPICO,  AIMCO  and  their
      affiliates. These claims include indemnification related to the litigation
      and certain other matters in connection with the Casden Merger.

3.   AIMCO,  or an  affiliate,  will deposit $25 million of the $29 million that
     Alan I. Casden is responsible  for  depositing  into the escrow account for
     the benefit of the Plaintiffs  pursuant to the terms of the  Stipulation of
     Settlement.  In connection  with this deposit by AIMCO,  The Casden Company
     will transfer to AIMCO  531,915  shares of AIMCO Class A Common Stock owned
     by The Casden Company, which shares are to be held in escrow by AIMCO until
     final  approval  of the  Stipulation  of  Settlement  by the  court and the
     Plaintiffs.  Upon such approval, AIMCO will become the owner of the 531,915
     shares.  If final approval by the court and the Plaintiffs is not obtained,
     the $25 million deposited by AIMCO into the escrow account will be returned
     to AIMCO and AIMCO will return to The Casden Company the 531,915 shares. On
     August 25, 2003, AIMCO caused the $25 million to be deposited in the escrow
     account for the benefit of the  Plaintiffs  and received in return from The
     Casden  Company and Alan I. Casden the 531,915  shares to be held in escrow
     as indicated.

4.   The Casden  Company will promise to pay an aggregate  amount of $35 million
     on a secured,  nonrecourse  basis to NAPICO.  The  Casden  Company  will be
     obligated to repay an aggregate of $7 million of the obligation  each year.
     The  obligation  to repay the $35 million  will bear the same  interest and
     mature on the same schedule as the promissory notes issued by NAPICO to the
     plaintiffs  pursuant to the  Stipulation  of  Settlement.  Payment of these
     obligations  will be  secured  by (i) a pledge of  744,681  shares of AIMCO
     Class A Common Stock owned by Alan I. Casden or an affiliated entity,  plus
     up to 60,000 additional shares for accrued interest, and (ii) cash proceeds
     of recoveries or settlements  that Alan I. Casden or any of his affiliates,
     or any of the former  shareholders of Casden  Properties  Inc.,  receive in
     connection with or related to the litigation (collectively,  "Recoveries").
     The payment  obligations  to NAPICO will be required to be prepaid with any
     Recoveries  received.  Payment  may be made in cash or in  shares  of AIMCO
     Class A Common Stock,  except  payments with respect to Recoveries  must be
     made in cash.

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

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

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

In March 2002,  the local  operating  general  partner of  Sheboygan  Apartments
Limited  Partnership  brought  action  against the  Partnership  and the General
Partner alleging that the parties breached the purchase agreement by refusing to
close a transaction regarding the sale of the property.  The parties consummated
a  settlement  of the action  whereby the  Partnership  diluted a portion of its
interest in the Local Limited  Partnership (see "Item 7. Financial  Statements -
Note 2"). The case was dismissed in August 2002.

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

In March 2002,  the operating  general  partner of Michigan  Beach Local Limited
Partnership  reached a  settlement  with the City of Chicago  for repairs to the
facade of Michigan Beach Apartments. Rehabilitation work is expected to commence
during  the  third   quarter  of  2003.   Pursuant  to  the  court  order,   all
rehabilitation   work  must  be   completed   no  later  than  July  2004.   The
rehabilitation is estimated to cost approximately $790,000. Michigan Beach Local
Limited  Partnership  is  requesting an advance from an affiliate of the General
Partner  to  complete  this  rehabilitation  project.  See  "Item  7.  Financial
Statements - Note 2" for further discussion.

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

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

No  matters  were  submitted  to a vote  of the  limited  partners  through  the
solicitation of proxies or otherwise during the quarter ended December 31, 2002.


<PAGE>


                                     PART II

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

The Limited  Partnership  Interests are not traded on a public exchange but were
sold through a public offering  managed by PaineWebber  Incorporated.  It is not
anticipated that any active public market will develop for the purchase and sale
of any Limited  Partnership  Interests,  therefore  an investor may be unable to
sell or  otherwise  dispose of his or her interest in the  Partnership.  Limited
Partnership Interests may not be transferred but can be assigned only if certain
requirements in the Partnership  Agreement are satisfied.  At December 31, 2002,
there were 3,685  registered  holders of units in NTCI-II.  The  Partnership has
invested in certain  government  assisted  projects under programs which in many
instances  restrict the cash return available to project owners. The Partnership
was  not  designed  to  provide  cash   distributions  to  Limited  Partners  in
circumstances  other than refinancing or disposition of its investments in Local
Partnerships. Distributions have not been made from inception of the Partnership
to December 31, 2002.


<PAGE>

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

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

Liquidity

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

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

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

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

Capital Resources

The Partnership raised $72,404,000 from investors by a public offering, the term
of which  expired  on April  22,  1992,  that  was used for the  acquisition  of
investments  in Local  Partnerships  which own the  projects.  NTCI-II  has made
capital  contributions  to 37 Local  Partnerships.  The investment in one of the
Local  Partnerships  was sold and one was  foreclosed  upon in 2001, and one was
sold  and  one was  foreclosed  upon in  2002.  As of  December  31,  2002,  the
Partnership holds limited partner interests in 33 Local Partnerships.

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

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

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

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

As of December  31,  2002,  the  Partnership  has cash and cash  equivalents  of
$399,000.  Substantially  all of this  cash is on  deposit  primarily  with high
credit quality financial  institutions,  earning interest.  This resulted in the
Partnership earning approximately $13,000 and $34,000 in interest income for the
years  ended  December  31, 2002 and 2001  respectively.  The amount of interest
income varies with the market rates available on deposits and with the amount of
funds  available for  investment.  Cash  equivalents can be converted to cash to
meet  obligations of the  Partnership as they rise. The  Partnership  intends to
continue investing available funds in this manner.

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

Results of Operations

The Partnership was formed to provide various  benefits to its Limited  Partners
as discussed in "Item 1.  Description of Business".  It is not expected that any
of the Local  Partnerships  in which the  Partnership has invested will generate
cash flow  sufficient to provide for  distributions  to Limited  Partners in any
material  amount.  The  Partnership  accounts for its  investments  in the Local
Partnerships on the equity method,  thereby adjusting its investment  balance by
its  proportionate  share of the income or loss of the Local  Partnerships.  The
investments in 21 of the 33 Local  Partnerships  have been reduced to zero as of
December 31, 2002.

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

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

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

The  Partnership,  as a limited  partner,  does not  exercise  control  over the
activities and  operations,  including  refinancing or selling  decisions of the
Local Partnerships.  Accordingly, the Partnership accounts for its investment in
the Local Partnerships using the equity method. Thus the individual  investments
are  carried  at cost plus the  Partnership's  share of the Local  Partnership's
profits  less the  Partnership's  share of the Local  Partnership's  losses  and
distributions  and impairment  charges.  However,  since the  Partnership is not
legally  liable  for  the  obligations  of  the  Local  Partnerships,  or is not
otherwise committed to provide additional support to them, it does not recognize
losses  once its  investment  in each of the Local  Partnerships  reaches  zero.
Distributions  from the Local  Partnerships  are accounted for as a reduction of
the  investment  balance  until  the  investment  balance  is  reduced  to zero.
Subsequent  distributions  received are recognized as income in the accompanying
statements  of  operations.  For those  investments  where the  Partnership  has
determined that the carrying value of its investments approximates the estimated
fair value of those investments, the Partnership's policy is to recognize equity
in  income  of the  Local  Partnerships  only  to the  extent  of  distributions
received,  and amortization of acquisition costs from those Local  Partnerships.
During the years ended  December 31, 2002 and 2001, the  Partnership  recognized
equity  in  loss  of  $995,000   and   $2,147,000,   respectively,   from  Local
Partnerships. During the years ended December 31, 2002 and 2001, the Partnership
received  $1,729,000 and $1,270,000,  respectively,  in distributions from Local
Partnerships  that were  recognized  as income in the  statements  of operations
since the Partnership's investment in the Local Partnerships has been reduced to
zero.

An annual  partnership  management  fee in an amount  equal to 0.5% of  invested
assets,  as  defined in the  Partnership  Agreement,  is payable to the  General
Partner.  The management  fee represents the annual  recurring fee which will be
paid  to the  General  Partner  for its  continuing  management  of  Partnership
affairs.  Management fees were approximately $636,000 and $737,000 for the years
ended December 31, 2002 and 2001, respectively.

Operating  expenses,  exclusive  of the  management  fee,  consist  of legal and
accounting  fees for  services  rendered  to the  Partnership  and  general  and
administrative expenses. Legal and accounting fees were approximately $1,844,000
and $642,000 for the years ended December 31, 2002 and 2001,  respectively.  The
increase in 2002 is primarily due to legal fees incurred in settling the lawsuit
with the General Partner of Quivira Local  Partnership and Sheboygan  Apartments
Limited Partnership as discussed in "Item 7. Financial  Statements - Notes 6 and
8". General and administrative expenses were approximately $178,000 and $136,000
for the years ended  December 31, 2002 and 2001,  respectively.  The increase in
general and administrative expenses is due to an increase in insurance expenses.

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

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

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

During the year ended December 31, 2002, the Partnership  diluted its investment
in the Sheboygan Regency House Limited  Partnership  leaving a 10.9% interest in
this  Local  Partnership.   Total  proceeds  received  in  connection  with  the
transaction  were  $247,000.  After  recognizing  approximately  $105,000  as  a
reduction  of  investment  balance,  the  Partnership's  investment  balance  in
Sheboygan  Regency  House  Limited  Partnership  had been  reduced to zero.  The
remaining  proceeds of  approximately  $144,000 were reported as gain on sale of
limited partnership interest on the accompanying statement of operations.

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

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

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

During the year ended  December 31,  2002,  an  impairment  loss of $790,000 was
recognized with respect to the Partnership's  investment in a Local Partnership,
Michigan  Beach.  The Local  Partnership  reached a settlement  with the City of
Chicago during 2002 to complete  necessary repairs to the exterior facade of the
building.  The total estimated cost to complete this project will be advanced to
Michigan  Beach by the  Partnership.  Since  the  Partnership  has no  remaining
investment  balance in Michigan Beach, and recovery of the advance is uncertain,
the entire  amount of the  estimated  cost is being  recognized as an impairment
loss during the year ended December 31, 2002.

