<Page>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-05506
College and University Facility Loan Trust Two
------------------------------------
(Exact name of registrant as specified in charter)
c/o U.S. Bank One Federal Street Boston, MA 02110
------------------------------------
(Address of principal executive offices) (Zip code)
Diana J. Kenneally
U.S. Bank Corporate Trust Services
One Federal Street
Boston, MA 02110
------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 603-6406
Date of fiscal year end: November 30
Date of reporting period: December 1, 2004 - May 31, 2005
<Page>
ITEM 1. REPORT TO STOCKHOLDERS.
<Page>
COLLEGE AND UNIVERSITY
FACILITY LOAN TRUST TWO
FINANCIAL STATEMENTS
SIX MONTHS ENDED MAY 31, 2005
<Page>
ACCOUNTANTS' COMPILATION REPORT
To the Owner Trustee of
College and University Facility
Loan Trust Two
We have compiled the accompanying statement of assets and liabilities of College
and University Facility Loan Trust Two (the "Trust"), including the schedule of
investments, as of May 31, 2005, and the related statements of operations, cash
flows, changes in net assets and financial highlights for the six months then
ended, in accordance with Statements on Standards for Accounting and Review
Services issued by the American Institute of Certified Public Accountants. The
financial information for the years ended November 30, 2004, 2003, 2002, 2001
and 2000, presented herein for comparative purposes, was audited by other
auditors, whose report thereon dated January 28, 2005 expressed an unqualified
opinion, except for the effect on the 2004 and 2003 financial statements of
accounting for investments under the amortized cost method of accounting as
described in Note 2 to the financial statements.
A compilation is limited to presenting in the form of financial statements
information that has been obtained from the books and records of the Trust. We
have not audited or reviewed the accompanying financial statements or
supplemental material and, accordingly, do not express an opinion or any other
form of assurance on them. However, we did become aware of a departure from
accounting principals generally accepted in the United States of America that is
described in the following paragraph.
As disclosed in Note 2 to the financial statements, the Trust is accounting for
its investments under the amortized cost method of accounting, adjusted by an
allowance for loan losses. Accounting principles generally accepted in the
United States of America require that the investments be accounted for under the
fair value method of accounting. Accounting for the investments under the fair
value method of accounting, based on the Trust's estimate of fair value as
described in Note 8, would result in an increase of approximately $17,754,000 in
the recorded value of the investments and an increase in unrealized appreciation
of investments of approximately $17,754,000 as of May 31, 2005.
We are not independent with respect to College and University Facility Loan
Trust Two.
/s/ BDO Seidman, LLP
Boston, Massachusetts
July 15, 2005
<Page>
COLLEGE AND UNIVERSITY
FACILITY LOAN TRUST TWO
STATEMENT OF ASSETS AND LIABILITIES
<Table>
<Caption>
MAY 31, 2005
- --------------------------------------------------------------------------------------
ASSETS:
INVESTMENTS, at amortized cost, net of allowance for loan losses of
$1,432,376 (Notes 1, 2, 6, 7 and 8, and Schedule of Investments) $ 70,042,313
CASH 20,093
INTEREST RECEIVABLE 701,999
DEFERRED BOND ISSUANCE COSTS (Note 2) 214,246
PREPAIDS 13,750
- --------------------------------------------------------------------------------------
Total assets 70,992,401
- --------------------------------------------------------------------------------------
LIABILITIES:
BONDS PAYABLE, net of unamortized discount (Notes 3 and 8) 58,227,179
INTEREST PAYABLE (Note 3) 1,455,937
ACCRUED EXPENSES AND OTHER LIABILITIES 200,895
DISTRIBUTION PAYABLE TO CLASS B CERTIFICATEHOLDERS (Note 5) 776,697
- --------------------------------------------------------------------------------------
Total liabilities 60,660,708
- --------------------------------------------------------------------------------------
NET ASSETS:
CLASS B CERTIFICATES, par value $1 - authorized, issued and
outstanding - 1,763,800 certificates (Note 5) 1,763,800
ACCUMULATED DEFICIT (Notes 2 and 5) (2,718,798)
ADDITIONAL PAID-IN CAPITAL (Note 2) 11,286,690
- --------------------------------------------------------------------------------------
Total net assets $ 10,331,692
======================================================================================
Net asset value per Class B certificate
(based on 1,763,800 certificates outstanding) $ 5.86
======================================================================================
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
3
<Page>
STATEMENT OF OPERATIONS
<Table>
<Caption>
SIX MONTHS ENDED MAY 31, 2005
- --------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest income (Note 2) $ 3,573,886
- --------------------------------------------------------------------------------------
EXPENSES:
Interest expense (Notes 2 and 3) 2,798,352
Servicer fees (Note 4) 26,697
Trustee fees (Note 4) 18,319
Other trust and bond administration expenses 147,548
- --------------------------------------------------------------------------------------
Total expenses 2,990,916
- --------------------------------------------------------------------------------------
Net investment income 582,970
- --------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 582,970
======================================================================================
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
4
<Page>
STATEMENT OF CASH FLOWS
<Table>
<Caption>
SIX MONTHS ENDED MAY 31, 2005
- --------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Interest received $ 1,658,457
Interest paid (1,654,732)
Operating expenses paid (208,516)
- --------------------------------------------------------------------------------------
Net cash used in operating activities (204,791)
- --------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net increase in funds held under investment agreements 7,684,701
Principal payments on Loans 4,774,046
- --------------------------------------------------------------------------------------
Net cash provided by investing activities 12,458,747
- --------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal repayments on Bonds (9,939,736)
Distributions to Class B certificateholders (2,318,735)
- --------------------------------------------------------------------------------------
Net cash used in financing activities (12,258,471)
- --------------------------------------------------------------------------------------
NET DECREASE IN CASH (4,515)
CASH, beginning of period 24,608
- --------------------------------------------------------------------------------------
CASH, end of period $ 20,093
======================================================================================
RECONCILIATION OF NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
TO NET CASH USED FOR OPERATING ACTIVITIES:
Net increase in net assets resulting from operations $ 582,970
