FORM 10-K

               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549

        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
               THE SECURITIES EXCHANGE ACT OF 1934

           For the fiscal year ended December 31, 1997
                               or

     [  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
             OF THE SECURITIES EXCHANGE ACT OF 1934

         For the transition period from   N/A   to   N/A

                 Commission File Number: 0-22520

                 CENTENNIAL MORTGAGE INCOME FUND
     (Exact name of registrant as specified in its charter)

         California                          33-0053488
  (State or other jurisdiction of             (I.R.S. Employer
 incorporation or organization)             Identification No.)

   1540 South Lewis Street, Anaheim, California        92805
   (Address of principal executive office)         (Zip Code)

Registrant's telephone number, including area code: (714)502-8484

Securities registered pursuant to Section 12(b) of the Act: None

  Securities registered pursuant to Section 12(g) of the Act:

                    Limited Partnership Units
                        (Title of Class)

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 file
such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                          YES  X     NO

Indicate by check mark whether if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (Section 229.405 of this
chapter) is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K.

                          YES  X     NO
            This report includes a total of 951 pages.













































                             PART I

ITEM 1. BUSINESS.

(a)  General Development of the Business

Centennial Mortgage Income Fund (the "Partnership"), a California
Limited Partnership, was organized on December 13, 1983.  The
Partnership's registration statement became effective June 8,
1984.  The general partners are John B. Joseph, Ronald R. White
and Centennial Corporation ("CC"), a privately-held corporation
whose stock is owned by affiliates of Ronald R. White and John B.
Joseph.

Beginning in the fourth quarter of 1985, the Partnership ceased
accepting capital contributions and entered its operating stage
of business.  During the fourth quarter of 1990, 60 months after
the closing of its offering stage, the Partnership ceased making
new loans and entered the repayment stage as required by the
Partnership Agreement.  For additional information, see Item 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

(b)  Financial Information about Industry Segments

Not applicable.

(c)  Narrative Description of Business

The Partnership was formed to invest in mortgage investments
consisting of participating first mortgage loans, construction
loans, and wrap-around and other junior loans on commercial,
industrial and residential income-producing real property.

The Partnership's objectives are to preserve the Partnership's
invested capital, provide increased cash distributions to the
limited partners as the cash flow from the properties underlying
mortgage investments increases over the life of the Partnership,
provide capital growth through participation in the increased
value of the underlying properties and provide liquidating
distributions as loans are repaid and cash from the sale of real
estate owned is no longer needed for development and operations
of real estate owned.

Due to the long term recession and falling real estate market
values in California during the early 1990's, many of the
Partnership's loans became delinquent and management of the
Partnership elected to foreclose, thereby increasing real estate
owned balances.  As a result, the Partnership became a direct
investor in this real estate.  The Partnership has managed its
operating properties and completed certain development processes
on its raw land over the last several years in an effort to make
this real estate more marketable.

Real estate owned by the Partnership reached a peak at December
31, 1993 when its total carrying value, before allowance for
possible losses, reached $21,394,000.  The real estate owned
balance before allowance for possible losses then decreased to
$13,820,000 at December 31, 1994 and decreased again to
$12,349,000 at year end 1995.  Real estate owned decreased again
to $11,360,000 as of December 31, 1996 and $8,490,000 as of
December 31, 1997.  As of December 31, 1997, the Partnership had
established a $2,354,000 allowance for possible losses on its
real estate owned.

Subsequent to December 31, 1997, the Partnership has received
$630,000 from the payoff of real estate loans receivable and has
received approximately $763,000 from the sale of its 4
condominiums in Oxnard, California.  Additionally, subsequent to
December 31, 1997, the Partnership's unconsolidated subsidiary,
LCR Development, Inc. ("LCR") has entered into purchase and sale
agreements to sell its remaining undeveloped lots and several of
its remaining homes.  Three of these homes had closed escrow as
of March 25, 1998 and the Partnership received approximately
$346,000 in loan repayments from the net proceeds of such sales.

As a result of the transactions discussed above for which payoffs
have been received and escrows have closed, the Partnership's
cash and cash equivalents balance had increased from $1.0 million
as of December 31, 1997 to approximately $2.8 million as of March
25, 1998.

The pending LCR transaction is still subject to numerous
contingencies and there can be no assurance that it will
ultimately close escrow.

The Partnership has identified and evaluated the impact on its
operating and application software and products of the problems
and uncertainties related to the year 2000.  The Partnership has
implemented a plan to address the issues and expects to resolve
year 2000 compliance issues primarily through replacement and
normal upgrades of its software and products, the cost of which
replacements and upgrades are not considered material.
Compliance is expected to be achieved during 1998 and/or early
1999.  However, there can be no assurance that such replacements
and upgrades can be completed on schedule.




Cautionary Statements Regarding Forward-Looking Information

The Partnership wishes to caution readers that the
forward-looking statements contained in this Form 10-K under
"Item 1. Business," "Item 7. Management's Discussion and Analysis
of Financial Condition and Results of Operations" and elsewhere
in this Form 10-K involve known and unknown risks and
uncertainties which may cause the actual results, performance or
achievements of the Partnership to be materially different from
any future results, performance or achievements expressed or
implied by any forward-looking statements made by or on behalf of
the Partnership.  In connection with the "safe harbor" provisions
of the Private Securities Litigation Reform Act of 1995, the
Partnership is filing the following cautionary statements
identifying important factors that in some cases have affected,
and in the future could cause the Partnership's actual results to
differ materially from those expressed in any such forward-
looking statements.

The factors that could cause the Partnership's results to differ
materially include, but are not limited to, general economic and
business conditions, including interest rate fluctuations; the
impact of competitive products and pricing; success of operating
initiatives; adverse publicity; changes in business strategy or
development plans; quality of management; availability, terms and
deployment of capital; the results of financing efforts; business
abilities and judgment of personnel; availability of qualified
personnel; employee benefit costs and changes in, or the failure
to comply with government regulations.

(d)  Financial Information about Foreign and Domestic Operations
and Export Sales

Not applicable.

ITEM 2. DESCRIPTION OF PROPERTY.

No properties or facilities are owned or leased by the
Partnership other than real estate owned which was obtained
through foreclosure of real estate loans receivable, as described
in notes 5 and 6 of Notes to Consolidated Financial Statements.









ITEM 3. LEGAL PROCEEDINGS.

Unbeknownst to the Partnership, on July 19, 1996, a default was
entered against the Partnership for failure to respond to a
complaint filed on July 17, 1995 in the San Bernardino Superior
Court, entitled Henry Yong Lim et al -vs- Cardinal Security, et
al and allegedly served on the Partnership in May 1996.  As shown
by the proofs of service, the complaint was served on the wrong
party in 1996.  The Partnership first became aware of its
involvement in this lawsuit in September 1997 when it received
copies of requests for entry of default judgement totaling
approximately $1,000,000.  The judgements involved damages and
injuries allegedly suffered by the plaintiffs as a result of an
altercation between the plaintiffs, other third parties and
security guards employed by the Partnership at its shopping
center in Upland, California.  The request for judgement names
Centennial Mortgage Income Fund Partnership as a defendant in
this action.  Since the Partnership was never served with the
complaint and had no other way of knowing about this action, the
Partnership has retained legal counsel to set aside the defaults
and any default judgements which may have been entered, due to
the lack of proper service and notice.  The Partnership has
tendered this action to its liability insurance carrier for legal
and liability coverage.  The default judgement has been set aside
and the plaintiff's have appealed.  Management intends to
vigorously defend any future actions related to this matter.
Management believes that even if the plaintiff's prevail in these
actions, the Partnership's insurance coverage and/or the security
company's insurance carrier should prevent the Partnership from
suffering a material loss from these proceedings.

There are no other material pending legal proceedings other than
ordinary routine litigation incidental to the registrant's
business.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters have been submitted to a vote of security holders.












                             PART II

ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP UNITS AND RELATED
SECURITY HOLDER MATTERS.

(a)  Securities Market Information

There is no market for the Partnership's limited partnership
units, nor is one expected to develop.

The Partnership units were offered by the Partnership through
selected dealers who were members of the National Association of
Securities Dealers, Inc.

(b)  Approximate Number of Holders of Limited Partnership Units

As of December 31, 1997, there were approximately 5,470 holders
of limited partnership units.

(c)  Partnership Distributions

No distributions were declared or paid by the Partnership during
the three year period ended December 31, 1997.

Management intends to distribute cash flow available for
distribution (as defined in the Partnership Agreement), if any,
on a periodic basis as substantial cash balances are accumulated
from property sales and/or loan payoffs.  Distributions may vary
in amount and may be suspended at such time as the Partnership
requires working capital, or at any time that the general
partners, in their sole discretion, determine it to be in the
best interest of the Partnership.  Subsequent to December 31,
1997, the general partners determined that the Partnership would
make a distribution prior to the end of July 1998.  The amount of
the distribution should be at least $2,000,000 or $51 per limited
partner unit, however, the exact amount of such distribution is
still undetermined due to the pending transactions discussed in
ITEM 1 above.  See Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.












<TABLE>

ITEM 6.  SELECTED FINANCIAL DATA.
<CAPTION>

                       (dollars in thousands, except per unit data)
                                        Years ended
<S>                  <C>            <C>            <C>            <C>
<C>
--------------------------------------------------------------------------------
----------
                     12/31/97       12/31/96       12/31/95       12/31/94
12/31/93
--------------------------------------------------------------------------------
----------

Consolidated Statement
  of Operations Data:

Total revenue........  $    991     $   1,105      $  1,159       $  1,096
$  1,246
Net income (loss)..         123        (2,514)       (2,776)        (1,286)
(5,968)
Net income (loss)
  per limited
  partnership unit
   basic and diluted.      3.18        (64.91)       (71.68)        (33.21)
(154.10)

Consolidated Balance
  Sheet Data:

Total loans before
  allowance for losses    3,847         3,297         4,793          6,641
3,489
Total real estate owned
  before allowance
  for losses              8,490        11,360        12,349         13,820
21,394
Total assets.........    10,397        11,394        14,842         17,688
20,927
Partners' equity.....     7,555         7,432         9,946         12,722
14,008
</TABLE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND  RESULTS OF OPERATIONS.

General

Net income (loss) and income (loss) per limited partnership unit
were $123,000 and $3.18 for the year ended December 31, 1997 as
compared to $(2,514,000) and $(64.91) for the year ended December
31, 1996 and $(2,776,000) and $(71.68) for the year ended
December 31, 1995.  The improved profitability in 1997 is
primarily attributable to a significant decrease in losses from
unconsolidated investees, a recovery of previously recorded
provision for losses and improved profitability of operating
properties.  A detailed discussion of the significant changes in
each component of revenue and expense for each of the years in
the three year period ended December 31, 1997 is included in the
following paragraphs.

Liquidity and Capital Resources

At December 31, 1997, the Partnership had $1,018,000 in cash and
interest bearing deposits.  During the year ended December 31,
1997, the Partnership's principal sources of cash were;
i)$1,118,000 in proceeds from the sale of real estate owned;
ii)$545,000 in net operating income from operating properties;
iii)$331,000 in principal reductions on loans receivable from
affiliates (LCR); iv)$159,000 in interest income on loans; and
v)$72,000 in interest income on interest bearing deposits.  The
Partnership's principal uses of cash during the year ended
December 31, 1997 were: i)$1,066,000 in principal payments on
notes payable; ii)$970,000 in advances on loans made to LCR;
iii)$356,000 in interest payments; iv)$306,000 in general and
administrative costs; and v)$162,000 in expenses associated with
non-operating properties (principally real estate taxes).

Subsequent to December 31, 1997, the Partnership has received
$630,000 from the payoff of real estate loans receivable and has
received approximately $763,000 from the sale of its 4
condominiums in Oxnard, California.  Additionally, subsequent to
December 31, 1997, the Partnership's unconsolidated subsidiary,
LCR has entered into purchase and sale agreements to sell its
remaining undeveloped lots and several of its remaining homes.
Three of these homes had closed escrow as of March 25, 1998 and
the Partnership received approximately $346,000 on loan
repayments from the net proceeds of such sales.





