FORM 10-Q

               SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C.  20549


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

For the quarterly period ended June 30, 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 -
Part I.  Financial Information
  Item 1.  Financial Statements
AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                                              June 30, 1998       Dec. 31, 1997
                                                                                             --------------      --------------
<S>                                                                                          <C>                 <C>          
Assets                                                                                                                        
 Cash and temporary cash investments, at cost which                                                                           
  approximates market value                                                                  $   2,441,803       $   2,577,493
 Investment in mortgage-backed securities (Note 5)                                               6,918,490           7,359,399
 Investment in preferred real estate participations (PREPs),                                                                  
  net of valuation allowance (Note 6)                                                                 -                   -   
 Interest receivable												                                                     	              52,015              55,977
 Other assets                                                                                       34,078              32,016
                                                                                             --------------      --------------
                                                                                             $   9,446,386       $  10,024,885
                                                                                             ==============      ==============
Liabilities and Partners' Capital                                                                                             
 Liabilities                                                                                                                  
  Accounts payable (Note 7)                                                                   $     60,001       $     142,959
  Distribution payable (Note 4)                                                                     95,482              97,003
                                                                                             --------------      --------------
                                                                                                   155,483             239,962
                                                                                             --------------      --------------
 Partners' Capital                                                                                                            
  General Partner                                                                                      100                 100
  Beneficial Unit Certificate Holders                                                                                         
  ($10.26 per BUC in 1998 and $10.80 in 1997)                                                    9,290,803           9,784,823
                                                                                             --------------      --------------
                                                                                                 9,290,903           9,784,923
                                                                                             --------------      --------------
                                                                                             $   9,446,386       $  10,024,885 
                                                                                             ==============      ==============
</TABLE>
AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
                                                           For the             For the         For the Six         For the Six
                                                     Quarter Ended       Quarter Ended        Months Ended        Months Ended
                                                     June 30, 1998       June 30, 1997       June 30, 1998       June 30, 1997
                                                    ---------------     ---------------     ---------------     ---------------
<S>                                                 <C>                 <C>                 <C>                 <C>           
Income                                                                                                                        
 Mortgage-backed securities income                  $      129,308      $      141,564      $      261,808      $      285,537
 Equity in earnings of property partnerships                  -                 21,049              15,508              47,061
 Interest income on temporary cash investments              33,451              35,128              68,251              67,741
                                                    ---------------     ---------------     ---------------     ---------------
                                                           162,759             197,741             345,567             400,339
Expenses                                                                                                                      
 General and administrative expenses (Note 7)               57,717              52,626             246,690              98,416
                                                    ---------------     ---------------     ---------------     ---------------
Net income                                          $      105,042      $      145,115      $       98,877      $      301,923
                                                    ===============     ===============     ===============     ===============
Net income allocated to:                                                                                                      
 General Partner                                    $        2,886      $        2,996      $        5,771      $        6,029
 BUC Holders                                               102,156             142,119              93,106             295,894
                                                    ---------------     ---------------     ---------------     ---------------
                                                    $      105,042      $      145,115      $       98,877      $      301,923
                                                    ===============     ===============     ===============     ===============
Net income, basic and diluted, per BUC              $          .11      $          .16      $          .10      $          .33
                                                    ===============     ===============     ===============     ===============
                                                                                                                               
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 SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>

