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, 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 -
AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>                                                                                    
                                                                                             March 31, 1999      Dec. 31, 1998
                                                                                             --------------      --------------
<S>                                                                                          <C>                 <C>
Assets
 Cash and temporary cash investments, at cost which
  approximates market value                                                                  $   1,039,253       $     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												                                                     	               4,845              35,796
 Other assets                                                                                        7,677             108,411
                                                                                             --------------      --------------
                                                                                             $   1,051,775       $   4,084,388
                                                                                             ==============      ==============
Liabilities and Partners' Capital
 Liabilities
  Accounts payable (Note 7)                                                                  $      46,464       $      62,506
  Distribution payable (Note 4)                                                                     35,324              55,548
                                                                                             --------------      --------------
                                                                                                    81,788             118,054
                                                                                             --------------      --------------
 Partners' Capital
  General Partner                                                                                      100                 100
  Beneficial Unit Certificate Holders
  ($1.07 per BUC in 1999 and $4.38 in 1998)                                                        969,887           3,966,234
                                                                                             --------------      --------------
                                                                                                   969,987           3,966,334
                                                                                             --------------      --------------
                                                                                             $   1,051,775       $   4,084,388
                                                                                             ==============      ==============
</TABLE>
AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                                             For the Three       For the Three
                                                                                              Months Ended        Months Ended
                                                                                             Mar. 31, 1999       Mar. 31, 1998
                                                                                             --------------      --------------
<S>                                                                                          <C>                 <C>
Income
 Mortgage-backed securities income                                                           $      17,322       $     132,500
 Equity in earnings of property partnerships                                                        20,081              15,508
 Interest income on temporary cash investments                                                      12,001              34,800
 Gain on sale of mortgage-backed securities                                                         90,198                -
                                                                                             --------------     ---------------
                                                                                                   139,602             182,808
Expenses
 General and administrative expenses (Note 7)                                                       67,443             188,973
                                                                                             --------------     ---------------
Net income (loss)                                                                                   72,159              (6,165)
Other comprehensive income:
 Unrealized holding losses on securities
  Unrealized holding losses arising during the period                                              (14,309)            (25,637)
  Plus reclassification adjustment for net gains included in net income                            (90,198)               -
                                                                                             --------------      -------------- 
 Change in net unrealized holding losses                                                          (104,507)            (25,637)
                                                                                             --------------      --------------
Comprehensive income                                                                         $     (32,348)      $     (31,802)
                                                                                             ==============      ==============
Net income (loss) allocated to:
 General Partner                                                                             $      29,639       $       2,885
 BUC Holders                                                                                        42,520              (9,050)
                                                                                             --------------      --------------
                                                                                             $      72,159       $      (6,165)
                                                                                             ==============      ==============
Net income (loss), basic and diluted, per BUC                                                $         .05       $        (.01)
                                                                                             ==============      ==============
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 THREE MONTHS ENDED MARCH 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>

                                                                                           Beneficial Unit
                                                                              General          Certificate
                                                                              Partner              Holders               Total
                                                                        --------------     ----------------     ---------------
<S>                                                                     <C>                <C>                  <C>   
Partner's Capital (excluding accumulated other comprehensive income)
 Balance at December 31, 1998	                                          $  	      100	     $   	 3,861,727     	$    3,861,827
 Net income                                                                    29,639               42,520              72,159 
 Cash distributions paid or accrued (Note 4)                                  (29,639)          (2,934,360)         (2,963,999)
                                                                        --------------     ----------------     ---------------
                                                                                  100              969,887             969,987
Accumulated Other Comprehensive Income                                  --------------     ----------------     ---------------
 Balance at December 31, 1998                                                    -                 104,507             104,507
 Net change                                                                      -                (104,507)           (104,507)
                                                                        --------------     ----------------     ---------------
                                                                                 -                    -                   - 
                                                                        --------------     ----------------     ---------------
Balance at March 31, 1999                                               $        100       $       969,887      $      969,987
                                                                        ==============     ================     ===============
</TABLE>

AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                                             For the Three       For the Three
                                                                                              Months Ended        Months Ended
                                                                                             Mar. 31, 1999       Mar. 31, 1998
                                                                                            ---------------     ---------------
<S>                                                                                         <C>                 <C>   
Cash flows from operating activities                                                                                           
 Net income (loss)                                                                          $       72,159      $       (6,165)
  Adjustments to reconcile net income (loss) to net cash
   provided by operating activities
    Equity in earnings of property partnerships                                                    (20,081)            (15,508)
    Gain on sale of mortgage-backed securities                                                     (90,198)               - 
    Amortization of discount on mortgage-backed securities                                          (1,264)             (3,363)
    Decrease in interest receivable                                                                 30,951               1,390
    Decrease in other assets                                                                       100,734               2,661
    Increase (decrease) in accounts payable                                                        (16,042)            100,877
                                                                                            ---------------     ---------------
 Net cash provided by operating activities                                                          76,259              79,892
                                                                                            ---------------     --------------
Cash flows from investing activities
 Mortgage principal payments received                                                               87,356             186,226
 Distributions received from PREPs                                                                  20,081              15,508
 Proceeds from sale of mortgage-backed securities                                                3,308,900                -
                                                                                            ---------------     ---------------
 Net cash provided by investing activities                                                       3,416,337             201,734
                                                                                            ---------------     ---------------
Cash flow used in financing activity
 Distributions paid                                                                             (2,984,223)           (289,729)
                                                                                            ---------------     ---------------
Net increase (decrease) in cash and temporary cash investments                                     508,373              (8,103)
Cash and temporary cash investments at beginning of period                                         530,880           2,577,493
                                                                                            ---------------     ---------------
Cash and temporary cash investments at end of period                                        $    1,039,253      $    2,569,390
                                                                                            ===============     ===============

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, 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 March 31, 1999, the holders of 10,455 BUCs elected 
to continue their current investment in the Partnership through the retention 
of their BUCs.

Management is in the process of liquidating the remaining assets of the 
Partnership and will distribute the net proceeds and dissolve the Partnership 
in accordance with the provisions of the Partnership agreement.

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 March
    31, 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>                               - 3 -

 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.

 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.

 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) New Accounting Pronouncement
				On January 1, 1999, the Partnership adopted Statement of Position 98-5, 
				"Reporting on the Costs of Start-Up Activities" (SOP 98-5).  SOP 98-5 
				requires costs of start-up activities and organization costs to be expensed
				as incurred.  The adoption of SOP 98-5 did not have an impact on the 
				Partnership's financial statements.

3. Partnership Reserve Account

The Partnership maintains a reserve account which consisted of cash and 
temporary cash investments of $1,039,253 at March 31, 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 March 31, 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.












<PAGE>                               - 4 -

AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 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 March 31, 1999						                                                                           	     $         -
                                                         											                                            ===============
</TABLE>

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.  

Descriptions of the PREPs held at March 31, 1999, 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, 1999                                                                            $           -
                                                                                                       =================
</TABLE>

Reconciliation of the carrying amount of the PREPs is as follows:
<TABLE>
<S>                                                                                                    <C>
Balance at December 31, 1998                                                                           $         -
  Addition
   Equity in earnings of property partnerships                                                                 20,081
  Deduction
   Distributions received from PREPs                                                                          (20,081)
                                                                                                       ---------------
Balance at March 31, 1999                                                                              $         -
                                                                                                       ===============
</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 the three months 
ended March 31, 1999, was $64,500.  The reimbursed expenses are presented on a
cash basis and do not reflect accruals made at quarter end.



<PAGE>                               - 5 -

AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
(UNAUDITED)

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 and 
amounted to $12,255 for the three months ended March 31, 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 the three months ended March 31, 1999.

On January 25, 1999, the Partnership sold GNMA Certificates with an aggregate 
carrying value of $2,519,832 to America First Mortgage Investments, Inc., 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.













































<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.  As a 
result, at March 31, 1999, the Partnership's only remaining Permanent 
Investments consisted of the three remaining PREPs.  Management is in the 
process of liquidating the remaining assets of the Partnership and will 
distribute the net proceeds and dissolve the Partnership in accordance with 
the provisions of the Partnership agreement.

The following table shows the occupancy levels of the properties financed by 
the Partnership in which the Partnership continues to hold PREPs at March 31, 
1999:

<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                  42                 90%
 Laurel Park Apartments                      Riverdale, GA                         387                 375                 97%
 Owings Chase Apartments                     Pikesville, MD                        234                 224                 96%
                                                                              ---------          ----------         -----------
                                                                                   668                 641                 96%
                                                                              =========          ==========         ===========
</TABLE>






















