DIVERSIFIED HISTORIC INVESTORS VII
10-K, 1997-10-10
REAL ESTATE
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                             UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, DC  20549
                                   
                               FORM 10-K

(Mark One)
[X]  ANNUAL  REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE  SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended            December 31, 1996
                          --------------------------------------------

[   ]  TRANSITION  REPORT  PURSUANT TO SECTION  13  OR  15(D)  OF  THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from ________________ to ___________________

Commission file number                 33-26385
                       -----------------------------------------------

                  DIVERSIFIED HISTORIC INVESTORS VII
- ----------------------------------------------------------------------
        (Exact name of registrant as specified in its charter)

           Pennsylvania                                23-2539694
- -------------------------------                   -------------------
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                    Identification No.)

        SUITE 500,  1521 LOCUST STREET,  PHILADELPHIA,  PA 19102
- ---------------------------------------------------------------------
(Address of principal executive offices)                  (Zip Code)

Registrant's telephone number, including area code  (215) 735-5001

Securities registered pursuant to Section 12(b) of the Act:   NONE

Securities registered pursuant to Section 12(g) of the Act: 17,839 Units

               UNITS OF LIMITED PARTNERSHIP INTEREST
- ----------------------------------------------------------------------
                           (Title of Class)

Indicate  by  check  mark whether the registrant  (1)  has  filed  all
reports  required to be filed by Section 13 or 15(d) of the Securities
Exchange  Act  of  1934 during the preceding 12 months  (or  for  such
shorter period that the registrant was required to file such reports),
and  (2) has been subject to such filing requirements for the past  90
days.                                                 Yes   X_  No

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

Aggregate  market  value  of  Units  held  by  non-affiliates  of  the
Registrant: Not Applicable*

*  Securities  not  quoted  in  any  trading  market  to  Registrant's
knowledge.
<PART>
                                PART I

Item 1.        Business

               a.   General Development of Business

                     Diversified Historic Investors VII ("Registrant")
is a limited partnership formed in 1988 under the Pennsylvania Uniform
Limited  Partnership  Act.  As of December 31,  1996,  Registrant  had
outstanding   17,839  units  of  limited  partnership  interest   (the
"Units").

                     Registrant  is presently in its operating  stage.
It  originally owned seven properties or interests therein.  Interests
in   two  properties  have  been  lost  through  foreclosure  of   the
properties,   and   interests  in  two  others   have   been   reduced
substantially.   See  Item 2. Properties, for  a  description  of  the
remaining properties.  It currently owns interests in five properties.
For  a  discussion of the operations of the Registrant, See  Part  II,
Item  7.  Management's Discussion and Analysis of Financial  Condition
and the Results of Operations.

                      The   following  is  a  summary  of  significant
transactions involving the Registrant's interests:

                     A  property owned by Robidoux Redevelopment Joint
Venture ("RRJV"), a limited partnership in which the Registrant owns a
99% interest, has historically been unable, from its own revenues,  to
meet  its  operating expenses and required debt service payments,  the
Developer/Operating General Partner has provided the necessary  funds.
Through 1992, these funds were provided pursuant to legal obligations.
Thereafter,  the Registrant was able to prevail upon the Developer  to
continue  such  funding on a voluntary basis.  In 1996, the  Developer
reported that it was no longer able nor willing to make such advances.
To  avoid  loss  of RRJV's property, either through foreclosure  or  a
forced  sale  at depressed values, in January 1997 the Registrant  has
sold  approximately 20% of its interest in RRJV.  Simultaneously  with
the sale, the Partnership Agreement was amended to allocate Low Income
Housing  Tax  Credits in the amount of $1,081,930 over the  next  nine
years to the purchaser.  The proceeds from the sale were sufficient to
satisfy outstanding obligations and should enable RRJV to continue  to
operate in the foreseeable future.

                     In  February  1990,  Registrant  acquired  a  99%
general   partnership   interest  in  Northern   Liberty   Development
Associates  ("NLDA"), a Pennsylvania limited partnership  which  owned
approximately  250,000 square feet ("sf") of undeveloped  property  in
the  Northern  Liberties section of Philadelphia,  Pennsylvania.   The
property  was  acquired during the active historic residential  rental
period  in  downtown Philadelphia and was intended to be rehabilitated
as  historically-certified, market rate residences; this  use  was  in
keeping  with  the redevelopment and gentrification  of  the  Northern
Liberties section of Philadelphia.  Due to the significant downturn in
many  sections  of  the country in the urban real  estate  market  for
luxury  housing, the original development plan was reconsidered.   The
Registrant explored various alternatives including the development  of
the  property  for  light  industrial  use  or  artists'  loft  space.
However,  these projects were determined to be economically infeasible
due  to  the deteriorating physical condition of the property.  During
1994, the Registrant was contacted by a local neighborhood group  that
was  interested  in  developing  the property  in  a  way  that  would
rehabilitate the existing historic structure.  The Registrant  entered
into  negotiations with the group and in December 1994, the Registrant
donated to the neighborhood group all but a 12,247 sf vacant lot.   At
the  time  of  the  donation, there was no  outstanding  debt  on  the
property.

                     In  1990, the Registrant acquired a 19%  minority
interest  for $550,000 in Mass & L Street Associates ("Mass &  L"),  a
general partnership which owned a hotel called the Morrison Clark Inn.
As  a  result of insufficient cash flow, Mass & L was unable  to  meet
scheduled  debt service payments.  In May 1992, in order to  forestall
the  threatened  foreclosure by the lender, a reorganization  petition
was  filed  pursuant  to Chapter 11 of the U.S. Bankruptcy  Code.   In
February  1993,  a  party holding a mortgage  on  the  property,  with
permission of the bankruptcy court, foreclosed on the property.

                     On  March  1, 1993, Shriver Square Joint  Venture
("SSJV"),  a general partnership in which the Registrant  owns  a  98%
interest,  filed a reorganization petition pursuant to Chapter  11  of
the U.S. Bankruptcy Code.  SSJV filed a Plan of Reorganization and  an
Amended  Plan  of  Reorganization (the "Amended Plan").   The  Amended
Plan, with some minor changes, was confirmed on October 15, 1993.  See
Item  2.c. Properties for a description of the Amended Plan.   Due  to
insufficient  cash flow generated by the property, SSJV ceased  making
debt  service  payments in January 1995.  The  loan  was  declared  in
default  by  the  lender  and, on March 30,  1995,  the  deed  to  the
property,  which was held in escrow pursuant to the Amended Plan,  was
delivered to the first mortgage holder.

                     On  August  14,  1992, Commercial Federal  Realty
Investors  Corporation ("CFRIC"), the owner of a 2%  interest  in  the
Hill  Hotel Apartments Joint Venture ("HHAJV") (the partnership  which
owns  Kensington  Tower)  filed an action in  the  District  Court  of
Douglas  County,  Nebraska seeking damages of $225,000  plus  interest
alleged  to  be  due  under  the terms of various  agreements  between
parties  which  were executed in connection with the establishment  of
the  joint  venture.   The Registrant denied  liability  and  filed  a
counterclaim seeking declaratory judgment and money damages for breach
of  contract  and  breach  of fiduciary duty.   On  June  1,  1993,  a
settlement  agreement was reached and an Amended  and  Restated  Joint
Venture  Agreement was reached whereby the Registrant was entitled  to
retain  all  funds held in escrow ($275,000) pursuant to the  original
joint   venture  agreement.   In  return,  CFRIC  agreed  to   convert
$1,319,000  in  amounts owed to it by HHAJV to a capital contribution,
(increasing  its ownership in HHAJV to 70%) and will receive  100%  of
future income, losses and tax credits for tax purposes until such time
as  it recovers $319,000 of the capital contribution, any advances  it
must make on behalf of the property in the form of loan reduction  and
cash flow shortfalls (with interest at 10%), and any amounts resulting
from  any  recapture of tax credits.  Thereafter,  future  income  and
losses  for both book and tax purposes will be allocated 70% to  CFRIC
and 30% to the Registrant.

               b.   Financial Information about Industry Segments

                    The Registrant operates in one industry segment.

               c.   Narrative Description of Business

                     Registrant  is  in  the  business  of  operating,
holding,  selling, exchanging and otherwise dealing in and  with  real
properties  containing  improvements  which  are  "Certified  Historic
Structures," as such term is defined in the Internal Revenue Code (the
"Code"),  or which are eligible for designation as such,  for  use  as
apartments,  offices, hotels and commercial spaces, or any combination
thereof, or low income housing eligible for the tax credit provided by
Section  42  of  the  Code, and such other uses  as  the  Registrant's
general partner may deem appropriate.

                      Since   the  Registrant's  inception,  all   the
properties  acquired  either  by  the Registrant,  or  the  subsidiary
partnerships  in  which it has an interest, except for  one  (Northern
Liberties),   have  been  rehabilitated  and  certified  as   Historic
Structures  and have received the related Investment Tax  Credit.   In
addition,  three  properties (Flint Goodridge,  Kensington  Tower  and
Robidoux)  are low-income housing structures which qualify  for,  have
received,  and will continue to receive, the Low Income  Tax  Credits.
Four  properties currently held by the Registrant are held for  rental
operations  and one property's final use has not yet been  determined.
At  this  time it is anticipated that all the properties,  except  the
undeveloped  property, will continue to be held for this purpose.   At
such  time  as real property values begin to increase, the  Registrant
will re-evaluate its investment strategy regarding the properties.