                                                                                           Beneficial Unit
                                                                              General          Certificate
                                                                              Partner              Holders               Total
                                                                        --------------     ----------------     ---------------
<S>                                                                     <C>                <C>                  <C>           
Partners' Capital (excluding net unrealized holding gains(losses))                                                            
 Balance at December 31, 1997                                           $         100      $     9,772,081      $    9,772,181
 Net income                                                                     5,771               93,106              98,877
 Cash distributions paid or accrued (Note 4)                                   (5,771)            (570,813)           (576,584)
                                                                        --------------     ----------------     ---------------
                                                                                  100            9,294,374           9,294,474
                                                                        --------------     ----------------     ---------------
Net unrealized holding gains (losses)
 Balance at December 31, 1997                                                    -                  12,742              12,742
 Net change                                                                      -                 (16,313)            (16,313)
                                                                        --------------     ----------------     ---------------
                                                                                 -                  (3,571)             (3,571)
                                                                        --------------     ----------------     ---------------
Balance at June 30, 1998                                                $         100      $     9,290,803      $    9,290,903
                                                                        ==============     ================     ===============
</TABLE>
AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                                               For the Six         For the Six
                                                                                              Months Ended        Months Ended
                                                                                             June 30, 1998       June 30, 1997
                                                                                            ---------------     ---------------
<S>                                                                                         <C>                 <C>           
Cash flows from operating activities                                                                                           
 Net income                                                                                 $       98,877      $      301,923
  Adjustments to reconcile net income to net cash                                                                             
   from operating activities                                                                                            
    Equity in earnings of property partnerships                                                    (15,508)            (47,061)
    Amortization of discount on mortgage-backed securities                                          (7,358)             (3,808)
    Decrease in interest receivable                                                                  3,962               2,636
    Decrease (increase) in other assets                                                             (2,062)             12,977
    Decrease in accounts payable                                                                   (82,958)            (15,252)
                                                                                            ---------------     ---------------
Net cash provided by (used in) operating activities                                               	 (5,047)             251,415
                                                                                            ---------------     ---------------
Cash flows from investing activities                                                                                          
 Mortgage principal payments received                                                              431,954             797,663
 Distributions received from PREPs                                                                  15,508              47,061
                                                                                            ---------------     ---------------
Net cash provided by investing activities                                                         	447,462             844,724
                                                                                            ---------------     ---------------
Cash flow used in financing activity                                                                                          
 Distributions paid                                                                               (578,105)           (605,358)
                                                                                            ---------------     ---------------
Net increase (decrease) in cash and temporary cash investments                                    (135,690)            490,781
Cash and temporary cash investments at beginning of period                                       2,577,493           2,072,577 
                                                                                            ---------------     ---------------
Cash and temporary cash investments at end of period                                        $    2,441,803      $    2,563,358 
                                                                                            ===============     ===============
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
JUNE 30, 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 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 11,060 BUCs elected to continue their 
current investment in the Partnership through the retention of their BUCs.

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 
    June 30, 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.







<PAGE>                               - 3 -
AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(UNAUDITED)

 C) Investment in PREPs
    The investment in PREPs consists of interests in limited partnerships 
    which own properties underlying the mortgage-backed securities and are 
    accounted for	using the equity method.  When an investment in a PREP has 
    been reduced to zero, earnings are recorded 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.

 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 quarter and six months 
    ended June 30, 1998, compared to the same periods in 1997 was as follows:

<TABLE>
<CAPTION>
                                                           For the             For the         For the Six         For the Six
                                                     Quarter Ended       Quarter Ended        Months Ended        Months Ended
                                                     June 30, 1998       June 30, 1997       June 30, 1998       June 30, 1997
                                                    ---------------     ---------------     ---------------     ---------------
<S>                                                 <C>                 <C>                 <C>                 <C>
Net income                                          $      105,042      $      145,115      $       98,877      $      301,923
Change in net unrealized holding gains (losses)             (9,324)             32,892             (16,313)             21,373
                                                    ---------------     ---------------     ---------------     ---------------
Comprehensive income                                $       95,718      $      178,007      $       82,564      $      323,296
                                                    ===============     ===============     ===============     ===============
                                                                           
</TABLE>

3. Partnership Reserve Account

The Partnership maintains a reserve account which consisted of the following 
at June 30, 1998:

<TABLE>
<S>                                                                   <C>
 Cash and temporary cash investments                                  $    2,350,633
 GNMA Certificates                                                         1,156,597
 FNMA Certificates                                                           812,765
                                                                      ---------------
                                                                      $    4,319,995
																																																																						===============
</TABLE>
<PAGE>                               - 4 -
AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(UNAUDITED)

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.

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.

As a result of the merger described in Note 1, on April 10, 1998, the 
Partnership reclassified its securities from held-to-maturity to 
available-for-sale.  The total amortized cost, gross unrealized holding gains, 
gross unrealized holding losses and aggregate fair value of securities 
transferred were $4,985,047, $100,123, $282,755 and $4,802,415, respectively.

