UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) September 29, 2008

REAL ESTATE ASSOCIATES LIMITED VII

(Exact name of registrant as specified in its charter)

            California                0-13810                 95-3290316

      (State or other jurisdiction (Commission            (I.R.S. Employer

           of incorporation)        File Number)        Identification Number)

55 Beattie Place

Post Office Box 1089

Greenville, South Carolina 29602

(Address of principal executive offices)

(864) 239-1000

(Issuer's telephone number)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

[ ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01   Other Events

Real Estate Associates Limited VII (the “Registrant”) has a 99.9% general partner interest in Real Estate Associates IV which, in turn, has a 98.99% limited partner interest in Hampshire House Apartments, Ltd., an Ohio limited partnership (“Hampshire House”). On September 29, 2008, Hampshire House entered into an Agreement of Sale and Purchase to sell its investment property, Hampshire House Apartments, to a third party, The Orlean Company (the “Purchaser”), an Ohio corporation, for a gross sales price of $4,600,000. After payment of closing costs and non-recourse notes payable due to an affiliate of the Purchaser, the Registrant expects to receive a distribution of approximately $217,000 from the sale of Hampshire House Apartments. The Registrant had no investment balance remaining in Hampshire House as of June 30, 2008.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

REAL ESTATE ASSOCIATES LIMITED VII

By:  National Partnership Investments Corp.

Corporate General Partner

By:  /s/Stephen B. Waters

Stephen B. Waters

Vice President

Date: October 2, 2008