Decrease in interest receivable 63,588
Decrease in accrued expenses and other liabilities (2,202)
Decrease in Bond interest payable (198,795)
Amortization of original issue discount on Bonds 1,321,821
Amortization of purchase discount on Loans (1,979,017)
Amortization of deferred Bond issuance costs 20,594
Increase in prepaid assets (13,750)
- --------------------------------------------------------------------------------------
Net cash used in operating activities $ (204,791)
======================================================================================
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
5
<Page>
STATEMENT OF CHANGES IN NET ASSETS
(NOTE 2(F))
<Table>
<Caption>
FOR THE
SIX MONTHS
ENDED YEAR ENDED
MAY 31, NOVEMBER 30,
2005 2004
- -------------------------------------------------------------------------------------------------------
(UNAUDITED) (AUDITED)
FROM OPERATIONS:
Net investment income $ 582,970 $ 2,113,216
- -------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Class B
certificateholders resulting from operations 582,970 2,113,216
- -------------------------------------------------------------------------------------------------------
CAPITAL CERTIFICATE TRANSACTIONS:
Distributions to Class B certificateholders (Note 5) (776,697) (3,699,863)
- -------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS (193,727) (1,586,647)
NET ASSETS:
Beginning of period 10,525,419 12,112,066
- -------------------------------------------------------------------------------------------------------
End of period $ 10,331,692 $ 10,525,419
=======================================================================================================
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
6
<Page>
COLLEGE AND UNIVERSITY
FACILITY LOAN TRUST TWO
FINANCIAL HIGHLIGHTS
(NOTES 1 AND 5)
<Table>
<Caption>
FOR THE
SIX MONTHS
ENDED
MAY 31, YEARS ENDED NOVEMBER 30,
2005 2004 2003 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED) (AUDITED)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
beginning of period $ 5.97 $ 6.87 $ 7.64 $ 8.53 $ 9.01 $ 10.05
- --------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME .33 1.20 1.04 1.37 1.15 1.34
PROVISION FOR LOAN
LOSSES - - - - - (.17)
DISTRIBUTION TO CLASS B
CERTIFICATEHOLDERS:
As tax return of
capital (.44) (2.10) (1.81) (2.26) (1.63) (2.21)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, end of
period $ 5.86 $ 5.97 $ 6.87 $ 7.64 $ 8.53 $ 9.01
================================================================================================================================
TOTAL INVESTMENT
RETURN (a) N/A N/A N/A N/A N/A N/A
NET ASSETS APPLICABLE
TO CLASS A PREFERRED
CERTIFICATES, end of
period $ - $ - $ - $ - $ - $ -
================================================================================================================================
NET ASSETS APPLICABLE
TO CLASS B
CERTIFICATES, end of
period $ 10,331,692 $ 10,525,419 $ 12,112,066 $ 13,478,109 $ 15,039,698 $ 15,898,314
================================================================================================================================
RATIOS AND SUPPLEMENTAL
DATA:
Ratio of operating
expenses to average
net assets
applicable to Class B
certificates 57.369%(b)(c) 71.19%(b) 66.777%(b) 70.03%(b) 69.21%(b) 73.02%(b)
Ratio of net
investment income to
average net assets
applicable to Class B
certificates 11.18% 18.67% 14.37% 16.97% 13.05% 14.10%
Number of Class B
certificates
outstanding, end
of period 1,763,800 1,763,800 1,763,800 1,763,800 1,763,800 1,763,800
</Table>
(a) The Trust's investments are recorded at amortized cost as discussed in Note
2. Accordingly, the financial statements do not reflect the market value of
such investments. For this reason, management believes that no meaningful
information can be provided regarding "Total Investment Return" and has not
included information under that heading.
(b) Excluding interest expense, the ratio of operating expenses to average net
assets applicable to Class B Certificates was 3.69%(c), 3.89%, 3.26%,
2.76%, 2.72% and 2.53% in 2005, 2004, 2003, 2002, 2001 and 2000,
respectively.
(c) Annualized.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
7
<Page>
COLLEGE AND UNIVERSITY
FACILITY LOAN TRUST TWO
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS
College and University Facility Loan Trust Two (the Trust) was formed on March
11, 1988 as a business trust under the laws of the Commonwealth of Massachusetts
by a declaration of trust by the Bank of Boston (the Owner Trustee), succeeded
by State Street Bank and Trust Company, succeeded by US Bank (successor Owner
Trustee), not in its individual capacity but solely as Owner Trustee. The Trust
is registered under the Investment Company Act of 1940 (as amended) as a
diversified, closed-end, management investment company.
The Trust was formed for the sole purpose of raising funds through the issuance
and sale of bonds (the Bonds). The Trust commenced operations on May 12, 1988
(the Closing Date) and issued Bonds in four tranches in the aggregate principal
amount (at maturity) of $450,922,000. The Bonds constitute full recourse
obligations of the Trust. The collateral securing the Bonds consists primarily
of a pool of college and university facility loans (the Loans) to various
postsecondary educational institutions and funds held under the indenture (the
Indenture) and the investment agreements. The Loans were originated by, or
previously assigned to, the United States Department of Education (ED) under the
College Housing Loan Program or the Academic Facilities Loan Program. The Loans,
which have been assigned to J.P. Morgan Trust Company, National Association, as
successor in interest to Bank One Trust Company, NA, formerly The First National
Bank of Chicago (the Bond Trustee), are secured by various types of collateral,
including mortgages on real estate, general recourse obligations of the
borrowers, pledges of securities and pledges of revenues. As of the Closing
Date, the Loans had a weighted average stated interest rate of approximately
3.18% and a weighted average remaining term to maturity of approximately 18.77
years. Payments on the Loans are managed by the Bond Trustee in various fund
accounts and are invested under investment contracts (Note 2) as specified in
the Indenture.
8
<Page>
All payments on the Loans and earnings under the investment agreements and any
required transfers from the Expense and Liquidity Funds are deposited to the
credit of the Revenue Fund held by the Bond Trustee, as defined within, and in
accordance with the Indenture. On each bond payment date, amounts on deposit in
the Revenue Fund are applied in the following order of priority: to pay amounts
due on the Bonds, to pay administrative expenses not previously paid from the
Expense Fund, to fund the Expense Fund to the Expense Fund Requirement and to
fund the Liquidity Fund to the Liquidity Fund Requirement. Any funds remaining
in the Revenue Fund on such payment date will be used to further pay down the
Bonds to the extent of the maximum principal distribution amount, after which
any residual amounts are paid to the certificateholders, as discussed in Note 5.