As a result of the transactions discussed above for which payoffs
have been received and escrows have closed, the Partnership's
cash and cash equivalents balance had increased from $1.0 million
as of December 31, 1997 to approximately $2.8 million as of March
25, 1998.

The additional pending transactions are still subject to numerous
contingencies and there can be no assurance that they will
ultimately close escrow.

Additional sources of funds are future operations of real estate
owned, sale of remaining real estate with a net carrying value of
approximately $5.4 million and payoffs of remaining loans.

The Partnership had no unfunded loan commitments to nonaffiliates
at December 31, 1997. The Partnership's notes payable commitments
for 1998 consist of interest and principal payments due of
approximately $288,000.  In addition to the note payable
commitments, the Partnership's principal capital requirements
include: i) real property taxes and bonds on real estate owned of
approximately $142,000 payable in 1998, and ii) selling, general
and administrative costs.  These commitments are expected to be
paid from existing cash balances, future loan payoffs, and the
sale of real estate owned.

The Partnership is continuously evaluating various alternative
strategies for liquidating its real estate assets.  These
alternative strategies include the potential joint venture and/or
build out of certain of the Partnership's properties in order to
increase their marketability and maximize the return to the
limited partners.  In the event the Partnership decides to
implement some of these strategies, it may require the
reinvestment of proceeds received from the payoff of existing
loans and/or the sale of other real estate assets.  The decision
to invest additional cash in existing assets will only be made
if, based on management's best judgment at the time, there is a
clear indication that such investment will generate a greater
return to the limited partners than any other strategies
available to the Partnership.   During 1995, the Partnership,
through its 50 percent owned corporation, LCR, entered into a
joint venture agreement with Home Devco, Inc. ("Home Devco"), an
affiliated entity, entitled Silverwood Homes ("Silverwood").For
further information see note 5 of Notes to Consolidated
Financial Statements.

Effective with the third quarter of 1991, the Partnership
suspended making any cash distributions to partners due to a
decline in liquidity and the uncertainty of the cash requirements
for existing and potential real estate owned.  Pursuant to the
Partnership Agreement, 60 months after the closing of the
offering, cash proceeds from mortgage investments are no longer
available for reinvestment by the Partnership.

Management believes that current and projected liquidity is
sufficient to fund operating expenses and to meet the contractual
obligations and cash flow operating requirements of the
Partnership.  Until recently, the general partners believed that
the cash proceeds from mortgage reductions and the sale of real
estate owned should be retained by the Partnership until such
time as it was assured that it had sufficient cash to fulfill any
potential operating requirements.  Due to the substantial real
estate and loan receivable balances, these potential operating
costs were considered to be very significant.  Based upon recent
developments, the general partners have determined that the
Partnership will make a distribution to its limited partners by
the end of July 1998.  The amount of this distribution is still
undetermined due to the uncertainty of the pending escrows
discussed above, but should be at least $2,000,000 or $51 per
limited partner unit.

Results of Operations

Management has noted that the long-term downturn in the real
estate industry in California has not only stabilized, it has
improved considerably in many sectors of the market.  The
improving real estate markets were a significant factor in the
increased profitability of the Partnership during 1997.

Interest income on loans to affiliates, including fees was
$37,000 for 1997, $100,000 for 1996, and $41,000 for 1995.  This
income is related to the Silverwood joint venture which is
constructing homes in Lancaster, California.  The real estate
market in Lancaster has not seen the improvement that many other
areas in California have.  As a result, the Partnership placed
certain of its loans to Silverwood on a nonaccrual status during
1996, thus decreasing interest income during the latter half of
1996 and all of 1997.  The increase from 1995 to 1996 resulted
from increasing loan balances to Silverwood.












The Partnership has begun to receive increased payments on
several of the Partnership's loans to nonaffiliates which had
been converted into nonperforming loans.  As a result, interest
income on loans to nonaffiliates, including fees, increased from
$78,000 during the year ended December 31, 1995 to $100,000
during the year ended December 31, 1996, and increased again to
$122,000 during the year ended December 31, 1997.  Management
believes that the increases in payments are directly attributable
to the improving real estate market in California.

Loans on "nonaccrual" refers to loans upon which the Partnership
is no longer accruing interest.  Management's policy is to cease
accruing interest on loans when collection of interest and/or
principal payments has become doubtful.  Loans to affiliates and
nonaffiliates on nonaccrual status amounted to $2,313,000,
$2,597,000, and $3,412,000 as of December 31, 1997, 1996 and
1995, respectively.  Had all accrued interest been recorded
throughout 1997, 1996 and 1995 on the affiliated and
nonaffiliated nonaccrual loans, interest income would have
increased by $483,000, $261,000, and $646,000, respectively, for
those periods.

Real estate loans receivable, earning is comprised of four loans
totaling $782,000 as of December 31, 1997 that are performing.
However, three of the loans totaling $692,000 were classified as
impaired.  These three loans had been restructured and had been
offset by a $31,000 allowance for losses as of the end of 1997.
Two of these notes were repaid subsequent to December 31, 1997
and the Partnership received $630,000 in net cash from these
repayments.  During 1997,the Partnership reversed $268,000 in
allowances for losses that had been recorded in prior years
against these repaid loans.

Real estate loans receivable, nonearning is comprised of four
past due or renegotiated loans totaling $1,072,000 as of December
31, 1997.  These loans are offset by $973,000 in deferred profit
and allowance for possible losses.  Most of the borrowers have
little or no equity in the underlying collateral for the loans
and as a result, these loans effectively represent an investment
in the real estate held as collateral.  Therefore, these loans
are carried on the balance sheet at the fair value of the
collateral or have been fully reserved.

Real estate loans receivable from unconsolidated investees,
earning and nonearning represent loans to LCR, an unconsolidated
corporation 50 percent owned by the Partnership, and loans to
Silverwood homes, a subsidiary of LCR.



The real estate owned balance before allowance for possible
losses at December 31, 1997, 1996 and 1995 was $8,490,000,
$11,360,000, and $12,349,000, respectively.  The balance at
December 31, 1997 is comprised of three properties and is offset
by a $2,354,000 allowance for possible losses.  One of these
three properties was sold subsequent to December 31, 1997 and the
Partnership received approximately $763,000 in net cash proceeds
from the sale.

The following sections entitled "Nonaccrual, Nonperforming Loans
and Other Loans to Affiliates" and "Real Estate Owned" provide a
detailed analysis of these assets.

Nonaccrual, Nonperforming Loans and Other Loans to Affiliates

Loans on nonaccrual status during the year ended December 31,
1997 are summarized below:

During 1994, the Partnership renegotiated an equity participation
note with an original committed amount of $374,000 secured by a
second deed of trust on a 32,431 square foot shopping center in
Corona, California.  The loan provides for interest due to be
payable at loan maturity; however, due to the amount of the
senior debt and the decrease in land values, the Partnership has
placed the loan on nonaccrual.  The principal balance and
nonaccrued interest at December 31, 1997 were $376,000 and
$144,000 respectively.  The Partnership has recorded a reduction
of $62,000 against the $376,000 principal balance which
represents previously nonaccrued interest and has also recorded a
$289,000 deferred profit in connection with this loan.
Additionally, due to the recent operating history of the property
and the large lien on the property which is senior to the
Partnership's note, an allowance for possible losses of $25,000
has also been recorded against this note.

During 1991, the Partnership sold a pad on an existing piece of
real estate owned in Corona, California and carried back
financing in the amount of $600,000.  The Partnership's share of
the loan is 77 percent.  Due to the loss of a major tenant, the
borrower has been unable to make full monthly interest payments
in accordance with the original note terms.  Management has
worked out a forbearance agreement with the borrower for payments
equal to the net cash flow from the property.  The remaining
interest due has been placed on nonaccrual.  The Partnerhip's
share of the principal balance and nonaccrued interest at
December 31, 1997 were $461,000, and $142,000, respectively.
The Partnership has recorded a $365,000 allowance for possible
losses against this note.


During 1989, the Partnership funded a loan with an original
committed amount of $343,000 to provide land development
financing in Perris, California.  The loan matured June 1, 1993
and the borrower was unable to make interest payments or pay off
the loan.  Given the depressed value of the property and the
amount of the delinquent bonds and taxes, the Partnership has
elected to not foreclose on this property and has established an
allowance for losses of $294,000, to fully reserve the carrying
value of the note.  The principal balance and nonaccrued interest
at December 31, 1997 are $294,000 and $208,000, respectively.

During 1994, the Partnership funded a $1,250,000 unsecured note
and a 50 percent participation in a $2,115,000 unsecured note,
both representing workout loans and due from LCR.  These two
loans reflect the majority of the cost basis of 179 residential
lots which LCR contributed to Silverwood.  LCR's only source of
repayment of these notes is the excess, if any, of proceeds from
the sale of the fully developed lots over the amount of secured
debt.  Due to the continuing decline in value of the lots,
management does not expect that either of these notes will ever
be repaid.  As a result, the loans have been placed on
nonaccrual.  As of December 31, 1997, the principal balance and
nonaccrued interest balances of the $1,250,000 note were
$1,250,000 and $392,000, respectively.  The Partnership's share
of the principal and nonaccrued balances of the $2,115,000 note
as of the same date were $1,055,000 and $323,000, respectively.
As discussed in note 5 of Notes to Consolidated Financial
Statements, the Partnership has reduced the carrying value of
these notes by $2,305,000, a portion of its share of losses from
this unconsolidated investee.

During 1994 and 1995, LCR had evaluated various alternative
strategies for liquidating its investment in the 179 lots in
Lancaster.  During 1995, LCR determined that its best course of
action appeared to be the full-scale buildout and sale of single-
family homes since the market for finished lots had fallen so
significantly.  LCR obtained construction financing commitments
from the Partnership and Centennial Mortgage Income Fund II
("CMIF II"), an affiliate.  LCR entered into a joint venture
agreement entitled Silverwood with Home Devco to construct and
sell single-family homes at the project.

Silverwood began constructing a model home complex at the project
in June 1995.  Construction commenced in September 1995 on Phase
I at the project.  Construction of Phase II of the project was
commenced in February 1997.  At December 31, 1997, the
Partnership holds a 50 percent participation in three notes and a
100 percent interest in a fourth note due from Silverwood
consisting of a land development loan, a model home loan and two
home construction loans with a combined disbursed balance of
$2,374,000.  The Partnership's disbursed balance of the
$3,266,000 development loan at December 31, 1997 was $1,212,000.
The Partnership's disbursed balance of the $490,000 model loan at
December 31, 1997 was $239,000.  At December 31, 1997, the
Partnership's disbursed balance of the $1,034,000 Phase I
construction loan was $171,000.  At December 31, 1997 the
Partnership's disbursed balance of the $870,000 Phase II
construction loan was $752,000.  As discussed in note 5 of Notes
to Consolidated Financial Statements, the Partnership had reduced
the carrying value of the land development loan by $381,000, the
remainder of its share of losses in unconsolidated investees.

Sales volumes of new homes in the Lancaster area have continued
to remain sluggish since 1995 while sales prices have remained
relatively flat and construction costs have increased.  This has
caused a further decline in the value of finished lots and a
reduction in the anticipated net proceeds the Partnership expects
it might realize from the buildout of homes at the project.
Additionally, Silverwood closed escrow on only two homes during
1996 and seven homes in 1997, far less than originally
anticipated.  As a result of these factors, LCR recorded a
$207,000, $2,516,000 and $1,077,000 provision for losses on real
estate investments during 1997, 1996 and 1995, respectively.
Subsequent to December 31, 1997, Silverwood has closed escrow on
three more homes in Phase II and has placed two more homes in
escrow.  Additionally,  Silverwood has entered into a purchase
and sale agreement to sell the 157 remaining undeveloped lots and
intends to cease its homebuilding activities.

Real Estate Owned

A description of the Partnership's principal real estate owned
and loan classified as insubstance foreclosure during the year
ended December 31, 1997 follows:

Shopping Center in Upland, California

During the third quarter of 1988, the Partnership foreclosed on a
loan secured by this project.  The Partnership originally
committed $5,600,000 for the rehabilitation of a 33,327 square
foot retail center and construction of an automotive service
facility in Upland, California.  Cost overruns and construction
delays prevented the borrower from selling the project and
thereby performing on the loan.  The property's carrying value
before allowance for possible losses was $4,628,000 at December
31, 1997.  The property is encumbered by a note of $2,421,000,
secured by a first trust deed on the property.  The Partnership
oversees the management and leasing of the property which is
currently 96 percent leased.
The Partnership had recorded a $921,000 allowance for losses
related to this property as of December 31, 1997.  The property
generated approximately $506,000 and $431,000 in net operating
income before debt service during 1997 and 1996, respectively.

