UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2010

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

For the transition period from __________ to __________

Commission File Number 0-18541

NATIONAL TAX CREDIT PARTNERS, L.P.

(Exact name of registrant as specified in its charter)

California	95-3906167
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

55 Beattie Place, PO Box 1089

Greenville, South Carolina 29602

(Address of principal executive offices)

(864) 239-1000

(Registrant’s telephone number, including area code)

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. [X] Yes [ ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [ ] Yes [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]

Accelerated filer [ ]

Non-accelerated filer [ ]

(Do not check if a smaller reporting company)

Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [ ] Yes [X] No

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

NATIONAL TAX CREDIT PARTNERS, L.P.

BALANCE SHEETS

(in thousands)

	June 30,	December 31,
	2010	2009
	(Unaudited)	(Note)
Assets

Investments in and advances to Local Partnerships
(Note 3)	$ 213	$ 368
Cash and cash equivalents	60	1
Total assets	$ 273	$ 369

Liabilities and Partners' Deficit

Liabilities:
Accounts payable and accrued expenses	$ 29	$ 77
Accrued fees due to affiliates (Note 4)	1,177	1,054
Due to affiliate (Note 4)	89	24
	1,295	1,155
Contingencies (Note 6)

Partners' deficit:
General partner	(528)	(526)
Limited partners	(494)	(260)
	(1,022)	(786)
Total liabilities and partners' deficit	$ 273	$ 369

Note: The balance sheet at December 31, 2009 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by generally accepted accounting principles for complete financial statements.

See Accompanying Notes to Financial Statements

NATIONAL TAX CREDIT PARTNERS, L.P.

STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per interest data)

	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2010	2009	2010	2009
Revenues:
Other income	$ --	$ 5	$ --	$ 5

Operating expenses:
Management fees - partners (Note 4)	46	46	93	93
General and administrative (Note 4)	23	23	39	46
Interest expense (Note 4)	1	1	2	1
Legal and accounting	20	17	37	33
Total operating expenses	90	87	171	173

Loss from Partnership operations	(90)	(82)	(171)	(168)
Gain from sales of limited partnership
interests in Local Partnerships (Note 3)	--	--	16	--
Distributions from Local Partnerships
recognized as income (Note 3)	56	56	56	56
Recovery of advances to Local Partnerships
previously recognized as expense (Note 3)	3	--	3	--
Advances to Local Partnerships
charged to expense (Note 3)	--	(14)	--	(16)
Impairment loss (Notes 2 and 3)	--	--	(120)	--
Equity in loss of Local Partnerships
and amortization of acquisition
costs (Note 3)	(1)	(6)	(20)	(30)
Net loss	$ (32)	$ (46)	$ (236)	$ (158)

Net loss allocated to general
partner (1%)	$ --	$ (1)	$ (2)	$ (2)
Net loss allocated to limited
partners (99%)	(32)	(45)	(234)	(156)
	$ (32)	$ (46)	$ (236)	$ (158)
Net loss per limited partnership
interest (Note 2)	$ (1.35)	$ (1.89)	$ (9.87)	$ (6.57)

See Accompanying Notes to Financial Statements

NATIONAL TAX CREDIT PARTNERS, L.P.

STATEMENT OF CHANGES IN PARTNERS' DEFICIT

(Unaudited)

(in thousands, except interest data)


	General	Limited
	Partner	Partners	Total

Partnership interests (A)		23,707

Partners' deficit,
December 31, 2009	$(526)	$ (260)	$ (786)

Net loss for the six months
ended June 30, 2010	(2)	(234)	(236)

Partners' deficit,
June 30, 2010	$(528)	$ (494)	$(1,022)

(A) Consists of 23,707 partnership interests at June 30, 2010 and December 31, 2009.

See Accompanying Notes to Financial Statements

NATIONAL TAX CREDIT PARTNERS, L.P.

STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

	Six Months Ended
	June 30,
	2010	2009
Cash flows from operating activities:
Net loss	$ (236)	$ (158)
Adjustments to reconcile net loss to net cash used in
operating activities:
Equity in loss of Local Partnerships and amortization
of acquisition costs	20	30
Distributions from Local Partnerships recognized as
a return on investment	15	--
Impairment loss	120	--
Advances to Local Partnerships charged to expense	--	16
Recovery of advances to Local Partnerships previously
recognized as expense	(3)	--
Gain from sales of limited partnership interests in
Local Partnerships	(16)	--
Changes in accounts:
Accounts payable and accrued expenses	(48)	(18)
Accrued fees due to affiliates	123	127
Due to affiliate	2	--
Net cash used in operating activities	(23)	(3)

Cash flows from investing activities:
Proceeds from sales of limited partnership interests in
Local Partnerships	16	--
Recovery of advances to Local Partnerships	3	--
Advances to Local Partnerships	--	(16)
Net cash provided by(used in) investing activities	19	(16)

Cash flows provided by financing activities:
Advances from affiliate	63	20

Net increase in cash and cash equivalents	59	1

Cash and cash equivalents, beginning of period	1	--

Cash and cash equivalents, end of period	$ 60	$ 1

See Accompanying Notes to Financial Statements

NATIONAL TAX CREDIT PARTNERS, L.P.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – GOING CONCERN

The accompanying unaudited financial statements have been prepared assuming that the Partnership (as defined below) will continue as a going concern. The Partnership continues to generate recurring operating losses and liabilities exceed available cash at June 30, 2010. The Partnership may seek operating advances from the General Partner (as defined below) of the Partnership or its affiliates. However, the General Partner or its affiliates are not obligated to fund such advances.