                      As   of  December  31,  1996,  Registrant  owned
interests  in  five  properties located in  Nebraska  (one),  Missouri
(one),  Pennsylvania  (one),  and  Louisiana  (two).   In  total,  the
properties in which the Registrant has a controlling interest  (Flint-
Goodridge  and Robidoux) contain 153 apartment units.  As of  December
31, 1996, 145 apartment units were under lease at monthly rental rates
ranging  from  $195  to  $596.   For  a  further  discussion  of   the
properties, see Item 2. Properties.

                     The Registrant is affected by and subject to  the
general   competitive  conditions  of  the  residential  real   estate
industry.   Due to the overbuilding that occurred in the  1980's,  the
competition  for  moderate-to-low income residential  tenants  in  the
local  markets  where  the  Registrant's  properties  are  located  is
generally strong.  As a result, the Registrant is forced to  keep  its
rent  levels competitively low in order to maintain moderate  to  high
occupancy  levels.   In  each market (New Orleans,  Louisiana,  Omaha,
Nebraska,  and  St.  Joseph's, Missouri), there  are  several  similar
historically-certified rehabilitated buildings that are  available  to
tenants  who fall within certain income restrictions.  However,  there
is  no organization which holds a dominant position in the residential
housing   in  any  of  the  geographic  areas  in  which  Registrant's
properties are located.

                      Registrant   has  no  employees.    Registrant's
activities are overseen by Brandywine Construction & Management,  Inc.
("BCMI"), a real estate management firm.

                d.    Financial Information about Foreign and Domestic
Operations and Export Sales.

                    See Item 8. Financial Statements and Supplementary
Data

Item 2.             Properties

                      As   of  December  31,  1996,  Registrant  owned
controlling  interests  in  three  partnerships  which  each  own  one
property  and minority interests in two additional partnerships  which
each  own  one  property.  A summary description of each  property  is
given below.

               a.   Flint-Goodridge Apartments - consists of a 93 unit
low  income housing facility at 2425 Louisiana Avenue in New  Orleans,
Louisiana.  In July 1989, Registrant acquired a 90% interest in Flint-
Goodridge  General  Partnership ("FGGP"), a general partnership  which
owns   Flint-Goodridge   Apartments,  for  a  cash   contribution   of
$2,808,000.    Registrant   subsequently   capitalized   $574,000   in
acquisition  costs  related  to  the investment.   FGGP  acquired  and
rehabilitated the buildings for $5,108,022 ($100.99 per sf), including
a mortgage note payable of $2,427,000.  The note bears interest at 10%
and  both principal (based on a 30-year amortization) and interest are
payable  monthly until June 2020.  The principal balance  at  December
31,  1996  was $2,257,650.  In addition, FGGP entered into  a  45-year
ground  lease  for the land on which the buildings are located  for  a
lump  sum rent of $90,000 payable at the inception of the lease.   The
property  is  managed  by  a  property management  firm  which  is  an
affiliate  of  the Registrant's co-general partner  in  FGGP.   As  of
December 31, 1996, 86 units were under lease (92%) with monthly  rents
ranging from $404 to $560.  All leases are renewable, one-year leases.
The  occupancy rate has been 99% for 1995, 96% for 1994, 96% for  1993
and 92% for 1992.  The monthly rental range has been approximately the
same  since  1992.  For tax purposes, this property has a federal  tax
basis  of $4,082,816 and is depreciated using the straight-line method
of  depreciation  with a useful life of 27.5 years.  The  annual  real
estate taxes are $2,953 which is based on an assessed value of $18,300
taxed  at  a  rate of $161.37 per $1,000.  No one tenant occupies  ten
percent  or more of the building.  It is the opinion of the management
of   the  Registrant  that  the  property  is  adequately  covered  by
insurance.

               b.   Robidoux School Apartments - consists of a 60 unit
low  income  housing facility at 201 South 10th Street in St.  Joseph,
Missouri.   In  September  1989, Registrant  acquired  a  99%  general
partnership interest in Robidoux Redevelopment Joint Venture ("RRJV"),
a  Missouri  general partnership which owns the property, for  a  cash
capital   contribution   of   $2,400,000.    Registrant   subsequently
capitalized  $446,000 in acquisition costs relating to the investment.
The  cost  to  acquire  and rehabilitate the property  was  $3,641,993
($99.52  sf)  including a construction note payable of  $1,450,000,  a
Community  Development Block Grant ("CDBG") loan of $74,000 (principal
balance at December 31, 1996 of $27,675), and a CDBG grant of $38,500.
The  construction loan's maturity was first extended from November 30,
1992  to  May 15, 1993, by reducing the principal balance by  $200,000
and  then  extended  again until September 15, 1994  by  reducing  the
principal  balance  by $200,000, payable $100,000 on  June  17,  1993,
$50,000 on September 14, 1993 and $50,000 on March 15, 1994.  The loan
was  further  extended to March 15, 1995 by paying  an  extension  fee
equal  to  one-half (1/2) percent of the principal balance  and  again
until  June 15, 1995.  On October 30, 1995, the construction loan  was
repaid  with  two  new loans, one for $850,000 (principal  balance  of
$831,099  at December 31, 1996) and the other for $200,000  (principal
balance of $0 at December 31, 1996.)  The first loan bears interest at
9%  with  monthly principal and interest payments based on a  30  year
amortization, principal balance due in October 2005.  The second  loan
has  an  interest rate of 8.75% and was due in March 1996.  This  note
was  repaid  by  an advance in March 1996 from David E.  Slattery,  an
affiliate of the Registrant's co-general partner.  The advance will be
repaid  out  of available cash flow and is non-interest bearing.   The
amounts repaid on the construction loan from the period November  1992
to  June  1995  were  funded by a line of credit extended  by  another
lender  ($489,539 principal outstanding at December  31,  1996)  which
bears  interest at prime plus 1% (9.25% and 9.5% at December 31,  1996
and  1995,  respectively) and is due July 2000.  The CDBG  loan  bears
interest  at  1%  and both principal and interest are payable  monthly
until   September  2000.   The  property  is  managed  by  a  property
management  firm which is an affiliate of the Registrant's  co-general
partner  of  RRJV.   As of December 31, 1996, 59 of the  60  apartment
units were under lease (98%), with monthly rents ranging from $195  to
$596.  All leases are renewable, one-year leases.  The occupancy  rate
has  been  92% for 1995, 87% for 1994, 97% for 1993 and 93% for  1992.
The  monthly rental range has been approximately the same since  1992.
For  tax purposes, this property has a federal tax basis of $4,317,625
and is depreciated using the straight-line method of depreciation with
a  useful life of 27.5 years.  The annual real estate taxes are $1,115
which  is  based on an assessed value of $13,840 taxed at  a  rate  of
$80.56 per $1,000.  No one tenant occupies ten percent or more of  the
building.  It is the opinion of the management of the Registrant  that
the property is adequately covered by insurance.

                c.    The Bakery Apartments - consists of 68 apartment
units  at 1111 South Peter Street in New Orleans, Louisiana.  In March
1991, Registrant acquired a 16.83% general partnership interest in The
Bakery  Apartments  General Partnership ("BAGP"), a Louisiana  general
partnership  which  owns  the property, for  a  cash  contribution  of
$300,000.    Certain  affiliates  of  the  Registrant   simultaneously
acquired  82.17%  of  the general partnership interests  in  the  same
Louisiana  general partnership for an aggregate cash  contribution  of
$1,400,000.    BAGP  acquired  and  rehabilitated  the  property   for
$5,029,000  ($65.18 per sf).  The rehabilitation of the  property  was
financed in part with two loans, one for $3,135,000 (principal balance
of  $3,018,994  at  December  31, 1996) and  the  other  for  $201,500
(principal balance of $194,924 at December 31, 1996).  The first  loan
bears  interest at 8.25%, with monthly principal and interest payments
based  on  a  30 year amortization schedule and is due in  1999.   The
second loan is from the general partner of BAGP and has the same terms
as the first loan.  In March 1991, a $175,000 collateral mortgage note
(principal balance of $169,385 at December 31, 1996) was issued to the
developer/partner  for  working capital  advances.   This  note  bears
interest at 9% with payments based on available positive cash flow  of
the  property.  In order to satisfy certain credit requirements of the
lender, the Registrant exchanged its general partnership interest  for
a   limited  partnership  interest  in  a  reconstituted  partnership.
However,  the  Registrant retained substantially the same  rights  and
privileges as it had as a general partner.  The property is managed by
a  property  management  firm which is an  affiliate  of  the  general
partner  of  BAGP.  As of December 31, 1996, 65 units are under  lease
(96%) with monthly rents ranging from $460 to $1,900.  All leases  are
renewable,  one year leases.  The occupancy rates have been  100%  for
1995, 93% for 1994, 92% for 1993 and 93% for 1992.  The monthly rental
range  has  been approximately the same since 1992.  For tax purposes,
this  property  has  a  federal  tax  basis  of  $3,381,856,  and   is
depreciated  using  the straight-line method of  depreciation  with  a
useful  life of 27.5 years.  The annual real estate taxes are  $11,708
which  is  based on an assessed value of $65,700 taxed at  a  rate  of
$17.82  per $100.  No one tenant occupies ten percent or more  of  the
building.  It is the opinion of the management of the Registrant  that
the property is adequately covered by insurance.

