# UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549

---

# FORM 10-K

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# (Mark One)

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

# For the quarterly period ended December 31, 2001

# OR

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

# For the transition period from     
                 to

# Commission file number            0-16817

# Krupp Insured Plus-II Limited Partnership

# Massachusetts
(State or other jurisdiction of incorporation or organization)

# 04-2955007
(IRS employer identification no.)

# One Beacon Street, Boston, Massachusetts
(Address of principal executive offices)

# 02108(Zip Code)

# (617) 523-0066
(Registrant's telephone number, including area code)

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

# Title                                                      Name of Exchange on which Registered

# Shares of Beneficial Interest                                                          None

# Securities registered pursuant to Section 12(g) of the Act:         None

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes   X            No

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

Aggregate market value of voting securities held by non-affiliates: Not applicable.

Documents incorporated by reference: see Part IV, Item 14

The exhibit index is located on pages 10-11

`PART I

This form 10-K contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21e of the Securities Exchange Act
of 1934. Actual results could differ materially from those projected in the
forward-looking statements as a result of a number of factors, including those
identified herein.


ITEM 1.    BUSINESS
------

Krupp Insured Plus-II Limited Partnership (the "Partnership") is a Massachusetts
limited partnership which was formed on October 29, 1986. The Partnership raised
approximately $292 million through a public offering of limited partner
interests evidenced by units of depositary receipts ("Units") and used the
investable proceeds primarily to acquire participating insured mortgages
("PIMs") and mortgage-backed securities ("MBS"). The Partnership considers
itself to be engaged only in the industry segment of investment in mortgages.

The Partnership's remaining PIM investment is a multi-family residential
property consisting of a MBS guaranteed as to principal and basic interest. This
MBS was issued or originated under or in connection with the housing program of
the Government National Mortgage Association ("GNMA"). This PIM provides the
Partnership with monthly payments of principal and basic interest and may also
provide for Partnership participation in the current revenue stream and in
residual value, if any, from a sale or other realization of the underlying
property (participation interest). The borrower conveys these rights to the
Partnership through a subordinated promissory note and mortgage. The
participation feature is neither insured nor guaranteed.

The Partnership also has investments in MBS and insured mortgages collateralized
by single-family or multi-family mortgage loans issued or originated by GNMA,
Fannie Mae, the Department of Housing and Urban Development ("HUD") or the
Federal Home Loan Mortgage Corporation ("FHLMC"). Fannie Mae and FHLMC guarantee
the principal and basic interest of the Fannie Mae and FHLMC MBS, respectively.
GNMA guarantees the timely payment of principal and basic interest on its MBS,
and HUD insures the pooled mortgage loans underlying the GNMA MBS and its own
direct mortgage loans.

Although the Partnership will terminate no later than December 31, 2026, it is
expected that the value of the PIMs generally will be realized by the
Partnership through repayment or sale as early as ten years from the dates of
the closings of the permanent loans and that the Partnership will realize the
value of all of its other investments within that time frame thereby resulting
in a dissolution of the Partnership significantly prior to December 31, 2026.

The Partnership's investments are not expected to be subject to seasonal
fluctuations. Any ultimate realization of the participation features of the PIMs
are subject to similar risks associated with equity real estate investments,
including: reliance on the owner's operating skills, ability to maintain
occupancy levels, control operating expenses, maintain the properties and
provide adequate insurance coverage; adverse changes in general economic
conditions, adverse local conditions, and changes in governmental regulations,
real estate zoning laws, or tax laws; and other circumstances over which the
Partnership may have little or no control.

The requirements for compliance with federal, state and local regulations to
date have not had an adverse effect on the Partnership's operations, and no
adverse effect is anticipated in the future.

As of December 31, 2001, there were no personnel directly employed by the
Partnership.

ITEM 2.    PROPERTIES
------

None

ITEM 3.    LEGAL PROCEEDINGS
------

There are no material pending legal proceedings to which the Partnership is a
party or to which any of its investments is the subject.

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

None.



                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
------

There currently is no established trading market for the Units.

The number of investors holding Units as of December 31, 2001 was approximately
12,500. One of the objectives of the Partnership is to provide quarterly
distributions of cash flow generated by its investments in mortgages. The
Partnership anticipates that future operations will continue to generate cash
available for distribution. Adjustments may be made to the distribution rate in
the future due to the realization and payout of the existing mortgages.

On July 18, 2001, the Partnership paid a special distribution of $.31 per
Limited Partner interest from the Orchard Landing MBS principal proceeds
received during May 2001 in the amount of $4,440,315.

On March 30, 2000, the Partnership paid a special distribution of $.58 per
Limited Partner interest from the prepayment proceeds received during February
2000 on the Greenhouse Apartments PIM in the amount of $8,428,984. The
underlying property was foreclosed on by the first mortgage lender during
January 1999. The Partnership continued to receive its full principal and basic
interest payments due on the PIM while the underlying mortgage was in default
because those payments were guaranteed by GNMA. The Partnership did not receive
any participation interest from this transaction.

On January 11, 2000, the Partnership paid a special distribution of $.43 per
Limited Partner interest from the Saratoga Apartments PIM prepayment proceeds
received in December 1999 in the amount of $6,204,960. The underlying property
value had not increased sufficiently to meet the criteria for the Partnership to
earn any participation interest.

The Partnership will make special distributions in the future when its PIM
prepays and when it liquidates any remaining assets.

The Partnership made the following distributions to its Partners during the two
years ended December 31, 2001 and 2000:

                                                       2001                              2000
                                          ----------------------------     ----------------------------
                                              Amount          Per Unit          Amount          Per Unit

Quarterly Distributions:
   Limited Partners                       $   5,862,204       $    .40     $    5,862,204       $    .40
   General Partners                              69,366            -                 97,176          -
                                          -------------                    --------------

                                              5,931,570                         5,959,380
                                          -------------                    --------------

Special Distributions:
      Limited Partners                        4,543,209       $    .31         14,802,066       $   1.01
                                          -------------                    --------------
Total Distributions                       $  10,474,779                    $   20,761,446
                                          =============                    ==============











ITEM 6.                                   SELECTED FINANCIAL DATA
------

The following table sets forth selected financial information regarding the
Partnership's financial position and operating results. This information should
be read in conjunction with Management's Discussion and Analysis of Financial
Condition and Results of Operations and the Financial Statements and
Supplementary Data, which are included in Item 7 and Item 8, (Appendix A) of
this report, respectively.




                                   2001                2000                1999                1998             1997
                                   ----                ----                ----                ----             ----

Total revenues               $     2,790,634     $    3,520,446        $   7,822,665      $   15,335,618    $  16,672,558

Net income                         2,171,571          2,770,378            6,146,718          12,017,670       12,972,600

Net income allocated to:
   Limited Partners ("LP")         2,106,424          2,687,267            5,962,316          11,657,140       12,583,422
   Average per LP interest               .14                .18                  .41                 .80            .86

   General Partners                   65,147             83,111              184,402             360,530          389,178
Total assets at:
              December 31         34,466,969         42,256,448           60,161,993         117,626,762      180,126,977

Distributions to:
   Quarterly to LPs                5,862,204          5,862,204           11,138,189          16,414,173       16,414,173
              Average per LP interest    .40                .40                  .76                1.12             1.12

   Specials to LPs                 4,543,209         14,802,066           51,587,401          56,716,830       24,767,815
   Average per LP interest               .31               1.01                 3.52                3.87             1.69

   General Partners                   69,366             97,176              217,645             385,355          436,626


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS
------

Certain statements in this Management's Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere in this Form 10-K constitute
"forward-looking statements" within the meaning of the Federal Private
Securities Litigation Reform Act of 1995. These forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the Partnership's actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or
implied by these forward-looking statements. These factors include, among other
things, federal, state or local regulations; adverse changes in general economic
or local conditions; pre-payments of mortgages; failure of borrowers to pay
participation interests due to poor operating results at properties underlying
the mortgages; uninsured losses and potential conflicts of interest between the
Partnership and its Affiliates, including the General Partners.