As a result of the above, there is substantial doubt about the Partnership’s ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

NOTE 2 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General

The information contained in the following notes to the unaudited financial statements is condensed from that which would appear in the annual audited financial statements. Accordingly, the unaudited financial statements included herein should be reviewed in conjunction with the audited financial statements and related notes thereto contained in the National Tax Credit Partners, L.P. (the "Partnership" or "Registrant") Annual Report for the fiscal year ended December 31, 2009. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end. The results of operations for the interim periods presented are not necessarily indicative of the results expected for the entire year.

In the opinion of the Partnership's management, the accompanying unaudited financial statements contain all adjustments (consisting primarily of normal recurring items) necessary to present fairly the financial position as of June 30, 2010, and the results of operations and changes in cash flows for the six months ended June 30, 2010 and 2009, respectively.

Organization

The Partnership, formed under the California Revised Limited Partnership Act, was organized on March 7, 1989. The Partnership was formed to invest primarily in other limited partnerships (the "Local Partnerships") which own or lease and operate multifamily housing complexes (“Apartment Complexes”) that are eligible for low-income housing tax credits or, in certain cases, historic rehabilitation tax credits ("Tax Credits"). The general partner of the Partnership (the "General Partner") is National Partnership Investments Corp. ("NAPICO"), a California corporation. The General Partner is a subsidiary of Apartment Investment and Management Company (“AIMCO”), a publicly traded real estate investment trust.

The General Partner has a 1% interest in operating profits and losses of the Partnership. The limited partners will be allocated the remaining 99% interest in proportion to their respective investments.

The Partnership shall continue in full force and effect until December 31, 2029, unless terminated prior to that date, pursuant to the partnership agreement or law.

Basis of Presentation

The accompanying unaudited financial statements have been prepared in conformity with accounting principles generally accepted in the United States.

The Partnership’s management evaluated subsequent events through the time this Quarterly Report on Form 10-Q was filed.

Certain reclassifications have been made to the 2009 balances to conform to the 2010 presentation.

Impairment of Long-Lived Assets

The Partnership reviews its investments in long-lived assets to determine if there has been any impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the sum of the expected future cash flows is less than the carrying amount of the assets, the Partnership recognizes an impairment loss to the extent the carrying value exceeds the estimated fair value. The Partnership recognized an impairment loss of $120,000 during the six months ended June 30, 2010 (see Note 3). No adjustments for impairment of value were recorded during the six months ended June 30, 2009.

Method of Accounting for Investments in Local Partnerships

The investments in Local Partnerships are accounted for using the equity method. Acquisition, selection and other costs related to the acquisition of the projects acquired are capitalized as part of the investment accounts and are being amortized by the straight line method over the estimated lives of the underlying assets, which is generally 30 years.

Net Loss Per Limited Partnership Interest

Net loss per limited partnership interest was computed by dividing the limited partners’ share of net loss by the number of limited partnership interests outstanding at the beginning of the year. The number of limited partnership interests used was 23,707 and 23,740 for the three and six months ended June 30, 2010 and 2009, respectively.

Recent Accounting Pronouncement

In December 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2009-17, Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities, or ASU 2009-17, which is effective for fiscal years beginning after November 15, 2009. ASU 2009-17, which modifies the guidance in FASB Accounting Standards Codification, or FASB ASC, Topic 810, “Consolidation”, introduces a more qualitative approach to evaluating VIEs for consolidation and requires a company to perform an analysis to determine whether its variable interests give it a controlling financial interest in a VIE. This analysis identifies the primary beneficiary of a VIE as the entity that has (a) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (b) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. In determining whether it has the power to direct the activities of the VIE that most significantly affect the VIE’s performance, ASU 2009-17 requires a company to assess whether it has an implicit financial responsibility to ensure that a VIE operates as designed, requires continuous reassessment of primary beneficiary status rather than periodic, event-driven assessments as previously required, and incorporates expanded disclosure requirements. The Partnership adopted ASU 2009-17 effective January 1, 2010. The adoption of ASU 2009-17 did not have a significant effect on the Partnership’s financial statements.