On the Closing Date, certificates were issued by the Trust to ED as partial
payments for the Loans. In December 1989, ED sold, through a private placement,
all of its ownership interest in the Trust.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) COLLEGE AND UNIVERSITY FACILITY LOANS
The Loans were purchased and recorded at a discount below par. Pursuant to a
"no-action letter" that the Trust received from the Securities and Exchange
Commission, the Loans, included in investments in the accompanying statement of
assets and liabilities, are being accounted for under the amortized cost method
of accounting. Under this method, the difference between the cost of each Loan
to the Trust and the scheduled principal and interest payments is amortized,
assuming no prepayments of principal, and included in the Trust's income by
applying the Loan's effective interest rate to the amortized cost of that Loan.
When a Loan prepays, the remaining discount is recognized as interest income.
The remaining balance of the purchase discount on the Loans as of May 31, 2005
was approximately $25,403,000 As a result of prepayments of Loans in the six
months ended May 31, 2005, additional interest income of approximately $57,000
was recognized.
9
<Page>
The Trust's policy is to discontinue the accrual of interest on Loans for which
payment of principal or interest is 180 days or more past due or for other such
Loans that management believes the collection of interest and principal is
doubtful. When a Loan is placed on nonaccrual status, all previously accrued but
uncollected interest is reversed against the current period's interest income.
Subsequently, interest income is generally recognized when received. Payments
are generally applied to interest first, with the balance, if any, applied to
principal. At May 31, 2005, no loans have been placed on nonaccrual status.
Accounting principles generally accepted in the United States of America (GAAP),
requires that the Loans be accounted for under the fair value method of
accounting. However, management believes that the amortized cost method of
accounting best serves the informational needs of the users of the Trust's
financial statements.
(b) OTHER INVESTMENTS
Other investments, which are included in investments in the accompanying
statement of assets and liabilities, consist of two investment agreements issued
by JP Morgan Chase Bank, bearing fixed rates of interest of 7.05% and 7.75%.
These investments may take the form of repurchase agreements (the underlying
collateral of which shall be as to form and substance acceptable to each
nationally recognized statistical rating agency that rates the Bonds), time
deposits or other lawful investments at JP Morgan Chase Bank's option. These
investments are carried at amortized cost. These investment agreements terminate
on the earlier of June 1, 2018 or the date on which the Bonds are paid-in-full.
GAAP requires that the investments be accounted for under the fair value method
of accounting. However, management believes that the amortized cost method of
accounting best serves the informational needs of the users of the Trust's
financial statements.
10
<Page>
(c) FEDERAL INCOME TAXES
It is the Trust's policy to comply with the requirements applicable to a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended, and to distribute substantially all of its investment company
taxable income to its certificateholders each year. Accordingly, no federal or
state income tax provision is required.
For tax purposes, the Loans were transferred to the Trust at their face values.
Accordingly, the accretion of the purchase discount creates a permanent book-tax
difference.
(d) DEFERRED BOND ISSUANCE COSTS
Deferred bond issuance costs are being amortized using the effective interest
rate method over the estimated lives of the Bonds, which are based on the
scheduled payments of the Loans. When Loan prepayments occur, an additional
portion of the deferred issuance costs is expensed in the year the prepayment
occurred, so that the future effective interest rate remains unchanged.
(e) ACCOUNTING FOR IMPAIRMENT OF A LOAN AND ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is based on the Trust's evaluation of the level of
the allowance required to reflect the risks in the loan portfolio, based on
circumstances and conditions known or anticipated at each reporting date.
The methodology for assessing the appropriateness of the allowance consists of a
review of the following three key elements:
(1) a valuation allowance for loans identified as impaired,
(2) a formula-based general allowance for the various loan portfolio
classifications, and
(3) an unallocated allowance.
11
<Page>
A loan is impaired when, based on current information and events, it is probable
that the Trust will be unable to collect all amounts due in accordance with the
contractual terms of the loan agreement. Loans identified as impaired are
further evaluated to determine the estimated extent of impairment.
The formula-based general allowance is derived primarily from a risk-rating
model that grades loans based on general characteristics of credit quality and
relative risk. As credit quality for individual loans deteriorates, the risk
rating and the allowance allocation percentage increases. The sum of these
allocations comprise the Trust's formula-based general allowance.
In addition to the valuation and formula-based general allowance, there is an
unallocated allowance. This element recognizes the estimation risks associated
with the valuation and formula-based models. It is further adjusted for
qualitative factors including, among others, general economic and business
conditions, credit quality trends, and specific industry conditions.
There are inherent uncertainties with respect to the final outcome of loans and
as such, actual losses may differ from the amounts reflected in the financial
statements.
12
<Page>
(f) PRESENTATION OF CAPITAL DISTRIBUTIONS
Capital distributions are accounted for in accordance with the American
Institute of Certified Public Accountants Statement of Position (SOP) 93-2,
"DETERMINATION, DISCLOSURE AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES." SOP
93-2 requires the Trust to report distributions that are in excess of tax-basis
earnings and profits as a tax return of capital and to present the capital
accounts on a basis that approximates the amounts that are available for future
distributions on a tax basis.
As of November 30, 2004, all tax earnings and profits have been distributed.
Accordingly, all accumulated undistributed net investment income has been
reclassified to additional paid-in capital. This reclassification results from
permanent book and tax differences such as the receipt of tax-exempt interest
income on certain Loans, the related interest expense on the Bonds, and the
accretion of purchase discount on the Loans. Amounts deducted for the loan loss
reserve are not currently deductible for tax purposes and have been reclassified
as an accumulated deficit. These reclassifications had no impact on the net
investment income or net assets of the Trust.
The Trust expects to have a tax return of capital for the fiscal year ending
November 30, 2005; however, the amount cannot be reasonably estimated at May 31,
2005.
