<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON D.C.  20549



                                   FORM 10-Q



              Quarterly Report Under Section 13 or 15(d) of the
                       Securities Exchange Act of 1934


        For the Quarter Ended                        Commission File No.
         September 30, 1996                                2-94249  
                           


              HALL INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP
             (Exact name of Registrant as specified in its charter)



         Arizona                                          75-1982134
    (State or other Jurisdiction of                    (I.R.S. Employer     
    Incorporation or Organization)                    Identification No.)
                                                        


                           4455 EAST CAMELBACK ROAD
                                 SUITE A-200
                           PHOENIX, ARIZONA  85018
              (Address of principal executive offices, zip code)


     Registrant's telephone number, including area code:  (602) 840-0060


Indicate by a 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>   2
PART I.    FINANCIAL INFORMATION:

           The financial statements and information included herein, except for
           the balance sheet at December 31, 1995, are unaudited; however, they
           reflect all adjustments which are, in the opinion of management,
           necessary for a fair statement of the results for the interim periods
           ended September 30, 1996 and 1995.  These results may not be
           indicative of the results which may be expected for the year ended
           December 31, 1996, or any other period.
        




                                       2
<PAGE>   3
              HALL INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP

                                 BALANCE SHEETS

               SEPTEMBER 30, 1996 AND DECEMBER 31, 1995 (NOTE 1)



<TABLE>
<CAPTION>
                                                                      September 30,             December 31,
                                                                           1996                    1995      
                                                                     ----------------         ---------------
                                                                       (Unaudited)
<S>                                                                <C>                       <C>
ASSETS

Cash and cash equivalents (Note 2)                                      $ 2,077,172             $  1,332,041
                                                                                                            
Mortgage notes receivable, net of an allowance for doubtful
   receivables of $5,018,000 and $4,576,000 at September 30, 1996
   and December 31, 1995, respectively (Note 4)                                   -                1,094,683
                                                                                                            
Accrued interest receivable, net of deferred interest of
   $4,849,164 and $3,928,180 at September 30, 1996 and
   December 31, 1995, respectively (Note 2)                               1,128,545                1,639,890
                                                                                                            
Deferred charges, net                                                           150                    1,950
                                                                        -----------             ------------ 
                                                                        $ 3,205,867             $  4,068,564
                                                                        ===========             ============

LIABILITIES AND PARTNERS' EQUITY

Accounts payable                                                        $        10             $          9

Deferred revenue                                                                  -                    2,338
                                                                        -----------             ------------ 

                                                                                 10                    2,347
                                                                        -----------             ------------ 
Partners' equity:
   Limited partners - 2,568 units outstanding
   at September 30, 1996 and December 31, 1995                            3,176,547                4,028,303
                                                                                                            

   General partner                                                           29,310                   37,914
                                                                        -----------             ------------ 
                                                                          3,205,857                4,066,217
                                                                        -----------             ------------ 

                                                                        $ 3,205,867             $  4,068,564
                                                                        ===========             ============
</TABLE>





             THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS ARE AN
                     INTEGRAL PART OF THESE BALANCE SHEETS.

                                       3
<PAGE>   4
              HALL INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP

                       UNAUDITED STATEMENTS OF OPERATIONS

    FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (NOTE 1)


<TABLE>
<CAPTION>
                                            For the Three    For the Nine     For the Three     For the Nine
                                            Months Ended     Months Ended     Months Ended      Months Ended
                                           Sept 30, 1996     Sept 30, 1996    Sept 30, 1995     Sept 30, 1995
                                           ---------------   --------------   --------------    -------------
<S>                                        <C>               <C>              <C>                <C>
   Revenues:

       Interest (Note 2)                   $       51,251    $     147,897    $      40,914       $  113,347

       Loan origination fees                            -            2,338            3,099            9,297
                                           --------------    -------------    -------------       ----------