Variable Interest Entities

The Partnership consolidates any variable interest entities in which the Partnership holds a variable interest and is the primary beneficiary. Generally, a variable interest entity, or VIE, is an entity with one or more of the following characteristics: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) as a group the holders of the equity investment at risk lack (i) the ability to make decisions about an entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. The primary beneficiary of a VIE is generally the entity that has (a) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (b) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

In determining whether it is the primary beneficiary of a VIE, the Partnership considers qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of the Partnership’s investment; the obligation or likelihood for the Partnership or other investors to provide financial support; and the similarity with and significance to the business activities of the Partnership and the other investors. Significant judgments related to these determinations include estimates about the current and future fair values and performance of real estate held by these VIEs and general market conditions.

In connection with the adoption of ASU 2009-17 the Partnership performed a reassessment of the Local Partnerships to determine which Local Partnerships would be deemed variable interest entities. As a result of this reassessment the Partnership determined that it holds variable interests in ten VIEs at June 30, 2010, for which the Partnership is not the primary beneficiary. The Partnership has concluded, based on its qualitative consideration of the partnership agreement, the partnership structure and the role of the general partner in each of the Local Partnerships, that the general partner of each of the Local Partnerships is the primary beneficiary of the respective Local Partnership. In making this determination, the Partnership considered the following factors:

· the general partners conduct and manage the business of the Local Partnerships;

· the general partners have the responsibility for and sole discretion over selecting a property management agent for the Local Partnerships’ underlying real estate properties;

· the general partners are responsible for approving operating and capital budgets for the properties owned by the Local Partnerships;

· the general partners are obligated to fund any recourse obligations of the Local Partnerships;

· the general partners are authorized to borrow funds on behalf of the Local Partnerships; and

· the Partnership, as a limited partner in each of the Local Partnerships, does not have the ability to direct or otherwise significantly influence the activities of the Local Partnerships that most significantly impact such entities’ economic performance.

The ten VIEs at June 30, 2010 consist of Local Partnerships that are directly engaged in the ownership and management of ten apartment properties with a total of 634 units. The Partnership is involved with those VIEs as a non-controlling limited partner equity holder. The Partnership’s maximum exposure to loss as a result of its involvement with the unconsolidated VIEs is limited to the Partnership’s recorded investments in and receivables from these VIEs, which was approximately $213,000 and $368,000 at June 30, 2010 and December 31, 2009, respectively. The Partnership may be subject to additional losses to the extent of any financial support that the Partnership voluntarily provides in the future.

NOTE 3 - INVESTMENTS IN AND ADVANCES TO LOCAL PARTNERSHIPS

At June 30, 2010 and December 31, 2009, the Partnership holds limited partnership interests in ten and twelve Local Partnerships, respectively, located in five and six states, respectively, and Puerto Rico. The Local Partnerships own residential projects consisting of 634 and 682 apartment units, respectively. The general partners responsible for management of the Local Partnerships (the "Local Operating General Partners") are not affiliated with the General Partner of the Partnership, except as discussed below.

National Tax Credit, Inc. ("NTC"), an affiliate of the General Partner, typically serves either as a special limited partner or non-managing administrative general partner in which case it receives 0.01 percent of operating profits and losses of the Local Partnerships. NTC or another affiliate of the general partner may serve as the Local Operating General Partner of the Local Partnership in which case it is typically entitled to 0.09 percent of operating profits and losses of the respective Local Partnership. The Partnership is also generally entitled to receive 50 percent of the net cash flow generated by the Apartment Complexes, subject to repayment of any loans made to the Local Partnerships (including loans provided by NTC or an affiliate), repayment for funding of development deficit and operating deficit guarantees by the Local Operating General Partners or their affiliates (excluding NTC and its affiliates), and certain priority payments to the Local Operating General Partners other than NTC or its affiliates.

The individual investments are carried at cost plus the Partnership’s share of the Local Partnership’s profits less the Partnership’s share of the Local Partnership’s losses, distributions and impairment charges. The Partnership is not legally liable for the obligations of the Local Partnerships and is not otherwise committed to provide additional support to them. Therefore, it does not recognize losses once its investment in each of the Local Partnerships reaches zero. Distributions from the Local Partnerships are accounted for as a reduction of the investment balance until the investment balance is reduced to zero. When the investment balance has been reduced to zero, subsequent distributions received are recognized as income in the accompanying statements of operations. During each of the three and six months ended June 30, 2010 and 2009, the Partnership received distributions of approximately $56,000 from Local Partnerships in which it does not have an investment balance, which were recognized as income. During the three and six months ended June 30, 2010, the Partnership received a distribution of approximately $15,000 from one Local Partnership in which it does have an investment balance, which was recognized as a reduction of the Partnership’s investment balance.

At times, advances are made to Local Partnerships. Advances made by the Partnership to the individual Local Partnerships are considered part of the Partnership's investment in limited partnerships. Advances made to Local Partnerships for which the investment has been reduced to zero are charged to expense. During the three and six months ended June 30, 2009, the Partnership advanced a total of approximately $14,000 and $16,000, respectively, to three Local Partnerships, Summitt I, II and III, to cover operating expenses of the Local Partnerships. There were no advances from the Partnership during the six months ended June 30, 2010. While not obligated to make any advances to any of the Local Partnerships, the Partnership made these advances in order to protect its economic investment in the Local Partnerships. The advances were recognized as expense on the accompanying statements of operations. During the three and six months ended June 30, 2010, the Partnership received repayment of an advance of approximately $3,000 from one Local Partnership, Tyrone Elderly. The repayment of advance was recognized as income on the accompanying statements of operations. No advances were repaid by Local Partnerships during the six months ended June 30, 2009.

the extent of distributions received and amortization of acquisition costs from those Local Partnerships. Therefore, the Partnership limits its recognition of equity earnings to the amount it expects to ultimately realize.