19 Acres in Sacramento, California

During the third quarter of 1991, the Partnership took a deed in
lieu of foreclosure on a second trust deed secured by 19 acres of
undeveloped land in Sacramento, California.  The property is
located in the North Natomas area and is zoned for light-
industrial commercial use. The property was encumbered by a
$900,000, 12 percent fixed interest rate note payable secured by
a first trust deed on the property which was repaid in December
1997. The Partnership continues to finalize the entitlement
processing, flood issues and provide for utility services for the
property. As these issues are finalized and the demand for
development land in the area returns, the Partnership intends to
list the property for sale.  At December 31, 1997, the carrying
value before allowance for possible losses of this asset was
$2,822,000 and the Partnership had recorded a $1,134,000
allowance for losses related to this project.

Auto Retail Center in Corona, California

During 1988, the Partnership funded a loan with an original
committed amount of $3,313,000 for the purpose of constructing a
39,185 square foot auto/retail center in Corona, California.  The
loan matured on September 1, 1989.  The borrower defaulted under
a forbearance agreement, and the Partnership filed a notice of
default on December 14, 1990.  The borrower filed for bankruptcy
on February 15, 1991.  A pad was sold during April 1991 resulting
in the Partnership receiving a net paydown of $249,000.  The
Partnership provided financing to the purchaser.  The Partnership
took a grant deed on the property through the Bankruptcy Courts
in December 1991.  The property was sold for $1,000,000 in July
1997 and the Partnership realized $935,000 in net cash proceeds
from the sale.

4 Condominiums in Oxnard, California

During 1990, the Partnership funded a loan secured by a first
trust deed with an original committed amount of $3,000,000 for
the construction of 12 condominiums in Oxnard, California.  The
borrower signed over control to the second trust deed holder in
December 1992 and the second trust deed holder, an affiliate,
abandoned the property.  The Partnership now controls the
property and receives 100 percent of all sales proceeds net of
selling costs.  As a result, the Partnership recorded an
insubstance foreclosure on these 12 condominiums. During 1997,
the Partnership sold one condominium, bringing the cumulative
sales total to eight units.  The Partnership recorded a $1,000
gain on the 1997 sale. The remaining four units were sold and
closed escrow subsequent to December 31, 1997.  The sales
subsequent to December 31, 1997 generated approximately $763,000
in net cash proceeds to the Partnership.  The carrying value
before allowance for possible losses at December 31, 1997 was
$1,040,000 and the Partnership had recorded a $299,000 allowance
for losses related to this project as of the same date.

Interest on Interest-Bearing Deposits

Interest earned on interest-bearing deposits was $72,000 in 1997,
$85,000 in 1996 and $102,000 in 1995.  The decrease in interest
on interest-bearing deposits in 1997 and 1996 is principally due
to a decrease in average cash balances.  Interest on interest-
bearing deposits represents interest earned on Partnership funds
invested, for liquidity, in time certificate and money market
deposits.

Income from Operations of Real Estate Owned

Income from operations of real estate owned for 1997, 1996 and
1995 consists of operating revenues of $755,000, $780,000, and
$784,000, respectively. These revenues were primarily from the
Upland Shopping Center and the auto retail center in Corona.  The
decrease in 1997 can be attributed to the sale of the auto retail
center in July 1997.

Provision for Possible Losses

The provision for (recovery of) possible losses was $(268,000)in
1997, $40,000 in 1996 and $836,000 in 1995.  The 1997 recovery
related to two loans secured by a mini-storage facility in Citrus
Heights, California that were repaid in January 1998.  The 1996
expense was primarily attributable to increased provisions on the
19 acres in Sacramento, the loan secured by the auto center in
San Bernardino and the auto retail center in Corona which were
partially offset by a reduction in the provision on the Upland
Shopping Center.  The 1995 provision relates primarily to the
auto retail center in Corona, California and the Upland Foothill
Shopping Center.

Management believes that the allowance for possible losses at
December 31, 1997 is adequate to absorb the known risks in the
Partnership's loan and real estate owned portfolios, including
losses on pending sales and possible foreclosures.




Other Expenses

The Partnership has invested in corporations in which it has less
than a majority ownership and accounts for these investments
using the equity method.  The Partnership's share of losses in
these unconsolidated investees was $125,000 for 1997, $2,304,000
for 1996 and $1,803,000 for 1995.  The 1997 share of losses
consists primarily of operating losses from the sale of homes
recorded by LCR.  The 1996 share of losses consists primarily of
provisions for losses on real estate investments recorded by LCR
and BKS Development Inc. ("BKS") related to the 179 lots in
Lancaster and the 283 acres owned by BKS in Bakersfield.  The
1996 losses also included additional costs related to the sale of
homes in Lancaster.  The 1995 share of losses consists primarily
of provisions for losses on real estate investments related to
the 179 lots in Lancaster and the 283 acres in Bakersfield.  The
Partnership had written off its investment in BKS completely
during 1996 and its remaining net carrying value of its
investment in LCR had been reduced to $1,993,000 as of December
31, 1997.

Operating expenses from operations of real estate owned were
$168,000 for 1997, $259,000 for 1996 and $265,000 for 1995.
These expenses were associated with the auto retail center in
Corona and the Upland Shopping Center.  The decrease in 1997 is
principally attributable to the sale of the auto retail center in
July 1997.

Operating expenses from operations of real estate owned paid to
affiliates were $41,000 for 1997, $55,000 for 1996 and $54,000
for 1995.  The expenses consist of property management fees paid
to affiliates of the general partners.  The decrease in 1997 is
principally attributable to the sale of the auto retail center in
July 1997.

Expenses associated with non-operating real estate owned were
$162,000 in 1997, $226,000 in 1996 and $254,000 in 1995.  The
expenses are primarily related to the 19 acres in Sacramento, a
23 acre parcel previously owned in Riverside and the condominiums
in Oxnard.  These costs include property taxes of $86,000,
$108,000 and $106,000 during 1997, 1996 and 1995, respectively.
The decrease for 1997 is due primarily to a decrease in property
tax expense resulting from the receipt of tax refunds and a
decrease in services rendered regarding the 19 acres in
Sacramento.  The decrease for 1996 is due primarily to a decrease
in legal costs associated with the 23 acres in Riverside.

Depreciation and amortization expense for 1997, 1996 and 1995
consists of $12,000, $23,000 and $115,000, respectively. The 1997
and 1996 amounts represent depreciation on office furniture and
equipment while the 1995 amount also includes depreciation for
the Upland Shopping Center.  The decrease for 1996 is due to the
adoption of SFAS 121.

Interest expense was $378,000 for 1997, $476,000 for 1996 and
$430,000 for 1995.  These amounts represent interest related to
the underlying debt on the Upland Shopping Center, the
intercompany debt on the auto retail center in Corona and the 19
acres in Sacramento.  The decrease for 1997 is attributable to
the intercompany debt on the auto retail center in Corona being
placed on nonaccrual for 1997 and a decrease in the principal
balance of the debt on the Upland shopping center.  The increase
for 1996 is due to the addition of extension fee expense on the
underlying debt on the Upland Shopping Center.

General and administrative expenses, affiliates totaled $203,000
for 1997, $218,000 for 1996 and $167,000 for 1995.  These
expenses are primarily salary allocation reimbursements paid to
affiliates for the management of the Partnership's assets.  The
decrease in 1997 was the result of a reduction in staffing.  The
increase for 1996 is primarily due to a $44,000 change in billing
methodology from mortgage investment servicing fees to salary
allocations.

General and administrative expenses, nonaffiliates totaled
$103,000 for 1997, $100,000 for 1996 and $79,000 for 1995.  The
1997 amount includes approximately $31,000 of costs associated
with the extension of the maturity of the note secured the Upland
Shopping Center and the legal proceedings involving the same
property.  The increase in 1996 is due to moving expenses, and
increases in office expenses and investor reporting costs.

Mortgage investment servicing fees paid to affiliates were $4,000
in 1997, $4,000 in 1996 and $48,000 in 1995.  These fees consist
of amounts paid to Centennial Corporation for servicing the
Partnership's loan portfolio.  Beginning in 1996, the Partnership
no longer incurred mortgage investment servicing fees for
servicing the Partnership's real estate owned portfolio.













ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Index to Consolidated Financial Statements and Schedules
attached hereto.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
REPORTING AND FINANCIAL DISCLOSURE

None.

                            PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Identification of General Partners

The Partnership is managed by its general partners.  The
individual general partners' principal occupations and
affiliations during the last five years are described in the
following table.  The general partners devote to the affairs of
the Partnership such portion of their time as they consider
necessary for the effective supervision of its affairs.


Name, Age and Position
Principal Occupation and
Affiliation during Last Five Years
-----------------------------------------------------------------
John B. Joseph
Age 59
General Partner

John B. Joseph is currently Vice Chairman of the Board of
Directors and Vice President of Centennial Corporation.  He is
also currently Chairman of the Board and Chief Executive Officer
of West Coast Bancorp ("WCB"), a publicly-held bank holding
company operating in California.  He has been Chairman of the
Board of Directors of WCB since its inception in 1981 and CEO
since April 1991.  Mr. Joseph also serves, or has served, in the
following capacities during the past five years: Vice Chairman of
the Board of Directors of The Centennial Group, Inc. ("CGI"), a
publicly-held real estate development corporation from February
1987 to July 1993; Senior Executive Vice President of CGI from
July 1987 to July 1993; general partner of various public and
private limited partnerships engaged in real estate development
and lending activities.  Mr. Joseph presently holds and has held,
over the past five years, various positions in the subsidiaries
of WCB and CGI.


Name, Age and Position
Principal Occupation and
Affiliation during Last Five Years
-----------------------------------------------------------------
Ronald R. White
Age 51
General Partner

Ronald R. White is currently President and CEO of Centennial
Corporation.  He is also currently Executive Vice President and
Vice Chairman of the Board of Directors of WCB.  Mr. White has
served in these capacities since April 1987.  Mr. White also
serves, or has served, in the following capacities during the
past five years: Chairman of the Board of Directors, President
and Chief Executive Officer of CGI from February 1987 to July
1993; general partner of various public and private limited
partnerships engaged in real estate development and lending
activities.  Mr. White presently holds and has held, over the
past five years, various positions in the subsidiaries of WCB and
CGI.

Mr. Joseph has 29 years of experience in asset management in both
securities and real estate.  Mr. Joseph has worked in all areas
of real estate.  In the past, Mr. Joseph has been engaged in the
syndication and management of over $100 million worth of income
property, including industrial complexes, shopping centers,
business centers, office buildings, commercial properties and
residential units.

Mr. White's career spans the financial and management fields in
both securities and real estate.  Mr. White has 27 years of
experience in asset management.  In the past, Mr. White has been
engaged in the syndication and management of over $100 million
worth of income property including industrial complexes, shopping
centers, business centers, office buildings, commercial
properties, and residential units.

Centennial Corporation ("CC"), a privately-held corporation,
whose stock is owned by affiliates of Ronald R. White and John B.
Joseph, was voted in as new general partner in 1993.  CC was
incorporated in 1983 to engage in the real estate lending
business and to provide consulting services.

Identification of Executive Officers

The Partnership does not have officers as such.  The affairs of
the Partnership are managed by the general partners noted above.



ITEM 11.  MANAGEMENT REMUNERATION AND TRANSACTIONS

The following table summarizes the types and recipients of
compensation paid and to be paid to the general partners and
affiliates by the Partnership.