13
<Page>
(g) USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires us to make estimates, judgments
and assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities at the date of the financial statements and for the period then
ended. On an on-going basis, the Trust evaluates the estimates used, including
those related to the allowance for loan losses. The Trust bases its estimates on
historical experience, current conditions and various other assumptions that the
Trust believes to be reasonable under the circumstances. These estimates form
the basis for making judgments about the carrying values of assets and
liabilities and are not readily apparent from other sources. These estimates are
used to assist the Trust in the identification and assessment of the accounting
treatment necessary with respect to commitments and contingencies. Actual
results may differ from these estimates under different assumptions or
conditions.
The allowance for loan losses is a critical accounting policy that requires
estimates and assumptions to be made in the preparation of the Trust's financial
statements. The allowance for loan losses is based on the Trust's evaluation of
the level of the allowance required in relation to the estimated loss exposure
in the loan portfolio. The allowance for loan losses is a significant estimate
and is therefore regularly evaluated for adequacy by taking into consideration
factors such as prior loan loss experience, the character and size of the loan
portfolio, business and economic conditions and the Trust's estimation of future
losses. The use of different estimates or assumptions could produce different
provisions for loan losses. See Note 2(e) for a detailed description of the
Trust's estimation process and methodology related to the allowance for loan
losses.
14
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3. BONDS
The Bonds outstanding at May 31, 2005 consist of the following:
<Table>
<Caption>
OUTSTANDING UNAMORTIZED CARRYING
INTEREST STATED PRINCIPAL DISCOUNT AMOUNT
TYPE RATE MATURITY (000'S) (000'S) (000'S)
--------------------------------------------------------------------------------------------
Sequential 4.00% June 1, 2018 $ 72,797 $ 14,570 $ 58,227
</Table>
Interest on the Bonds is payable semiannually. On June 1, 2005, the Trust made a
principal payment of $4,224,241 on the Bonds.
Principal payments on the Bonds will be made prior to the respective stated
maturities on each bond payment date in an amount equal to the lesser of either
(1) amounts available in the Revenue Fund after certain required payments of
interest and principal (at the stated maturity of the Bonds) and administrative
expenses after required transfers to the Expense Fund and the Liquidity Fund
(such that the amounts on deposit are equal to the Expense Fund Requirement and
the Liquidity Fund Requirement, respectively), or (2) the Maximum Principal
Distribution Amount, as defined within the Indenture. These principal payments
will be applied to each class of Bonds in the order of their stated maturities,
so that no payment of principal will be made on the Bonds of any class until all
Bonds having an earlier stated maturity have been paid in full.
15
<Page>
The estimated aggregate principal payments on the Bonds at May 31, 2005 after
taking into consideration actual Loan prepayments, Defaulted Loans and the
Maximum Principal Distribution Amount, as defined in the Indenture, are as
follows:
<Table>
<Caption>
AMOUNT
FISCAL YEAR (000'S)
- --------------------------------------------------------------------
2005 $ 4,224
2006 8,829
2007 7,791
2008 6,896
2009 6,492
Thereafter 38,565
- --------------------------------------------------------------------
Total $ 72,797
====================================================================
</Table>
Actual Bond principal payments may differ from estimated payments because
borrowers may prepay or default on their obligations. The Bonds are not subject
to optional redemption by either the Trust or the bondholders.
In the event of negative cash flows, a Liquidity Fund has been established and
maintained such that, on or before such payment date, the Liquidity Fund may be
used by the Bond Trustee to make any required payments on the Bonds and to pay
operating expenses of the Trust. The original issue discount is being amortized
using the effective interest rate method over the estimated lives of the Bonds,
which are based on the scheduled payments of the Loans. Accordingly, loan
prepayments have the effect of accelerating bond payments. When Bond payments
occur sooner than estimated payments, a portion of the original issue discount
is expensed in the year of prepayment, so that the future effective interest
rate on the Bonds remains unchanged.
16
<Page>
4. ADMINISTRATIVE AGREEMENTS
(a) SERVICER
As compensation for the services provided under the servicing agreement, GMAC
Commercial Mortgage receives a servicing fee. The fee is earned each date
payments are received on each Loan and is equal to 0.075 of 1% of the
outstanding principal balance of each Loan divided by the number of payments of
principal and interest in a calendar year. For the six months ended May 31,
2005, this fee totaled $25,442. GMAC Commercial Mortgage is reimbursed by the
Trust for out-of-pocket expenses incurred in connection with the inspection of
buildings and property used as collateral for the loans. For the six months
ended May 31, 2005, out-of-pocket expenses totaled $1,255.
(b) TRUSTEES
As compensation for services provided, the Owner and Bond Trustees are entitled
under the Declaration of Trust and the Indenture to receive the following fees:
- - The Owner Trustee, in its capacities as manager of the Trust and as Owner
Trustee, earned fees of $6,250 and $7,500, respectively, for the six months
ended May 31, 2005.
- - The Bond Trustee is entitled to an annual fee equal to 0.015 of 1% of the
aggregate outstanding principal of the Bonds on the bond payment date
immediately preceding the date of payment of such fee. The Bond Trustee is
also reimbursed for out-of-pocket expenses in an amount not to exceed 4% of
the applicable annual fee. In addition, the Bond Trustee is reimbursed for
other agreed-upon related expenses. For the six months ended May 31, 2005,
total Bond Trustee fees and out-of-pocket expenses amounted to $4,569.
17
<Page>
5. CERTIFICATES
Holders of each of the Class B certificates receive amounts paid to the Owner
Trustee pursuant to the Declaration of Trust on a pro rata basis. On June 1,
2005, a distribution of $776,697 was made to the Class B certificateholders.
This payment is reflected as a liability in the accompanying statement of assets
and liabilities.
While the Bonds are outstanding, distributions to the Class B certificateholders
are made on the second business day in each June and December (the Distribution
Date) and, after the Bonds are paid in full, on the first business day of each
calendar month. The certificateholders shall each be entitled to one vote per
certificate.
6. ALLOWANCE FOR LOAN LOSSES
An analysis of the allowance for loan losses for the six months ended May 31,
2005 is summarized as follows:
<Table>
Balance, beginning of year $ 1,432,376
Reduction in reserve for loan losses -
Charge-offs -
- ------------------------------------------------------------------------
Balance, end of year $ 1,432,376
========================================================================
</Table>
At May 31, 2005, there were no recorded investments in loans that are considered
to be impaired. See Note 2(e) for a discussion of the Trust's impaired loan
accounting policy.