As of June 30, 2010 and December 31, 2009, the investment balance in nine of the ten and eleven of the twelve Local Partnerships, respectively, had been reduced to zero.

The following is a summary of the investments in Local Partnerships for the six months ended June 30, 2010 (in thousands):

Investment balance, beginning of period	$ 368
Equity in losses of Local Partnership	(17)
Amortization of acquisition costs	(3)
Distribution recognized as a reduction of investment balance	(15)
Impairment loss	(120)
Investment balance, end of period	$ 213

The following are estimated unaudited condensed combined statements of operations for the three and six months ended June 30, 2010 and 2009 for the Local Partnerships in which the Partnership has investments (2010 and 2009 amounts exclude the operations of Grinnell Park and North Liberty for which the Partnership sold its interests in January 2010 and Summit I, II and III and Glenark Landing, for which no information is available)(in thousands):

	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2010	2009	2010	2009
Revenues:
Rental and other income	$ 1,118	$ 1,074	$ 2,252	$ 2,168

Expenses:
Depreciation and amortization	245	240	489	480
Interest	393	391	787	783
Operating	653	564	1,324	1,254
Total expenses	1,291	1,195	2,600	2,517
Loss from continuing operations	$ (173)	$ (121)	$ (348)	$ (349)

Blue Lake

In 2003, the property owned by Blue Lake was sold without the consent or knowledge of the Partnership and without the requisite recapture bond. The Partnership filed an action against the Local Operating General Partner of the Local Partnership in 2003. Trial was scheduled for May 2008, however, the matter was settled prior to the trial date. The terms of the settlement agreement include a payment of $300,000 to be paid in quarterly installments. The first installment of $100,000 was received in July 2008 and was recognized as other income during the year ended December 31, 2008. The remaining installments of $50,000 each were due on a quarterly basis beginning September 30, 2008. On October 23, 2008, the Partnership obtained a judgment for approximately $1,000,000 against the Local Operating General Partner of the Local Partnership as a result of the unpaid September 30, 2008 installment. The Partnership is taking action to collect the judgment. The Partnership had no investment in the Blue Lake Local Partnership at June 30, 2010 and December 31, 2009. Under the terms of the Partnership Agreement, neither the Partnership nor the General Partner is subject to a liability to the limited partners of the Partnership for the amounts of Tax Credits at risk of recapture as a result of the recapture bond not being obtained at the time of the sale of the property. The limited partners will be responsible for any tax credit recapture liability on their respective income tax returns.

Grinnell Park and North Liberty

On January 22, 2010 the Partnership sold its limited partnership interests in two Local Partnerships, Grinnell Park Apartments and North Liberty Park, LP Apartments (“Grinnell Park” and “North Liberty”, respectively) for a total sales price of $16,000, which was recognized as gain from sales of limited partnership interests in Local Partnerships during the six months ended June 30, 2010. The Partnership’s investment balance in both Grinnell Park and North Liberty was zero at June 30, 2010 and December 31, 2009.

Tyrone Elderly

On April 12, 2010, a Local Partnership, Tyrone Elderly Limited Partnership (“Tyrone Elderly”), entered into a sale contract to sell its investment property to a third party for a purchase price of $300,000 plus the balance of the mortgage loans and related accrued interest encumbering the property, with the mortgage loans being assumed by the buyer. The closing is expected to be completed during the third quarter of 2010. The Partnership determined that the carrying amount of its limited partnership investment in Tyrone Elderly exceeded the estimated proceeds the Partnership would expect to receive from the sale and recognized an impairment loss of $120,000 during the six months ended June 30, 2010. The Partnership’s investment balance in Tyrone Elderly was approximately $213,000 and $368,000 at June 30, 2010 and December 31, 2009, respectively.

NOTE 4 – TRANSACTIONS WITH AFFILIATED PARTIES

Under the terms of the Amended and Restated Agreement of the Limited Partnership, the Partnership is obligated to the General Partner for the following fees:

(a) An annual Partnership management fee in an amount equal to 0.5 percent of invested assets (as defined in the Partnership Agreement) as of the beginning of the year is payable to the General Partner. For each of the six months ended June 30, 2010 and 2009, approximately $93,000 has been expensed. At June 30, 2010 and December 31, 2009, approximately $1,013,000 and $920,000, respectively, is owed to the General Partner and is included in accrued fees due to affiliates.