                                                   51,251          150,235           44,013          122,644
                                           --------------    -------------    -------------       ----------
   Expenses:

       Operating                                   47,701           96,795            4,514           56,370

       Bad Debt (Reversal)                        442,000          912,000        ( 540,670)       ( 540,670)

       Amortization                                   600            1,800              600            1,800
                                           --------------    -------------    -------------       ----------

                                                  490,301        1,010,595        ( 535,556)       ( 482,500)
                                           --------------    -------------    -------------       ----------

          Net income (loss)                $    ( 439,050)   $   ( 860,360)   $     579,569       $  605,144
                                           ==============    =============    =============       ==========

Net income (loss) allocable to
   limited partners                        $    ( 434,659)   $   ( 851,756)   $     573,773       $  599,093

Net income (loss) allocable to
   general partner                                ( 4,391)         ( 8,604)           5,796            6,051
                                           --------------    -------------    -------------       ----------

Net income (loss)                          $    ( 439,050)   $   ( 860,360)   $     579,569       $  605,144
                                           ==============    =============    =============       ==========

Net income (loss) per limited
   partnership unit                        $        ( 168)   $       ( 332)   $         223       $      233
                                           ==============    =============    =============       ==========
</TABLE>





             THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS ARE AN
                       INTEGRAL PART OF THESE STATEMENTS.

                                       4
<PAGE>   5
              HALL INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP

                         STATEMENTS OF PARTNERS' EQUITY

                FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND
                 FOR THE YEAR ENDED DECEMBER 31, 1995 (NOTE 1)



<TABLE>
<CAPTION>
                                                General                  Limited
                                                Partner                  Partners               Total   
                                             -------------              -----------          ------------
<S>                                          <C>                        <C>                  <C>
Balance, December 31, 1994                   $      20,237              $ 2,278,289          $  2,298,526
                                                                                                         

   Net income                                       17,677                1,750,014             1,767,691
                                             -------------              -----------          ------------

Balance, December 31, 1995                          37,914                4,028,303             4,066,217
                                                                                                         

   Net loss                                        ( 8,604)               ( 851,756)            ( 860,360)
                                             -------------              -----------          ------------

Balance, September 30, 1996                  $      29,310              $ 3,176,547          $  3,205,857
                                             =============              ===========          ============
</TABLE>





             THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS ARE AN
                       INTEGRAL PART OF THESE STATEMENTS.

                                       5
<PAGE>   6
              HALL INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP

                       UNAUDITED STATEMENTS OF CASH FLOWS

        FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (NOTE 1)



<TABLE>
<CAPTION>
                                                                            1996                      1995    
                                                                        ------------                  --------
<S>                                                                    <C>                   <C>
Cash Flows From Operating Activities
   Receipt of interest on Specific Loans and
     short-term investments                                             $    189,243           $    577,516
                                                                                                           
   Payment of operating costs                                                (96,795)               (51,885)
                                                                        ------------           ------------
       Net cash provided by  operating
          activities, net of distributions                                    92,448                525,631
                                                                                                           

Cash Flows From Financing Activities
   Loans to Affiliated Borrowers                                            (442,000)                     -
                                                                                                           
   Payment of Loans to Affiliated Borrowers                                1,094,683                      -
                                                                        ------------           ------------
       Net cash from financing activities                                    652,683                      -
                                                                        ------------           ------------
Cash and cash equivalents, beginning of
   year                                                                    1,332,041                204,315
                                                                        ------------           ------------
Cash and cash equivalents, end of period                                $  2,077,172           $    729,946
                                                                        ============           ============

RECONCILIATION OF NET INCOME (LOSS) TO CASH PROVIDED BY
   OPERATING ACTIVITIES:
   Net income (loss)                                                    $   (860,360)          $     25,575
                                                                                                           
   Adjustments to reconcile net income to
       net cash provided by operating activities:
       Amortization expense                                                    1,800                  1,200
       Bad Debt Expense                                                      442,000                      -
                                                                                                           
       Decrease in accrued interest receivable                               511,345                505,084
                                                                                                           
       Increase (decrease) in accounts payable                                     1                    (30)
       Decrease in deferred revenue                                           (2,338)                (6,198)
                                                                        ------------           ------------
          Net cash provided by operating
             activities, net of distributions                           $     92,448           $    525,631
                                                                        ============           ============
</TABLE>





             THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS ARE AN
                       INTEGRAL PART OF THESE STATEMENTS.

