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 March 31, 1998 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 -
AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                                             Mar. 31, 1998       Dec. 31, 1997
                                                                                             --------------      --------------
<S>                                                                                          <C>                 <C>
Assets
 Cash and temporary cash investments, at cost which
  approximates market value                                                                  $   2,569,390       $   2,577,493
 Investment in mortgage-backed securities (Note 5)                                               7,150,899           7,359,399
 Investment in preferred real estate participations (PREPs),
  net of valuation allowance (Note 6)                                                                 -                   -
 Interest receivable												                                                     	              54,587              55,977
 Other assets                                                                                       29,355              32,016
                                                                                             --------------      --------------
                                                                                             $   9,804,231       $  10,024,885
                                                                                             ==============      ==============
Liabilities and Partners' Capital
 Liabilities
  Accounts payable (Note 7)                                                                   $    243,836       $     142,959
  Distribution payable (Note 4)                                                                     95,722              97,003
                                                                                             --------------      --------------
                                                                                                   339,558             239,962
                                                                                             --------------      --------------
 Partners' Capital
  General Partner                                                                                      100                 100
  Beneficial Unit Certificate Holders
  ($10.45 per BUC in 1998 and $10.80 in 1997)                                                    9,464,573           9,784,823
                                                                                             --------------      --------------
                                                                                                 9,464,673           9,784,923
                                                                                             --------------      --------------
                                                                                             $   9,804,231       $  10,024,885
                                                                                             ==============      ==============
</TABLE>
AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                   For the             For the
                                                                                             Quarter Ended       Quarter Ended
                                                                                             Mar. 31, 1998       Mar. 31, 1997
                                                                                             --------------      --------------
<S>                                                                                          <C>                 <C>
Income
 Mortgage-backed securities income                                                           $     132,500       $     143,973
 Equity in earnings of property partnerships                                                        15,508              26,012
 Interest income on temporary cash investments                                                      34,800              32,613
                                                                                             --------------      --------------
                                                                                                   182,808             202,598
Expenses
 General and administrative expenses (Note 7)                                                      188,973              45,790
                                                                                             --------------      --------------
Net income (loss)                                                                            $      (6,165)      $     156,808
                                                                                             ==============      ==============
Net income (loss) allocated to:
 General Partner                                                                             $       2,885       $       3,033
 BUC Holders                                                                                        (9,050)            153,775
                                                                                             --------------      --------------
                                                                                             $      (6,165)      $     156,808
                                                                                             ==============      ==============
Net income (loss), basic and diluted, per BUC                                                $        (.01)      $         .17
                                                                                             ==============      ==============

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








<PAGE>                              - 1 -
AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
STATEMENT OF PARTNERS' CAPITAL
FOR THE QUARTER ENDED MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>

                                                                                           Beneficial Unit
                                                                              General          Certificate
                                                                              Partner              Holders               Total
                                                                        --------------     ----------------     ---------------
<S>                                                                     <C>                <C>                  <C>   
Partner's Capital (excluding net unrealized holding gains (losses))
 Balance at December 31, 1997	                                          $  	      100	     $   	 9,772,081     	$    9,772,181
 Net income (loss)                                                              2,885               (9,050)             (6,165)
 Cash distributions paid or accrued (Note 4)                                   (2,885)            (285,563)           (288,448)
                                                                        --------------     ----------------     ---------------
                                                                                  100            9,477,468           9,477,568
Net unrealized holding gains (losses)                                   --------------     ----------------     ---------------
 Balance at December 31, 1997                                                    -                  12,742              12,742
 Net change                                                                      -                 (25,637)            (25,637)
                                                                        --------------     ----------------     ---------------
                                                                                 -                 (12,895)            (12,895)
                                                                        --------------     ----------------     ---------------
Balance at March 31, 1998                                               $        100       $     9,464,573      $    9,464,673
                                                                        ==============     ================     ===============
</TABLE>

AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                   For the             For the
                                                                                             Quarter Ended       Quarter Ended
                                                                                             Mar. 31, 1998       Mar. 31, 1997
                                                                                            ---------------     ---------------
<S>                                                                                         <C>                 <C>   
Cash flows from operating activities                                                                                           
 Net income (loss)                                                                          $       (6,165)     $      156,808
  Adjustments to reconcile net income (loss) to net cash
   provided by operating activities
    Equity in earnings of property partnerships                                                    (15,508)            (26,012)
    Amortization of discount on mortgage-backed securities                                          (3,363)             (1,858)
    Decrease in interest receivable                                                                  1,390               1,839
    Decrease in other assets                                                                         2,661              10,072
    Increase (decrease) in accounts payable                                                        100,877              (1,704)
                                                                                            ---------------     ---------------
 Net cash provided by operating activities                                                          79,892             139,145
                                                                                            ---------------     ---------------
Cash flows from investing activities
 Mortgage principal payments received                                                              186,226             667,342
 Distributions received from PREPs                                                                  15,508              26,012
                                                                                            ---------------     ---------------
 Net cash provided by investing activities                                                         201,734             693,354
                                                                                            ---------------     ---------------
Cash flow used in financing activity
 Distributions paid                                                                               (289,729)           (304,554)
                                                                                            ---------------     ---------------
Net increase (decrease) in cash and temporary cash investments                                      (8,103)            527,945
Cash and temporary cash investments at beginning of period                                       2,577,493           2,072,577
                                                                                            ---------------     ---------------
Cash and temporary cash investments at end of period                                        $    2,569,390      $    2,600,522
                                                                                            ===============     ===============

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









<PAGE>                              - 2 -
AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
(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 General Partnership interest 
in AFCA 6 was acquired by America First Mortgage Investments, Inc. (See Note 
9).

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, 1997.  In the opinion of management, all normal and recurring 
    adjustments necessary to present fairly the financial position at March
    31, 1998, 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 as a separate component of 
    partners' capital.  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 adjustments to the 
    component of partners' capital.  The Partnership does not have investment 
    securities classified as trading.

 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 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.

 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 fair 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 fair value of the properties 
    underlying the PREPs.




<PAGE>                              - 3 -
AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
(UNAUDITED)

 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.

 H) Comprehensive Income
    In the first quarter of 1998, the Partnership adopted Statement of 
    Financial Accounting Standards No. 130, "Reporting Comprehensive Income" 
    (SFAS 130).  SFAS 130 requires the display and reporting of comprehensive 
    income, which includes all changes in Partners' Capital with the exception 
    of additional investments by partners or distributions to partners.  
    Comprehensive income for the Partnership includes net income and the 
    change in net unrealized holding losses on investments charged or credited 
    to Partners' Capital.  Comprehensive income for the quarters ended March 
    31, 1998 and 1997 was as follows:

<TABLE>
<CAPTION>
                                                                                For the             For the
                                                                          Quarter Ended       Quarter Ended
                                                                          Mar. 31, 1998       Mar. 31, 1997
                                                                         ---------------     ---------------
<S>                                                                      <C>                 <C>
Net income (loss)                                                        $       (6,165)     $      156,808
Change in net unrealized holding gains (losses)                                 (25,637)            (11,519)
                                                                         ---------------     ---------------
Comprehensive income (loss)                                              $      (31,802)     $      145,289
                                                                         ===============     ===============
</TABLE>

3. Partnership Reserve Account

The Partnership maintains a reserve account which consisted of the following 
at March 31, 1998:

<TABLE>
<S>                                                                      <C>
 Cash and temporary cash investments                                     $    2,288,000
 GNMA Certificates                                                            1,246,775
 FNMA Certificates                                                              919,077
                                                                         ---------------
                                                                         $    4,453,852
                                                                         ===============
</TABLE>

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.  See Note 5 regarding the investment in mortgage-backed 
securities.

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.



<PAGE>                              - 4 -
AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
(UNAUDITED)

5. Investment in Mortgage-Backed Securities

The mortgage-backed securities held by the Partnership represent Government 
National Mortgage Association (GNMA) Certificates and Federal National 
Mortgage Association (FNMA) Certificates.  The GNMA Certificates are backed by 
first mortgage loans on multifamily housing properties and pools of 
single-family properties.  The FNMA Certificates are backed by pools of 
single-family properties.  The GNMA Certificates are debt securities issued by 
a private mortgage lender and are guaranteed by GNMA as to the full and timely 
payment of principal and interest on the underlying loans.  The FNMA 
Certificates are debt securities issued by FNMA and are guaranteed as to the 
full and timely payment of principal and interest on the underlying loans.

