FORM 10-Q

               SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C.  20549


 X   Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
 Act of 1934

For the quarterly period ended June 30, 1999 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:  0-17582

  AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
     (Exact name of registrant as specified in its charter)

Delaware                                                47-0719051
(State or other jurisdiction                            (IRS Employer
of incorporation or organization)                       Identification No.)


Suite 400, 1004 Farnam Street, Omaha, Nebraska          68102
(Address of principal executive offices)                (Zip Code)


(402) 444-1630
(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>                               - i -

Part I.  Financial Information
  Item 1.  Financial Statements
AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
BALANCE SHEETS
(UNAUDITED)

<TABLE>
<CAPTION>
                                                                                              June 30, 1999       Dec. 31, 1998
                                                                                             --------------      --------------
<S>                                                                                          <C>                 <C>
Assets
 Cash and temporary cash investments, at cost which
  approximates market value                                                                  $      300,841       $     530,880
 Investment in mortgage-backed securities (Note 5)                                                     -              3,409,301
 Investment in preferred real estate participations (PREPs),
  net of valuation allowance (Note 6)                                                                  -                   -
 Interest receivable												                                                     	                1,988              35,796
 Other assets                                                                                         4,650             108,411
                                                                                             --------------       --------------
                                                                                             $      307,479       $   4,084,388
                                                                                             ==============       ==============
Liabilities and Partners' Capital
 Liabilities
  Accounts payable (Note 7)                                                                  $       36,073       $      62,506
  Distribution payable (Note 4)                                                                      39,988              55,548
                                                                                             --------------       --------------
                                                                                                     76,061             118,054
                                                                                             --------------       --------------
 Partners' Capital
  General Partner                                                                                       100                 100
  Beneficial Unit Certificate Holders
  ($.26 per BUC in 1999 and $4.38 in 1998)                                                          231,318           3,966,234
                                                                                             --------------       --------------
                                                                                                    231,418           3,966,334
                                                                                             --------------       --------------
                                                                                             $      307,479       $   4,084,388
                                                                                             ==============       ==============

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

</TABLE>

































<PAGE>                               - 1 -
AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
                                                           For the             For the         For the Six         For the Six
                                                     Quarter Ended       Quarter Ended        Months Ended        Months Ended
                                                     June 30, 1999       June 30, 1998       June 30, 1999       June 30, 1998
                                                    ---------------     ---------------     ---------------     ---------------
<S>                                                 <C>                 <C>                 <C>                 <C>
Income
 Mortgage-backed securities income                  $         -      $         129,308      $       17,332     $       261,808
 Equity in earnings of property partnerships                  -                   -                 20,081              15,508
 Interest income on temporary cash investments              10,255              33,451              22,247              68,251
 Gain on sale of mortgage-backed securities                   -                   -                 90,198                -
 Gain on sale of PREPs                                     404,141                -                404,141                -
                                                    ---------------     ---------------     ---------------     ---------------
                                                           414,396             162,759             553,999             345,567
Expenses
 General and administrative expenses (Note 7)               36,778              57,717             104,222             246,690
                                                    ---------------     ---------------     ---------------     ---------------
Net income                                                 377,618             105,042             449,777              98,877
Other comprehensive income:
 Unrealized holding losses on securities
  Unrealized holding losses arising during the period         -                 (9,324)            (14,309)            (16,313)
  Plus reclassification adjustment for net gains
   included in net income                                     -                   -                (90,198)               -
                                                    ---------------     ---------------     ---------------     ---------------
Change in net unrealized holding losses                       -                 (9,324)           (104,507)            (16,313)
                                                    ---------------     ---------------     ---------------     ---------------
Comprehensive income                                $      377,618      $       95,718      $      345,270      $        82,564
                                                    ===============     ===============     ===============     ===============
Net income allocated to:
 General Partner                                    $       11,163      $        2,886      $       40,802      $        5,771
 BUC Holders                                               366,455             102,156             408,975              93,106
                                                    ---------------     ---------------     ---------------     ---------------
                                                    $      377,618      $      105,042      $      449,777      $       98,877
                                                    ===============     ===============     ===============     ===============
Net income, basic and diluted, per BUC              $          .41      $          .11      $          .45      $          .10
                                                    ===============     ===============     ===============     ===============