(b) A property disposition fee is payable to the General Partner in an amount equal to the lesser of (i) one-half of the competitive real estate commission that would have been charged by unaffiliated third parties providing comparable services in the area where the apartment complex is located, or (ii) 3 percent of the sales price received in connection with the sale or disposition of the apartment complex or local partnership interest, but in no event will the property disposition fee and all amounts payable to unaffiliated real estate brokers in connection with any such sale exceed in the aggregate, the lesser of the competitive rate (as described above) or 6 percent of such sale price. Receipt of the property disposition fee will be subordinated to the distribution of sale or refinancing proceeds by the Partnership until the limited partners have received distributions of sale or refinancing proceeds in an aggregate amount equal to (i) their 10 percent priority return for any year not theretofore satisfied (as defined in the Partnership Agreement) and (ii) an amount equal to the aggregate adjusted investment (as defined in the Partnership Agreement) of the limited partners. No disposition fees have been paid.

(c) The Partnership reimburses NAPICO for certain expenses. The reimbursement to NAPICO was approximately $30,000 and $34,000 for the six months ended June 30, 2010 and 2009, respectively, and is included in general and administrative expenses. At June 30, 2010 and December 31, 2009, approximately $164,000 and $134,000, respectively, is owed to NAPICO and is included in accrued fees due to affiliates.

As of June 30, 2010, the fees and advances due to the General Partner exceeded the Partnership’s cash. The Partnership Agreement provides that the fees and advances due to the General Partner may only be paid from the Partnership’s available cash, however, the Partnership still remains liable for all such amounts.

NTC, or another affiliate of the General Partner, is the Local Operating General Partner in four of the Partnership's ten Local Partnerships. In addition, NTC is either a special limited partner or an administrative general partner in each Local Partnership.

An affiliate of the General Partner managed one property owned by a Local Partnership during each of the six months ended June 30, 2010 and 2009. The Local Partnership pays the affiliate property management fees in the amount of 5 percent of its gross rental revenues. The amounts paid were approximately $19,000 for each of the six months ended June 30, 2010 and 2009.

The General Partner is not obligated to advance funds to the Partnership for operations or to fund Partnership advances to Local Partnerships, but may voluntarily do so from time to time. Accordingly during the six months ended June 30, 2010 and 2009, an affiliate of the General Partner advanced the Partnership approximately $63,000 and $20,000, respectively, to fund partnership operating expenses. The advances bear interest at prime plus 2% (5.25% at June 30, 2010) and incurred interest expense of approximately $2,000 and $1,000 for the six months ended June 30, 2010 and 2009, respectively. At June 30, 2010 and December 31, 2009 approximately $89,000 and $24,000, respectively, of advances and accrued interest remain unpaid and are included in due to affiliates on the accompanying balance sheets. The Partnership may receive additional advances of funds from AIMCO Properties, L.P., although AIMCO Properties, L.P. is not obligated to provide such advances. For more information on AIMCO Properties, L.P., including copies of its audited balance sheet, please see its reports filed with the Securities and Exchange Commission.

NOTE 5 – FAIR VALUE OF FINANCIAL INSTRUMENTS

FASB ASC Topic 825, “Financial Instruments”, requires disclosure of fair value information about financial instruments whether or not recognized in the balance sheet, for which it is practicable to estimate fair value. Fair value is defined as the amount at which the instruments could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. At June 30, 2010, the Partnership believes that the carrying amount of other assets and liabilities reported on the balance sheet that require such disclosure approximated their fair value due to the short-term maturity of these instruments.

NOTE 6 – CONTINGENCIES

The General Partner is involved in various lawsuits arising from transactions in the ordinary course of business. In the opinion of management and the General Partner, the claims will not result in any material liability to the Partnership.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of

Operations.

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements in certain circumstances. Certain information included in this Quarterly Report contains or may contain information that is forward-looking within the meaning of the federal securities laws, including, without limitation, statements regarding the Partnership’s future financial performance and the effect of government regulations. Actual results may differ materially from those described in these forward-looking statements and, in addition, will be affected by a variety of risks and factors some of which are beyond the Partnership’s control including, without limitation: financing risks, including the availability and cost of financing and the risk that the Partnership’s cash flows from operations may be insufficient to meet required payments of principal and interest; national and local economic conditions; the general level of interest rates; the terms of governmental regulations that affect the Partnership and its investment in Local Partnerships and interpretations of those regulations; the competitive environment in which the Partnership operates; real estate risks, including fluctuations in real estate values and the general economic climate in local markets and competition for residents in such markets; litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; and possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by the Local Partnerships in which the Partnership has invested. Readers should carefully review the Partnership’s financial statements and the notes thereto, as well as the other documents the Partnership files from time to time with the Securities and Exchange Commission.

The General Partner monitors developments in the area of legal and regulatory compliance.