18
<Page>
7. LOANS
Scheduled principal and interest payments on the Loans as of May 31, 2005,
excluding payments for Loans in Default, as defined in the Indenture, are as
follows:
<Table>
<Caption>
PRINCIPAL INTEREST
PAYMENTS PAYMENTS TOTAL
FISCAL YEAR (000'S) (000'S) (000'S)
- -----------------------------------------------------------------------
2005 $ 6,785 $ 1,459 $ 8,244
2006 9,486 2,504 11,990
2007 8,726 2,214 10,940
2008 7,782 1,951 9,733
2009 7,461 1,710 9,171
Thereafter 48,255 7,264 55,519
- -----------------------------------------------------------------------
Total $ 88,495 $ 17,102 $ 105,597
=======================================================================
</Table>
Expected payments may differ from contractual payments because borrowers may
prepay or default on their obligations. Accordingly, actual principal and
interest on the Loans may vary significantly from the scheduled payments. As of
May 31, 2005, there were no Loans in Default.
19
<Page>
The following analysis summarize the stratification of the Loan portfolio by
type of collateral and institution as of May 31, 2005:
<Table>
<Caption>
AMORTIZED
NUMBER COST
TYPE OF COLLATERAL OF LOANS (000'S) %
- ---------------------------------------------------------------------------
Loans secured by a first mortgage 126 $ 39,618 62.8%
Loans not secured by a first mortgage 56 23,474 37.2
- ---------------------------------------------------------------------------
Total Loans 182 $ 63,092 100%
===========================================================================
<Caption>
AMORTIZED
NUMBER COST
TYPE OF INSTITUTION OF LOANS (000'S) %
- ---------------------------------------------------------------------------
Private 130 $ 39,814 63.1%
Public 52 23,278 36.9
- ---------------------------------------------------------------------------
Total Loans 182 $ 63,092 100%
===========================================================================
</Table>
The ability of a borrower to meet future debt service payments on a Loan will
depend on a number of factors relevant to the financial condition of such
borrower, including, among others, the size and diversity of the borrower's
sources of revenues; enrollment trends; reputation; management expertise; the
availability and restrictions on the use of endowments and other funds; the
quality and maintenance costs of the borrower's facilities and, in the case of
some Loans to public institutions, which are obligations of a state, the
financial condition of the relevant state or other governmental entity and its
policies with respect to education. The ability of a borrower to maintain
enrollment levels will depend on such factors as tuition costs, geographical
location, geographic diversity, quality of the student body, quality of the
faculty and the diversity of program offerings.
20
<Page>
The collateral for Loans that are secured by a mortgage on real estate generally
consists of special purpose facilities, such as dormitories, dining halls and
gymnasiums, which are integral components of the overall educational setting. As
a result, in the event of borrower default on a Loan, the Trust's ability to
realize the outstanding balance of the Loan through the sale of the underlying
collateral may be negatively impacted by the special purpose nature and location
of such collateral.
8. FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "DISCLOSURES ABOUT FAIR
VALUE OF FINANCIAL INSTRUMENTS," allows for the use of a wide range of valuation
techniques; therefore, it may be difficult to compare the Trust's fair value
information to independent markets or to other fair value information.
Accordingly, the fair value information presented below does not purport to
represent, and should not be construed to represent, the underlying market value
of the Trust's net assets or the amounts that would result from the sale or
settlement of the related financial instruments. Further, as the assumptions
inherent in fair value estimates change, the fair value estimates will change.
Current market prices are not available for most of the Trust's financial
instruments since an active market generally does not exist for such
instruments. In accordance with the terms of the Indenture, the Trust is
required to hold all of the Loans to maturity and to use the cash flows
therefrom to retire the Bonds. Accordingly, the Trust has estimated the fair
values of its financial instruments using a discounted cash flow methodology.
This methodology is similar to the approach used at the formation of the Trust
to determine the carrying amounts of these items for financial reporting
purposes. In applying the methodology, the calculations have been adjusted for
the change in the relevant market rates of interest, the estimated duration of
the instruments and an internally developed credit risk rating of the
instruments. All calculations are based on the scheduled principal and interest
payments on the Loans because the prepayment rate on these Loans is not subject
to estimate.
21
<Page>
The estimated fair value of each category of the Trust's financial instruments
and the related book value presented in the accompanying statement of assets and
liabilities as of May 31, 2005 is as follows:
<Table>
<Caption>
AMORTIZED
COST FAIR VALUE
(000'S) (000'S)
- ----------------------------------------------------------------------
Loans $ 61,660* $ 78,242
Investment Agreements:
Revenue Fund 1,782 2,197
Liquidity Fund 6,600 7,357
- ----------------------------------------------------------------------
$ 70,042 $ 87,796
======================================================================
Bonds $ 58,227 $ 71,479
======================================================================
</Table>
*Net of allowance for loan losses of $1,432,376.