                                       6
<PAGE>   7
              HALL INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP

                         NOTES TO FINANCIAL STATEMENTS

(1)    SIGNIFICANT ACCOUNTING POLICIES:

       In the opinion of management, the accompanying audited and unaudited
       financial statements contain all adjustments necessary to present fairly
       the financial position of Hall Institutional Mortgage Fund Limited
       Partnership (the "Partnership"), as of September 30, 1996 and December
       31, 1995, and the results of operations and changes in financial
       position for the nine months ended  September 30, 1996 and 1995.  The
       general partner of the Partnership is Hall Pension Fund Associates and
       the general partner of Hall Pension Fund Associates is Hall 1985
       Management Associates (the "Managing General Partner").

       For a summary of additional significant accounting policies and other
       matters, see the notes to financial statements of the Partnership which
       are included in the Annual Report of Form 10-K for the year ended
       December 31, 1995.

(2)    ACCRUED INTEREST RECEIVABLE:

       The original loans made by the Partnership were to affiliated
       partnerships ("Affiliated Borrowers") which at the time of origination
       were secured only by a subordinate lien on the mortgaged real property
       which was pledged as security ("Specific Loans"). All of the Specific
       Loans have been  modified and do not require payment of interest until
       either sale or refinancing of the Affiliated Borrower's real property or
       in some instances to the extent cash flow is available from the
       Affiliated Borrowers after the payment in full of the Affiliated
       Borrower's first lien mortgage or other amounts having priority. Certain
       of the Partnership's loans, through restructure and reorganization of
       Affiliated Borrowers, are in full or part subordinated to the return of
       equity in addition to being subordinate to senior indebtedness of the
       Affiliated Borrower. Accordingly, in the first nine, six and three
       months of 1996, the Partnership accrued interest of $525,426, $351,745
       and $178,064 respectively, of which $450,984, $300,656 and $150,328 was
       deferred.

       In February 1995, three of the Affiliated Borrowers, along with 25 other
       partnerships (collectively hereafter referred to as the "Hall LPs"),
       entered into a transaction with affiliates of NHP, Inc., Paine Webber
       and Hall Financial Group, Inc. whereby the properties were transferred
       to separate limited partnerships (the "New LPs") by the respective
       Affiliated Borrowers (the "NHP Transaction"). As a result of the NHP
       Transaction, Lanetree Associates Limited Partnership, Twintree
       Associates Limited Partnership and Coachtree Associates Limited
       Partnership ("NHP Transaction Partnerships") each hold a limited
       partnership interest in its respective New LP in which affiliates of
       NHP, Inc. and Paine Webber are general partners. As part of the NHP
       Transaction, the senior mortgage for each property involved in the NHP
       Transaction was paid in full. In addition, as part of the NHP
       Transaction, each Hall LP (including the NHP Transaction Partnerships)
       received cash at closing, and is entitled to a defined priority equity
       amount in the New LPs (the "Preferred Equity") and an annual return on
       the Preferred Equity of 6% per annum (the "Operational Preference")
       provided that all of the Hall LPs have been paid the full amountof the
       Operational Preference due at the end of each calender quarter.