The accompanying notes are an integral part of the financial statements.
</TABLE>

































<PAGE>                                - 2 -

AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
STATEMENT OF PARTNERS' CAPITAL
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>

                                                                                           Beneficial Unit
                                                                              General          Certificate
                                                                              Partner              Holders               Total
                                                                        --------------     ----------------     ---------------
<S>                                                                     <C>                <C>                  <C>
Partners' Capital (excluding accumulated other comprehensive income)
 Balance at December 31, 1998                                           $         100      $     3,861,727       $   3,861,827
 Net income                                                                    40,802              408,975             449,777
 Cash distributions paid or accrued (Note 4)                                  (40,802)          (4,039,384)         (4,080,186)
                                                                        --------------     ----------------     ---------------
                                                                                  100              231,318             231,418
                                                                        --------------     ----------------     ---------------
Accumulated Other Comprehensive Income
 Balance at December 31, 1998                                                    -                 104,507             104,507
 Net change                                                                      -                (104,507)           (104,507)
                                                                        --------------     ----------------     ---------------
                                                                                 -                    -                   -
                                                                        --------------     ----------------     ---------------
Balance at June 30, 1999                                                $         100      $       231,318       $     231,418
                                                                        ==============     ================     ===============
</TABLE>
AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                                               For the Six         For the Six
                                                                                              Months Ended        Months Ended
                                                                                             June 30, 1999       June 30, 1998
                                                                                            ---------------     ---------------
<S>                                                                                         <C>                 <C>
Cash flows from operating activities
 Net income                                                                                 $      449,777      $       98,877
  Adjustments to reconcile net income to net cash
   from operating activities
    Equity in earnings of property partnerships                                                    (20,081)            (15,508)
    Amortization of discount on mortgage-backed securities                                          (1,264)             (7,358)
    Gain on sale of mortgage-backed securities                                                     (90,198)               -
    Gain on sale of PREPs                                                                         (404,141)               -
    Decrease in interest receivable                                                                 33,808               3,962
    Decrease (increase) in other assets                                                            103,762              (2,062)
    Decrease in accounts payable                                                                   (26,433)            (82,958)
                                                                                            ---------------     ---------------
Net cash provided by (used in) operating activities                                               	 45,230              (5,047)
                                                                                            ---------------     ---------------
Cash flows from investing activities
 Mortgage principal payments received                                                               87,355             431,954
 Distributions received from PREPs                                                                  20,081              15,508
 Proceeds from sale of mortgage-backed securities                                                3,308,900                -
 Proceeds from sale of PREPs                                                                       404,141                -
                                                                                            ---------------     ---------------
Net cash provided by investing activities                                                        3,820,477             447,462
                                                                                            ---------------     ---------------
Cash flow used in financing activity
 Distributions paid                                                                             (4,095,746)           (578,105)
                                                                                            ---------------     ---------------
Net decrease in cash and temporary cash investments                                               (230,039)           (135,690)
Cash and temporary cash investments at beginning of period                                         530,880           2,577,493
                                                                                            ---------------     ---------------
Cash and temporary cash investments at end of period                                        $      300,841      $    2,441,803
                                                                                            ===============     ===============
The accompanying notes are an integral part of the financial statements.
</TABLE>





<PAGE>                               - 3 -

AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
(UNAUDITED)

1. Organization

America First PREP Fund 2 Pension Series Limited Partnership (the Partnership)
was formed on February 2, 1988, under the Delaware Revised Uniform Limited
Partnership Act for the purpose of acquiring a portfolio of federally-insured
multifamily mortgages and other investments including preferred real estate
participations (PREPs).  PREPs consist of equity interests which are intended
to provide the Partnership with a participation in the net cash flow and net
sale or refinancing proceeds of the properties collateralizing the mortgage
loans.  The Partnership began operations with the first escrow closing on May
25, 1988, and will continue in existence until December 31, 2017, unless
terminated earlier under the provisions of the Partnership Agreement.  The
General Partner of the Partnership is America First Capital Associates Limited
Partnership Six (AFCA 6).