Liquidity and Capital Resources

The most significant demands on the Partnership's liquidity are the quarterly
distributions paid to investors. Funds for investor distributions come from the
monthly principal and interest payments received on the PIMs and MBS, the
principal prepayments of the PIMs and MBS, and interest earned on the
Partnership's cash and cash equivalents. In general, the General Partners try to
set a distribution rate that provides for level quarterly distributions. To the
extent that quarterly distributions do not fully utilize the cash available for
distribution and cash balances increase, the General Partners may adjust the
distribution rate or distribute such funds through a special distribution. The
portion of distributions attributable to the principal collections reduces the
capital resources of the Partnership. As the capital resources decrease, the
total cash flows to the Partnership also will decrease and over time will result
in periodic adjustments to the distributions paid to investors. The General
Partners periodically review the distribution rate to determine whether an
adjustment is necessary based on projected future cash flows. Based on current
projections, the General Partners have determined that the Partnership will
adjust the current distribution rate beginning with the distribution payable in
February 2002 to $.05 per Limited Partner interest per quarter. This will result
in a payment of approximately $733,000 each quarter.




In addition to providing insured or guaranteed monthly principal and basic
interest payments, the Partnership's PIM investment also may provide
participation interest if the underlying property operates successfully. The
Partnership may receive a share in any operating cash flow that exceeds debt
service obligations and capital needs or a share in any appreciation in value
when the property is sold or refinanced. However, this participation is neither
guaranteed nor insured, and it is dependent upon whether property operations or
its terminal value meet certain criteria.

During May 2001, the Partnership received a payoff of the Orchard Landing MBS in
the amount of $4,440,315. On July 18, 2001 the Partnership paid a special
distribution of $.31 per Limited Partner interest from the principal proceeds.

Also during May 2001, the Partnership received $30,769 from the borrowers of the
Richmond Park PIM as a settlement to release the loan's participation features.
The property was not generating sufficient cash flow to pay any participation
from property operations nor did it have sufficient appreciation in value to
meet the threshold to pay any participation based on value if the property was
sold or refinanced. Considering the property's physical condition, there was
little likelihood that its status would improve. Rental rate increase and
occupancy levels had been difficult to achieve. Consequently, all of the cash
flow generated by the property went back into operations. While the borrower had
assured that the insured first mortgage debt was serviced, no major capital
improvements were undertaken to enhance the property's leasing efforts.
Furthermore, routine maintenance and repairs were beginning to be prioritized
according to need and available cash. The condition of the property and its
inability to generate sufficient cash flow seriously impaired the ability of the
borrower to either sell the property or refinance it without taking a loss.
Their business plan was to make a significant investment in the property to
correct deferred maintenance and functional obsolescence and to market it for
leasing in order to reposition the property for a successful sale or refinance.
They were unwilling to make the significant investments necessary while the
property was encumbered with the PIM's participation features. As a result, the
borrowers requested a release of the participation features while keeping the
insured first mortgage in place until the property turns around. The General
Partners agreed to this request in return for the settlement because there was
no expectation that the Partnership would be entitled to any participation
proceeds now or in the future in the property's physical condition. Upon this
settlement, the insured first mortgage loan on Richmond Park was reclassified
from a PIM to a MBS as the only remaining portion of the investment is a GNMA
MBS. The Partnership also reclassified this investment to available for sale
concurrent with the release of the participation feature. The Partnership will
continue to receive the scheduled principal and interest payments on the first
mortgage until the property is refinanced or sold.

On March 30, 2000, the Partnership paid a special distribution of $.58 per
Limited Partner interest from the prepayment proceeds received during February
2000 on the Greenhouse Apartments PIM in the amount of $8,428,984. The
underlying property was foreclosed on by the first mortgage lender during
January 1999. The Partnership continued to receive its full principal and basic
interest payments due on the PIM while the underlying mortgage was in default
because those payments were guaranteed by GNMA. The Partnership did not receive
any participation interest from this transaction.

On January 11, 2000, the Partnership paid a special distribution of $.43 per
Limited Partner interest from the Saratoga Apartments PIM prepayment proceeds
received in December 1999 in the amount of $6,204,960. The underlying property
value had not increased sufficiently to meet the criteria for the Partnership to
earn any participation interest.

On November 22, 1999, the Partnership paid a special distribution of $.72 per
Limited Partner interest from the Le Coeur du Monde Apartments PIM prepayment
proceeds received in October 1999 in the amount of $9,422,001. The Partnership
also received $472,587 of accrued and unpaid participation interest attributable
to property operations from its Le Coeur du Monde PIM investment and $1,102,701
of participation interest attributable to the Partnership's share in the
increase in the property's value.

On June 18, 1999, the Partnership paid a special distribution of $.83 per
Limited Partner interest from the Country Meadows Apartments PIM prepayment
proceeds received in May 1999 in the amount of $12,015,224. The underlying
property value had not increased sufficiently to meet the criteria for the
Partnership to earn any participation interest. The Partnership did receive a
$60,076 prepayment premium for the early payoff of the Country Meadows PIM.




On February 26, 1999, the Partnership paid a special distribution of $1.97 per
Limited Partner interest from the prepayments of the Stanford Court, Hillside
Court, Carlyle Court and Waterford Court Apartments PIMs. On January 25, 1999,
the Partnership received prepayments of the Stanford Court, Hillside Court,
Carlyle Court and Waterford Court Apartments PIMs in the amounts of $6,609,242,
$4,266,759, $7,696,897 and $9,394,386, respectively. In addition to the
prepayments, the Partnership received $860,052 of Shared Appreciation Interest
and prepayment penalties and $432,877 of Minimum Additional Interest and Shared
Income Interest during December 1998.

The Partnership's only remaining PIM investment is the GNMA security backed by
the first mortgage loan on Denrich Apartments. Presently, the borrower is
working on refinancing the underlying first mortgage as there are no contractual
obligations remaining that would prevent a prepayment of the underlying first
mortgage. The property is thirty years old, and rental rate increases have not
kept pace with the increasing costs of maintenance, repairs and replacements.
Denrich Apartments does not compete successfully in the Philadelphia
neighborhood where it is located. Occupancy, which generally fluctuates in the
mid 80% range, is adversely affected by cash constraints that have led to
extensive deferred maintenance. Denrich Apartments operated under a long-term
workout agreement with the Partnership that expired at the end of 2000. The
General Partners do not expect the Partnership to receive participation interest
from Denrich Apartments. The property is currently negotiating a refinancing
agreement and the General Partners expect that the borrower will close his
refinancing transaction during 2002. If the borrower is successful, it would
result in a payoff of the Denrich PIM to the Partnership followed by a
liquidation of the remaining assets and a final special distribution to the
Partners.

Critical Accounting Policy

The Partnership's critical accounting policy relates primarily to revenue
recognition related to the participation feature of the Partnership's PIM
investment. The Partnership's policy is as follows:

Basic interest on the PIM is recognized based on the stated coupon rate of the
GNMA MBS. The Partnership's recognizes interest related to the participation
feature when the amount becomes fixed and the transaction that gives rise to
such amount is consummated.

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------

Assessment of Credit Risk

The Partnership's investments in mortgages are guaranteed or insured by GNMA,
Fannie Mae, FHLMC or HUD and therefore the certainty of their cash flows and the
risk of material loss of the amounts invested depends on the creditworthiness of
these entities.

Fannie Mae is a federally chartered private corporation that guarantees
obligations originated under its programs. FHLMC is a federally chartered
corporation that guarantees obligations originated under its programs and is
wholly-owned by the twelve Federal Home Loan Banks. These obligations are not
guaranteed by the U.S. Government or the Federal Home Loan Bank Board. GNMA
guarantees the timely payment of principal and basic interest on the securities
it issues, which represent interests in pooled mortgages insured by HUD.
Obligations insured by HUD, an agency of the U.S. Government, are backed by the
full faith and credit of the U.S. Government.

At December 31, 2001 the Partnership includes in cash and cash equivalents
approximately $699,000 of commercial paper, which is issued by entities with a
credit rating equal to one of the top two rating categories of a nationally
recognized statistical rating organization.

