UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                            

                                   FORM 10-Q

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

For the quarterly period ended    September 30, 1996

                                      OR

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          0-14378        


             Krupp Institutional Mortgage Fund Limited Partnership


            Massachusetts                                   04-2860302
(State or other jurisdiction of                          (IRS employer
incorporation or organization)                     identification no.)

470 Atlantic Avenue, Boston, Massachusetts                       02210
(Address of principal executive offices)                    (Zip Code)


                                (617) 423-2233
             (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.  Yes   X    No      

<PAGE>
                        PART I.  FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

This Form 10-Q contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934.  Actual results could differ materially from those
projected in the forward-looking statements as a result of a number of
factors, including those identified herein.

             KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP

                                BALANCE SHEETS
                                             

                                    ASSETS

<TABLE>
<CAPTION>
                                                September 30,  December 31,
                                                    1996          1995    

<S>                                             <C>            <C>
Mortgage notes receivable, net of loan loss
   reserve of $16,524,000 (Notes 2 and 3)       $ 6,981,336    $11,795,943
Cash and cash equivalents                         1,236,306      1,260,798 
Accrued interest receivable - mortgage notes,
   net of reserve for uncollectible interest of
   $11,616,195 and $9,755,416, respectively          
   (Note 3)                                          50,729        112,304
Other assets                                          2,506          3,735

      Total assets                              $ 8,270,877
                                                               $13,172,780
                                                               


                       LIABILITIES AND PARTNERS' EQUITY

Other liabilities                               $    67,313    $    12,952

Partners' equity (deficit) (Note 4):

   Limited Partners (30,059 Units outstanding)    8,421,132     13,327,834
   General Partners                                (217,568)      (168,006)

      Total Partners' equity                      8,203,564     13,159,828

      Total liabilities and Partners' equity    $ 8,270,877    $13,172,780

</TABLE>
                    The accompanying notes are an integral
                       part of the financial statements.
<PAGE>
             KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP

                           STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                             


                                 For the Three Months     For the Nine Months
                                 Ended September 30,      Ended September 30,

                                   1996        1995         1996       1995  

<S>                              <C>         <C>          <C>        <C>
Interest income:
   Mortgage notes receivable
      (Notes 2 and 3)            $73,737     $124,791     $359,284   $663,250
   Cash equivalents               16,793       19,455       62,650     49,908

         Total interest income    90,530      144,246      421,934    713,158

Expenses:
   Expense reimbursements to
      affiliates (Note 5)         12,951       12,816       36,644     38,448
   General and administrative      7,384       12,646       44,794     35,941

         Total expenses           20,335       25,462       81,438     74,389

Net income                       $70,195     $118,784     $340,496   $638,769


Allocation of net income (Note 4):

   Limited Partners              $69,493     $117,596     $337,091   $632,381

   Per Unit of Limited Partner    
      Interest (30,059 Units
      outstanding)               $  2.31     $   3.91     $  11.21   $  21.04

   General Partners              $   702     $  1,188     $  3,405   $  6,388

</TABLE>
                 The accompanying notes are an integral
                       part of the financial statements.
<PAGE>
             KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP

                           STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                              

                                                    For the Nine Months Ended
                                                        September 30,       
                                                       1996         1995     
<S>                                                <C>           <C>
Operating activities:
   Net income                                      $   340,496   $  638,769
   Adjustments to reconcile net income to
      net cash provided by operating activities:
         Decrease in accrued interest
            receivable-mortgage notes                   61,575      130,034
         Decrease in other assets                        1,229       10,409
         Increase (decrease) in other liabilities       54,361       (2,846)

            Net cash provided by operating
               activities                              457,661      776,366

Investing activity: 
   Decrease in mortgage notes receivable             4,814,607       19,596

Financing activity:
   Distributions                                    (5,296,760)    (455,439)

Net increase (decrease) in cash and cash
   equivalents                                         (24,492)     340,523 