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

Subsequent to December 31, 2002, the  Partnership  diluted its investment in the
Rancho del Mar  Apartments  Limited  Partnership to 66.4% from 99%. The proceeds
received  of  approximately  $1,018,000  were offset  against the  Partnership's
investment balance in the Local Partnership.

Under recently adopted law and policy,  the United States  Department of Housing
and Urban Development ("HUD") has determined not to renew the Housing Assistance
Payment  ("HAP")  Contracts  on a long  term  basis on the  existing  terms.  In
connection with renewals of the HAP Contracts under such new law and policy, the
amount of rental  assistance  payments under renewed HAP Contracts will be based
on market rentals instead of above market  rentals,  which may be the case under
existing HAP Contracts.  The payments under the renewed HAP Contracts may not be
in an amount  that  would  provide  sufficient  cash  flow to  permit  owners of
properties  subject to HAP  Contracts to meet the debt service  requirements  of
existing  loans  insured by the Federal  Housing  Administration  of HUD ("FHA")
unless such mortgage loans are  restructured.  In order to address the reduction
in payments under HAP Contracts as a result of this new policy, the Multi-family
Assisted Housing Reform and  Affordability  Act of 1997 ("MAHRAA")  provides for
the  restructuring  of  mortgage  loans  insured  by the  FHA  with  respect  to
properties  subject  to the  Section 8 program.  Under  MAHRAA,  an  FHA-insured
mortgage  loan can be  restructured  into a first  mortgage  loan  which will be
amortized on a current basis and a low interest  second mortgage loan payable to
FHA which will only be payable on  maturity  of the first  mortgage  loan.  This
restructuring results in a reduction in annual debt service payable by the owner
of the  FHA-insured  mortgage  loan and is  expected  to result in an  insurance
payment from FHA to the holder of the  FHA-insured  loan due to the reduction in
the principal amount. MAHRAA also phases out project-based subsidies on selected
properties  serving  families not located in rental markets with limited supply,
converting such subsidies to a tenant-based subsidy.

When the HAP  Contracts are subject to renewal,  there can be no assurance  that
the  Local  Partnerships  in which the  Partnership  has an  investment  will be
permitted to restructure its mortgage  indebtedness  under MAHRAA.  In addition,
the  economic  impact  on the  Partnership  of the  combination  of the  reduced
payments  under  the  HAP  Contracts  and  the  restructuring  of  the  existing
FHA-insured mortgage loans under MAHRAA is uncertain.

Recent Accounting Pronouncements

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

The Partnership has not entered into any partnership  investments  subsequent to
January  31,  2003.  The  Partnership  is  in  the  process  of  evaluating  its
investments in unconsolidated  partnerships that may be deemed variable interest
entities under the provisions of FIN 46. At December 31 2002, the  Partnership's
maximum  exposure to loss with  regard to  unconsolidated  partnerships  was its
recorded investment in these partnerships totaling approximately $9,109,000. The
Partnership has not yet determined the anticipated impact of adopting FIN 46 for
its partnership  agreements that existed as of January 31, 2003. However, FIN 46
may require the  consolidation  of the assets,  liabilities  and  operations  of
certain of the Partnership's  unconsolidated  partnership investments.  Although
the Partnership does not believe the full adoption of FIN 46 will have an impact
on net earnings,  the Partnership cannot make any definitive conclusion until it
completes its evaluation.

Critical Accounting Policies and Estimates

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

Method of Accounting for Investments in Limited Partnerships

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

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

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

ITEM 7.     FINANCIAL STATEMENTS

                        National Tax Credit Investors II
                       (a California limited partnership)

      LIST OF FINANCIAL STATEMENTS

      Report of Ernst & Young, LLP, Independent Auditors

      Report of Deloitte & Touche, LLP, Independent Public Accountants

      Balance Sheet - December 31, 2002

      Statements of Operations - Years ended December 31, 2002 and 2001

      Statements of Changes in Partners' (Deficiency) Capital  - Years ended
      December 31, 2002 and 2001

      Statements of Cash Flows - Years ended December 31, 2002 and 2001

      Notes to Financial Statements


<PAGE>




                         Report of Independent Auditors



The Partners
National Tax Credit Investors II

We have audited the accompanying  balance sheet of National Tax Credit Investors
II as of December 31, 2002, and the related statements of operations,  partners'
(deficiency)  capital  and cash flows for the year then ended.  These  financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our  audit.  We did not  audit  the  financial  statements  of  certain  limited
partnerships,  the  investments  in  which  are  reflected  in the  accompanying
financial  statements  using the  equity  method  of  accounting.  The  investee
information  for these  limited  partnerships  is included in Notes 2 and 7. The
financial  statements  of  these  limited  partnerships  were  audited  by other
auditors whose reports have been furnished to us, and our opinion, insofar as it
relates to the amounts included for these limited partnerships,  is based solely
on the reports of the other auditors.

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

In our  opinion,  based on our  audit and the  reports  of other  auditors,  the
financial statements referred to above present fairly, in all material respects,
the financial position of National Tax Credit Investors II at December 31, 2002,
and the results of its  operations and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States.


                                                            /s/Ernst & Young LLP

Greenville, South Carolina
August 22, 2003



<PAGE>



                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


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


We  have  audited  the   accompanying   statements  of   operations,   partners'
(deficiency)  capital  and cash flows of  National  Tax Credit  Investors  II (a
California  limited  partnership)for  the year ended  December 31,  2001.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our  audit.  We did not  audit  the  financial  statements  of  certain  limited
partnerships,  the  investments  in  which  are  reflected  in the  accompanying
financial  statements using the equity method of accounting.  The equity in loss
of these limited partnerships represents 40 percent of the total net loss of the
Partnership for the year ended December 31, 2001 and these limited  partnerships
represent  a  substantial  portion of the  investee  information  in Note 2. The
financial  statements  of  these  limited  partnerships  were  audited  by other
auditors. Their reports have been furnished to us and our opinion, insofar as it
relates to the amounts included for these limited  partnership,  is based solely
on the reports of the other auditors.

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

In our  opinion,  based on our  audit and the  reports  of other  auditors,  the
financial statements referred to above present fairly, in all material respects,
the results of operations and cash flows of National Tax Credit Investors II for
the year ended  December  31,  2001 in  conformity  with  accounting  principles
generally accepted in the United States of America.


/s/DELOITTE & TOUCHE LLP

Los Angeles, California
April 5, 2002


<PAGE>


<TABLE>
<CAPTION>

                        NATIONAL TAX CREDIT INVESTORS II

                                  BALANCE SHEET
                                 (in thousands)

                                DECEMBER 31, 2002

                            ASSETS

<S>                                       <C>                                <C>
  Investments in Local Partnerships (Note 2)                                 $ 9,109
  Cash and cash equivalents                                                      399
  Restricted cash (Note 3)                                                       267
       TOTAL ASSETS                                                          $ 9,775

        LIABILITIES AND PARTNERS' (DEFICIENCY) CAPITAL

LIABILITIES:
  Accrued fees and expenses due to affiliates (Note 4)                       $ 1,127
  Accounts payable and accrued expenses                                          152
  Accrued liability to a Local Partnership (Notes 2 & 4)                         790

Contingencies (Note 8)

Partners' (Deficiency) Capital:
  General Partners                                               $ (552)
  Limited Partners                                                 8,258       7,706


       TOTAL LIABILITIES AND PARTNERS' (DEFICIENCY) CAPITAL                  $ 9,775

                   See Accompanying Notes to Financial Statements
</TABLE>



<PAGE>


                        NATIONAL TAX CREDIT INVESTORS II

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

<TABLE>
<CAPTION>

                                                                Years Ended December 31,
                                                                   2002         2001
Operating Income:
<S>                                                                <C>          <C>
Interest and other income                                          $ 41         $ 35
Gain on legal settlement (Note 6)                                     108           --
      Total operating income                                          149           35

Operating expenses:
  Management fees - partners (Note 4)                                 636          737
  General and administrative (Note 4)                                 178          136
  Legal and accounting                                              1,844          642
      Total operating expenses                                      2,658        1,515

Loss from partnership operations                                   (2,509)      (1,480)

Impairment loss (Note 2)                                           (1,624)          --
Gain on sale of limited partnership interests (Note 2)              1,760          266
Distributions from limited partnerships
  recognized as income (Note 2)                                     1,729        1,270
Equity in loss of Local Partnerships and
  amortization of acquisition costs (Note 2)                         (995)      (2,147)

Net loss                                                          $(1,639)     $(2,091)

  Net loss allocated to general partners (1%)                      $ (16)       $ (21)
  Net loss allocated to limited partners (99%)                     (1,623)      (2,070)

                                                                  $(1,639)
$(2,091)

Net loss per limited partnership interest (Note 1)                $(22.42)     $(28.59)


                   See Accompanying Notes to Financial Statements
</TABLE>



<PAGE>


                        NATIONAL TAX CREDIT INVESTORS II

               STATEMENTS OF CHANGES IN PARTNERS'(DEFICIENCY) CAPITAL
                                 (in thousands)

<TABLE>
<CAPTION>

                                                     General        Limited
                                                     Partner        Partners        Total

Partners' (deficiency) capital at
<S>        <C> <C>                                   <C>            <C>            <C>
  December 31, 2000                                  $ (515)        $11,951        $11,436

Net loss for the year ended December 31, 2001            (21)        (2,070)        (2,091)

Partners' (deficiency) capital at
  December 31, 2001                                     (536)         9,881          9,345

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

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

                   See Accompanying Notes to Financial Statements
</TABLE>


                        NATIONAL TAX CREDIT INVESTORS II

                            STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                    Years Ended December 31,
                                                                        2002          2001
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                   <C>           <C>
  Net loss                                                            $(1,639)      $(2,091)
  Adjustments to reconcile net loss to net cash used in
    operating activities:
      Gain on sale of partnership interest                             (1,760)         (266)
      Equity in loss of limited partnerships and
        amortization of acquisition costs                                 995         2,147
      Impairment loss                                                   1,624            --
      (Decrease) increase in accounts payable and
        accrued expenses                                                 (203)          328
      Decrease in accrued fees and expenses
        due to partners                                                (1,418)       (1,171)
         Net cash used in operating activities                         (2,401)       (1,053)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital contributions                                                    --          (447)
  Proceeds from sale of limited partnership interests                   2,084         1,030
  Distributions recognized as a reduction of investment
     balance                                                              374           190
  Increase in restricted cash                                              (2)           (8)
  Advances to limited partnerships                                       (233)           --
         Net cash provided by investing activities                      2,223           765

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

NET DECREASE IN CASH AND CASH EQUIVALENTS                                (178)         (288)
CASH AND CASH EQUIVALENTS, beginning of year                              577           865
CASH AND CASH EQUIVALENTS, end of year                                 $ 399         $ 577

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

                   See Accompanying Notes to Financial Statements
</TABLE>


                        NATIONAL TAX CREDIT INVESTORS II

                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2002


Note 1 - Organization and Significant Accounting Policies

Organization

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

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

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

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

Basis of Presentation

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

Cash and Cash Equivalents

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

Method of Accounting for Investment in Local Partnerships

The  Partnership's  investment  in Local  Partnerships  are accounted for on the
equity   method.   Acquisition,   selection  and  other  costs  related  to  the
Partnership's  investments  are  capitalized  and  are  being  amortized  on the
straight line method over the estimated lives of the underlying assets, which is
generally 30 years.