Interest Rate Risk

The Partnership's primary market risk exposure is to interest rate risk, which
can be defined as the exposure of the Partnership's net income, comprehensive
income or financial condition to adverse movements in interest rates. At
December 31, 2001, the Partnership's PIM and MBS comprise the majority of the
Partnership's assets. Decreases in interest rates may accelerate the prepayment
of the Partnership's investments. The Partnership does not utilize any
derivatives or other instruments to manage this risk as the Partnership plans to
hold all of its investments to expected maturity. The Partnership monitors
prepayments and considers prepayment trends, as well as distribution
requirements of the Partnership, when setting regular distribution policy. For
MBS, the Partnership forecasts prepayments based on trends in similar securities
as reported by statistical reporting entities such as Bloomberg. For its
remaining PIM, the Partnership continues to monitor the borrower's intention to
refinance the underlying first mortgage.

The table on the following page provides information about the Partnership's
financial instruments that are sensitive to changes in interest rates. For
mortgage investments, the table presents principal cash flows and related
weighted average interest rates ("WAIR") by expected maturity dates. The
expected maturity date is contractual maturity adjusted for expectations of
prepayments.




                                    Expected maturity dates ($ in thousands)

                                                                                               Total
                    2002       2003        2004        2005          2006      Thereafter      Face      Fair
                                                                                               Value     Value


Interest-sensitive assets:

MBS                $  1,059   $    984    $    929    $    891    $     868   $    24,876   $  29,607   $   30,575
WAIR                  7.56%      7.56%       7.56%       7.56%        7.56%         7.56%       7.56%

PIM                   3,101      -           -           -            -            -            3,101       3,247
WAIR                  8.00%      0.00%       0.00%       0.00%        0.00%         0.00%       8.00%
                   --------   --------    --------    --------    ---------   -----------   ---------    ---------

Total Interest-
sensitive assets   $  4,160   $    984    $    929    $    891    $     868   $    24,876   $  32,708   $   33,822
                   ========   ========    ========    ========    =========   ===========   =========   ==========

    Results of Operations

    The following discussion relates to the operation of the Partnership during the
    years ended December 31, 2001, 2000 and 1999.
                                                                      (Amounts  in   thousands)
                                                                2001            2000               1999
                                                                ----            ----               ----
         Interest income on PIMs:
           Basic interest                                   $     613        $   1,360          $   3,682
           Participation interest                                  31            -                  1,635
         Interest income on MBS                                 2,022            1,685              1,826
         Other interest income                                    125              475                680
         Partnership expenses                                    (553)            (628)              (778)
         Amortization of prepaid fees and
           expenses                                               (66)            (122)              (898)
                                                            ---------        ---------          ---------

              Net Income                                    $   2,172        $   2,770          $   6,147
                                                            =========        =========          =========

     Net income decreased during 2001 as compared to 2000 primarily due to lower
     basic interest on PIMs and other interest income. This decrease was
     partially offset by an increase in interest income on MBS and decreases in
     general and administrative expenses, asset management fees and amortization
     expense. The reduction in basic interest on PIMs is primarily due to the
     reclassification of the Richmond Park PIM to an MBS in May 2001. Interest
     income on MBS increased due to the reclassification, but was partially
     offset by the payoff of the Orchard Landing MBS in May 2001. Other interest
     income decreased due to significantly lower average interest rates earned
     on cash balances available for short-term investing in 2001 versus 2000.
     General and administrative expenses were greater during 2000 due to higher
     processing costs. Asset management fees decreased due to the decrease in
     the Partnership's investments as a result of principal collections and
     payoffs. Amortization expense was greater during 2000 as compared to 2001
     as a result of the full amortization of the remaining prepaid fees and
     expenses on the PIM prepayments in 2000.



     Net income decreased during 2000 as compared to 1999 primarily due to lower
     basic and participation interest on PIMs. This was partially offset by a
     decrease in amortization. The reduction in basic interest on PIMs is due to
     the payoff of the Greenhouse PIM in 2000 and the payoffs of the Saratoga,
     Le Coeur du Monde, Country Meadows, Stanford Court, Hillside Court, Carlyle
     Court and Waterford Court PIMs in 1999. Participation interest was higher
     in 1999 than 2000 as the loans that paid off in 1999 generated higher
     Shared Appreciation Interest and prepayment premiums than the Greenhouse
     PIM which paid off in 2000. The decrease in amortization was also related
     to the payoff activity in 1999 which resulted in the write-off of the
     remaining deferred expenses attributed to those loans.

     As the Partnership distributes principal collections on MBS and PIMs
     through quarterly or special distributions, the invested assets of the
     Partnership will decline which should result in a continuing decline in net
     income.


ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
------

See Appendix A to this report.


ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
------

None.

                                    PART III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
-------

The Partnership has no directors or executive officers. Information as to the
directors and executive officers of Krupp Plus Corporation which is a General
Partner of the Partnership and is the general partner of Mortgage Services
Partners Limited Partnership, which is the other General Partner of the
Partnership, is as follows:

                                                              Position with
                    Name and Age                           Krupp Plus Corporation

                   Douglas Krupp (55)                      President, Co-Chairman of the Board and Director
                   George Krupp (57)                       Co-Chairman of the Board and Director
                   Peter F. Donovan (48)                   Senior Vice President
                   Ronald Halpern (60)                     Senior Vice President
                   Robert A. Barrows (44)                  Vice President and Treasurer
                   Carol J.C. Mills (52)                   Vice President

     Douglas Krupp  co-founded  and serves as  Co-Chairman  and Chief  Executive
     Officer  of The  Berkshire  Group,  an  integrated  real  estate  financial
     services  firm engaged in real estate  acquisitions,  property  management,
     investment  sponsorship,  venture capital  investing,  mortgage banking and
     financial  management,  and  ownership of two operating  companies  through
     private equity investments.  Mr. Krupp has held the position of Co-Chairman
     since The Berkshire  Group was  established as The Krupp  Companies in 1969
     and he has  served as the  Chief  Executive  Officer  since  1992.  He is a
     graduate of Bryant College where he received an honorary  Doctor of Science
     in Business Administration in 1989.

     George Krupp is the Co-Founder and  Co-Chairman of The Berkshire  Group, an
     integrated  real  estate  financial  services  firm  engaged in real estate
     acquisitions,  property management, investment sponsorship, venture capital
     investing,  mortgage banking and financial management, and ownership of two
     operating companies through private equity investments.  Mr. Krupp has held
     the position of Co-Chairman  since The Berkshire  Group was  established as
     The Krupp Companies in 1969. Mr. Krupp has been an instructor of history at
     the New Jewish High School in Waltham,  Massachusetts  since  September  of
     1997.  Mr.  Krupp  attended  the  University  of  Pennsylvania  and Harvard
     University  and holds a Master's  Degree in History from Brown  University.
     Douglas and George Krupp are brothers.



     Peter F. Donovan is Chief Executive  Officer of Berkshire  Mortgage Finance
     which position he has held since January of 1998 and in this  capacity,  he
     oversees  the  strategic  growth  plans  of  this  mortgage  banking  firm.
     Berkshire Mortgage Finance is the 10th largest commercial mortgage servicer
     in the United  States with a servicing  and asset  management  portfolio of
     $14.1  billion.  Previously  he served as President  of Berkshire  Mortgage
     Finance  from  January of 1993 to January of 1998 and in that  capacity  he
     directed  the  production,  underwriting,  servicing  and asset  management
     activities  of the firm.  Prior to that,  he was Senior Vice  President  of
     Berkshire  Mortgage  Finance  and was  responsible  for  all  participating
     mortgage originations.  Before joining the firm in 1984, he was Second Vice
     President,  Real Estate Finance for  Continental  Illinois  National Bank and
     Trust,  where he managed a $300  million  construction  loan  portfolio  of
     commercial properties. Mr. Donovan received a B.A. from Trinity College and
     an M.B.A. degree from Northwestern  University.  Mr. Donovan is currently a
     member of the Advisory Council for Fannie Mae.

     Ronald Halpern is President and COO of Berkshire  Mortgage Finance.  He has
     served in these positions since January of 1998 and in this capacity, he is
     responsible for the overall operations of the Company.  Prior to January of
     1998, he was Executive Vice President, managing the underwriting,  closing,
     portfolio  management  and servicing  departments  for  Berkshire  Mortgage
     Finance.  Before  joining  the  firm in  1987,  he held  senior  management
     positions  with  the  Department  of  Housing  and  Urban   Development  in
     Washington D.C. and several HUD regional  offices.  Mr. Halpern has over 30
     years of experience in real estate finance which includes his experience as
     prior Chairman of the MBA Multifamily  Housing  Committee.  He holds a B.A.
     degree  from the  University  of the City of New York and J.D.  degree from
     Brooklyn Law School.