Cash and cash equivalents, beginning of period       1,260,798    1,026,664

Cash and cash equivalents, end of period           $ 1,236,306   $1,367,187

</TABLE>

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

<PAGE>
             KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP

                         NOTES TO FINANCIAL STATEMENTS
                                            

(1) Accounting Policies

    Certain information and footnote disclosures normally included in
    financial statements prepared in accordance with generally accepted
    accounting principles have been condensed or omitted in this report on
    Form 10-Q pursuant to the Rules and Regulations of the Securities and
    Exchange Commission.  In the opinion of The Krupp Corporation and The
    Krupp Company Limited Partnership-III ("Krupp Co.-III"), the General
    Partners of Krupp Institutional Mortgage Fund Limited Partnership (the
    "Partnership"), the disclosures contained in this report are adequate to
    make the information presented not misleading.  See Notes to Financial
    Statements in the Partnership's Annual Report on Form 10-K for the year
    ended December 31, 1995 for additional information relevant to
    significant accounting policies followed by the Partnership.

    In the opinion of the General Partners of the Partnership, the
    accompanying unaudited financial statements reflect all adjustments
    necessary to present fairly the Partnership's financial position as of
    September 30, 1996, its results of operations for the three and nine
    months ended September 30, 1996 and 1995, and cash flows for the nine
    months ended September 30, 1996 and 1995.  Certain prior year balances
    have been reclassified to conform with current year financial statement
    presentation.

    The results of operations for the three and nine months ended September
    30, 1996 are not necessarily indicative of the results which may be
    expected for the full year.  See Management's Discussion and Analysis of
    Financial Condition and Results of Operations included in this report.

    
(2) Krupp Equity Limited Partnership ("KELP")

        Condensed financial statements of KELP are as follows:

                      KRUPP EQUITY LIMITED PARTNERSHIP
                          CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
                                           
                                   ASSETS
                                                September 30,   December 31,
                                                    1996            1995    

    <S>                                         <C>             <C>
    Property at cost                            $ 12,702,534    $ 30,960,353 
    Property valuation provision                  (5,000,000)     (5,986,000)
    Accumulated depreciation                      (3,737,050)    (10,206,689)
                                                   3,965,484      14,767,664
 
    Other assets                                     323,805       1,086,232

       Total assets                             $  4,289,289    $ 15,853,896
  
                       LIABILITIES AND PARTNERS' DEFICIT
                                                
    Mortgage notes payable to the Partnership   $ 28,298,295    $ 28,319,943
    Mortgage notes payable (A)                          -          7,599,279
    Notes payable to an affiliate                    300,000         300,000
    Accrued interest payable to affiliates         7,199,212      10,171,783
    Due to affiliates                                667,463         767,737
    Other liabilities                                414,732         633,691

       Total liabilities                          36,879,702      47,792,433

    Partners' deficit                            (32,590,413)    (31,938,537)
       Total liabilities and Partners'
          deficit                               $  4,289,289    $ 15,853,896

</TABLE>
                       KRUPP EQUITY LIMITED PARTNERSHIP
                      CONDENSED STATEMENTS OF OPERATIONS
                                             
<TABLE>
<CAPTION>
                               For the Three Months     For the Nine Months
                                Ended September 30,      Ended September 30,   
                                  1996       1995        1996          1995    

    <S>                        <C>        <C>         <C>          <C>
    Revenue                    $ 257,067  $ 870,535   $ 1,459,430  $ 2,593,352
    Property operating
       expenses                  (70,704)  (353,794)     (637,314)  (1,028,390)
    Income before depreciation,
       amortization and        
       interest                  186,363    516,741       822,116    1,564,962
    Depreciation and
       amortization (A)          (58,966)   (82,301)     (724,149)    (240,497)
    Interest expense            (754,808)  (930,176)   (2,411,839)  (2,769,644)
    Loss before gain on sale
       of properties            (627,411)  (495,736)   (2,313,872)  (1,445,179)
    Gain on sale of 
       properties (A)               -          -        1,661,996         -   
    Net loss                   $(627,411) $(496,736)  $  (651,876) $(1,445,179)
</TABLE>
     (A) On March 5, 1996, KELP sold Village Green Apartments to an 
         unaffiliated third party for $5,200,000.  The buyer assumed the
         first mortgage note payable on the property of $4,633,989.  On April
         29, 1996, KELP remitted available sale proceeds of $585,959 to the
         Partnership.

