FORM 10-Q



                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


           QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934


(Mark One)
{ X }  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
       SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended        June 30, 1997

{   }  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to


For Quarter Ended       June 30, 1997        Commission file number   0-15747

                      Brown-Flournoy Equity Income Fund Limited Partnership
                      (Exact Name of Registrant as Specified in its Charter)


                 Delaware                                 58-1688140
         (State or Other Jurisdiction of               (I.R.S. Employer
         Incorporation or Organization)             Identification Number)



 225 East Redwood Street, Baltimore, Maryland                 21202
   (Address of Principal Executive Offices)                (Zip Code)

        Registrant's Telephone Number, Including Area Code:     (410) 727-4083

                                               N/A
                      (Former Name, Former Address, and Former Fiscal Year,
                                 if Changed Since Last Report.)

  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>

              BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP




                                      INDEX


                                                                        Page No.
Part I.  Financial Information


     Item 1.     Financial Statements
                 Balance Sheets                                             1
                 Statements of Operations                                   2
                 Statements of Partners' Capital                            3
                 Statements of Cash Flows                                   4
                 Notes to Financial Statements                            5-6


     Item 2.     Management's Discussion and Analysis of
                        Financial Condition and Results of Operations     7-8


Part II.   Other Information

     Item 1. through Item 6.                                                9

     Signatures                                                            10






<PAGE>
BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP

Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
                                                                 June 30,        December 31,
                                                                   1997              1996

Assets

<S>                                                           <C>               <C>
 Investment in real estate                                    $ 13,895,264      $ 14,355,212
 Cash and cash equivalents                                       1,477,739         1,467,365
 Other assets
  Accounts receivable                                               24,769            19,744
  Prepaid expenses                                                  32,302            70,500
  Loan fees, less accumulated amortization
   of $208,031 and $73,434, respectively                            60,991            93,761

 Total other assets                                                118,062           184,005

Total assets                                                  $ 15,491,065      $ 16,006,582


Liabilities and Partners' Capital

 Accounts payable and accrued expenses including
  $30,188 and $28,941 due to affiliates, respectively         $    543,503      $    417,042
 Tenant security deposits                                          102,450           110,890
 Mortgage loans payable                                         20,400,000        20,400,000

 Total liabilities                                              21,045,953        20,927,932


 Partners' Capital
  General Partners                                                (265,640)         (252,969)
  Limited Partners
   Class A - $1,000 stated value per unit;
    27,000 units outstanding                                    (5,289,348)       (4,668,481)
   Class B                                                             100               100

 Total partners' capital                                        (5,554,888)       (4,921,350)

Total liabilities and partners' capital                       $ 15,491,065      $ 16,006,582

</TABLE>

See accompanying notes to financial statements

-1-
<PAGE>
BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP

Statements of Operations
For the three months ended March 31,
(Unaudited)
<TABLE>
<CAPTION>
                                                                1997            1996

Revenues
<S>                                                         <C>             <C>
 Rental income                                              $1,144,916      $1,150,058
 Interest income                                                14,573          13,935

                                                             1,159,489       1,163,993


Expenses
 Compensation and related benefits                             142,806         117,063
 Utilities                                                      68,363          67,197
 Property taxes                                                 93,007          90,498
 Insurance                                                      19,300          17,871
 Advertising                                                    27,774          29,673
 Maintenance and repairs                                        83,202          99,663
 Property management fee                                        57,246          57,503
 Other                                                           7,851           7,686
 Administrative and professional fees                           29,998          16,983
 Interest expense                                              471,750         484,556
 Depreciation of property and equipment                        264,521         255,780
 Amortization of loan fees                                      67,298          18,547

                                                             1,333,116       1,263,020

Net loss                                                    $ (173,627)     $  (99,027)


Net loss per unit of Class A limited
 partnership interest                                       $    (6.30)     $    (3.59)

</TABLE>


See accompanying notes to financial statements

-2-
<PAGE>
  BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP

             Statements of Partners' Capital
            For the six months ended June 30,
                       (Unaudited)
<TABLE>
<CAPTION>
                                                                        Class A     Class B
                                                            General     Limited     Limited
                                                            Partners    Partner     Partners     Total


