BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
                                   101 Arch Street
                                   Boston, MA 02110
 
   
                                                 August 18, 1997

Dear Limited Partner: 

    As you are by now aware, Oldham Institutional Tax Credits LLC, a
Massachusetts limited liability company (the "Purchaser"), has made an offer
(the "Oldham Offer") to purchase Units representing units of limited partnership
interests ("Units") of Boston Financial Tax Credit Fund VII, A Limited
Partnership (the "Partnership"), for an increased cash purchase price of $820
per Unit.  The Purchaser is an affiliate of Arch Street VII, Inc., and Arch
Street VII Limited Partnership , the general partners of the Partnership (the
"General Partners").

    The General Partners are expressing no opinion and are remaining neutral
with respect to the Oldham Offer.  Although the General Partners are not making
a recommendation with respect to the Oldham Offer, the General Partners believe
that Limited Partners should carefully consider the following factors in making
their own decision of whether to accept or reject the Oldham Offer:
 
- -   The Purchaser is an affiliate of the General Partners.  The executive
    officers and directors of the managing member of the Purchaser also serve
    as the executive officers and directors of the Managing General Partner. 
    Therefore, the General Partners, subject to their fiduciary duties, may
    have a conflict of interest with respect to certain matters involving the
    Partnership and its Limited Partners:

    -    There may be a conflict of interest in responding to the Oldham Offer.
    
    -    If the Purchaser is successful in acquiring a significant number of
         Units pursuant to the Oldham Offer, the Purchaser could be in a
         position to significantly influence all Partnership decisions on which
         Limited Partners may vote.  This voting ability could prevent
         nontendering Limited Partners from taking action that they desired but
         the Purchaser and the General Partners opposed and enable the
         Purchaser and the General Partners to take action desired by the
         Partnership but opposed by the nontendering Limited Partners.
    
    -    There may also be a conflict of interest if the Purchaser's
         acquisition of Units has the effect of making any future change in the
         Partnership's current management by the General Partners more
         difficult.
    

- -   The Oldham Offer will provide Limited Partners with an immediate
    opportunity to liquidate their investment in the Partnership. Limited
    Partners who have a present 



    or future need for the tax credits and/or tax losses from the Units may,
    however, prefer to retain their Units and not tender them pursuant to the
    Oldham Offer.
 
- -   As stated by the Purchaser in the Oldham Offer, there may be a conflict of
    interest between the Purchaser's desire to purchase the Units at a low
    price and a Limited Partner's desire to sell its Units at a high price. 
    Therefore, Limited Partners might receive greater value if they hold their
    Units, rather than tender. Furthermore, Limited Partners should be aware
    that a secondary market exists for the Units.
 
- -   LIMITED PARTNERS WILL NO LONGER RECEIVE THE TAX CREDITS AND/OR TAX LOSSES
    FROM THE UNITS SHOULD THEY TENDER PURSUANT TO THE OLDHAM OFFER.
 
- -   Limited Partners who tender their Units will lose the right to receive any
    future distributions from the Partnership, including distributions from any
    refinancing or sale of the Partnership's properties. The Partnership has
    made no distributions to Limited Partners in the past, and there can be no
    assurance as to the timing, amount or occurrence of any future
    distributions.
 
- -   Limited Partners should consult with their respective advisors about the
    financial, tax, legal and other consequences of the Oldham Offer.

   
    Enclosed is a copy of the Partnership's amended Statement on Schedule 14D-9
which has been filed with the Securities and Exchange Commission and sets forth
the Partnership's response to the Oldham Offer.  Limited Partners are advised to
carefully read the amended Schedule 14D-9.
    

    Please do not hesitate to call the Partnership at (800) 829-9213 (ext. 10)
for assistance in any Partnership matter.
 
                             BOSTON FINANCIAL TAX CREDIT FUND
                             VII, A LIMITED PARTNERSHIP

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