UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

[ X ]

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

For the fiscal year ended March 31, ~~2010~~2011

[ ]

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

For the transition period ~~from~~from________________________________ ~~____________________________________~~to ~~to____________________________~~_______________________________________________

Commission file number 0-24584

Boston Financial Tax Credit Fund VII, A Limited ~~Partnership_______________________~~ Partnership

(Exact name of registrant as specified in its charter)

Massachusetts ~~____04~~ 04-~~3166203_________ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization)~~3166203

~~101~~ (State ~~Arch~~or ~~Street,~~other ~~Boston,~~jurisdiction ~~Massachusetts 02110-1106 ________~~ of (~~Address~~I.R.S. ofEmployer ~~principal~~Identification ~~executive offices~~No.) ~~(Zip Code)~~

incorporation or organization)

101 Arch Street, Boston, Massachusetts 02110-1106

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (617) 439-3911

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

Title of each class	Name of each exchange on which registered
None	None

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

UNITS OF LIMITED PARTNERSHIP INTEREST

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o Yes ý No

o Yes ý No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o Yes ý No

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.

ý Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T

(§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). o Yes o No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Subsection 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b -2 of the Exchange Act.

Large accelerated filer o Accelerated Filer o

Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company ý

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

o Yes ý No

State the aggregate sales price of Fund units held by nonaffiliates of the registrant: $45,581,000 as of ~~March~~September 3130, 2010.

BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED MARCH 31, ~~2010~~2011

TABLE OF CONTENTS

Page No.

PART I Item 1 Business K-4 Item 2 Properties K-6 Item 3 Legal Proceedings K-9 Item 4 Submission of Matters to a Vote of Security Holders K-9 PART II Item 5 Market for the Registrant's Units and Related Security Holder Matters K-9 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations K-9 Item 8 Financial Statements and Supplementary Data K-16 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure K-16 Item 9A Controls and Procedures K-16 Item 9B Other Information K-17 PART III Item 10 Directors and Executive Officers of the Registrant K-17 Item 11 Management Remuneration K-18 Item 12 Security Ownership of Certain Beneficial Owners and Management K-18 Item 13 Certain Relationships and Related Transactions and Director Independence K-18 Item 14 Principal Accountant Fees and Services K-20 Item 15 Exhibits, Financial Statement Schedules K-20 SIGNATURES K-21 CERTIFICATIONS K-22

PART I

Item 1 Business K-4

Item 2 Properties K-6

Item 3 Legal Proceedings K-9

Item 4 (Removed and Reserved) K-9

PART II

Item 5 Market for the Registrant's Units and

Related Security Holder Matters K-9

Item 7 Management's Discussion and Analysis of

Financial Condition and Results of Operations K-9

Item 8 Financial Statements and Supplementary Data K-15

Item 9 Changes in and Disagreements with Accountants

on Accounting and Financial Disclosure K-15

Item 9A Controls and Procedures K-16

Item 9B Other Information K-16

PART III

Item 10 Directors and Executive Officers

of the Registrant K-17

Item 11 Management Remuneration K-17

Item 12 Security Ownership of Certain Beneficial

Owners and Management K-18

Item 13 Certain Relationships and Related Transactions

and Director Independence K-18

Item 14 Principal Accounting Fees and Services K-19

Item 15 Exhibits, Financial Statement Schedules K-19

SIGNATURES K-21

CERTIFICATIONS K-22

PART I

Item 1. Business

Boston Financial Tax Credit Fund VII, A Limited Partnership (the "Fund") is a Massachusetts limited partnership formed on September 14, 1992 under the laws of the Commonwealth of Massachusetts. The ~~Fund's~~Amended ~~partnership~~and ~~agreement~~Restated Agreement of Limited Partnership (the "Partnership Agreement") ~~authorizes~~authorized the sale of up to 100,000 units of Limited Partnership Interest (“Unit”) at $1,000 per Unit. On November 30, 1993, the Fund held its final investor closing. In total, the Fund received $50,930,000 (“Gross Proceeds”) of capital contributions for 50,930 Units. Such amounts exclude five unregistered Units previously acquired for $5,000 by the Initial Limited Partner, which is also one of the General Partners. The offering of Units terminated on January 21, 1994. No further sale of Units is expected.

The Fund is engaged solely in the business of real estate investment. Accordingly, a presentation of information about industry segments is not applicable and would not be material to an understanding of the Fund's business taken as a whole.

The Fund originally invested as a limited partner or member in nineteen other limited partnerships or limited liability companies (collectively, "Local Limited Partnerships") which own and operate residential apartment complexes ("Properties"), some of which benefit from some form of federal, state or local assistance programs and all of which qualify for low-income housing tax credits ("Tax Credits") added to the Internal Revenue Code (the "Code") by the Tax Reform Act of 1986. The ~~investment~~Fund’s objectives ofare ~~the Fund include the following~~to: (i) to provide investors with annual tax credits which they may use to reduce their federal income taxes; (ii) to provide limited cash distributions from the operations of apartment complexes; and (iii) to preserve and protect the Fund's capital with the possibility of realizing a profit through the sale or refinancing of apartment complexes. There cannot be any assurance that the Fund will attain any or all of these investment objectives. A more detailed discussion of these investment objectives, along with the risks in achieving them, is contained in the sections of the Prospectus entitled "Investment Objectives and Policies - Principal Investment Objectives" and "Investment Risks", which are herein incorporated by this reference.

~~Table~~Since Athe onLocal Limited Partnerships no longer generate any tax credits, the ~~following~~Fund ~~page~~is ~~lists~~in the ~~Properties~~process ~~originally~~of ~~acquired~~disposing byof ~~the~~its interests in Local Limited Partnerships. The Fund has disposed of its interests in ~~which~~thirteen Local Limited Partnerships, and the Fund currently has ~~invested~~only six Local Limited Partnership Interests remaining. ~~Item~~In 7general, sale of ~~this~~the ~~Report~~Fund’s ~~contains~~interests ~~other~~in ~~significant~~a ~~information~~Local ~~with~~Limited ~~respect~~Partnership will be subject to ~~such~~various restrictions. The Fund will hold Local Limited ~~Partnerships. As~~Partnership ~~required~~interests byfor ~~applicable~~periods ~~rules,~~consistent with the terms of the ~~acquisition of each~~ Local Limited Partnership ~~interest~~agreements, ~~have~~the ~~been~~Partnership ~~described~~Agreement inand athe ~~supplement~~best tointerests of the ~~Prospectus~~Fund ~~and~~(including ~~collected~~Tax inCredit ~~the~~recapture ~~post-effective~~considerations). ~~amendment~~Table toA on the ~~Registration~~following ~~Statement;~~pages ~~such~~lists ~~descriptions~~the ~~are~~Properties ~~incorporated~~originally ~~herein~~acquired by the Local Limited Partnerships in which the Fund has invested. Item 7 of this ~~reference~~Report contains other significant information with respect to such Local Limited Partnerships.

TABLE A

SELECTED LOCAL LIMITED

PARTNERSHIP DATA

		Date
Properties owned by		Interest
Local Limited Partnerships	Location	Acquired
Oak Ridge (1)	Macon, GA	12/31/92
Santa Fe Oaks II (1)	Gainesville, FL	12/31/92
Andrew’s Pointe	Burnsville, MN	04/13/92
Palo Verde II (1)	Henderson, NV	05/19/93
Woods Lane (1)	Rogers, AR	07/30/93
Crafton Place (1)	Fayetteville, AR	07/30/93
Guardian Place	Richmond, VA	10/07/93
Guardian Place (1)	Richmond, VA	10/07/93
Twin Oaks Meadows	Lansing, MI	10/29/93
Sunrise Terrace (1)	Madera, CA	11/24/93
Wynmor	Brooklyn Park, MN	12/22/93
Citrus Glen (1)	Orlando, FL	12/30/93
St. Andrews Pointe (1)	Columbia, SC	01/05/94
Des Moines St. Village (1)	Des Moines, IA	01/31/94
Fountain Lakes (1)	Benton, AR	02/02/94
Fairhaven Manor	Burlington, WA	03/08/94
Grand Boulevard Renaissance	Chicago, IL	08/03/94
Grand Boulevard Renaissance (1)	Chicago, IL	08/03/94
Los Claveles II (1)	Trujillio Alto, PR	08/31/94
Springwood	Tallahassee, FL	12/15/94
Harford Commons	Baltimore, MD	02/28/95

(1) The Fund no longer has interests in the Local Limited Partnerships which own these Properties.

Although the Fund's investments in Local Limited Partnerships are not subject to seasonal fluctuations, the Fund's equity in losses of Local Limited Partnerships, to the extent it reflects the operations of individual Properties, may vary from quarter to quarter based upon changes in occupancy and operating expenses as a result of seasonal factors.

Each Local Limited Partnership has as its general partners ("Local General Partners") one or more individuals or entities not affiliated with the Fund or its General Partners. In accordance with the partnership agreements under which such entities are organized ("Local Limited Partnership Agreements"), the Fund depends on the Local General Partners for the management of each Local Limited Partnership. As of March 31, ~~2010~~2011, no Local Limited Partnerships have a common Local General Partner or affiliated group of Local General Partners. The Local General Partners of the remaining Local Limited Partnerships are identified in the ~~Acquisition~~schedule ~~Reports~~in ~~reported~~Item on2 ~~Forms~~of ~~8-K,~~this ~~which are herein incorporated by reference~~Report.

The Properties owned by Local Limited Partnerships in which the Fund has invested are, and will continue to be, subject to competition from existing and future apartment complexes in the same areas. The success of the Fund will depend on many outside factors, most of which are beyond the control of the Fund and which cannot be predicted at this time. Such factors include general economic and real estate market conditions, both on a national basis and in those areas where the Properties are located, the availability and cost of borrowed funds, real estate tax rates, operating expenses, energy costs and governmental regulations. In addition, other risks inherent in real estate investment may influence the ultimate success of the Fund, including: (i) possible reduction in rental income due to an inability to maintain high occupancy levels or adequate rental levels; (ii) possible adverse changes in general economic conditions and adverse local conditions, such as competitive over-building or a decrease in employment or adverse changes in real estate laws, including building codes; and (iii) possible future adoption of rent control legislation which would not permit increased costs to be passed on to the tenants in the form of rent increases or which suppress the ability of the Local Limited Partnerships to generate operating cash flow. Since some of the Properties benefit from some form of governmental assistance, the Fund is subject to the risks inherent in that area including decreased subsidies, difficulties in finding suitable tenants and obtaining permission for rent increases. In addition, any Tax Credits allocated to investors with respect to a Property are subject to recapture to the extent that the Property or any portion thereof ceases to qualify for the Tax Credits. Other future changes in federal and state income tax laws affecting real estate ownership or limited partnerships could have a material and adverse effect on the business of the Fund.

The Fund is managed by Arch Street VIII, Inc., (the “Managing General Partner ~~of the Fund~~”). The other General Partner of the Fund is Arch Street VII Limited Partnership (“Arch Street VII L.P.”). The Fund, which does not have any employees, reimburses Boston Financial Investment Management, LP (“Boston Financial”) an affiliate of the General Partners, for certain expenses and overhead costs. A complete discussion of the management of the Fund is set forth in Item 10 of this Report. The Fund currently has no employees.

The General Partners were affiliates of MMA Financial, Inc. Municipal Mortgage & Equity, LLC (“MuniMae”), the parent company of MMA Financial, Inc., sold substantially all of the assets of its Low Income Housing Tax Credit business to Boston Financial. The first stage of this sale closed on July 30, 2009 and the second stage closed on October 13, 2009. From July 30, 2009 through October 13, 2009, MuniMae had engaged BFIM Asset Management, LLC, an affiliate of Boston Financial, to provide asset management to the Fund. On October 13, 2009, the partnership interests in the General Partners were directly and/or indirectly transferred from entities controlled by MuniMae to one or more entities controlled and owned by Boston Financial.

Item 2. Properties

The Fund currently owns limited partnership interests in ~~eight~~six Local Limited Partnerships which own and operate Properties, some of which benefit from some form of federal, state or local assistance programs and all of which qualify for the Tax Credits added to the Code by the Tax Reform Act of 1986. The Fund’s ownership interest in each Local Limited Partnership is 99%, with the exception of Springwood Apartments which is 19.8% and Eden Park which is 67.99%.

Each of the Local Limited Partnerships has received an allocation of Tax Credits from the relevant state tax credit agency. In general, the Tax Credits run for ten years from the date the Property is placed in service. The required holding period (the "Compliance Period") of the Properties is fifteen years. During these fifteen years, the Properties must satisfy rent restrictions, tenant income limitations and other requirements, as promulgated by the Code, in order to maintain eligibility for the Tax Credits at all times during the Compliance Period. Once a Local Limited Partnership has become eligible for the Tax Credits, it may lose such eligibility and suffer an event of recapture if its Property fails to remain in compliance with the requirements.

In addition, some of the Local Limited Partnerships have obtained one or a combination of different types of loans such as: (i) below market rate interest loans; (ii) loans provided by a redevelopment agency of the town or city in which the Property is located at favorable terms; or (iii) loans that have repayment terms that are based on a percentage of cash flow.

The schedule on the following pages provides certain key information on the Local Limited Partnership interests ~~acquired~~currently byinvested in the Fund.

			Capital Contributions
Local Limited Partnership			~~Total~~		~~Paid~~		~~Mtge. Loans~~			~~Occupancy at~~
Property Name	~~Number of~~		~~Committed at~~Total		~~Through~~Paid		~~Payable~~Mtge. atLoans		~~Type of~~	~~March~~Occupancy ~~31,~~at
Property Location	~~Apts~~Number ~~Units~~of		~~March~~Committed ~~31, 2010~~at		~~March 31, 2010~~Through		~~December~~Payable ~~31, 2009~~at		~~Subsidy~~Type *of	~~2010~~March 31,
Local General Partner	Apts Units		March 31, 2011		March 31, 2011		December 31, 2010		Subsidy	2011
Andrew's Pointe Limited
Partnership
Andrew's Pointe
Burnsville, MN		57		~~1,333,800~~		~~1,333,800~~		~~1,767,185~~	~~None~~		98	%
Guardian Place
Shelter Corporation		57		1,333,800		1,333,800		967,279	None		98	%
Limited Partnership
Guardian Place		120		2,174,390		2,174,390		3,368,317	None		94	%
Richmond, VA
Twin Oaks Meadows Limited
Dividend Housing Association
Limited Partnership
Twin Oaks Meadows
Lansing, MI		63		~~1,436,400~~		~~1,436,400~~		~~1,951,296~~	~~None~~		98	%
First Centrum Corporation		63		1,436,400		1,436,400		1,961,829	None		87	%
Eden Park Limited
Partnership
Wynmor
Brooklyn Park, MN		~~324~~		~~5,527,758~~		~~5,527,758~~		~~5,496,070~~	~~None~~		94	%
Wynmor Redevelopment L.P. c/o
R.E Equitie		324		5,527,758		5,527,758		5,386,422	None		96	%
Fairhaven Manor Limited
Partnership
Fairhaven Manor
Burlington, WA		40		~~1,232,020~~		~~1,232,020~~		~~714,646~~	~~None~~		95	%
Grand Boulevard Renaissance I
Manor Properties, L.L.C.		40		1,232,020		1,232,020		685,672	None		100	%
Limited Partnership
			Capital Contributions
Grand Boulevard Renaissance
Local Limited Partnership
Chicago, IL		30		936,719		936,719		1,692,349	Section 8		90	%
Property Name			Total		Paid		Mtge. Loans			Occupancy at
Property Location	Number of		Committed at		Through		Payable at		Type of	March 31,
Local General Partner	Apts Units		March 31, 2011		March 31, 2011		December 31, 2010		Subsidy		2011
Springwood Apartments,
A Limited Partnership
Springwood
Tallahassee, FL		~~113~~		~~624,804~~		~~624,804~~		~~3,205,985~~	~~None~~		76	%
Flournoy Development Co.		113		624,804		624,804		3,107,247	None		89	%
BHP/Harford Commons
Limited Partnership
Harford Commons
Baltimore, MD		30		~~1,128,000~~		~~1,128,000~~		~~1,736,092~~	~~None~~		87	%
		777	$	14,393,891	$	14,393,891	$	19,931,940
RH II LLC		30		1,128,000		1,128,000		1,736,092	None		90	%
		627	$	11,282,782	$	11,282,782	$	13,844,541

* Section 8 This subsidy, which is authorized under Section 8 of Title II of the Housing and Community Development Act of 1974, allows qualified low-income tenants to pay 30% of their monthly income as rent with the balance paid by the federal government.