Use of Estimates

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

Net Loss Per Limited Partnership Interest

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

Impairment of Long-Lived Assets

The  Partnership  reviews  long-lived  assets to determine if there has been any
permanent  impairment whenever events or changes in circumstances  indicate that
the  carrying  amount  of the asset  may not be  recoverable.  If the sum of the
expected future cash flows is less than the carrying  amount of the assets,  the
Partnership  recognizes an impairment loss. For the year ended December 31, 2002
impairment  losses of $1,624,000 were recognized with respect to the investments
in two Local  Partnerships.  No impairment  losses were  recognized for the year
ended December 31, 2001. See "Note 2" for further information.

Fair Value of Financial Statements

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

Segment Reporting

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

Recent Accounting Pronouncements

In August 2001, the Financial  Accounting  Standards  Board issued SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived  Assets".  SFAS No. 144
provides  accounting  guidance for  financial  accounting  and reporting for the
impairment or disposal of long-lived  assets.  SFAS No. 144 supersedes  SFAS No.
121,  "Accounting  for the  Impairment of Long-Lived  Assets and for  Long-Lived
Assets to be Disposed Of". SFAS No. 144 is effective for fiscal years  beginning
after December 15, 2001. The Partnership  adopted SFAS 144 effective  January 1,
2002. Its adoption did not have a material  effect on the financial  position or
results of operations of the Partnership.

Effective  January 1, 2002,  the  Partnership  adopted  Statement  of  Financial
Accounting  Standards  ("SFAS")  No.  144,  "Accounting  for the  Impairment  or
Disposal of Long-Lived  Assets",  which  established  standards for the way that
public business  enterprises report information about long-lived assets that are
either  being held for sale or have  already  been  disposed of by sale or other
means.  The standard  requires that results of operations for a long-lived asset
that is being held for sale or has  already  been  disposed  of be reported as a
discontinued operation on the statement of operations. As a result, the combined
statements  of  operations in Note 2 have been restated as of January 1, 2001 to
reflect the operations of Cottonwood, Wade Walton and Cottages of North St. Paul
Local Partnerships as loss from discontinued operations.

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

The Partnership has not entered into any partnership  investments  subsequent to
January  31,  2003.  The  Partnership  is  in  the  process  of  evaluating  its
investments in unconsolidated  partnerships that may be deemed variable interest
entities under the provisions of FIN 46. At December 31, 2002, the Partnership's
maximum  exposure to loss with  regard to  unconsolidated  partnerships  was its
recorded investment in these partnerships totaling approximately $9,109,000. The
Partnership has not yet determined the anticipated impact of adopting FIN 46 for
its partnership  agreements that existed as of January 31, 2003. However, FIN 46
may require the  consolidation  of the assets,  liabilities  and  operations  of
certain of the Partnership's  unconsolidated  partnership investments.  Although
the Partnership does not believe the full adoption of FIN 46 will have an impact
on net earnings,  the Partnership cannot make any definitive conclusion until it
completes its evaluation.

Note 2 - Investments in Local Partnerships

As of December 31, 2002 the Partnership holds limited  partnership  interests in
33  Local  Limited  Partnerships  (the  "Local  Partnerships"),  located  in  22
different  states.  As  a  limited  partner  of  the  Local  Partnerships,   the
Partnership  does not have  authority  over  day-to-day  management of the Local
Partnerships  or their  properties  (the  "Apartment  Complexes").  The  general
partners  responsible  for  management  of the Local  Partnerships  (the  "Local
Operating General  Partners") are not affiliated with the General Partner of the
Partnership, except as discussed below.

At December 31, 2002, the Local Partnerships own residential projects consisting
of 3,325 apartment units.

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

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

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

As  of  December  31,  2002,  the  investment  balance  in 21 of  the  33  Local
Partnerships had been reduced to zero.

The  following  is a  summary  of the  investments  in  and  advances  to  Local
Partnerships for the year ended December 31, 2002(in thousands):


Balance, beginning of year                          $11,184
Advances to limited partnerships                        233
Impairment loss                                      (1,624)
Equity in losses of limited partnerships               (903)
Distributions recognized as a reduction
  of investment balance                                (374)
Accrued liability to a Local Partnership                790
Amortization of capitalized acquisition
  costs and fees                                        (92)
Sale of partnership interests                       $ (105)

Investments balance, end of year                    $ 9,109

The difference  between the investment  per the  accompanying  balance sheets at
December 31, 2002 and the equity per the Local Partnerships'  combined financial
statements  is due  primarily  to  cumulative  unrecognized  equity in losses of
certain  Local  Partnerships,  costs  capitalized  to  the  investment  account,
cumulative  distributions  recognized as income, the Partnership's  recording of
capital  contributions  payable  to the  Local  Partnerships  in its  investment
balance and recognition of impairment losses.

Selected  financial  information from the combined  financial  statements of the
Local  Partnerships  at December 31, 2002 for the years ended  December 31, 2002
and 2001:

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

                                                             December 31, 2002
Assets:
  Land                                                            $ 7,244
  Buildings and improvements, net of accumulated
   depreciation of approximately $50,424                           78,085
  Other assets                                                      8,687
      Total assets                                                $94,016

Liabilities and Partners' Capital:
  Liabilities:
  Mortgage notes payable                                          $74,341
  Other liabilities                                                17,375
Partners' Capital:                                                  2,300
Total liabilities and Partners' Capital                           $94,016


                    CONDENSED COMBINED RESULTS OF OPERATIONS
                        OF THE LOCAL LIMITED PARTNERSHIPS
                                 (in thousands)
<TABLE>
<CAPTION>

                                                         Years Ended December 31,
                                                           2002             2001
                                                                       (Restated)(1)
<S>                                                      <C>              <C>
Total revenues                                           $17,633          $17,712

Expenses:
  Interest expense                                         5,345            4,789
  Depreciation and amortization                            4,487            4,524
  Operating expenses                                      10,743           12,362

    Total expenses                                        20,575           21,675

Net loss from continuing operations                       (2,942)          (3,963)

Loss from discontinued operations                             --             (290)

Net loss                                                 $(2,942)         $(4,253)

Net loss allocable to the Partnership                    $(2,568)         $(4,088)
</TABLE>

(1)   The December  31, 2001  amounts have been  restated to reflect the sale of
      the investment in the Cottages of North St. Paul Limited  Partnership  and
      the foreclosure sale of the Wade Walton Limited Partnership.

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

Under recently adopted law and policy,  the United States  Department of Housing
and Urban Development ("HUD") has determined not to renew the Housing Assistance
Payment  ("HAP")  Contracts  on a long  term  basis on the  existing  terms.  In
connection with renewals of the HAP Contracts under such new law and policy, the
amount of rental  assistance  payments under renewed HAP Contracts will be based
on market rentals instead of above market  rentals,  which may be the case under
existing HAP Contracts.  The payments under the renewed HAP Contracts may not be
in an amount  that  would  provide  sufficient  cash  flow to  permit  owners of
properties  subject to HAP  Contracts to meet the debt service  requirements  of
existing  loans  insured by the Federal  Housing  Administration  of HUD ("FHA")
unless such mortgage loans are  restructured.  In order to address the reduction
in payments under HAP Contracts as a result of this new policy, the Multi-family
Assisted Housing Reform and  Affordability  Act of 1997 ("MAHRAA")  provides for
the  restructuring  of  mortgage  loans  insured  by the  FHA  with  respect  to
properties  subject  to the  Section 8 program.  Under  MAHRAA,  an  FHA-insured
mortgage  loan can be  restructured  into a first  mortgage  loan  which will be
amortized on a current basis and a low interest  second mortgage loan payable to
FHA which will only be payable on  maturity  of the first  mortgage  loan.  This
restructuring results in a reduction in annual debt service payable by the owner
of the  FHA-insured  mortgage  loan and is  expected  to result in an  insurance
payment from FHA to the holder of the  FHA-insured  loan due to the reduction in
the principal amount. MAHRAA also phases out project-based subsidies on selected
properties  serving  families not located in rental markets with limited supply,
converting such subsidies to a tenant-based subsidy.

When the HAP  Contracts are subject to renewal,  there can be no assurance  that
the  Local  Partnerships  in which the  Partnership  has an  investment  will be
permitted to restructure their mortgage  indebtedness under MAHRAA. In addition,
the  economic  impact  on the  Partnership  of the  combination  of the  reduced
payments  under  the  HAP  Contracts  and  the  restructuring  of  the  existing
FHA-insured mortgage loans under MAHRAA is uncertain.

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

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

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

During the year ended December 31, 2002, the Partnership  diluted its investment
in the Sheboygan Regency House Limited  Partnership  leaving a 10.9% interest in
this  Local  Partnership.   Total  proceeds  received  in  connection  with  the
transaction  were  $247,000.  After  recognizing  approximately  $105,000  as  a
reduction  of  investment  balance,  the  Partnership's  investment  balance  in
Sheboygan  Regency  House  Limited  Partnership  had been  reduced to zero.  The
remaining  proceeds of  approximately  $144,000 were reported as gain on sale of
limited partnership interest on the accompanying statement of operations.