     Robert A. Barrows is Senior Vice President and Chief  Financial  Officer of
     Berkshire  Mortgage Finance.  Mr. Barrows has held several positions within
     The  Berkshire  Group since  joining  the company in 1983 and is  currently
     responsible for accounting,  financial reporting and treasury functions for
     Berkshire Mortgage Finance. Prior to joining The Berkshire Group, he was an
     audit supervisor for Coopers and Lybrand L.L.P. in Boston. He received a B.S.
     degree from Boston College and is a Certified Public Accountant.

     Carol J.C. Mills is Senior Vice President for Loan  Management of Berkshire
     Mortgage  Finance and in this  capacity,  she is  responsible  for the Loan
     Servicing and Asset Management functions of Berkshire Mortgage Finance. She
     manages the estimated  $14.1 billion  portfolio of loans.  Ms. Mills joined
     Berkshire  in December  1997 as Vice  President  and was promoted to Senior
     Vice  President in January 1999.  From January 1989 through  November 1997,
     Ms. Mills was Vice  President of First  Winthrop  Corporation  and Winthrop
     Financial Associates, in Cambridge, MA. Ms. Mills earned a B.A. degree from
     Mount  Holyoke  College and a Master of  Architecture  degree from  Harvard
     University.  Ms. Mills is a member of the Real Estate Finance  Association,
     New England Women in Real Estate, the Mortgage Bankers  Association and the
     Servicing Advisory Council for Freddie Mac.

ITEM 11.      EXECUTIVE COMPENSATION
-------

The Partnership has no directors or executive officers.

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

As of December 31, 2001, no person owned of record or was known by the General
Partners to own beneficially more than 5% of the Partnership's 14,655,512
outstanding Limited Partner interests. The only interests held by management or
its affiliates consist of its General Partner and Corporate Limited Partner
Interests.

ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-------

Information required under this Item is contained in Note F to the Partnership's
Notes To Financial Statements presented in Appendix A to this report.







                                     PART IV

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

(a)   1.    Financial  Statements - see Index to Financial  Statements and
            Schedule included under Item 8, Appendix A, page F-2 of this
            report.

2.          Financial Statement Schedule - see Index to Financial Statements and
            Schedule included under Item 8, Appendix A, page F-2 of this report.
            All other schedules are omitted as they are not applicable, not
            required or the information is provided in the Financial Statements
            or the Notes thereto.

(b)  Reports on Form 8-K

During the last quarter of the year ended December 31, 2001, the Partnership did
not file any reports on Form 8-K.

(c)  Exhibits:

     Number and Description
     Under Regulation S-K

     The following page reflects all applicable Exhibits required under Item 601
     of Regulation S-K: (4) Instruments defining the rights of security holders
     including indentures:

(4.1)Amended and Restated  Agreement of Limited  Partnership dated as of May 29,
     1987 [Exhibit A to Prospectus included in Post Effective Amendment No. 1 of
     Registrant's  Registration Statement on Form S-11 dated June 18, 1987 (File
     No. 33-9889)].*

(4.2)Second Amendment to Agreement of Limited  Partnership  dated as of June 17,
     1987  [Exhibit  4.6 in  Post  Effective  Amendment  No.  l of  Registrant's
     Registration  Statement  on  Form  S-11  dated  June  18,  1987  (File  No.
     33-9889)].*

(4.3)Subscription  Agreement  whereby a subscriber  agrees to purchase Units and
     adopts the  provisions  of the Amended and  Restated  Agreement  of Limited
     Partnership  [Exhibit D to Prospectus  included in Post Effective Amendment
     No. 1 of  Registrant's  Registration  Statement on Form S-11 dated June 18,
     1987 (File No. 33-9889)].*

(4.4)Copy  of  Amended   Certificate  of  Limited  Partnership  filed  with  the
     Massachusetts  Secretary  of State  on  April  28,  1987.  [Exhibit  4.4 in
     Amendment No. 1 of Registrant's  Registration  Statement on Form S-11 dated
     May 14, 1987 (File No. 33-9889)].*

(10)   Material Contracts:

(10.1) Form of agreement between the Partnership and Krupp Mortgage Corporation.
     [Exhibit 10.3 in Amendment No. 1 of Registrant's  Registration Statement on
     Form S-11 dated May 14, 1987 (File No. 33-9889)].*

Denrich Apartments

(10.2) Prospectus for GNMA Pool No. 267075 (PL).  [Exhibit 10.29 to Registrant's
     Report  on Form  10-K  for the year  ended  December  31,  1988  (File  No.
     0-16817)].*

(10.3) Subordinated  Multifamily  Mortgage  (including  Subordinated  Promissory
     Note) dated  November 3, 1988 between  Arthur J. Stagnaro and Krupp Insured
     Plus-II Limited Partnership.  [Exhibit 10.30 to Registrant's Report on Form
     10-K for the year ended December 31, 1988 (File No. 0-16817)].*

(10.4) Modification Agreement dated June 28, 1995 between Arthur J. Stagnaro and
     Krupp Insured  Plus-II  Limited  Partnership  [Exhibit 10.1 to Registrant's
     Report  on Form  10-Q  for the  quarter  ended  June  30,  1995  (File  No.
     0-16817)].*

Richmond Park Apartments

(10.5)  Prospectus  for GNMA Pool No.  260865  (PL)  [Exhibit 1 to  Registrant's
     Report on Form 8-K dated August 30, 1989 (File No. 0-16817)].*


      * Incorporated by reference.





                                   SIGNATURES



Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on the 22nd day of March,
2002.

                                   KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                                   By: Krupp Plus Corporation,
                                       a General Partner



                                   By:  /s/ Douglas Krupp
                                       --------------------------------------
                                       Douglas Krupp, President, Co-Chairman
                                       (Principal Executive Officer) and
                                       Director of Krupp Plus Corporation


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities indicated, on the 22nd day of March, 2002.

            Signatures                            Title(s)


 /s/ Douglas Krupp                                President, Co-Chairman (Principal Executive Officer) and
----------------------------
Douglas Krupp                                          Director of Krupp Plus Corporation, a General Partner



 /s/ George Krupp                                 Co-Chairman (Principal Executive Officer) and Director of
----------------------------
George Krupp                                           of Krupp Plus Corporation, a General Partner



 /s/ Peter F. Donovan                             Senior Vice President of Krupp Plus Corporation, a General Partner
----------------------------
Peter F. Donovan



 /s/ Robert A. Barrows                             Treasurer and Chief Accounting Officer of Krupp Plus Corporation,
----------------------------
Robert A. Barrows                                      a General Partner






                                   APPENDIX A

                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP







                        FINANCIAL STATEMENTS AND SCHEDULE
                               ITEM 8 of FORM 10-K

             ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
                      For the Year Ended December 31, 2001




                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                   INDEX TO FINANCIAL STATEMENTS AND SCHEDULES




              Report of Independent Accountants                                                                       F-3

              Balance Sheets at December 31, 2001 and 2000                                                            F-4

              Statements of Income and Comprehensive Income for
              the Years Ended December 31, 2001, 2000 and 1999                                                        F-5

              Statements of Changes in Partners' Equity for the Years
              Ended December 31, 2001, 2000 and 1999                                                                  F-6

              Statements of Cash Flows for the Years Ended December 31, 2001,
              2000 and 1999                                                                                           F-7

              Notes to Financial Statements                                                                    F-8 - F-16



              All schedules are omitted as they are not applicable or not
              required, or the information is provided in the financial
              statements or the notes thereto.





                        REPORT OF INDEPENDENT ACCOUNTANTS






To the Partners of  Krupp Insured Plus-II Limited Partnership:

In our opinion, the financial statements listed in the accompanying index
present fairly, in all material respects, the financial position of Krupp
Insured Plus- II Limited Partnership (the "Partnership") at December 31, 2001
and 2000 and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2001 in conformity with accounting
principles generally accepted in the United States of America. 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 of these statements in accordance with
auditing standards generally accepted in the United States of America which
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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.