<S>                                                       <C>        <C>          <C>        <C>
Balance at December 31, 1996                              $ (252,969)$ (4,668,481)$      100 $ (4,921,350)

Net loss                                                      (7,161)    (350,867)          -    (358,028)

Distributions to partners                                     (5,510)    (270,000)          -    (275,510)


Balance at June 30, 1997                                  $ (265,640)$ (5,289,348)$      100 $ (5,554,888)



Balance at December 31, 1995                              $ (234,522)$ (3,764,559)$      100 $ (3,998,981)

Net loss                                                      (4,296)    (210,496)          -    (214,792)

Distributions to partners                                     (5,510)    (270,000)          -    (275,510)


Balance at June 30, 1996                                  $ (244,328)$ (4,245,055)$      100 $ (4,489,283)

</TABLE>

      See accompanying notes to financial statements

                           -3-
<PAGE>
BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP

Statements of Cash Flows
For the six months ended June 30,
(Unaudited)
<TABLE>
<CAPTION>

                                                                    1997                 1996


Cash flow from operating activities
<S>                                                           <C>                  <C>
 Net loss                                                     $      (358,028)     $      (214,792)
 Adjustments to reconcile net loss to net
  cash provided by operating activities
   Depreciation of property and equipment                             527,121              522,037
   Amortization of loan fees                                          134,597               37,094
   Changes in assets and liabilities
    Increase in accounts receivable                                    (5,025)             (11,948)
    Decrease in prepaid expenses                                       38,198               35,578
    Increase  in accounts payable and accrued expenses                126,461              101,004
    (Decrease) increase in tenant security deposits                    (8,440)               2,367

Net cash provided by operating activities                             454,884              471,340

Cash flows from investing activities-
 additions to investment in real estate                               (67,173)             (71,378)

Cash flows from financing activities
 Decrease in mortgage loans payable                                          -             (67,629)
 Financing costs                                                     (101,827)                    -
 Distributions to investors                                          (275,510)            (275,510)

Net cash used in financing activities                                (377,337)            (343,139)


Net increase in cash and cash equivalents                              10,374               56,823

Cash and cash equivalents
 Beginning of period                                                1,467,365            1,447,679

 End of period                                                $     1,477,739      $     1,504,502

</TABLE>


See accompanying notes to financial statements

-4-
<PAGE>
              BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP

                          Notes to Financial Statements
                                  June 30, 1997
                                   (Unaudited)


(1)     The Fund and Basis of Preparation

        The accompanying  financial  statements of Brown-Flournoy  Equity Income
        Fund  Limited  Partnership  (the  "Fund")  do  not  include  all  of the
        information  and  note  disclosures   normally   included  in  financial
        statements  prepared in accordance  with generally  accepted  accounting
        principles.  The  unaudited  interim  financial  statements  reflect all
        adjustments which are, in the opinion of management, necessary to a fair
        statement  of the results for the interim  periods  presented.  All such
        adjustments  are of a normal  recurring  nature.  The unaudited  interim
        financial  information  should be read in conjunction with the financial
        statements contained in the 1996 Annual Report.

(2)     Investment in Real Estate

        Investment  in real estate is stated at the lower of fair value or cost,
        net of accumulated depreciation, and is summarized as follows:
<TABLE>
<CAPTION>

                                                                 June 30, 1997            December 31, 1996

<S>                                                              <C>                        <C>
              Land                                               $  1,205,950               $  1,205,950
              Buildings                                            20,417,743                 20,417,743
              Furniture, fixtures and equipment                     2,470,839                  2,403,666

                                                                   24,094,532                 24,027,359
              Less:  accumulated depreciation                      10,199,268                  9,672,147

              Total                                               $13,895,264                $14,355,212
</TABLE>

(3)     Cash and Cash Equivalents

        The  Fund  considers  all  highly  liquid   investments   with  original
        maturities of three months or less to be cash equivalents. Cash and cash
        equivalents consist of the following, stated at cost, which approximates
        market value.
<TABLE>
<CAPTION>
                                                                 June 30, 1997            December 31, 1996