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

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

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

During the year ended  December 31,  2002,  an  impairment  loss of $790,000 was
recognized with respect to the Partnership's  investment in a Local Partnership,
Michigan  Beach.  The Local  Partnership  reached a settlement  with the City of
Chicago during 2002 to complete  necessary repairs to the exterior facade of the
building.  The total estimated cost to complete this project will be advanced to
Michigan  Beach by the  Partnership.  Since  the  Partnership  has no  remaining
investment  balance in Michigan Beach, and recovery of the advance is uncertain,
the entire  amount of the  estimated  cost is being  recognized as an impairment
loss during the year ended December 31, 2002.

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

Subsequent to December 31, 2002, the  Partnership  diluted its investment in the
Rancho del Mar  Apartments  Limited  Partnership to 66.4% from 99%. The proceeds
received  of  approximately  $1,018,000  were offset  against the  Partnership's
investment balance in the Local Partnership.

Note 3 - Restricted Cash

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

Note 4 - Transactions with Affiliated Parties

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

      (a) An annual Partnership management fee in an amount equal to 0.5 percent
      of invested assets (as defined in the Partnership Agreement) is payable to
      the  General  Partner.  For the years  ended  December  31, 2002 and 2001,
      partnership  management fees in the amount of  approximately  $636,000 and
      $737,000,  respectively,  were recorded as an expense.  As of December 31,
      2002, management fees in the amount of approximately  $952,000 were due to
      the General Partner.

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

(c)   The Partnership  reimburses NAPICO certain expenses.  The reimbursement to
      NAPICO was approximately  $63,000 and $65,000 for the years ended December
      31,  2002  and  2001,  respectively,   and  is  included  in  general  and
      administrative  expenses.  As of  December  31,  2002,  reimbursements  of
      approximately $175,000 were due to the General Partner.

As of December 31, 2002, the fees and expenses due the General Partner  exceeded
the Partnership's  cash. The General Partner,  during the forthcoming year, will
not  demand  payment  of  amounts  due in  excess  of such cash or such that the
Partnership would not have sufficient  operating cash; however,  the Partnership
will remain liable for all such amounts.

NTCI-II or  another  affiliate  of the  General  Partner is the Local  Operating
General Partner in ten of the Partnership's 33 Local Partnerships.  In addition,
NTCI-II is  typically  either a special  limited  partner  or an  administrative
general partner in each Local Partnership.

An affiliate of the General Partner is currently  managing four properties owned
by  Local  Partnerships.  The  Local  Partnerships  pay the  affiliate  property
management fees in the amount of five percent of their gross rental revenues and
data processing fees. The amounts paid were approximately  $125,000 and $138,000
for the years ended December 31, 2002 and 2001, respectively.

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

Note 5 - Income Taxes

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

A reconciliation follows:

                                                  Years Ended December 31,
                                                     2002            2001
                                                       (in thousands)

Net loss per financial statements                  $(1,639)        $(2,091)
  Other                                             (1,561)         (1,457)
  Gain on foreclosure of Partnership interest       (2,772)         (1,807)
Loss per tax return                                 (5,972)         (5,355)

Loss per limited partnership interest              $(81.55)        $(73.16)

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

                                                   December 31, 2002
                                                     (in thousands)
      Net assets as reported                            $ 7,706
      Add (deduct):
        Deferred offering costs                            9,367
        Investment in Partnerships                       (12,716)
        Other                                              6,902
      Net deficit - federal tax basis                   $ 11,259

Note 6 - Gain on Legal Settlement

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

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

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

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

<TABLE>
<CAPTION>

                                                  Buildings
                                                     And
                                                   Related
                                                  Personal                 Accumulated
        Description         Encumbrances  Land    Property      Total     Depreciation

<S>                             <C>      <C>        <C>         <C>           <C>
Ashville Equity (Westview)      (1)      $ 171      $ 637       $ 808         $ 57
Columbus Junction Park          (1)          40        800         840          283
Countryside Place               (1)         470      8,292       8,762        3,387
Eastridge Apts.                 (1)          35        572         607           35
Edgewood Apts.                  (1)         158      3,895       4,053        1,723
Fourth Street                   (1)         242      4,219       4,461        1,672
Germantown Apts.                (1)         210      4,599       4,809        2,095
Great Basin Assoc.              (1)         143      1,413       1,556          402
Grimes Park Apts.               (1)          50        536         586          196
Jamestown Terrace               (1)         298      3,495       3,793        1,040
Jefferson Meadows               (1)          86      4,941       5,027        2,306
Kentucky River                  (1)         149      2,011       2,160          641
Lincoln Grove                   (1)         118      3,907       4,025        1,254
Meadowlakes                     (1)         136      3,924       4,060        1,741
Michigan Beach                  (1)         792      4,672       5,464          520
Nickel River (Wedgewood)        (1)         140      3,049       3,189        1,034
Norwalk Park Apts.              (1)          51        483         534          188
Oakview Apts.                   (1)          81      3,620       3,701        1,403
Palm Springs View Apts.         (1)         901      6,744       7,645        2,464
Pam Apts.                       (1)          50      2,652       2,702        1,771
Parkwood Landing                (1)         720      9,226       9,946        3,996
Pensacola Affordable            (1)         252      1,847       2,099          794
Pineview Terrace                (1)          82      3,241       3,323          993
Quivira Place                   (1)         100     13,113      13,213        5,612
Rancho del Mar                  (1)          75      8,088       8,163        2,899
Salem Park Apts.                (1)         204      4,282       4,486        2,132
Sheboygan                       (1)          47      2,575       2,622        1,189
Sitka III (Spruce Grove)        (1)          42      1,463       1,505          651
Soldotna (Northwood Senior)     (1)          59      1,890       1,949          577
Torres de Plata II              (1)         158      3,845       4,003        1,735
Villa Real                      (1)         905      6,468       7,373        2,416
Virginia Park Meadows           (1)          78      4,946       5,024        2,294
Westbridge Apts.                (1)         201      3,064       3,265          924
Total                                    $7,244   $128,509    $135,753       $50,424
</TABLE>

(1) See "Item 1. Description of Business" for details.

(3) Reconciliation of real estate

                                                      Years Ended December 31,
                                                         2002           2001

                                                           (in thousands)
Balance at beginning of period                         $145,578       $152,554
Retirements during the period                              (374)          (268)
Disposals of rental properties                           (9,152)        (5,780)
Impairment losses on rental properties                     (299)          (928)
Balance at end of period                               $135,753       $145,578

        Reconciliation of accumulated depreciation

                                                      Years Ended December 31,
                                                         2002           2001

                                                           (in thousands)
Balance at beginning of period                          $50,268       $47,881
Depreciation expense for the period                       4,395         4,207
Disposals of rental properties                           (4,239)       (1,820)
Balance at end of period                                $50,424       $50,268

Note 8 - Contingencies

On August 27, 1998, two investors holding an aggregate of eight units of limited
partnership  interests  in Real Estate  Associates  Limited  III (an  affiliated
partnership in which NAPICO is the corporate  general partner) and two investors
holding an  aggregate  of five units of limited  partnership  interests  in Real
Estate Associates Limited VI (another affiliated  partnership in which NAPICO is
the corporate general partner) commenced an action in the United States District
Court for the Central District of California against the Partnership, NAPICO and
certain other  defendants.  The complaint  alleged that the defendants  breached
their  fiduciary  duty  to  the  limited  partners  of  certain  NAPICO  managed
partnerships  and  violated  securities  laws by  making  materially  false  and
misleading statements in the consent solicitation statements sent to the limited
partners  of  such  partnerships   relating  to  approval  of  the  transfer  of
partnership interests in limited partnerships, owning certain of the properties,
to affiliates of Casden  Properties  Inc.,  organized by an affiliate of NAPICO.
The plaintiffs  sought  equitable  relief,  as well as compensatory  damages and
litigation  related costs.  On August 4, 1999, one investor  holding one unit of
limited  partnership  interest in Housing Programs  Limited (another  affiliated
partnership  in which  NAPICO is the  corporate  general  partner)  commenced  a
virtually  identical  action in the United States District Court for the Central
District  of  California  against  the  Partnership,  NAPICO and  certain  other
entities.  The second action was subsumed in the first action, and was certified
as a  class  action.  On  August  21,  2001,  plaintiffs  filed  a  supplemental
complaint,  which added new claims,  including a  rescission  of the transfer of
partnership interests and an accounting.

In November 2002, the jury returned  special verdicts against NAPICO and certain
other defendants in the amount of approximately  $25.2 million for violations of
securities laws and against NAPICO for approximately  $67.3 million for breaches
of fiduciary duty. In addition, the jury awarded the plaintiffs punitive damages
against  NAPICO of  approximately  $92.5  million.  On April 29, 2003, the Court
entered  judgment  against NAPICO and certain other  defendants in the amount of
$25.2 million for  violations of  securities  laws and against  NAPICO for $67.3
million for breaches of  fiduciary  duty,  both  amounts plus  interest of $25.6
million, and for punitive damages against NAPICO in the amount of $2.6 million.

On May 30, 2003,  NAPICO and certain other defendants  entered into a memorandum
of  understanding  with the plaintiff  class and their  counsel  relating to the
settlement of the litigation.

On  August  11,  2003,  NAPICO  and  certain  other  defendants  entered  into a
Stipulation of Settlement (the  "Stipulation of Settlement")  with the plaintiff
class (the  "Plaintiffs")  and their counsel  relating to the  settlement of the
litigation.  On August 25, 2003, the court granted  preliminary  approval of the
Stipulation of Settlement. Pursuant to the Stipulation of Settlement, within two
days  after  receiving  the  court's   preliminary   approval  of  the  proposed
settlement, Alan I. Casden, on behalf of himself, NAPICO and other defendants in
the  litigation,  caused $29 million to be deposited  into an escrow account for
the benefit of the Plaintiffs.  The Stipulation of Settlement remains subject to
the final approval of the court, as well as the approval of the Plaintiffs. Upon
final court  approval,  approval by the  Plaintiffs and the lapse of any time to
appeal the court approval of the settlement, the following shall occur:

1.    Alan I. Casden,  on behalf of himself,  NAPICO and other defendants in the
      litigation,  will transfer to an agent for the Plaintiffs shares of common
      stock  ("Class A Common  Stock") of AIMCO owned by certain  affiliates  of
      Alan I. Casden with an aggregate  market value of $19 million,  subject to
      certain transfer restrictions,  or at Alan I. Casden's option, $19 million
      in cash.