The Fund does not guarantee any of the mortgages or other debt of the Local Limited Partnerships.

Duration of leases for occupancy in the Properties described above is generally six to twelve months. The Managing General Partner believes the Properties described herein are adequately covered by insurance.

Additional information required under this item, as it pertains to the Fund, is contained in Items 1, 7 and 8 of this Report.

Item 3. Legal Proceedings

The Fund is not a party to any pending legal or ~~administrate~~administrative proceeding, and to the best of its knowledge, no legal or administrative proceeding is threatened or contemplated against it.

Item 4. ~~Submission~~(Removed ofand ~~Matters to a Vote of Security Holders~~Reserved)

None.

PART II

Item 5. Market for the Registrant's Units and Related Security Holder Matters

There is no public market for the Units, and it is not expected that a public market will develop. If a Limited Partner desires to sell Units, the buyer of those Units will be required to comply with the minimum purchase and retention requirements and investor suitability standards imposed by applicable federal or state securities laws and the minimum purchase and retention requirements imposed by the Fund. The price to be paid for the Units, as well as the commissions to be received by any participating broker-dealers, will be subject to negotiation by the Limited Partner seeking to sell his Units. Units will not be redeemed or repurchased by the Fund.

The Partnership Agreement does not impose on the Fund or its General Partners any obligation to obtain periodic appraisals of assets or to provide Limited Partners with any estimates of the current value of Units.

As of March 31, ~~2010~~2011, there were 2,238 record holders of Units of the Fund.

Cash distributions, when made, are paid annually. During the year ended March 31, ~~2010~~2011, ano cash distribution ~~of $1,004,196~~ was paid. During the year ended March 31, ~~2009~~2010, noa cash distribution of $1,004,196 was paid to Unit holders.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Certain matters discussed herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The use of words like “anticipate,” “estimate,” “intend,” “project,” “plan,” “expect,” “believe,” “could,” and similar expressions are intended to identify such forward-looking statements. The Fund intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements and is including this statement for purposes of complying with these safe harbor provisions. Although the Fund believes the forward-looking statements are based on reasonable assumptions and current expectations, the Fund can give no assurance that its expectations will be attained. Actual results and timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors, including, without limitation: (i) possible reduction in rental income due to an inability to maintain high occupancy levels or adequate rental levels; (ii) possible adverse changes in general economic conditions and adverse local conditions, such as competitive overbuilding, a decrease in employment rates or adverse changes in real estate laws, including building codes; (iii) possible future adoption of rent control legislation which would not permit increased costs to be passed on to the tenants in the form of rent increases or which would suppress the ability of the Local Limited Partnership to generate operating cash flow; and (iv) general economic and real estate conditions and interest rates.

Executive Level Overview

~~The~~Boston Financial Tax Credit Fund VII, A Limited Partnership (the "Fund") is a Massachusetts limited partnership organized to invest as a limited partner or member in other limited partnerships or limited liability companies (collectively, "Local Limited Partnerships") which own and operate apartment complexes that are eligible for low income housing tax credits (“Tax Credits”) which may be applied against the federal income tax liability of an investor. The Fund’s objectives are to: (i) provide investors with annual ~~tax~~Tax ~~credits~~Credits which they may use to reduce their federal income tax liability; (ii) provide limited cash distributions from the operations of apartment complexes and; (iii) preserve and protect the Fund’s capital. Arch Street VIII, Inc., a Massachusetts corporation is the Managing General Partner of the Fund. Arch Street VII Limited Partnership, a Massachusetts limited partnership, whose general partner consists of Arch Street, Inc., is also a General Partner. Both the Managing General Partner and Arch Street VII, L.P. are affiliates of Boston Financial Investment Management, LP (“Boston Financial”). The General Partners were affiliates of MMA Financial, Inc. Municipal Mortgage & Equity, LLC (“MuniMae”), the parent company of MMA Financial, Inc., sold substantially all of the assets of its Low Income Housing Tax Credit business to Boston Financial. The first stage of this sale closed on July 30, 2009 and the second stage closed on October 13, 2009. From July 30, 2009 through October 13, 2009, MuniMae had engaged BFIM Asset Management, LLC, an affiliate of Boston Financial, to provide asset management to the Fund. On October 13, 2009, the partnership interests in the General Partners were directly and/or indirectly transferred from entities controlled by MuniMae to one or more entities controlled and owned by Boston Financial. The fiscal year of the Fund ends on March 31.

As of March 31, ~~2010~~2011, the ~~Partnership~~Fund’s investment portfolio consisted of a limited ~~partnership~~partner interest in ~~eight~~six Local Limited Partnerships, which own and operate a multi-family apartment complex that ~~has~~had generated, but no longer generates, Tax Credits. Since inception, the ~~Partnership~~Fund generated Tax Credits, net of recapture, of approximately $1,485 per Limited Partner Unit. InThe ~~the~~ aggregate, ~~actual~~amount ~~and~~of ~~estimated~~ Tax Credits ~~enabled~~generated by the ~~Fund~~Partnership tois ~~meet~~consistent with the objective specified in the Fund’s prospectus.

Properties that receive low income housing Tax Credits must remain in compliance with rent restriction and set-aside requirements for at least 15 calendar years from the date the Property is placed in service. Failure to do so would result in the recapture of a portion of the Property’s Tax Credits. The Compliance Period for ~~seven~~all of the remaining ~~eight~~ Properties, which the Fund has an interest, expired on or before December 31, ~~2009. The Compliance Period for the one remaining Property will expire December 31,~~ 2010. The Managing General Partner has negotiated agreements that will ultimately dispose of the Fund’s interest in ~~one~~two ~~additional~~ Local Limited ~~Partnership~~Partnerships in ~~2010~~2011. In addition, the Fund is in negotiations with potential buyers to dispose of its interest in the four other Local Limited Partnerships~~. One~~ ~~Local Limited Partnership~~ in ~~which the Fund had an interest was disposed of during the three months ended March 31, 2010~~2011.

OnIn February 5, 2010, the Fund distributed $994,153.60, or $19.52 per Unit, representing a cash distribution from the proceeds of recent property sales. The Managing General Partner anticipates making an additional distribution in the future.

The Managing General Partner will continue to closely monitor the operations of the Properties during the Compliance Periods and will formulate disposition strategies with respect to the Fund’s remaining Local Limited Partnership interests. ~~It is unlikely that the Managing General Partner will be able to dispose of the Fund’s Local Limited Partnership interests concurrently with the expiration of each Property’s Compliance Period.~~ The Fund shall dissolve and its affairs shall be wound up upon the disposition of the final Local Limited Partnership interest and other assets of the Fund. Investors will continue to be Limited Partners, receiving K-1s and quarterly and annual reports, until the Fund is dissolved.

Critical Accounting Policies

The Fund’s accounting ~~polices~~policies include those that relate to its recognition of investments in Local Limited Partnerships using the equity method of accounting. The Fund’s policy is as follows:

The Local Limited Partnerships in which the Fund invests are Variable Interest Entities ("VIE"s). The Fund is involved with the VIEs as a non-controlling limited partner equity holder. The investments in the Local Limited Partnerships are made primarily to obtain ~~tax~~Tax ~~credits~~Credits on behalf of the Fund’s investors. The Tax Credits generated by Local Limited Partnerships are not reflected on the books of the Fund as such credits are allocated to investors for use in offsetting their federal income tax liability. The general partners or managing members of the Local Limited Partnerships (the “Local General Partners”), who are considered to be the primary beneficiaries, ~~control~~have the ~~day-~~power to~~-day~~ ~~operations~~direct the activities of the Local Limited Partnerships. The ~~general~~Local ~~partners~~General Partners are also responsible for maintaining compliance with the ~~tax~~Tax ~~credit~~Credit program and for providing subordinated financial support in the event operations cannot support debt and ~~property~~Property tax payments. The Fund, through its ownership percentages, may participate in property disposition proceeds. The timing and amounts of these proceeds are unknown but can impact the Fund’s financial position, results of operations or cash flows. Because the Fund is not the primary beneficiary of these ~~VIEs~~Local Limited Partnerships, it accounts for its investments in the Local Limited Partnerships using the equity method of accounting. The Fund's exposure to economic and financial statement losses is limited to its investments in the ~~VIEs. The~~Local ~~Fund~~Limited ~~may~~Partnerships beand ~~subject~~estimated tofuture ~~additional~~funding ~~losses~~commitments. To to the extent ~~of any financial support~~ that the Fund ~~voluntarily~~does ~~provides~~not inreceive the ~~future. Under~~full ~~the~~amount ~~equity~~of ~~method,~~Tax ~~the~~Credits ~~investment~~specified isin ~~carried~~its atinitial ~~cost,~~investment ~~adjusted~~contribution ~~for~~agreement, ~~the~~it ~~Fund’s~~may ~~share~~be ofeligible ~~net~~to ~~income~~receive orpayments ~~loss and for cash distributions~~ from the Local ~~Limited~~General ~~Partnerships;~~Partners ~~equity~~under inthe ~~income~~provisions ~~or loss~~ of ~~the~~Tax ~~Local~~Credit ~~Limited Partnerships is included currently in the Fund's operations~~guarantees. AThe ~~liability~~Fund ismay ~~recorded~~be ~~for~~subject ~~delayed~~to ~~equity~~additional ~~capital~~losses ~~contributions~~ to ~~Local Limited Partnerships. Under~~ the ~~equity~~extent ~~method,~~of aany ~~Local~~financial ~~Limited~~support ~~Partnership~~that ~~investment~~the ~~will~~Fund ~~not~~voluntarily beprovides ~~carried~~in ~~below~~the ~~zero~~future. ToThe ~~the~~Fund ~~extent~~may ~~that~~voluntarily ~~equity~~provide inadvances ~~losses~~to ~~are incurred when~~ the ~~Fund’s carrying value of the respective~~ Local Limited ~~Partnership~~Partnerships ~~has been reduced~~ to afinance ~~zero~~operations ~~balance,~~or ~~the~~to ~~losses~~make ~~will~~debt beservice ~~suspended and offset against future income~~payments. ~~Income~~The ~~from~~Fund aassesses ~~Local~~the ~~Limited~~collectability ~~Partnership,~~of ~~where~~any ~~cumulative~~advances ~~equity~~at ~~in losses plus cumulative distributions have exceeded~~ the ~~total~~time ~~investment in~~ the ~~Local~~advance ~~Limited~~is ~~Partnership,~~made ~~will~~and ~~not~~records bea ~~recorded~~reserve ~~until~~if ~~all~~collectability ofis ~~the~~not ~~related~~reasonably ~~unrecorded losses have been offset~~assured. ToThe ~~the~~Fund ~~extent~~does ~~that~~not aguarantee ~~Local~~any ~~Limited Partnership with a carrying value~~ of ~~zero distributes cash to~~ the ~~Fund,~~mortgages ~~that~~or ~~distribution~~other isdebt ~~recorded~~of ~~as income on~~ the ~~books~~Local ofLimited ~~the Fund~~Partnerships.

~~The~~Under ~~Fund has implemented policies and practices for assessing other-than-temporary declines in~~ the ~~values~~equity ~~of its investments in Local Limited Partnerships. Periodically~~method, the ~~carrying~~investment ~~values~~is ofcarried ~~the~~at ~~investments~~cost, ~~are~~adjusted ~~tested~~ for ~~other-than-temporary impairment. If an other-than-temporary decline in carrying value exists, a provision to reduce~~ the ~~investment~~Fund’s toshare ~~the sum~~ of ~~the~~net ~~estimated~~income ~~remaining~~or ~~benefits~~loss ~~will~~and befor ~~recorded~~cash indistributions from the ~~Fund's financial statements. The estimated remaining benefits for each~~ Local Limited ~~Partnership~~Partnerships; ~~consist~~equity ofin ~~estimated~~income ~~future~~or ~~tax~~loss ~~losses and tax credits over the estimated life~~ of the ~~investment~~Local ~~and~~Limited ~~estimated~~Partnerships ~~residual~~is ~~proceeds~~included atcurrently ~~disposition. Included~~ in the ~~estimated~~Fund's ~~residual~~operations. A ~~proceeds~~liability ~~calculation~~ is anrecorded ~~estimated~~for ~~net~~delayed ~~operating~~equity ~~income~~capital ~~capitalized~~contributions ~~at a rate specific~~ to ~~the location of each~~ Local Limited ~~Partnership less the estimated terminal debt balance of the Local Limited Partnership~~Partnerships. ~~Generally,~~Under the ~~carrying~~equity ~~values~~method, ofa ~~most~~ Local Limited ~~Partnerships~~Partnership investment will ~~decline~~not ~~through~~be ~~losses~~carried ~~and~~below ~~distributions~~zero. ~~However,~~To the ~~Fund~~extent ~~may~~that ~~record~~equity ~~impairment~~in losses ifare ~~the~~incurred ~~expiration~~when ofthe ~~tax~~Fund’s ~~credits~~carrying ~~outpaces~~value ~~losses and distributions from any~~ of the respective Local Limited ~~Partnerships.~~Partnership ~~During~~has ~~the~~been ~~year~~reduced ~~ended~~to ~~March 31~~zero, ~~2010,~~these ~~the~~excess ~~Fund~~losses ~~concluded~~will ~~that~~be ~~two~~suspended ~~of the Local Limited Partnerships had experienced other-than-temporary declines in their carrying values~~ and ~~impairment~~offset ~~losses~~against ~~were~~future ~~recorded~~income. Income ~~for~~from ~~West End Place,~~ a Local Limited Partnership ~~for $496~~,~~000~~ ~~and~~where ~~Oak~~cumulative ~~Knoll~~equity ~~Renaissance,~~in alosses ~~Limited~~plus ~~Partnership~~cumulative ~~for $518,000.~~distributions ~~During~~have ~~the~~exceeded ~~year ended March 31, 2009,~~ the ~~Fund~~total ~~concluded~~investment ~~that~~in ~~three of~~ the Local Limited ~~Partnerships~~Partnership, ~~had~~will ~~experienced~~not ~~other-than-temporary~~be ~~declines~~recorded inuntil ~~their~~all ~~carrying~~of ~~values~~the ~~and~~related ~~impairment~~unrecorded losses ~~were~~have ~~recorded~~been ~~for~~offset. To ~~Beaverdam~~the ~~Creek~~extent ~~Associates,~~that a Local Limited Partnership ~~for~~with ~~$106,000,~~a ~~Pike~~carrying ~~Place,~~value aof ~~Limited~~zero ~~Partnership~~distributes ~~for~~cash ~~$453~~to the Fund,~~000~~ ~~and~~that ~~Oak~~distribution ~~Knoll~~is ~~Renaissance,~~recorded aas ~~Limited~~income ~~Partnership~~in ~~for~~the ~~$813,000~~Fund’s statement of operations.

The Fund has implemented policies and practices for assessing other-than-temporary declines in the values of its investments in Local Limited Partnerships. Periodically, the carrying values of the investments are tested for other-than-temporary impairment. If an other-than-temporary decline in carrying value exists, a provision is recorded to reduce the investment to the sum of the estimated remaining benefits. The estimated remaining benefits for each Local Limited Partnership consists of the estimated future benefit from tax losses and tax credits over the estimated life of the investment and estimated residual proceeds at disposition. Estimated residual proceeds are calculated by capitalizing the estimated net operating income and subtracting the estimated terminal debt balance of each Local Limited Partnership. Generally, the carrying values of most Local Limited Partnerships will decline through losses and distributions. However, the Fund may record impairment losses if the expiration of tax credits outpaces losses and distributions from any of the Local Limited Partnerships. During the years ended March 31, 2011 and 2010, the Fund concluded that one of the Local Limited Partnerships had experienced other-than-temporary declines in its carrying value and impairment losses were recorded: Fairhaven Manor for $231,000 and $9,000, respectively.