                d.   Kensington Tower ("Hill Hotel")- consists of a 65
unit  low income housing facility and 3,550 sf of commercial space  at
505  South  16th Street in Omaha, Nebraska.  In June 1989,  Registrant
acquired  a  98% general partnership interest in Hill Hotel Apartments
Joint Venture ("HHAJV"), a Nebraska general partnership which owns the
property  for  a cash contribution of $2,350,000.  HHAJV acquired  and
rehabilitated  the property for $4,369,249 ($105.93 sf),  including  a
construction note payable of $2,700,000.  The note was originally  due
in  April  1992.   During  1990  and 1991,  this  note  was  partially
refinanced  with  $400,000 of a $600,000 Community  Development  Block
Grant  ("CDBG")  loan  (principal balance  at  December  31,  1996  of
$600,000),  a $500,000 Tax Increment Financing ("TIF") Loan (principal
balance   at   December  31,  1996  of  $221,764)  and  a   $1,100,000
subordinated  note payable to the co-general partner.   In  1992,  the
remaining  $200,000 of the CDBG Loan was applied to  the  construction
loan ($60,000) and to the TIF Loan ($140,000), in order to extend  the
date of the construction loan's maturity from April 1992 to June 1993.
The construction loan balance was $1,030,591 at December 31, 1993.  In
March   1994,  the  construction  loan  was  repaid  with  a  $665,000
(principal  balance  of  $581,875  at  December  31,  1996),   15-year
permanent  loan with an interest rate of 8-3/8% and a $365,000  equity
contribution from Commercial Federal Realty Investors Corporation, the
Registrant's  co-general partner.  On June 1,  1993,  an  amended  and
restated  joint venture agreement was reached whereby the Registrant's
interest  was reduced to a 30% interest.  See Item 1.a. for additional
information   The  property  is managed  by  an  independent  property
management  firm.  As of December 31, 1996, 61 units are  under  lease
(94%)  with  monthly rents ranging from $300 to $445.  All leases  are
renewable,  one-year leases.  The occupancy rates have  been  94%  for
1995, 89% for 1994, 92% for 1993 and 89% for 1992.  The monthly rental
range  has  been approximately the same since 1992.  For tax purposes,
this  property  has  a  federal  tax  basis  of  $5,323,340,  and   is
depreciated  using  the straight-line method of  depreciation  with  a
useful  life of 27.5 years.  The annual real estate taxes are  $55,283
which  is based on an assessed value of $2,045,900 taxed at a rate  of
$27.02 per $1,000.  No one tenant occupies ten percent or more of  the
building.  It is the opinion of the management of the Registrant  that
the property is adequately covered by insurance.

Item 3.        Legal Proceedings

                a.    To the best of its knowledge, Registrant is  not
party  to,  nor  is  any of its property the subject  of  any  pending
material legal proceedings.

Item 4.        Submission of Matters to a Vote of Security Holders

                No matter was submitted during the fiscal year covered
by this report to a vote of security holders.

                                PART II

Item  5.             Market for Registrant's Common Equity and Related
Stockholder Matters

                a.   There is no established public trading market for
the  Units.   Registrant  does not anticipate  any  such  market  will
develop.    Trading  in  the  units  occurs  solely  through   private
transactions.   The  Registrant is not aware of the  prices  at  which
trades  occur.  Registrant's records indicate that 266 units of record
were sold or exchanged in 1996.

                b.    As of December 31, 1996, there were 1,717 record
holders of Units.

                c.   Registrant has not declared any cash dividends in
1996 or 1995.

Item 6.        Selected Financial Data

                The following selected financial data are for the five
years ended December 31, 1996.  The data should be read in conjunction
with  the consolidated financial statements included elsewhere herein.
This data is not covered by the independent auditors' report.

                         1996       1995        1994        1993         1992
                 
Rental income        $  713,215 $   829,061 $ 1,271,400 $ 1,323,950  $ 1,135,053
Interest income           1,742       1,591       1,851      16,010      42,911
Net loss                708,659   1,482,456   3,783,580   1,982,140   1,341,756
Net loss per Unit         39.33       82.28      209.97      110.00       74.46
Total assets (net of   
depreciation and                                
amortization)         9,929,110  10,194,943  15,894,832  19,711,424  24,851,148
Debt obligations      3,605,963   3,858,348   7,197,834   9,087,050   7,184,570

Note:   See  Part II, Item 7.2 Results of Operations  for a discussion
of   factors  which  materially  affect  the  comparability   of   the
information reflected in the above table.

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

               (1)  Liquidity

                     As  of  December  31, 1996 Registrant  had  total
unrestricted cash of $66,639.  Such funds are expected to be  used  to
pay  liabilities  and  general  and  administrative  expenses  of  the
Registrant,  and  to  fund  cash deficits  of  the  properties.   Cash
generated from operations is used primarily to fund operating expenses
and  debt  service.   If  cash flow proves  to  be  insufficient,  the
Registrant  will  attempt  to negotiate loan  modifications  with  the
various  lenders  in order to remain current on all obligations.   The
Registrant is not aware of any additional sources of liquidity.

                    As of December 31, 1996, Registrant had restricted
cash  of  $94,758  consisting primarily  of  funds  held  as  security
deposits,  replacement reserves and escrows for taxes  and  insurance.
As  a consequence of these restrictions as to use, Registrant does not
deem these funds to be a source of liquidity.

                     In  recent  years  the  Registrant  has  realized
significant  losses, including the foreclosure of two properties.   At
the  present  time,  with  the  exception  of  Northern  Liberty,  the
remaining  properties are able to generate enough cash flow  to  cover
their  operating expenses and debt service, but there is no additional
cash available to the Registrant to pay its general and administrative
expenses.

                     It  is the Registrant's intention to continue  to
hold  the  properties until they can no longer meet the  debt  service
requirements  and  the  properties  (or  its  interests  therein)  are
foreclosed, or the market value of the properties increases to a point
where  they  can be sold at a price which is sufficient to  repay  the
underlying  indebtedness.   With  respect  to  Northern  Liberty,  any
development of the remaining lot and building will require  additional
funding of capital.  The Registrant has not yet identified any sources
for this funding.

                     The legal proceedings in which the Registrant has
been  involved  over  the last several years  has  only  affected  the
Registrant's liquidity to the extent that legal fees were required  to
be  paid,  as none of the properties or interests that were ultimately
lost had previously generated any positive cash flow.

               (2)  Capital Resources

                     Due  to the relatively recent rehabilitations  of
the   properties,  any  capital  expenditures  needed  are   generally
replacement  items  and  are funded out of  cash  from  operations  or
replacement  reserves, if any.  The Registrant is  not  aware  of  any
factors which would cause historical capital expenditure levels not to
be  indicative of capital requirements in the future, and accordingly,
does  not  believe that it will have to commit material  resources  to
capital investment for the foreseeable future.

               (3)  Results of Operations

                    During 1996, the Registrant incurred a net loss of
$708,659 ($39.33 per limited partnership unit), compared to a net loss
of $1,482,456 ($82.28 per limited partnership unit) in 1995, and a net
loss  of  $3,783,580 ($209.97 per limited partnership unit)  in  1994.
Included in the 1994 loss is $2,830,664 of extraordinary loss relating
to  the donation of the property owned by Northern Liberty Development
Associates.    Included  in  the  loss  for  1995   is   $697,082   of
extraordinary loss relating to the foreclosure of Shriver Square.

                    Rental income decreased from $1,271,400 in 1994 to
$829,061 in 1995 to $713,215 in 1996.  The decrease from 1995 to  1996
and 1994 to 1995 is mainly due to the foreclosure of Shriver Square on
March 30, 1995.  The decrease from 1995 to 1996 is partially offset by
an  increase in rental income at Flint Goodridge due to higher average
rental rates.  In addition, the decrease from 1994 to 1995 is due to a
decrease at Robidoux due to a gradual decrease in rents charged by the
property  (as  discussed below) partially offset  by  an  increase  in
rental  income  at Flint Goodridge due to an increase in  the  average
occupancy at the property.

                    Operating expenses decreased from $650,715 in 1994
to  $475,921 in 1995 to $426,718 in 1995.  The decrease from  1995  to
1996 and from 1994 to 1995 is mainly due to the foreclosure of Shriver
Square on March 30, 1995.  The decrease from 1995 to 1996 is also  the
result  of  a  decrease  in maintenance expense  at  Robidoux  due  to
operational efficiencies achieved at the property partially offset  by
an  increase in maintenance expense at Flint Goodridge due to deferred
maintenance  performed  in 1996 and increase  in  wages  and  salaries
expense  at  Flint  Goodridge due to the fact that employees  received
cost of living pay increases.  The decreased loss from 1995 to 1996 is
also  due to an overall decrease in rental operations expense at Flint
Goodridge  due to a decrease in maintenance expense as a result  of  a
reduction  in  security services, partially offset by an  increase  in
wages and salaries expense (which was due to employees receiving  cost
of  living  pay  increases  as  well as  higher  health  and  property
insurance premiums).