2.    NAPICO will issue an aggregate of $35 million in promissory  notes for the
      benefit of the  Plaintiffs.  An aggregate of $7 million of notes are to be
      repaid each year. The notes will bear interest  based on applicable  rates
      of  U.S.  Treasury  bills  with  similar  maturities.  The  notes  will be
      guaranteed by AIMCO Properties, L.P., an affiliate of AIMCO.

3.    The parties to the  Stipulation of Settlement  will release each other and
      related parties from any and all claims associated with the litigation and
      the Plaintiffs'  investment in the  partnerships  that were the subject of
      the litigation.

4.    The $29 million in the escrow  account  established by Alan I. Casden will
      be released to the Plaintiffs.

Pursuant to the Stipulation of Settlement, upon final approval of the settlement
by the court,  the parties shall jointly  request that a new judgment be entered
in the litigation that will, among other things, expunge the judgment originally
entered against NAPICO and the other defendants on April 29, 2003.

On August 12, 2003, in connection with the proposed  settlement  pursuant to the
Stipulation of Settlement, NAPICO and AIMCO executed a Settlement Agreement (the
"Settlement  Agreement") with the prior  shareholders of Casden  Properties Inc.
The principal terms of the Settlement Agreement include:

1.    That NAPICO will  voluntarily  discontinue  the action it commenced on May
      13, 2003 against the former  shareholders  of Casden  Properties  Inc. and
      other  indemnitors in AIMCO's March 2002 acquisition of Casden  Properties
      Inc. (the "Casden Merger").

2.    That Alan I. Casden and certain  related  entities  will  resolve  certain
      pending  claims  for  indemnification  made by  NAPICO,  AIMCO  and  their
      affiliates. These claims include indemnification related to the litigation
      and certain other matters in connection with the Casden Merger.

3.   AIMCO,  or an  affiliate,  will deposit $25 million of the $29 million that
     Alan I. Casden is responsible  for  depositing  into the escrow account for
     the benefit of the Plaintiffs  pursuant to the terms of the  Stipulation of
     Settlement.  In connection  with this deposit by AIMCO,  The Casden Company
     will transfer to AIMCO  531,915  shares of AIMCO Class A Common Stock owned
     by The Casden Company, which shares are to be held in escrow by AIMCO until
     final  approval  of the  Stipulation  of  Settlement  by the  court and the
     Plaintiffs.  Upon such approval, AIMCO will become the owner of the 531,915
     shares.  If final approval by the court and the Plaintiffs is not obtained,
     the $25 million deposited by AIMCO into the escrow account will be returned
     to AIMCO and AIMCO will return to The Casden Company the 531,915 shares. On
     August 25, 2003, AIMCO caused the $25 million to be deposited in the escrow
     account for the benefit of the  Plaintiffs  and received in return from The
     Casden  Company and Alan I. Casden the 531,915  shares to be held in escrow
     as indicated.

4.   The Casden  Company will promise to pay an aggregate  amount of $35 million
     on a secured,  nonrecourse  basis to NAPICO.  The  Casden  Company  will be
     obligated to repay an aggregate of $7 million of the obligation  each year.
     The  obligation  to repay the $35 million  will bear the same  interest and
     mature on the same schedule as the promissory notes issued by NAPICO to the
     plaintiffs  pursuant to the  Stipulation  of  Settlement.  Payment of these
     obligations  will be  secured  by (i) a pledge of  744,681  shares of AIMCO
     Class A Common Stock owned by Alan I. Casden or an affiliated entity,  plus
     up to 60,000 additional shares for accrued interest, and (ii) cash proceeds
     of recoveries or settlements  that Alan I. Casden or any of his affiliates,
     or any of the former  shareholders of Casden  Properties  Inc.,  receive in
     connection with or related to the litigation (collectively,  "Recoveries").
     The payment  obligations  to NAPICO will be required to be prepaid with any
     Recoveries  received.  Payment  may be made in cash or in  shares  of AIMCO
     Class A Common Stock,  except  payments with respect to Recoveries  must be
     made in cash.

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

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

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

In March 2002,  the local  operating  general  partner of  Sheboygan  Apartments
Limited  Partnership  brought  action  against the  Partnership  and the General
Partner alleging that the parties breached the purchase agreement by refusing to
close a transaction regarding the sale of the property.  The parties consummated
a  settlement  of the action  whereby the  Partnership  diluted a portion of its
interest in the Local Limited  Partnership (see "Item 7. Financial  Statements -
Note 2"). The case was dismissed in August 2002.

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

In March 2002,  the operating  general  partner of Michigan  Beach Local Limited
Partnership  reached a  settlement  with the City of Chicago  for repairs to the
facade of Michigan Beach Apartments. Rehabilitation work is expected to commence
during  the  third   quarter  of  2003.   Pursuant  to  the  court  order,   all
rehabilitation   work  must  be   completed   no  later  than  July  2004.   The
rehabilitation is estimated to cost approximately $790,000. Michigan Beach Local
Limited  Partnership  is  requesting an advance from an affiliate of the General
Partner  to  complete  this  rehabilitation  project.  See  "Item  7.  Financial
Statements - Note 2" for further discussion.

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

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

Effective  August 29,  2002,  the  Registrant  dismissed  its prior  Independent
Auditors,  Deloitte & Touche LLP and retained as its new  Independent  Auditors,
Ernst & Young LLP. Deloitte & Touche LLP's  Independent  Auditors' Report on the
Registrant's  financial statements for the calendar year ended December 31, 2001
did not  contain an adverse  opinion or a  disclaimer  of  opinion,  and was not
qualified or modified as to uncertainty,  audit scope or accounting  principles.
The  decision  to  change  Independent  Auditors  was  approved  by the  General
Partner's  director.  During the calendar year ended 2001 and through August 29,
2002, there were no  disagreements  between the Registrant and Deloitte & Touche
LLP on any matter of accounting  principles or  practices,  financial  statement
disclosure,  or auditing scope of procedure which  disagreements if not resolved
to the  satisfaction  of  Deloitte & Touche  LLP,  would have  caused it to make
reference to the subject  matter of the  disagreements  in  connection  with its
reports.

Effective  August 29,  2002,  the  Registrant  engaged  Ernst & Young LLP as its
Independent Auditors.  During the last two calendar years and through August 29,
2002,  the  Registrant  did not consult  Ernst & Young LLP  regarding any of the
matters or events set forth in Item 304 (a)(2)(i) and (ii) of Regulation S-B.

                                    PART III.

ITEM 9.     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:

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

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

Peter K. Kompaniez              58    Director
David R. Robertson              37    President, Chief Executive Officer
                                        and Director
Michael J. Hornbrook            48    Executive Vice President and Chief
                                        Operating Officer
Jeffrey H. Sussman              37    Senior Vice President, General
                                        Counsel and Secretary
Brian H. Shuman                 40    Senior Vice President and Chief
                                        Financial Officer

Peter K.  Kompaniez  has been a Director  of NAPICO  since  April 1,  2000.  Mr.
Kompaniez  has been  Vice  Chairman  of the  Board  of  Directors  of  Apartment
Investment and Management  Company  ("AIMCO")  since July 1994 and was appointed
President of AIMCO in July 1997.

David R. Robertson has been President, Chief Executive Officer and a Director of
NAPICO since October 2002.  Mr.  Robertson is also  Executive  Vice President of
AIMCO  and  is  responsible  for  property  operations,   asset  management  and
transaction   activities   within  AIMCO   Capital's   portfolio  of  affordable
properties. Prior to joining AIMCO, Mr. Robertson was a member of the investment
banking group at Smith Barney from 1991 to 1996,  where he was  responsible  for
real estate investment  banking  transactions in the western United States,  and
was part of the Smith Barney team that managed  AIMCO's  initial public offering
in 1994.  From February 1996 until  February  2002,  when Mr.  Robertson  joined
AIMCO, he was the Chairman and Chief Executive Officer of Robeks Corporation,  a
privately held chain of specialty food stores.

Michael J.  Hornbrook has been  Executive Vice President of NAPICO since January
2002 and became Chief Operating  Officer of NAPICO in April 2002. Mr.  Hornbrook
is also  Senior  Vice  President  of AIMCO  and is  responsible  for tax  credit
placement activities and transactions involving properties in AIMCO's affordable
housing portfolio  located in the western United States.  Prior to January 2002,
Mr.  Hornbrook  was a partner in the law firm of McGuire Woods LLP in the firm's
Chicago office and  specialized in the area of real estate law with a particular
focus on affordable  housing and tax credits.  Mr. Hornbrook was the Chairman of
the firm's Affordable Housing Group.

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

Brian H. Shuman is Senior Vice  President and Chief  Financial  Officer,  having
joined NAPICO in 2000.  Mr. Shuman is responsible  for the financial  affairs of
NAPICO,  as well as the limited  partnerships  sponsored  by it. From 1996 until
joining  NAPICO in August  2000,  Mr.  Shuman was Vice  President  - Finance for
Preferred Health  Management  Inc., the largest provider of worker  compensation
diagnostic  imaging  services in California  formed in 1996, and was responsible
for establishing and managing the accounting,  billing, collection, treasury and
financial  reporting  departments.  From  1994  to  1996,  Mr.  Shuman  was  the
Controller  for DVI Business  Credit  Corporation,  which  provides  asset based
lending to a wide range of health concerns.

The  executive  officers  and  directors  of the  General  Partner  fulfill  the
obligations  of the Audit  Committee  and  oversee the  Partnership's  financial
reporting  process on behalf of the General Partner.  Management has the primary
responsibility for the financial  statements and the reporting process including
the systems of internal controls. In fulfilling its oversight  responsibilities,
the executive officers and directors of the General Partner reviewed the audited
financial  statements with management including a discussion of the quality, not
just the  acceptability,  of the accounting  principles,  the  reasonableness of
significant  judgments,   and  the  clarity  of  disclosures  in  the  financial
statements.