                                               Amount Earned/
Type of                                      Reimbursable for the
Compensation &                                   Year Ended
Name of Entity      Description of Payment    December 31, 1997
-----------------------------------------------------------------
Operating Stage:

Application and     An amount up to a maximum     $      ---
commitment fees     of 3 percent of the gross
- the general       proceeds of the offering
partner or          on any single mortgage
affiliates          investment, and an aggregate
                    maximum of 7 percent of the
                    gross proceeds of the offering,
                    payable to the general partners
                    or affiliates.  The application
                    and commitment fees are payable
                    solely from borrowers and
                    prospective borrowers and not
                    directly from the proceeds of
                    the offering.

General partners'   The general partners or       $  244,000 (1)
reimbursable        affiliates shall be entitled
expenses            to reimbursement for certain
 - general          expenses, subject to the
partner or          conditions of the Partnership
affiliates          Agreement.

General partners'   A 5 percent interest in       $      ---
interest in cash    cash flow available for
distributions       distribution for any year
- general           until all limited
partners or         partnership unit holders
affiliates          have received an amount
                    equal to a 12 percent
                    non-cumulative annual return
                    on their adjusted invested
                    capital, and 10 percent of
                    the balance of any cash flow
                    available for distribution
                    for such year.

Mortgage            1/4 of 1 percent of the       $    4,000 (2)
investment          maximum amount funded or to
servicing fees      be funded by the Partnership
                    on mortgage investments
                    serviced by CC and CMIF, Inc.,
                    an indirect subsidiary of CGI.

Repayment Stage:

General partners'   One percent of mortgage       $      ---
share of            reductions until all limited
mortgage            partners have received an
reductions          amount equal to their adjusted
- general           invested capital and cumulative
partners or         distributions (including cash
affiliates          flow available for distribution)
                    equal to a 12 percent annual
                    return with respect to their
                    adjusted invested capital, and
                    15 percent of the balance of
                    any mortgage reductions.

(1)  Such reimbursable expenses include salaries and related
salary expenses for services which could be performed directly
for the Partnership by independent parties such as legal,
clerical, accounting, financial reporting, governmental
reporting, transfer agent, data processing and duplication
services.  Such reimbursement of expenses will be made regardless
of whether any distributions are made to the limited partners.

(2)  Mortgage Investment Servicing Fees are payable on the
     maximum amount to be funded on a Mortgage Investment from the
     date the Partnership first signs a letter of commitment for such
     Mortgage Investment.  Fees shown in the table represent amounts
     earned by CC for servicing these mortgage investments.
(3)
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

(a)  Security Ownership of Certain Beneficial Owners

No persons are known by the Partnership to own beneficially more
than 5 percent of the limited partnership units at December 31,
1997.





(b)  Security Ownership of Management

The percent of units owned by Management outstanding is less than
1 percent.

Name and address       Nature and Number of       Percent of
of Beneficial Owner      Units Outstanding      Units Outstanding
-----------------------------------------------------------------

Ronald R. White
1540 S. Lewis St.
Anaheim, CA  92805    Limited partnership units: 1         ---

(c)  Change in Control

The Partnership knows of no contractual arrangements which may at
a subsequent date result in a change of control of the
Partnership.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

This disclosure is made in note 5 of the Notes to the
Consolidated Financial Statements which is incorporated in this
filing.


                             PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K

(a)(1) and (a)(2) - See Index to Consolidated Financial
Statements and Schedules attached hereto.

(a)(3) - Exhibits.

None.

(b)(4) - Reports on Form 8-K.

None.









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.


CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
A California Limited Partnership


By:/s/John B. Joseph
_________________________________
John B. Joseph
General Partner                                    March 31, 1998


By:/s/Ronald R. White
_________________________________
Ronald R. White
General Partner                                    March 31, 1998


By:  CENTENNIAL CORPORATION
     General Partner

/s/John B. Joseph
_________________________________
John B. Joseph
Executive Vice President                           March 31, 1998


/s/Ronald R. White
_________________________________
Ronald R. White
President                                          March 31, 1998


/s/Joel H. Miner
_________________________________
Joel H. Miner
Chief Financial Officer                            March 31, 1998















        CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                      A Limited Partnership






                          ANNUAL REPORT



















                            Form 10-K
                Consolidated Financial Statements
                 Items 8, 14(a)(1) and 14(a)(2)
                 December 31, 1997, 1996 and 1995
           (With Independent Auditors' Report Thereon)








            CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                     A Limited Partnership

                 Items 8, 14(a)(1) and 14(a)(2)
     Index to Consolidated Financial Statements and Schedules

Consolidated Financial Statements                            Page

  Independent Auditors' Report............................   F-3

  Consolidated Balance Sheets --
  December 31, 1997 and 1996..............................   F-4

  Consolidated Statements of Operations --
  Years ended December 31, 1997, 1996 and 1995............   F-7

  Consolidated Statements of Partners' Equity --
  Years ended December 31, 1997, 1996 and 1995............   F-9

  Consolidated Statements of Cash Flows --
  Years ended December 31, 1997, 1996 and 1995............   F-10

  Notes to Consolidated Financial Statements .............   F-14

Schedules

  Schedule III - Consolidated Real Estate Owned and
  Accumulated Depreciation and Amortization. .............   F-38

  Schedule IV - Mortgage Loans on Real Estate.............   F-42

All other schedules are omitted as the required information is
inapplicable, or the information is presented in the consolidated
financial statements or notes thereto.















                               F-1
Exhibit 21

                      LCR DEVELOPMENT, INC.
                    A California Corporation

            Index to Consolidated Financial Statements

Consolidated Financial Statements                            Page

  Independent Auditors' Report............................   F-53

  Consolidated Balance Sheets --
  December 31, 1997 and 1996..............................   F-54

  Consolidated Statements of Operations --
  Years ended December 31, 1997, 1996 and 1995............   F-56

  Consolidated Statements of Stockholders' Equity (Deficit)
  Years ended December 31, 1997, 1996 and 1995............   F-57

  Consolidated Statements of Cash Flows --
  Years ended December 31, 1997, 1996 and 1995............   F-58

  Notes to Consolidated Financial Statements..............   F-60

























                               F-2


                   INDEPENDENT AUDITORS' REPORT



To the General Partners
Centennial Mortgage Income Fund:

We have audited the consolidated financial statements of
Centennial Mortgage Income Fund, a limited partnership, and
subsidiaries as listed in the accompanying index.  In connection
with our audits of the consolidated financial statements, we also
have audited the financial statement schedules as listed in the
accompanying index.  These consolidated financial statements and
financial statement schedules are the responsibility of the
Partnership's management.  Our responsibility is to express an
opinion on these consolidated financial statements and financial
statement schedules based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Centennial Mortgage Income Fund and subsidiaries as
of December 31, 1997 and 1996, and the results of their
operations and their cash flows for each of the years in the
three-year period ended December 31, 1997 in conformity with
generally accepted accounting principles.  Also, in our opinion,
the related financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as
a whole, present fairly, in all material respects, the
information set forth therein.

                              KPMG Peat Marwick LLP

Orange County, California
March 20, 1998


                               F-3
        CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                     A Limited Partnership

                   Consolidated Balance Sheets

<TABLE>
<CAPTION>

                   December 31, 1997 and 1996

<S>                              <C>               <C>
   Assets                             1997              1996
-----------------------------------------------------------------
Cash and cash
  equivalents (note 5)            $  1,018,000      $  1,712,000

Real estate loans
  receivable, earning                  782,000           700,000
Real estate loans
  receivable, nonearning             1,072,000         1,066,000
Real estate loans receivable
  from unconsolidated investee,
  earning (note 5)                     752,000               ---
Real estate loans receivable
  from unconsolidated investee,
  nonearning (note 5)                1,241,000         1,531,000
-----------------------------------------------------------------
                                     3,847,000         3,297,000

Less allowance for possible
  loan losses (note 3)                 714,000           982,000
-----------------------------------------------------------------
Net real estate loans receivable     3,133,000         2,315,000
-----------------------------------------------------------------

Real estate owned, held for
  sale (notes 6 and 7)               7,450,000        10,050,000
Real estate owned, held
  for sale, insubstance
  foreclosed (note 6)                1,040,000         1,310,000
-----------------------------------------------------------------
                                     8,490,000        11,360,000







                               F-4
        CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                     A Limited Partnership

                   Consolidated Balance Sheets
                          (Continued)
<CAPTION>
                   December 31, 1997 and 1996

<S>                              <C>               <C>
   Assets                             1997              1996
-----------------------------------------------------------------
Less allowance for possible
   losses on real estate
   owned (note 4)                    2,354,000         4,101,000
-----------------------------------------------------------------
    Net real estate owned            6,136,000         7,259,000
-----------------------------------------------------------------

Accrued interest receivable              5,000             4,000
Other assets, net                       47,000           104,000
Due from unconsolidated investee        58,000               ---
-----------------------------------------------------------------
                                 $  10,397,000     $  11,394,000
=================================================================

























                               F-5
        CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                     A Limited Partnership

                   Consolidated Balance Sheets
                          (Continued)

<CAPTION>

                   December 31, 1997 and 1996

<S>                                  <C>           <C>
  Liabilities and Partners' Equity       1997          1996
-----------------------------------------------------------------
Notes payable (note 7)               $  2,421,000   $  3,355,000
Notes payable to affiliates (note 5)       73,000         74,000
Accounts payable and
  accrued liabilities                      20,000         23,000
Interest payable to affiliates on
  notes secured by real estate (note 5)    39,000        220,000
Payable to affiliates                         ---          1,000
Deferred profit on equity participation   289,000        289,000
-----------------------------------------------------------------
   Total liabilities                    2,842,000      3,962,000
-----------------------------------------------------------------

Partners' equity (deficit)
  -- 38,729 limited partnership
  units outstanding in 1997 and 1996
    General partners                     (525,000)      (525,000)
    Limited partners                    8,080,000      7,957,000
-----------------------------------------------------------------
    Total partners' equity              7,555,000      7,432,000

Contingencies (note 8)
-----------------------------------------------------------------
                                     $ 10,397,000   $ 11,394,000
=================================================================

</TABLE>









  See accompanying notes to consolidated financial statements
                               F-6
        CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                     A Limited Partnership

             Consolidated Statements of Operations
<TABLE>
<CAPTION>
         Years ended December 31, 1997, 1996 and 1995

<S>                    <C>          <C>          <C>
                          1997          1996          1995
-----------------------------------------------------------------
Revenue:
Interest on loans to
  affiliates, including
  fees (note 5)         $  37,000    $  100,000       $  41,000
Interest on loans to
  nonaffiliates,
  including fees          122,000       100,000          78,000
Interest on
  interest-bearing
  deposits (note 5)        72,000        85,000         102,000
Gain on sale of property    1,000        40,000         154,000
Income from operations
  of real estate owned    755,000       780,000         784,000
Other                       5,000           ---             ---
-----------------------------------------------------------------
    Total revenue         992,000     1,105,000       1,159,000
-----------------------------------------------------------------
Expenses:
Provision for (recovery of)
  losses (notes 3 and 4) (268,000)       40,000         836,000
Loss on sale of
  property                  6,000           ---             ---
Share of losses in
  unconsolidated
  investees (note 5)      125,000     2,304,000       1,803,000
Operating expenses
  from operations
  of real estate owned    168,000       259,000         265,000
Operating expenses from
  operations of real
  estate owned paid to
  affiliates (note 5)      41,000        55,000          54,000
Expenses associated
  with non-operating
  real estate owned       162,000       226,000         254,000



                               F-7
          CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                        A Limited Partnership

               Consolidated Statements of Operations
                         (Continued)
<CAPTION>

             Years ended December 31, 1997, 1996 and 1995

<S>                    <C>          <C>            <C>
                          1997          1996             1995
-----------------------------------------------------------------
Depreciation and
  amortization expense     12,000        23,000         115,000
Interest expense          378,000       476,000         430,000
General and
  administrative,
  affiliates (note 5)     203,000       218,000         167,000
General and
  administrative,
  nonaffiliates           103,000       100,000          79,000
Mortgage investment
  servicing fees paid
  to affiliates (note 5)    4,000         4,000          48,000
-----------------------------------------------------------------
    Total expenses        934,000     3,705,000       4,051,000
-----------------------------------------------------------------
Income (loss) before
  minority interest      $ 58,000   $(2,600,000)    $(2,892,000)