                     Interest expense decreased from $625,778 in  1994
to  $437,942 in 1995 to $355,222 in 1996.  The decrease from  1995  to
1996  and  1994  to 1995 is due to the foreclosure of Shriver  Square.
The  decrease from 1995 to 1996 is also due to a decrease in  interest
expense at Robidoux resulting from a non-interest bearing advance made
by the Registrant's co-general partner in order to repay the principal
balance  of  a  loan which matured in March 1996.   In  addition,  the
decrease from 1994 to 1995 is due to a decrease at Flint Goodridge due
to an audit adjustment made in 1994 to accrue interest on a note which
was in prior years deemed to be non-interest bearing, partially offset
by  an increase at Robidoux due to the refinancing of the construction
loan which lowered the interest rate.

                      Depreciation  and  amortization  decreased  from
$733,184  in  1994  to  $494,626 in 1995 to  $426,589  in  1996.   The
decrease  from 1995 to 1996 and 1994 to 1995 is due to the foreclosure
on  Shriver Square.  The decrease from 1995 to 1996 is also due  to  a
decrease  in depreciation expense at Flint Goodridge due to  the  fact
that  all  personal property became fully depreciated  in  the  second
quarter  of  1996  partially  offset by an  increase  in  amortization
expense at Robidoux due to the amortization of loan costs incurred  in
the refinancing of the construction loan.

                     During the year, losses of $363,000 were incurred
at  Registrant's properties compared to a loss of $711,000 in 1995 and
a  loss  of  $627,000  in  1994. A discussion of  individual  property
operations/activities follows:

                     In  1996, Registrant sustained a loss of $174,000
at Flint-Goodridge including $206,000 of depreciation and amortization
expense  compared  to  a  loss  of  $155,000  including  $213,000   of
depreciation and amortization expense in 1995 and a loss  of  $209,000
including $227,000 of depreciation and amortization expense  in  1994.
Since  Flint-Goodridge  is a low income housing  property,  rents  are
fixed  in  relation to specified income levels of its tenants.   As  a
result,  the  property experiences high occupancy  but  rental  income
remains low.  The increase in the loss from 1995 to 1996 is the result
of an increase in maintenance and wages and salaries expense partially
offset  by an increase in rental income and a decrease in depreciation
expense.   Maintenance  expense increased due to deferred  maintenance
performed  in 1996 while wages and salaries expense increased  due  to
the fact that employees received cost of living pay increases.  Rental
income  increased due to an increase in the average rental  rates  and
depreciation  decreased due to the fact that personal property  became
fully depreciated in the second quarter of 1996.  The decrease in  the
loss  from 1995 to 1994 is due to an increase in rental income  and  a
decrease  in interest and maintenance expense partially offset  by  an
increase  in insurance and wage expense.  Rental income increased  due
to  higher occupancy levels during the year and interest decreased due
to an audit adjustment made in 1994 to accrue interest on a note which
was  in  prior  years deemed to be non-interest bearing.   Maintenance
expense decreased as a result of a reduction in security services, and
the increased wages expense is due to the fact that employees received
cost  of  living pay increases. Health and property insurance premiums
also increased during 1995.

                    In 1996, Registrant incurred a loss of $189,000 at
Robidoux  including $175,000 of depreciation and amortization  expense
compared to a loss of $211,000 including $173,000 of depreciation  and
amortization expense in 1995 and a loss of $157,000 including $173,000
of depreciation and amortization expense in 1994.  Since Robidoux is a
low  income housing property, rents are fixed in relation to specified
income  levels of its tenants.  Accordingly, as with Flint  Goodridge,
the property experiences high occupancy but rental income remains low.
The  decrease  in the loss from 1995 to 1996 is due to a  decrease  in
maintenance  and interest expense partially offset by an  increase  in
amortization   expense.    Maintenance  expense   decreased   due   to
operational  efficiencies  achieved at  the  property  while  interest
expense  decreased due to a non-interest bearing advance made  by  the
Registrant's  co-general  partner in  order  to  repay  the  principal
balance  of a loan which matured in March 1996.  Amortization  expense
increased  due  to  the  amortization of loan costs  incurred  in  the
refinancing of the construction loan.  The increase in the  loss  from
1994  to  1995  is the result of a decrease in rental income  combined
with  an increase in interest expense.  Rental income decreased  as  a
result  of a turnover from higher rental rate tenants to lower  rental
rate  tenants while interest expense increased due to the  refinancing
of the construction loan.

                     In  1996,  Registrant incurred a loss  of  $0  at
Shriver  Square  compared to a loss of $345,000 including  $61,000  of
depreciation and amortization expense in 1995 and a loss  of  $261,000
including $246,000 of depreciation and amortization expense  in  1994.
The  1995  loss  without  effect of the foreclosure  would  have  been
$147,036.   The increase in the loss from 1994 to 1995 results  mainly
from  the  loss of the property on March 30, 1995 and an  increase  of
legal  fees associated with the foreclosure of the property.  Included
in  operations  from  1995  is  an  extraordinary  loss  of  $197,715,
representing  the  difference between the fair  market  value  of  the
assets foreclosed and the liabilities satisfied.

                     In  1994, the Registrant was contacted by a local
neighborhood that was interested in developing the property  owned  by
Northern  Liberty Development Associates ("NLDA") in a way that  would
rehabilitate the existing historic structure.  The Registrant  entered
into  negotiations with the group and in December 1994, the Registrant
donated to the neighborhood group all but a 12,247 sf vacant lot.   At
the  time  of  the  donation, there was no  outstanding  debt  on  the
property.  Included in operations for 1994 is an extraordinary loss of
$2,830,664 relating to the donation of the property.

                    Summary of Minority Interest Investments

                     The  Registrant owns a minority interest  in  the
Bakery  Apartments  which it accounts for on  the  cost  method.   The
Registrant  does  not  include  the  assets,  liabilities,  income  or
expenses of the Bakery in the consolidated financial statements.   The
following  operating  information is provided for  the  property.   In
1996,  the  Bakery  Apartments incurred a loss of  $211,000  including
$236,000 of depreciation and amortization expense compared to  a  loss
of  $180,000  including  $252,000  of  depreciation  and  amortization
expense  in 1995 compared to a loss of $201,000 including $252,000  of
depreciation and amortization expense in 1994.  The Registrant expects
that  full  occupancy and positive cash flow will continue  throughout
1997.

                      The  Registrant  owns  a  minority  interest  in
Kensington  Tower  which it accounts for on the  equity  method.   The
Registrant  does not include the assets or liabilities  of  Kensington
Tower   in  the  consolidated  financial  statements.   The  following
operating  information  is  provided  for  the  property.   In   1996,
Registrant incurred a loss of $49,000 compared to a loss of $43,000 in
1995,  and  a  loss  of  $51,000 in 1994.  The Registrant  expects  to
achieve in 1997 results comparable to those experienced in 1996.

                    Effective January 1, 1995, the Partnership adopted
the provisions of Statement of Financial Accounting Standards ("SFAS")
No. 121, "Accounting for the Impairment of Long - Lived Assets and for
Long  -  Lived  Assets to be Disposed Of."  There  was  no  cumulative
effect of the adoption of SFAS No. 121.

Item 8.        Financial Statements and Supplementary Data

               Registrant is not required to furnish the supplementary
financial information referred to in Item 302 of Regulation S-K.
<PAGE>                                   
                                   
                     Independent Auditor's Report

To the Partners of
Diversified Historic Investors VII

We  have  audited  the  accompanying consolidated  balance  sheets  of
Diversified   Historic   Investors   VII   (a   Pennsylvania   Limited
Partnership) and subsidiaries as of December 31, 1996 and 1995 and the
related statements of operations, changes in partners' equity and cash
flows  for  the years ended December 31, 1996, 1995 and  1994.   These
consolidated  statements are the responsibility of  the  Partnership's
management.   Our  responsibility is to express an  opinion  on  these
consolidated  financial statements based on our audits.   We  did  not
audit the financial statements of Flint Goodridge General Partnership,
which statements reflect total assets of $3,930,967 and $4,096,553  as
of  December  31, 1996 and 1995, respectively, and total  revenues  of
$528,792  and  $514,172, respectively for the years  then  ended.   In
addition,  we  did not audit the financial statements  of  The  Bakery
Apartments General Partnership, which statements reflect total  assets
of  $3,943,320  and  $4,137,829  as of  December  31,  1996  and  1995
respectively, and total revenues of $629,206 and $640,781 respectively
for  the  years  then ended.  Those statements were audited  by  other
auditors  whose  reports have been furnished to us, and  our  opinion,
insofar  as  it  relates to the amounts included for  Flint  Goodridge
General Partnership and The Bakery Apartments General Partnership,  is
based solely on the reports of the other auditors.

We conducted our audits in accordance with generally accepted auditing
standards.   Those  standards require that we  plan  and  perform  the
audits  to  obtain  reasonable assurance about whether  the  financial
statements  are  free  of material misstatement.   An  audit  includes
examining,  on  a  test  basis, evidence supporting  the  amounts  and
disclosures  in  the  financial statements.  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 and the report  of
other auditors provide a reasonable basis for our opinion.

In  our opinion, based on our audits and the report of other auditors,
the  consolidated  financial  statements  referred  to  above  present
fairly,   in   all  material  respects,  the  financial  position   of
Diversified Historic Investors VII as of December 31, 1996  and  1995,
and the results of their operations and their cash flows for the years
ended  December  31, 1996, 1995 and 1994 in conformity with  generally
accepted accounting principles.