The executive  officers and directors of the General  Partner  reviewed with the
independent  auditors,  who are  responsible  for  expressing  an opinion on the
conformity  of  those  audited  financial  statements  with  generally  accepted
accounting  principles,  their  judgments  as  to  the  quality,  not  just  the
acceptability,  of the Partnership's accounting principles generally accepted in
the United  States and such other  matters as are required to be discussed  with
the  Audit  Committee  or its  equivalent  under  auditing  standards  generally
accepted in the United States.  In addition,  the Partnership has discussed with
the  independent  auditors the auditors'  independence  from  management and the
Partnership  including  the matters in the written  disclosures  required by the
Independence  Standards  Board and  considered  the  compatibility  of non-audit
services with the auditors' independence.

The executive  officers and directors of the General Partner  discussed with the
Partnership's  independent auditors the overall scope and plans for their audit.
In  reliance on the reviews and  discussions  referred to above,  the  executive
officers and directors of the General Partner have approved the inclusion of the
audited financial  statements in the Form 10-KSB for the year ended December 31,
2002 for filing with the Securities and Exchange Commission.

The General Partner has reappointed Ernst & Young LLP as independent auditors to
audit the financial  statements of the  Partnership for 2003. Fees for 2002 were
annual  audit  services  of   approximately   $29,000  and  non-audit   services
(principally tax-related) of approximately $26,000.

ITEM 10.    EXECUTIVE COMPENSATION

Neither  the  director  nor the  officers  received  any  remuneration  from the
Registrant for the year ended December 31, 2002.

ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a)    The  General  Partner  owns all of the  outstanding  general  partnership
       interests of NTCI II. No person or entity was known by the  Registrant to
       own of record or  beneficially  more than 5% of the  Limited  Partnership
       Interests of the Registrant as of December 31, 2002.

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

ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

(a)   An annual Partnership  management fee in an amount equal to 0.5 percent of
      invested  assets (as defined in the  Partnership  Agreement) is payable to
      the  General  Partner.  For the years  ended  December  31, 2002 and 2001,
      partnership  management fees in the amount of  approximately  $636,000 and
      $737,000,  respectively,  were recorded as an expense.  As of December 31,
      2002, management fees in the amount of approximately  $952,000 were due to
      the General Partner.

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

(c)   The Partnership  reimburses NAPICO certain expenses.  The reimbursement to
      NAPICO was approximately  $63,000 and $65,000 for the years ended December
      31,  2002  and  2001,  respectively,   and  is  included  in  general  and
      administrative  expenses.  As of  December  31,  2002,  reimbursements  of
      approximately $175,000 were due to the General Partner.

As of December 31, 2002, the fees and expenses due the General Partner  exceeded
the  Partnership's  cash. The partners,  during the  forthcoming  year, will not
demand  payment  of  amounts  due in  excess  of  such  cash or  such  that  the
Partnership would not have sufficient  operating cash; however,  the Partnership
will remain liable for all such amounts.

NTCI-II or  another  affiliate  of the  General  Partner is the Local  Operating
General Partner in ten of the Partnership's 33 Local Partnerships.  In addition,
NTCI-II is  typically  either a special  limited  partner  or an  administrative
general partner in each Local Partnership.

An affiliate of the General Partner is currently  managing four properties owned
by  Local  Partnerships.  The  Local  Partnerships  pay the  affiliate  property
management  fees in the  amount of three to six  percent of their  gross  rental
revenues and data processing fees. The amounts paid were approximately  $125,000
and $138,000 for the years ended December 31, 2002 and 2001, respectively.

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

During the year ended  December 31,  2002,  an  impairment  loss of $790,000 was
recognized with respect to the Partnership's  investment in a Local Partnership,
Michigan  Beach.  The Local  Partnership  reached a settlement  with the City of
Chicago during 2002 to complete  necessary repairs to the exterior facade of the
building.  The total estimated cost to complete this project will be advanced to
Michigan  Beach by the  Partnership.  Since  the  Partnership  has no  remaining
investment  balance in Michigan Beach, and recovery of the advance is uncertain,
the entire  amount of the  estimated  cost is being  recognized as an impairment
loss during the year ended December 31, 2002.

ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K

      a) Exhibits:

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

            Exhibit 16.1 Letter dated  August 29, 2002,  from  Deloitte & Touche
            LLP filed as an exhibit to the  Registrant's  Current Report on Form
            8-K dated August 29, 2002, and incorporated herein by reference.

            Exhibit 99, Certification of  Chief  Executive   Officer  and  Chief
            Financial Officer.

            Exhibit 99.1, Independent Auditors' Report for Columbus Junction
                 Park, Limited Partnership

            Exhibit 99.2, Independent Auditors' Report for Grimes Park
                Apartments, L.P.

            Exhibit 99.3, Independent Auditors' Report for Jamestown Terrace

            Exhibit 99.4, Independent Auditors' Report for Jefferson Meadows
            Limited Dividend Housing Assoc.

            Exhibit 99.5, Independent Auditors' Report for Kentucky River
            Apartments, Ltd.

            Exhibit 99.6, Independent Auditors' Report for Wynnefield Lincoln
                Grove Limited Partnership

            Exhibit 99.7,Independent Auditors' Report for Michigan Beach Limited
            Partnership

            Exhibit 99.8, Independent Auditors' Report for Norwalk Park
                Apartments, L. P.

            Exhibit 99.9, Independent Auditors' Report for Oak View Spartanburg
            Associates, L. P.

            Exhibit 99.10, Independent Auditors' Report for Palm Springs View
            Apartments, Ltd.

            Exhibit 99.11, Independent Auditors' Report for Pampa Partnership
            Limited

            Exhibit 99.12,Independent Auditors' Report for Huntsville Properties
                 Limited Partnership (Parkwood Landing)

            Exhibit 99.13, Independent Auditors' Report for Northwestern
                Partners, Ltd. (Pensacola Affordable)

            Exhibit 99.14, Independent Auditors' Report for Torres Del Plata II
            Limited Partnership

            Exhibit 99.15, Independent Auditors' Report for Villa Real Limited
            Partnership

            Exhibit 99.16, Independent Auditors' Report for Virginia Park
                Meadows Limited Dividend Housing A.

            Exhibit 99.17, Independent Auditors' Report for Nickel River
                Investment

            Exhibit 99.18, Independent Auditors' Report for Pen-Hill-Co Limited
            Partnership (Westbridge Apartments)

            Exhibit 99.19, Independent Auditors' Report for Ashville Equity
                Limited Partnership (Westview)

            Exhibit 99.20, Independent Auditors' Report for Pineview Terrace I
                Limited Partnership

         b) Reports on Form 8-K filed  during the  quarter  ended  December  31,
2002:

            None.

ITEM 14.    CONTROLS AND PROCEDURES

The principal  executive officer and principal  financial officer of the General
Partner, who are the equivalent of the Partnership's principal executive officer
and  principal  financial  officer,  respectively,  have,  within 90 days of the
filing  date  of  this  annual  report,   evaluated  the  effectiveness  of  the
Partnership's  disclosure  controls and  procedures  (as defined in Exchange Act
Rules 13a-14(c) and 15d-14(c)) and have determined that such disclosure controls
and  procedures  are  adequate.  There have been no  significant  changes in the
Partnership's  internal  controls or in other  factors that could  significantly
affect the  Partnership's  internal  controls since the date of evaluation.  The
Partnership does not believe any significant deficiencies or material weaknesses
exist in the Partnership's internal controls. Accordingly, no corrective actions
have been taken.

                                   SIGNATURES

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


                                    NATIONAL TAX CREDIT INVESTORS II
                                    (a California limited partnership)


                                    By:   National Partnership Investments Corp.
                                          General Partner

                                    By:   /s/Peter K. Kompaniez
                                          Peter K. Kompaniez
                                          Director

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

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

                                    Date: September 22, 2003

In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  Registrant and in the capacities and on the
dates indicated.


/s/Peter K. Kompaniez     Director                      Date: September 22, 2003
Peter K. Kompaniez


/s/David R. Robertson     President, Chief Executive    Date: September 22, 2003
David R. Robertson        Officer and Director


/s/Brian H. Shuman        Senior Vice President         Date: September 22, 2003
Brian H. Shuman           and Chief Financial Officer


                                  CERTIFICATION


I, David R. Robertson, certify that:


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


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


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


4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


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


      b) Evaluated the effectiveness of the registrant's disclosure controls and
      procedures  as of a date  within 90 days prior to the filing  date of this
      annual report (the "Evaluation Date"); and


      c) Presented in this annual report our conclusions about the effectiveness
      of the disclosure  controls and  procedures  based on our evaluation as of
      the Evaluation Date;


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


      a) All  significant  deficiencies  in the design or  operation of internal
      controls which could adversely affect the registrant's  ability to record,
      process,  summarize and report  financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and


      b) Any fraud,  whether or not material,  that involves management or other
      employees  who  have  a  significant  role  in the  registrant's  internal
      controls; and


6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date:  September 22, 2003

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




                                  CERTIFICATION


I, Brian H. Shuman, certify that:


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


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


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

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


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


      b) Evaluated the effectiveness of the registrant's disclosure controls and
      procedures  as of a date  within 90 days prior to the filing  date of this
      annual report (the "Evaluation Date"); and


      c) Presented in this annual report our conclusions about the effectiveness
      of the disclosure  controls and  procedures  based on our evaluation as of
      the Evaluation Date;


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


      a) All  significant  deficiencies  in the design or  operation of internal
      controls which could adversely affect the registrant's  ability to record,
      process,  summarize and report  financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and


      b) Any fraud,  whether or not material,  that involves management or other
      employees  who  have  a  significant  role  in the  registrant's  internal
      controls; and