Liquidity and Capital Resources

At March 31, ~~2010~~2011, the Fund had cash and cash equivalents of $2,~~671~~479,~~659~~438 as compared with $12,~~564~~671,~~981~~659 at March 31, ~~2009~~2010. This ~~increase~~decrease is primarily attributable to ~~cash~~normal ~~distribution~~fund ~~received from Local Limited Partnerships in excess of cash used for operating activities, and proceeds from the sale of investments in Local Limited Partnerships~~operations. Cash used for operations includes $~~377~~487,~~511~~540 to the Managing General Partner for accrued asset management fees.

The Managing General Partner initially designated 5% of the Gross Proceeds as Reserves, as defined in the Partnership Agreement. The Reserves were established to be used for working capital of the Fund and contingencies related to the ownership of Local Limited Partnership interests. The Managing General Partner may increase or decrease such Reserves from time to time, as it deems appropriate. At March 31, ~~2010~~2011 and ~~2009~~2010, $2,~~759~~453,~~197~~262 and $12,~~587~~759,~~737~~197, respectively, has been designated as Reserves.

To date, professional fees relating to various Property issues totaling approximately $128,000 have been paid from Reserves. In the event a Local Limited Partnership encounters operating difficulties requiring additional funds, the Fund’s management might deem it in its best interest to voluntarily provide such funds in order to protect its investment. As of March 31, ~~2010~~2011, the Fund has advanced approximately $1,525,000 to Local Limited Partnerships to fund operating deficits.

The Managing General Partner believes that the investment income earned on the Reserves, along with cash distributions received from Local Limited Partnerships, to the extent available, will be sufficient to fund the Fund's ongoing operations. Reserves may be used to fund operating deficits, if the Managing General Partner deems funding appropriate. To date, the Fund has used approximately $1,~~866~~560,000 of Reserves to fund operations. If Reserves are not adequate to cover the Fund’s operations, the Fund will seek other financing sources including, but not limited to, the deferral of Asset Management Fees paid to an affiliate of the Managing General Partner or working with Local Limited Partnerships to increase cash distributions.

Since the Fund invests as a limited partner, the Fund has no contractual duty to provide additional funds to the Local Limited Partnerships beyond its specified investment. Thus, as of March 31, ~~2010~~2011, the Fund had no contractual or other obligation to ~~any~~the Local Limited ~~Partnership~~Partnerships ~~which~~that had not been paid or provided for ~~except as disclosed above~~.

Cash Distributions

No cash distributions were made during the year ended March 31, 2011. Cash distributions of $1,004,196 were made during the year ended March 31, 2010. The Fund is currently working on disposing of its interest in certain Local Limited Partnerships during the next ~~twelve~~nine months. These dispositions may result in cash available for distribution, but due to the uncertainty of the sales, no guarantees can be made as to the extent of their outcome on distributions. Based on the results of ~~2009~~2010 Property operations, the Local Limited Partnerships are not expected to distribute significant amounts of cash to the Fund because such amounts will be needed to fund Property operating costs. In addition, some of the Properties benefit from some type of federal or state subsidy and, as a consequence, are subject to restrictions on cash distributions.

Results of Operations

The Fund’s results of operations for the year ended March 31, ~~2010~~2011 resulted in a net ~~income~~loss of $1469,~~294,814~~872 as compared to a net income of $~~357~~1,~~813~~294,814 for the same period in ~~2009~~2010. The ~~increase~~decrease in net income is primarily attributable to ana ~~increase~~decrease in gain on ~~sale~~disposition of investments in Local Limited Partnerships, ana ~~increase~~decrease in cash distribution income, aand ~~decrease~~an inincrease ~~equity~~ in ~~losses,~~impairment aon ~~decrease~~investments in ~~the~~Local ~~provision~~Limited ~~for~~Partnerships, ~~valuation~~partially ofoffset ~~advances~~by toa ~~Local~~decrease ~~Limited~~in ~~Partnerships~~equity in losses, and a decrease in ~~impairment~~general onand ~~investments~~administrative ~~in Local Limited Partnerships~~expenses. The ~~increase~~decrease in gain on ~~sale~~disposition of investments in Local Limited Partnerships is due to the sale of ~~five~~only two Local Limited Partnerships ~~made~~during in the current year, with disposition proceeds received for only one property. The ~~increase~~decrease in cash distribution income is due to ana ~~increase~~decrease in distributions from Local Limited Partnerships with carrying values of zero. The ~~decrease~~increase in impairment on investments in Local Limited Partnerships is ~~the~~due ~~result~~to of the Fund recording ~~fewer~~an ~~valuation~~impairment ~~allowances~~allowance offor its investments in certain Local Limited Partnerships ~~in the current year~~. ~~The~~ ~~decrease~~Equity in ~~provision~~losses ~~allowance~~of ~~on advances to~~ Local Limited Partnerships isdecreased due to the ~~result~~sale of ~~advances~~five ~~made to one~~ Local Limited ~~Partnership~~Partnerships in the prior year. ~~Equity~~ inGeneral ~~losses~~and ~~decreased~~administrative ~~primarily~~expenses decreased due to ana ~~increase~~decrease in ~~unrecognized~~charges ~~losses~~due ~~and~~to ~~distributions~~an byaffiliate of the ~~Fund~~Managing ofGeneral ~~Local~~Partner ~~Limited~~for ~~Partnerships~~operations ~~with~~and ~~carrying~~administrative ~~value~~expenses necessary for the operation of ~~zero~~the Fund.

Low-Income Housing Tax Credits

The Tax Credits per Limited Partner stabilized in 1996. The credits have ended as all properties have reached the end of the ten year credit period.

Property Discussions

~~Half~~Three of the Properties in which the Fund has an interest have stabilized operations and operate above breakeven atas of December 31, ~~2009~~2010. Some Properties ~~generate~~generated cash flow deficits that the Local General Partners of those Properties fund through project expense loans, subordinated loans or operating escrows. However, some Properties have had persistent operating difficulties that could either: (i) have an adverse impact on the Fund’s liquidity; or (ii) result in their foreclosure~~; or (iii) result in the Managing General Partner deeming it appropriate for the Fund to dispose of its interest in the Local Limited Partnership prior to the expiration of the Compliance Period~~. Also, the Managing General Partner, in the normal course of the Fund’s business, ~~may~~is ~~arrange~~arranging for the future disposition of its interest in ~~certain~~all of its Local Limited Partnerships. The following Property discussions focus ~~only~~ on all such Properties.

As previously reported, ~~although~~the ~~operations~~Managing atGeneral ~~Palo~~Partner ~~Verde~~entered ~~II,~~into ~~located~~an inagreement ~~Henderson,~~that ~~Nevada,~~would ~~remained~~require ~~strong,~~ the ~~former~~ Local General Partner ~~filed for bankruptcy protection and refused~~ to ~~remit~~either topurchase the Fund’s ~~its~~interest ~~priority~~in ~~cash~~Sunrise ~~distributions~~Terrace, ~~representing~~located ain ~~default~~Madera, ~~under~~California, after the ~~terms~~end of the ~~Local~~compliance ~~Limited~~period ~~Partnership~~on ~~Agreement. An~~December ~~affiliate~~31, 2008, based on the appraised value of the ~~Managing~~Property, ~~General~~or ~~Partner~~to ~~assumed~~market the Property for sale. The Local General Partner ~~interest~~opted into ~~September~~market ~~2001. Since~~ the ~~statute~~Property offor ~~limitations~~sale onand ~~potential~~a ~~litigation~~Purchase ~~involving~~and ~~one~~Sales ofAgreement ~~the~~was ~~former~~signed ~~Local~~on ~~General~~June ~~Partners~~9, ~~expired~~2009 inand ~~2005~~amended on June 23, 2009. The sale of the ~~Managing~~Property ~~General~~occurred ~~Partner~~August ~~expected~~18, a2009 ~~mid-2008~~and ~~disposal~~net ofproceeds to the Fund’s ~~interest~~totaled $557,042, ~~upon~~or $10.94 per Unit. All profit and loss benefits stopped flowing to the ~~sale~~Fund as of ~~the~~August ~~underlying~~18, ~~Property~~2009; however, the investment in ~~this~~the Local Limited Partnership~~. On~~ ~~May~~was ~~29,~~written ~~2008,~~off the Fund’s ~~interest~~books ~~was~~at ~~transferred,~~the ~~resulting~~end inof ~~net~~90 ~~sales~~days ~~proceeds~~as tothere ~~the~~were ~~Partnership~~outstanding ofworking ~~$1,630,776,~~capital oritems ~~$32.02~~at ~~per~~the ~~Unit. The~~Local ~~Managing~~Limited ~~General~~Partnership ~~Partner,~~level inyet ~~accordance~~to ~~with~~be ~~and~~resolved. The astransaction ~~permitted~~resulted byin ~~the~~a ~~Partnership~~2009 ~~Agreement,~~tax ~~retained~~loss ~~the entire amount~~ of ~~sales~~$151,668, ~~proceeds~~or in$2.98 ~~Reserves~~per Unit. ~~The~~However, ~~sale~~in ~~resulted~~2010, inthe ~~2008~~Fund incurred taxable ~~income~~gain of $115,~~030~~283,~~956,~~ or $200.~~24,~~30 per Unit, as a result of outstanding working capital items. The Fund no longer has an interest in this Local Limited Partnership.

As previously reported, Los Claveles II, located in Trujillio Alto, Puerto Rico, operated below breakeven through the twelve-month period ending December 31, 2008 due to a reduction in rental revenues associated with low occupancy levels and an increase in utility expenses. A site visit conducted by a representative of the Managing General Partner in November 2007 indicated the Property was in acceptable physical shape. The Managing General Partner signed an agreement in December 2002 with the Local General Partner whereby the Fund would pay its remaining capital commitment of $350,000 and release Fund Reserves of approximately $50,000 in exchange for an exit option that would allow the Fund to put its interest to the Local General Partner at any time for $10,000. Further, the Local General Partner had the right, subsequent to the expiration of the Compliance Period on December 31, 2008, to call the Fund’s interest for a price of $10,000. As part of the agreement, the Local General Partner provided an operating guarantee in the form of a Local General Partner indemnification of any loss or any recapture of Tax Credits through the end of the Compliance Period. The Compliance Period ended December 31, 2008. The Transfer Agreement stated above was amended on December 31, 2008 to allow for a 100% put of the Fund’s interest on January 1, 2009 for $0. The put was exercised for $0 on January 28, 2009, to be effective January 1, 2009. The transaction resulted in 2009 taxable income of $4,313,997, or about $84.70, per Unit. The Fund no longer has an interest in this Local Limited Partnership.

As previously reported, occupancy rose from 75% at December 31, 2007 to 97% at September 30, 2008 for Des Moines Street Village, located in Des Moines, Iowa. Property operations improved significantly during the twelve month period ending December 31, 2008. Due to increased occupancy, the Property operated above breakeven. In June 2008, the Fund advanced $48,404 to the Property in order to pay real estate taxes originally due in September 2007. These past due real estate taxes resulted in the Local General Partner defaulting on the Partnership agreement, as well as the mortgage loan. The Managing General Partner was actively pursuing a replacement of the Local General Partner. While the Local General Partner had previously funded deficits and the Property remained current on its debt obligations, the Managing General Partner approved the Local General Partner request to a reduced rate refinancing of the Property’s first mortgage in April 2004. As part of this transaction, the Managing General Partner, and the Local General Partner, entered into a put agreement whereby the Fund could transfer its interest in the Local Limited Partnership for a nominal amount, any time after the expiration of the Compliance Period on December 31, 2009. On January 29, 2009, the Managing General Partner removed the Local General Partner and as a result, the previous put agreement was no longer valid. The Managing General Partner, concurrently with the removal of the Local General Partner, entered into a new put agreement with the Local General Partner successor and sold its interest for $1, to be effective January 30, 2009. The transaction resulted in a 2009 tax loss of $35,354, or about $0.69, per Unit. The Fund no longer has an interest in this Local Limited Partnership.

As previously reported, the Managing General Partner entered into an agreement that would require the Local General Partner to either purchase the Fund’s interest in Sunrise Terrace, located in Madera, California, after the end of the compliance period on December 31, 2008, based on the appraised value of the Property, or to market the Property for sale. The Local General Partner opted to market the Property for sale and a Purchase and Sales Agreement was signed on June 9, 2009 and amended on June 23, 2009. The sale of the Property occurred August 18, 2009 and net proceeds to the Fund totaled $557,041, or $10.94 per Unit. All profit and loss benefits stopped flowing to the Fund as of August 18, 2009; however, the investment in the Local Limited Partnership was written off the Fund’s books at the end of 90 days as there were outstanding working capital items at the Local Limited Partnership level yet to be resolved. The 2009 tax loss is $151,668, or $2.98 per Unit. The Fund no longer has an interest in this Local Limited Partnership.

As previously reported, the Managing General Partner entered into an agreement to sell the Fund’s interest in Woods Lane, L.P., located in Rogers, Arkansas, to the Local General Partner. This transaction occurred on September 30, 2009, which resulted in net sales proceeds to the Fund of $124,691, or $2.45 per Unit. The Managing General Partner, in accordance with and as permitted by the Partnership Agreement, retained the entire amount of sales proceeds in Reserves. The transaction resulted in 2009 taxable income of $606,686, or about $11.91, per Unit. The Fund no longer has an interest in this Local Limited Partnership.

As previously reported, the Managing General Partner entered into an agreement to sell the Fund’s interest in Fountain Lakes, L.P., located in Benton, Arkansas, to the Local General Partner. This transaction occurred on September 30, 2009, which resulted in net sales proceeds to the Fund of $1,504,949, or $29.55 per Unit. The Managing General Partner, in accordance with and as permitted by the Partnership Agreement, retained the entire amount of sales proceeds in Reserves. It was previously reported that this transaction would result in 2009 estimated tax loss of $1,080,000, or $21.21 per Unit; however, this estimate did not include the sales proceeds noted above. The transaction resulted in 2009 taxable income of $383,899, or about $7.54, per Unit. The Fund no longer has an interest in this Local Limited Partnership.

As previously reported, the Managing General Partner anticipated transferring the Fund’s interest in the Local Limited Partnership that owns Crafton Place Apartments, located in Fayetteville, Arkansas, in the third quarter fiscal year 2010. This transaction occurred on September 30, 2009, which resulted in net sales proceeds to the Fund of $300,220, or $5.89 per Unit. The Managing General Partner, in accordance with and as permitted by the Partnership Agreement, retained the entire amount of sales proceeds in Reserves. It was previously reported that this transaction would result in 2009 estimated tax loss of $210,000, or $4.12 per Unit; however, this estimate did not include the sales proceeds noted above. The transaction resulted in 2009 taxable income of $62,634, or about $1.23, per Unit. The Fund no longer has an interest in this Local Limited Partnership.

As previously reported, with respect to the Fund, a Settlement Agreement providing an option, subject to various conditions, to purchase the Fund’s interests in Affordable/Citrus Glen, Ltd., located in Orlando, FL, was not exercised. The Managing General Partner explored alternative exit strategies for this Local Limited Partnership interest. The Fund’s interest in the Local Limited Partnership terminated January 4, 2010. Based on an early 2009 valuation, the Managing General Partner expected a sale to result in approximately $1,500,000, or $29.45 per Unit, in sales proceeds. However, due to market conditions, net sales proceeds to the Fund were $200,000, or $3.93 per Unit. ~~The~~This ~~Managing General Partner estimates that this~~ transaction ~~will~~resulted ~~result~~ in 2010 taxable gain projected toof ~~be approximately~~ $~~314~~334,~~000~~892, or about $6.1758 per Unit. The Fund no longer has an interest in the Local Limited Partnership.