Our  audits  were made for the purpose of forming an  opinion  on  the
basic  financial  statements taken as a whole.  The Schedule  of  Real
Estate  and Accumulated Depreciation on page 30 is presented  for  the
purposes  of  additional analysis and is not a required  part  of  the
basic  financial statements.  Such information has been  subjected  to
the  auditing  procedures applied in the audit of the basic  financial
statements  and,  in  our opinion, is fairly stated  in  all  material
respects  in  relation to the basic financial statements  taken  as  a
whole.


Gross, Kreger & Passio, L.L.C.
Philadelphia, Pennsylvania
February 12, 1997
<PAGE>
                     Independent Auditor's Report

To the Partners of
Flint Goodridge General Partnership
New Orleans, Louisiana:

We have audited the accompanying balance sheets of HUD Project No. 064-
35269-PM  of  the Flint Goodridge General Partnership, as of  December
31,  1996  and 1995, and the related statements of income, changes  in
partners'  equity,  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 generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General  of the 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.   An  audit
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  Flint
Goodridge  General  Partnership, HUD Project No. 064-35269-PM,  as  of
December 31, 1996 and 1995, and the results of its operations, changes
in  partners'  equity,  and cash flows for the  years  then  ended  in
conformity with generally accepted accounting principles.

In  accordance with Government Auditing Standards and the Consolidated
Audit  Guide for Audits of HUD Programs issued by the U.S.  Department
of  Housing and Urban Development, we have also issued a report  dated
January  27,  1997,  on our consideration of Flint  Goodridge  General
Partnership's internal control structure and reports dated January 27,
1997, on its compliance with specific requirements applicable to major
HUD  programs and specific requirements applicable to Affirmative Fair
Housing.

Pailet, Meurier and LeBlanc, L.L.P.
Metairie, Louisiana
January 27, 1997
<PAGE>
                     Independent Auditor's Report

To the Partners of
The Bakery Apartments Limited Partnership

We  have  audited  the  accompanying  balance  sheets  of  The  Bakery
Apartments Limited Partnership, for December 31, 1996 and 1995 and the
related statements of operations, partners' equity and cash flows  for
the years 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 audit.

We conducted our audits in accordance with generally accepted auditing
standards.   Those  standards require that we  plan  and  perform  the
audits  to  obtain  reasonable assurance about whether  the  financial
statements  are  free  of material misstatement.   An  audit  includes
examining,  on  a  test  basis, evidence supporting  the  amounts  and
disclosures  in  the  financial statements.  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 The Bakery
Apartments  Limited Partnership as of December 31, 1996 and  1995  and
the  results of its operations and its cash flows for the  years  then
ended in conformity with generally accepted accounting principles.

Pailet, Meurier and LeBlanc, L.L.P.
Metairie, Louisiana
January 17, 1997
<PAGE>
                  DIVERSIFIED HISTORIC INVESTORS VII
                        (a limited partnership)
                                   
              INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                                   
                   AND FINANCIAL STATEMENT SCHEDULES


Consolidated financial statements:                                   Page

       Consolidated Balance Sheets at December 31, 1996 and 1995      18
                                                
       Consolidated Statements of Operations for the Years Ended
         December 31, 1996, 1995, and 1994                            19
                                                               
       Consolidated Statements of Changes in Partners' Equity for
         the Years Ended December 31, 1996, 1995, and 1994            20
                                                    
       Consolidated Statements of Cash Flows for the Years Ended
         December 31, 1996, 1995, and 1994                            21
                                                    
       Notes to consolidated financial statements                    22-27
                                                
Financial statement schedules:          

       Schedule XI - Real Estate and Accumulated Depreciation         29
                                                    
       Notes to Schedule XI                                           30



All other schedules are omitted because they are not applicable or the
required information is shown in the consolidated financial statements
or notes thereto.
<PAGE>
                      DIVERSIFIED HISTORIC INVESTORS VII
                           (a limited partnership)
                                                    
                          CONSOLIDATED BALANCE SHEETS
                           December 31, 1996 and 1995
                                                    
                                    Assets

                                                  1996               1995  
Rental properties at cost:                                
       Land                                    $    35,469       $    35,469
       Buildings and improvements               10,520,536        10,517,258 
                                                ----------        ---------- 
                                                10,556,005        10,552,727
       Less - accumulated depreciation          (2,826,761)       (2,405,790)
                                                ----------        ----------
                                                 7,729,244         8,146,937
                                     
Cash and cash equivalents                           66,639            29,942
Restricted cash                                     94,758            87,909 
Investment in affiliate                          1,443,806         1,492,779
Other assets (net of accumulated                                            
       amortization of $98,531 and $92,912)        594,663           437,376 
                                                ----------        ----------
             Total                             $ 9,929,110       $10,194,943 
                                                ==========        ==========
                         Liabilities and Partners' Equity
                                             
Liabilities:                                 
       Debt obligations                        $ 3,605,963       $ 3,858,348 
       Accounts payable:                    
             Trade                                 800,373           380,863
             Related parties                       360,346           105,369
       Interest payable                             40,631            53,122 
       Tenant security deposits                     27,352            23,753
       Other liabilities                            31,502                 0
                                                ----------        ----------
             Total liabilities                   4,866,167         4,421,455 
                                                ----------        ----------
Minority interests                                 250,262           252,148
                                                ----------        ----------
Partners' equity                                 4,812,681         5,521,340
                                                ----------        ----------
             Total                             $ 9,929,110       $10,194,943
                                                ==========        ==========

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

                        DIVERSIFIED HISTORIC INVESTORS VII
                              (a limited partnership)
                                                    
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                                  
               For the Years Ended December 31, 1996, 1995 and 1994


                                              1996        1995          1994
                                    
Revenues:                              
       Rental income                      $  713,215   $  829,061   $1,271,400
       Interest income                         1,742        1,591        1,851
                                           ---------    ---------    ---------
            Total revenues                   714,957      830,652    1,273,251
                                           ---------    ---------    ---------
Costs and expenses:                                                    
       Rental operations                     426,718      475,921      650,715
       General and administrative            168,000      168,000      168,000
       Interest                              355,222      437,942      625,778
       Depreciation and amortization         426,589      494,626      733,184
                                           ---------    ---------    ---------
             Total costs and expenses      1,376,529    1,576,489    2,177,677
                                           ---------    ---------    ---------
Loss before minority interests and    
   equity in affiliate                      (661,572)    (745,837)    (904,426)
Minority interests' portion of loss            1,886        3,444        2,581
Equity in net loss of affiliate              (48,973)     (42,981)     (51,071)
                                           ---------    ---------    ---------
Loss before extraordinary item              (708,659)    (785,374)    (952,916)
Extraordinary loss                                 0     (697,082)  (2,830,664)
                                           ---------    ---------    ---------
Net loss                                 ($  708,659) ($1,482,456) ($3,783,580)
                                           =========    =========    =========
Net loss per limited partnership unit:       
       Loss before minority interests and             
          equity in affiliate            ($    36.71) ($    41.39) ($    50.19)
       Minority interests                        .10          .19          .14 
       Equity in net loss of affiliate         (2.72)       (2.39)       (2.83)
                                           ---------    ---------    ---------
       Loss before extraordinary item         (39.33)      (43.59)      (52.88)
       Extraordinary item                          0       (38.68)     (157.09)
                                           ---------    ---------    ---------
                                         ($    39.33) ($    82.28) ($   209.97)
                                           =========    =========    =========

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

                      DIVERSIFIED HISTORIC INVESTORS VII
                         (a limited partnership)
                                                    
            CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY
                                                    
             For the Years Ended December 31, 1996, 1995 and 1994


                                              Dover
                                             Historic         
                                             Advisors    Limited               
                                              VII (1)  Partners (2)   Total
                                                    
Percentage participation in profit or loss     1%          99%         100%

Balance at December 31, 1993                 518,379   10,268,997   10,787,376
Net loss                                     (37,836)  (3,745,744)  (3,783,580)
                                             -------   ----------   ----------
Balance at December 31, 1994                 480,543    6,523,253    7,003,796
Net loss                                     (14,824)  (1,467,632)  (1,482,456)
                                             -------    ---------    ---------
Balance at December 31, 1995                 465,719    5,055,621    5,521,340
Net loss                                      (7,087)    (701,572)    (708,659)
                                             -------    ---------    ---------
Balance at December 31, 1996                $458,632   $4,354,049   $4,812,681
                                             =======    =========    =========


 (1)   General Partner.

 (2)   17,839 limited partnership units outstanding at
       December 31, 1996, 1995, and 1994.