6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date:  September 22, 2003

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

                        NATIONAL TAX CREDIT INVESTORS II
                                  EXHIBIT INDEX


Exhibit     Description of Exhibit



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

   99      Certification of Chief Executive Officer and Chief Financial Officer.

   99.1     Independent Auditor's Report for  Columbus  Junction  Park,  Limited
            Partnership

   99.2     Independent Auditor's Report for Grimes Park Apartments, L.P.

   99.3     Independent Auditor's Report for Jamestown Terrace

   99.4     Independent Auditor's Report for Jefferson Meadows Limited Dividend
            Housing Assoc.

   99.5     Independent Auditor's Report for Kentucky River Apartments, Ltd.

   99.6     Independent Auditor's Report for Wynnefield Lincoln Grove Limited
            Partnership

   99.7     Independent Auditor's Report for Michigan Beach Limited Partnership

   99.8     Independent Auditor's Report for Norwalk Park Apartments, L. P.

   99.9     Independent Auditor's Report for Oak View Spartanburg Associates,
            L. P.

   99.10    Independent Auditor's Report for Palm Springs View Apartments, Ltd.

   99.11    Independent Auditor's Report for Pampa Partnership Limited

   99.12     Independent Auditor's Report for Huntsville Properties Limited
             Partnership (Parkwood Landing)

   99.13    Independent Auditor's Report for Northwestern Partners, Ltd.
            (Pensacola Affordable)

   99.14    Independent Auditor's Report for Torres Del Plata II Limited
              Partnership

   99.15    Independent Auditor's Report for Villa Real Limited Partnership

   99.16    Independent Auditor's Report for Virginia Park Meadows Limited
              Dividend Housing A.

   99.17    Independent Auditor's Report for Nickel River Investment

   99.18    Independent Auditor's Report for Pen-Hill-Co Limited Partnership
             (Westbridge Apartments)

   99.19    Independent Auditor's Report for Ashville Equity Limited Partnership
            (Westview)

   99.20    Independent Auditor's Report for Pineview Terrace I Limited
                Partnership

Exhibit 99


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



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

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

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


                                           /s/David R. Robertson
                                    Name:  David R. Robertson
                                    Date:  September 22, 2003


                                           /s/Brian H. Shuman
                                    Name:  Brian H. Shuman
                                    Date:  September 22, 2003


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


Exhibit 99.1

Independent Auditor's Report

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

We have  audited the  accompanying  balance  sheets of Columbus  Junction  Park,
Limited Partnership as of December 31, 2002 and 2001, and the related statements
of income,  partners' (deficit),  and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects the financial  position of Columbus Junction Park, Limited
Partnership  as of December 31, 2002 and 2001, and the results of its operations
and its cash  flows for the  years  then  ended in  conformity  with  accounting
principles generally accepted in the United States of America.

/s/McGladrey & Pullen, CPA
Des Moines Iowa
January 22, 2002

Exhibit 99.2

Independent Auditor's Report

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

We have  audited  the  accompanying  balance  sheets  of  Grimes  Park,  Limited
Partnership  as of December  31, 2002 and 2001,  and the related  statements  of
income,  partners'  (deficit),  and cash flows for the years then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects the financial position of Grimes Park, Limited Partnership
as of December 31, 2002 and 2001, and the results of its operations and its cash
flows  for the  years  then  ended  in  conformity  with  accounting  principles
generally accepted in the United States of America.

/s/McGladrey & Pullen, CPA
Des Moines Iowa
January 22, 2002

Exhibit 99.3

Independent Auditor's Report

To the Partners
Jamestown Terrace, a California Limited Partnership

We have  audited the  accompanying  balance  sheets of Jamestown  Terrace,  Recd
Project No. 04-055-0363605470, as of December 31, 2002 and 2001, and the related
statements of operations, changes in partners' capital (deficit), and cash flows
for the years then ended.  These financial  statements are the responsibility of
the  Partnership's  management.  Our  responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects the financial position of Jamestown Terrace as of December
31, 2002 and 2001,  and the results of its operations and its cash flows for the
years then ended in conformity with accounting  principles generally accepted in
the United States of America.

In accordance with Government Accounting Standards,  we have also issued reports
dated  January  17,  2003 on our  consideration  of the  Partnership's  internal
control and on our tests of its compliance with laws, regulations, contracts and
grants.  These reports are an integral part of the audit performed in accordance
with Government  Auditing  Standards and should be read in conjunction with this
report in considering the results of the audit.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental  information on pages 17
through  21 is  presented  for  purposes  of  additional  analysis  and is not a
required  part of the basic  financial  statements.  Such  information  has been
subjected to the audit  procedures  applied in the audit of the basic  financial
statements taken as a whole.

/s/Rockoff, Harlan, Rasof, Ltd. CPA
January 17, 2003
January 22, 2002

Exhibit 99.4

Independent Auditor's Report



To the Partners
Jefferson Meadows Limited Dividend
Housing Association Limited Partnership

We have audited the  accompanying  balance  sheet of Jefferson  Meadows  Limited
Dividend   Housing   Association   Limited   Partnership  (a  Michigan   limited
partnership),  MSHDA  Development  No. 848, as of December 31, 2002,  2001,  and
2000, and the related statements of income, partners' equity (deficit), and cash
flows  for  the  years  then  ended.   These   financial   statements   are  the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of Jefferson  Meadows  Limited
Dividend Housing Association Limited Partnership,  MSHDA Development No. 848, as
of December 31, 2002, 2001, and 2000, and the results of its operations, changes
in partners' equity  (deficit),  and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January  9, 2003,  on our  consideration  of  Jefferson  Meadows  Limited
Dividend  Housing  Association  Limited  Partnership's   internal  control  over
financial  reporting and on our tests of its compliance with certain  provisions
of laws, regulations,  contracts,  and grants. The report is an integral part of
an audit performed in accordance with Government  Auditing  Standards and should
be read in  conjunction  with this  report in  considering  the  results  of our
audits.



                                                         /s/Plante & Moran, PLLC

January 9, 2003


Exhibit 99.5

Independent Auditors Report

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

I have audited the accompanying balance sheet of Kentucky River Apartments, Ltd,
a Kentucky  Limited  Partnership,  as of  December  31,  2002 and 2001,  and the
related statements of operations, partners' capital and cash flows for the years
then  ended.   These  financial   statements  are  the   responsibility  of  the
partnership's  management.  My  responsibility is to express an opinion on these
financial statements based on my audits.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Kentucky River Apartments,  Ltd., a
Kentucky  Limited  Partnership as of December 31, 2002 and 2001, and the results
of its  operations  and its cash flows for the years  ended in  conformity  with
accounting principles generally accepting in the United States of America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental information on 10 and 11
is presented for purposes of  additional  analysis and is not a required part of
the basic financial statements. Such information has been subjected to the audit
procedures  applied in the audit of the basic  financial  statements  and, in my
opinion is fairly  stated in all  material  respects  in  relation  to the basic
financial statements taken as a whole.

/s/Donald W. Causey, CPA, P.C.
Gadsden, Alabama
February, 17, 2003


Exhibit 99.6

Independent Auditors' Report


To the Partners
Wynnefield Lincoln Grove Limited Partnership


      We have audited the accompanying balance sheet of Wynnefield Lincoln Grove
Limited  Partnership  as of December 31,  2002,  and the related  statements  of
operations,  partners'  equity (deficit) and cash flows for the year then ended.
These  financial   statements  are  the   responsibility  of  the  partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

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

      In our opinion, the financial statements referred to above present fairly,
in all material  respects,  the financial  position of Wynnefield  Lincoln Grove
Limited  Partnership as of December 31, 2002, and the results of its operations,
the  changes  in  partners'  equity  (deficit)  and cash flows for the year then
ended, in conformity with accounting principles generally accepted in the United
States of America.

      In accordance with Government  Auditing  Standards,  we have also issued a
report dated January 14, 2003 on our  consideration of Wynnefield  Lincoln Grove
Limited Partnership's internal control over financial reporting and our tests of
its  compliance  with certain  provisions  of laws,  regulations,  contracts and
grants. That report is an integral part of an audit performed in accordance with
Government Auditing Standards and should be read in conjunction with this report
in considering the results of our audit.






                                                 /s/Reznick Fedder & Silverman
Charlotte, North Carolina
January 14, 2003


Exhibit 99.7

Independent Auditors' Report

To the Partners
Michigan Beach Limited Partnership

We have  audited  the  accompanying  balance  sheets of Michigan  Beach  Limited
Partnership   (a  limited   partnership),   FHA  Project  No.   071_94030   (the
"Partnership"),  as of December 31, 2002 and 2001 and the related  statements of
operations,  changes in partners'  deficiency  and cash flows for the years then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of  Michigan  Beach  Limited
Partnership  as of December 31, 2002 and 2001 and the results of its  operations
and its cash flows for the years then ended in  conformity  with U.S.  generally
accepted accounting principles.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  February  8,  2003 on our  consideration  of the  Partnership's  internal
control and on our tests of its  compliance  with  certain  provisions  of laws,
regulations,  contracts  and grants.  Those  reports are an integral  part of an
audit performed in accordance with Government  Auditing  Standards and should be
read in conjunction with this report in considering the results of our audit.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The  accompanying  additional  financial
data (shown on pages 14 through 16) are  presented for the purpose of additional
analysis and are not a required  part of the basic  financial  statements of the
Partnership.  Such  information  has been  subjected to the auditing  procedures
applied in the audit of the basic financial  statements and, in our opinion,  is
fairly  stated in all  material  respects  in  relation  to the basic  financial
statements taken as a whole.

/s/Altschuler, Melvoin and Glasser LLP

Los Angeles, California
February 8, 2003

Michigan Beach Limited Partnership
FHA Project No. 071_94030


Exhibit 99.8

Independent Auditor's Report

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

We have  audited  the  accompanying  balance  sheets of  Norwalk  Park,  Limited
Partnership  as of December  31, 2002 and 2001,  and the related  statements  of
income,  partners'  (deficit),  and cash flows for the years then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects  the  financial   position  of  Norwalk  Park,   Limited
Partnership  as of December 31, 2002 and 2001, and the results of its operations
and its cash  flows for the  years  then  ended in  conformity  with  accounting
principles generally accepted in the United States of America.

/s/McGladrey & Pullen, CPA
Des Moines Iowa
January 22, 2002


Exhibit 99.9

Independent Auditors' Report



To the Partners
Oak View Spartanburg Associates, L.P.
(A South Carolina Limited Partnership)
Spartanburg, South Carolina


We  have  audited  the  accompanying  balance  sheets  of Oak  View  Spartanburg
Associates,  L.P. (A South Carolina Limited Partnership) as of December 31, 2002
and 2001,  and the related  statements  of  operations  and changes in partners'
equity and cash flows for the years then ended.  These financial  statements are
the  responsibility of the Partnership's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material   respects,   the  financial  position  of  Oak  View  Spartanburg
Associates,  L.P. (A South Carolina Limited Partnership) as of December 31, 2002
and 2001,  and the  results of its  operations  and its cash flows for the years
then ended in conformity with accounting  principles  generally  accepted in the
United States of America.