As previously reported, Guardian Place, located in Richmond, Virginia, refinanced its existing debt, on July 29, 2005. In addition to an annual debt service reduction of approximately $49,000, additional loan proceeds were utilized to retire a second mortgage and provide for a distribution of refinancing proceeds of $212,461 to the Fund on August 1, 2005. The Managing General Partner, in accordance with and as permitted by the Partnership Agreement, retained the entire amount of refinancing proceeds in Reserves. As part of this transaction, the Managing General Partner and the Local General Partner entered into an agreement that would allow for a sale at the end of the Compliance Period on December 31, 2009. ~~The~~As ~~Managing~~previously ~~General~~anticipated, ~~Partner~~an isAugust ~~anticipating~~30, ~~a May~~ 2010 sale of the Fund’s interest in the Local Limited Partnership occurred. The ~~Managing General Partner expects a~~ sale toresulted ~~result~~ in ~~approximately~~ $~~140~~472,~~000~~876, or $29.7528 per Unit, in sales proceeds. ~~The~~This ~~Managing General Partner estimates that this~~ transaction ~~will~~resulted ~~result~~ in 2010 taxable gain ~~projected~~of ~~to be approximately~~ $1,~~010~~391,~~000~~909, or about $1927.8333 per Unit. The Fund no longer has an interest in this Local Limited Partnership.

As previously reported, occupancy at Grand Boulevard Renaissance, located in Chicago, Illinois ~~averaged~~continued ~~96%~~to ~~for~~be in the ~~nine~~mid-90 ~~months~~percentile ~~ending~~throughout ~~December 31, 2009~~2010. ~~Debt~~However, debt service coverage iswas not at an acceptable level and the Property iswas operating ~~above~~below breakeven. ~~However,~~The ~~working~~operating ~~capital~~deficit ~~still~~for ~~remains~~the ~~below~~first ~~acceptable~~nine ~~levels~~months of 2010 was approximately $11,000. A representative of the Managing General Partner conducted a physical inspection as part of a June 2009 site visit. Despite improvements since an October 2008 visit, the Property was still assigned an unfavorable rating due to significant deferred maintenance and unaddressed issues. The Managing General Partner’s representative also ~~considers~~considered property management to be weak and limited in capacity to address the physical needs of the Property. Advances from the Local General Partner and working capital ~~have~~ enabled the Property to remain current on its loan obligations. In response to prior deficits, during 2001 the Local General Partner negotiated with the first mortgage lender to reduce the interest rate on the current first mortgage. In addition, in an effort to further reduce the Property’s debt service burden, in July 2003 the Local Limited Partnership and the Illinois Housing Development Authority closed on a mortgage restructuring of the second mortgage that reduced monthly debt service payments until June 1, 2005. As part of the transaction, the management agent agreed to subordinate a percentage of its management fee to payment of the second mortgage debt service. The tax credit compliance period expired December 31, 2009. The ~~Managing~~Fund’s ~~General~~interest ~~Partner~~in isthe ~~currently~~Property ~~working~~was transferred on aDecember ~~strategy~~31, to2010 ~~dispose~~for of$47,548, ~~the~~which ~~Fund’s~~was ~~interest~~due into the ~~property~~Fund for aoutstanding ~~nominal~~cumulative ~~sum~~priority distributions. This transaction resulted in ~~late-~~2010 taxable gain of $3,404, or about $0.07 per Unit. The Fund no longer has an interest in this Local Limited Partnership.

As previously reported, in an effort to reduce the Fund’s risk to chronic operating difficulties at Wynmor, also known as Eden Park, located in Brooklyn Park, Minnesota, the Managing General Partner and Local General Partner, on October 1, 2003, entered into an agreement to transfer a portion of the Fund’s interest in the Property’s future Tax Credits (approximately $11 per Unit) and tax losses to the Local General Partner. In return, the Local General Partner agreed to deposit $500,000 into an escrow to be used to fund current and future operating deficits and to fund as much as an additional $500,000 to cover future operating deficits. The Managing General Partner and Local General Partner also have an agreement that allows for the Managing General Partner to put the Fund’s interest to the Local General Partner for $1100 any time after October 1, 2003 and that the Local General Partner could call the Fund’s interest for fair market value any time after January 2, 2009. The Managing General Partner ~~expects~~previously expected the put to be exercised in ~~July~~December 2010; however, it is now projected for September 2011 as the property is being reevaluated. The Managing General Partner estimates that this transaction will result in 2011 taxable loss projected to be approximately $580,000, or about $11.39per Unit. Occupancy averaged 9493% for the ~~nine~~year ~~months~~ ending December 31, ~~2009;~~2010. The ~~however, the~~ Property operated ~~slightly~~above ~~below~~ breakeven for the same time period. The Compliance Period for the Property expired on December 31, 2008.

As previously reported, the Local General Partner of Twin Oaks Meadows, located in Lansing, Michigan, with the Fund’s consent, obtained soft loan financing in May 2004 to undertake much needed security improvements to the Property, reduce payables and fund operating deficits. In return for its consent, the Fund received a ~~put~~Put option that allows the Fund to transfer its interest in the Local Limited Partnership for a nominal price to the Local General Partner at any time subsequent to the end of the Property’s Compliance Period on December 31, 2009. Occupancy rose from 70% for the three months ending June 30, 2008 to 98% for the year ending March 31, 2010. Occupancy averaged 95% for the nine months ending December 31, ~~2009~~2010. Crime in the immediate area has subsided as result of a neighborhood watch program that was implemented. A new management company was brought in July 2008, which the Managing General Partner believes has helped occupancy at the Property. The Tax Credit Compliance Period expired December 31, 2009. The Managing General Partner is currently working on a strategy to dispose of the Fund’s interest in the ~~property~~Property for a nominal sum in late-~~2010~~2011. The Managing General Partner estimates that this transaction will result in 2011 taxable gain projected to be approximately $570,000, or about $11.19 per Unit.

As previously reported, the Managing General Partner negotiated an exit strategy with the Local General Partner of ~~Fairhaven~~Andrew’s ~~Manor~~Pointe, located in ~~Burlington~~Burnsville, ~~Washington,~~Minnesota. The ~~was~~compliance ~~working~~period onexpired aDecember ~~permanent~~31, ~~loan extension~~2008. The ~~loan~~Local ~~matured~~General onPartner ~~June~~and 1,Managing ~~2009,~~General atPartner ~~which~~agreed ~~time~~on a ~~balloon~~price ~~payment~~for ~~was due; however,~~ the ~~note~~Local ~~was~~General ~~extended~~Partner ~~for~~to 60purchase ~~months~~the (5Fund’s ~~years). The~~interest ~~Compliance~~in ~~Period~~the ~~ended December 31~~Property, ~~2008;~~which ~~therefore,~~occurred ~~there~~on isJune no7, ~~recapture risk at the Property~~2011. The ~~Managing~~transaction ~~General~~resulted ~~Partner~~in isnet ~~currently~~sales ~~negotiating~~proceeds anof ~~exit~~$925,000, ~~strategy~~or ~~with the Local General Partner~~$18. ~~The~~16 ~~likely~~per ~~end~~Unit ~~result~~and ~~is that~~ the ~~Local General Partner and~~ Managing General Partner ~~will~~estimates ~~agree~~2011 ontaxable aincome ~~price~~of ~~for~~$1,230,000, ~~the~~or ~~Local~~$24.15 ~~General~~per ~~Partner~~Unit. The toFund ~~purchase~~no ~~the~~longer ~~Fund’s~~has an interest in the ~~property,~~Local ~~which~~Limited ~~is currently estimated for January 2011~~Partnership.

As previously reported, the ~~Managing~~Local General Partner isof ~~currently~~Fairhaven ~~negotiating~~Manor, anlocated ~~exit~~in ~~strategy~~Burlington, ~~with~~Washington, ~~the~~was ~~Local~~working ~~General~~on ~~Partner~~a ofpermanent ~~Andrew’s~~loan ~~Pointe~~extension. The loan matured on June 1, ~~located~~2009, inat ~~Burnsville~~which time a balloon payment was due; however, ~~Minnesota~~the note was extended for 60 months (5 years). The ~~compliance~~Compliance ~~period~~Period ~~expired~~ended December 31, 2008; therefore, there is no recapture risk at the Property. The Managing General Partner is currently negotiating an exit strategy with the Local General Partner. The likely end result is that the Local General Partner and Managing General Partner will agree on a price for the Local General Partner to purchase the Fund’s interest in the ~~property~~Property, which is currently estimated for ~~September~~late-2011. ~~2010~~Estimated net sales proceeds, if any, as well as taxable income or loss, is unknown at ~~the~~this ~~earliest~~time.

As previously reported, the Managing General Partner anticipated the Fund’s interest in the Local Limited Partnership that owns SpringWood Apartments, located in Tallahassee, Florida, would be terminated upon the sale of the Property in the third quarter of 2008, a transaction that could have resulted in net sales proceeds to the Fund of approximately $200,000, or $3.93 per Unit. In July 2008, the potential buyer withdrew their interest to purchase this Property. ~~The~~ Subsequently, the Managing General Partner isexplored ~~currently~~an ~~exploring~~ alternative exit ~~strategies~~strategy for this Local Limited Partnership interest. The Managing General Partner ~~anticipates~~previously anticipated the Fund’s interest in the Local Limited Partnership ~~will~~would generally terminate no earlier than 90 days upon the sale of the Property in ~~July~~June 2011 for a nominal sum. ~~Net~~ However, ~~sales~~the ~~proceeds~~transfer toof the Fund’s ~~are~~interest ~~not~~in ~~known~~the atLocal Limited Partnership occurred on June 1, 2011 for no consideration. The Managing General Partner estimates that this ~~time~~transaction will result in 2011 taxable income of $50,000, or $0.98 per Unit. As previously reported, the debt matured on March 1, 2011; however, it was extended for three years. The Tax Credit compliance period ended on December 31, 2009. The Fund no longer has interest in this Local Limited Partnership.

As previously reported, the Managing General Partner is currently negotiating an exit strategy with the Local General Partner of Harford Commons, located in Baltimore, Maryland. The Local General Partner and Managing General Partner agreed upon on a nominal price for the Local General Partner to purchase the Fund’s interest in the Property, which is currently estimated for mid-2011. The Managing General Partner estimates that this transaction will result in 2011 taxable income estimated to be $920,000, or $18.06 per Unit. The compliance period expired December 31, 2010.

Inflation and Other Economic Factors

Inflation had no material impact on the operations or financial condition of the Fund for the years ended March 31, ~~2010~~2011 and ~~2009~~2010.

Since some Properties benefit from some form of government assistance, the Fund is subject to the risks inherent in that area including decreased subsidies, difficulties in finding suitable tenants and obtaining permission for rent increases. In addition, the Tax Credits allocated to investors with respect to a Property are subject to recapture to the extent that a Property or any portion thereof ceases to qualify for Tax Credits.

Certain Properties in which the Fund has invested are located in areas suffering from poor economic conditions. Such conditions could have an adverse effect on the rent or occupancy levels at such Properties. Nevertheless, the Managing General Partner believes that the generally high demand for below market rate housing will tend to negate such factors. However, no assurance can be given in this regard.

Item 8. Financial Statements and Supplementary Data

Information required under this Item is submitted as a separate section of this Report. See Index on page F-1 hereof.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

~~The~~We ~~Fund~~conducted ~~maintains~~an ~~disclosure~~evaluation ~~controls~~of ~~and~~the ~~procedures~~effectiveness ~~designed~~of tothe ~~ensure~~design ~~that~~and ~~information~~operation ~~required~~of toour bedisclosure ~~disclosed~~controls and procedures, as defined in ~~reports~~Rules ~~filed~~13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, ~~(“Exchange~~as ~~Act”)~~amended, isor ~~recorded,~~the ~~processed~~Exchange Act, ~~summarized~~to ~~and~~ensure ~~reported~~that ~~within~~information ~~the~~required ~~specified~~to ~~time~~be ~~periods. The~~disclosed ~~Fund’s~~by ~~Chief~~us ~~Executive~~in ~~Officer~~the ~~and~~reports ~~its~~filed ~~Chief~~or ~~Financial~~submitted ~~Officer~~by ~~(collectively,~~us under the ~~“Certifying~~Exchange ~~Officers”)~~Act ~~are~~is ~~responsible~~recorded, ~~for~~processed, ~~maintaining~~summarized ~~disclosure~~and ~~controls~~reported, ~~for~~within the ~~Fund. The~~time ~~controls~~periods ~~and~~specified ~~procedures~~in ~~established~~the bySecurities ~~the~~and ~~Fund~~Exchange ~~are~~Commission's ~~designed~~rules toand ~~provide~~forms, ~~reasonable~~including ~~assurance~~to ensure that information required to be disclosed by ~~the~~us ~~issuer~~ in the reports ~~that~~filed itor ~~files~~submitted orby ~~submits~~us under the Exchange Act is ~~recorded,~~accumulated ~~processed~~and communicated to management to allow timely decisions regarding required disclosure. Based on that evaluation, ~~summarized~~management ~~and~~has ~~reported~~concluded ~~within~~that ~~the~~as ~~time~~of ~~periods~~March ~~specified~~31, in2011, ~~the~~our ~~Commission’s~~disclosure ~~rules~~controls and ~~forms~~procedures were effective.

~~As of the end of the period covered by this report, the Certifying Officers evaluated the effectiveness of the Fund~~Management’s ~~disclosure~~Report ~~controls and procedures. Based~~ on ~~the~~Internal ~~evaluation,~~Control ~~the~~over ~~Certifying~~Financial Officers concluded that as of March 31, 2010, the Fund’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including the Certifying Officers, as appropriate to allow timely decisions regarding required disclosure.Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our management conducted an assessment of the effectiveness of our internal control over financial reporting. This assessment was based upon the criteria for effective internal control over financial reporting established in Internal Control ~~over~~— ~~Financial~~Integrated ~~Reporting~~Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission.

The ~~Certifying~~Fund’s ~~Officers~~internal ~~have~~control ~~also~~over ~~concluded~~financial ~~that~~reporting ~~there~~involves ~~was~~a noprocess ~~change~~designed into ~~the~~provide ~~Fund’s~~reasonable ~~internal~~assurance ~~controls~~regarding ~~over~~the reliability of financial reporting ~~identified~~and the preparation of financial statements for external purposes in ~~connection~~accordance with ~~the~~generally ~~evaluation~~accepted ~~that~~accounting ~~occurred~~principles. ~~during~~Internal control over financial reporting includes the ~~Fund’s~~controls ~~third~~themselves, ~~fiscal~~as ~~quarter~~well ~~that~~as ~~has~~monitoring ~~materially~~of ~~affected,~~the orcontrols isand ~~reasonably~~internal ~~likely~~auditing practices and actions to ~~materially~~correct ~~affect,~~deficiencies ~~the~~identified. ~~Fund’s~~Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Management assessed the effectiveness of the Fund’s internal control over financial reporting as of March 31, 2011. Based on this assessment, management concluded that, as of March 31, 2011, the Fund’s internal control over financial reporting was effective.

Changes in Internal Control over Financial Reporting

There have not been any changes in our internal control over financial reporting during the fourth quarter of our fiscal year ended March 31, 2011, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors and Executive Officers of the Registrant

The Managing General Partner ~~of the Fund is Arch Street VIII, Inc., a Massachusetts corporation (the “Managing General Partner”), an affiliate of Boston Financial. The Managing General Partner~~ was incorporated in September 1992. The Investment Committee of the Managing General Partner approved all investments. The names and positions of the principal officers and the directors of the Managing General Partner are set forth below.

Name Position ~~Kenneth J. Cutillo Chief Executive Officer~~

~~The~~Kenneth ~~other General Partner of the Fund is Arch Street VII Limited Partnership, a Massachusetts limited partnership ("Arch Street VII L~~J.~~P.")~~ ~~that~~Cutillo Chief ~~was~~Executive ~~organized in September 1992. The managing general partner of Arch Street VII L.P. is Arch Street VII, Inc.~~Officer

~~The~~Arch ~~Managing~~Street ~~General~~VII ~~Partner~~L.P., ~~provides~~a ~~day-to-day~~Massachusetts ~~management~~limited ofpartnership ~~the~~was ~~Fund. Compensation~~organized ~~is discussed~~ in ~~Item~~September 101992. The ofmanaging ~~this~~general ~~report. Such~~partner ~~day-to-day~~of ~~management~~Arch ~~does~~Street ~~not~~VII ~~include~~L.P. ~~the~~is ~~management~~Arch ofStreet ~~the~~VII, ~~Properties~~Inc.

The ~~business~~Managing ~~experience~~General ofPartner ~~each~~provides day-to-day management of the ~~persons~~Fund. Compensation ~~listed~~is ~~above~~discussed isin ~~described~~Item ~~below~~11 of this report. ~~There~~Such isday-to-day nomanagement ~~family~~does ~~relationship~~not ~~between~~include ~~any~~the management of the ~~persons listed in this section~~Properties.