22
<Page>
COLLEGE AND UNIVERSITY FACILITY LOAN TRUST TWO
SCHEDULE OF INVESTMENTS
MAY 31, 2005
(Dollar Amounts in Thousands)
<Table>
<Caption>
INTERNAL
OUTSTANDING STATED RATE OF AMORTIZED
PRINCIPAL INTEREST MATURITY RETURN % (A) COST (NOTES
BALANCE DESCRIPTION RATE % DATE (UNAUDITED) 1 AND 2)
- ----------- ------------------------------------------------------- ----------- ----------- ------------ -----------
COLLEGE AND UNIVERSITY LOANS (88.0%)
-------ALABAMA-------
$ 75 Alabama Agricultural and Mechanical University 3.000-3.750 07/01/2005 10.25 $ 72
1,375 Alabama Agricultural and Mechanical University 3.000 05/01/2018 10.27 905
1,650 Auburn University 3.000 12/01/2018 9.16 1,107
120 Huntingdon College 3.000 10/01/2008 10.60 104
266 Talladega College 3.000 12/01/2012 10.24 201
850 University of Alabama in Birmingham 3.000 11/01/2008 7.97 772
-------ARKANSAS-------
78 University of Central Arkansas 3.000 04/01/2005 10.69 78
-------CALIFORNIA-------
146 Azusa Pacific University 3.750 04/01/2015 10.88 104
370 California Polytechnic State University 3.000 11/01/2007 10.05 334
95 California State University 3.000 11/01/2006 8.75 90
825 California State University 3.000 11/01/2013 8.93 648
2,068 California State University 3.000 11/01/2019 8.99 1,416
370 Chapman College 3.000 10/01/2013 10.65 271
54 Chapman College 3.000 11/01/2005 10.63 52
85 Chapman College 3.000 11/01/2007 10.57 76
12 Gavilan College 3.000 04/01/2006 10.59 11
359 Lassen Junior College District 3.000 04/01/2020 10.27 224
220 Occidental College 3.000 10/01/2019 10.41 139
245 San Diego State University 3.000 11/01/2006 10.04 228
1,325 University Student Co-Operative Association 3.000 04/01/2019 10.70 873
200 West Valley College 3.000 04/01/2009 10.50 168
-------COLORADO-------
340 Regis College (Denver) 3.000 11/01/2012 10.47 260
-------DELAWARE-------
134 Wesley College 3.375 05/01/2013 10.88 102
340 University of Delaware 3.000 11/01/2006 9.08 320
519 University of Delaware 3.000 12/01/2018 8.81 358
-------FLORIDA-------
185 Embry-Riddle Aeronautical University 3.000 09/01/2007 10.64 165
100 Florida Atlantic University 3.000 07/01/2006 10.18 92
98 Florida Institute of Technology 3.000 11/01/2009 10.53 82
135 Nova University 3.000 12/01/2007 10.04 117
28 Stetson University 3.000 01/01/2006 11.25 26
195 University of Central Florida 3.000 10/01/2007 10.08 176
1,590 University of Florida 3.000 07/01/2014 10.15 1,153
140 University of South Florida 3.750 07/01/2005 10.30 134
</Table>
SEE ACCOMPANYING ACCOUNTANTS' COMPILATION REPORT AND NOTES TO FINANCIAL
STATEMENTS.
23
<Page>
<Table>
<Caption>
INTERNAL
OUTSTANDING STATED RATE OF AMORTIZED
PRINCIPAL INTEREST MATURITY RETURN % (A) COST (NOTES
BALANCE DESCRIPTION RATE % DATE (UNAUDITED) 1 AND 2)
- ----------- ------------------------------------------------------- ----------- ----------- ------------ -----------
-------GEORGIA-------
$ 111 Emmanuel College 3.000 11/01/2013 10.45 $ 82
135 LaGrange College 3.000 03/01/2009 11.06 111
318 Mercer University 3.000 05/01/2014 10.58 231
510 Morehouse College 3.000 07/01/2010 10.50 401
55 Morris Brown College 3.750 05/01/2007 11.12 49
1,110 Morris Brown College 2.750-3.750 05/01/2018 10.89 737
695 Paine College 3.000 10/01/2016 10.45 474
-------ILLINOIS-------
555 Concordia College 3.000 05/01/2019 10.65 345
50 Knox College 3.000 04/01/2006 11.15 46
900 Sangamon State University 3.000 11/01/2018 10.12 602
-------INDIANA-------
35 Anderson University 3.000 03/01/2006 11.19 32
23 Purdue University 3.000 07/01/2005 9.26 22
178 Taylor University 3.000 10/01/2012 10.50 136
556 Taylor University 3.000 10/01/2013 10.49 412
3,190 Vincennes University 3.000 06/01/2023 9.02 1,996
-------IOWA-------
42 NIACC Dormitories, Inc. 3.000 10/01/2012 10.27 32
238 Simpson College 3.000 07/01/2016 10.58 160
37 Waldorf College 3.000 07/01/2005 10.77 35
87 Wartburg College 3.750 04/01/2011 11.00 69
-------KANSAS-------
60 Fort Hays State University 3.000 10/01/2007 10.08 54
23 Hesston College 3.000 04/01/2006 11.14 21
-------KENTUCKY-------
218 Georgetown College 3.000 12/01/2008 10.04 183
440 Georgetown College 3.000 12/01/2009 10.05 358
111 Spalding University 3.000 09/01/2007 10.66 101
263 Transylvania University 3.000 11/01/2010 10.51 214
-------LOUISIANA-------
69 Dillard University 3.000 04/01/2008 11.09 61
38 Louisiana State University 3.000 07/01/2005 8.84 36
65 Louisiana State University 3.000 07/01/2006 8.87 62
-------MARYLAND-------
203 Hood College 3.625 11/01/2014 10.54 152
1,523 Morgan State University 3.000 11/01/2014 10.56 1,093
</Table>
SEE ACCOMPANYING ACCOUNTANTS' COMPILATION REPORT AND NOTES TO FINANCIAL
STATEMENTS.
