American Affordable Housing Ii Limited Partnership 10-Q 2008 Q3 Quarterly report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period endedDecember 31, 2007 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        0-17696

AMERICAN AFFORDABLE HOUSING II LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)

Massachusetts	04-2992309
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)

One Boston Place, Suite 2100, Boston, Massachusetts  02108
(Address of principal executive offices)           (Zip Code)

Registrant's telephone number, including area code(617)624-8900

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.

Yesý Noo

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

Large accelerated filero	Accelerated filero
Non-accelerated filero	Smaller reporting companyý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yeso Noý

AMERICAN AFFORDABLE HOUSING II LIMITED PARTNERSHIP

QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED DECEMBER 31, 2007

TABLE OF CONTENTS

FOR THE QUARTER ENDED December 31, 2007

Balance_Sheets*

Statements_of_Operations 4

Changes_in_Partners'_DEFICIT 6

Statements_of_Cash_Flows 7

Notes_to_Financial_Statements 8

Note A Organization 8

Note B Accounting and Financial Reporting Policies 8

Note C Related Party Transactions 9

Note D Investments in Operating Partnerships 9

Combined_Statements_of_Operations 10

NOTE_E_TAXABLE_LOSS 11

NOTE_F_SUBSEQUENT_EVENT 11

Liquidity 12

Capital_Resources 12

Results_of_Operations 13

Quantitative_and_Qualitative_Disclosure 19

Controls_and_Procedures 19

Part_II_Other_Information 20

Signatures 21

American Affordable Housing II Limited Partnership

BALANCE SHEETS

		December 31, 2007 (Unaudited)	March 31, 2007 (Audited)
ASSETS
Cash and cash equivalents		$ 152,461	$ 468,159
		$  152,461	$  468,159
LIABILITIES AND PARTNERS' DEFICIT
LIABILITIES
Accounts payable		$  -	$  7,500
Accounts payable affiliates		6,780,480	6,991,012
		6,780,480	6,998,512
PARTNERS' DEFICIT
Limited Partners
	Units of limited partnership  interest, $1,000 stated value per unit; issued and outstanding, 26,501 units (Note A)	(6,339,717)	(6,243,028)
General Partner		(288,302)	(287,325)
		(6,628,019)	(6,530,353)
		$  152,461	$  468,159

The accompanying notes are an integral part of this statement

American Affordable Housing II Limited Partnership

STATEMENTS OF OPERATIONS

Three Months Ended December 31,
(Unaudited)

		2007	2006
Income
	Interest income	$  1,556	$  1,894
	Other income	-	-
		1,556	1,894
Share of income from Operating Partnerships (Note D)		-	151,058
Expenses
	Professional fees	4,778	6,268
	General and administrative expenses	10,432	6,621
	Asset management fees (Note C)	14,888	(15,741)
		30,098	(2,852)
NET INCOME (LOSS)		$ (28,542)	$ 155,804
Net income (loss) allocated to general partner		$  (285)	$  1,558
Net income (loss) allocated limited partners		$ (28,257)	$ 154,246
Net income (loss) per unit of limited partnership interest		$        (1.07)	$       5.80

The accompanying notes are an integral part of this statement

American Affordable Housing II Limited Partnership

STATEMENTS OF OPERATIONS

Nine Months Ended December 31,
(Unaudited)

		2007	2006
Income
	Interest income	$  6,611	$   2,832
	Other income	-	21,784
		6,611	24,616
Share of income from Operating Partnerships (Note D)		-	201,308
Expenses
	Professional fees	33,184	24,104
	General and administrative expenses	20,872	9,480
	Asset management fees (Note C)	50,221	71,988
		104,277	105,572
NET INCOME (LOSS)		$ (97,666)	$ 120,352
Net income (loss) allocated to general partner		$  (977)	$  1,204
Net income (loss) allocated limited partners		$ (96,689)	$ 119,148
Net income (loss) per unit of limited partnership interest		$        (3.65)	$       4.50