                                       7
<PAGE>   8
       In the event all of the Hall LP's have not bee paid the amount of the
       Operational Preference due  at the end of each calender quarter, the
       annual  return on the Preferred Equity in calculating the Operational
       Participation increases to 9% per annum (hereafter referred to as a
       "Non-Major Default").  A Non-Major Default occurred in April 1996, and
       is continuing. In addition to Operational Preference, each NHP
       Transaction Partnership is entitled to a priority return of the
       Preferred Equity and any accrued and unpaid Operational Preference upon
       refinancing or sale of the properties over other equity classes and a
       20% participation in net proceeds available from sale or refinancing
       after payment of the Preferred Equity and any accrued and unpaid
       Operational Preference ("Sale or Refinancing Participation Proceeds").
       As a condition of the NHP Transaction, the Partnership was required to
       release its second lien positions and retain unsecured loans from the
       NHP Transaction Partnerships for the remaining balances on their
       respective Specific Loans. The remaining balances on the NHP Transaction
       Partnerships' Specific Loans have the same economic and payment terms as
       prior to the NHP Transaction. Lanetree Associates Limited Partnership
       distributed $569,419 to the Partnership in March 1995 in partial payment
       of its loan obligation to the Partnership from proceeds it received at
       closing of the NHP Transaction. There were not sufficient proceeds at
       closing (after the payment of priority repayments) to distribute funds
       to the Partnership from Coachtree Associates Limited Partnership or
       Twintree Associates Limited Partnership. However, the NHP Transaction
       Partnerships remain obligated to the Partnership pursuant to each
       partnership's Bankruptcy Plan. The terms of the Preferred Equity held by
       the NHP Transaction Partnerships provide that defined amounts be paid
       not later than December 10, 2000. NHP, Inc. has the option to pay the
       Preferred Equity amounts due the NHP Transaction Partnerships at an
       earlier date at a discounted amount. If NHP, Inc. exercises its option
       within twenty-one months of the original transaction date, or November
       7, 1996, it would result in the following estimated payments, excluding
       Sale or Refinancing Participation Proceeds and assuming a Non-Major
       Default had not occurred,  to the Partnership from each of the NHP
       Transaction Partnerships:

<TABLE>
               <S>                                       <C>
               Coachtree  . . . . . . . . . . . . . . . .  $177,960
               Lanetree . . . . . . . . . . . . . . . .  $1,167,626
               Twintree . . . . . . . . . . . . . . . . .  $381,815
</TABLE>

       The amounts the Partnership would receive on December 10, 2000, 
       excluding Sale or Refinancing Participation Proceeds and assuming a 
       Non-Major Default had not occurred, is estimated to be:

<TABLE>
               <S>                                       <C>
               Coachtree  . . . . . . . . . . . . . . . .  $334,743
               Lanetree . . . . . . . . . . . . . . . .  $1,167,626
               Twintree . . . . . . . . . . . . . . . . .  $561,409
</TABLE>

       During the first three months of 1996, two Affiliated Borrowers,
       Lanetree Associates Limited Partnership and Hall Seven Trails Associates
       ("Arrowtree"), repaid accrued interest to the Partnership of $71,512 and
       $44,274, respectively. In the second quarter of 1996, based on an
       updated analysis, management increased the reserve for accrued interest
       receivable by $470,000.





                                       8
<PAGE>   9
(3)    DISTRIBUTIONS TO PARTNERS:

       There were no partner distributions paid during the first nine months 
       of 1996.

(4)    MORTGAGE NOTES RECEIVABLE:

       In January 1996, Northtree Associates Limited Partnership
       ("Candlewick"), an Affiliated Borrower, refinanced the Candlewick
       apartments' mortgages. The property was refinanced with a new $5.0
       million first lien mortgage which accrues interest at 7.58% with
       principal and interest payments due monthly based on a 22-year
       amortization schedule through maturity on February 1, 2003. As a
       condition of the refinancing agreement, the Partnership was required to
       release its second lien position and retain an unsecured recourse
       promissory note from Candlewick for the remaining balance on
       Candlewick's Specific Loan. The remaining balance on the Candlewick
       Specific Loan has the same economic terms as prior to the refinancing.
       The Partnership believes it was in its best interest to release its
       second lien position to allow the refinancing to be consummated, thereby
       decreasing Candlewick's first lien mortgage interest rate and extending
       the maturity date.