At June 30, 1998, the total amortized cost, gross unrealized holding gains, 
gross unrealized holding losses, and aggregate fair value of mortgage-backed 
securities are $6,922,161, $115,262, $118,933 and $6,918,490, respectively.

Descriptions of the Partnership's mortgage-backed securities at June 30, 
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> 
  GNMA Certificates:                                                                                                       
     Broadmoor Court	              					  Colorado Springs, CO         47		    			9.25%    						10/15/29			  $   		587,300
			  Owings Chase Apartments												  Pikesville, MD														234				 				6.75%    						12/15/23									3,036,811
			  Pools of single-family mortgages 			  																										   				 				 8.74%(1) 		2016 to 2018									1,325,017
			  Pools of single-family mortgages			  																		   								           6.03%(1)				 						2008											599,399(2)
			  Pools of single-family mortgages		 												  																   								 7.58%(1)					 					2008											557,198(2)
  FNMA Certificates:                                                                                                       
			  Pools of single-family mortgages																  														   				 				 5.52%(1)						 				2000									  812,765(2)
                                                                                              					 								 ---------------
  Balance at June 30, 1998                                                                                   $    6,918,490 
                                                                                              							 							===============
</TABLE>
  (1) Represents yield to the Partnership.
  (2) Reserve account asset - see Note 3.









<PAGE>                               - 5 -
AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(UNAUDITED)

Reconciliation of the carrying amount of the mortgage-backed securities is as 
follows:
<TABLE>
<S>																																																																					                                     <C>
Balance at December 31, 1997						                                                                        	  $    7,359,399
  Additions
   Amortization of discount on mortgage-backed securities					                                            		          7,358
   Change in net unrealized holding gains                                                                           166,319
  Deduction																																																														                                                 
   Mortgage principal payments received                                                                   	        (431,954)
   Net unrealized loss on securities transferred from held-to-maturity to
    available-for-sale                                                                                             (182,632)
                                                         											                                         ---------------
Balance at June 30, 1998           																																																																 		     		$			 6,918,490
																																																																																																							    		===============
</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.  Certain of the 
agreements have been amended to defer payment of the base return.

Descriptions of the PREPs at June 30, 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 June 30, 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 June 30, 1998                                                                               $         -     
                                                                                                       ===============
</TABLE>

7. Transactions with Related Parties

Prior to merger, substantially all the Partnership's general and 
administrative expenses were 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 $101,658 ($13,204 for the quarter ended 
June 30, 1998).  The reimbursed expenses are presented on a cash basis and do 
not reflect accruals made at quarter end.




<PAGE>                               - 6 -
AMERICA FIRST PREP FUND 2 PENSION SERIES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(UNAUDITED)

Prior to the Merger AFCA 6 was 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 (none for the quarter ended 
June 30, 1998), all of which was paid by the Partnership.

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 Owing 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 $23,755 in 
1998 ($11,864 for the quarter ended June 30, 1998).          

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 in 1998.
















































<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. At June 30, 1998, the Partnership continued to hold two GNMA 
Certificates and three PREPs (referred to as the Permanent Investments) in 
addition to various Single-Family Certificates.

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 June 30, 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                  43                  91%
 Laurel Park Apartments                      Riverdale, GA                         387                 375                  97%
 Owings Chase Apartments                     Pikesville, MD                        234                 225                  96%
                                                                              ---------          ----------         -----------
   				                                                                            668                 643                  96%
                                                                              =========          ==========         ===========
</TABLE>