PricewaterhouseCoopers LLP
Boston, Massachusetts
March 22, 2002









                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                                 BALANCE SHEETS

                           December 31, 2001 and 2000


                                     ASSETS
                                                                                                     2001               2000
                                                                                                     ----               ----

Participating Insured Mortgages ("PIMs")
  (Notes B, C and H)                                                                           $   3,101,005        $  17,541,596
Mortgage-Backed Securities and insured
 mortgage ("MBS") (Notes B, D and H)                                                              30,211,162            21,247,646
                                                                                               -------------        --------------

      Total mortgage investments                                                                  33,312,167           38,789,242

Cash and cash equivalents (Notes B, C and H)                                                         933,678            3,125,710
Interest receivable and other assets                                                                 221,124              275,591
Prepaid acquisition fees and expenses, net of
 accumulated amortization of $0 and $733,572, respectively (Note B)                                  -                     65,905
                                                                                               -------------        -------------

      Total assets                                                                             $  34,466,969        $  42,256,448
                                                                                               =============        =============


                        LIABILITIES AND PARTNERS' EQUITY


Liabilities                                                                                    $      17,875        $      17,889
                                                                                               -------------        -------------

Partners' equity (deficit) (Notes A, C and E):

Limited Partners                                                                                  34,084,355           42,383,344
   (14,655,512 Limited Partner interest outstanding)

General Partners                                                                                    (341,667)            (337,448)

Accumulated comprehensive income (Note B)                                                            706,406              192,663
                                                                                               -------------        -------------

      Total Partners' equity                                                                      34,449,094           42,238,559
                                                                                               -------------        -------------

      Total liabilities and Partners' equity                                                   $  34,466,969        $  42,256,448
                                                                                               =============        ==============




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






                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                  STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

              For the Years Ended December 31, 2001, 2000 and 1999


                                                                           2001                2000               1999
                                                                           ----                ----               ----

      Revenues:
         Interest income - PIMs:
           Basic interest                                            $       613,152    $      1,360,247      $   3,681,868
           Participation interest                                             30,769             -                1,634,686
         Interest income - MBS                                             2,021,867           1,685,246          1,826,026
         Other interest income                                               124,846             474,953            680,085
                                                                     ---------------    ----------------      -------------

                Total revenues                                             2,790,634           3,520,446          7,822,665
                                                                     ---------------    ----------------      -------------

      Expenses:
         Asset management fee to an affiliate (Note F)                       261,650             299,983            496,464
         Expense reimbursement to affiliates (Note F)                        119,166             125,209             94,160
      Amortization of prepaid fees and expenses (Note B)                      65,905             122,275            898,457
         General and administrative                                          172,342             202,601            186,866
                                                                     ---------------    ----------------      -------------

                Total expenses                                               619,063             750,068          1,675,947
                                                                     ---------------    ----------------      -------------

      Net income (Notes E and G)                                           2,171,571           2,770,378          6,146,718

      Other Comprehensive Income:

         Net change in unrealized gain  on MBS                               513,743              87,582           (435,431)
                                                                     ---------------    ----------------      -------------

      Total Comprehensive Income                                     $     2,685,314    $      2,857,960      $   5,711,287
                                                                     ===============    ================      =============

      Allocation of net income (Notes E and G.):

         Limited Partners                                            $     2,106,424    $      2,687,267      $   5,962,316
                                                                     ===============    ================      =============

         Average net income per Limited Partner
          Interest (14,655,512 Limited Partner                       $           .14    $            .18      $         .41
                                                                     ===============    ================      =============
          interests outstanding)

         General Partners                                            $        65,147    $         83,111      $     184,402
                                                                     ===============    ================      ==============






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




                                            KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                                            STATEMENTS OF CHANGES IN PARTNERS' EQUITY

                                      For the Years Ended December 31, 2001, 2000 and 1999



                                                                                       Accumulated           Total
                                                  Limited              General        Comprehensive         Partners'
                                                 Partners              Partners            Income             Equity
                                                 --------              --------            ------             -------

Balance at December 31, 1998                   $ 117,123,621         $  (290,140)       $   540,512        $ 117,373,993

Net income                                         5,962,316             184,402              -                6,146,718

Quarterly distributions                          (11,138,189)           (217,645)             -              (11,355,834)

Special distributions                            (51,587,401)               -             -                  (51,587,401)

Change in unrealized gain on MBS                      -                     -              (435,431)            (435,431)
                                               -------------         -----------        -----------        -------------

Balance at December 31, 1999                      60,360,347            (323,383)           105,081           60,142,045

Net income                                         2,687,267              83,111              -                2,770,378

Quarterly distributions                           (5,862,204)            (97,176)             -               (5,959,380)

Special distributions                            (14,802,066)               -                 -              (14,802,066)

Change in unrealized gain on MBS                         -                 -                 87,582               87,582
                                               -----------------     -----------        -----------        --------------

Balance at December 31, 2000                      42,383,344            (337,448)           192,663           42,238,559

Net income                                         2,106,424              65,147            -                  2,171,571

Quarterly distributions                           (5,862,204)            (69,366)           -                 (5,931,570)

Special distributions                             (4,543,209)              -                -                 (4,543,209)

Change in unrealized gain on MBS                      -                    -                513,743              513,743
                                               -------------         -----------        -----------        --------------

Balance at December 31, 2001                   $  34,084,355         $  (341,667)       $   706,406        $  34,449,094
                                               =============         ===========        ===========        =============








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








                                           KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                                                   STATEMENTS OF CASH FLOWS

                                     For the Years Ended December 31, 2001, 2000 and 1999


                                                                     2001                     2000                 1999
                                                                   -------                  -------              --------
Operating activities:
 Net income                                                     $   2,171,571            $    2,770,378       $   6,146,718
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Amortization of prepaid fees and expenses                           65,905                   122,275             898,457
   Premium Amortization                                                22,153                   -                   -
   Shared Appreciation Interest and prepayment
    premiums                                                            -                       -                (1,162,777)
   Changes in assets and liabilities:
       Decrease in interest receivable
          and other assets                                             54,467                   102,695             352,543
       Decrease in liabilities                                            (14)                   (2,059)             (232,821)
                                                                -------------             -------------       --------------- -

            Net cash provided by operating activities               2,314,082                 2,993,289           6,002,120
                                                                -------------             -------------       -------------

Investing activities:
   Principal collections on PIMs including Shared Appreciation
       Interest and prepayment premium of  $1,162,777 in 1999         119,842                 8,682,792          57,196,596
   Principal collections on MBS                                     5,848,823                 1,117,892           2,078,965
                                                                -------------            --------------       -------------

            Net cash provided by investing activities               5,968,665                 9,800,684           59,275,561
                                                                -------------            --------------       --------------

Financing activities:
Quarterly distributions                                            (5,931,570)               (5,959,380)        (11,355,834)
   Special distributions                                           (4,543,209)              (14,802,066)        (51,587,401)
                                                                -------------            --------------       -------------

    Net cash used for financing activities                        (10,474,779)              (20,761,446)        (62,943,235)
                                                                -------------            --------------        ------------

Net (decrease) increase in cash and equivalents                    (2,192,032)               (7,967,473)          2,334,446

Cash and cash equivalents, beginning of year                        3,125,710                11,093,183           8,758,737
                                                                -------------            --------------        ------------

Cash and cash equivalents, end of year                          $     933,678            $    3,125,710       $ 11,093,183
                                                                =============            ==============       ============

Supplemental disclosure of non-cash investing activities:
    Reclassification of investment in a PIM to MBS              $  14,320,749            $      -             $     -
                                                                =============            ==============       ============

 Non cash activities:
    Increase (decrease) in fair value of MBS                    $     513,743            $       87,582       $    (435,431)
                                                                =============            ==============       =============









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



                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

A. Organization

    Krupp Insured Plus-II Limited Partnership (the "Partnership") was formed on
    October 29, 1986 by filing a Certificate of Limited Partnership in The
    Commonwealth of Massachusetts. The Partnership was organized for the purpose
    of investing in multi-family loans and mortgage backed securities. The
    Partnership issued all of the General Partner Interests to Krupp Plus
    Corporation and Mortgage Services Partners Limited Partnership in exchange
    for capital contributions aggregating $3,000. The Partnership terminates on
    December 31, 2026, unless terminated earlier upon the occurrence of certain
    events as set forth in the Partnership Agreement.