~~Mr.~~The ~~Cutillo~~business ~~is the Chief Executive Officer of Boston Financial. He has 15 years of~~ experience in the low-income housing tax credit industry as a senior executive and tax attorney. Prior to joining Boston Financial, Mr. Cutillo was a Senior Vice President at Alliant Asset Management Company, LLC. From 2001 to 2008, Mr. Cutillo was responsible for supervising that firm's acquisition department. From 1998 to 2001, Mr. Cutillo was a Tax Partner at McGuireWoods, LLP and Chairman of ~~its Affordable Housing Group. His practice at McGuireWoods, LLP focused exclusively on~~ the ~~representation~~person oflisted ~~institutional~~above ~~investors,~~is ~~syndication~~described ~~firms and developers working in the affordable housing industry~~below. Mr. Cutillo began his career in affordable housing in 1994 as tax counsel at Ungaretti & Harris, where he represented large financial institutions in their investment in various tax advantaged products. Mr. Cutillo received his B.A. from The University of the South in Political Science and History, a Juris Doctor cum laude from the University of Georgia School of Law, and a Master of Laws in Taxation from the University of Florida's Graduate Tax Program.

Mr. Cutillo is the Chief Executive Officer of Boston Financial. He has 16 years of experience in the low-income housing tax credit industry as a senior executive and tax attorney. Prior to joining Boston Financial, Mr. Cutillo was a Senior Vice President at Alliant Asset Management Company, LLC. From 2001 to 2008, Mr. Cutillo was responsible for supervising that firm's acquisition department. From 1998 to 2001, Mr. Cutillo was a Tax Partner at McGuireWoods, LLP and Chairman of its Affordable Housing Group. His practice at McGuireWoods, LLP focused exclusively on the representation of institutional investors, syndication firms and developers working in the affordable housing industry. Mr. Cutillo began his career in affordable housing in 1994 as tax counsel at Ungaretti & Harris, where he represented large financial institutions in their investment in various tax advantaged products. Mr. Cutillo received his B.A. from The University of the South in Political Science and History, a Juris Doctor cum laude from the University of Georgia School of Law, and a Master of Laws in Taxation from the University of Florida's Graduate Tax Program.

The Fund is organized as a limited partnership solely for the purpose of real estate investment and does not have any employees. Therefore the Fund has not adopted a Code of Ethics.

The Fund is structured as a limited partnership that was formed principally for real estate investment and is not “listed” issuer as defined by Rule 10A-3 of the Securities Exchange Act of 1934. Accordingly, neither an audit committee nor a financial expert to serve on such a committee has been established by the Fund.

Item 11. Management Remuneration

Neither the directors nor officers of ~~Arch~~the ~~Street~~Managing ~~VIII,~~General ~~Inc.~~Partner, ~~nor~~ the partners of Arch Street VII L.P., nor any other individual with significant involvement in the business of the Fund receives any current or proposed remuneration from the Fund.

Item 12. Security Ownership of Certain Beneficial Owners and Management

As of March 31, ~~2010~~2011, the following is the only entity known to the Fund to be the beneficial owner of more than 5% of the Units outstanding:

Title of	Name and Address of	Beneficially	Amount
Class	Beneficial Owner	Owned	Percent of Class

Limited	Oldham Institutional Tax Credits LLC	5,349 units	10.5%
Partner	101 Arch Street
	Boston, MA

Oldham Institutional Tax Credits LLC, is an affiliate of Arch Street VIII, Inc., the Managing General Partner.

The equity securities ~~registered~~of by the Fund are registered under Section 12(g) of the Exchange Act. ~~of 1934 consist of~~ 100,000 Units were registered, 50,930 of which were sold to the public. ~~The~~ ~~remaining Units were deregistered in Post-Effective Amendment No. 4 dated January 20, 1995, which is herein incorporated by reference.~~ Holders of Units are permitted to vote on matters affecting the Fund only in certain unusual circumstances and do not generally have the right to vote on the operation or management of the Fund.

Arch Street VII L.P. owns five ~~(unregistered)~~ Units not included in the Units sold to the public.

Except as described in the preceding paragraphs, neither ~~Arch~~the ~~Street~~Managing ~~VIII,~~General ~~Inc.~~Partner, Arch Street VII L.P., Boston Financial nor any of their executive officers, directors, partners or affiliates is the beneficial owner of any Units. None of the foregoing persons possesses a right to acquire beneficial ownership of Units.

The Fund does not know of any existing arrangement that might at a later date result in a change in control of the Fund.

Item 13. Certain Relationships and Related Transactions and Director Independence

The Fund ~~was~~paid ~~required to pay~~ certain fees to and ~~reimburse~~reimbursed certain expenses of the Managing General Partner or its affiliates in connection with the organization of the Fund and the offering of Units. The Fund was also required to pay certain fees to and reimburse certain expenses of the Managing General Partner or its affiliates in connection with the administration of the Fund and its acquisition and disposition of investments in Local Limited Partnerships. In addition, the General Partners are entitled to certain Fund distributions under the terms of the Partnership Agreement. Also, an affiliate of the General Partners will receive up to $10,000 from the sale or refinancing proceeds of each Local Limited Partnership, if it is still a limited partner at the time of such transaction. All such fees, expenses and distributions paid during the years ended March 31, 2010 and 2009 are described below and in the sections of the Prospectus entitled "Estimated Use of Proceeds", "Management Compensation and Fees" and "Profits and Losses for Tax Purposes, Tax Credits and Cash Distributions." Such sections are incorporated herein by reference.

The Fund is permitted to enter into transactions involving affiliates of the Managing General Partner, subject to certain limitations established in the Partnership Agreement.

Information regarding the ~~Fees~~fees paid and ~~expense~~expenses ~~reimbursements~~reimbursed ~~made in the two years ended March 31, 2010~~ is ~~presented~~ as follows:

Organizational Fees and Expenses and Selling Expenses

In accordance with the Partnership Agreement, the Fund is required to pay certain fees to and reimburse expenses of the Managing General Partner and others in connection with the organization of the Fund and the offering of its Limited Partnership Units. Commissions, fees and accountable expenses related to the sale of the Units totaling $6,304,898 were charged directly to Limited Partners' equity. In connection therewith, $4,329,050 of selling expenses and $1,975,848 of offering expenses incurred on behalf of the Fund have been paid to an affiliate of the Managing General Partner. In addition, the Fund has paid $50,000 in organization costs to an affiliate of the Managing General Partner. This cost has been included in the balance sheet. Total organization and offering expenses, exclusive of selling commissions and underwriting advisory fees, did not exceed 5.5% of the Gross Proceeds, and organizational and offering expenses, inclusive of selling commissions and underwriting advisory fees, did not exceed 15.0% of the Gross Proceeds. No organizational fees and expenses were paid during the two years ended March 31, 2010.

Acquisition Fees and Expenses

In accordance with the Partnership Agreement, the Fund was required to pay acquisition fees to and reimburse acquisition expenses of the Managing General Partner or its affiliates for selecting, evaluating, structuring, negotiating and closing the Fund's investments in Local Limited Partnerships. Acquisition fees totaled 6% of the Gross Proceeds. Acquisition expenses, which include legal fees and expenses, travel and communications expenses, costs of appraisals and accounting fees and expenses, totaled 1.5% of the Gross Proceeds. Acquisition fees totaling $3,055,800 for the closing of the Fund's Local Limited Partnership investments were paid to an affiliate of the Managing General Partner. Of this amount, approximately $2,567,000 is included as capital contributions to Local Limited Partnerships. Acquisition expenses totaling $763,950 were incurred and have been reimbursed to an affiliate of the Managing General Partner. No acquisition fees or expenses were paid during the two years ended March 31, 2010.

Asset Management Fees

In accordance with the Partnership Agreement, an affiliate of the ~~Managing~~ General ~~Partner~~Partners is paid an annual fee for services in connection with the administration of the affairs of the Fund. The affiliate currently receives 0.5% (annually adjusted by the CPI factor) of Gross Proceeds as the annual ~~Asset~~asset ~~Management~~management ~~Fee~~fee. Fees earned in each of the two years ended March 31, ~~2010~~2011 and ~~2009~~2010 are as follows:

	2010		2009
	2011		2010
Asset management fees	$	~~380~~389,~~060~~159	$	~~377~~380,~~230~~060

Salaries and Benefits Expense Reimbursements

An affiliate of the ~~Managing~~ General ~~Partner~~Partners is reimbursed for the cost of the Fund's salaries and benefits expenses. The reimbursements are based upon the size and complexity of the Fund's operations. Reimbursements paid or payable in each of the two years ended March 31, ~~2010~~2011 and ~~2009~~2010 are as follows:

	2010		2009
	2011		2010
Salaries and benefits expense reimbursements	$	~~168~~154,~~544~~396	$	~~149~~168,~~089~~544

Cash Distributions Paid to the General Partners

In accordance with the Partnership Agreement, the General Partners ~~of the Fund, Arch Street VIII, Inc. and Arch Street VII L.P.,~~ receive 1% of cash distributions paid to partners. ANo cash ~~distribution~~distributions ofwere ~~$10,042 was~~ made ~~to the General Partners~~ during the year ended March 31, ~~2010~~2011. NoA cash ~~distributions~~distribution ~~were~~of $10,042 was made to the General Partners during the year ended March 31, ~~2009~~2010.

Additional information concerning cash distributions, fees and ~~other~~expense ~~fees~~reimbursements paid or payable to the ~~Managing~~ General ~~Partner~~Partners and ~~its~~their affiliates ~~and~~for the ~~reimbursement~~two ~~of expenses paid or payable to Boston Financial and its affiliates during the~~ years ended March 31, ~~2010~~2011 ~~and 2009~~ is presented in ~~Note~~the 4Notes to the Financial Statements.

Item 14. Principal ~~Accountant~~Accounting Fees and Services

The Fund paid or accrued fees for services rendered by the principal accountants for the two years ended March 31, ~~2010~~2011 as follows:

	2010		2009
	2011		2010
Audit fees	$	6542,~~127~~500	$	7265,~~286~~127
Tax fees	$	2,500	$	2,500

No other fees were paid or accrued to the principal ~~accountants~~accountant during the two years ended March 31, ~~2010~~2011.

Item 15. Exhibits, Financial Statement Schedules ~~and Reports on Form 8-K~~

(a) ~~Documents~~ 1 ~~filed~~and as2. Financial aStatements ~~part~~and ofFinancial ~~this~~Statement ~~Report~~Schedules

In response to this portion of Item 15, the financial statements and the auditors'’ ~~report~~reports relating thereto are submitted as a separate section of this Report. See Index to the Financial Statements on page F-1 hereof.

All other financial statement schedules and exhibits for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under related instructions or are inapplicable and therefore have been omitted.

(b) 1. Exhibits

31Exhibit No.~~1 Certification~~ of3 ~~Principal~~- ~~Executive~~Organization ~~Officer and Principal Financial Officer pursuant to Section 302 of~~Documents.

~~the~~3.1 ~~Sarbanes-Oxley~~Amended ~~Act~~and Restated Agreement of ~~2002~~Limited Partnership, dated as of December 24, 1992 – Exhibit A to Prospectus contained in Form S-11 Registration Statement, File no. 33-52468.

31Exhibit No.2 31 Certification ~~of Principal Executive Officer and Principal Financial Officer pursuant to Section~~ 302 of

31.1 Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

3231.1 2 Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section ~~906~~302 of the Sarbanes-Oxley Act of 2002.

~~the~~Exhibit ~~Sarbanes-Oxley~~No. ~~Act~~32 ofCertification ~~2002.~~906

32.2 1 Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

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

BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

By: Arch Street VIII, Inc.

its Managing General Partner

By: /s/Kenneth J. Cutillo Date: June 29, ~~2010 Kenneth J. Cutillo President Arch Street VIII, Inc. (Chief Executive Officer)~~2011

Kenneth J. Cutillo

President

Arch Street VIII, Inc.

(Chief Executive Officer)

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

By: /s/Kenneth J. Cutillo Date: June 29, ~~2010 Kenneth J. Cutillo President Arch Street VIII, Inc. (Chief Financial Officer)~~2011

~~By: /s/~~Kenneth J. Cutillo ~~Date: June 29, 2010 Kenneth J. Cutillo President Arch Street VIII, Inc. (Chief Accounting Officer)~~

-President

Arch Street VIII, Inc.

(Chief Financial Officer)

By: /s/Kenneth J. Cutillo Date: June 29, 2011

Kenneth J. Cutillo

President

Arch Street VIII, Inc.

(Chief Accounting Officer)

BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, ~~2010~~2011

INDEX

Page No.

Report of Independent Registered Public Accounting Firm

for the years ended March 31, 2011 and 2010 F-2

Financial Statements

Balance ~~Sheet~~Sheets - March 31, ~~2010~~2011 and ~~2009~~ 2010 F-3

Statements of Operations - For the years ended

March 31, ~~2010~~2011 and ~~2009~~ 2010 F-4

Statements of Changes in Partners' Equity -

For the years ended March 31, ~~2010~~2011 and ~~2009~~ 2010 F-5

Statements of Cash Flows - For the years ended

March 31, ~~2010~~2011 and ~~2009~~ 2010 F-6

Notes to the Financial Statements F-7

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of

Boston Financial Tax Credit Fund VII, A Limited Partnership

We have audited the accompanying balance sheets of Boston Financial Tax Credit Fund VII, A Limited Partnership as of March 31, ~~2010~~2011 and ~~2009~~2010, and the related statements of operations, changes in partners’ equity (deficiency) and cash flows for the years then ended. These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Boston Financial Tax Credit Fund VII, A Limited Partnership as of March 31, ~~2010~~2011 and ~~2009~~2010, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/Reznick Group, P.C.