                                                     /s/Norman, Johnson & Co, PA
Spartanburg, South Carolina
February 5, 2003


Exhibit 99.10

Independent Auditors' Report

To the Partners
Palm Springs View Apartments, Ltd.

We have audited the accompanying balance sheets of Palm Springs View Apartments,
Ltd. (a limited partnership),  FHA Project No. 143_94002_PM (the "Partnership"),
as of  December  31,  2002 and 2001 and the related  statements  of  operations,
changes in partners'  deficiency and cash flows for the years then ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of Palm Springs View Apartments,
Ltd. as of December 31, 2002 and 2001 and the results of its  operations and its
cash flows for the years then ended in conformity with U.S.  generally  accepted
accounting principles.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated March 10, 2003 on our consideration of the Partnership's  internal control
and on our tests of its compliance with certain provisions of laws, regulations,
contracts and grants.  Those reports are an integral part of an audit  performed
in  accordance  with  Government  Auditing  Standards  and  should  be  read  in
conjunction with this report in considering the results of our audit.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The  accompanying  additional  financial
data (shown on pages 13 through 15) are  presented for the purpose of additional
analysis and are not a required  part of the basic  financial  statements of the
Partnership.  Such  information  has been  subjected to the auditing  procedures
applied in the audit of the basic financial  statements and, in our opinion,  is
fairly  stated in all  material  respects  in  relation  to the basic  financial
statements taken as a whole.

/s/Altschuler, Melvoin and Glasser LLP

Los Angeles, California
March 10, 2003

Palm Springs View Apartments, Ltd.
FHA Project No. 143_94002_PM


Exhibit 99.11

January 20, 2003

The Partners
Pampa Partnership Limited
Houston, Texas

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

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Pampa Partnership Limited as of
December 31, 2002 and 2001 and the results of its  operations and cash flows for
each of the years ended  December 31, 2002,  2001 and 2000, in  conformity  with
accounting principles generally accepted in the United States of America.

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


Exhibit 99.12

                          Independent Auditors' Report

To the Partners
Huntsville Properties, L.P.


We have audited the accompanying balance sheet of Huntsville Properties,  L.P.(a
Georgia limited partnership), as of December 31, 2002,and the related statements
of operations,  changes in partners'  equity  (deficit),  and cash flows for the
year then  ended.  These  financial  statements  are the  responsibility  of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Huntsville Properties, L.P., as
of December 31, 2002,  and the results of its  operations,  changes in partners'
equity  (deficit),  and cash flows for the years then ended in  conformity  with
accounting principles generally accepted in the United States of America.

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

/s/Habif, Arogeti & Wynne LLP

February 19, 2003


Exhibit 99.13

Independent Auditor's Report



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


I  have  audited  the  accompanying  general  purpose  financial  statements  of
Northwestern  Partners,  Ltd. (a Florida limited partnership) as of December 31,
2002, as listed in the Table of Contents.  These  financial  statements  are the
responsibility of the partnership's  management. My responsibility is to express
an opinion on these financial statements based on my audit.

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

In my  opinion,  the  general  purpose  financial  statements  referred to above
present fairly, in all material respects, the financial position of Northwestern
Partners,  Ltd. as of December 31, 2002, and the results of its operations,  the
changes  in  partners'  capital  and cash  flows  for the  years  then  ended in
conformity with generally accepted accounting principles.




/s/Tom E. Brewster
CERTIFIED PUBLIC ACCOUNTANT
Pensacola, Florida
March 16, 2003


Exhibit 99.14

                Independent Auditors' Report On Financial Statements



Partners
Torres del Plata II Limited Partnership


     We have  audited  the  accompanying  balance  sheets of Torres del Plata II
Limited Partnership as of December 31, 2002 and 2001, and the related statements
of operations,  partners'  equity(deficiency)  and cash flows for the years then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

     We conducted our audits in accordance  with  auditing  standards  generally
accepted  in the  United  States of  America  and the  standards  applicable  to
financial  audits  contained in  Government  Auditing  Standards,  issued by the
Comptroller  General of the United States, and the US Department of Agriculture,
Farmers Home Administration Audit Program Handbook, issued in the December 1989.
Those  standards  and the audit  program  require  that we plan and  perform the
audits to obtain reasonable assurance about whether the financial statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statements  presentation.  We believe that our audits provide a reasonable basis
for our opinion.

    In our opinion,  the financial  statements referred to above present fairly,
in all material respects,  the financial position of Torres del Plata II Limited
Partnership,  as of  December  31,  2002  and  2001,  and  the  results  of  its
operations,  the changes in partners' equity (deficiency) and cash flows for the
years then ended, in conformity with accounting principles generally accepted in
the United States of America.

     In  accordance  with  Government  Auditing  Standards,  we have also issued
reports  dated  January 14,  2003,  on our  consideration  of the  Partnership's
internal  control and on our tests on its compliance with certain  provisions of
laws, regulations,  contracts, loan covenants and agreements.  Those reports are
an integral part of an audit performed in accordance  with  Government  Auditing
Standards and should be read in conjunction  with this report in considering the
results of our audits.



/s/Torres Llompart, Sanchez Ruiz & Co.

January 14, 2003
License No. 169
San Juan, Puerto Rico


Exhibit 99.15

Independent Auditors' Report
To the Partners
Villa Real Limited Partnership

We  have  audited  the  accompanying   balance  sheets  of  Villa  Real  Limited
Partnership (a New Mexico limited  partnership) as of December 31, 2002 and 2001
and the related  statements of operations,  changes in partners' equity and cash
flows  for  the  years  then  ended.   These   financial   statements   are  the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements referred to above, present fairly, in
all material respects,  the financial position of Villa Real Limited Partnership
as of December 31, 2002 and 2001 and the results of its  operations and its cash
flows for the years  then  ended in  conformity  with  U.S.  generally  accepted
accounting principles.


/s/Altschuler, Melvoin and Glasser LLP
Los Angeles, California
February 11, 2003

Exhibit 99.16

                          Independent Auditor's Report



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


We have audited the accompanying  balance sheet of Virginia Park Meadows Limited
Dividend   Housing   Association   Limited   Partnership  (a  Michigan   limited
partnership),  MSHDA  Development  No. 849, as of December 31, 2002,  2001,  and
2000, and the related statements of income, partners' equity (deficit), and cash
flows  for  the  years  then  ended.   These   financial   statements   are  the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of Virginia Park Meadows Limited
Dividend Housing Association Limited Partnership,  MSHDA Development No. 849, as
of December 31, 2002, 2001, and 2000, and the results of its operations, changes
in partners' equity  (deficit),  and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.

In accordance with Government Auditing Standards, we have also issued our report
dated  January 9, 2003 on our  consideration  of Virginia  Park Meadows  Limited
Dividend  Housing  Association  Limited  Partnership's   internal  control  over
financial  reporting and on our tests of its compliance with certain  provisions
of laws, regulations,  contracts,  and grants. The report is an integral part of
an audit performed in accordance with Government  Auditing  Standards and should
be read in conjunction with this report in considering the results of our audit.

/s/Plante & Moran

January 9, 2003


Exhibit 99.17

Independent Auditor's Report



To the Partners
Nickel River Investment, A Wisconsin
 Limited Partnership


We have audited the accompanying  balance sheets of Nickel River  Investment,  A
Wisconsin  Limited  Partnership as of December 31, 2002, 2001, and 2000, and the
related statements of operations and changes in partners' equity, and cash flows
for the years then ended.  These financial  statements are the responsibility of
the  Partnership's  management.  Our  responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Nickel River  Investment,  A
Wisconsin  Limited  Partnership as of December 31, 2002,  2001 and 2000, and the
results  of its  operations  and its cash  flows  for the  years  then  ended in
conformity with accounting principles generally accepted in the United States of
America.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplementary  information on page 12
is presented for the purposes of additional  analysis and is not a required part
of the basic financial  statements.  Such  information has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion,  is fairly  stated in all  material  respects in relation to the
basic financial statements taken as a whole.




                                                /s/Stienessen, Schlegel & Co LLC
                                                   Certified Public Accountants

January 15, 2003


Exhibit 99.18

Independent Auditors' Report



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


We  have  audited  the  accompanying   balance  sheets  of  Pen-Hill-Co  Limited
Partnership,  as of December 31, 2002 and 2001,  and the related  statements  of
income,  change in  partners'  equity and cash  flows for the years then  ended.
These  financial   statements  are  the   responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material   respects,   the  financial   position  of  Pen-Hill-Co   Limited
Partnership,  as of  December  31,  2002  and  2001,  and  the  results  of  its
operations,  changes in partners capital and cash flows for the years then ended
in conformity with accounting principles generally accepted in the United States
of America.

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

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs  issued by the U.S.  Department  of Housing and
Urban  Development,  we have also issued a report dated  January 20, 2003 on our
consideration of Pen-Hill-Co Limited Partnership's  internal control and reports
dated January 20, 2003 on its compliance with specific  requirements  applicable
to major HUD programs and Fair Housing and Non-Discrimination. Those reports are
an integral part of an audit performed in accordance  with  Government  Auditing
Standards and should be read in conjunction  with this report in considering the
results of our audit.






                                                 /s/DuRant, Schraibman & Lindsay
January 20, 2003


Exhibit 99.19

To the Partners
Ashville Equity Limited Partnership

We have  audited  the  accompanying  balance  sheet of Ashville  Equity  Limited
Partnership  as of December 31, 2002 and the related  statements of  operations,
changes in partners'  deficiency  and cash flows for the year then ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

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

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

/s/Altschuler, Melvoin and Glasser LLP
Los Angeles, California
March 14, 2003

Exhibit 99.20



                          Independent Auditor's Report




To The Partners
Pineview Terrace I, L.P.

We have audited the  accompanying  Balance Sheets of Pineview Terrace I, L.P. (a
Texas  Limited  Partnership)  as of December 31, 2002 and 2001,  and the related
statements of income, partners'  equity/(deficit),  and cash flows for the years
then  ended.   These  financial   statements  are  the   responsibility  of  the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Pineview Terrace I, L.P. as of
December 31, 2002 and 2001, and the results of its operations and its cash flows
for the years then ended in  conformity  with  accounting  principles  generally
accepted in the United States of America.

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

Harrisonville, MO
January 23, 2003