The accompanying notes are an integral part of this statement

American Affordable Housing II Limited Partnership

STATEMENTS OF CHANGES IN PARTNERS' DEFICIT

Nine Months Ended December 31,
(Unaudited)

	Limited Partners	General Partner	Total
Partners' capital (deficit)  April 1, 2007	$ (6,243,028)	$(287,325)	$(6,530,353)
Net loss	(96,689)	(977)	(97,666)
Partners' capital (deficit)   December 31, 2007	$(6,339,717)	$(288,302)	$(6,628,019)

The accompanying notes are an integral part of this statement

American Affordable Housing II Limited Partnership

STATEMENTS OF CASH FLOWS

Nine Months Ended December 31,
(Unaudited)

			2007	2006
Cash flows from operating activities:
	Net Income (Loss)		$   (97,666)	$   120,352
	Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
		Share of (Income) Loss from Operating Partnerships	-	(201,308)
		Changes in assets and liabilities:
		Decrease (Increase) in other assets	-	(83,000)
		Increase (Decrease) in accounts payable and accrued expenses	(7,500)	-
		Increase (Decrease) in accounts payable affiliates	(210,532)	168,235
		Net cash provided by (used in) operating activities	(315,698)	4,279
	Cash flows from investing activities:
		Proceeds from the sale of Operating Partnerships	-	50,250
		Net cash provided by (used in) investing activities	-	50,250
		INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(315,698)	54,529
Cash and cash equivalents, beginning			468,159	197,409
Cash and cash equivalents, ending			$    152,461	$    251,938

The accompanying notes are an integral part of this statement

American Affordable Housing II Limited Partnership

NOTES TO FINANCIAL STATEMENTS

December 31, 2007
(Unaudited)

NOTE A - ORGANIZATION

American Affordable Housing II Limited Partnership ("Partnership") was formed under the laws of The Commonwealth of Massachusetts on May 13, 1987, for the purpose of acquiring, holding, and disposing of limited
partnership interests in operating partnerships which were to acquire, develop, rehabilitate, operate and own newly constructed, existing or rehabilitated low-income apartment complexes. Effective as of June 1, 2001 there was a restructuring, and as a result, the Partnership's general partner was reorganized as follows. The general partner of the Partnership continues to be Boston Capital Associates Limited Partnership, a Massachusetts limited partnership. The general partner of the Partnership's general partner is BCA Associates Limited Partnership, a Massachusetts limited partnership, whose sole general partner is C&M Management, Inc., a Massachusetts corporation and whose limited partners are Herbert F. Collins and John P. Manning. Mr. Manning is the principal of Boston Capital Partners, Inc.

Pursuant to the Securities Act of 1933, the Partnership filed a Form S-11 Registration Statement with the Securities and Exchange Commission, effective December 21, 1987, which covered the offering (the "Public Offering") of the Partnership's units of limited partner interest, as well as the units of limited partner interest offered by American Affordable Housing I, III, IV, and V Limited Partnerships (together with the Partnership, the
"Partnerships"). The Partnerships registered 50,000 units of limited partner interest at $1,000 each unit for sale to the public. The Partnership sold 26,501 units of limited partner interest, representing $26,501,000 of capital contributions.

NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES

The condensed financial statements included herein as of December 31, 2007 and for the nine months then ended have been prepared by the Registrant, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The Registrant's accounting and financial reporting policies are in conformity with generally accepted accounting principles and include adjustments in interim periods considered necessary for a fair presentation of the results of operations. All such adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. It is suggested that these condensed financial statements are read in conjunction with the financial statements and the notes thereto included in the Registrant's Annual Report Statement on Form 10-K.

The accompanying financial statements reflect the Partnership's results of operations for an interim period and are not necessarily indicative of the results of operations for the fiscal year ending March 31, 2008.