Minority
  interest (note 5)        65,000        86,000         116,000
-----------------------------------------------------------------
  Net income (loss)      $123,000   $(2,514,000)    $(2,776,000)
=================================================================
Net income (loss) per
  limited partnership
  unit-basic and diluted $   3.18   $    (64.91)    $    (71.68)
=================================================================

</TABLE>







  See accompanying notes to consolidated financial statements
                               F-8
        CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                     A Limited Partnership

          Consolidated Statements of Partners' Equity
<TABLE>
<CAPTION>

         Years ended December 31, 1997, 1996 and 1995

<S>                   <C>            <C>            <C>
                                                        Total
                         General        Limited         Partners'
                         Partners       Partners        Equity
-----------------------------------------------------------------
Balance (deficit) at
  December 31, 1994    $ (525,000)   $ 13,247,000   $ 12,722,000

Net loss                      ---      (2,776,000)    (2,776,000)
-----------------------------------------------------------------
Balance (deficit) at
  December 31, 1995      (525,000)     10,471,000      9,946,000

Net loss                      ---      (2,514,000)    (2,514,000)
-----------------------------------------------------------------
Balance (deficit) at
  December 31, 1996      (525,000)      7,957,000      7,432,000

Net income                    ---         123,000        123,000
-----------------------------------------------------------------
Balance (deficit) at
  December 31, 1997    $ (525,000)   $  8,080,000   $  7,555,000
=================================================================

</TABLE>














  See accompanying notes to consolidated financial statements
                               F-9
        CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                     A Limited Partnership

             Consolidated Statements of Cash Flows
         Years ended December 31, 1997, 1996 and 1995

<TABLE>
<CAPTION>

<S>                <C>            <C>            <C>
                          1997           1996          1995
-----------------------------------------------------------------
Cash flows from
 operating activities:
  Net income (loss)      $ 123,000   $ (2,514,000)   $ 2,776,000)
  Adjustments to
   reconcile net income
   (loss) to net cash
   used in operating
   activities:
     Amortization
      of unearned
      loan fees             (2,000)        (2,000)          ---
     Depreciation
      and amortization      12,000         23,000       115,000
     Provision for
    (recovery of) losses  (268,000)        40,000       836,000
     Interest accrued to
      principal on loans
      to affiliates        (37,000)      (195,000)      (47,000)
     Minority interest     (65,000)       (86,000)     (116,000)
     Loss (gain) on
      sale of real
      estate owned           5,000        (40,000)     (154,000)
     Share of losses
      in unconsolidated
      investees            125,000      2,304,000     1,803,000
Changes in assets
  and liabilities:
   (Increase) decrease
    in accrued interest
    receivable              (1,000)        14,000        24,000
   (Increase) decrease
    in other assets         45,000         (5,000)      (34,000)
   Decrease in accounts
    payable and accrued
    liabilities             (3,000)       (28,000)       (4,000)


                               F-10
        CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                     A Limited Partnership

             Consolidated Statements of Cash Flows
                          (Continued)
         Years ended December 31, 1997, 1996 and 1995

<CAPTION>
<S>                <C>            <C>            <C>
                               1997           1996          1995
-----------------------------------------------------------------
   Increase in
    interest and property
    taxes payable on
    real estate owned            ---         4,000         3,000
   Decrease in payable to
    affiliates                (1,000)       (3,000)       (5,000)
   Increase (decrease)
    in interest payable
    to affiliates on
    notes secured by
    real estate               (4,000)       49,000        (1,000)
-----------------------------------------------------------------
   Net cash used in
    operating
    activities               (71,000)     (439,000)     (356,000)
-----------------------------------------------------------------
Cash flows from
  investing activities:
   Principal collected
    on loans made
    to customers              24,000        50,000       288,000
   Principal collected
    on loans made
    to affiliates            331,000       113,000           ---
   Advances on loans
    made to customers        (21,000)          ---           ---
   Advances on
    loans made to
    affiliates              (970,000)   (1,044,000)     (429,000)
   Proceeds from
    sale of real
    estate owned           1,118,000       190,000     1,285,000
   Capital expenditures
    for real estate owned        ---      (273,000)      (58,000)
   Increase in due from
    unconsolidated investee  (58,000)          ---          ---


                               F-11
        CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                     A Limited Partnership

             Consolidated Statements of Cash Flows
                          (Continued)

         Years ended December 31, 1997, 1996 and 1995

<CAPTION>
<S>                     <C>            <C>            <C>
                            1997           1996          1995
-----------------------------------------------------------------
   (Increase) decrease
    in short-term
    investments              ---         103,000        (103,000)
-----------------------------------------------------------------
   Net cash provided by
    (used in) investing
    activities           424,000        (861,000)        983,000
-----------------------------------------------------------------
Cash flows from
  financing activities:
   Advances on
    notes payable
    to affiliates         19,000          70,000          62,000
   Principal payments
    on notes payable    (934,000)         (5,000)         (9,000)
   Principal payments on
    notes payable
    to affiliates       (132,000)            ---             ---
-----------------------------------------------------------------
   Net cash provided by
    (used in) financing
    activities        (1,047,000)         65,000          53,000
-----------------------------------------------------------------
Net increase
  (decrease) in
  cash and cash
  equivalents           (694,000)     (1,235,000)        680,000
Cash and cash
  equivalents at
  beginning of year    1,712,000       2,947,000       2,267,000
-----------------------------------------------------------------
Cash and cash
  equivalents
  at end of year    $  1,018,000    $  1,712,000    $  2,947,000
=================================================================


                               F-12
        CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                     A Limited Partnership

             Consolidated Statements of Cash Flows
                          (Continued)
         Years ended December 31, 1997, 1996 and 1995

<CAPTION>
<S>                <C>            <C>            <C>
                          1997           1996          1995
-----------------------------------------------------------------
Supplemental
  schedule of
  cash flow
  information:
   Cash paid during
    the year for:
      Interest      $    356,000    $    400,000    $    401,000
-----------------------------------------------------------------
Supplemental
  schedule of
  noncash investing
  and financing
  activities:
Decrease in
  deferred profit
  on equity
  participation
  and real estate
  loans resulting
  from foreclosure  $        ---    $    270,000    $        ---
Decrease in notes
  payable and real
  estate owned
  resulting from
  foreclosure                ---         650,000             ---
Decrease in interest
  and taxes payable
  on real estate
  owned and real
  estate owned
  resulting from
  foreclosure                ---          15,000             ---




    See accompanying notes to consolidate financial statements

                               F-13
        CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                     A Limited Partnership

           Notes to Consolidated Financial Statements

                 December 31, 1997, 1996, 1995

(1)  Summary of Significant Accounting Policies

Business

Centennial Mortgage Income Fund (the "Partnership") initially
invested in commercial, industrial and residential income-
producing real property through mortgage investments consisting
of participating first mortgage loans, other equity participation
loans, construction loans, and wrap-around and other junior
loans.  The Partnership's underwriting policy for granting credit
was to fund loans secured by first and second deeds of trust on
real property.  The Partnership's area of concentration is in
California.  In the normal course of business, the Partnership
participated with other lenders in extending credit to single
borrowers; the Partnership did this in an effort to decrease
credit concentrations and provide a greater diversification of
credit risk.

As of December 31, 1997, a majority of the loans secured by
operating properties have been repaid to the Partnership.
However, during the early 1990's, real estate market values for
undeveloped land and commercial real estate in California
declined severely.  As the loans secured by undeveloped land and
certain operating properties became delinquent, management of the
Partnership elected to foreclose on certain of these loans,
thereby increasing real estate owned balances.  As a result, the
Partnership has become a direct investor in this real estate and
intends to manage operating properties and develop raw land until
such time as the Partnership is able to sell this real estate
owned.  The real estate owned balance before allowance for
possible losses at December 31, 1995 was $12,349,000 decreasing
to $11,360,000 at year end 1996 and $8,490,000 at year end 1997.

Basis of Presentation

The Partnership formed several subsidiaries to own and operate
certain of its real estate assets.  The corporations formed were
BNN Development, Inc., ("BNN"), Upland Foothill Retail, Inc.,
("Upland"), CPI Development, Inc., ("CPI"), Grand Plaza Auto
Retail, Inc., ("Grand Plaza"), LCR Development, Inc., ("LCR") and
BKS Development, Inc., ("BKS").  All of these corporations are
California corporations.
                               F-14
The Partnership owns a 100 percent interest in Upland and CPI,
86.25 percent interest in BNN, 86.7 percent interest in Grand
Plaza and a 50 percent interest in LCR and BKS.  Several of the
Partnership's assets have been transferred to these new
corporations, at the Partnership's cost basis, in transactions
which included no cash down with the Partnership carrying a
substantial portion of the financing.  Upland, CPI, BNN, and
Grand Plaza have been consolidated in the accompanying
consolidated financial statements, and all significant inter-
company balances and transactions, including the aforementioned
transfers, have been eliminated in consolidation.

As the Partnership's ownership interest in LCR and BKS is more
than 20 percent but does not exceed 50 percent, the Partnership
accounts for its ownership interest using the equity method.
Under the equity method of accounting, these loans are a
component of the Partnership's investment in LCR and BKS, and
therefore the Partnership has recorded losses by LCR and BKS as a
reduction of the carrying value of these loans receivable (see
note 5).

Organization

The Partnership was organized on December 13, 1983 in accordance
with the provisions of the California Limited Partnership Act.
The Partnership commenced operations in 1984.  The general
partners are John B. Joseph, Ronald R. White and Centennial
Corporation ("CC"), a privately-held California corporation whose
stock is owned by affiliates of Messrs. Joseph and White.

Partners' Capital Accounts

Cash available for distribution, as defined in the Partnership
Agreement, is to be allocated 95 percent to the limited partners
and 5 percent to the general partners until each limited partner
has received an amount equal to a 12 percent non-cumulative
annual return on his adjusted invested capital (as defined in the
Partnership Agreement).  Thereafter, cash available for
distribution is to be allocated 90 percent to the limited
partners and 10 percent to the general partners.  All
distributions of mortgage reductions (as defined in the
Partnership Agreement) after the first sixty months following the
closing date of the Partnership, shall be distributed 99 percent
to the limited partners and 1 percent to the general partners,
until each limited partner has received a 12 percent cumulative
annual return on his adjusted invested capital, after which such
amounts are to be distributed 85 percent to the limited partners
and 15 percent to the general partners.  In order to

                               F-15
properly reflect the ecomonic effect of the allocations discussed
above, the Partnership has allocated financial statements net
earnings (losses) 95 percent to the limited partners and 5
percent to the general partners through 1992.  The Partnership
had no cash available for distribution during the three years
ended December 31, 1997.

Based upon these and various other terms of the Partnership
Agreement, it is improbable that the general partners would be
required to make any capital contributions to the Partnership in
excess of their negative capital account as of December 31, 1992.
Accordingly, since January 1, 1993, the Partnership has allocated
100 percent of the income and losses to the limited partners.

Real Estate Loans and Allowance for Possible Loan Losses

Loans are reported at the principal amount outstanding, net of
unearned income and the allowance for possible loan losses.
Interest accrual is discontinued when, in the opinion of
management, its collection is deemed doubtful.  The allowance for
possible loan losses is established through a provision for
possible losses charged to expense.  Loans are charged against
the allowance for possible loan losses when management believes
that the collectibility of principal is unlikely.

Management believes that the allowance for possible loan losses
is adequate.  While management uses available information to
recognize losses on loans, future additions to the allowance may
be necessary based on changes in economic conditions.

Impaired Loans

The Partnership considers a loan to be impaired when based upon
current information and events, it believes it is probable that
the Partnership will be unable to collect all amounts due
according to the contractual terms of the loan agreement.  In
determining impairment, the Partnership considers large non-
homogeneous loans including nonaccrual loans, troubled debt
restructuring and performing loans which exhibit, among other
characteristics, high loan-to-value ratios, low debt-coverage
ratios, or other indications that the borrowers are experiencing
increased levels of financial difficulty.  The Partnership bases
the measurement of collateral-dependent impaired loans on the
fair value of the loan's collateral.  The amount by which the
recorded investment of the loan exceeds the measure of the
impaired loan's value is recognized by recording a valuation
allowance.