    The Partnership commenced the public offering of Limited Partner interests
    on May 29, 1987 and completed its public offering having sold 14,655,412
    Limited Partner interests for $292,176,381 net of purchase volume discounts
    of $931,859 as of May 27, 1988. In addition, Krupp Depositary Corporation
    owns one hundred Limited Partner interests.

B.  Significant Accounting Policies

    The Partnership uses the following accounting policies for financial
    reporting purposes, which may differ in certain respects from those used for
    federal income tax purposes (Note G).

    Basis of Presentation

    The accompanying financial statements have been prepared on the accrual
    basis of accounting in accordance with accounting principles generally
    accepted in the United States of America ("GAAP").

    MBS

    The Partnership, in accordance with Financial Accounting Standards Board's
    Statement 115, "Accounting for Certain Investments in Debt and Equity
    Securities" ("FAS 115"), classifies its MBS portfolio as available-for-sale.
    As such the Partnership carries its MBS at fair market value and reflects
    any unrealized gains (losses) as a separate component of Partners' Equity.
    The Partnership amortizes purchase premiums or discounts over the life of
    the underlying mortgages using the effective interest method.

    The Partnership also holds a Federal Housing Administration ("FHA") insured
    mortgage which is classified as MBS and is carried at amortized cost. The
    Partnership holds this loan at amortized cost. The Partnership does not
    establish loan loss reserves as its investments are fully insured by the
    FHA.

    PIMs

    The Partnership accounts for the MBS portion of its PIM in accordance with
    FAS 115 under the classification of held to maturity. The Partnership
    carries the Government National Mortgage Association ("GNMA") MBS at
    amortized cost.

    Basic interest on the PIM is recognized based on the stated coupon rate of
    the GNMA MBS. The Partnership's recognizes interest related to the
    participation feature when the amount becomes fixed and the transaction that
    gives rise to such amount is consummated.

    Cash and Cash Equivalents

    The Partnership includes all short-term investments with maturities of three
    months or less at the date of acquisition in cash and cash equivalents. The
    Partnership invests its cash primarily in commercial paper and money market
    funds with a commercial bank and has not experienced any loss to date on its
    invested cash.


                                    Continued




                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS, Continued


B.  Significant Accounting Policies, continued

    Prepaid Fees and Expenses
    Prepaid fees and expenses consisted of acquisition fees and expenses paid
    for the acquisition of PIMs. The Partnership amortized prepaid acquisition
    fees and expenses using a method that approximated the effective interest
    method over a period of ten to twelve years, which represented the estimated
    life of the underlying mortgage.

    Upon the repayment of a PIM, any unamortized acquisition fees and expenses
    related to such loan were expensed.

    Income Taxes

    The Partnership is not liable for federal or state income taxes because
    Partnership income is allocated to the partners for income tax purposes. If
    the Partnership's tax returns are examined by the Internal Revenue Service
    or state taxing authority and such an examination results in a change in
    Partnership taxable income, such change will be reported to the partners.

    Estimates and Assumptions

    The preparation of financial statements in accordance with GAAP requires
    management to make estimates and assumptions that affect the reported amount
    of assets and liabilities, contingent assets and liabilities and revenues
    and expenses during the period. Actual results could differ from those
    estimates.

C. PIMs

    At December 31, 2001 and 2000, the Partnership had investments in one PIM
    and two PIMs, respectively. The Partnership's remaining PIM consists of a
    GNMA MBS representing the securitized first mortgage loan on the underlying
    property and participation interests in the revenue stream and appreciation
    of the underlying property above specified base levels. The borrower conveys
    these participation features to the Partnership generally through a
    subordinated promissory note and mortgage (the "Agreement").

    The Partnership receives guaranteed monthly payments of principal and basic
    interest on the GNMA MBS and HUD insures the first mortgage loan underlying
    the GNMA MBS.

    The Partnership may receive income related to its participation interests in
    the underlying property, however, these amounts are neither insured nor
    guaranteed.

    The participation features consist of the following: (i) "Minimum Additional
    Interest" equal to .5% per annum calculated on the unpaid principal balance
    of the first mortgage on the underlying property , (ii) "Shared Income
    Interest" is 25% of the monthly gross rental income generated by the
    underlying property in excess of a specified base, but only to the extent
    that it exceeds the amount of Minimum Additional Interest received during
    such month and (iii) "Shared Appreciation Interest" is 25% of any increase
    in the value of the underlying property in excess of a specified base.
    Payment of Minimum Additional Interest and Shared Income Interest from the
    operations of the property is limited to 50% of net revenue or Surplus Cash
    as defined by HUD.







                                    Continued





                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS, Continued
                                 ---------------

C. PIMs, continued


    The total amount of Minimum Additional Interest, Shared Income Interest and
    Shared Appreciation Interest payable on the maturity date by the underlying
    borrower usually cannot exceed 50% of any increase in value of the property.

    Shared Appreciation Interest is payable when one of the following occurs:
    (1) the sale of the underlying property to an unrelated third party on a
    date which is later than five years from the date of the Agreement, (2) the
    maturity date or accelerated maturity date of the Agreement, or (3)
    prepayment of amounts due under the Agreement and the insured mortgage.

    Under the Agreement, the Partnership, upon giving twelve months written
    notice, can accelerate the maturity date of the Agreement and insured
    mortgage to a date not earlier than ten years from the date of the Agreement
    for (a) the payment of all participation interest due under the Agreement as
    of the accelerated maturity date, or (b) the payment of all participation
    interest due under the Agreement plus all amounts due on the first mortgage
    note on the property.

    During May 2001, the Partnership received $30,769 from the borrowers of the
    Richmond Park PIM as a settlement to release the loan's participation
    features. The property was not generating sufficient cash flow to pay any
    participation from property operations nor did it have sufficient value to
    meet the threshold to pay any participation based on value if the property
    was sold or refinanced. The borrowers asked for a release of the
    participation features while keeping the insured first mortgage in place
    until the property turns around. The General Partners agreed to this request
    in return for the settlement because there was no expectation that the
    Partnership would be entitled to any participation proceeds now or in the
    future in the property's current condition. Upon this settlement, the
    insured first mortgage loan on Richmond Park was reclassified from a PIM to
    a MBS as the only remaining portion of the investment is a GNMA MBS. The
    Partnership also reclassified this investment to available for sale
    concurrent with the release of the participation feature. The Partnership
    will continue to receive the scheduled principal and interest payments on
    the first mortgage until the property is refinanced or sold.

    On March 30, 2000, the Partnership paid a special distribution of $.58 per
    Limited Partner interest from the prepayment proceeds received during
    February 2000 on the Greenhouse Apartments PIM in the amount of $8,428,984.
    The underlying property was foreclosed on by the first mortgage lender
    during January 1999. The Partnership continued to receive its full principal
    and basic interest payments due on the PIM while the underlying mortgage was
    in default because those payments were guaranteed by GNMA. The Partnership
    did not receive any participation interest from this transaction.

    On January 11, 2000, the Partnership paid a special distribution of $.43 per
    Limited Partner interest from the Saratoga Apartments PIM prepayment
    proceeds received in December 1999 in the amount of $6,204,960. The
    underlying property value had not increased sufficiently enough to meet the
    criteria for the Partnership to earn any participation interest.

    In September 1999, the Partnership received Shared Appreciation Interest and
    accrued Minimum Additional and Shared Income Interest of $1,102,701 and
    $472,587, respectively in connection with the Le Coeur du Monde PIM. The
    Partnership also received $279,447 relating to repayment of interest rate
    rebates. The Partnership received the principal proceeds of $9,422,001 in
    October. The principal proceeds and Shared Appreciation Interest were
    distributed to the Limited Partners through a special distribution of $.72
    per Limited Partner interest on November 22, 1999.



                                    Continued




                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS, Continued
                                 ---------------
C. PIMs, continued

    On June 18, 1999, the Partnership made a special distribution of $.83 per
    Limited Partner interest with the proceeds of the Country Meadows PIM. The
    Partnership received principal of $12,015,224 and a prepayment premium of
    $60,076 from this prepayment.