24
<Page>
<Table>
<Caption>
INTERNAL
OUTSTANDING STATED RATE OF AMORTIZED
PRINCIPAL INTEREST MATURITY RETURN % (A) COST (NOTES
BALANCE DESCRIPTION RATE % DATE (UNAUDITED) 1 AND 2)
- ----------- ------------------------------------------------------- ----------- ----------- ------------ -----------
-------MASSACHUSETTS-------
$ 252 Hampshire College 3.000 07/01/2013 10.75 $ 183
926 Hampshire College 3.000 02/01/2014 10.70 666
165 Brandeis University 3.000 11/01/2011 10.64 130
680 College of the Holy Cross 3.625 10/01/2013 10.60 522
220 College of the Holy Cross 3.000 10/01/2006 10.63 204
2,294 Northeastern University 3.000 05/01/2018 10.53 1,497
283 Springfield College 3.500 05/01/2013 10.67 217
1,900 Tufts University 3.000 10/01/2021 10.39 1,145
525 Wheaton College 3.500 04/01/2013 10.70 393
15 Wheelock College 3.000 05/01/2011 10.23 12
-------MICHIGAN-------
62 Albion College 3.000 10/01/2009 10.56 50
66 Concordia College 3.000 04/01/2009 11.05 59
375 University of Michigan 3.750 10/01/2005 9.51 362
-------MINNESOTA-------
274 College of Saint Thomas 3.000 11/01/2009 10.53 230
29 College of Santa Fe 3.000 10/01/2005 10.66 28
463 College of Santa Fe 3.000 10/01/2018 10.43 303
349 MacAlester College 3.000 05/01/2020 10.46 219
-------MISSISSIPPI-------
1,169 Hinds Junior College 3.000 04/01/2013 10.42 887
476 Millsaps College 3.000 11/01/2021 10.34 288
1,230 Mississippi State University 3.000 12/01/2020 9.64 770
-------MISSOURI-------
360 Central Missouri State University 3.000 07/01/2007 10.18 321
193 Drury College 3.000 04/01/2015 10.63 137
260 Drury College 3.000 10/01/2010 10.75 210
236 Southeast Missouri State University 3.000 04/01/2007 10.58 214
-------MONTANA-------
250 Carroll College 3.750 06/01/2014 10.46 184
127 Carroll College 3.000 06/01/2018 10.15 82
-------NEW HAMPSHIRE-------
111 New England College 3.000 04/01/2016 10.77 74
-------NEW JERSEY-------
1,270 Fairleigh Dickinson University 3.000 11/01/2017 10.39 845
435 Newark Beth Israel Hospital 3.625 01/01/2014 11.06 312
1,235 Rider College 3.625 11/01/2013 10.42 943
322 Rider College 3.000 05/01/2017 10.70 212
485 Rutgers, The State University 3.750 05/01/2016 9.19 365
238 Seton Hill College 3.625 11/01/2014 10.53 176
</Table>
SEE ACCOMPANYING ACCOUNTANTS' COMPILATION REPORT AND NOTES TO FINANCIAL
STATEMENTS.
25
<Page>
<Table>
<Caption>
INTERNAL
OUTSTANDING STATED RATE OF AMORTIZED
PRINCIPAL INTEREST MATURITY RETURN % (A) COST (NOTES
BALANCE DESCRIPTION RATE % DATE (UNAUDITED) 1 AND 2)
- ----------- ------------------------------------------------------- ----------- ----------- ------------ -----------
-------NEW YORK-------
$ 739 College of Saint Rose 3.000 05/01/2022 10.43 $ 440
435 Daemen College 3.000 04/01/2016 10.77 291
322 Dowling College 3.000 10/01/2010 10.75 260
802 D'Youville College 3.000 04/01/2018 10.90 507
1,238 Hofstra University 3.000 11/01/2012 10.61 942
102 Long Island University 3.000 11/01/2009 10.69 85
356 Long Island University 3.000 11/01/2009 10.69 297
395 Long Island University 3.625 06/01/2014 10.49 289
584 Memorial Hospital for Cancer and Allied Diseases 3.375 04/01/2012 10.68 453
261 Utica College 3.000 11/01/2009 10.53 219
-------NORTH CAROLINA-------
125 Catawba College 3.000 12/01/2009 10.27 103
290 Elizabeth City State University 3.000 10/01/2017 10.02 197
168 High Point College 3.000 12/01/2010 10.26 131
44 Lenoir Rhyne College 3.000 12/01/2006 10.04 39
324 Saint Mary's College 3.000 06/01/2020 10.14 199
77 University of North Carolina 3.000 11/01/2005 8.81 75
215 University of North Carolina 3.000 01/01/2008 9.50 188
13 University of North Carolina 3.000 01/01/2007 9.50 12
-------OHIO-------
41 Rio Grande College 3.000 03/30/2009 10.93 34
164 University of Steubenville 3.125 04/01/2010 10.98 132
525 Wittenberg University 3.000 05/01/2015 10.76 362
182 Wittenberg University 3.000 11/01/2017 10.39 122
19 Wooster Business College 3.000 03/30/2009 10.88 16
-------OKLAHOMA-------
610 Cameron University 3.000 04/01/2007 10.16 549
275 Langston University 3.000 04/01/2007 10.56 246
-------OREGON-------
594 George Fox College 3.000 07/01/2018 10.64 382
63 Linfield College 3.000 10/01/2017 10.44 42
-------PENNSYLVANIA-------
378 Albright College 3.000 11/01/2015 10.23 273
120 Carnegie-Mellon University 3.000 05/01/2009 10.73 100
745 Carnegie-Mellon University 3.000 11/01/2017 10.51 494
800 Drexel University 3.500 05/01/2014 10.53 593
435 Gannon University 3.000 11/01/2011 10.49 342
165 Gannon University 3.000 12/01/2022 10.13 95
160 Lycoming College 3.625 05/01/2014 10.64 118
225 Lycoming College 3.750 05/01/2015 10.62 163
146 Moravian College 3.375 11/01/2012 10.52 113
</Table>
SEE ACCOMPANYING ACCOUNTANTS' COMPILATION REPORT AND NOTES TO FINANCIAL
STATEMENTS.