       During the first quarter of 1996, Arrowtree refinanced its mortgages. As
       part of the overall refinancing, the property was transferred to
       Arrowtree Properties, Ltd. ("New Arrowtree"), with Arrowtree retaining a
       99% interest in New Arrowtree. The property was refinanced with a new
       $2.75 million first lien mortgage which accrues interest at 7.57% with
       principal and interest payments due monthly. The refinancing allowed
       Arrowtree to repay the Partnership in full the $181,000 of principal and
       $44,274 of accrued interest on a loan the Partnership made to Arrowtree
       pursuant to the 1994 restructuring of Arrowtree's first lien mortgage.
       Arrowtree also made a partial payment of $914,000 on Arrowtree's
       Specific Loan. As a condition of the refinancing agreement, the
       Partnership was required to release its second lien position and retain
       an unsecured recourse promissory note from Arrowtree for the remaining
       balance on Arrowtree's Specific Loan. The remaining balance on the
       Arrowtree Specific Loan has the same economic and payment terms as prior
       to the refinancing.

       In August 1996, Hall Brambletree Associates Limited Partnership
       ("Brambletree"), an Affiliated Borrower, refinanced the Brambletree
       apartments' mortgages. The property was refinanced with a new $6.105
       million first lien mortgage which accrues interest at 8.245% with
       principal and interest payments due monthly based on a 30- year
       amortization schedule through maturity on September 1, 2006. As a
       condition of the refinancing, the Partnership was required to loan
       Brambletree an additional $442,000 with the same terms as the
       Brambletree Specific Loan. Along with the additional loan, the
       Partnership was required to release its second lien position and retain
       an unsecured recourse promissory note from Brambletree for the remaining
       balance on Brambletree's Specific Loan. The remaining balance on the
       Brambletree Specific Loan has the same economic terms as prior to the
       refinancing. The Partnership believes it was in its best interest to
       release its second lien position to allow the refinancing to be
       consummated, thereby decreasing Brambletree's first lien mortgage
       interest rate and extending the maturity date.





                                       9
<PAGE>   10
       The Partnership updated an analysis of the collectibility of its
       mortgage notes receivable at December 31, 1995.  The Partnership
       reversed bad debt reserves totaling $1,653,386 during 1995 primarily
       based on interest payments received during 1995 the principal and
       interest payments received in connection with the Arrowtree refinancing
       discussed above. During the third quarter of 1996, the Partnership
       reserved the $442,000 advanced to Brambletree.

(5)    INVESTMENT ACT OF 1940:

       The accompanying financial statements have been prepared assuming that
       the Partnership will continue as a going concern. In February 1996, the
       Partnership's attorneys advised the Partnership that the release of the
       second lien positions on certain of the loan receivables could cause the
       Partnership to be treated as an investment company under the 1940
       Investment Company Act (the "1940 Act") by the Securities and Exchange
       Commission. The Partnership cannot become an investment company under
       the 1940 Act because it is in conflict with its partnership agreement
       and the purpose of the original offering.  Certain securities
       regulations which may be applicable to the Partnership complicate the
       determination of the best alternative for future operations of the
       Partnership.  Although there can be no assurances with respect to the
       outcome, the Partnership intends to use its best efforts to implement
       the alternative that provides the maximum benefit to its limited
       partners, while maintaining compliance with all applicable securities
       regulations. The alternatives currently being evaluated, if implemented,
       may require the Partnership to seek limited partner approval. If such
       limited partner approval is required, proxy statements will be sent to
       the limited partners which will request their votes regarding certain
       aspects of the alternative proposed.