<PAGE>                               - 7 -

Distributions

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

<TABLE>
<CAPTION>
                                                                                              For the Three      For the Three
                                                                                               Months Ended       Months Ended
                                                                                              Mar. 31, 1999      Mar. 31, 1998
                                                                                              --------------     --------------
<S>                                                                                           <C>                <C>
Regular monthly distributions
 Income                                                                                       $       .0469      $         -
 Return of capital                                                                                    .0689              .3152
                                                                                              --------------     --------------
                                                                                              $       .1158      $       .3152
                                                                                              ==============     ==============
Special distributions
 Return of capital                                                                            $      3.1230              -
                                                                                              ==============     ==============
Total distributions
 Income                                                                                       $       .0469                -
 Return of capital                                                                                   3.1919              .3152
                                                                                              --------------     --------------
                                                                                              $      3.2388      $       .3152
                                                                                              ==============     ============== 
Distributions
	Paid out of cash flow (including mortgage principal payments)                                $      3.7956      $       .3152
 Placed in reserves                                                                                  (.5568)               -  
                                                                                              --------------     --------------
                                                                                              $      3.2388      $       .3152
                                                                                              ==============     ==============
                     


</TABLE>

Prior to the sale of the GNMA Certificate and Single-Family Certificates as 
described above, regular monthly distributions to investors consisted 
primarily of interest and principal received on such investments.  Additional 
cash for distributions was received from PREPs and temporary cash 
investments.  Subsequent to the aforementioned sale, the Partnership's sources 
of cash for distributions consist of cash 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 the three months ended March 31,1999, a net amount of $504,416 
of undistributed mortgage principal payments was placed in reserves.  The 
total amount held in reserves at March 31, 1999, was $1,039,253.

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 PREPs held by the Partnership 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 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.  (See footnote 2C and 2D to the financial 
statements for further discussion.)



<PAGE>                               - 8 -

The Partnership previously reduced each of its PREP investments to zero.  As 
such, equity in earnings of the property partnerships are recorded only to the 
extent distributions are received.  The Partnership has no legal obligation to 
provide additional cash support to the underlying property partnerships as it 
is not the general partner, nor has it reduced its investment in the PREPs 
below zero to recognize its allocated share of the property partnerships' 
losses.

Results of Operations

The table below compares the results of operations for each period shown.
<TABLE>
<CAPTION>
                                                                         For the Three       For the Three            Increase
                                                                          Months Ended        Months Ended           (Decrease)
                                                                         Mar. 31, 1999       Mar. 31, 1998           From 1998
                                                                        ---------------     ---------------     ---------------
<S>                                                                     <C>                 <C>                 <C>
Mortgage-backed securities income                                       $       17,322      $      132,500      $     (115,178)
Equity in earnings of property partnerships                                     20,081              15,508               4,573
Interest income on temporary cash investments                                   12,001              34,800             (22,799)
Gain on the sale of mortgage securities                                         90,198               -                  90,198
                                                                        ---------------     ---------------     ---------------
                                                                               139,602             182,808             (43,206)
General and administrative expenses                                             67,443             188,973            (121,530)
                                                                        ---------------     ---------------     ---------------
Net income (loss)                                                       $       72,159              (6,165)             78,324
                                                                        ===============     ===============     ===============
</TABLE>

Mortgage-backed securities income decreased $115,178 for the three months 
ended March 31, 1999, compared to the same period 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 three 
months ended March 31, 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.

Interest income on temporary cash investments decreased $22,799 for the three 
months ended March 31, 1999, compared to the same period in 1998 due to a 
decrease in the average cash balance as withdrawals were made from reserves in 
1998 and distributed to BUC holders.

The Partnership recorded a gain of $90,198 for the three months ended March 
31, 1999, in connection with the January 25, 1999, sales of its remaining 
mortgage-backed securities.

General and administrative expenses decreased $121,530 for the three months 
ended March 31, 1999, compared to the same period in 1998.  This decrease was 
due primarily to transaction costs of approximately $121,600 incurred in 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 

<PAGE>                               - 9 -

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 mid-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 mid-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 
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 

<PAGE>                               - 10 -

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.  

During the three months ended March 31, 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>                              - 11 -

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 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)).

               27.  Financial Data Schedule

          (b) Reports on Form 8-K

               The Registrant filed the following reports on Form 8-K during 
               the quarter for which this report is filed.

               Item Reported      Financial Statements Filed   Date of Report
                
														 2. Acquisition             No                December 23, 1998
                  or Disposition
                  of Assets


               2. Acquisition             No                 January 25, 1999
                  or Disposition
                  of Assets


				

























<PAGE>                               - 12 -

                                  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  12, 1999













































<PAGE>                              - 13 -