American Affordable Housing II Limited Partnership

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2007

(Unaudited)

NOTE C - RELATED PARTY TRANSACTIONS

An annual partnership management fee based on 0.5 percent of the aggregate cost of all apartment complexes owned by the Operating Partnerships has been accrued as payable to Boston Capital Asset Management Limited Partnership. The partnership management fee paid for the nine months ended December 31, 2007 and 2006 was $286,092 and $0, respectively. The annual partnership management fee accrued for the quarters ended December 31, 2007 and 2006 was $24,705 and $50,925, respectively. Total partnership management fees accrued as of December 31, 2007 are $6,468,228.

During the quarters ended December 31, 2007 and 2006, affiliates of the Partnership's general partner did not advance any money to the Partnership to pay operating expenses of the Partnership, or make advances and/or loans to Operating Partnerships. Total advances for these costs at December 31, 2007 were $261,667. These and any additional advances will be repaid, without interest, from available cash flow or the proceeds of sales or refinancing of the Partnership's interests in Operating Partnerships.

The Partnership also accrued various affiliate administrative expenses including travel, printing, salaries, postage, and overhead allocations. Total accruals at December 31, 2007 were $50,585.

NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS

At December 31, 2007 and 2006, the Partnership had limited partnership equity interests in 15 Operating Partnerships each of which owned an apartment complex.

Under the terms of the Partnership's investment in each Operating Partnership, the Partnership was required to make capital contributions to the Operating Partnerships. These contributions were payable in installments upon each Operating Partnership achieving specified levels of construction and/or operations. At December 31, 2007 and 2006, all such capital contributions had been paid to the Operating Partnerships.

The Partnership's fiscal year ends March 31st of each year, while all the Operating Partnerships' fiscal years are the calendar year. Pursuant to the provisions of each Operating Partnership Agreement, financial results for each of the Operating Partnerships are provided to the Partnership within 45 days after the close of each Operating Partnership's quarterly period. Accordingly, the current financial results available for the Operating Partnerships are for the nine months ended September 30, 2007.

American Affordable Housing II Limited Partnership

NOTES TO FINANCIAL STATEMENTS

December 31, 2007
(Unaudited)

COMBINED SUMMARIZED STATEMENTS OF OPERATIONS

NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)

The unaudited combined statements of operations of the Operating

Partnerships for the nine months ended September 30, 2007 and 2006 are as follows:

	2007	2006
Revenues
Rental income	$ 718,408	$ 3,518,530
Interest and other	21,834	100,501
	740,242	3,619,031
Expenses
Interest expense	125,861	758,438
Depreciation and amortization	179,129	819,161
Operating expenses	585,550	2,569,020
	890,540	4,146,619
NET LOSS	$   (150,298)	$   (527,588)
Net loss allocation to American   Affordable Housing II Limited   Partnership*	$ (148,795)	$ (522,312)
Net loss allocated to other    partners	$ (1,503)	$ (5,276)

*Amounts include $148,795 and $522,312 for 2007 and 2006, respectively, of loss not recognized under the equity method of accounting.

The Partnership accounts for its investments using the equity method of accounting. Under the equity method of accounting, the Partnership adjusts its investment cost for its share of each Operating Partnership's results of
operations and for any distributions received or accrued. However, the Partnership recognizes individual operating losses only to the extent of capital contributions. Excess losses are suspended for use in future years to
offset excess income.

American Affordable Housing II Limited Partnership

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2007

(Unaudited)

NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (CONTINUED)

At December 31, 2007 and 2006, the Partnership has limited partnership equity interests in 15 Operating Partnerships, which own apartment complexes. During the quarters ended December 31, 2007 and 2006, 0 and 3, respectively, of the Operating Partnerships were sold. The dispositions resulted in cash proceeds to the Partnership of $50,250 as of December 2006. A gain was recorded on the disposal of the assets of $201,308 for the quarter ended December 31, 2006. Of this amount a receivable of $151,058 was recorded at December 31, 2006.

NOTE E - TAXABLE LOSS

The Partnership's taxable loss for the calendar year ended December 31, 2007 is expected to differ from its loss for financial reporting purposes. This is primarily due to accounting differences in depreciation incurred by the Operating Partnerships and also differences between the equity method of accounting and IRS accounting methods. No provision or benefit for income taxes has been included in these financial statements since taxable income or loss passes through to, and is reportable by, the partners individually.