Liquidity and Capital Resources

The Partnership’s primary source of funds is the receipt of distributions from Local Partnerships in which the Partnership has invested. It is not expected that any of the Local Partnerships in which the Partnership invested will generate cash from operations sufficient to provide distributions to the Limited Partners. Such cash from operations, if any, would first be used to meet operating expenses of the Partnership. The Partnership's investments are not readily marketable and may be affected by adverse general economic conditions which, in turn, could substantially increase the risk of operating losses for the Apartment Complexes, the Local Partnerships and the Partnership. These problems may result from a number of factors, many of which cannot be controlled by the General Partner. In order to replenish the Partnership's cash reserves, the Partnership intends to generate additional cash from sales and refinancings of certain properties owned by Local Partnerships and through sales of the Partnership’s limited partner interests in Local Partnerships.

As of June 30, 2010 and December 31, 2009, the Partnership had cash and cash equivalents of approximately $60,000 and $1,000, respectively. The increase in cash and cash equivalents of approximately $59,000 is due to approximately $63,000 and $19,000 of cash provided by financing and investing activities, respectively, partially offset by approximately $23,000 of cash used in operating activities. Cash provided by financing activities consisted of advances received from affiliates. Cash provided by investing activities consisted of proceeds from the sales of limited partnership interests in Local Partnerships and recovery of an advance from one Local Partnership.

The General Partner is not obligated to advance funds to the Partnership for operations or to fund Partnership advances to Local Partnerships, but may voluntarily do so from time to time. Accordingly during the six months ended June 30, 2010 and 2009, an affiliate of the General Partner advanced the Partnership approximately $63,000 and $20,000, respectively, to fund partnership operating expenses. The advances bear interest at prime plus 2% (5.25% at June 30, 2010) and incurred interest expense of approximately $2,000 and $1,000 for the six months ended June 30, 2010 and 2009, respectively. At June 30, 2010 and December 31, 2009 approximately $89,000 and $24,000, respectively, of advances and accrued interest remain unpaid and are included in due to affiliates on the balance sheets. The Partnership may receive additional advances of funds from AIMCO Properties, L.P., although AIMCO Properties, L.P. is not obligated to provide such advances. For more information on AIMCO Properties, L.P., including copies of its audited balance sheet, please see its reports filed with the Securities and Exchange Commission.

Distributions from the Local Partnerships are accounted for as a reduction of the investment balance until the investment balance is reduced to zero. When the investment balance has been reduced to zero, subsequent distributions received are recognized as income. During each of the three and six months ended June 30, 2010 and 2009, the Partnership received distributions of approximately $56,000 from Local Partnerships in which it does not have an investment balance, which were recognized as income. During the three and six months ended June 30, 2010, the Partnership received a distribution of approximately $15,000 from one Local Partnership in which it does have an investment balance, which was recognized as a reduction of the Partnership’s investment balance.

The Partnership does not have the ability to assess Limited Partners for additional capital contributions to provide capital if needed by the Partnership or Local Partnerships. Accordingly, if circumstances arise that cause the Local Partnerships to require capital in addition to that contributed by the Partnership and any equity of the local general partners, the only sources from which such capital needs will be able to be satisfied (other than the limited reserves available at the Partnership level) will be (i) third-party debt financing (which may not be available if, as expected, the Apartment Complexes owned by the Local Partnerships are already substantially leveraged), (ii) other equity sources (which could adversely affect the Partnership's interest in operating cash flow and/or proceeds of sale or refinancing of the Apartment Complexes and possibly even result in adverse tax consequences to the Limited Partners), or (iii) the sale or disposition of Apartment Complexes. There can be no assurance that any of such sources would be readily available in sufficient proportions to fund the capital requirements of the Local Partnerships. If such sources are not available, the Local Partnerships would risk foreclosure on their Apartment Complexes if they were unable to renegotiate the terms of their first mortgages and any other debt secured by the Apartment Complexes, which would have significant adverse tax consequences to the Limited Partners.

Results of Operations

The Partnership, as a limited partner, does not have a contractual relationship with the Local Partnerships or exercise control over the activities and operations, including refinancing or selling decisions of the Local Partnerships that would require or allow for consolidation. Accordingly, the Partnership accounts for its investment in the Local Partnerships using the equity method. Thus the individual investments are carried at cost plus the Partnership’s share of the Local Partnership’s losses, distributions and impairment charges. However, since the Partnership is not legally liable for the obligations of the Local Partnerships, or is not otherwise committed to providing additional support to them, it does not recognize losses once its investment in each of the Local Partnerships reaches zero. Distributions from the Local Partnerships are accounted for as a reduction of the investment balances until the investment balance is reduced to zero. Subsequent distributions received are recognized as income in the statements of operations. During each of the three and six months ended June 30, 2010 and 2009, the Partnership received distributions of approximately $56,000 from Local Partnerships in which it does not have an investment balance, which were recognized as income. During the three and six months ended June 30, 2010, the Partnership received a distribution of approximately $15,000 from one Local Partnership in which it does have an investment balance which was recognized as a reduction of the Partnership’s investment balance. For those investments where the Partnership has determined that the carrying value of its investments approximates the estimated fair value of those investments, the Partnership’s policy is to recognize equity in income of the Local Partnerships only to the extent of distributions received, and amortization of acquisition costs from those Local Partnerships. During the three and six months ended June 30, 2010 and 2009, respectively, the Partnership recognized equity in loss and amortization of acquisition costs of approximately $1,000 and $20,000, and approximately $6,000 and $30,000, respectively, from one Local Partnership, Tyrone Elderly Limited Partnership (“Tyrone Elderly”).