         On May 16, 1996, KELP sold North Salado Village Shopping Center to
         an unaffiliated third party for $7,350,000.  After satisfying the
         first mortgage note payable of $2,920,405 and closing costs, KELP
         remitted available sales proceeds of $4,207,000 to the Partnership
         on June 6, 1996.

(3)  Provision for Credit Losses and Accrued Interest Reserves

     The General Partners of the Partnership have recorded a cumulative
     provision for credit losses of $16,524,000 on its mortgage notes
     receivable.  As of September 30, 1996, total proceeds of $4,792,959,
     resulting from the sales of Village Green Apartments and North Salado
     Village, have been applied against the Partnership's outstanding
     mortgage note receivable balance.

     Additionally, the Partnership has recorded cumulative provisions for
     uncollectible interest of $11,616,195 and $9,775,416 as of September 30,
     1996 and December 31, 1995, respectively.  These cumulative provisions
     are booked against the carrying value of the assets in order to reflect
     management's current estimates of the underlying property values which,
     given the inherent uncertainty of real estate valuation in the current
     market, could differ from the ultimate value obtained upon sale of such
     properties.
     
(4)  Summary of Change in Partners' Equity  

     A summary of changes in Partners' equity (deficit) for the nine months
     ended September 30, 1996 is as follows:
<TABLE>
<CAPTION>
                                                                 Total
                                     Limited       General      Partners'
                                     Partners      Partners      Equity   
      <S>                           <C>            <C>         <C>
      Balance at
         December 31, 1995          $13,327,834    $(168,006)  $13,159,828
      Net income                        337,091        3,405       340,496
      Distributions                  (5,243,793)     (52,967)   (5,296,760)
      Balance at 
         September 30, 1996         $ 8,421,132    $(217,568)  $ 8,203,564

</TABLE>
(5)  Related Party Transactions

     The Partnership reimburses affiliates of the General Partners for
     certain expenses incurred in connection with the activities of the
     Partnership, including:  communications, bookkeeping and clerical work
     necessary in maintaining relations with Limited Partners, and
     accounting, tax and computer services necessary for the maintenance of
     the books and records of the Partnership.
<PAGE>

             KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP
                                            

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and Results
of Operations contains forward-looking statements including those concerning
Management's expectations regarding the future financial performance and
future events.  These forward-looking statements involve significant risk and
uncertainties, including those described herein.  Actual results may differ
materially from those anticipated by such forward-looking statements.

Liquidity and Capital Resources

Currently, the Partnership has sufficient liquidity to meet its operating
needs.  The most significant capital need is distributions to investors. 
However, distributions are currently dependent on cash flow received from
KELP's interest payments on the Participating Notes based upon the cash flow
of the underlying properties.  Due to fluctuations in the cash flow payments
received from KELP and its effect on the Partnership's liquidity, the
Partnership may need to periodically adjust its distribution rate.  Therefore,
sustaining the current distribution rate is mainly dependent upon the future
cash flow payments received from KELP.

KELP's properties have not generated cash flow sufficient to meet the terms of
their existing obligations.  The retail centers have historically suffered
from an economic downturn in retail sales beginning in the late 1980's. 
Recently, the properties have maintained a consistent level of operating cash
flow.  The partners of KELP have made cumulative capital contributions of
approximately  $4,673,000 to cover prior operating deficits and have arranged
for certain short-term borrowings.  Additionally, the affiliated management
agent has not received payment of management fees since 1991.  The General
Partners of the Partnership have not commenced foreclosure proceedings because
they have determined that there are advantages to allowing KELP to continue to
own the properties.
  