On April 10, 1998, the Partnership consummated a merger with AF Merger, L.P.,
a Delaware limited partnership (Merger L.P.), pursuant to an Agreement and
Plan of Merger, dated as of July 29, 1997 (the Merger Agreement), among the
Partnership, Merger L.P., America First Participating/Preferred Equity
Mortgage Fund Limited Partnership, a Delaware limited partnership, America
First PREP Fund 2 Limited Partnership, a Delaware limited partnership, and
America First Mortgage Investments, Inc., a Maryland corporation (AFM).  The
Partnership was the surviving limited partnership of the merger with Merger
L.P., but as a result of the merger, (i) the general partner interest in AFCA
6 was acquired by AFM, (ii) the limited partner interest in AFCA 6 was
acquired by a wholly-owned subsidiary of AFM, (iii) a total 883,422 BUCs of
the Partnership were exchanged, at the rate of approximately 1.31 shares per
BUC, for 1,153,552 shares of the common stock of AFM and (iv) AFM became the
holder of such BUCs.  Accordingly, the Partnership has become a partnership
subsidiary of AFM.  As of June 30, 1999, the holders of 10,455 BUCs elected
to continue their current investment in the Partnership through the retention
of their BUCs.

As of June 30, 1999, all of the Permanent Investments of the Partnership had
been liquidated.  Management expects that the remaining assets of the
Partnership will be liquidated, the net proceeds will be distributed and the
Partnership will be dissolved prior to December 31, 1999.

2. Summary of Significant Accounting Policies

 A) Financial Statement Presentation
    The financial statements of the Partnership are prepared without audit on
    the accrual basis of accounting in accordance with generally accepted
    accounting principles.  The financial statements should be read in
    conjunction with the financial statements and notes thereto included in
    the Partnership's Annual Report on Form 10-K for the year ended December
    31, 1998.  In the opinion of management, all normal and recurring
    adjustments necessary to present fairly the financial position at June 30,
				1999, and results of operations for all periods presented have been
    made.

    The preparation of financial statements in conformity with generally
    accepted accounting principles requires management to make estimates and
    assumptions that affect the reported amounts of assets and liabilities and
    disclosure of contingent assets and liabilities at the date of the
    financial statements and the reported amounts of revenues and expenses
    during the reporting period.  Actual results could differ from those
    estimates.

 B) Investment in Mortgage-Backed Securities
    Investment securities are classified as held-to-maturity,
    available-for-sale, or trading.  Investments classified as
    held-to-maturity are carried at amortized cost.  Investments classified as
    available-for-sale are reported at fair value with any unrealized gains or
    losses excluded from earnings and reflected in other comprehensive income.
		  Subsequent increases and decreases in the net unrealized gain/loss on the
			 available-for-sale securities are reflected as adjustments to the carrying
			 value of the portfolio and in comprehensive income.  The Partnership does
			 not have investment securities classified as trading.

<PAGE>                               - 4 -

AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
(UNAUDITED)

 C) Investment in PREPs
    The investment in PREPs consists of interests in limited partnerships
    which own properties underlying the mortgage-backed securities and are
    accounted for	using the equity method.  When an investment in a PREP has
    been reduced to zero, earnings are recorded only to the extent that
    distributions are received.  PREPs are not insured or guaranteed.  The
    value of these investments is a function of the value of the real estate
    underlying the PREPs.  The Partnership held no PREPs at June 30, 1999.

 D) Allowance for Losses on Investment in PREPs
    The allowance for losses on investment in PREPs is a valuation reserve
    which has been established at a level that management feels is adequate to
    absorb potential losses on investments in PREPs.  The allowance is based
    on the net realizable value of the properties underlying the PREPs.  The
				allowance is periodically reviewed and adjustments are made to the
				allowance when there are significant changes in the net realizable value
				of the properties underlying the PREPs.  The Partnership held no PREPs at
				June 30, 1999.