Bethesda, Maryland

June 29, ~~2010~~2011

BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

BALANCE SHEETS

MARCH 31, ~~2010~~2011 and ~~2009~~2010

	2010		2009
	2011		2010
Assets
Cash and cash equivalents	$	2,~~671~~479,~~659~~438	$	12,~~564~~671,~~981~~659
Restricted cash (Note 4)		~~244,396~~-		~~284~~244,~~447~~396
Investments in Local Limited Partnerships (Note 4)		~~346~~84,~~611~~293		1346,~~224,904~~611
Other assets		388		141
Due from affiliate (Note 5)		1,454		-
Total Assets	$	3,263,054	$	3,074,473
Other assets		660		388
Total Assets	$	2,565,845	$	3,263,054
Liabilities and Partners' Equity
Due to affiliates (Notes 4 and 5)	$	195,786	$	297,110
Due to affiliate (Note 5)	$	-	$	96,927
Accrued expenses		5826,~~387~~836		5958,~~100~~387
Total Liabilities		254,173		356,210
Interest Payable (Note 4)		-		98,859
General, Initial and Investor Limited Partners' Equity		3,008,881		2,718,263
Total Liabilities		26,836		254,173
Total Liabilities and Partners' Equity	$	3,263,054	$	3,074,473
General, Initial and Investor Limited Partners' Equity		2,539,009		3,008,881
Total Liabilities and Partners' Equity	$	2,565,845	$	3,263,054

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

BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

STATEMENTS OF OPERATIONS

For the Years Ended March 31, ~~2010~~2011 and ~~2009~~2010

	2010			2009
	2011			2010
Revenue:
Investment	$	2610,~~290~~542		$	2926,~~105~~290
Cash distribution income		~~274~~30,~~976~~085			87274,~~177~~976
Total Revenue		~~301~~40,~~266~~627			~~116~~301,~~282~~266
Expense:
Asset management fees, affiliate (Note 5)		~~380~~389,~~060~~159			~~377~~380,~~230~~060
Provision for valuation allowance on advances to Local
Impairment on investments in Local Limited Partnerships (Note 4)		231,000			9,000
Limited Partnerships (Note 4)		-			48,404
Impairment on investments in Local Limited Partnerships (Note 4)		9,000			99,000
General and administrative (includes reimbursements
to an affiliate in the amount of $168,544 and
to an affiliate in the amount of $154,396 and
$149,089 in 2010 and 2009, respectively) (Note 5)		283,596			271,160
$168,544 in 2011 and 2010, respectively) (Note 5)		251,637			283,596
Amortization		43,~~925~~543			94,~~693~~925
Total Expense		~~677~~875,~~581~~339			~~805~~677,~~487~~581
Loss before equity in losses of Local Limited Partnerships
and gain on sale of investments in Local Limited Partnerships		(376,315	)		(689,205	)
and gain on disposition of investments in Local Limited Partnerships		(834,712	)		(376,315	)
Equity in losses of Local Limited Partnerships (Note 4)		(~~217~~48,~~920~~265	)		(~~385~~217,~~150~~920	)
Gain on sale of investments in Local Limited Partnerships (Note 4)		1,889,049			1,432,168
Gain on disposition of investments in Local Limited
Net Income	$	1,294,814		$	357,813
Partnerships (Note 4)		413,105			1,889,049
Net Income allocated:
Net Income (Loss)	$	(469,872	)	$	1,294,814
General Partners	$	12,948		$	3,578
Net Income (Loss) allocated:
Limited Partners		1,281,866			354,235
General Partners	$	(4,699	)	$	12,948
	$	1,294,814		$	357,813
Limited Partners		(465,173	)		1,281,866
Net Income per Limited Partner Unit
	$	(469,872	)	$	1,294,814
(50,930 Units)	$	25.17		$	6.96
Net Income (Loss) per Limited Partner Unit
(50,930 Units)	$	(9.13	)	$	25.17

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

BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

STATEMENTS OF CHANGES IN PARTNERS' EQUITY

For the Years Ended March 31, ~~2010~~2011 and ~~2009~~2010

				Initial		Investor
	General			Limited		Limited
	Partners			Partners		Partners			Total
Balance at March 31, 2008	$	23,604			5,000		2,331,846		$	2,360,450
Balance at March 31, 2009	$	27,182		$	5,000	$	2,686,081		$	2,718,263
Net Income		3,578			-		354,235			357,813
Balance at March 31, 2009		27,182			5,000		2,686,081			2,718,263
Cash distributions		(10,042	)		-		(994,154	)		(1,004,196	)
Net Income		12,948			-		1,281,866			1,294,814
Balance at March 31, 2010	$	30,088		$	5,000	$	2,973,793		$	3,008,881
Net Loss		(4,699	)		-		(465,173	)		(469,872	)
Balance at March 31, 2011	$	25,389		$	5,000	$	2,508,620		$	2,539,009

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

BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

STATEMENTS OF CASH FLOWS

For the Years Ended March 31, ~~2010~~2011 and ~~2009~~2010

	2010			2009
	2011			2010
Cash flows from operating activities:
Net Income	$	1,294,814		$	357,813
Net Income (Loss)	$	(469,872	)	$	1,294,814
Adjustments to reconcile net income to net
Adjustments to reconcile net income (loss) to net
cash used for operating activities:
Equity in losses of Local Limited Partnerships		~~217~~48,~~920~~265			~~385~~217,~~150~~920
Gain on sale of investments in Local Limited Partnerships		(1,889,049	)		(1,432,168	)
Gain on disposition of investments in
Impairment on investments in Local Limited Partnerships		9,000			99,000
Local Limited Partnerships		(413,105	)		(1,889,049	)
Amortization		4,925			9,693
Impairment on investments in Local Limited Partnerships		231,000			9,000
Cash distributions included in net income		(274,976	)		(87,177	)
Amortization		3,543			4,925
Other non-cash item		(690	)		(6,249	)
Cash distributions included in net income (loss)		(30,085	)		(274,976	)
Increase (decrease) in cash arising from changes
Decrease in cash arising from changes
in operating assets and liabilities:
Other assets		(247	)		615
Due from affiliate		(1,454	)		-
Due to affiliates		(101,324	)		(175,981	)
Other assets		(272	)		(388	)
Accrued expenses		(713	)		3,229
Due to affiliate		(96,927	)		(61,132	)
Other liabilities		-			(45,198	)
Accrued expenses		(31,551	)		(713	)
Net cash used for operating activities		(~~740~~760,~~340~~458	)		(~~891~~699,~~273~~599	)
Cash flows from investing activities: Release of restricted cash		40145,~~741~~537			-
Cash distributions received from Local Limited Partnerships		680,613			211,861
Investments in Local Limited Partnerships		(145,537	)		-
Proceeds from sale of investments in Local Limited Partnerships		2,129,860			1,630,776
Cash distributions received from Local Limited Partnerships		95,361			680,613
Net cash provided by investing activities		2,851,214			1,842,637
Proceeds from disposition of investments in
Local Limited Partnerships		472,876			2,129,860
Net cash provided by investing activities		568,237			2,810,473
Cash flows from financing activities:
Cash distributions		~~(1,004,196~~-	)		-(1,004,196	)
Net cash used for financing activities		(1,004,196	)		-
Net cash provided by (used for) financing activities		-			(1,004,196	)
Net increase in cash and cash equivalents		1,106,678			951,364
Net increase (decrease) in cash and cash equivalents		(192,221	)		1,106,678
Cash and cash equivalents, beginning		12,~~564~~671,~~981~~659			~~613~~1,~~617~~564,981
Cash and cash equivalents, ending	$	2,~~671~~479,~~659~~438		$	12,~~564~~671,~~981~~659

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

BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

NOTES TO THE FINANCIAL STATEMENTS

1. Organization

Boston Financial Tax Credit Fund VII, A Limited Partnership (the "Fund") is a Massachusetts limited partnership organized to invest as a limited partner or member in other limited partnerships or limited liability companies (collectively, "Local Limited Partnerships") which own and operate apartment complexes that are eligible for low income housing tax credits (“Tax Credits”) which may be applied against the federal income tax liability of an investor. The Fund’s ~~objective~~objectives are to: (i) provide investors with annual ~~tax~~Tax ~~credits~~Credits which they may use to reduce their federal income tax liability; ii) provide limited cash distributions from the operations of apartment complexes and; iii) preserve and protect the Fund’s capital. Arch Street VIII, Inc., a Massachusetts corporation is the Managing General Partner of the Fund. Arch Street VII Limited Partnership, a Massachusetts limited partnership, whose general partner consists of Arch Street, Inc., is also a General Partner. Both the Managing General Partner and Arch Street VII, L.P. are affiliates of Boston Financial Investment Management, LP (“Boston Financial”). The General Partners were affiliates of MMA Financial, Inc. Municipal Mortgage & Equity, LLC (“MuniMae”), the parent company of MMA Financial, Inc., sold substantially all of the assets of its Low Income Housing Tax Credit business to Boston Financial. The first stage of this sale closed on July 30, 2009 and the second stage closed on October 13, 2009. From July 30, 2009 through October 13, 2009, MuniMae had engaged BFIM Asset Management, LLC, an affiliate of Boston Financial, to provide asset management to the Fund. On October 13, 2009, the partnership interests in the General Partners were directly and/or indirectly transferred from entities controlled by MuniMae to one or more entities controlled and owned by Boston Financial. The fiscal year of the Fund ends on March 31.

The Partnership Agreement authorizes the sale of up to 100,000 Units of limited partnership interest ("Units") at $1,000 per Unit. In total, the Fund received $50,930,000 of capital contributions from investors admitted as Limited Partners for 50,930 Units. On November 30, 1993, the Fund held its final investor closing.

Generally, profits, losses, tax credits and cash flow from operations are allocated 99% to the Limited Partners and 1% to the General Partner. Net proceeds from a sale of the Fund’s interest in a Local Limited Partnership or refinancing of a Local Limited Partnership will be allocated 95% to the Limited Partners and 5% to the General Partner after certain priority payments. The General Partners may have an obligation to fund deficits in their capital accounts, subject to limits set forth in the Partnership Agreement. However, to the extent that the General Partners’ capital accounts are in a deficit position, certain items of net income may be allocated to the General Partners in accordance with the Partnership Agreement.

2. Significant Accounting Policies

Cash Equivalents

Cash equivalents represent short-term, highly liquid instruments with original maturities of 90 days or less.

Concentration of Credit Risk

The Fund invests its cash primarily in money market ~~funds~~and demand deposit accounts with commercial banks. At times, cash balances at a limited number of banks and financial institutions may exceed federally insured amounts. Management believes it mitigates its credit risk by investing in major financial institutions.

BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

NOTES TO THE FINANCIAL STATEMENTS (continued)

2. Significant Accounting Policies (continued)

Investments in Local Limited Partnerships

The Local Limited Partnerships in which the Fund invests are Variable Interest Entities ("VIE"s). ~~The~~because ~~Fund~~the isowners ~~involved~~of ~~with~~ the ~~VIEs as a non-controlling limited partner~~ equity ~~holder. The~~at ~~investments~~risk in ~~the~~these ~~Local~~entities ~~Limited~~do ~~Partnerships are made primarily to obtain tax credits on behalf of the Fund’s investors. The Tax Credits generated by Local Limited Partnerships are~~ not ~~reflected~~have on the ~~books~~power ~~of the Fund as such credits are allocated~~ to ~~investors~~direct ~~for use in offsetting~~ their ~~federal income tax liability. The general partners of the Local Limited Partnerships, who are considered to be the primary beneficiaries, control the day-to-day~~ operations ~~of the Local Limited Partnerships~~. ~~The~~In ~~general~~accordance ~~partners are also responsible for maintaining compliance~~ with the ~~tax~~accounting ~~credit~~guidance ~~program and~~ for ~~providing subordinated financial support in~~ the ~~event~~consolidation ~~operations~~of ~~cannot support debt and property tax payments. The Fund~~VIEs, ~~through its ownership percentages, may participate in property disposition proceeds. The timing and amounts of these proceeds are unknown but can impact~~ the Fund’s ~~financial~~determines ~~position,~~when ~~results~~it ofshould ~~operations~~include ~~or cash flows. Because~~ the ~~Fund~~assets, isliabilities ~~not~~and ~~the~~activities ~~primary beneficiary~~ of ~~these~~a ~~VIEs,~~VIE itin ~~accounts for~~ its ~~investments~~financial instatements ~~the Local Limited Partnerships using the equity method of accounting. The Fund's exposure to economic~~ and ~~financial~~when ~~statement~~it ~~losses~~should isdisclose ~~limited~~information toabout its ~~investments~~relationship inwith ~~the~~a ~~VIEs~~VIE. ~~The~~ ~~Fund~~A ~~may~~VIE beis ~~subject~~a tolegal ~~additional~~structure ~~losses~~used to ~~the~~conduct ~~extent~~activities ofor ~~any~~hold ~~financial~~assets, ~~support~~and ~~that~~a ~~the~~VIE ~~Fund~~must ~~voluntarily~~be ~~provides~~consolidated inby the ~~future. Under~~entity ~~the~~that ~~equity method, the investment~~ is ~~carried~~determined atto ~~cost,~~be ~~adjusted for~~ the ~~Fund~~VIE’s ~~share~~primary ofbeneficiary. The ~~net~~primary ~~income~~beneficiary ~~or loss and for cash distributions from the Local Limited Partnerships; equity in income or loss~~ of ~~the~~a ~~Local~~VIE ~~Limited Partnerships~~ is ~~included currently in~~ the ~~Fund's~~entity ~~operations. A~~that ~~liability~~has is(i) ~~recorded~~the ~~for~~power ~~delayed equity capital contributions~~ to ~~Local~~direct ~~Limited Partnerships. Under~~ the ~~equity~~activities ~~method,~~of ~~a Local Limited Partnership investment will not be carried below zero. To~~ the ~~extent~~VIE that ~~equity~~most insignificantly ~~losses~~impact ~~are incurred when~~ the ~~Fund~~VIE’s ~~carrying~~economic ~~value~~performance ofand (ii) the ~~respective~~obligation ~~Local Limited Partnership has been reduced~~ to aabsorb ~~zero balance, the~~ losses ~~will~~or bereceive ~~suspended~~benefits ~~and~~that ~~offset~~could ~~against~~potentially future income. Income from a Local Limited Partnership, where cumulative equity in losses plus cumulative distributions have exceeded the total investment in the Local Limited Partnership, will not be ~~recorded~~significant ~~until~~to ~~all of~~ the ~~related unrecorded losses have been offset~~VIE. To If ~~the~~multiple ~~extent~~unrelated ~~that~~parties ashare ~~Local~~such ~~Limited~~power, ~~Partnership~~as ~~with a carrying value of zero distributes cash to the Fund~~defined, ~~that~~no ~~distribution~~party is ~~recorded~~required asto ~~income~~consolidate on the ~~books of the Fund~~VIE.

~~Excess~~The ~~investment~~Fund ~~costs~~determines ~~over~~whether the ~~underlying~~Local ~~net~~Limited ~~assets~~Partnerships ~~acquired~~are ~~have~~VIEs ~~arisen~~and ~~from~~whether ~~acquisition~~it ~~fees~~is ~~paid~~the ~~and~~primary ~~expenses~~beneficiary ~~reimbursed~~at tothe andate ~~affiliate~~ of initial involvement with the ~~Fund~~Local Limited Partnerships. ~~These~~ ~~fees~~The ~~and~~Fund ~~expenses~~reassesses ~~are~~whether ~~included~~it is the primary beneficiary of a Local Limited Partnership on an ongoing basis based on changes in facts and circumstances. In determining whether it is the primary beneficiary, the Fund’s ~~investments~~considers inthe purpose and activities of the Local Limited ~~Partnerships~~Partnership, including the variability and ~~are~~related ~~being~~risks ~~amortized~~the onLocal aLimited ~~straight-line~~Partnership ~~basis~~incurs ~~over~~and 35transfers ~~years~~to orother ~~until~~entities aand their related parties. If the Fund determines that it is the primary beneficiary of the Local Limited Partnership’s, ~~respective~~the ~~investment~~Local ~~balance~~Limited ~~has~~Partnership ~~been~~is ~~reduced~~consolidated towithin ~~zero~~the Fund’s financial statements.

The ~~General~~Fund ~~Partners~~is ~~have~~involved ~~elected~~with tothe ~~report~~Local ~~results~~Limited ofPartnerships as a non-controlling equity holder. The investments in the Local Limited Partnerships onare amade ~~90-day~~primarily ~~lag~~to ~~basis~~obtain ~~because~~tax credits on behalf of the Fund’s investors. The tax credits generated by Local Limited Partnerships ~~report~~are ~~their~~not ~~results~~reflected on athe ~~calendar~~books ~~year~~of ~~basis~~the Fund as such credits are allocated to investors for use in offsetting their federal income tax liability. ~~Accordingly~~The general partners or managing members of the Local Limited Partnerships (the “Local General Partners”), who are considered to be the ~~financial~~primary ~~information~~beneficiaries, ~~about~~have the power to direct the activities of the Local Limited Partnerships. The ~~that~~general ispartners ~~included~~or managing members are also responsible for maintaining compliance with the Tax Credit program and for providing subordinated financial support in the ~~accompanying~~event operations cannot support debt and Property tax payments. The Fund, through its ownership percentages, may participate in property disposition proceeds. The timing and amounts of these proceeds are unknown but can impact the Fund’s financial ~~statements~~position, results of operations or cash flows. Because the Fund is asnot the primary beneficiary of ~~December~~these ~~31,~~Local ~~2009~~Limited ~~and~~Partnerships, ~~2008~~it ~~and~~accounts for its investments in the ~~years~~Local ~~then~~Limited ~~ended~~Partnerships using the equity method of accounting.