NOTE F - SUBSEQUENT EVENT

On January 10, 2008, our General Partner recommended that the Unit holders approve a plan of liquidation and dissolution for the Partnership, or the "Plan." Pursuant to the Plan, the General Partner would be able to, without further action by the Unit holders:

liquidate the assets and wind up the business of the Partnership;

make liquidating distributions in cancellation of the Units , if any;

dissolve the Partnership after the sale of all of the Partnership's assets; and

take, or cause the Partnership to take, such other acts and deeds and shall do, or cause the Partnership to do, such other things, as are necessary or appropriate in connection with the dissolution, winding up and liquidation of the Partnership, the termination of the responsibilities and liabilities of the Partnership under applicable law, and the termination of the existence of the Partnership.

For a more complete discussion of the Plan, see the Partnership's Definitive Proxy Statement on Schedule 14A, filed with the SEC on January 10, 2008.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

This Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements including our intentions, hopes, beliefs, expectations, strategies and predictions of our future activities, or other future events or conditions. These statements are "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbors created by these acts. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including, for example, the factors identified in Part I, Item 1A. "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended March 31, 2007. Although we believe that the assumptions underlying these forward-looking statements are reasonable, any of the assumptions could be inaccurate, and there can be no assurance that the forward-looking stat ements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in these forward-looking statements, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved.

Liquidity

The Partnership's primary source of funds was the proceeds of its Public Offering. Other sources of liquidity have included (i) interest earned on working capital reserves, and (ii) cash distributions from operations of the Operating Partnerships in which the Partnership has invested. Both of these sources of liquidity are available to meet the obligations of the Partnership.

The Partnership is currently accruing the annual partnership management fee. Partnership management fees accrued during the quarter ended December 31, 2007 were $24,705 and total partnership management fees accrued as of December 31, 2007 were $6,468,228. During the quarter and year ended December 31, 2007, $0 and $286,092, respectively, of accrued partnership management fees were paid. Pursuant to the Partnership Agreement, these liabilities will be deferred until the Partnership receives sales or refinancing proceeds from Operating Partnerships, which will be used to satisfy these liabilities.

As of December 31, 2007, an affiliate of the general partner of the Partnership advanced a total of $312,252 to the Partnership to pay various operating expenses of the Partnership, and to make advances and/or loans to Operating Partnerships. These advances are included in Accounts payable-affiliates. There was an advance of $1,447 during the quarter and nine months ended December 31, 2007.

All payables to affiliates will be paid, without interest, from available cash flow or the proceeds of sales or refinancing of the Partnership's interests in Operating Partnerships. There were no payments to an affiliate of the general partner during the nine months ended December 31, 2007.

Capital Resources

The Partnership received $26,501,000 in subscriptions for Units (at $1,000 per Unit) during the period February 2, 1988 to December 21, 1988 pursuant to the Public Offering, resulting in net proceeds available for investment in Operating Partnerships (after payment of acquisition fees and expenses and funding of a reserve) of $18,550,700.

As of December 31, 2007, the Partnership had committed to investments requiring cash payments of $18,613,793, all of which has been paid. At December 31, 2007, the Partnership held $152,461, which is comprised of working capital. Since the Partnership has completed funding of all investments, it anticipates that there should be no significant need for capital resources in the future.

Results of Operations

As of December 31, 2007 and 2006 the Partnership held limited partnership interests in 15 Operating Partnerships. In each instance the apartment complex owned by the applicable Operating Partnership is eligible for the federal housing tax credit. Initial occupancy of a unit in each apartment complex which complied with the minimum set-aside test (i.e., initial occupancy by tenants with incomes equal to no more than a certain percentage of area median income) and the rent restriction test (i.e., gross rent charged tenants does not exceed 30% of the applicable income standards) is referred to as "Qualified Occupancy." Each of the Operating Partnerships and each of the respective apartment complexes are described more fully in the Prospectus or applicable report on Form 8-K. The general partner of the Partnership believes that there is adequate casualty insurance on the properties.