 E) Income Taxes
    No provision has been made for income taxes since Beneficial Unit
    Certificate (BUC) Holders are required to report their share of the
    Partnership's income for federal and state income tax purposes.

 F) Temporary Cash Investments
    Temporary cash investments are invested in short-term debt securities
    purchased with an original maturity of three months or less.

 G) Net Income Per BUC
    Net income per BUC has been calculated based on the number of BUCs
    outstanding (905,974) for all periods presented.

3. Partnership Reserve Account

The Partnership maintains a reserve account which consisted of cash and
temporary cash investments of $300,841 at June 30, 1999.

The reserve account was established to maintain working capital for the
Partnership and is available for distribution to BUC Holders and for any
contingencies related to Permanent Investments and the operation of the
Partnership.

4. Partnership Income, Expenses and Cash Distributions

The Partnership Agreement contains provisions for distributing the cash
available for distribution and for the allocation of income and expenses for
tax purposes among AFCA 6 and BUC Holders.

Cash distributions included in the financial statements represent the actual
cash distributions made during each period and the cash distributions accrued
at the end of each period.

5. Investment in Mortgage-Backed Securities

At June 30, 1999, the Partnership did not hold any investments in
mortgage-backed securities since the Partnership sold its entire portfolio of
mortgage-backed securities on January 25, 1999.  (See Note 7.)













<PAGE>                               - 5 -

AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
(UNAUDITED)

Reconciliation of the carrying amount of the mortgage-backed securities is as
follows:
<TABLE>
<S>																																																																					                                        <C>

Balance at December 31, 1998			                                                                                 $    3,409,301
  Additions
   Amortization of discount on mortgage-backed securities					                                            		             1,264
   Realized gain on sale of securities                                                                                  90,198
  Deductions
   Mortgage principal payments received                                                                   	            (87,356)
   Change in net unrealized holding gains (losses) on
    available-for-sale securities                                                                                     (104,507)
   Sale of securities                                                                                               (3,308,900)
                                                         											                                            ---------------
Balance at June 30, 1999						                                                                            	     $         -
                                                         											                                            ===============
</TABLE>

6.	Investment in PREPs

The Partnership sold its remaining PREP interests during June, 1999;
therefore, at June 30, 1999, the Partnership did not hold any investments in
PREPs.  (See Note 7.)

7. Transactions with Related Parties

Substantially all the Partnership's general and administrative expenses are
paid by AFCA 6 or an affiliate and reimbursed by the Partnership.  The amount
of such expenses reimbursed to AFCA 6 or an affiliate during the six months
ended June 30, 1999, was $106,777 ($42,277 for the quarter ended June 30,
1999). The reimbursed expenses are presented on a cash basis and do not
reflect accruals made at quarter end.

A property management subsidiary of America First Companies L.L.C. (America
First) has been retained by the property partnerships which own Laurel Park
Apartments and Owings Chase Apartments to provide management services for
these properties.  A director of the general partner of AFCA 6 is a principal
owner of America First.  The fees for services provided represent the lower of
(i) costs incurred in providing management of the property, or (ii) customary
fees for such services determined on a competitive basis.  Prior to the
Partnership's sale of its PREP interests in such properties during June, 1999,
as described below, management fees amounted to $24,324 for the six months
ended June 30, 1999 ($12,069 for the quarter ended June 30, 1999).

The general partner of the property partnership that owns Owings Chase
Apartments is principally owned by an employee of America First.  Other
affiliates of America First also own nominal interest in such general partner.
The general partner has a nominal interest in the property partnership's
profits, losses and cash flow which is subordinate to the interest of the
Partnership.  The general partner did not receive cash distributions from the
property partnership during 1999 prior to the Partnership's sale of its PREP
interest in such property during June, 1999, as described below.

On January 25, 1999, the Partnership sold GNMA Certificates with an aggregate
carrying value of $2,519,832 to America First Mortgage Investments, Inc.
(AFMI), the holder of the majority of BUCs of the Partnership and the general
partner of the general partner of the Partnership.  The Partnership's cash
proceeds from the sale were $2,625,050, including accrued interest of $13,510,
which represented the fair market value of the securities.  The Partnership
recognized a gain of $91,732 on the sale.  Proceeds from the sale were
distributed February 1, 1999.