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

                       DIVERSIFIED HISTORIC INVESTORS VII
                             (a limited partnership)
                                                    
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                    
               For the Years Ended December 31, 1996, 1995 and 1994

                                               1996        1995         1994
                                           
Cash flows from operating activities:    
Net loss                                    ($708,659) ($1,482,456) ($3,783,580)
   Adjustments to reconcile net loss to net
     cash provided by (used in) operating
     activities:
Depreciation and amortization                 426,589      494,626      733,184
Extraordinary loss                                  0      697,082    2,830,664
Equity in loss of affiliate                    48,973       42,981       51,071
Changes in assets and liabilities:                               
   Increase in restricted cash                 (6,849)      (9,743)     (48,031)
   (Increase) decrease in other assets       (162,905)      (2,831)      17,292
   Increase (decrease) in accounts payable
     - trade                                  419,510      233,399       (4,435)
   Increase (decrease) in accounts payable -                      
     related parties                          254,977      (59,456)     (35,946)
   (Decrease) increase in interest payable    (12,491)      46,618       19,385
   Increase in tenant security deposits         3,599        1,952          135
   Increase in other liabilities               31,502            0            0
   Net cash provided by (used in) operating   -------    ---------    ----------
     activities                               294,246      (37,828)    (220,261)
Cash flows from investing activities:         -------    ---------    ---------
  Purchase of rental property and improvements (3,278)     (12,270)     (67,615)
                                              -------    ---------    ---------
   Net cash used in investing activities:      (3,278)     (12,270)     (67,615)
Cash flows from financing activities:         -------    ---------    --------- 
  Proceeds from debt financing                      0      295,142       65,926
  Principal payments                         (252,385)    (224,567)     (79,190)
  Minority interest                            (1,886)      (3,444)      (2,581)
   Net cash (used in) provided by financing   -------    ---------    ---------
     activities                              (254,271)      67,131      (15,845)
Net increase (decrease) in cash and cash      -------    ---------    ---------
  equivalents                                  36,697       17,033     (303,721)
                                              -------    ---------    ---------
Cash and cash equivalents at beginning of year 29,942       12,909      316,630
                                              -------    ---------    ---------
Cash and cash equivalents at end of year     $ 66,639   $   29,942   $   12,909
                                              =======    =========    =========
Supplemental Disclosure of Cash Flow Information:  
   Cash paid during the year for interest    $379,053   $  426,051   $  602,291

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

                      DIVERSIFIED HISTORIC INVESTORS VII
                            (a limited partnership)
                                                    
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                    
NOTE A - ORGANIZATION

Diversified  Historic Investors VII (the "Partnership") was formed in December
1988 with  Dover  Historic Advisors  VII  (a general partnership whose partners
are Mr. Gerald Katzoff and Dover Historic  Advisors, Inc.)  as  the General
Partner.  Upon the admittance of additional limited partners, the initial 
limited partner withdrew.

The   Partnership  was  organized  to  acquire,  rehabilitate,  and  manage
real properties containing improvements  which are Certified Historic 
Structures, as defined in the Internal Revenue  Code  of  1986 ("the  Code"), 
or  which may also be (but are not required to be) eligible for low  income
housing tax credits as provided by Section 42 of the Code, and such other uses 
as Dover Historic Advisors  VII  (the "General  Partner")  deems  appropriate,
and to engage in any and all activities  related  or  incidental thereto.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A  summary  of  the  significant  accounting policies consistently applied  in
the preparation of the accompanying consolidated financial statements follows.

1.     Principles of Consolidation

The  accompanying  financial  statements of the Partnership include  the 
accounts  of  three  subsidiary partnerships  (the  "Ventures"), in which the
Partnership has controlling  interests,  with  appropriate elimination of
inter-partnership transactions and balances.  In addition, the Partnership owns
a minority interest  of 16.83% in one partnership, which it accounts for on the
cost method, and a minority interest of  30%  in  one  partnership,  which it
accounts for on the equity method.  These  financial  statements reflect  all
adjustments (consisting only of normal recurring adjustments) which, in the 
opinion  of  the General Partner, are necessary for a fair statement of results
for those years.

2.     Deferred Expenses

Loan  fees  have  been  incurred with respect to certain loans.  Such fees were
deferred  and  are  being amortized over the term of the related loans.

The Partnership prepaid all amounts due under a ground lease for one of its
properties.  Such prepayments have been deferred and are being amortized over
the term of the lease (45 years).


3.     Net Loss per Limited Partnership Unit

The  net loss per limited partnership unit is based on the weighted average
number of limited partnership units outstanding during the period (17,839 in
1996, 1995, and 1994).

4.     Cash and Cash Equivalents

The Partnership considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents.

5.     Restricted Cash

Restricted  cash includes amounts held for tenant security deposits, real estate
tax reserves and other cash restricted as to use.

6.     Depreciation

Depreciation  is computed using the straight-line method over the estimated
useful lives of  the  assets.  Buildings and improvements are depreciated
over 25 years and furniture and fixtures over five years.

7.     Income Taxes

Federal  and  state  income taxes are payable by the individual partners;
accordingly, no provision or liability for income taxes is reflected in the
financial statements.

8.     Revenue Recognition

Revenues  are recognized when rental payments are due on a straight-line basis.
Rental payments received in advance are deferred until earned.

9.      Rental Properties

Rental properties are stated at cost.  A provision for impairment of value is
recorded when a decline in value of property is determined to be other than
temporary as a result of one or more of the following: (1) a property is
offered for sale at a price below its current carrying value, (2) a property
has significant  balloon payments due within the foreseeable future for which
the Partnership does no have the resources to meet, and anticipates it will be
unable to obtain replacement financing or debtmodification sufficient to allow
a continued hold of the property over a reasonable period of time, (3) a 
property has been, and is expected to continue, generating significant operating
deficits and the Partnership is unable or unwilling to sustain such deficit
results of operations, and has been unable to, or anticipates it will be unable
to, obtain debt  modification, financing or refinancing  sufficient  to allow
a  continued hold of the property for a reasonable period of time or, (4) a
property's  value  has declined  based on management's expectations with respect
to projected future operational cash flows and prevailing economic conditions.
An impairment loss is indicated when the undiscounted, sum of  estimated future
cash flows from an asset, including estimated sales proceeds, and assuming a
reasonable period of ownership up to 5 years, is less than the carrying amount
of the asset.  The impairment loss is measured as the difference between the
estimated fair value and the carrying amount of the asset.  In the absence of
the above circumstances, properties and improvements are stated at cost.
An analysis is done on an annual basis at December 31.

10.    New Accounting Pronouncement

Effective  January  1, 1995, the Partnership adopted the provisions of Statement
of Financial  Accounting Standards ("SFAS") No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of."
There was no cumulative effect of the adoption of SFAS No. 121.

NOTE C - PARTNERSHIP AGREEMENTS

The  significant terms of the Agreement of Limited Partnership (the
"Agreement"), as they relate  to  the financial statements, follow:

All distributable cash from operations (as defined in the Agreement of Limited
Partnership) will be distributed 1% to the General Partner and 99% to the
 limited partners.

All  distributable  cash  from  sales or dispositions (as defined) will be
distributed  to  the  limited partners  up  to  their adjusted invested capital
(as defined) plus an amount equal to  the  sum  of  the greater  of an 8.5%
cumulative, noncompounded annual return on the average after-credit invested 
capital (as  defined), less amounts previously distributed (as defined);
thereafter, after receipt by the General Partner or its affiliates of any
accrued but unpaid real estate brokerage commissions, the balance will be
distributed 15% to the General Partner and 85% to the limited partners.

Net income or loss from operations of the Partnership is allocated 1% to the 
General Partner and 99% to the limited partners.

NOTE D - ACQUISITIONS

The Partnership acquired controlling general or limited partnership interests in
Ventures  and  minority interests in partnerships during the period from June
1989 to March 1991, as discussed below.

In June 1989, the Partnership was admitted, with a 98% general partner interest,
to a Nebraska  general partnership which owns a building located in Nebraska,
consisting of 65 apartment units and 3,550 square feet  of  commercial  space,
for a cash capital contribution of $2,350,000.  In addition,  $3,000,000 of
rehabilitation  costs  relating to the investment have been capitalized  as
part of the building and improvements.  These capitalized costs have been
removed from the balance sheet.  Pursuant to the June 1993 Amended and Restated
Joint Venture Agreement, the Partnership's interest was reduced to 30%.

In  July  1989,  the  Partnership was admitted, with a 90% general partner
nterest,  to a Pennsylvania general partnership which owns two buildings
located in Louisiana, consisting of 93 apartments units, for a cash capital
contribution of $2,808,000.

In  September  1989,  the Partnership was admitted, with a 99% general partner
interest, to a Missouri general partnership which owns a building located in
Missouri, consisting of 60 apartment units, for a cash capital contribution of
$2,400,000.  In addition, $2,300,000 of rehabilitation costs relating to the
investment have been capitalized as part of the building and improvements.

In  December  1989,  the  Partnership was admitted, with a 98% general partner
interest, to a Nebraska general partnership which owns property located in South
Dakota, consisting of 58,793 square feet of commercial  space, for a cash
capital contribution of $1,350,000.  In addition, $3,400,000 of acquisition
costs relating to the investment have been capitalized as part of the building
and improvements.   In March  1995,  the  deed to the property, which was held
in escrow, was delivered to  the  first  mortgage
holder.

In  February  1990, the Partnership was admitted, with a 99% general partner
interest, to a Pennsylvania general partnership, which owned a property which
was originally intended to be rehabilitated into 250,000  square feet of
residential and commercial space located in Pennsylvania, for a cash
contribution of  $2,000,000.  In December 1994, the Partnership donated to a
neighborhood group all but a 12,247 sf vacant lot.