As of December 31, 2007 and 2006 the Qualified Occupancy of the Operating Partnerships was 100%. The Partnership had a total of 15 properties at December 31, 2007, all of which were at 100% Qualified Occupancy.

The Partnership incurs an annual partnership management fee to Boston Capital Asset Management Limited Partnership, which we also refer to as BCAMLP, in an amount equal to 0.5% of the aggregate cost of the apartment complexes owned by the Operating Partnerships, less the amount of various partnership management and reporting fees paid by the Operating Partnerships. The annual partnership management fee incurred and the reporting fees paid by the Operating Partnerships for the three and nine months ended December 31, 2007 are as follows:

3 Months Management Fee Net of Reporting Fee	3 Months Reporting Fee	9 Months Management Fee Netof Reporting Fee	9 Months Reporting Fee
$ 14,888	$ 9,817	$ 50,221	$ 23,892

The Partnership's investment objectives do not include receipt of significant cash distributions from the Operating Partnerships in which it has invested. The Partnership's investments in Operating Partnerships have been made principally with a view towards realization of federal housing tax credits for allocation to its partners and Unit holders.

In 2003, the Partnership and Boston Capital Tax Credit Fund I - Series 3 negotiated the sale of their investment limited partner interest in Paige Hall, a Minnesota Limited Partnership, to the operating general partner for the assumption of the outstanding mortgage balance of approximately $2,591,339 and proceeds to the investment limited partnerships of $150,000. The sale closed on December 19, 2005. Of the total proceeds, $20,000 is for the payment of outstanding reporting fees, and $130,000 is proceeds for the sale of the investment limited partnerships' interest. In the 10-Q filed for the quarter ended December 31, 2005, it was estimated that of the total proceeds, $27,753 and $22,247, for the Partnership and Series 3, respectively, would be distributed to the investors. This represented a per Unit distribution of $9.987 for the Partnership and a per Unit distribution of $.008 for Series 3. The total return to the investors would have been distributed based on the number of Uni ts held by each investor. The remaining proceeds of $80,000 were paid to BCAMLP for fees and expenses related to the sale and partial reimbursement for amounts owed to affiliates. The breakdown of the amount paid to BCAMLP is as follows: $10,000 represents the reimbursement of expenses incurred in connection with the disposition of the property, which includes salary reimbursement, mailing cost and third party legal fees; and $70,000 represents payment of outstanding partnership management fees due to BCAMLP. It has now been decided that the reimbursement related to the disposition of $27,753 and $22,247, for the Partnership and Series 3, respectively, will not be paid, and that these amounts originally anticipated to be returned to investors will be added back to the investment limited partners' respective working capital reservesdue to the fact that the Prospectus of the Partnership requires that the proceeds be utilized in this manner.The monies returned to working capital reserves will be available to pay obligations of the investment limited partnerships. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnerships' investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnerships' investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the investment limited partner interest of $66,607 and $53,393 for the Partnership and Series 3, respectively, was realized in the quarter ended December 31, 2005.

In June 2007, the investment general partner of Lovington Housing approved an agreement to sell the property and the transaction is anticipated to close in March 2008. The anticipated sales price is $1,208,004, which includes the outstanding mortgage balance of approximately $1,004,000 and cash proceeds to the investment limited partners of $105,248. Of the total proceeds anticipated to be received, $68,400 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the sale. Of the remaining proceeds, it is anticipated that $7,500 will be paid to BCAMLP for expenses related to the sale, which includes third party legal costs. The remaining proceeds from the sale of $29,348 are anticipated to be returned to cash reserves held by the Partnership. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid partnership management fees, and accrued but unpaid expenses of the investment lim ited partnership. After all outstanding obligations of the investment limited partnership are satisfied, any remaining monies will be distributed based on the number of Units held by each investor at the time of distribution.