During the quarter ended June 30, 1999, the Partnership sold its PREP
interests in Broadmoor Court, Owings Chase Apartments and Laurel Park
Apartments to AFMI.  The PREP interests, which had an aggregate carrying value
of zero, were sold for a total of $404,141 which represented their estimated
fair value.  The Partnership recognized a gain of $404,141 on the sale.
Proceeds from the sale were distributed to BUC holders on August 2, 1999.

<PAGE>                               - 6 -

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

Liquidity and Capital Resources

The Partnership's primary sources of capital include cash flow from operations
and, through January, 1999, principal payments on its mortgage-backed
securities.  The Partnership's primary uses of capital include the payment of
operating expenses.

The Partnership originally acquired: (i) five mortgage-backed securities
guaranteed as to principal and interest by the Government National Mortgage
Association (GNMA) collateralized by first mortgage loans on multifamily
housing properties located in four states (the GNMA Certificates); (ii)
various mortgage-backed securities collateralized by pools of single-family
mortgages and guaranteed as to principal and interest by either GNMA or the
Federal National Mortgage Association (FNMA) (the Single-Family Certificates)
and; (iii) limited partnership interests (PREPs) in five limited partnerships
which own the multifamily housing properties financed by the GNMA
Certificates.  Prior to 1999, the Partnership was repaid by GNMA on the GNMA
Certificates collateralized by the Villages at Moonraker, Laurel Park
Apartments and Ashwood Apartments. In addition, the Partnership sold its GNMA
Certificate collateralized by Owings Chase Apartments to America First
Mortgage Investments, Inc. (AFMI), the holder of the majority of BUCs of the
Partnership and the general partner of the Partnership.  Prior to 1999, the
Partnership sold or otherwise disposed of its PREPs in two properties.  During
January, 1999, the Partnership sold its remaining GNMA Certificate to AFMI.
During January, 1999, the Partnership also sold to AFMI and a third party the
Single-Family Certificates it held at December 31, 1998.  During the quarter
ended June 30, 1999, the Partnership sold to AFMI the three remaining PREPs it
held at December 31, 1998.  As a result, at June 30, 1999, the Partnership no
longer held any Permanent Investments. Management expects that the remaining
assets of the Partnership will be liquidated, the net proceeds will be
distributed and the Partnership will be dissolved prior to December 31, 1999.

Distributions

Cash distributions paid or accrued per Beneficial Unit Certificate (BUC) were
as follows:

<TABLE>
<CAPTION>
                                                                                                For the Six         For the Six
                                                                                               Months Ended        Months Ended
                                                                                              June 30, 1999       June 30, 1998
                                                                                             --------------      --------------
<S>                                                                                          <C>                 <C>
Regular monthly distributions
 Income                                                                                      $       .2316       $       .1028
 Return of capital                                                                                   -                   .5273
                                                                                             --------------      --------------
                                                                                             $       .2316       $       .6301
                                                                                             ==============      ==============
Special distributions
 Income                                                                                      $       .2198                 -
 Return of capital                                                                                  4.0072                 -
                                                                                             --------------      --------------
                                                                                             $      4.2270       $         -
                                                                                             ==============      ==============
Total distributions
 Income                                                                                      $       .4514       $       .1028
 Return of capital                                                                                  4.0072               .5273
                                                                                             --------------      --------------
                                                                                             $      4.4586       $       .6301
                                                                                             ==============      ==============
Distributions
	Paid out of cash flow (including mortgage principal payments)                               $      4.2002       $       .6301
 Withdrawn from reserves                                                                             .2584               -
                                                                                             --------------      --------------
                                                                                             $      4.4586       $       .6301
                                                                                             ==============      ==============
</TABLE>