The Fund,'s exposure asto aeconomic and financial statement losses is limited ~~partner~~to its investment balance in the Local Limited Partnerships, isand ~~subject~~estimated tofuture ~~risks~~funding ~~inherent~~commitments. To inthe extent that the ~~ownership~~Fund ofdoes ~~property~~not ~~which~~receive ~~are~~the ~~beyond~~full ~~its~~amount ~~control,~~of ~~such~~tax ascredits ~~fluctuations~~specified in ~~occupancy~~its ~~rates~~initial ~~and~~investment ~~operating~~contribution ~~expenses~~agreement, ~~variations~~it inmay ~~rental~~be ~~schedules,~~eligible ~~proper~~to ~~maintenance~~receive payments from the general partner or managing member of ~~facilities~~the ~~and~~Local ~~continued~~Limited ~~eligibility~~Partnerships under the provisions of tax ~~credits~~credit guarantees. IfThe Fund may be subject to additional losses to the ~~cost~~extent of ~~operating~~any aadditional ~~property~~financial ~~exceeds~~support that the ~~rental~~Fund ~~income~~voluntarily ~~earned~~provides ~~thereon,~~in the future. The Fund may ~~deem~~voluntarily itprovide inadvances ~~its~~to ~~best~~the ~~interest~~Local toLimited ~~voluntarily~~Partnerships ~~provide~~to ~~funds~~finance inoperations ~~order~~or to ~~protect~~make ~~its~~debt ~~investment~~service payments. The Fund assesses the collectability of any advances at the time the advance is made and records a reserve if collectability is not reasonably assured. The Fund does not guarantee any of the mortgages or other debt of the Local Limited Partnerships.

~~The~~Under the equity method, the investment is carried at cost, adjusted for the Fund’s ~~may~~share ~~provide~~of ~~advances~~net toincome or loss and for cash distributions from the Local Limited Partnerships; toequity ~~finance~~in ~~operations~~income or toloss ~~make~~of ~~debt~~the ~~service~~Local ~~payments~~Limited Partnerships is included currently in the Fund's operations. ~~The~~A ~~Fund~~liability ~~assesses~~is ~~the~~recorded ~~collectability~~for ofdelayed ~~any~~equity ~~advances~~capital atcontributions to Local Limited Partnerships. In the ~~time~~event that a Local Limited Partnership has recorded other comprehensive income or loss, the ~~advance~~Fund iswill ~~made~~evaluate its impact on the Fund and ~~records~~determine awhether ~~reserve~~it ifshould ~~collectability~~be isincluded ~~not~~as ~~reasonably~~other ~~assured~~comprehensive income (loss) in the statement of partners’ equity (deficiency). Under ~~The~~the ~~Fund~~equity ~~does~~method, a Local Limited Partnership investment will not ~~guarantee~~be ~~any~~carried ofbelow zero. To the ~~mortgages~~extent orthat ~~other~~equity ~~debt~~in losses are incurred when the Fund’s carrying value of the respective Local Limited ~~Partnerships~~Partnership has been reduced to zero, these excess losses will be suspended and offset against future income. Income from a Local Limited Partnership, where cumulative equity in losses plus cumulative distributions have exceeded the total investment in the Local

~~Boston~~BOSTON ~~Financial~~FINANCIAL ~~Tax~~TAX ~~Credit~~CREDIT ~~Fund~~FUND VII, A ~~Limited~~LIMITED ~~Partnership~~ PARTNERSHIP

NOTES TO THE FINANCIAL STATEMENTS (continued)

2. Significant Accounting Policies (continued)

Investments in Local Limited Partnerships (continued)

~~The Fund has implemented policies and practices for assessing other-than-temporary declines in the values of its investments in Local~~ Limited ~~Partnerships. Periodically~~Partnership, the carrying values of the investments are tested for other-than-temporary impairment. If an other-than-temporary decline in carrying value exists, a provision to reduce the investment to the sum of the estimated remaining benefits will not be recorded inuntil ~~the~~all ~~Fund's financial statements. The estimated remaining benefits for each Local Limited Partnership consist~~ of ~~estimated~~the ~~future~~related ~~tax~~unrecorded losses ~~and~~have ~~tax~~been ~~credits over the estimated life of the investment and estimated residual proceeds at disposition~~offset. To ~~Included in~~ the ~~estimated~~extent ~~residual~~that ~~proceeds calculation is an estimated net operating income capitalized at~~ a ~~rate specific to the location of each~~ Local Limited Partnership ~~less~~with ~~the~~a ~~estimated~~carrying ~~terminal~~value ~~debt balance~~ of ~~the~~zero ~~Local~~distributes ~~Limited~~cash ~~Partnership. Generally,~~to the ~~carrying~~Fund, ~~values~~that ofdistribution ~~most~~is ~~Local~~recorded ~~Limited~~as ~~Partnerships~~income ~~will~~in ~~decline through losses and distributions. However,~~ the Fund’s ~~may~~statement ~~record impairment losses if the expiration~~ of ~~tax credits outpaces losses and distributions from any of the Local Limited Partnerships~~operations.

Excess investment costs over the underlying net assets acquired have arisen from acquisition fees paid and expenses reimbursed to an affiliate of the Fund. These fees and expenses are included in the Fund's investments in Local Limited Partnerships and are being amortized on a straight-line basis over 35 years or until a Local Limited Partnership’s respective investment balance has been reduced to zero.

Management has elected to report results of the Local Limited Partnerships on a 90-day lag basis because the Local Limited Partnerships report their results on a calendar year basis. Accordingly, the financial information of the Local Limited Partnerships that is included in the accompanying financial statements is as of December 31, 2010 and 2009 and for the years then ended.

The Fund is subject to risks inherent in the ownership of property which are beyond its control, such as fluctuations in occupancy rates and operating expenses, variations in rental schedules, proper maintenance of facilities and continued eligibility of tax credits. If the cost of operating a property exceeds the rental income earned thereon, the Fund may deem it in its best interest to voluntarily provide funds in order to protect its investment.

Use of Estimates

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

Income Taxes

The Fund has elected to be treated as a partnership which is a pass-through entity for income tax purposes and, as such, is not subject to income taxes. Rather, all items of taxable income, deductions and tax credits are passed through to and are reported by its partners on their respective income tax returns. ~~The~~ Accordingly, ~~Fund’s~~these ~~federal~~financial ~~tax~~statements ~~status~~do asnot reflect a ~~pass-through~~provision ~~entity~~for isincome ~~based~~taxes onand ~~its legal status as a partnership. Accordingly,~~ the Fund ishas ~~not~~no ~~required~~other ~~to take any~~ tax positions inwhich ~~order~~must tobe ~~qualify~~considered asfor ~~a pass-through entity~~disclosure. The Fund is required to file and does file tax returns with the Internal Revenue Service and other ~~taxing~~state ~~authorities. Accordingly, these financial statements do not reflect a provision for income taxes~~ and ~~the~~local ~~Fund has no other~~ tax ~~positions~~jurisdictions which ~~must~~are ~~be considered for disclosure. The Fund is~~ subject to examination ~~by major tax jurisdictions~~ for tax years ~~2006~~2007 through ~~2009~~2010.

~~Subsequent~~BOSTON ~~Events~~FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

Events that occur after the balance sheet date but before the financial statements were available to be issued must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at the balance sheet date are recognized in the accompanying financial statements. Subsequent events which provide evidence about conditions that existed after the balance sheet date require disclosure in the accompanying notes. Management evaluated the activity of the Fund and concluded that no subsequent events have occurred that would require recognition in the financial statements or disclosure in the notes to the financial statements.

Boston Finanical Tax Credit Fund VII, A Limited Partnership

NOTES TO THE FINANCIAL STATEMENTS (continued)

32. ~~New~~ Significant Accounting ~~Principles~~Policies (continued)

~~Codification~~Subsequent ~~and Hierarchy of Generally Accepted Accounting Principles~~Events

InEvents ~~June~~that ~~2009,~~occur ~~the~~after ~~FASB issued authoritative guidance which establishes~~ the ~~FASB~~balance ~~Standards~~sheet ~~Accounting~~date ~~Codification~~but ~~(“Codification”)~~before as the ~~source~~financial ofstatements ~~authoritative~~were ~~GAAP~~available ~~recognized by the FASB~~ to be ~~applied~~issued toare ~~nongovernmental~~evaluated ~~entities. It is effective~~ for ~~interim~~recognition ~~and~~or ~~annual reporting periods ending after September 15, 2009~~disclosure. The ~~Fund~~effects ~~has~~of ~~adopted~~subsequent ~~this~~events ~~authoritative~~that ~~guidance~~provide ~~with~~evidence ~~its~~about ~~September~~conditions ~~30,~~that ~~2009~~existed ~~reporting. The~~at ~~only~~the ~~other~~balance ~~source~~sheet ofdate ~~authoritative~~are ~~GAAP~~recognized isin the ~~rules~~accompanying ~~and~~financial ~~interpretive~~statements. Subsequent ~~releases~~events ~~of the SEC~~ which ~~only~~provide ~~apply~~evidence toabout ~~SEC~~conditions ~~registrants.~~that ~~The~~existed ~~Codification~~after ~~supersedes all~~ the ~~existing~~balance ~~non-SEC~~sheet ~~accounting~~date ~~and~~require ~~reporting~~disclosure ~~standards~~in ~~upon~~the ~~its~~accompanying ~~effective date~~notes. Management ~~Since~~evaluated the ~~issuance~~activity of the ~~Codification~~Fund isand ~~not~~concluded ~~intended~~that tono ~~change~~subsequent orevents ~~alter~~have ~~existing~~occurred ~~GAAP,~~that ~~adoption~~would ofrequire ~~this~~recognition ~~statement~~in ~~did not have an impact on~~ the ~~Fund’s~~ financial ~~position~~statements or ~~results~~disclosure ofin ~~operations, but did change~~ the ~~way~~notes into ~~which GAAP is referenced in~~ the ~~Fund’s~~ financial statements.

3. New Accounting Principle

Consolidation of Variable Interest Entities

In June 2009, the FASB issued an amendment to the accounting and disclosure requirements for the consolidation of variable interest entities (VIEs). The amended guidance modifies the consolidation model to one based on control and economics, and replaces the current quantitative primary beneficiary analysis with a qualitative analysis. The primary beneficiary of a VIE will be the entity that has (1i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2ii) the obligation to absorb losses or receive benefits that could potentially be significant to the VIE. If multiple unrelated parties share such power, as defined, no party will be required to consolidate the VIE. Further, the amended guidance requires continual reconsideration of the primary beneficiary of a VIE and adds an additional reconsideration event for determination of whether an entity is a VIE. Additionally, the amendment requires enhanced and expanded disclosures around VIEs. This amendment is effective for fiscal years beginning after November 15, 2009. The adoption of this guidance on April 1, 2010 isdid not ~~expected to~~ have a material effect on the Fund’s financial statements.

4. Investments in Local Limited Partnerships

The Fund currently ~~owns~~has limited ~~partnership~~partner interests in ~~eight~~six Local Limited Partnerships which were organized for the purpose of owning and operating multi-family housing complexes, all of which are government-assisted. The Fund's ownership interest in each Local Limited Partnership is 99%, with the exception of Springwood Apartments which is 19.8%, and Eden Park which is 67.99%~~, and Fountain Lakes which is 90%~~. The Fund may have negotiated or may negotiate options with the Local General Partners to purchase or sell the Fund’s interests in the Local Limited ~~Partnership’s~~Partnerships at the end of the Compliance Period atfor nominal prices. In the event that ~~Local~~Properties ~~Limited Partnerships~~ are sold to a third parties, or upon dissolution of the Local Limited ~~Partnership’s~~Partnerships, proceeds will be distributed according to the terms of each Local Limited Partnership agreement.

~~Boston~~BOSTON ~~Financial~~FINANCIAL ~~Tax~~TAX ~~Credit~~CREDIT ~~Fund~~FUND VII, A ~~Limited~~LIMITED ~~Partnership~~ PARTNERSHIP

NOTES TO THE FINANCIAL STATEMENTS (continued)

4. Investments in Local Limited Partnerships (continued)

The following is a summary of investments in Local Limited Partnerships at March 31, ~~2010~~2011 and ~~2009~~2010:

	2010			2009
	2011 2010
Capital contributions and advances paid to Local Limited Partnerships and purchase price paid to withdrawing partners of Local Limited Partnerships	$	1411,~~407~~295,~~031~~923		$	2714,~~305~~407,~~481~~031
Cumulative equity in losses of Local Limited Partnerships (excluding cumulative unrecognized losses of $4,024,182 and $3,570,296)		(11,284,006	)		(20,745,430	)
Cumulative equity in losses of Local Limited Partnerships (excluding cumulative unrecognized losses of $4,425,279 and
Cumulative cash distributions received from Local Limited Partnerships		(1,262,921	)		(2,382,471	)
$4,024,182 at March 31, 2011 and 2010, respectively		(8,533,553	)		(11,284,006	)
Investments in Local Limited Partnerships before adjustments		1,860,104			4,177,580
Cumulative cash distributions received from Local Limited Partnerships		(932,150	)		(1,262,921	)
Investments in Local Limited Partnerships before adjustments		1,830,220			1,860,104
Excess investment costs over the underlying assets acquired:
Acquisition fees and expenses		~~581~~428,~~846~~112			~~846~~581,~~688~~846
Cumulative amortization of acquisition fees and expenses		(~~195~~147,~~552~~898	)		(~~298~~195,~~577~~552	)
Investments in Local Limited Partnerships before valuation allowance		~~2,246,398~~			~~4,725,691~~
Valuation allowance on investments in Local Limited Partnerships		(1,899,787	)		(3,500,787	)
and impairment		2,110,434			2,246,398
Investments in Local Limited Partnerships	$	346,611		$	1,224,904
Cumulative valuation allowance on advances to Local Limited Partnerships (13,141)					(13,141	)
Cumulative impairment on investments to Local Limited Partnerships		(2,013,000	)		(1,886,646	)
Investments in Local Limited Partnerships	$	84,293		$	346,611

~~During the year ended March 31, 2009, the Fund advanced $48,404 to one of the Local Limited Partnerships, all of which was reserved.~~ The Fund has ~~also~~ recorded aan ~~valuation~~impairment ~~allowance~~ for its investments in ~~certain~~ Local Limited Partnerships in order to appropriately reflect the estimated net realizable value of these investments.

Summarized combined financial information of the Local Limited Partnerships in which the Fund has invested as of December 31, ~~2009~~2010 and ~~2008~~2009 (due to the Fund's policy of reporting the financial information of its Local Limited Partnership interests on a 90 day lag basis), excluding the financial statements of two Local Limited Partnerships, is as follows:

~~Boston~~BOSTON ~~Finanical~~FINANCIAL ~~Tax~~TAX ~~Credit~~CREDIT ~~Fund~~FUND VII, A ~~Limited~~LIMITED ~~Partnership~~ PARTNERSHIP

NOTES TO THE FINANCIAL STATEMENTS (continued)

4. Investments in Local Limited Partnerships (continued)

Summarized Balance Sheets - as of December 31,

	2009			2008
	2010			2009
Assets:
Investment property, net	$	2512,~~854~~805,~~043~~615		$	4425,~~067~~854,~~522~~043
Other assets		21,~~240~~093,~~940~~938			42,~~510~~240,~~500~~940
Total Assets	$	2813,~~094~~899,~~983~~553		$	4828,~~578~~094,~~022~~983
Liabilities and Partners' Equity (Deficiency):
Liabilities and Partners' Deficiency:
Mortgage notes payable	$	2310,~~043~~737,~~444~~294		$	4423,~~035~~043,~~823~~444
Other liabilities		63,~~594~~517,~~721~~701			86,~~534~~594,~~676~~721
Total Liabilities		2914,~~638~~254,~~165~~995			5229,~~570~~638,~~499~~165
Fund's deficiency		(2,~~736~~084,~~242~~835	)		(42,~~993~~736,~~560~~242	)
Other partners' equity		1,~~193~~729,~~060~~393			1,~~001~~193,~~083~~060
Total Partners' Deficiency:		(1355,~~543,182~~442	)		(31,~~992~~543,~~477~~182	)
Total Liabilities and Partners' Equity	$	28,094,983		$	48,578,022
Total Liabilities and Partners' Deficiency	$	13,899,553		$	28,094,983

Summarized Statements of Operations -

for the years ended December 31,

	2009			2008
	2010			2009
Rental and other income	$	94,~~688~~701,~~547~~323		$	129,~~017~~688,~~642~~547
Expenses:
Operating		63,~~756~~734,~~999~~757			86,~~268~~756,~~699~~999
Interest		1618,~~951,790~~764			21,~~614~~951,~~705~~790
Depreciation and amortization		21,~~533~~020,~~888~~527			2,~~954~~533,~~166~~888
Total Expenses		115,~~242~~374,~~677~~048			1311,~~837~~242,~~570~~677
Net Loss	$	(1672,~~554,130~~725	)	$	(1,~~819~~554,~~928~~130	)
Fund’s share of net loss (2008 includes $78,010 from prior years)	$	(1,033,766	)	$	(1,325,043	)
Fund’s share of Net Loss	$	(465,753	)	$	(1,033,766	)
Other partners' share of net loss	$	(520,364	)	$	(416,875	)
Other partners' share of Net Loss	$	(206,972	)	$	(520,364	)

~~For~~The ~~the~~2010 ~~years~~requirement ~~ended~~for ~~March~~an ~~31,~~audited ~~2010~~financial ~~and~~statement ~~2009,~~for the ~~Fund~~Local ~~has~~Limited ~~not~~Partnership ~~recognized~~with ~~$815,846~~a ~~and~~carrying ~~$1,022,349,~~value ~~respectively,~~ of ~~equity~~zero inwas ~~losses~~waived ~~relating~~and tois ~~certain~~therefore ~~Local~~not ~~Limited~~included ~~Partnerships~~ in ~~which~~the ~~cumulative~~above ~~equity~~summarized incombined ~~losses~~financial ~~and~~information. The ~~distributions~~Fund's ~~exceeded~~estimated ~~its~~equity ~~total~~in ~~investment~~loss inof ~~these~~the Local Limited ~~Partnerships. Previously~~Partnership ~~unrecognized~~is ~~losses of~~ $8286,~~456~~000 ~~were~~for ~~included in losses recognized in~~ the year ended March 31, ~~2009~~2011.