       The accompanying financial statements have not been prepared on the
       liquidation basis of accounting, as it is not determinable if an
       immediate liquidation of the Partnership will be required. This
       uncertainty raises substantial doubt about the Partnership's ability to
       continue as a going concern. The accompanying financial statements do
       not include any adjustments that might result from the outcome of this
       uncertainty.





                                       10
<PAGE>   11
              HALL INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP

          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

       CAPITAL RESOURCES AND LIQUIDITY -

       The Partnership's primary sources of liquidity are repayments of
       principal and interest from the NHP Transaction Partnerships and
       repayments of principal and interest from Affiliated Borrowers that have
       refinanced their mortgages. Liquidity is also maintained with cash the
       Partnership holds as working capital reserves.

       The Partnership's ability to pay distributions to the general and
       limited partners was, prior to the NHP Transaction, materially affected
       by the non-payment of interest on the loans owed by Affiliated
       Borrowers. It has not yet been determined whether there will be
       distributions from operations in 1996 as a result of the NHP Transaction
       and certain Affiliated Borrowers' refinancing of their underlying debts.
       As of September 30, 1996, certain of the Affiliated Borrowers were not
       making payments to the Partnership. Accordingly, during the first nine,
       six and three months of 1996, the Partnership deferred $450,984,
       $300,656 and $150,328 respectively of accrued interest income.  The
       Partnership expects to continue to defer a majority of the accrued
       interest quarterly through December 31, 1996. Interest accrued on
       Lanetree Associates Limited Partnership is being recognized as income as
       a result of the December 31, 1995 analysis of collectibility of mortgage
       notes receivable and the NHP Transaction.


       RESULTS OF OPERATIONS -

       The Partnership recorded net (loss) and income of $(860,360), and
       $605,144 for the nine months ended September 30, 1996 and 1995,
       respectively.  During the first nine, six and three months of 1996,
       $73,456, $45,557 and $5,678 respectively of interest income was earned
       on short-term investments. In the six and three month period ending
       September 30, 1996, and June 30, 1996, the Partnership incurred
       professional fees of approximately $72,097 and $31,000 respectively
       related to analyzing the value of the mortgage receivables (see Note 5).
       Accounting fees of approximately $5,500 relating to the December 31,
       1995, audit were also incurred in the second quarter of 1996. Due to an
       updated analysis, the Partnership recorded $470,000 as bad debt expense
       in the second quarter of 1996. In the third quarter of 1996, the
       Partnership recorded as bad debt expense, the $442,000 advance made in
       connection with Brambletree's refinancing.





                                       11
<PAGE>   12
PART II.     OTHER INFORMATION:

ITEM 1.      LEGAL PROCEEDINGS

             The Partnership is not a party to any material legal proceedings.


ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K

     (A)     Exhibit 27 - Financial Data Schedule

     (B)     None





                                       12
<PAGE>   13
                                   SIGNATURES


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


HALL INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP

By:   Hall Pension Fund Associates,
      its General Partner

      By:   Hall 1985 Management Associates Limited Partnership
            its General Partner

            By:   Hall Apartment Associates, Inc.,
                  its Managing General Partner


            By:    /s/ Don Braun               Date:    September 14, 1996     
                  ------------------------            -------------------------
                  Don Braun                    
                  President/Treasurer


Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following person in the capacities
indicated of the Managing General Partner, on behalf of the registrant on the
date indicated.

      By:   Hall Apartment Associates, Inc., the Managing General Partner of
            Hall 1985 Management Associates Limited Partnership, the General
            Partner of Hall Pension Fund Associates, the General Partner of
            Hall Institutional Mortgage Fund Limited Partnership



            By:    /s/ Don Braun               Date:    September 14, 1996     
                  ------------------------            -------------------------
                  Don Braun                    
                  President/Treasurer





                                       13

<PAGE>   14

                              INDEX TO EXHIBITS



<TABLE>
<CAPTION>
EXHIBIT
NUMBER                   DESCRIPTION
-------                  -----------
<S>           <C>
  27          -  Financial Data Schedule

</TABLE>