<S>                                                               <C>                        <C>
        Cash and money market                                     $   518,963                $   532,655
        Certificates of deposit with interest rates
              ranging from 5.16 to 5.2% in 1997 and
              5.0% to 5.6% in 1996                                    958,776                    934,710

                                                                   $1,477,739                 $1,467,365
</TABLE>

(4)     Related Party Transactions

        Brown  Equity  Income  Properties,   Inc.,  the  Administrative  General
        Partner,  billed the Fund $10,917 and $20,149 in the quarters ended June
        30,  1997  and  1996,  respectively,  for  reimbursement  of the cost of
        administrative  services  and  expenses  made  on  behalf  of the  Fund.
        Flournoy  Properties,  Inc.,  an  affiliate of the  Development  General
        Partner,  is  the  managing  agent  for  the  properties  and  earned  a
        management fee of $56,997 and $59,642  representing  5% of gross monthly
        operating  revenues from the  properties  during the quarters ended June
        30, 1997 and 1996, respectively.

                                                      -5-


<PAGE>

              BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP

                          Notes to Financial Statements
                                  June 30, 1997
                                   (Unaudited)

(5)     Mortgage Loans Payable

        The Fund's General  Partners  secured first  mortgage loans  aggregating
        $20.8  million  on August  30,  1989  which  were  secured  by the land,
        apartment  units  and  all  other  improvements  to the  four  apartment
        properties.  These  loans  were  for an  original  term of 7 years  with
        interest  only  payments  at 9.6%.  Interest  only was  payable  monthly
        through September 1994, and thereafter  monthly payments were based on a
        30- year amortization  schedule with a balloon payment due at the end of
        the 7 year term.

        The mortgage  loans  matured on September 1, 1996.  The Fund  refinanced
        these  loans  with  Columbus  Bank & Trust.  The  terms of the new loans
        provide  for  interest  only  payments  of  prime  plus  1%  in  monthly
        installments for one year. The new loans total  $20,400,000 and provided
        proceeds  sufficient to satisfy the repayment of the old mortgage loans,
        and  all  costs  of the  refinancing.  The  Fund  is  required  to pay a
        commitment   fee  of  one  point   payable  in   advance  in   quarterly
        installments.  Columbus Bank & Trust has agreed to extend these loans to
        December 31, 1997 at no additional cost to the Fund. The Fund intends to
        repay these  balances with proceeds from mortgage  refinancing  or other
        capital transactions.

(6)     Net Loss per Unit of Class A Limited Partnership Interest

        Net loss per Class A Limited  Partnership  interest is  disclosed on the
        Statements of Operations and is based upon 27,000 units outstanding.



                                                      -6-

<PAGE>
              BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP

                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations

Liquidity and Capital Resources

         At  June  30,  1997  the  Fund  had  a  working  capital   position  of
unrestricted  cash and cash  equivalents of $1,375,289 and accounts  payable and
accrued expenses of $543,503.  Restricted cash represents  amounts retained from
tenants for security deposits and totaled $102,450 at June 30, 1997. The working
capital  balance  represents   reserves  for  future   contingencies  that  were
established  from mortgage  loan proceeds and are deemed  sufficient to meet the
Fund's liquidity  requirements even under very pessimistic  operating scenarios.
Reserves may be distributed as the General Partners deem appropriate.

         Cash and cash equivalents  increased  $57,311 during the second quarter
of 1997. This increase represents the net effect of $292,870 in cash provided by
operating activities, $46,977 utilized for capital expenditures, financing costs
of $50,827 and distributions to investors of $137,755.

         In August 1997 the Fund made a cash  distribution  to its  investors of
$137,755.  This distribution was derived from unrestricted cash available at the
end of the second quarter.

         On August  27,  1996 the Fund  closed on  interim  one year  loans that
mature in September  1997.  Columbus Bank and Trust,  the lender,  has agreed to
extend these loans to December 31,  1997.  These loans will serve the  financial
needs of the Fund  until it  selects  a  permanent  financial  solution  for the
repayment of its debt. The terms of the interim  financing  provide for interest
only payments of prime (8.50% at June 30, 1997) plus 1% in monthly installments.
The new loans totaled  $20,400,000 and provided  proceeds  sufficient to satisfy
the  repayment  of the  existing  mortgage  loans,  as well as all  costs of the
refinancing.