At June 30, 2010 and December 31, 2009, the investment balance in nine of the ten and eleven of the twelve Local Partnerships, respectively, had been reduced to zero.

The Partnership’s net loss for the three and six months ended June 30, 2010 was approximately $32,000 and $236,000, respectively, compared to approximately $46,000 and $158,000 for the three and six months ended June 30, 2009, respectively. The decrease in net loss for the three months ended June 30, 2010 is due to decreases in equity in loss of Local Partnerships and amortization of acquisition costs and advances to Local Partnerships charged to expense, and an increase in recovery of advances to Local Partnerships, partially offset by a decrease in total revenues and an increase in total operating expenses. The increase in net loss for the six months ended June 30, 2010 is due to a decrease in total revenues and the recognition of an impairment loss in 2010, partially offset by the recognition of a gain on sales of limited partnership interests in Local Partnerships in 2010 and decreases in equity in loss of Local Partnerships and amortization of acquisition costs, advances to Local Partnerships charged to expense and total operating expenses and an increase in recovery of advances to Local Partnerships.

An annual management fee is payable to the General Partner and is calculated at 0.5 percent of the original invested assets of the remaining partnerships. The management fee represents the annual recurring fee which will be paid to the General Partner for its continuing management of the Partnership's affairs. Management fees were approximately $46,000 and $93,000 for each of the three and six months ended June 30, 2010 and 2009, respectively.

Total revenues decreased for the three and six months ended June 30, 2010 due to other income recognized in 2009 resulting from a refund of legal fees related to a 2002 property sale.

Operating expenses, exclusive of the management fee, consist of legal and accounting fees for services rendered to the Partnership, interest expense and general and administrative expenses. For the three months ended June 30, 2010 and 2009, legal and accounting fees were approximately $20,000 and $17,000, respectively, interest expense was approximately $1,000 and $1,000, respectively, and general and administrative expenses were approximately $23,000 and $23,000, respectively. For the six months ended June 30, 2010 and 2009, legal and accounting fees were approximately $37,000 and $33,000, respectively, interest expense was approximately $2,000 and $1,000, respectively, and general and administrative expenses were approximately $39,000 and $46,000, respectively. The increase in legal and accounting fees for both periods is primarily due to an increase in costs associated with the litigation involving Blue Lake (as discussed below). The decrease in general and administrative expenses for the six month period is primarily due to decreases in costs associated with the Partnership’s quarterly communications with investors and the cost of services included in the management reimbursements paid to the General Partner as allowed under the Partnership Agreement.

Because of (i) the nature of the Apartment Complexes, (ii) the difficulty of predicting the resale market for low-income housing in the future, and (iii) the inability of the Partnership to directly cause the sale of Apartment Complexes by local general partners, but generally only to require such local general partners to use their respective best efforts to find a purchaser for the Apartment Complexes it is not possible at this time to predict whether the liquidation of substantially all of the Partnership’s assets and the disposition of the proceeds, if any, in accordance with the Partnership Agreement will be able to be accomplished promptly. If a Local Partnership is unable to sell an Apartment Complex, it is anticipated that the local general partner will either continue to operate such Apartment Complex or take such other actions as the local general partner believes to be in the best interest of the Local Partnership.

The Partnership, as a limited partner in the Local Partnerships in which it has invested, is subject to the risks incident to the management and ownership of improved real estate. The Partnership's investments are also subject to adverse general economic conditions, and accordingly, the status of the national economy, including substantial unemployment and concurrent inflation, could increase vacancy levels, rental payment defaults, and operating expenses, which in turn, could substantially increase the risk of operating losses for the Apartment Complexes.

Blue Lake

Grinnell Park and North Liberty

Tyrone Elderly

On April 12, 2010, a Local Partnership, Tyrone Elderly, entered into a sale contract to sell its investment property to a third party for a purchase price of $300,000 plus the balance of the mortgage loans and related accrued interest encumbering the property, with the mortgage loans being assumed by the buyer. The closing is expected to be completed during the third quarter of 2010. The Partnership determined that the carrying amount of its limited partnership investment in Tyrone Elderly exceeded the estimated proceeds the Partnership would expect to receive from the sale and recognized an impairment loss of $120,000 during the six months ended June 30, 2010. The Partnership’s investment balance in Tyrone Elderly was approximately $213,000 and $368,000 at June 30, 2010 and December 31, 2009, respectively.