In September 1990, the Partnership purchased 19% interest of a Washington, D.C.
general partnership which owned a building located in Washington, D.C.,
consisting of 54 hotel rooms, for a cash capital contribution of $550,000.
In February 1993, a party holding a mortgage on the property, with  permission
of the bankruptcy court, foreclosed on the property.

In March 1991, the Partnership purchased 16.83% interest of a Pennsylvania
general partnership which owns a building located in Louisiana, consisting of 68
units, for $300,000.

NOTE E - DEBT OBLIGATIONS

Debt obligations are as follows:                                   
                                                              December 31,
                                                           1995         1994
                                                          ------       ------
Mortgage payable, interest at 10%; payable in monthly   $2,257,650  $2,280,454
installments of principal and interest of $20,819, with
maturity in June 2020; collateralized by related rental
property.

Note payable, interest at 9%; principal and interest       831,099     847,273
payments of $7,648 due monthly; with maturity at October
2005; collateralized by related rental property.

Note payable, interest at 8.75%; equal monthly installments      0     198,058
of $50,000 beginning December 15, 1995; with balance of
principal and accrued interest due March 1996.

Note payable, interest only at prime plus 1% (effective    489,539     497,108
rate of 9.25% and 9.5% at December 31, 1996 and 1995,
respectively); payable in monthly payments of principal
of $5,300 and interest; remaining principal balance due
July 2000; collateralized by related rental property.

Note payable, interest at 1%; principal and interest
payments of $648 due monthly; remaining principal due
September 2000; collateralized by related rental property.  27,675      35,455
                                                         ---------   ---------
                                                        $3,605,963  $3,858,348
                                                         =========   =========
Maturities of debt obligations at December 31, 1996, are as follows:

               Year Ending December 31,

                          1997                   $    90,888
                          1998                        90,419
                          1999                        89,384
                          2000                       445,614
                          2001                        62,844
                          Thereafter               2,826,815
                                                   ---------
                                                  $3,605,963
                                                   =========
NOTE F - RELATED PARTY TRANSACTIONS

Included in Accounts Payable - Related Party is $311,030 and $55,674 at
December 31, 1996 and 1995, respectively, owed to an affiliate of the General
Partner, by one of the Partnership's Ventures, for additional amounts advanced
for working capital needs.  These advances are non-interest bearing and will
be paid out of available cash flow.

Included in Accounts Payable - Related Party is $49,316 and $49,695 at December
31, 1996 and 1995, respectively, owed to the co - general partner, by one of
the Partnership's Ventures, for additional amounts advanced for working capital
needs.  These advances are non-interest bearing and will be paid out of
available cash flow.

NOTE G - COMMITMENTS AND CONTINGENCIES

In 1994, the Registrant was contacted by a local neighborhood group that was
interested in developing the property located in the Northern Liberties section
of Philadelphia, Pennsylvania in a way that would rehabilitate the existing
historic structure.  The Registrant entered into negotiations with the group
and in December 1994, the Registrant donated to the neighborhood group all but
a 12,247 sf vacant lot. At the time of the donation, there was no outstanding
debt on the property.

On March 1, 1993, Shriver Square Joint Venture ("SSJV") filed a reorganization
petition pursuant to Chapter 11 of the U.S. Bankruptcy Code.  On September 10,
1993, SSJV filed the Third Amended Plan of Reorganization (the "Plan").  The
Plan was confirmed in October 1993. Due to insufficient cash flow generated 
by the  property, SSJV ceased making debt service payments in January  1995.
The loan was declared in default by the lender and on March 30, 1995, the deed
to the property, which was held in escrow  pursuant to the Amended Plan, was
delivered to the first mortgage  holder.   The  Partnership recognized an
extraordinary loss of $697,082 in 1995 for the difference between the book 
value of the property (which approximated fair value) and the extinguished debt.

NOTE H - SUBSEQUENT EVENTS

A  property owned by Robidoux Redevelopment Joint Venture ("RRJV"), a limited
partnership in which the Partnership owns a 99% interest, has historically been
unable, from its own revenues, to meet its operating expenses and required debt
service payments, the Developer/Operating General Partner has provided the 
necessary funds.  Through 1992, these funds were provided pursuant to  legal
obligations, thereafter, the Registrant was able to prevail upon the Developer
to continue such funding on a voluntary basis.  In 1996, the Developer reported 
that it was no longer able nor willing to make such advances.  To avoid  loss
of  RRJV's  property, either through foreclosure or a forced sale at  depressed 
values,  in January 1997 the Partnership has sold approximately 20% of its
interest in RRJV.  Simultaneously with the sale,  the Partnership Agreement was
amended to allocate Low Income Housing Tax Credits in the amount of $1,081,930
over the next nine years to the purchaser.  The proceeds from the sale  were
sufficient to satisfy outstanding obligations and should enable RRJV to continue
to operate in the foreseeable future.

NOTE I - INCOME TAX BASIS RECONCILIATION

Certain items enter into the determination of the results of operations in
different time period for financial reporting ("book") purposes and for income
tax ("tax") purposes.  A reconciliation follows:

                                               For the Years Ended December 31,

                                                 1996        1995        1994
                                                ------      ------      ------
Net loss - book                               ($708,659)($1,482,456)($3,783,580)
Legal fees                                            0           0    (312,280)
Loss on foreclosure                                   0   1,865,551     349,994
Loss on donation                               (325,907)          0           0
Other timing differences                            370     (22,453)    (50,366)
Minority interest                                16,651      17,795      40,559
Excess of book over tax depreciation            163,237     203,405     224,885
                                              ---------   ---------   ---------
Net income (loss) - tax                     ($  854,308) $  581,842 ($3,530,788)
                                              =========   =========   =========

Partners' equity - book                      $4,812,681  $5,521,340  $7,003,796
Distribution to limited partners                 33,861      33,861      33,861
Costs of issuance                             2,288,270   2,288,270   2,288,270
Basis reduction due to Investment Tax Credit (3,790,041) (3,790,041) (3,790,041)
Cumulative tax under book loss                3,432,945   3,578,594     627,138
Capital contributions                          (641,684)   (641,684)   (641,684)
                                              ---------   ---------   ---------
Partner's equity - tax                       $6,136,032  $6,990,340  $5,521,340
                                              =========   =========   =========

<PAGE>

                                        SUPPLEMENTAL INFORMATION
<PAGE>

                       DIVERSIFIED HISTORIC INVESTORS VII
                            (a limited partnership)
                                         
              SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION
                               DECEMBER 31, 1996                 

                               Initial Cost to           Costs
                                 Partnership          Capitalized
                                     (b)              Subsequent
                                                          to
                                                      Acquisition

                                          Buildings       
                                              and          
Description(a)   Encumbrances  Land (b)  Improvements Improvements
                    (d)
                                                        
93 unit                                                       
apartments in
New Orleans, LA   $2,257,650    $17,182   $4,667,050    $969,253
                                                   
60 unit                                                       
apartments in
St. Joseph, MO     1,348,314      1,500    2,482,287   2,272,024
                                                              
250,000 square                                                
feet of 
residential                                                
and commercial
space in
Philadelphia, PA        -        16,787    1,792,112     193,190
                   ---------     ------    ---------   ---------
                  $3,605,964    $35,469   $8,941,449  $3,434,467
                   =========     ======    =========   =========

                 Gross Amount at which
                Carried at December 31, 1996

                           Buildings                                
                             and               Accumulated   Date of    Date
Description (a)  Land    Improvements  Total   Depreciation Construct Acquired
                  (b)                  (b)(c)     (c)(e)        
93 unit                                                                
apartments in
New Orleans, LA  $17,182  $5,655,494  $5,672,676  $1,594,330    1989     7/89
                                                                      
60 unit                                                               
apartments in
St. Joseph, MO     1,500   4,763,339   4,764,839   1,203,953    1989     9/89
                                                            
250,000 square                                            
feet of
residential                                                                   
and commercial
space in
Philadelphia,PA   16,787     101,703     118,490     28,478     (a)      2/90
                  ------  ----------  ----------  ---------
                 $35,469 $10,520,536 $10,556,005 $2,826,761                  
                  ======  ==========  ==========  =========




<PAGE>
                     DIVERSIFIED HISTORIC INVESTORS VII
                          (a limited partnership)
                                                    
                            NOTES TO SCHEDULE XI
                                                   
                              DECEMBER 31, 1996

(A)    All  properties are certified historic structures as defined in the
       Internal Revenue Code of 1986, or are eligible for designations as
       such.  The "date of construction" refers to the period in which such
       properties were rehabilitated.

(B)    The cost of real estate owned at December 31, 1996, for Federal income
       tax purposes was approximately $8,589,192.   The depreciable basis of
       the building and improvements of the properties has been reduced for
       Federal income tax purposes by the historic rehabilitation credit.

(C)    Reconciliation of real estate:

                                            1996          1995          1994
Balance at beginning of year            $10,552,727   $16,826,909   $19,702,935
Additions during this year:      
   Improvements                               3,278        12,270        22,284
Deductions during the year:       
   Retirements                                    0    (6,286,452)   (2,898,310)
                                         ----------    ----------    ----------
Balance at end of year                  $10,556,005   $10,552,727   $16,826,909
                                         ==========    ==========    ==========
Reconciliation of accumulated depreciation:
                                            1996          1995         1994
Balance at beginning of year             $2,405,790    $3,007,245    $2,412,417
Depreciation expense for the year           420,971       422,396       716,497
Deductions during the year:               
   Retirements                                    0    (1,043,851)     (121,669)
                                          ---------     ---------     ---------
Balance at end of year                   $2,826,761    $2,405,790    $3,007,245
                                          =========     =========     =========
(D) See Note E to the consolidated financial statements for further information.