Results of Operations

         For the second  quarter  and first six months of 1997  rental  revenues
declined 4% and 2%, respectively,  from the same periods in 1996. The decline in
revenues is largely  attributable to lower occupancy at the High Ridge property.
Excluding High Ridge, the Fund  experienced  modest increases in rental revenues
during these periods.

         Total expenses  increased 1% and 3% during the second quarter and first
six months of 1997,  respectively,  as compared to the same periods in 1996. The
higher expenses are attributable to additional loan fees and compensation costs.
The Fund  experienced  higher loan fees when it became obligated to pay Columbus
Bank & Trust a 1% origination  fee (paid  quarterly) on its new mortgage  loans.
Compensation costs increased because certain  landscaping  functions,  which had
previously been  contracted out, are now being performed  internally at the Park
Place  property.  Performing  this work  internally  required  the hiring of two
additional staff members.

         Occupancy  for the  Fund's  properties  averaged  88% during the second
quarter of 1997,  a 3% decline  from the same  period in 1996.  During the first
half of the year the Fund  achieved  an average  occupancy  of 89%, a 1% decline
from the first half of 1996.  These lower  rates are  directly  attributable  to
lower occupancy at the High Ridge property. Occupancy at High Ridge declined 13%
and 11% during the second quarter and first six months of 1997, respectively, as
compared to the same periods in 1996.

         The Park  Place  property,  located  in  Spartanburg,  South  Carolina,
experienced  a 2% decline in  occupancy  during the second  quarter of 1997 when
compared to the same period in 1996. In spite of the lower  occupancy,  revenues
increased 3% due to higher corporate rental income.

         The operations at the High Ridge property,  located in Athens, Georgia,
have been severely  challenged over the past six months due to several  recently
completed  apartment  communities.  Occupancy  averaged  78%  during  the second
quarter of 1997, a decline of 13% from the same period in 1996. This decrease is
due  largely  to  the  migration  of  tenants  to  newly  constructed  apartment
communities.  In an effort to combat this  situation,  management  performed  an
extensive  market survey of the competitive  properties.  Through this survey it
was  determined  that many of the new  properties  had lower  rents.  Management
adjusted  rents to compete with the new  properties and subsequent to the rental
adjustment, occupancy has increased to 93%.

                                                      -7-

<PAGE>

              BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP

                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations
Results of Operations (continued)

         Occupancy  during the second quarter of 1997 averaged 91% at the Hidden
Lake property,  located in Union City, Georgia, a decrease from the 95% recorded
in the  second  quarter  of 1996.  Management  has  recently  implemented  a new
corporate marketing campaign to reverse this decline.

         The  operations at the Southland  Station  property,  located in Warner
Robins,  Georgia,  showed  marked  improvement  during  the first  half of 1997.
Occupancy  increased  5% during this period when  compared to the same period in
1996. This higher occupancy level led to a 2% increase in total revenues.

         All four properties remain in excellent condition.



                                                      -8-
<PAGE>


              BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP


                           PART II. OTHER INFORMATION




Item 1.     Legal Proceedings

                  Inapplicable

Item 2.     Changes in Securities

                  Inapplicable

Item 3.     Defaults upon Senior Securities

                  Inapplicable

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

                  Inapplicable

Item 5.     Other Information

                  Inapplicable

Item 6.     Exhibits and Reports on Form 8-K

                  a)  Exhibits:   None.

                  b)  Reports on Form 8-K:  None.



                                                        -9-

<PAGE>
              BROWN-FLOURNOY EQUITY INCOME FUND LIMITED PARTNERSHIP




                                   SIGNATURES





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



                                            BROWN-FLOURNOY EQUITY INCOME FUND
                                                          LIMITED PARTNERSHIP



DATE:           8/8/97                    By:    /s/ John M. Prugh
                                            John M. Prugh
                                            President and Director
                                          Brown Equity Income Properties, Inc.
                                            Administrative General Partner



DATE:           8/8/97                   By:     /s/ Timothy M. Gisriel
                                            Timothy M. Gisriel
                                            Treasurer
                                         Brown Equity Income Properties, Inc.
                                            Administrative General Partner




                                                -10-

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