    On February 26, 1999, the Partnership made a special distribution to the
    Limited Partners of $1.97 per Limited Partner Interest. This special
    distribution was the result of the prepayment of the Stanford Court,
    Hillside Court, Carlyle Court and Waterford Court Apartments PIMs. The
    Partnership received principal of $27,967,284 during January 1999, Shared
    Appreciation Interest and prepayment premiums of $860,052 and accrued
    Minimum Additional and Shared Income Interest of $432,877 during December
    1998 from these prepayments.

    At December 31, 2001 and 2000 there were no loans within the Partnership's
    portfolio that were delinquent as to principal or interest.

    The Partnership's PIMs consisted of the following at December 31, 2001 and
    2000:


                                                                                                           Investment Basis at
                                Original         Interest         Maturity           Monthly                    December 31,
                                                                                                       -----------------------------
       GNMA                    Face Amount       Rates (a)         Dates (e)         Payment (f)           2001             2000
       ----                  --------------    -------------   ----------------     --------------     ------------     ------------
Denrich Apartments
Philadelphia, PA             $    3,500,000          8%           12/15/23          $      24,800      $  3,101,005     $  3,148,969
                                                   (b)(c)
                                                   (d)(g)

Richmond Park (h)
Richmond Heights, OH             16,000,000           -               -                  -                 -              14,392,627
                             --------------                                                            -----------      ------------


                             $   19,500,000                                                            $ 3,101,005      $  7,541,596
                             ==============                                                            ===========      ============
                                                                                                           (j)

(a)  Represents the permanent interest rate of the GNMA MBS. In addition, the
     Partnership receives participation interest consisting of (i) Minimum
     Additional Interest, (ii) Shared Income Interest and (iii) Shared
     Appreciation Interest.

(b)  Minimum Additional Interest is at a rate of .5% per annum calculated on the
     unpaid principal balance of the first mortgage note.

(c)  Shared Income Interest is based on 25% of monthly gross rental income over a specified base amount.

(d)  Shared Appreciation Interest is based on 25% of any increase in the value of the project over the specified base value.

(e)  The Partnership's GNMA MBS has a call provision, which allows the Partnership to accelerate the maturity date.






                                    Continued



                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS, Continued


C.   PIMs, continued

(f)  The normal monthly payment consisting of principal and basic interest is
     payable monthly at level amounts over the term of the GNMA MBS.

(g)  On June 28, 1995, the Partnership entered into a temporary basic interest
     rate reduction agreement on the Denrich Apartments PIM. Beginning July 1,
     1995, the basic interest rate decreased from 8% per annum to 6.25% per
     annum for thirty months, then increased to 6.75% per annum for the
     following thirty-six month period and then increased to the original rate
     of 8% per annum. The difference between basic interest at the original
     interest rate and the reduced rates accumulated and will be payable from
     surplus cash or from the net proceeds of a sale or refinancing. These
     accumulated amounts will be due and payable prior to any distributions to
     the borrower or payment of participation interest to the Partnership. Also
     under the agreement, the Base Value for calculating Shared Appreciation
     Interest decreased from $4,025,000 to $3,500,000.

(h)  During May 2001, the Partnership received $30,769 as a settlement to
     release the loan's participation features. The insured first mortgage loan
     was reclassified from a PIM to a MBS.

(i)  The aggregate cost of the PIM for federal income tax purposes is $3,101,005.

     A reconciliation of the carrying value of PIMs for each of the three years
     in the period ended December 31, 2001 is as follows:

                                                         2001                   2000                    1999
                                                         ----                   ----                    ----

Balance at beginning of period                     $ 17,541,596           $   26,224,388         $   82,258,207

Deductions during period:
   Prepayments and
    principal collections                              (119,842)              (8,682,792)           (56,033,819)
   Reclass to MBS                                   (14,320,749)                 -                      -
                                                   ------------           --------------         --------------

Balance at end of period                           $  3,101,005           $   17,541,596         $   26,224,388
                                                   ============           ==============         ==============


The underlying mortgage of the Denrich Apartments PIM is collateralized by a
multi-family apartment complex located in Philadelphia, Pennsylvania. The
apartment complex has 89 units.






                                    Continued



                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS, Continued


D. MBS

      During May 2001, the Partnership received a payoff of the Orchard Landing
      MBS in the amount of $4,440,315. On July 18, 2001 the Partnership paid a
      special distribution of $.31 per Limited Partner interest from the
      principal proceeds.

      At December 31, 2001, the Partnership's MBS portfolio had an amortized
      cost of $17,982,354 and unrealized gains of $706,406. At December 31,
      2001, the Partnership's insured mortgage had an amortized cost of
      $11,522,402 and an unrealized gain of $363,763. At December 31, 2000, the
      Partnership's MBS portfolio has an amortized cost of $9,407,384 and
      unrealized gains and losses of $233,123 and $40,460, respectively. At
      December 31, 2000, the Partnership's insured mortgage had an amortized
      cost of $11,647,599 and an unrealized gain of $203,833. The portfolio has
      maturities ranging from 2007 to 2028.

                                                                                            Unrealized
                  Maturity Date                               Fair Value                        Gain
                 --------------                             -------------                 ----------------
                  2002 - 2006                               $  -                          $   -
                  2007 - 2011                                  1,643,717                        159,611
                  2012 - 2028                                 28,931,208                        910,558
                                                            ------------                  -------------

                      Total                                 $ 30,574,925                  $   1,070,169
                                                            ============                  ==============

E.    Partners' Equity

      Profits and losses from Partnership operations and Distributable Cash Flow
      are allocated 97% to the Unitholders and Corporate Limited Partner (the
      "Limited Partners") and 3% to the General Partners.

      Upon the occurrence of a capital transaction, as defined in the
      Partnership Agreement, net cash proceeds will be distributed first, to the
      Limited Partners until they have received a return of their total invested
      capital, second, to the General Partners until they have received a return
      of their total invested capital, third, 99% to the Limited Partners and 1%
      to the General Partners until the Limited Partners receive an amount equal
      to any deficiency in the 11% cumulative return on their invested capital
      that exists through fiscal years prior to the date of the capital
      transaction, fourth, to the class of General Partners until they have
      received an amount equal to 4% of all amounts of cash distributed under
      all capital transactions and fifth, 96% to the Limited Partners and 4% to
      the General Partners.

      Upon the occurrence of a terminating capital transaction, as defined in
      the Partnership Agreement, the net cash proceeds and winding up of the
      affairs of the Partnership will be allocated among the Partners first, to
      each class of Partners in the amount equal to, or if less than, in
      proportion to, the positive balance in the Partner's capital accounts,
      second, to the Limited Partners until they have received a return of their
      total invested capital, third, to the General Partners until they have
      received a return of their total invested capital, fourth, 99% to the
      Limited Partners and 1% to the General Partners until the Limited Partners
      have received to any deficiency in the 11% cumulative return on their
      invested capital that exists through fiscal years prior to the date of the
      capital transaction, fifth, to the General Partners until they have
      received an amount equal to 4% of all amounts of cash distributed under
      all capital transactions and sixth, 96% to the Limited Partners and 4% to
      the General Partners.

      Profits arising from a capital transaction, will be allocated in the same
      manner as related cash distributions. Losses from a capital transaction
      will be allocated 97% to the Limited Partners and 3% to the General
      Partners.

      During 2001, 2000 and 1999 the Partnership made quarterly distributions
      totaling $.40, $.40 and $.76 per Limited Partner interest, respectively.
      The Partnership made special distributions of $.31, $1.01 and $3.52 per
      Limited Partner interest in 2001, 2000 and 1999, respectively.