~~Boston~~The ~~Financial~~financial ~~Tax~~information ~~Credit~~of ~~Fund~~the ~~VII~~Local Limited Partnership, Awhich was disposed of during the year ended March 31, 2011, as discussed below, is not included in the above summarized combined financial information. The Fund’s estimated equity in loss of the Local Limited Partnership is $3,000 for the year ended March 31, 2011.

For the years ended March 31, 2011 and 2010, the Fund has not recognized $592,254 and $815,846, respectively, of equity in losses relating to certain Local Limited Partnerships in which cumulative equity in losses and distributions exceeded its total investment in the Local Limited Partnerships. Previously unrecognized losses of $85,766 are included in losses recognized in the year ended March 31, 2011.

BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

NOTES TO THE FINANCIAL STATEMENTS (continued)

4. Investments in Local Limited Partnerships (continued)

The Fund’s deficiency as reflected by the Local Limited Partnerships of ($2,~~736~~084,~~242)~~835 and ($42,~~993~~736,~~560)~~242 at ~~December~~March 31, ~~2009~~2011 and ~~2008~~2010, respectively, differs from the Fund’s investments in Local Limited Partnerships before adjustments of $1,~~860~~830,~~104~~220 and $41,~~177~~860,~~580~~104 at ~~December~~March 31, ~~2009~~2011 and ~~2008~~2010, respectively, due to: (i) cumulative unrecognized losses as described above; (ii) syndication costs charged to equity by the Local Limited Partnerships that are not reflected in the Fund’s investments in Local Limited Partnerships; (iii) advances to Local Limited Partnerships that the Fund included in investments in Local Limited Partnerships; (iv) ~~one~~the financial information of the Local Limited Partnership ~~whose~~that ~~interest~~is ~~was~~not ~~sold~~included in the ~~quarter~~summarized ~~ended~~balance ~~March~~sheets ~~31,~~of the Local Limited Partnership due to the 2010 ~~and~~requirement ~~two~~for an audited financial statement being waived; (v) one Local Limited ~~Partnerships~~Partnership whose ~~interests~~interest ~~were~~was ~~sold~~disposed of in the quarter ended March 31, ~~2009,~~2010 ~~being~~that are included in the ~~summarized~~December 31, 2009 balance sheets of the Local Limited ~~Partnerships at December 31, 2009 and 2008, respectively~~Partnership; and (vvi) differences in the accounting treatment of miscellaneous items.

~~During~~For the year ended March 31, ~~2010~~2011, one of the ~~Fund~~Local ~~sold~~Limited ~~its~~Partnerships, ~~interest~~with ina ~~five~~carrying ~~Local~~value ~~Limited~~of ~~Partnerships~~zero, was considered to have current maturity of debt issues resulting in athe ~~gain~~Partnership’s ofcurrent ~~$1,889,049~~liabilities significantly exceeding its current assets. ~~During~~ This condition was significant enough to warrant its independent auditor to issue an audit report that raised substantial doubt about the ~~year~~Local ~~ended~~Limited ~~March~~Partnership’s ~~31,~~ability ~~2009~~to continue as a going concern. However, the Fund ~~sold~~believes ~~its~~that ~~interest~~support infrom ~~three~~the Local General Partner will likely mitigate substantial risk to the Fund. The property owned by the Local Limited ~~Partnerships~~Partnership ~~resulting~~is incurrently abeing ~~gain~~marketed offor $1sale. Due to the current efforts to sell the property,~~432,168~~ the Fund does not anticipate that Fund Reserves will be used to support property operations.

~~The~~During the year ended March 31, 2011, the Fund ~~has~~sold ~~set~~its ~~aside~~interest in antwo ~~escrow~~Local ~~account~~Limited ~~future~~Partnerships. The ~~capital~~Fund’s ~~contributions~~investment ~~related~~value toat ~~its~~the ~~investment~~time of the sales was $59,771 resulting in ~~one~~a gain on disposition of investments in Local Limited ~~Partnership~~Partnerships of $413,105 for the year ended March 31, 2011. ~~Interest~~The ~~earned~~Fund onreceived ~~this~~$472,876 ~~deposit~~during isthe ~~payable~~year toended March 31, 2011 from the sales of its interest in these Local ~~General~~Limited ~~Partner~~Partnerships. AsDuring ofthe year ended March 31, 2010 ~~and 2009~~, the Fund sold its interest in five Local Limited Partnerships. The Fund’s ~~escrow~~investment ~~balance~~value isat the time of the sales was $~~244~~240,~~396~~811 ~~and~~resulting in a net gain on disposition of investments in Local Limited Partnerships of $~~284~~1,~~447~~889,049 ~~respectively. As~~for ofthe year ended March 31, 2010. The ~~and~~Fund ~~2009,~~received $982,129,860 ~~and~~during ~~$139,051,~~the ~~respectively~~year ofended ~~interest~~March ~~due~~31, to2010 from the ~~Local~~sales ~~General~~of ~~Partner~~its isinterest ~~included~~ in ~~due~~these toLocal ~~affiliates~~Limited Partnerships.

The Fund had set aside in an escrow account future capital contributions related to its investment in one Local Limited Partnership. This Local Limited Partnership was sold during the year ended March 31, 2011. As a result, the escrow was used to pay capital contributions to the Local Limited Partnership of $145,537 and interest owed to the Local General Partner of $98,859 during the year ended March 31, 2011. As of March 31, 2011 and 2010, the Fund’s escrow balance is zero and $244,396, respectively. As of March 31, 2011 and 2010, zero and $98,859, respectively, of interest is due to the Local General Partner.

5. Transactions with Affiliates

An affiliate of the ~~Managing~~ General ~~Partner~~Partners receives the base amount of 0.50% (annually adjusted by the CPI factor) of Gross Proceeds as the annual ~~Asset~~asset ~~Management~~management ~~Fee~~fee for administering the affairs of the Fund. Asset ~~Management~~management ~~Fees~~fees of $~~380~~389,~~060~~159 and $~~377~~380,~~230~~060 have been expensed in the years ended March 31, ~~2010~~2011 and ~~2009~~2010, respectively. During the years ended March 31, ~~2010~~2011 and ~~2009~~2010, $~~377~~487,~~512~~540 and $~~494~~377,~~416~~512 respectively, were paid out of available cash flow for ~~Asset~~asset ~~Management~~management ~~Fees~~fees. Included in due to ~~affiliates~~affiliate at March 31, 2010 ~~and 2009~~ is $96,~~926~~927 ~~and~~of ~~$94~~asset management fees. Included in due from affiliate at March 31,~~378~~ 2011, ~~respectively~~is an overpayment of ~~Asset~~$1,454 ~~Management~~for ~~Fees~~asset management fees.

An affiliate of the ~~Managing~~ General ~~Partner~~Partners is reimbursed for the cost of the Fund's salaries and benefits expenses. Included in general and administrative expenses for the years ended March 31, ~~2010~~2011 and ~~2009~~2010 is $~~168~~154,~~544~~396 and $~~149~~168,~~089~~544, respectively, that the Fund has incurred for these expenses. During the year ended March 31, ~~2010~~2011 and ~~2009~~2010, salaries and benefits of $~~219~~154,~~658~~396 and $~~169~~219,~~776~~658, respectively, were paid to the affiliate of the ~~Managing~~ General ~~Partner~~Partners for these expenses. As of March 31, ~~2010~~2011 and ~~2009,~~2010 $0there ~~and~~are ~~$51,114,~~no ~~respectively~~unpaid ofsalaries ~~these~~and ~~reimbursements~~benefits ~~remains unpaid~~expenses.

AnBOSTON ~~affiliate~~FINANCIAL ofTAX ~~the~~CREDIT ~~General~~FUND ~~Partner was reimbursed for the actual cost of the Fund's operating expenses. As of March 31~~VII, ~~2010~~A ~~and~~LIMITED ~~2009, $0 and $12,567, respectively is reimbursable to the affiliate.~~PARTNERSHIP

Boston Financial Tax Credit Fund VII, A Limited Partnership

NOTES TO THE FINANCIAL STATEMENTS (continued)

6. Federal Income Taxes

The following schedule reconciles the reported financial statement net income (loss) for the fiscal years ended March 31, ~~2010~~2011 and ~~2009~~2010 to the net income ~~(loss)~~ reported on the Form 1065, U.S. Partnership Return of Income for the years ended December 31, ~~2009~~2010 and ~~2008~~2009:

	2010			2009
	2011			2010
Net Income per financial statements	$	1,294,814		$	357,813
Net Income (Loss) per financial statements	$	(469,872	)	$	1,294,814
Equity in losses of Local Limited Partnerships for financial reporting
purposes in excess of equity in losses for tax purposes		~~164~~199,~~139~~448			~~127~~164,~~263~~139
Equity in losses of Local Limited Partnerships not recognized
for financial reporting purposes		(815,846	)		(939,893	)
for financial reporting purposes, net of recognition of previously
unrecognized losses		(506,488	)		(815,846	)
Adjustment to reflect March 31 fiscal year end to
December 31 taxable year end		6(14,~~362~~652	)		(86,~~434~~362	)
Amortization for tax purposes in excess of amortization
for financial reporting purposes		(2417,~~418~~150	)		(2624,~~633~~418	)
Provision for valuation allowance on advances to Local Limited
Partnerships, not deductible for tax purposes		-			48,404
Impairment on investments in Local Limited Partnerships
not deductible for tax purposes		9231,000			999,000
Gain on sale of investments in Local Limited Partnerships for tax
Gain on disposition of investments in Local Limited Partnerships for tax
purposes in excess of gain recognized for financial reporting purposes		41,~~330~~332,~~433~~383			-4,330,433
Gain on sale of investments in Local Limited Partnerships for financial
Cash distributions included in net income (loss) for financial reporting
reporting purposes in excess of gain recognized for tax purposes		-			(429,344	)
purposes		(30,085	)		(274,976	)
Cash distributions included in net income (loss) for financial reporting purposes		(274,976	)		(87,177	)
Net Income per tax return	$	724,584		$	4,689,508
Net Income (loss) per tax return	$	4,689,508		$	(859,001	)

~~Boston~~The ~~Financial~~differences ~~Tax~~in ~~Credit~~the assets and liabilities of the Fund ~~VII~~for financial reporting purposes and tax purposes as of March 31, A2011 ~~Limited~~and ~~Partnership~~ December 31, 2010, respectively, are as follows:

	Financial
	Reporting		Tax
	Purposes		Purposes			Differences

Investments in Local Limited Partnerships	$	84,293	$	(610,712	)	$	695,005
Other assets	$	2,480,098	$	9,047,607		$	(6,567,509	)
Liabilities	$	25,382	$	128,705		$	(103,323	)

The differences in assets and liabilities of the Fund for financial reporting and tax purposes are primarily attributable to: (i) the cumulative equity in losses from Local Limited Partnerships for tax purposes is approximately $2,620,000 more than for financial reporting purposes, including approximately $4,425,000 of losses the Fund has not recognized relating to Local Limited Partnerships whose cumulative equity in losses exceed its total investments; (ii) the cumulative amortization of acquisition fees for tax purposes exceeds financial reporting purposes by approximately $101,000; (iii) the Fund has recorded an impairment allowance on its investments in Local Limited Partnerships for approximately $2,013,000 that is not recorded for tax purposes; and (iv) organizational and offering costs of approximately $6,305,000 that have been capitalized for tax purposes are charged to Limited Partners’ equity for financial reporting purposes.

BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

NOTES TO THE FINANCIAL STATEMENTS (continued)

6. Federal Income Taxes (continued)

The differences in the assets and liabilities of the Fund for financial reporting purposes and tax purposes as of March 31, 2010 and December 31, 2009, respectively, are as follows:

	Financial
	Reporting		Tax
	Purposes		Purposes			Differences

Investments in Local Limited Partnerships	$	346,611	$	(1,342,218	)	$	1,688,829
Other assets	$	2,916,443	$	10,218,702		$	(7,302,259	)
Liabilities	$	254,173	$	288,682		$	(34,509	)

The differences in assets and liabilities of the Fund for financial reporting and tax purposes are primarily attributable to: (i) the cumulative equity in losses from Local Limited Partnerships for tax purposes is approximately $7,407,000 more than for financial reporting purposes, including approximately $4,024,000 of losses the Fund has not recognized relating to Local Limited Partnerships whose cumulative equity in losses exceed its total investments; (ii) the cumulative amortization of acquisition fees for tax purposes exceeds financial reporting purposes by approximately $172,000; (iii) the Fund has recorded an impairment allowance on its investments in Local Limited Partnerships for approximately $1,887,000 that is not recorded for tax purposes; and (iv) organizational and offering costs of approximately $6,305,000 that have been capitalized for tax purposes are charged to Limited Partners’ equity for financial reporting purposes.

The differences in the assets and liabilities of the Fund for financial reporting purposes and tax purposes as of March 31, 2009 and December 31, 2008, respectively are as follows:

	Financial
	Reporting		Tax
	Purposes		Purposes			Differences
Investments in Local Limited Partnerships	$	1,224,904	$	(4,063,128	)	$	5,288,032
Other assets	$	1,849,569	$	8,282,050		$	(6,432,481	)
Liabilities	$	356,210	$	320,628		$	35,582

The differences in assets and liabilities of the Fund for financial reporting and tax purposes are primarily attributable to: (i) the cumulative equity in losses from Local Limited Partnerships for tax purposes is approximately $9,805,000 more than for financial reporting purposes, including approximately $3,570,000 of losses the Fund has not recognized relating to Local Limited Partnerships whose cumulative equity in losses exceed its total investments; (ii) the cumulative amortization of acquisition fees for tax purposes exceeds financial reporting purposes by approximately $214,000; (iii) approximately $62,000 of cash distributions received from Local Limited Partnerships were received during the three months ended March 31, 2009; (iv) the Fund has recorded an impairment allowance on its investments in Local Limited Partnerships for approximately $3,488,000 that is not recorded for tax purposes; and (v) organizational and offering costs of approximately $6,305,000 that have been capitalized for tax purposes are charged to Limited Partners’ equity for financial reporting purposes.

Boston Financial Tax Credit Fund VII, A Limited Partnership

NOTES TO THE FINANCIAL STATEMENTS (continued)

7. Significant Subsidiaries

The following Local Limited Partnerships invested in by the Fund represents more than 20% of the Fund’s total assets or equity as of March 31, 2010 or 2009 or net losses for the years ended either March 31, 2010 or 2009. The following financial information represents the performance of these Local Limited Partnerships for the years ended December 31, 2009 and 2008:

Citrus Glen	2009			2008
Total Assets	$	4,455,331		$	4,985,663
Total Liabilities	$	5,692,072		$	5,867,615
Revenue	$	1,397,815		$	1,407,210
Net Loss	$	(291,867	)	$	(254,158	)

Filing Compare · BOSTON FINANCIAL TAX CREDIT FUND VII LP