At March 31, 1998, the total amortized cost, gross unrealized holding 
gains, gross unrealized holding losses, and aggregate fair value of 
available-for-sale securities are $2,178,747, $20,407, $33,302 and $2,165,852, 
respectively.  The total amortized cost, gross unrealized holding gains, gross 
unrealized holding losses, and aggregate fair value of held-to-maturity 
securities are $4,985,047, $100,123, $282,755 and $4,802,415, respectively.

Descriptions of the Partnership's mortgage-backed securities at March 31, 
1998, are as follows:

<TABLE>
<CAPTION>
                                          		                  Number	  Interest	      Maturity           Carrying
  Type of Security and Name         	Location               of Units       Rate           Date             Amount
  ----------------------------------	--------------------   --------   --------   -------------    ---------------
  <S>                              	<C>                     <C>        <C>        <C>	             <C>
  Held-to-Maturity
    GNMA Certificates:
     Broadmoor Court	              	Colorado Springs, CO         47	     9.25%    	    10/15/29    $      577,932
     Owings Chase Apartments		      Pikesville, MD		            234	     6.75%    	    12/15/23	        3,141,721
     Pools of single-family mortgages 				                            	  8.74%(1)  2016 to 2018	        1,265,394
                                                                                                    --------------
                                                                                                        4,985,047
                                                                                                    --------------

  Available-for-Sale
    GNMA Certificates:
     Pools of single-family mortgages			  		                             6.03%(1)          2008	          644,232(2)
     Pools of single-family mortgages		 			                              7.58%(1)	         2008	          602,543(2)

    FNMA Certificates:
     Pools of single-family mortgages					                               5.52%(1)          2000	          919,077(2)
												                                                                                       ---------------
													                                                                                           2,165,852
                                                                                              	    ---------------
  Balance at March 31, 1998                                                                        $    7,150,899
                                                                                              	    ===============
</TABLE>
  (1) Represents yield to the Partnership.
  (2) Reserve account asset - see Note 3.

Reconciliation of the carrying amount of the mortgage-backed securities is as 
follows:
<TABLE>
<S>																																																																					                                        <C>
Balance at December 31, 1997						                                                                        	     $    7,359,399
  Addition
   Amortization of discount on mortgage-backed securities					                                            		             3,363
  Deductions
   Mortgage principal payments received                                                                   	          (186,226)
   Change in net unrealized holding gains (losses) on
    available-for-sale securities                                                                                     (25,637)
                                                         											                                            ---------------
Balance at March 31, 1998						                                                                           	     $    7,150,899
                                                         											                                            ===============
</TABLE>


<PAGE>                              - 5 -
AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
(UNAUDITED)

6.	Investment in PREPs

The Partnership's PREPs consist of interests in limited partnerships which own 
multifamily properties financed by the Partnership.  The limited partnership 
agreements originally provided for the payment of a base return on the equity 
provided to the limited partnerships and for the payment of additional amounts 
out of a portion of the net cash flow or net sale or refinancing proceeds of 
the properties subject to various priority payments.  Certain of the 
agreements have been amended to defer payment of the base return.

Descriptions of the PREPs held at March 31, 1998, are as follows:

<TABLE>
<CAPTION>
                                                                                                               Carrying
  Name                             Location                 Partnership Name                                     Amount 
  --------------------------       --------------------     -----------------------------              -----------------
  <S>                              <C>                      <C>                                        <C> 
  Broadmoor Court                  Colorado Springs, CO     Stazier Associates Colorado Springs, Ltd.  $         53,547
  Owings Chase Apartments          Pikesville, MD           Owings Chase Limited Partnership                    150,000
  Laurel Park Apartments           Riverdale, GA            Gold Key Venture                                       -
                                                                                                       -----------------
                                                                                                                203,547
  Less valuation allowance                                                                                     (203,547)
                                                                                                       -----------------
  Balance at March 31, 1998                                                                            $           -
                                                                                                       =================
</TABLE>

Reconciliation of the carrying amount of the PREPs is as follows:
<TABLE>
<S>                                                                                                    <C>
Balance at December 31, 1997                                                                           $         -
  Addition
   Equity in earnings of property partnerships                                                                 15,508
  Deduction
   Distributions received from PREPs                                                                          (15,508)
                                                                                                       ---------------
Balance at March 31, 1998                                                                              $         -
                                                                                                       ===============
</TABLE>

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 1998 was 
$88,454.  The reimbursed expenses are presented on a cash basis and do not 
reflect accruals made at quarter end.