<PAGE>                               - 7 -

Results of Operations

The tables below compare the results of operations for each period shown.
<TABLE>
<CAPTION>
                                                                               For the             For the            Increase
                                                                         Quarter Ended       Quarter Ended           (Decrease)
                                                                         June 30, 1999       June 30, 1998           From 1998
                                                                        ---------------     ---------------     ---------------
<S>                                                                     <C>                 <C>                 <C>
Mortgage-backed securities income                                       $      		-           $     129,308      $    (129,308)
Interest income on temporary cash investments                                   10,255              33,451            (23,196)
Gain on sale of PREPs                                                          404,141                -               404,141
                                                                        ---------------     ---------------     ---------------
                                                                               414,396             162,759            251,637
General and administrative expenses                                             36,778              57,717            (20,939)
                                                                        ---------------     ---------------     ---------------
Net income                                                              $      377,618       $     105,042       $    272,576
                                                                        ===============     ===============     ===============
</TABLE>

<TABLE>
<CAPTION>
                                                                           For the Six         For the Six             Increase
                                                                          Months Ended        Months Ended           (Decrease)
                                                                         June 30, 1999       June 30, 1998            From 1998
                                                                        ---------------     ---------------     ---------------
<S>                                                                     <C>                 <C>                 <C>
Mortgage-backed securities income                                       $       17,332      $      261,808      $     (244,476)
Equity in earnings of property partnerships                                     20,081              15,508               4,573
Interest income on temporary cash investments                                   22,247              68,251             (46,004)
Gain on sale of mortgage-backed securities                                      90,198                -                 90,198
Gain on sale of PREPs                                                          404,141                -                404,141
                                                                        ---------------     ---------------     ---------------
                                                                               553,999             345,567             208,432
General and administrative expenses                                            104,222             246,690            (142,468)
                                                                        ---------------     ---------------     ---------------
Net income                                                              $      449,777      $       98,877      $      350,900
                                                                        ===============     ===============     ===============
</TABLE>

Mortgage-backed securities income decreased for the quarter and six months
ended June 30, 1999, compared to the same periods in 1998 due to the sales of
the Partnership's mortgage-backed securities on January 25, 1999, and December
23, 1998.  Since the Partnership no longer holds any investments in
mortgage-backed securities, it will not receive such income in the future.

Equity in earnings of property partnerships is a function of the cash flow
received by the Partnership from its interest in the operating partnerships
which own the properties.  Prior to the write-down of each investment in PREPs
to zero, equity in earnings of property partnerships also reflects the
Partnership's allocable share of earnings generated by each of the
properties.  See footnotes 2C and 6 to the financial statements for further
discussion regarding these investments.

Equity in earnings of property partnerships increased $4,573 for the six
months ended June 30, 1999, compared to the same period in 1998 due to an
increase of $12,974 in cash flow from Owings Chase offset by a decrease of
$8,401 in cash flow received from Broadmoor Court.  Since the Partnership no
longer holds any investment in PREPs, it will not receive such income in the
future.

Interest income on temporary cash investments decreased for the quarter and
six months ended June 30, 1999, compared to the same periods in 1998 due to a
decrease in the average cash balance as withdrawals were made from reserves in
1998 and 1999 and distributed to BUC holders.

The Partnership recorded a gain of $90,198 for the six months ended June 30,
1999, in connection with the January 25, 1999, sales of its remaining
mortgage-backed securities.  The Partnership also recorded a gain of $404,141
for the quarter and six months ended June 30, 1999, in connection with the
June, 1999 sales of its remaining PREP interests.



<PAGE>                               - 8 -

General and administrative expenses decreased for the quarter and six months
ended June 30, 1999, compared to the same periods in 1998.  This decrease was
due primarily to a decrease of $23,363 in salaries for the quarter ended June
30, 1999, and transaction costs of approximately $121,600 incurred during the
six months ended June 30, 1998, in conjunction with the merger described in
Note 1 to the financial statements.

Year 2000

The Partnership does not own or operate its own computer system and owns no
business or other equipment.  However, the operation of the Partnership's
business relies on the computer system and other equipment maintained by
America First Companies L.L.C., an affiliate of its general partner ("America
First").  In addition, the Partnership has business relationships with a
number of third parties whose ability to perform their obligations to the
Partnership depend on such systems and equipment.  Some or all of these
systems and equipment may be affected by the inability of certain computer
programs and embedded circuitry to correctly recognize dates occurring after
December 31, 1999.  America First has adopted a plan to deal with this
so-called "Year 2000 problem" with respect to its information technology
("IT") systems, non-IT systems and third party business relationships.