In August 2006, the Partnership transferred its interest in Harbor Hill Associates, LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,182,147 and cash proceeds to the investment limited partner of $7,886. Of the total proceeds, $1,199 was paid to BCAMLP for expenses related to the sale, which includes third party legal costs. The remaining proceeds of $6,687 were returned to cash reserves held by the Partnership. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid partnership management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of Units held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership' s investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership's investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the investment limited partner interest of $6,687 was realized in the quarter ended September 30, 2006.

In August 2006, the Partnership transferred its interest in Bowdoinham Associates, LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,236,422 and cash proceeds to the investment limited partner of $7,885. Of the remaining proceeds $1,198 was paid to BCAMLP for expenses related to the sale, which includes third party legal costs. The remaining proceeds of $6,687 were returned to cash reserves held by the Partnership. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid partnership management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of Units held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partner ship's investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership's investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the investment limited partner interest of $6,687 was realized in the quarter ended September 30, 2006.

In August 2006, the Partnership transferred its interest in Deer Crossing Associates, LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,145,547 and cash proceeds to the investment limited partner of $12,869. Of the proceeds received $5,250 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the sale. Of the remaining proceeds $1,158 was paid to BCAMLP for expenses related to the sale, which includes third party legal costs. The remaining proceeds of $6,461 were returned to cash reserves held by the Partnership. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid partnership management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of Units he ld by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership's investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership's investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the investment limited partner interest of $6,461 was realized in the quarter ended September 30, 2006.

In August 2006, the Partnership transferred its interest in Maple Tree Associates, LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,199,207 and cash proceeds to the investment limited partner of $14,215. Of the proceeds received $6,466 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the sale. Of the remaining proceeds $1,177 was paid to BCAMLP for expenses related to the sale, which includes third party legal costs. The remaining proceeds of $6,572 were returned to cash reserves held by the Partnership. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid partnership management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of Units held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership's investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership's investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the investment limited partner interest of $6,572 was realized in the quarter ended September 30, 2006.

In August 2006, the Partnership transferred its interest in Perramond Associates, LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,145,673 and cash proceeds to the investment limited partner of $9,423. Of the proceeds received $1,864 represents reporting fees due to an affiliate of the investment partnership and the balance represent proceeds from the sale. Of the remaining proceeds $1,148 was paid to BCAMLP for expenses related to the sale, which includes third party legal costs. The remaining proceeds of $6,411 were returned to cash reserves held by the Partnership. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid partnership management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of Units held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership's investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership's investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the investment limited partner interest of $6,411 was realized in the quarter ended September 30, 2006.

In August 2006, the Partnership transferred its interest in Sara Pepper Associates, LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $611,131 and cash proceeds to the investment limited partner of $3,905. Of the remaining proceeds $594 was paid to BCAMLP for expenses related to the sale, which includes third party legal costs. The remaining proceeds of $3,311 were returned to cash reserves held by the Partnership. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid partnership management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of Units held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership's investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership's investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the investment limited partner interest of $3,311 was realized in the quarter ended September 30, 2006.

In August 2006, the Partnership transferred its interest in Silver Pines Associates, LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,336,624 and cash proceeds to the investment limited partner of $8,827. Of the remaining proceeds $1,340 was paid to BCAMLP for expenses related to the sale, which includes third party legal costs. The remaining proceeds of $7,487 were returned to cash reserves held by the Partnership. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid partnership management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of Units held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnersh ip's investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership's investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the investment limited partner interest of $7,487 was realized in the quarter ended September 30, 2006.

In August 2006, the Partnership transferred its interest in Wilder Associates, LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,176,206 and cash proceeds to the investment limited partner of $16,024. Of the proceeds received $8,204 represents reporting fees due to an affiliate of the investment partnership and the balance represent proceeds from the sale. Of the remaining proceeds $1,186 was paid to BCAMLP for expenses related to the sale, which includes third party legal costs. The remaining proceeds of $6,634 were returned to cash reserves held by the Partnership. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid partnership management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of Units held by ea ch investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership's investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership's investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the investment limited partner interest of $6,634 was realized in the quarter ended September 30, 2006.