AFCA 6 is entitled to an administrative fee of .35% per annum of the 
outstanding principal amounts invested in mortgage-backed securities, PREPs, 
and temporary cash investments to be paid by the Partnership to the extent 
such amount is not paid by property owners.  During 1998, AFCA 6 earned 
administrative fees of $5,952, all of which was paid by the Partnership.

The general partner of the property partnership which owns Owings Chase 
Apartments is principally owned by an employee of an affiliate of AFCA 6.  
Such employee has a nominal interest in the affiliate.  Affiliates of AFCA 6 
also own small interests in the 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 in 1998.

An affiliate of AFCA 6 has been retained to provide property management 
services for Laurel Park Apartments and Owings Chase Apartments.  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 and amounted to $11,891 in 1998.


<PAGE>                              - 6 -
AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
(UNAUDITED)

9. Subsequent Event

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.  The holders of 23,219 BUCs elected to continue their 
current investment in the Partnership through the retention of their BUCs.





















































<PAGE>                              - 7 -
     Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations

Liquidity and Capital Resources

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.  The Partnership has been repaid by GNMA on the GNMA 
Certificates collateralized by the Villages at Moonraker, Laurel Park 
Apartments and, during January of 1997, Ashwood Apartments.  During 1995, the 
Partnership withdrew as a limited partner of the operating partnership which 
owns the Villages at Moonraker and, therefore, no longer holds its PREP in 
this property.  During 1996 the Partnership sold its PREP in Ashwood 
Apartments.  The Partnership has retained its PREP in Laurel Park Apartments.  
Collectively, the two remaining GNMA Certificates and the three remaining 
PREPs are referred to as the Permanent Investments.  In addition, the 
Partnership held various Single-Family Certificates at March 31, 1998.

The following table shows the occupancy levels of the properties financed by 
the Partnership in which the Partnership continues to hold an equity interest 
at March 31, 1998:

<TABLE>
<CAPTION>
                                                                                                     Number          Percentage
                                                                                 Number            of Units            of Units
 Property Name                               Location                          of Units            Occupied            Occupied
-------------------------------------        ------------------               ---------          ----------         -----------
<S>                                          <C>                              <C>                <C>                <C>
 Broadmoor Court                             Colorado Springs, CO                   47                  45                 96%
 Laurel Park Apartments                      Riverdale, GA                         387                 379                 98%
 Owings Chase Apartments                     Pikesville, MD                        234                 220                 94%
                                                                              ---------          ----------         -----------
                                                                                   668                 644                 96%
                                                                              =========          ==========         ===========
</TABLE>

Distributions

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

<TABLE>
<CAPTION>
                                                                                                    For the            For the
                                                                                              Quarter Ended      Quarter Ended
                                                                                              Mar. 31, 1998      Mar. 31, 1997
                                                                                              --------------     --------------
<S>                                                                                           <C>                <C>
Regular monthly distributions
 Income                                                                                       $        -         $       .1697
 Return of capital                                                                                    .3152              .1617
                                                                                              --------------     --------------
                                                                                              $       .3152      $       .3314
                                                                                              ==============     ==============
Distributions
	Paid out of cash flow (including mortgage principal payments)                                $       .3152      $       .3314
                                                                                              ==============     ==============
</TABLE>










<PAGE>                               - 8 -
Regular monthly distributions to investors consist primarily of interest and 
principal received on GNMA Certificates and Single-Family Certificates.  
Additional cash for distributions is received from PREPs and temporary cash 
investments.  The Partnership may draw on reserves to pay operating expenses 
or to supplement cash distributions to BUC Holders.  The Partnership is 
permitted to replenish its reserves through the sale or refinancing of 
assets.  During 1998, a net amount of $108,387 of undistributed mortgage 
principal payments was withdrawn from reserves.  The total amount held in 
reserves at March 31, 1998, was $4,453,852 of which $2,165,852 was invested in 
Single-Family Certificates.  

The Partnership believes that cash provided by operating and investing 
activities and, if necessary, withdrawals from the Partnership's reserves will 
be adequate to meet its short-term and long-term liquidity requirements, 
including the payments of distributions to BUC Holders.  Under the terms of 
the Partnership Agreement, the Partnership has the authority to enter into 
short-term and long-term debt financing arrangements; however, the Partnership 
currently does not anticipate entering into such arrangements.  The 
Partnership is not authorized to issue additional BUCs to meet short-term and 
long-term liquidity requirements.