On March 5, 1996, KELP sold Village Green Apartments to an unaffiliated third
party for $5,200,000. The buyer assumed the principal outstanding on the first
mortgage note payable on the property of $4,633,989.  On April 29, 1996, KELP
remitted to the Partnership the available sale proceeds, net of closing costs,
of $585,959.

On May 16, 1996, KELP sold North Salado Village Shopping Center to an
unaffiliated third party for $7,350,000.  The outstanding first mortgage note
payable on the property of $2,920,405 was paid at the closing.  On June 6,
1996, KELP remitted to the Partnership sales proceeds, net of closing costs,
of $4,207,000.

The Partnership made an additional distribution of $4,841,321, utilizing the
proceeds received from KELP from the sales of Village Green Apartments and
North Salado Village Shopping Center.

Operations

The decrease in interest income earned for the three and nine months ended
September 30, 1996, as compared to the three and nine months ended September
30, 1995, is a result of lower cash flow payments from the underlying KELP
mortgages.  This decrease is partially offset by an increase in interest
income from higher average cash and cash equivalents available for investment.
General and administrative expense decreased for the three months ended
September 30, 1996, as compared to the same period in 1995, as a result of a
decrease in costs related to the preparation and mailing of reports to
investors. 

For the nine months ended September 30, 1996, as compared to the nine months
ended September 30, 1995, general and administrative expense increased due to
an increase in audit expenditures, partially offset by a decrease in investor
related costs, as discussed above.


Distributable Cash from Operations

Distributable Cash from Operations, of approximately $70,000 and $119,000 for
the three months ended September 30, 1996 and 1995, respectively and $340,000
and $639,000 for the nine months ended September 30, 1996 and 1995,
respectively, as defined by Section 5.01 of the Partnership Agreement, is
equivalent to net income of the Partnership.

KELP's Results of Operations
  
The following table presents an analysis of KELP's cash deficit for the three
and nine months ended September 30, 1996 and 1995:
<TABLE>
<CAPTION>
  
                                 
                                For the Three Months    For the Nine Months
                                 Ended September 30,     Ended September 30,  
                                 (Rounded to $1,000)    (Rounded to $1,000) 
                                   1996        1995      1996        1995   

<S>                           <C>         <C>         <C>        <C>
Cash flow from properties
   before mortgage debt
   service and capital
   improvement expenditures
   and reserves                $165,000    $ 518,000   $833,000   $1,558,000

Mortgage debt service
   exclusive of amounts
   due to the Partnership       (30,000)    (239,000)  (308,000)    (716,000)

Capital improvement
   expenditures                 (84,000)    (172,000)  (231,000)    (242,000)

Contribution to capital
   improvement reserve              -         (6,000)    (4,000)      (8,000)

Cash flow from properties
   before mortgage debt
   service to the Partnership    51,000      101,000    290,000      592,000

Mortgage debt service to the
   Partnership                  (51,000)    (101,000)  (290,000)    (592,000)

KELP general and 
   administrative expenses      (17,000)      (3,000)   (32,000)     (16,000)

   Cash Deficit                $(17,000)   $  (3,000)  $(32,000)  $  (16,000)
</TABLE>
   
<PAGE>

               KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP

                            PART II - OTHER INFORMATION
                                               

   
Item 1.  Legal Proceedings
         Response:  None

Item 2.  Changes in Securities
         Response:  None

Item 3.  Defaults upon Senior Securities
         Response:  None

Item 4.  Submission of Matters to a Vote of Security Holders
         Response:  None

Item 5.  Other Information
         Response:  None

Item 6.  Exhibits and Reports on Form 8-K
         Response:  None


<PAGE>

                                   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, thereunto duly authorized.



                       Krupp Institutional Mortgage Fund Limited Partnership
                                           (Registrant)



                           BY: /s/Robert A. Barrows                        
                               Robert A. Barrows
                               Treasurer and Chief Accounting Officer of The
                               Krupp Corporation, a General Partner.



DATE: November 14, 1996