In August 2006, the operating general partner of Platteville Apartments, A Limited Partnership entered into an agreement to sell the property and the transaction was anticipated to close in the first quarter 2007. However, the agreement expired on March 31, 2007, as the buyer was unable to consummate the sale.

In August 2006, the operating general partner of Kersey Apartments, A Limited Partnership entered into an agreement to sell the property and the transaction was anticipated to close in the first quarter 2007. However, the agreement expired on March 31, 2007, as the buyer was unable to consummate the sale.

In December 2006, the investment partnership transferred its interest in Michelle Manor Apartments, A California Limited Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance and cash proceeds to the investment limited partner of $32,955. Of the proceeds received, $2,500 was paid to BCAMLP for expenses related to the sale, which included third party legal costs. The remaining proceeds from the sale of $30,455 were returned to cash reserves held by the Partnership. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid partnership management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of Units held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were app lied against the investment limited partnership's investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership's investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the investment limited partner interest of $30,455 was realized in the quarter ended December 31, 2006. Although the transfer of the Operating Partnership has been recognized as of December 31, 2006, the proceeds were received in the first quarter of 2007.

In December 2006, the investment partnership transferred its interest in Lake Havasu Investment Group, A California Limited Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance and cash proceeds to the investment limited partner of $55,418. Of the proceeds received, $30,600 represents reporting fees due to an affiliate of the investment partnership and the balance represent proceeds from the sale. Of the remaining proceeds, $2,500 was paid to BCAMLP for expenses related to the sale, which included third party legal costs. The remaining proceeds from the sale of $22,318 were returned to cash reserves held by the Partnership. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid partnership management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monie s will be distributed based on the number of Units held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership's investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership's investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the investment limited partner interest of $22,318 was realized in the quarter ended December 31, 2006. Although the transfer of the Operating Partnership has been recognized as of December 31, 2006, the proceeds were received in the first quarter of 2007.

In December 2006, the investment partnership transferred its interest in Anthony Garden Apartments, A California Limited Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance and cash proceeds to the investment limited partner of $133,185. Of the total investment limited partner proceeds received, $32,400 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the sale. Of the remaining proceeds received, $2,500 was paid to BCAMLP for expenses related to the sale, which included third party legal costs. The remaining proceeds from the sale of $98,285 were returned to cash reserves held by the Partnership. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid partnership management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment p artnership are satisfied, any remaining monies will be distributed based on the number of Units held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership's investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership's investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the investment limited partner interest of $98,285 was realized in the quarter ended December 31, 2006. Although the transfer of the Operating Partnership has been recognized as of December 31, 2006, the proceeds were received in the first quarter of 2007.

Off Balance Sheet Arrangements

None.

Critical Accounting Policies and Estimates

The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which requires the Partnership to make certain estimates and assumptions. A summary of significant accounting policies is provided in Note 1 to the financial statements. The following section is a summary of some aspects of those accounting policies that may require subjective or complex judgments and are most important to the portrayal of the Partnership's financial condition and results of operations. The Partnership believes that there is a low probability that the use of different estimates or assumptions in making these judgments would result in materially different amounts being reported in the financial statements.

The Partnership is required to assess potential impairments to its long-lived assets, which are primarily investments in limited partnerships. The Partnership accounts for its investment in limited partnerships in accordance with the equity method of accounting since the Partnership does not control the operations of the Operating Partnerships.

If the book value of the Partnership's investment in an Operating Partnership exceeds the estimated value derived by management, which generally consists of the remaining future low-income housing credits allocable to the Partnership and the estimated residual value to the Partnership, the Partnership reduces its investment the such Operating Partnership and includes the reduction in equity in loss of investment of limited partnerships.