Off-Balance Sheet Arrangements

The Partnership owns limited partnership interests in unconsolidated Local Partnerships, in which the Partnership’s ownership percentage ranges from 5% to 99%. However, based on the provisions of the relevant partnership agreements, the Partnership, as a limited partner, does not have a contractual relationship with the Local Partnerships that would require or allow for consolidation under accounting principles generally accepted in the United States (see “Note 2 – Organization and Summary of Significant Accounting Policies” of the financial statements in “Item 1. Financial Statements”). There are no lines of credit, side agreements or any other derivative financial instruments between the Local Partnerships and the Partnership. Accordingly the Partnership’s maximum risk of loss related to these unconsolidated Local Partnerships is limited to the recorded investments in and receivables from the Local Partnerships. See “Note 3 – Investments In and Advances to Local Partnerships” of the financial statements in “Item 1. Financial Statements” for additional information about the Partnership’s investments in unconsolidated Local Partnerships.

Other

AIMCO and its affiliates owned 437 limited partnership interests in the Partnership representing 1.84% of the outstanding interests at June 30, 2010. It is possible that AIMCO or its affiliates will acquire additional limited partnership interests in the Partnership in exchange for cash or a combination of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO, either through private purchases or tender offers. Pursuant to the Partnership Agreement, unitholders holding a majority of the limited partnership interests are entitled to take action with respect to a variety of matters, that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the General Partner. Although the General Partner owes fiduciary duties to the limited partners of the Partnership, the General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of the General Partner, as general partner, to the Partnership and its limited partners may come into conflict with the duties of the General Partner to AIMCO as its sole stockholder.

Variable Interest Entities

· the general partners conduct and manage the business of the Local Partnerships;

· the general partners have the responsibility for and sole discretion over selecting a property management agent for the Local Partnerships’ underlying real estate properties;

· the general partners are responsible for approving operating and capital budgets for the properties owned by the Local Partnerships;

· the general partners are obligated to fund any recourse obligations of the Local Partnerships;

· the general partners are authorized to borrow funds on behalf of the Local Partnerships; and

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires the Partnership to make estimates and assumptions. Judgments and assessments of uncertainties are required in applying the Partnership’s accounting policies in many areas. The Partnership believes that of its significant accounting policies, the following may involve a higher degree of judgment and complexity.

Method of Accounting for Investments in Limited Partnerships

For those investments where the Partnership has determined that the carrying value of its investments approximates the estimated fair value of those investments, the Partnership’s policy is to recognize equity in income of the Local Partnerships only to the extent of distributions received and amortization of acquisition costs from those Local Partnerships. Therefore, the Partnership limits its recognition of equity earnings to the amount it expects to ultimately realize.

Item 4T. Controls and Procedures.

(a) Disclosure Controls and Procedures.

The Partnership’s management, with the participation of the principal executive officer and principal financial officer of the General Partner, who are the equivalent of the Partnership’s principal executive officer and principal financial officer, respectively, has evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the principal executive officer and principal financial officer of the General Partner, who are the equivalent of the Partnership’s principal executive officer and principal financial officer, respectively, have concluded that, as of the end of such period, the Partnership’s disclosure controls and procedures are effective.

(b) Changes in Internal Control Over Financial Reporting.

There has been no change in the Partnership’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 6. Exhibits.

See Exhibit Index.

The agreements included as exhibits to this Form 10-Q contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:

· should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

· have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

· may apply standards of materiality in a way that is different from what may be viewed as material to an investor; and

· were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. The Registrant acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this Form 10-Q not misleading. Additional information about the Registrant may be found elsewhere in this Form 10-Q and the Registrant’s other public filings, which are available without charge through the SEC’s website at http://www.sec.gov.

SIGNATURES

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 thereunto duly authorized.

	NATIONAL TAX CREDIT PARTNERS L.P.
	(a California limited partnership)

	By: National Partnership Investments Corp.
	General Partner

Date: August 13, 2010	By: /s/Steven D. Cordes
	Steven D. Cordes
	Senior Vice President

Date: August 13, 2010	By: /s/Stephen B. Waters
	Stephen B. Waters
	Senior Director of Partnership Accounting

NATIONAL TAX CREDIT PARTNERS, L.P.

EXHIBIT INDEX

Exhibit Description of Exhibit

3 Partnership Agreement (herein incorporated by reference to the Partnership's Form S-11 Registration No. 33-27658).

10.1 Contract for Purchase and Sale of Partnership Interests, dated November 17, 2009, by and between National Tax Credit, Inc., a California corporation, National Tax Credit Partners, L.P., a California limited partnership, and Oswald Investments, L.C., an Iowa limited liability company, or its assign and Ted Oswald, individually or his assigns, incorporated by reference to the Current Report on Form 8-K dated November 17, 2009.

10.2 Contract for Purchase and Sale of Partnership Interests, dated November 17, 2009, by and between National Tax Credit, Inc., a California corporation, National Tax Credit Partners, L.P., a California limited partnership, and Oswald Investments, L.C., an Iowa limited liability company, or its assign and Ted Oswald, individually or his assigns, incorporated by reference to the Current Report on Form 8-K, dated November 17, 2009.

31.1 Certification of equivalent of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of equivalent of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification of the equivalent of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.