26
<Page>
<Table>
<Caption>
INTERNAL
OUTSTANDING STATED RATE OF AMORTIZED
PRINCIPAL INTEREST MATURITY RETURN % (A) COST (NOTES
BALANCE DESCRIPTION RATE % DATE (UNAUDITED) 1 AND 2)
- ----------- ------------------------------------------------------- ----------- ----------- ------------ -----------
$ 1,957 Philadelphia College of Art 3.000 01/01/2022 10.62 $ 1,142
400 Saint Vincent College 3.500 05/01/2013 10.86 298
885 Villanova University 3.000 04/01/2019 10.70 549
277 York Hospital 3.000 05/01/2020 10.64 170
-------RHODE ISLAND-------
35 Rhode Island College 3.000 10/01/2005 10.09 34
-------SOUTH CAROLINA-------
210 Benedict College 3.000 11/01/2006 10.61 196
1,462 Benedict College 3.000 11/01/2020 10.36 907
40 Clemson University 3.000 07/01/2005 9.51 38
72 Coker College 3.000 12/01/2009 10.04 59
311 Morris College 3.000 11/01/2009 10.53 261
-------SOUTH DAKOTA-------
145 Dakota Wesleyan University 3.000 10/01/2015 10.46 104
-------TENNESSEE-------
243 Cumberland University 3.000 08/01/2017 10.52 158
152 Hiwassee College 3.000 09/15/2018 10.58 98
-------TEXAS-------
255 Houston Tillotson College 3.500 04/01/2014 10.90 185
105 McLennan Community College 3.000 04/01/2006 10.49 97
204 Southern Methodist University 3.000 10/01/2007 10.61 182
1,700 Southwest Texas State University 3.000 10/01/2015 9.51 1,239
1,252 Stephen F. Austin State University 3.375-3.500 10/01/2012 9.57 999
346 Texas A & I University 3.000 07/01/2009 9.57 294
315 Texas Southern University 3.500 04/01/2013 10.45 238
520 University of Saint Thomas 3.000 10/01/2019 10.41 329
-------VERMONT-------
101 Champlain College 3.000 12/01/2013 10.19 72
1,227 Saint Michael's College 3.000 05/01/2013 10.60 920
210 Vermont State College 3.000 06/01/2008 9.02 185
181 Vermont State College 3.000 07/01/2014 9.30 136
-------VIRGINIA-------
880 James Madison University 3.000 06/01/2009 10.49 730
338 Lynchburg College 3.750 05/01/2015 10.64 247
480 Lynchburg College 3.000 05/01/2018 10.68 309
243 Mary Baldwin College 3.375 05/01/2012 10.68 189
440 Marymount University 3.000 05/01/2016 10.52 299
2,308 Norfolk State University 3.000 12/01/2021 9.77 1,417
150 Randolph-Macon College 3.000 05/01/2010 10.72 124
348 Saint Paul's College 3.000 11/01/2014 10.56 254
1,572 Virginia Commonwealth University 3.000 06/01/2011 10.01 1,241
161 Virginia Wesleyan College 3.000 11/01/2009 10.54 138
</Table>
SEE ACCOMPANYING ACCOUNTANTS' COMPILATION REPORT AND NOTES TO FINANCIAL
STATEMENTS.
27
<Page>
<Table>
<Caption>
INTERNAL
OUTSTANDING STATED RATE OF AMORTIZED
PRINCIPAL INTEREST MATURITY RETURN % (A) COST (NOTES
BALANCE DESCRIPTION RATE % DATE (UNAUDITED) 1 AND 2)
- ----------- ------------------------------------------------------- ----------- ----------- ------------ -----------
$ 111 Virginia Wesleyan College 3.000 11/01/2010 10.51 $ 90
-------WASHINGTON-------
229 Seattle University 3.000 11/01/2008 10.55 198
70 Western Washington University 3.750 10/01/2005 10.19 67
-------WEST VIRGINIA-------
191 Bethany College 3.375 11/01/2012 10.54 151
215 Bethany College 3.000 11/01/2017 10.40 143
325 Bethany College 3.000 11/01/2012 10.40 249
30 Wheeling College 3.000 11/01/2007 10.59 27
-------WISCONSIN-------
324 Carroll College 3.750 03/01/2015 10.93 237
405 Marian College 3.000 10/01/2016 10.45 276
95 Saint Norbert College 3.000 04/01/2007 11.10 85
-------DISTRICT OF COLUMBIA-------
2,289 Georgetown University 3.000 11/01/2020 10.36 1,419
5,940 Georgetown University 4.000 11/01/2020 10.52 3,922
-------PUERTO RICO-------
40 Inter American University of Puerto Rico 3.000 09/01/2007 10.66 36
1,795 Inter American University of Puerto Rico 3.000 01/01/2017 10.94 1,186
1,069 University of Puerto Rico, Rio Piedras Campus 3.000 06/01/2011 9.39 860
- ----------- -----------
88,495 Total College and University Loans 63,092
- ----------
Allowance for Loan Losses 1,432
-----------
Net Loans of the Trust 61,660
-----------
INVESTMENT AGREEMENTS (12.0%)
1,782 JPMorgan Chase Bank - Liquidity Fund 7.750 06/01/2018 7.750 1,782
6,600 JPMorgan Chase Bank - Revenue Fund 7.050 06/01/2018 7.050 6,600
- ----------- -----------
8,382 Total Investment Agreements 8,382
- ----------- -----------
$ 96,877 Total Investments (100.0%) $ 70,042
=========== ===========
</Table>
(A) Represents the rate of return based on the contributed cost and the
amortization to maturity.
SEE ACCOMPANYING ACCOUNTANTS' COMPILATION REPORT AND NOTES TO FINANCIAL
STATEMENTS.
28
<Page>
ITEM 2. CODE OF ETHICS
Not applicable to the registrant.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
Not applicable to the registrant.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not applicable to the registrant.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable to the registrant.
ITEM 6. SCHEDULE OF INVESTMENTS
Schedule is included as part of the report to shareholders filed under Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not applicable to the registrant.
ITEM 8. PORTFOLIO MANAGER OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable to the registrant.
ITEM 9. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS
Not applicable to the registrant.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable to the registrant.
ITEM 11. CONTROLS AND PROCEDURES
(a) Not applicable to the registrant.
(b) Not applicable to the registrant.
<Page>
ITEM 12. EXHIBITS
The following exhibits are attached to this Form N-CSR:
(a)
(1) Code of ethics or amendments: not applicable to the registrant.
(2) Certification by the registrant's Owner Trustee, as required by Rule
30a-2(a) under the Investment Company Act of 1940, is attached.
(3) Annual Compliance Statement of the Servicer, GMAC Commercial Mortgage
Corporation, is attached.
(4) Attestation Report of Independent Accountants, PricewaterhouseCoopers,
LLP, is attached.
(5) GMAC reports pursuant to section 1301, 1302, 1303, 1304, 1306 and 1307
of the servicer agreement.
(b) Certification by the registrant's Owner Trustee, as required by Rule
30a-2(b) under the Investment Company Act of 1940, is attached.
<Page>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) College and University Facility Loan Trust Two
--------------------------------------------------------------
By (Signature and Title) /s/ Diana J. Kenneally Assistant Vice President
--------------------------------------------------
Date August 8, 2005
-------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /s/ Diana J. Kenneally Assistant Vice President
--------------------------------------------------
Date August 8, 2005
-------------------