                               F-16
Real Estate Owned

During 1995, the Partnership accounted for foreclosed assets
using the American Institute of Certified Public Accountants
Statement of Position 92-3 ("SOP 92-3"), "Accounting for
Foreclosed Assets".  SOP 92-3 indicated that foreclosed assets
were presumed held for sale and not for the production of income.
Accordingly, foreclosed assets held for sale were carried at the
lower of cost or fair value minus estimated costs to sell.  The
cost of such assets at the time of foreclosure was the fair value
of the asset foreclosed.  Immediately after foreclosure, a
valuation allowance was recognized for estimated costs to sell
through a charge to income.  All of the Partnership's real estate
owned, including insubstance foreclosures, was presumed held for
sale.

Effective January 1, 1996, the Partnership adopted Statement of
Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of" ("SFAS 121").  SFAS 121 supersedes SOP 92-3 and also
requires that long-lived assets to be disposed of be reported at
the lower of the carrying amount or fair value less costs to
sell.  An impairment loss shall be measured as the amount by
which the carrying amount of the asset exceeds the fair value of
the assets less costs to sell.  SFAS 121 requires that assets to
be disposed of not be depreciated while they are held for
disposal.  Estimated fair values are determined by using
appraisals, discounted cash flows and/or other valuation
techniques.  The actual market price of real estate can only be
determined by negotiation between independent parties in a sales
transaction.  The Partnership considered all real estate owned as
held for sale during 1997 and 1996 and continues to actively
market all properties using third party brokers and in house
sales staff.  Management's intent is to attempt to sell all
properties within one year, however, it is improbable that all of
the Partnership's assets will actually be sold in that period.

The Partnership considers collateral for a loan "insubstance"
foreclosed only when the borrower actually surrenders the
collateral to the creditor and the creditor receives physical
possession of the borrower's assets.

Loan Fees

Origination fees and direct costs associated with lending are
netted and amortized to interest income as an adjustment to yield
over the respective lives of the loans using the interest method.


                               F-17
Deferred Profit on Equity Participation

Deferred profit on equity participation represents the
Partnership's portion of equity from real estate
loans/investments that was earned, but has not yet been paid by
the borrower.  Generally, revenue is recognized when collection
of the deferred profit becomes assured.  No deferred profit was
recognized during 1995, 1996 and 1997.

Income Taxes

Under provisions of the Internal Revenue Code and the California
Revenue and Taxation Code, partnerships are generally not subject
to income taxes.  For tax purposes, any income or losses realized
are those of the individual partners, not the Partnership.  The
Partnership reports certain transactions differently for tax and
financial statement purposes.  The following is a recap of
current and cumulative temporary differences between income for
generally accepted accounting principles ("GAAP") and taxable
earnings:




























                               F-18


</TABLE>
<TABLE>
<S>                               <C>                <C>                 <C>
Current Temporary Differences      Partnership          Corporations
Total
                                   (Unaudited)          (Unaudited)
(Unaudited)
--------------------------------------------------------------------------------
----------
GAAP loss for the year
  ended December 31, 1997          $(2,454,000)       $  2,577,000        $
123,000
Provision for losses                  (350,000)         (1,665,000)
(2,015,000)
Charge-offs deductible
  for tax purposes                    (119,000)                ---
(119,000)
Accrued expenses deducted
  using the cash method                    ---          (1,329,000)
(1,329,000)
Carrying costs expensed
  for books and capitalized
  for tax purposes                         ---             123,000
123,000
Depreciation                          (107,000)            158,000
51,000
Minority interest share of
  losses not taxable                       ---             353,000
353,000
Share of losses in unconsolidated
 investee not deductible               122,000                 ---
122,000
Net operating loss carry forward           ---            (217,000)
(217,000)
--------------------------------------------------------------------------------
----------
Taxable (loss) for the year
  ended December 31, 1997          $(2,908,000)        $       ---
$(2,908,000)
================================================================================
==========
Taxable loss allocable to
  General Partners                 $       ---
================================================================================
==========
Taxable loss per
  limited partner unit             $    (75.09)
================================================================================
==========
</TABLE>
                                           F-19
<TABLE>
                                                December 31, 1997
-----------------------------------------------------------------
<S>                                 <C>            <C>

Cumulative Temporary Differences     Partnership    Corporations
                                     (Unaudited)     (Unaudited)
-----------------------------------------------------------------
Provision for losses                $  1,934,000    $  1,134,000
Charge-offs on foreclosures not
  deductible for tax purposes          2,113,000             ---
Deferred profit previously taxable       289,000             ---
Accrued expenses not deducted for tax
  purposes using the cash basis              ---         286,000
Carrying costs expensed for books
  and capitalized for tax purposes           ---       1,214,000
Depreciation                            (210,000)            ---
Net operating loss carryforwards             ---           6,000
Interest income accrued for
  tax, not for GAAP                      220,000             ---
Minority interest
  in losses not taxable                      ---        (362,000)
Share of losses in
  unconsolidated investee
  not deductible                       2,686,000             ---
-----------------------------------------------------------------
Total cumulative
  temporary differences             $  7,032,000    $  2,278,000
=================================================================

</TABLE>

The cumulative temporary partnership differences shown above,
which total approximately $182.00 per limited partnership unit,
should reverse when the Partnership liquidates its investments,
assuming that future tax law changes do not preclude the
Partnership from deducting these deferred items.  There can be no
assurance that these will be realized as future operations of the
Partnership could result in greater or lesser amounts of
allocable tax losses to the limited partners.  In addition, the
deductibility of taxable losses is dependent upon each limited
partners' individual tax position.  The reversal of these
differences should result in future taxable income or loss per
limited partnership unit which is less than or greater than the
Partnership will report for financial statement purposes.
Management believes that the share of losses in unconsolidated
investee is a temporary difference since the Partnership holds
approximately $4,679,000 in notes receivable from this investee,
                               F-20
a portion of which could be charged to bad debt expense should
this investee liquidate its single property holdings at current
carrying values.

In addition, as of December 31, 1997, the Partnership held
approximately $3,929,000 in loans and interest receivable from
the consolidated corporations.  These loans have been eliminated
in the Partnership's consolidated financial statements.  It is
anticipated that the temporary differences should reverse on the
corporations' returns when the corporations liquidate their
investments.  If these investments are liquidated at current
carrying values, the Partnership should be able to deduct bad
debt expense on its tax returns in the approximate amount of the
temporary differences shown above which is approximately $64.00
per limited partnership unit.

The subsidiary corporations are subject to taxation and account
for income taxes under an asset liability approach to
establishing deferred tax assets and liabilities for the
temporary differences between the financial reporting basis and
the tax basis of the corporations' assets and liabilities.  None
of the subsidiary corporations have paid any income taxes since
their respective formations and all of them have had net deferred
tax assets which have been fully offset by valuation allowances
as of December 31, 1997, 1996 and 1995.  Accordingly, no tax
expense or benefit has been recorded by these corporations during
the three years ended December 31, 1997.  No deferred tax asset
related to the corporations cumulative temporary differences
shown above has been recorded in the consolidated financial
statements due to the improbability of realization.  Future
consolidated financial statements could reflect income tax
expense in the event that these corporations generate GAAP income
in excess of the temporary differences shown above.  Some of the
subsidiary corporations are cash basis taxpayers.

Statements of Cash Flows

For purposes of reporting cash flows, cash and cash equivalents
includes cash and interest-bearing deposits with original
maturities of three months or less.

Net Loss Per Limited Partnership Unit

Net loss per limited partnership unit for financial statement
purposes was based on the weighted average number of limited
partnership units outstanding of 38,729 in 1997, 1996 and 1995.



                               F-21

Use of Estimates

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

Depreciation and Amortization

Prior to the adoption of SFAS 121 on January 1, 1996,
depreciation and amortization of real estate assets was charged
to expense on a straight-line basis over the estimated useful
lives of the assets; 31.5 years for buildings, or, in the case of
tenant improvements, over the terms of the leases from 6 months
to 14 years if shorter than the estimated useful lives.

Revenue Recognition

Revenue from rental income on real estate owned is recognized on
a straight-line basis over the life of the lease when payments
become due under operating leases.  During 1997, 1996 and 1995,
the Partnership has recognized gains or losses on the sale of
real estate owned as the gains or losses are determinable and the
earnings process is complete.

Impact of Accounting Pronouncements Issued but not Adopted by the
Partnership

In June 1997, Statement of Financial Accounting Standards No.
130, "Reporting Comprehensive Income" ("SFAS 130"), was issued
and is effective for fiscal years beginning after December 15,
1997.  This statement requires companies to classify items of
other comprehensive income by their nature in an income statement
and display the accumulated balance of other income separately
from retained earnings and additional paid-in capital in the
equity section of a statement of financial position.

In June 1997, Statement of Financial Accounting Standards No.131,
"Disclosures about Segments of an Enterprise and Related
Information" ("SFAS 131"), was issued and is effective for fiscal
years beginning after December 15, 1997.  This statement
establishes standards for segment reporting in the financial
statements.

                               F-22
The Partnership anticipates that the adoption of SFAS 130 and 131
will not result in disclosures that will be materially
different from those presently required.

(2)  Fair Value of Financial Instruments

Statement of Financial Accounting Standards No. 107 "Disclosures
About Fair Value of Financial Instruments" ("SFAS 107"), requires
that the Partnership disclose estimated fair values for its
financial instruments as well as the methods and significant
assumptions used to estimate fair values.  The following
information does not purport to represent the aggregate net fair
value of the Partnership.

The following methods and assumptions were used by the
Partnership in estimating the fair value of each class of
financial instrument.

Cash and Cash Equivalents

The carrying amount, which is cost, is assumed to be the fair
value because of the liquidity of these instruments.

Accrued Interest Receivable, Accounts Payable and Accrued
Liabilities and Interest Payable

Carrying amounts approximate fair value because of the short-term
maturity of these instruments, or they are due on demand.

Real Estate Loans Receivable, Earning and Nonearning

The net carrying value of the real estate loans receivable,
earning and nonearning, is estimated to be fair value.
Management believes these loans are impaired, and accordingly,
the loans are carried at the fair value of the underlying real
estate collateral.

Real Estate Loans Receivable from Unconsolidated Investee -
Earning and Nonearning

The net carrying value of loans from unconsolidated investee is
not estimable due to the uncertainty of the amounts and timing of
future payments to be made.






                              F-23
Notes Payable

The carrying value of notes payable to nonaffiliates approximate
fair value because the interest rates on these notes are
approximately equal to current market rates for notes secured by
similar assets.

Notes Payable to Affiliates

As discussed in note 5, the notes payable to affiliates are
reduced by the cumulative minority interest losses to reflect the
net outstanding payable to the affiliate. Due to the uncertainty
of the amounts and timing of future payments to be made, the
determination of fair value of these notes is not practical.

(3)  Allowance for Possible Loan Losses

Changes in the allowance for possible loan losses are as follows:

<TABLE>
<CAPTION>
<S>                    <C>            <C>           <C>
                           1997           1996         1995
-----------------------------------------------------------------
Balance at
  beginning of year      $  982,000    $  957,000    $ 1,157,000
Loans charged-off               ---           ---       (233,000)
Provision for
  (recovery of)
  loan losses              (268,000)       25,000         33,000
-----------------------------------------------------------------
Balance at end of year   $  714,000    $  982,000    $   957,000
=================================================================
</TABLE>

At December 31, 1997, the carrying value of loans that are
considered to be impaired totaled $3,005,000 (of which $2,313,000
were on nonaccrual status).  At December 31, 1997, the allowance
for possible loan losses totaled $714,000.  One of the loans
receivable is recorded with a corresponding deferred profit
liability of $289,000.  There were five loans to an
unconsolidated investee considered impaired for which there is no
related allowance for possible loan losses at December 31, 1997.
However, as discussed in note 5, the unconsolidated investee has
recorded an allowance for losses of $4,063,000 and the
Partnership's proportionate share of the losses in unconsolidated
investee reflects the majority of this allowance.  There was a

                               F-24
$255,000 and $1,044,000 investment in impaired loans for the
years ended December 31, 1997 and 1996, respectively.  For the
years ended December 31, 1997, 1996 and 1995, the Partnership
recognized interest income on these impaired loans of $96,000,
$169,000 and $13,000, respectively.  There was no interest income
recognized using the cash basis method of income during the years
ended December 31, 1997, 1996 and 1995.  If these loans had been
current throughout their terms, interest income would have
increased by approximately $369,000, $261,000 and $646,000 for
the years ended December 31, 1997, 1996 and 1995, respectively.