State of Readiness

The IT system maintained by America First consists primarily of personal
computers, most of which are connected by a local area network.  All
accounting and other record keeping functions relating to the Partnership that
are conducted in house by America First are performed on this PC-LAN system.
America First does not own or operate any "mainframe" computer systems.  The
PC-LAN system runs software programs that America First believes are
compatible with dates after December 31, 1999.  America First has engaged a
third party computer consulting firm to review and test its PC-LAN system to
ensure that it will function correctly after that date and expects that this
process, along with any necessary remediation, will be completed by early in
the final quarter of 1999.  America First believes any Year 2000 problems
relating to its IT systems will be resolved without significant operational
difficulties. However, there can be no assurance that testing will discover
all potential Year 2000 problems or that it will not reveal unanticipated
material problems with the America First IT systems that will need to be
resolved.

Non-IT systems include embedded circuitry such as microcontrollers found in
telephone equipment, security and alarm systems, copiers, fax machines, mail
room equipment, heating and air conditioning systems and other infrastructure
systems that are used by America First in connection with the operation of the
Partnership's business.  America First is reviewing its non-IT systems along
with the providers that service and maintain these systems, with initial
emphasis being placed on those, such as telephone systems, which have been
identified as necessary to America First's ability to conduct the operation of
the Partnership's business activities.  America First expects that any
necessary modification or replacement of such "mission critical" systems will
be accomplished by early in the final quarter of 1999.

The Partnership has no control over the remediation efforts of third parties
with which it has material business relationships and the failure of certain
of these third parties to successfully remediate their Year 2000 issues could
have a material adverse effect on the Partnership.  Accordingly, America First
has undertaken the process of contacting each such third party to determine
the state of their readiness for Year 2000.  Such parties include, but are not
limited to, the obligors on the Partnership's remaining GNMA Certificate and
Single-Family Certificates, the Partnership's transfer and paying agent and
the financial institutions with which the Partnership maintains accounts.
America First has received initial assurances from certain of these third
parties that their ability to perform their obligations to the Partnership are
not expected to be materially adversely affected by the Year 2000 problem.
America First will continue to request updated information from these material
third parties in order to assess their Year 2000 readiness.  If a material
third party vendor is unable to provide assurance to America First that it is,
or will be, ready for Year 2000, America First intends to seek an alternative
vendor to the extent practical.

Costs

All of the IT systems and non-IT systems used to conduct the Partnership's

<PAGE>                               - 9 -

business operations are owned or leased by America First.  Under the terms of
its partnership agreement, neither America First nor the Partnership's general
partner may be reimbursed by the Partnership for expenses associated with
their computer systems or other business equipment.  Therefore, the costs
associated with the identification, remediation and testing of America First's
IT and non-IT systems will be paid by America First rather than the
Partnership.  The Partnership will bear its proportionate share of the costs
associated with surveying the Year 2000 readiness of third parties.  However,
the Partnership's share of the costs associated with these activities is
expected to be insignificant.  Accordingly, the costs associated with
addressing the Partnership's Year 2000 issues are not expected to have a
material effect on the Partnership's results of operations, financial position
or cash flow.

Year 2000 Risks

The Partnership's general partner believes that the most reasonably likely
worst-case scenario will be that one or more of the third parties with which
it has a material business relationship will not have successfully dealt with
its Year 2000 issues and, as a result, is unable to provide services or
otherwise perform its obligations to the Partnership.  For example, if an
obligor on the Partnership's GNMA Certificate and Single-Family Certificates
encounters a serious and unexpected Year 2000 issue, it may be unable to make
a timely payment of principal and interest to the Partnership.  This, in turn,
could cause a delay or temporary reduction in cash distributions to BUC
holders.  In addition, if the Partnership's transfer and paying agent
experiences Year 2000-related difficulties, it may cause delays in making
distributions to BUC holders or in the processing of transfers of BUCs.  It is
also possible that one or more of the IT and non-IT systems of America First
will not function correctly, and that such problems may make it difficult to
conduct necessary accounting and other record keeping functions for the
Partnership.  However, based on currently available information, the general
partner does not believe that there will be any protracted systemic failures
of the IT or non-IT systems utilized by America First in connection with the
operation of the Partnership's business.