(E) See Note B to the consolidated financial statements for depreciation method
    and lives.
<PAGE>
Item 9.        Changes in and Disagreements with Accountants on Accounting and
               Financial Disclosure

               None.

                                    PART III

Item 10.       Directors and Executive Officers of Registrant

               a.   Identification of Directors - Registrant has no directors.

               b.   Identification of Executive Officers

                    The  General Partner of the Registrant is Dover Historic
Advisors VII (DoHA-VII), a Pennsylvania general partnership.  The partners of
DoHA-VII are as follows:

Name                Age  Position             Term of Office    Period Served
                                                                        
Gerald Katzoff      49   Partner in DoHA-VII  No fixed term     December 1988-
                                                                May 1997
                                   
Dover Historic      --   Partner in DoHA-VII  No fixed term     December 1988 -
Advisors, Inc.                                                  May 1997
("Dover Advisors")
SWDHA, Inc.         --   Partner in DoHA-VII  No fixed term     Since May 1997
                                                   
EPK, Inc.           --   Partner in DoHA-VII  No fixed term     Since May 1997
                  
                     For further description of Dover Advisors, see paragraph e.
of this Item.  There is no arrangement or understanding between either person
named above and any other person pursuant to which any person was or is to be
selected as an officer.

                c.    Identification of Certain Significant Employees. 
Registrant has no employees.  Its administrative and operational functions are
carried out by a property management and partnership administration firm engaged
by the Registrant.

               d.   Family Relationships.  There is no family relationship
between or among the executive officers and/or any person nominated or chosen
by Registrant to become an executive officer.

              e.      Business Experience. DoHA-VII is a general partnership
formed in 1988.  The General Partner is responsible for management and control
of Registrant's affairs and will have general responsibility and authority in
conducting its operations.  The General Partner may retain its affiliates to
manage certain of the Properties.

              On  May  13, 1997, SWDHA, Inc. replaced Gerald Katzoff and
EPK, Inc. replaced DHP, Inc.  as partners  of  DoHA-VII.  Spencer Wertheimer,
the President of SWDHA, Inc., is an attorney with  extensive experience in
real estate activities ventures.

              EPK,  Inc.  is  a  Delaware corporation formed for the purpose of
managing  properties  or interests therein.  EPK, Inc. is a wholly-owned
subsidiary of D, LTD, an entity formed in 1985 to act as the holding company
for various corporations engaged in the development and management of
historically certified  properties and conventional real estate as well as a
provider of financial  (non-banking) services.  EPK, Inc. is an affiliate of
DoHA-VII.

             The officers and directors of EPK, Inc. are described below.

              Donna M. Zanghi (age 40) was appointed on May 13, 1997 as
Secretary and Treasurer of EPK, Inc.  Ms. Zanghi previously served as Secretary
and Treasurer of DHP, Inc.  since June 14, 1993 and as a Director  and
Secretary/Treasurer of D, LTD.  She was associated with DHP, Inc. and its
affiliates since 1984  except for the period from December 1986 to June 1989 and
the period from November 1, 1992 to June 14, 1993.

              Michele F. Rudoi (age 32) was appointed on May 13, 1997 as
Assistant Secretary and Director of EPK, Inc.  Ms. Rudoi previously served as
Assistant Secretary and Director of both D, LTD and DHP, Inc. since
January 27, 1993.

Item 11.       Executive Compensation

                a.    Cash  Compensation - During 1996, Registrant paid no cash
compensation to DoHA-VII, any partner therein or any person named in paragraph
c. of Item 10.

                b.    Compensation  Pursuant  to  Plans  - Registrant  has  no 
plan pursuant to which compensation was paid or distributed during 1996, or is
proposed to be paid or distributed in the future, to DoHA-VII, any partner
therein, or any person named in paragraph c. of Item 10.

                c.   Other Compensation - No compensation not referred to in
paragraph a. or paragraph b. of this Item was paid or distributed during 1996
to Dover Advisors, DoHA-VII, any partner therein, or any person named in 
paragraph c. of Item 10.

               d.   Compensation of Directors - Registrant has no directors.

               e.   Termination of Employment and Change of Control
Arrangement - Registrant has no compensatory plan or arrangement, with respect
to any individual, which results or will result  from  the  resignation or
retirement of any individual, or any termination of  such  individual's 
employment  with  Registrant or from a change in control of Registrant or a
change in such individual's responsibilities following such a change in control.

Item 12.       Security Ownership of Certain Beneficial Owners and Management

               a.   Security Ownership of Certain Beneficial Owners - No person
is known to Registrant to be the beneficial owner of more than five percent of
the issued and outstanding Units.

                b.    Security  Ownership  of  Management  -  No  equity 
securities of Registrant are beneficially owned by any person named in paragraph
c. of Item 10.

                c.    Changes in Control - Registrant does not know of any 
arrangement, the operation of which may at a subsequent date result in a 
change in control of Registrant.

Item 13.       Certain Relationships and Related Transactions

               a.   Pursuant to Registrant's Amended and Restated Agreement of
Limited Partnership, DoHA-VII  is  entitled to 10% of Registrant's distributable
cash from operations in each year.  There was no such share allocable to
DoHA-VII for fiscal years 1994 through 1996.

               b.  Certain Business Relationships - Registrant has no directors.

               c.  Indebtedness  of  Management  - No executive officer  or 
significant employee of Registrant, Registrant's general partner (or any
employee thereof), or any affiliate of any such  person, is or has at any time
been indebted to Registrant.
<PAGE>
                                  PART IV

Item 14. (A)   Exhibits, Financial Statement Schedules and Reports on Form 8-K.

               1.   Financial Statements:

                    a.  Consolidated Balance Sheets at December 31, 1996
                        and 1995.

                    b.  Consolidated Statements of Operations for the Years
                        Ended December 31, 1996, 1995 and 1994.

                    c.  Consolidated  Statements of Changes in Partners'  Equity
                        for the Years Ended December 31, 1996, 1995 and 1994.

                    d.  Consolidated  Statements of Cash  Flows  for  the  Years
                        Ended December 31, 1996, 1995 and 1994.

                    e.  Notes to consolidated financial statements.

                2.  Financial statement schedules:

                    a.  Schedule XI- Real Estate and Accumulated Depreciation.

                    b.  Notes to Schedule XI.

                3.  Exhibits:

                    (a)  Exhibit   Document
                         Number
                           3       Registrant's Amended and Restated Certificate
                                   of Limited Partnership and Agreement of
                                   Limited Partnership, previously filed as part
                                   of Amendment No. 2 of Registrant's
                                   Registration Statement on Form S-11, are
                                   incorporated herein by reference.
                                          
                           21      Subsidiaries of the Registrant are listed in 
                                   Item 2. Properties of this Form 10-K.

                     (b)  Reports on Form 8-K:

                          No  reports  were  filed on Form 8-K during the
                          quarter ended December 31, 1996.

                     (c)  Exhibits:

                          See Item 14 (A) (3) above.
<PAGE>

                                               SIGNATURES

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

                            DIVERSIFIED HISTORIC INVESTORS VII
                                             
Date:  October 10, 1997     By: Dover Historic Advisors, VII General Partner
                                             
                                By: EPK, Inc., Partner
                                                 
                                    By:  /s/ Donna M. Zanghi
                                        DONNA M. ZANGHI,
                                        Secretary and Treasurer
                                                      
                                    By:  /s/ Michele F. Rudoi
                                        MICHELE F. RUDOI,
                                        Assistant Secretary

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

             Signature                   Capacity                 Date

DOVER HISTORIC ADVISORS VII           General Partner

By: EPK, Inc., Partner

    By:  /s/ Donna M. Zanghi                                  October 10, 1997
         DONNA M. ZANGHI,
         Secretary and Treasurer

    By:  /s/ Michele F. Rudoi                                 October 10, 1997
         MICHELE F. RUDOI,
         Assistant Secretary



<TABLE> <S> <C>

<ARTICLE> 5
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-END>                               DEC-31-1996
<CASH>                                          66,639
<SECURITIES>                                         0
<RECEIVABLES>                                        0
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                                     0
<PP&E>                                      10,556,005
<DEPRECIATION>                               2,826,761
<TOTAL-ASSETS>                               9,929,110
<CURRENT-LIABILITIES>                        1,160,719
<BONDS>                                      3,605,963
                                0
                                          0
<COMMON>                                             0
<OTHER-SE>                                   4,812,681
<TOTAL-LIABILITY-AND-EQUITY>                 9,929,110
<SALES>                                              0
<TOTAL-REVENUES>                               714,957
<CGS>                                                0
<TOTAL-COSTS>                                        0
<OTHER-EXPENSES>                               426,718
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                             355,222
<INCOME-PRETAX>                              (708,659)
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                          (708,659)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                 (708,659)
<EPS-PRIMARY>                                  (39.33)
<EPS-DILUTED>                                        0
        

</TABLE>


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