Asset Quality

The Partnership continues to receive monthly principal and interest payments 
on its GNMA Certificates and Single-Family Certificates which are fully 
guaranteed either by GNMA or FNMA.  The obligations of GNMA are backed by the 
full faith and credit of the United States government.  

PREPs, however, are not insured or guaranteed.  The value of these investments 
is a function of the value of the real estate underlying the PREPs.  It is the 
policy of the Partnership to make a periodic review of the real estate 
underlying the PREPs in order to establish, when necessary, a valuation 
reserve on the investment in PREPs.  The allowance for losses on investment in 
PREPs is based on the fair value of the properties underlying the PREPs.  The 
fair value of the properties underlying the PREPs is based on management's 
best estimate of the net realizable value of such properties; however, the 
ultimate realized values may vary from these estimates.  The allowance is 
periodically reviewed and adjustments are made to the allowance when there are 
significant changes in the estimated net realizable value of the properties 
underlying the PREPs.  Internal property valuations and reviews performed 
during the quarter ended March 31, 1998, indicated that the PREPs recorded on 
the balance sheet at March 31, 1998, required no adjustments to their current 
carrying amounts.

The overall status of the Partnership's Permanent Investments has remained 
relatively constant since December 31, 1997.

Results of Operations

The table below compares the results of operations for each period shown.
<TABLE>
<CAPTION>
                                                                               For the             For the            Increase
                                                                         Quarter Ended       Quarter Ended           (Decrease)
                                                                         Mar. 31, 1998       Mar. 31, 1997           From 1997
                                                                        ---------------     ---------------     ---------------
<S>                                                                     <C>                 <C>                 <C>
Mortgage-backed securities income                                       $      132,500      $      143,973      $      (11,473)
Equity in earnings of property partnerships                                     15,508              26,012             (10,504)
Interest income on temporary cash investments                                   34,800              32,613               2,187
                                                                        ---------------     ---------------     ---------------
                                                                               182,808             202,598             (19,790)
General and administrative expenses                                            188,973              45,790             143,183
                                                                        ---------------     ---------------     ---------------
Net income (loss)                                                       $       (6,165)     $      156,808      $     (162,973)
                                                                        ===============     ===============     ===============
</TABLE>

Mortgage-backed securities income decreased $11,473 for the quarter ended 
March 31, 1998, compared to the same period in 1997 due to the continued 
amortization of the principal balances of the Partnership's mortgage-backed 
securities.




<PAGE>                               - 9 -
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. 

Equity in earnings of property partnerships decreased $10,504 for the quarter 
ended March 31, 1998, compared to the same period in 1997 due to a decrease 
in cash flow received from Broadmoor Court.

General and administrative expenses increased $143,183 for the quarter ended 
March 31, 1998, compared to the same period in 1997.  This increase was due 
primarily to transaction costs of approximately $121,600 incurred in 
conjunction with the merger described in Note 9 to the financial statements 
and an increase in salaries and related expenses.

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.  
The requirements of Item 3 of Form 10-Q are not applicable to the Partnership 
prior to its Annual Report on Form 10-K for the year ending December 31, 1998. 











































<PAGE>                              - 10 -
PART II.  OTHER INFORMATION

     Item 4.   Submission of Matters to a Vote of Securities Holders

               On or about February 17, 1998, AFCA 6 began the solicitation of 
               consents from the holders of the Partnership's Beneficial Unit 
               Certificates (BUCs) to approve a merger of AF Merger, L.P., a 
               Delaware limited partnership, with and into the Partnership 
               with the result being the Partnership becoming a partnership 
               subsidiary of America First Mortgage Investments, Inc., a 
               Maryland corporation.  On April 10, 1998, the BUC holders took 
               action by written consent in lieu of a meeting to approve the 
               proposed merger which was consummated on that date.  See Note 9 
               to the Financial Statements.

               The results of the solicitation of BUC holder consent for the 
               merger were as follows:

                    FOR          AGAINST          ABSTAIN/BROKER NONVOTE
                  604,388         2,160                   299,426

     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 Exchange 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 Exchange 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)).

          (b)  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 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.

                                   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

Date:  May 13, 1998














































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