(4)  Allowance for Possible Losses on Real Estate Owned

Changes in the allowance for possible losses on real estate owned
are as follows:

<TABLE>
<CAPTION>
<S>                    <C>            <C>             <C>
                          1997            1996            1995
-----------------------------------------------------------------
Balance at
  beginning of year   $  4,101,000    $  4,523,000   $ 4,013,000
Provision for losses           ---          15,000       803,000
Real estate owned
  charged-off           (1,747,000)       (437,000)     (293,000)
-----------------------------------------------------------------
Balance at
  end of year         $  2,354,000    $  4,101,000   $ 4,523,000
=================================================================
</TABLE>

(5)  Transactions with Affiliates

Under the provisions of the Partnership Agreement, CC is entitled
to receive from the Partnership mortgage investment servicing
fees for loans serviced equal to an annual rate of 1/4 of 1
percent of the committed amounts to be funded by the Partnership.
The Partnership incurred $4,000, $4,000 and $48,000 of mortgage
investment servicing fees payable to CC in 1997, 1996 and 1995 of
which $4,000, $4,000 and $52,000 were paid in 1997, 1996 and
1995.







                               F-25
As discussed in note 1, the Partnership owns 50 percent of the
stock of two corporations which have not been consolidated in the
accompanying financial statements, LCR and BKS.  The balance of
stock in these corporations is owned by Centennial Mortgage
Income Fund II ("CMIF II"), an affiliate.  LCR has invested in a
joint venture, Silverwood Homes ("Silverwood") which is
constructing homes.  The Partnership has participated in making
several loans to these corporations and this joint venture.
Under the equity method of accounting, these loans are a
component of the Partnership's investment in LCR and BKS, and
therefore the Partnership has recorded losses by LCR and BKS as a
reduction of the carrying value of these loans receivable.  The
Partnership wrote off its investment in and loans receivable from
BKS during 1996 when its share of losses equaled its investment
and the probability of recovery of any of its investment became
unlikely.  Accordingly, the December 31, 1996 consolidated
balance sheet and all of the 1997 consolidated financial
statements include only amounts related to the LCR and Silverwood
loans and investments.





























                               F-26
A summary of these real estate loans receivable from
unconsolidated investee as of December 31, 1997 is as follows:

<TABLE>
<CAPTION>
<S>                      <C>           <C>           <C>
                                                          Net
                         Principal      Losses          Carrying
                          Balance       Offset           Value
-----------------------------------------------------------------
Unsecured note
  receivable from LCR   $ 1,250,000    $ 1,250,000   $       ---

50 percent interest
  in unsecured note
  receivable from LCR     1,055,000      1,055,000           ---

50 percent interest
  in development loan
  secured by a first
  trust deed from
  Silverwood              1,212,000        381,000       831,000

50 percent interest
  in construction loan
  secured by a first
  trust deed from
  Silverwood                239,000            ---       239,000

50 percent interest in
  construction loan secured
  by a first trust deed
  from Silverwood           171,000            ---       171,000

Construction loan secured
  by a first trust deed
  from Silverwood           752,000            ---       752,000
-----------------------------------------------------------------
Totals                  $ 4,679,000    $ 2,686,000   $ 1,993,000

</TABLE>








                               F-27
A summary of these real estate loans receivable from
unconsolidated investee as of December 31, 1996 is as follows:

<TABLE>
<CAPTION>
<S>                      <C>           <C>           <C>
                                                          Net
                         Principal      Losses          Carrying
                          Balance       Offset           Value
-----------------------------------------------------------------
Unsecured note
  receivable from LCR   $ 1,250,000    $ 1,250,000   $       ---

50 percent interest
  in unsecured note
  receivable from LCR     1,055,000      1,055,000           ---

50 percent interest
  in development loan
  secured by a first
  trust deed from
  Silverwood                977,000        256,000       721,000

50 percent interest
  in construction loan
  secured by a first
  trust deed from
  Silverwood                239,000            ---       239,000

50 percent interest
  in construction loan
  secured by a first
  trust deed from
  Silverwood                571,000            ---       571,000
-----------------------------------------------------------------
Totals                  $ 4,092,000    $ 2,561,000   $ 1,531,000

</TABLE>











                               F-28
The Partnership has not accrued its share of interest on the
unsecured notes receivable from LCR which was approximately
$715,000 and $533,000 as of December 31, 1997 and 1996,
respectively.

The Partnership has not accrued its share of interest on two of
the Silverwood loans which was approximately $188,000 as of
December 31, 1997.

LCR has entered into a joint venture agreement entitled
Silverwood with Home Devco, ("Home Devco"), an affiliate of the
general partners of the Partnership, to construct and sell single-
family homes at the project.  During 1995, LCR contributed 179
lots which were zoned for single family homes in Lancaster,
California to the joint venture as its initial capital
contribution.  As LCR has a 99.99 percent ownership interest in
the joint venture, Silverwood has been consolidated with LCR.

The consolidated balance sheets and statements of operations of
LCR have not been consolidated in the Partnership's financial
statements.  The Partnership accounts for its investment in this
corporation using the equity method.  The following represents
condensed financial information for LCR at December 31, 1997 and
1996 and for the years ended December 31, 1997, 1996 and 1995:

























                               F-29
                     LCR Development, Inc.
                  Consolidated Balance Sheets
<TABLE>
<CAPTION>

<S>                         <C>                <C>
                            December 31,          December 31,
  Assets                        1997                 1996
-----------------------------------------------------------------
Cash                        $    11,000         $       ---
Restricted cash                  20,000              10,000

Real estate owned             6,950,000           6,492,000
Less allowance for
  losses on real
  estate investments          4,063,000           3,898,000
-----------------------------------------------------------------
Net real estate owned         2,887,000           2,594,000

Organization costs                1,000               1,000
-----------------------------------------------------------------
                            $ 2,919,000         $ 2,605,000
=================================================================

  Liabilities and Stockholders' Deficit
-----------------------------------------------------------------
Notes payable
  to affiliates:
    CMIF                    $ 4,679,000         $ 4,092,000
    CMIF II                   2,250,000           2,360,000
-----------------------------------------------------------------
Total notes payable           6,929,000           6,452,000

Accounts payable
  and accrued liabilities        38,000              11,000
Interest payable
  to affiliates               1,377,000             845,000
Payable to affiliates            75,000              16,000
-----------------------------------------------------------------
Total liabilities             8,419,000           7,324,000

Stockholders'
 deficit                     (5,500,000)         (4,719,000)
-----------------------------------------------------------------
                            $ 2,919,000         $ 2,605,000
=================================================================
</TABLE>


                               F-30
                   LCR Development, Inc.
            Consolidated Statements of Operations

<TABLE>
<CAPTION>

           Years ended December 31, 1997, 1996 and 1995

<S>                    <C>            <C>           <C>
                           1997           1996          1995
-----------------------------------------------------------------
Housing sales          $   834,000    $   233,000    $       ---

Cost of housing sales      852,000        238,000            ---
Provision for losses on
  real estate owned        207,000      2,516,000      1,077,000
Selling and
  marketing expenses       131,000        184,000            ---
General and
  administrative            64,000        162,000         (3,000)
-----------------------------------------------------------------
Operating loss            (420,000)    (2,867,000)    (1,074,000)
Interest expense          (361,000)       151,000            ---
-----------------------------------------------------------------
Net (loss)             $  (781,000)   $(3,018,000)  $ (1,074,000)
=================================================================
Interest not included
  in share of losses      (532,000)      (336,000)      (197,000)
-----------------------------------------------------------------
Allocable net loss     $  (249,000)   $(2,682,000)  $   (877,000)
=================================================================
Share of losses
  recorded             $  (125,000)   $(1,966,000)   $  (438,000)
=================================================================

</TABLE>

Although the Partnership owns a 50 percent interest in LCR, it
holds more than 50 percent of LCR's debt.  Since the Partnership
has made a $1,250,000 unsecured loan to LCR, the Partnership was
allocated losses to the extent of the unsecured loan and
remaining losses were allocated 50 percent to the Partnership and
50 percent to CMIF II during 1996.  Additionally, the Partnership
and CMIF II have not recorded interest income in connection with
the $1,377,000 of accrued interest payable to affiliates by LCR
and Silverwood.  Accordingly, the Partnership has not recorded
its share of losses from LCR to the extent that it represents
this nonaccrued interest income.

                               F-31
<TABLE>
<CAPTION>
        Difference of Allocation of Share of Losses
<S>                                   <C>
                                           1997
-----------------------------------------------------------------
The Partnership's 50 percent share
  of LCR's stockholders' deficit
  at December 31, 1997                 $(2,750,000)

Cumulative interest payable by LCR
  to the Partnership not accrued as
  income by the Partnership                689,000

Loans receivable considered as part
  of the Partnership's investment        4,679,000

Disproportionate loss allocation          (625,000)
-----------------------------------------------------------------
Net loans receivable                   $ 1,993,000
=================================================================

</TABLE>

As discussed above, the Partnership holds 50 percent of the stock
of BKS with CMIF II.  BKS owned a 283 acre residential tract in
Bakersfield, California and foreclosed on this property on August
8, 1994.  Bonds and taxes accrued on the property increased from
$1,605,000 at December 31, 1995 to $2,085,000 at December 31,
1996.  During 1995, BKS reduced its carrying value of the
property and the Partnership recorded $1,364,000 as its share of
BKS's net loss for the year.  During 1996, the bond holders
commenced foreclosure proceedings on the property.  Management
elected to abandon the property in 1996 due to the fact that land
values had not increased.  Therefore, during 1996, the
Partnership recorded its $338,000 share of losses in connection
with BKS which resulted in the Partnership's investment in BKS
being reduced to a zero balance.  Bonds, property taxes and note
payable to affiliates are nonrecourse liabilities and, therefore,
the Partnership and BKS have no contingent liability in excess of
the property.  The Partnership has no future obligation nor risk
of additional losses related to this investee.







                              F-32
The Partnership reimburses the general partner for salaries and
related expenses incurred on behalf of the Partnership for
services such as legal, clerical, accounting, property management
and other administrative functions.  The general partners and
affiliates charged $244,000, $273,000 and $221,000 for such
services in 1997, 1996 and 1995, respectively.

During 1997, 1996 and 1995, the Partnership maintained interest-
bearing deposits with Sunwest Bank, an affiliate of the general
partners.  The balances at December 31, 1997, 1996 and 1995 were
$2,000, $534,000 and $280,000, respectively.  Interest earned on
such deposits for 1997, 1996 and 1995 was $13,000, $22,000 and
$5,000, respectively.

In July 1997, the auto retail center in Corona, California was
sold by Grand Plaza Auto Retail, Inc. ("Grand Plaza"), a
consolidated subsidiary corporation of the Partnership.  The
Partnership owns an 86.7 percent interest in Grand Plaza with the
balance of 13.3 percent owned by Centennial Mortgage Income Fund
III ("CMIF III") an affiliate.  Both the Partnership and CMIF III
had made loans to Grand Plaza prior to the sale that exceeded the
value of the assets held by it.  CMIF III's share of these loans
had been reduced by its share of Grand Plaza's operating losses,
with the net amount having been shown as notes and interest
payable to affiliates in the Partnership's financial statements.
Grand Plaza realized $935,000 in net cash proceeds from the sale
of the property.  Grand Plaza charged off $1,665,000 of its
$2,600,000 carrying value of the property against its allowance
for losses on real estate owned and recorded a $6,000 loss on the
sale.  The net sales proceeds were used to pay a portion of the
notes payable by Grand Plaza to the Partnership and CMIF III.
CMIF III'S share of the proceeds was $123,000.

