Distributions

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

<TABLE>
<CAPTION>
                                                                                                For the Six         For the Six
                                                                                               Months Ended        Months Ended
                                                                                              June 30, 1998       June 30, 1997
                                                                                             --------------      --------------
<S>                                                                                          <C>                 <C>           
Regular monthly distributions                                                                                                  
 Income                                                                                      $       .1028       $       .3266
 Return of Capital                                                                                   .5273               .3322
                                                                                             --------------      --------------
                                                                                             $       .6301       $       .6588
                                                                                             ==============      ==============
Distributions                                                                                                                 
	Paid out of cash flow (including mortgage principal payments)                               $       .6301       $       .6588
                                                                                             ==============      ==============
</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 $45,753 of undistributed mortgage 
principal payments was withdrawn from reserves (a net amount of $62,634 was 
placed in reserves for the quarter ended June 30, 1998).  The total 
amount held in reserves at June 30, 1998, was $4,319,995 of which $1,969,362 
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 six months ended June 30, 1998, indicated that the PREPs recorded 
on the balance sheet at June 30, 1998, required no adjustments to their 
current carrying amounts.

The overall status of the Partnership's Permanent Investments has remained 
relatively constant since March 31, 1998.

Results of Operations

The tables below compare the results of operations for each period shown.
<TABLE>
<CAPTION>
                                                                               For the             For the            Increase
                                                                         Quarter Ended       Quarter Ended           (Decrease)
                                                                         June 30, 1998       June 30, 1997           From 1997
                                                                        ---------------     ---------------     ---------------
<S>                                                                     <C>                 <C>                 <C>           
Mortgage-backed securities income                                       $      129,308      $      141,564      $      (12,256)
Equity in earnings of property partnerships                                       -                 21,049             (21,049)
Interest income on temporary cash investments                                   33,451              35,128              (1,677)
                                                                        ---------------     ---------------     ---------------
                                                                               162,759             197,741             (34,982)
General and administrative expenses                                             57,717              52,626               5,091
                                                                        ---------------     ---------------     ---------------
Net income                                                              $      105,042      $      145,115      $      (40,073)
                                                                        ===============     ===============     ===============
</TABLE>








<PAGE>                               - 9 -
<TABLE>
<CAPTION>
                                                                           For the Six         For the Six            Increase
                                                                          Months Ended        Months Ended           (Decrease)
                                                                         June 30, 1998       June 30, 1997           From 1997
                                                                        ---------------     ---------------     ---------------
<S>                                                                     <C>                 <C>                 <C>
Mortgage-backed securities income                                       $      261,808      $      285,537      $      (23,729)
Equity in earnings of property partnerships                                     15,508              47,061             (31,553)
Interest income on temporary cash investments                                   68,251              67,741                 510
                                                                        ---------------     ---------------     ---------------
                                                                               345,567             400,339             (54,772)
General and administrative expenses                                            246,690              98,416             148,274
                                                                        ---------------     ---------------     ---------------
Net income                                                              $       98,877      $      301,923      $     (203,046)
                                                                        ===============     ===============     ===============
</TABLE>

Mortgage-backed securities income decreased for the quarter and six months 
ended June 30, 1998, compared to the same periods in 1997 due to the continued 
amortization of the principal balances of the Partnership's mortgage-backed 
securities.

The decrease in equity in earnings of property partnerships for the quarter 
and six months ended June 30, 1998 compared to the same periods in 1997 is due 
to the Partnership receiving a distribution of approximately $21,000 from 
Owings Chase Apartments during the quarter ended June 30, 1997, whereas no 
such distribution was received during the same period in 1998.  Also 
contributing to the decrease for the six months ended June 30, 1998, compared 
to the same period in 1997 was a decrease in cash flow received from Broadmoor 
Court.

General and administrative expenses increased for the quarter ended June 30, 
1998, compared to the same period in 1997 due to an increase in salaries and 
related expenses which were partially offset by a decrease in transaction 
costs incurred in conjunction with the merger described in Note 1 to the 
financial statements and an overall decrease in other general and 
administrative expenses.  General and administrative expenses increased for the 
six months ended June 30, 1998, compared to the same period in 1997 due 
primarily to an increase of approximately $116,000 in transaction costs 
incurred in conjunction with the merger described in Note 1 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 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits

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

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

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

          (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 the Securities Exchange Act of 1934, the 
registrant has duly caused this report to be signed on its behalf by the 
undersigned, thereunto duly authorized.

Dated:  August 13, 1998       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

















































<PAGE>                               - 12 -