                                    Continued



                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS, Continued


E. Partners' Equity, continued

   As of December 31, 2001, the following cumulative partner contributions and
   allocations have been made since the inception of the Partnership:

                                                    Corporate                          Accumulated
                                                    Limited         General          Comprehensive
                          Unitholders                Partner        Partners             Income             Total
                        ----------------         ---------------  -------------       -------------    ---------------

Capital
contributions           $  292,176,381           $      2,000     $     3,000         $  -             $   292,181,381

Syndication
costs                      (15,580,734)               -               -                  -                (15,580,734)

Quarterly
distributions             (249,750,539)                (1,740)     (5,898,928)              -            (255,651,207)

Special
distributions             (172,347,642)                (1,176)           -                  -            (172,348,818)

Net income                 179,586,552                  1,253       5,554,261               -             185,142,066

Unrealized
gains on MBS                     -                    -                  -                706,406             706,406
                        --------------           ------------    ------------         -----------      --------------


Total at
December 31, 2001       $   34,084,018           $        337    $   (341,667)        $   706,406      $   34,449,094
                        ==============           ============    ============         ===========      ==============


F. Related Party Transactions

   Under the terms of the Partnership Agreement, the General Partners or their
   affiliates are entitled to an asset management fee for the management of the
   Partnership's business, equal to .75% per annum of the value of the
   Partnership's actual and committed mortgage assets, payable quarterly. The
   General Partners may also receive an incentive management fee in an amount
   equal to .3% per annum on the Partnership's total invested assets provided
   the Unitholders have received their specified non-cumulative annual return on
   their Invested Capital. Total fees payable to the General Partners for
   management services shall not exceed 10% of Distributable Cash Flow over the
   life of the Partnership.

   Additionally, the Partnership reimburses affiliates of the General Partners
   for certain costs incurred in connection with maintaining the books and
   records of the Partnership the preparation and mailing of financial reports,
   tax information and other communications to investors and legal fees and
   expenses.











                                    Continued



                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS, Continued



G.     Federal Income Taxes

       The reconciliation of the income reported in the accompanying financial
       statements with the income reported in the Partnership's 2001 federal
       income tax return is as follows:

       Net income per statement of income                                                 $     2,171,571

       Less:  Book to tax difference for amortization of
              prepaid fees and expenses                                                          (232,139)
                                                                                          ---------------

       Net income for federal income tax purposes                                         $    1,939,432
                                                                                          ===============

       The allocation of the 2001 net income for federal income tax purposes is
       as follows:

                                                                                            Portfolio
                                                                                              Income

              Unitholders                                                                 $    1,881,236
              Corporate Limited Partner                                                               13
              General Partners                                                                    58,183
                                                                                          ---------------

                                                                                          $    1,939,432

       For the years ended December 31, 2001, 2000 and 1999 the average per unit
       net income to the Unitholders for federal income tax purposes was $.13,
       $.15 and $.33 respectively.

       The basis of the Partnership's assets for financial reporting purposes
       was less than its tax basis by approximately $183,000 and $929,000 at
       December 31, 2001 and 2000, respectively. The basis of the Partnership's
       liabilities for financial reporting purposes were the same as its tax
       basis at December 31, 2001 and 2000, respectively.

H.     Fair Value Disclosures of Financial Instruments

       The Partnership uses the following methods and assumptions to estimate
       the fair value of each class of financial instruments:

       Cash and Cash Equivalents

       The carrying amount approximates fair value because of the short maturity
       of those instruments.

       MBS

       The Partnership estimates the fair value of MBS based on quoted market
       prices while it estimates the fair value of insured mortgages based on
       quoted prices of MBS with similar interest rates. Based on the estimated
       fair value determined using these methods and assumptions, the
       Partnership's investments in MBS had gross unrealized gains of
       approximately $1,070,000 at December 31, 2001 and gross unrealized gains
       and losses of $437,000 and $40,000, respectively, at December 31, 2000.




                                    Continued



                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS, Continued


H.     Fair Value Disclosures of Financial Instruments, continued
       -----------------------------------------------

       PIMs

       As there is no active trading market for these investments, Management
       estimates the fair value of the PIMs using quoted market prices of MBS
       having a similar interest rate. Management does not include any
       participation interest in the Partnership's estimated fair value arising
       from the properties as Management does not believe it can predict the
       time of realization of the feature with any certainty. Based on the
       estimated fair value determined using these methods and assumptions, the
       Partnership's investments in PIMs had gross unrealized gains of
       approximately $146,000 at December 31, 2001 and gross unrealized gains of
       approximately $46,000 at December 31, 2000.


       At December 31, 2001 and 2000, the estimated fair values of the
       Partnership's financial instruments are as follows (amounts rounded to
       nearest thousand):

                                                                  2001                              2000
                                                                  ----                              -----
                                                           Fair           Carrying           Fair          Carrying
                                                           Value            Value           Value            Value
                                                        ---------         ---------       ----------       --------

        Cash and cash equivalents                       $     934         $     934       $   3,126        $  3,126

        MBS and insured mortgages                          30,575            30,211          21,451          21,248

        PIMs                                                3,247             3,101          17,588          17,542
                                                        ---------         ---------       ---------        --------

                                                        $  34,756         $  34,246       $  42,165        $ 41,916
                                                        =========         =========       =========        ========













                           Unaudited Distributable Cash Flow and Net Cash Proceeds from Capital Transactions

Shown below is the calculation of Distributable Cash Flow and Net Cash Proceeds
from Capital Transactions, as defined by Section 17 of the Partnership
Agreement, and the source of cash distributions for the year ended December 31,
2001 and the period from inception through December 31, 2001. The General
Partners provide certain of the information below to meet requirements of the
Partnership Agreement and because they believe that it is an appropriate
supplemental measure of operating performance. However, Distributable Cash Flow
and Net Cash Proceeds from Capital Transactions should not be considered by the
reader as a substitute to net income as an indicator of the Partnership's
operating performance or to cash flows as a measure of liquidity.


                                                                                  Year Ended     Inception Through
                                                                                   12/31/01           12/31/01
                                                                                   --------          ---------
                                                                      (Amounts in thousands, except per Unit amounts)
Distributable Cash Flow:
-----------------------
Income for tax purposes                                                            $   1,939         $ 186,032
Items not requiring (not providing) the use of
 operating funds:
   Amortization of prepaid fees and expenses                                             298            16,932
   Acquisition expenses paid from offering
    proceeds charged to operations                                                       -                 690
   Shared Appreciation Income/prepayment premiums                                        -              (6,157)
   Premium Amortization                                                                   22                22
   Gain on sale of MBS                                                                   -                (377)
                                                                                   ---------         ---------
Total Distributable Cash Flow ("DCF")                                              $   2,259         $ 197,142
                                                                                   =========         =========

Limited Partners Share of DCF                                                      $   2,191         $ 191,228
                                                                                   =========         =========

Limited Partners Share of DCF per Unit (14,655,512)                                $     .15         $   13.05
                                                                                   =========         =========

General Partners Share of DCF                                                      $      68         $   5,914
                                                                                   =========         =========

Net Proceeds from Capital Transactions:
--------------------------------------
Principal collections on PIMs and PIM sale proceeds
 including Shared Appreciation Income/prepayment premiums                          $     120        $  174,380
Principal collections on MBS and MBS sale proceeds                                     5,849            99,376
Reinvestment of MBS and PIM principal collections
 and sale proceeds                                                                       -             (41,966)
Gain on sale of MBS                                                                      -                 377
                                                                                   ---------        ----------
Total Net Proceeds from Capital Transactions                                       $   5,969        $  232,167
                                                                                   =========        ==========

Cash available for distribution
(DCF plus proceeds from Capital Transactions)                                      $   8,228        $  429,309
                                                                                   =========        ==========

Distributions:
   Limited Partners                                                                $   9,673(a)     $  422,834(b)
                                                                                   =========        ==========

   Limited Partners Average per Unit                                               $     .66(a)     $    28.85(b)(c)
                                                                                   =========        ==========

   General Partners                                                                $      68(a)     $    5,914(b)
                                                                                   =========        ==========

           Total Distributions                                                     $   9,741        $  428,748
                                                                                   =========        ==========

(a)    Represents all distributions paid in 2001 except February 2001
         quarterly distribution and includes an estimate of the quarterly
         distribution to be paid in February 2002.
(b)    Includes an estimate of the quarterly distribution to be paid in
         February 2002.
(c)    Limited Partners average per Unit return of capital as of February
         2002 is $15.80 [$28.85 - $13.05] Return of capital represents that
         portion of distributions which is not funded from DCF such as
         proceeds from the sale of assets and substantially all of the
         principal collections received from MBS and PIMs.`