As of March 31, 2004, the Partnership adopted FASB Interpretation No. 46 - Revised ("FIN46R"), "Consolidation of Variable Interest Entities." FIN 46R provides guidance on when a company should include the assets, liabilities, and activities of a variable interest entity ("VIE'') in its financial statements and when it should disclose information about its relationship with a VIE. A VIE is a legal structure used to conduct activities or hold assets, which must be consolidated by a company if it is the primary beneficiary because it absorbs the majority of the entity's expected losses, the majority of the expected returns, or both.

Based on the guidance of FIN 46R, the Operating Partnerships in which the Partnership invests meet the definition of a VIE. However, management does not consolidate the Partnership's interests in these VIEs under FIN 46R, as it is not considered to be the primary beneficiary. The Partnership currently records the amount of its investment in these partnerships as an asset in the balance sheet, recognizes its share of partnership income or losses in the statement of operations, and discloses how it accounts for material types of these investments in the financial statements.

The Partnership's balance in investment in Operating Partnerships, plus the risk of recapture of tax credits previously recognized on these investments, represents its maximum exposure to loss. The Partnership's exposure to loss on these partnerships is mitigated by the condition and financial performance of the underlying properties as well as the strength of the local general partners and their guarantee against credit recapture.

In September 2006, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards (SFAS) No. 157, "Fair Value Measurements," (SFAS 157), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosure about fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and shall be applied prospectively except for very limited transactions, which for the Fund is April 1, 2008. In December 2007, the FASB delayed the implementation of SFAS 157 as it pertains to non-financial assets and liabilities until November 15, 2008, which for the Fund is April 1, 2009. The Fund is currently evaluating the potential impact of the adoption of SFAS 157 on its financial statements.

Item 3	Quantitative and Qualitative Disclosure About Market Risk
	Not Applicable

Item 4	Controls & Procedures
	(a)	Controls and Procedures
		As of the end of the period covered by this report, the Partnership's general partner, under the supervision and with the participation of the Principal Executive Officer and Principal Financial Officer of C&M Management, Inc., carried out an evaluation of the effectiveness of the Partership's "disclosure controls and procedures" as defined in under the Securities Exchange Act of 1934 Rules 13a-15 and 15d-15. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that, as of the end of the period covered by this report, the Partnership's disclosure controls and procedures were effective to ensure that information required to be disclosed by it in the reports that it files or submits under the Securities Exchange Act of 1934 (i) is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) is accumulated and communicated to the Partnership's management, including the Partne rship's Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
	(b)	Changes in Internal Controls
		There were no changes in the Partnership's internal control over financial reporting that occurred during the quarter ended December 31, 2007 that materially affected, or are reasonably likely to materially affect, the Partnership's internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings
	None
Item 1A.	Risk Factors
	There have been no material changes from the risk factors set forth under Part I, Item 1A. "Risk Factors" in our Form 10-K for the fiscal year ended March 31, 2007.
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
	None
Item 3.	Defaults upon Senior Securities
	None
Item 4.	Submission of Matters to a Vote of Security  Holders
	None
Item 5.	Other Information
	None
Item 6.	Exhibits
	(a)Exhibits
		31.a Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, of John P. Manning, Principal Executive Officer, filed herein
		31.b Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, of Marc N. Teal, Principal Financial Officer, filed herein
		32.a Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of John P. Manning, Principal Executive Officer, filed herein
		32.b Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Marc N. Teal, Principal Financial Officer, filed herein

SIGNATURES

Pursuant to the requirements of Section 13 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.

	American Affordable Housing II
	Limited Partnership
	By:	Boston Capital Associates Limited
		Partnership, General Partner
		By:	BCA Associates Limited Partnership,
			General Partner
		By:	C&M Management Inc.,
			General Partner
Date: February 14, 2008		By:	/s/ John P. Manning
			John P. Manning

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

DATE	SIGNATURE	TITLE
February 14, 2008	/s/ John P. Manning	Director, President
	John P. Manning	(Principal Executive
		Officer), C&M
		Management Inc;

DATE	SIGNATURE	TITLE
February 14, 2008	/s/ Marc N. Teal	Senior Vice President, Chief Financial Officer
	Marc N. Teal	(Principal Accounting and Financial Officer)
		C&M Management Inc.