Contingency Plans

Because of the progress which America First has made toward achieving Year
2000 readiness, the Partnership has not made any specific contingency plans
with respect to the IT and non-IT systems of America First.  In the event of a
Year 2000 problem with its IT system, America First may be required to
manually perform certain accounting and other record-keeping functions.
America First plans to terminate the Partnership's relationships with material
third party service providers that are not able to represent to America First
that they will be able to successfully resolve their material Year 2000 issues
in a timely manner.  However, the Partnership will not be able to terminate
its relationships with certain third parties, such as the obligors on its
remaining GNMA Certificate and Single-Family Certificates, who may experience
Year 2000 problems.  The Partnership has no specific contingency plans for
dealing with Year 2000 problems experienced with these third parties.

This report contains forward looking statements that reflect management's
current beliefs and estimates of future economic circumstances, industry
conditions, the Partnership's performance and financial results.  All
statements, trend analysis and other information concerning possible or
assumed future results of operations of the Partnership and the real estate
investments it has made (including, but not limited to, the information
contained in "Management's Discussion and Analysis of Financial Condition and
Results of Operations"), constitute forward-looking statements.  BUC holders
and others should understand that these forward looking statements are subject
to numerous risks and uncertainties and a number of factors could affect the
future results of the Partnership and could cause those results to differ
materially from those expressed in the forward looking statements contained
herein.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

In January, 1999, the Partnership sold all	of its mortgage-backed securities
and, accordingly, is no longer subject to material interest and prepayment
risks with respect to its remaining assets.




<PAGE>                               - 10 -

PART II.  OTHER INFORMATION

     Item 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits

               4(a) Agreement of Limited Partnership dated May 25, 1988
                    (incorporated herein by reference to Form 10-Q dated
                    June 30, 1988 filed pursuant to Section 13 or 15(d) of
                    the Securities Act of 1934 by America First PREP Fund 2
                    Pension Series Limited Partnership (Commission File No.
                    0-17582)).

               4(b) Form of Certificate of Beneficial Unit Certificate
                    (incorporated herein by reference to Form 10-Q dated
                    June 30, 1988 filed pursuant to Section 13 or 15(d) of
                    the Securities Act of 1934 by America First PREP Fund 2
                    Pension Series Limited Partnership (Commission File No.
                    0-17582)).

               4(c) Agreement and Plan of Merger, dated as of July 29, 1997,
                    among the Registrant, America First Participating/Preferred
                    Equity Mortgage Fund Limited Partnership, America First
                    Prep Fund 2 Limited Partnership and AF Merger, L.P.
                    (incorporated herein by reference to Form 10-Q dated
                    June 30, 1997, filed pursuant to Section 13 or 15(d) of the
                    Securities Exchange Act of 1934 by America First PREP Fund
                    2 Pension Series Limited Partnership (Commission File No.
                    0-17582)).

               27.  Financial Data Schedule

          (b)  Reports on Form 8-K

               The Registrant did not file a report on Form 8-K during the
               quarter for which this report is filed.







































<PAGE>                               - 11 -

	                                  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.

Dated: August 13, 1999        AMERICA FIRST PREP FUND 2
                              PENSION SERIES LIMITED PARTNERSHIP

                              By America First Capital
                                   Associates Limited
                                   Partnership Six, General
                                   Partner of the Registrant

                              By America First Mortgage Investments, Inc.,
                                   General Partner of America
																																			First Capital Associates
																																			Limited Partnership Six


                              By /s/ Stewart Zimmerman
                                   Stewart Zimmerman,
                                   President and Chief Executive Officer

                              By /s/ Gary Thompson
                                   Gary Thompson
	                                  Chief Financial Officer
















































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