                              F-33
The Partnership owns an interest in BNN, the corporation which
owns the 19 acres in Sacramento, California jointly with an
affiliated entity CMIF III.  At December 31, 1997, the ownership
percentages are 86.25 for the Partnership and 13.75 for CMIF III.
The assets and liabilities of this corporation have been
consolidated in the accompanying consolidated financial
statements.  Notes payable and interest payable to affiliates at
December 31, 1997 and 1996 includes $473,000 and $452,000,
respectively, and the Partnership had recorded $361,000 and
$295,000, respectively, of minority interest in cumulative losses
from this corporate joint venture against the note payable to
affiliates balance as of the same dates.  The notes payable to
affiliates balance reflects CMIF III's share of a note payable by
the corporation to the Partnership and CMIF III.  The note bears
interest at 15 percent fixed and matures August 1, 1998.

<TABLE>

(6)  Real Estate Owned

<CAPTION>
Real estate owned consists of the following:

<S>                               <C>              <C>
                                   December 31,     December 31,
                                      1997             1996
-----------------------------------------------------------------
1. Shopping Center in Upland, CA $   4,628,000    $   4,628,000
2. 19 acres in Sacramento, CA        2,822,000        2,822,000
3. Auto retail center in Corona, CA       ---         2,600,000
4. Condominiums in Oxnard, CA        1,040,000        1,310,000
-----------------------------------------------------------------
Total real estate owned          $   8,490,000    $  11,360,000
=================================================================
</TABLE>

At December 31, 1997 and 1996, property number 4 is accounted for
as insubstance foreclosure under SFAS 118 as the Partnership does
not currently hold legal title to this property, but the borrower
has surrendered the collateral to the control of the Partnership.









                              F-34
The Partnership leases its operating properties under several non-
cancelable operating lease agreements.  Future minimum rents to
be received as of December 31, 1997, are as follows:

<TABLE>
<CAPTION>

<S>                                   <C>

Years ending December 31,
-----------------------------------------------------------------
1998                                   $   638,000
1999                                       598,000
2000                                       473,000
2001                                       473,000
2002                                       473,000
Thereafter                               2,501,000
-----------------------------------------------------------------
                                       $ 5,156,000
=================================================================

</TABLE>



























                              F-35
<TABLE>

(7) Notes Payable

<CAPTION>

Notes payable consist of the following:

<S>                              <C>             <C>
                                  December 31,    December 31,
                                     1997            1996
-----------------------------------------------------------------
Note payable secured by
  shopping center in
  Upland, CA with interest
  and principal payments due
  monthly of $24,000; interest
  rate of 9.5 percent which may
  be adjusted based on changes
  in the LIBOR rate,
  maturing June 1, 2007         $ 2,421,000      $ 2,455,000

Note payable secured by
  19 acres in Sacramento, CA
  with interest only payments
  due monthly; interest rate of
  12 percent fixed, repaid
  in December, 1997                     ---          900,000
-----------------------------------------------------------------
  Total notes payable           $ 2,421,000      $ 3,355,000
=================================================================
</TABLE>

















                              F-36
 (8)  Contingencies

Unbeknownst to the Partnership, on July 19, 1996, a default was
entered against the Partnership for failure to respond to a
complaint filed on July 17, 1995 in the San Bernardino Superior
Court, entitled Henry Yong Lim et al -vs- Cardinal Security, et
al and allegedly served on the Partnership in May 1996.  As shown
by the proofs of service, the complaint was served on the wrong
party in 1996.  The Partnership first became aware of its
involvement in this lawsuit in September 1997 when it received
copies of requests for entry of default judgement totaling
approximately $1,000,000.  The judgements involved damages and
injuries allegedly suffered by the plaintiffs as a result of an
altercation between the plaintiffs, other third parties and
security guards employed by the Partnership at its shopping
center in Upland, California.  The request for judgement names
Centennial Mortgage Income Fund Partnership as a defendant in
this action.  Since the Partnership was never served with the
complaint and had no other way of knowing about this action, the
Partnership has retained legal counsel to set aside the defaults
and any default judgements which may have been entered, due to
the lack of proper service and notice.  The Partnership has
tendered this action to its liability insurance carrier for legal
and liability coverage.  The default judgement has been set aside
and the plaintiff's have appealed.  Management intends to
vigorously defend any future actions related to this matter.
Management believes that even if the plaintiff's prevail in these
actions, the Partnership's insurance coverage and/or the security
company's insurance carrier should prevent the Partnership from
suffering a material loss from these proceedings.

There are no other material pending legal proceedings other than
ordinary routine litigation incidental to the Partnership's
business.  Based on part of advice of legal counsel, management
does not believe that the results of any of these matters will
have a material impact on the Partnership's financial position or
results of operations.












                              F-37
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership

Schedule III
<TABLE>
                            Consolidated Real Estate Owned
                                    December 31, 1997

<CAPTION>
                                            Initial                    Costs
Capitalized
                                            Cost to
Subsequent
                                          Partnership                  to
Acquisition

<S>                                 <C>                 <C>               <C>
                                                         Real Estate
Property                             Encumbrances          Owned
Improvements<F4>
--------------------------------------------------------------------------------
----------
Shopping Center in Upland           $ 2,421,000          $  4,903,000        $
(275,000)
19 acres in Sacramento                      ---             2,567,000
255,000
4 Condominiums in Oxnard                    ---               915,000
125,000
--------------------------------------------------------------------------------
----------
                                    $ 2,421,000          $  8,385,000        $
105,000
================================================================================
==========













                                           F-38
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership

Schedule III

                            Consolidated Real Estate Owned
                                       (Continued)
                                    December 31, 1997

<CAPTION>
                   Gross Amount at Which
                  Carried on Books (F3)
<S>                   <C>             <C>         <C>               <C>
                                                                  Life On Which
                     Real Estate                  Date            Depreciation
Property                Owned          Total    Acquired           Is Computed
--------------------------------------------------------------------------------
----------
Shopping Center
  in Upland          $ 4,628,000   $ 4,628,000   August 1988          (F1)
19 acres in
  Sacramento           2,822,000     2,822,000   August 1991          None
4 Condominiums
  in Oxnard            1,040,000     1,040,000   December 1992 (F2)   None
---------------------------------------------------------------
                     $ 8,490,000   $ 8,490,000    $      ---
===============================================================










                                           F-39
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership

Schedule III

                            Consolidated Real Estate Owned
                                       (Continued)
                                    December 31, 1997

<CAPTION>

<FN>
<F1> Prior to the adoption of SFAS 121, tenant improvements were depreciated
over life of leases; buildings depreciated over 31.5 years;

<F2> Insubstance foreclosure;

<F3> Aggregate cost for Federal Income Tax purposes is $9,883,000 at December
31, 1997;

<F4> Improvements are presented net of accumulated depreciation as required per
SFAS 121.

</FN>


</TABLE>










                       See accompanying independent auditors' report.
                                           F-40
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership

Schedule III
<TABLE>
                            Consolidated Real Estate Owned
                                       (Continued)
                                    December 31, 1997

<CAPTION>

The following is a summary of consolidated real estate owned for the years ended
December 31, 1997, 1996, and 1995.

<S>                                     <C>               <C>              <C>
                                             1997             1996
1995
--------------------------------------------------------------------------------
----------
Balance at beginning of year            $ 11,360,000      $ 12,339,000      $
13,705,000
Additions during period:
  Improvements                                ---              273,000
58,000
Deductions during period:
  Real estate sold                        (1,123,000)         (150,000)
(1,131,000)
  Real estate foreclosed                         ---          (665,000)
---
  Charge-offs                             (1,747,000)         (437,000)
(293,000)
--------------------------------------------------------------------------------
----------
Balance at year end                     $  8,490,000      $ 11,360,000      $
12,339,000
================================================================================
=========









                                           F-41
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership

Schedule IV

</TABLE>
<TABLE>
<CAPTION>
                              Mortgage Loans on Real Estate
                                    December 31, 1997
<S>                         <C>               <C>                      <C>
                               Interest          Final
Periodic
Description                      Rate         Maturity Date
Payment Terms
--------------------------------------------------------------------------------
----------
Note secured by:

First Trust Deed
Interest only
  on Two-Unit Pad
balloon payment
  in Corona, CA               11% fixed         April 1, 1994                of
$460,000

Second Trust Deed
  on Mini-Storage
Interest only
  Facility in
balloon payment
  Citrus Heights, CA           7% fixed        November 1, 2000              of
$608,000

Unsecured Note
  on Mini-Storage
  Facility in
  Citrus Heights, CA         12% fixed           May 1, 1997               P + I
monthly

First Trust Deed
$5,106 P + I
  on 17,789 s.f.
monthly-balloon
  Auto Care Center in
payment of
  San Bernardino, CA        Prime + 3%         August 1, 1998
$290,000




                                           F-42
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership

Schedule IV
<CAPTION>
                              Mortgage Loans on Real Estate
                                       (Continued)
                                    December 31, 1997

<S>                         <C>               <C>                    <C>
                               Interest          Final
Periodic
Description                      Rate         Maturity Date            Payment
Terms
--------------------------------------------------------------------------------
----------
Note secured by:

Second Trust Deed
Interest only
  on 32,341 s.f.
balloon
  Retail Center
payment of
  in Corona, CA               10% fixed         June 30, 1998
$374,000

55 percent
  interest in                                                              P + I
  Second Trust Deed
monthly
  on single-family
balloon
  residence in
payment of
  Sacramento, CA               5% fixed          May 1, 1998
$150,000

Unsecured Note related
  to 179 lots in                                                           P + I
due at
  Lancaster, CA             7.75% fixed         June 30, 1998
maturity






                                           F-43
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership

Schedule IV
<CAPTION>
                              Mortgage Loans on Real Estate
                                       (Continued)
                                    December 31, 1997

<S>                         <C>               <C>                    <C>
                               Interest          Final
Periodic
Description                      Rate         Maturity Date            Payment
Terms
--------------------------------------------------------------------------------
----------
Note secured by:

50 percent interest
  in unsecured
  note related to
  179 lots in                                                              P + I
due at
  Lancaster, CA             7.75% fixed        June 30, 1998
maturity

First Trust Deed
Interest only
  on 7.83 acres
balloon
  of vacant land
payment of
  in Perris, CA               12% fixed        June 1, 1993
$294,000

50 percent interest
  in First Trust
  Deed on 165 lots                                                        P + I
due at
  in Lancaster, CA            Prime + 1%      August 1, 1999
maturity






                                           F-44
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership

Schedule IV
<CAPTION>
                              Mortgage Loans on Real Estate
                                       (Continued)
                                    December 31, 1997

<S>                         <C>               <C>                    <C>
                               Interest          Final
Periodic
Description                      Rate         Maturity Date            Payment
Terms
--------------------------------------------------------------------------------
----------
Note secured by:

50 percent interest
  in First Trust
  Deed on four
  single family homes                                                    P + I
due at
  in Lancaster, CA            Prime + 1%      July 1, 1998
maturity

50 percent interest in
  First Trust Deed on one
  single family home                                                     P + I
due at
  in Lancaster, CA            Prime + 1%      July 1, 1998
maturity

First Trust Deed
  on eight single
  family homes in                                                        P + I
due at
  Lancaster, CA               Prime + 1%      July 1, 1998
maturity

First Trust Deed on
  single family home
  in Lancaster, CA            9.5% fixed      April 30, 2000             P + I
monthly


                                           F-45
                         CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership

Schedule IV
<CAPTION>
                              Mortgage Loans on Real Estate
                                       (Continued)
                                    December 31, 1997

<S>                <C>             <C>           <C>                <C>
                                                                       Principal
Amount
                                      Face           Carrying            of Loan
Subject
                                    Amount of        Amount of            to
Delinquent
Description         Prior Liens     Mortgages     Mortgages (F1)     Principal
or Interest
--------------------------------------------------------------------------------
----------
Note secured by:

First Trust Deed
  on Two-Unit Pad
  in Corona, CA         None         $  461,000      $  461,000           $
461,000

Second Trust Deed
  on Mini-Storage    1st T.D.
  Facility in           of
  Citrus Heights, CA  $2,950,000        608,000         607,000
None

Unsecured note       1st T.D. of
  on Mini-Storage    $2,950,000
  Facility in        2nd T.D. of
  Citrus Heights, CA   $608,000          72,000          55,000
None

54% interest in a First
  Trust Deed on 17,780 s.f
  Auto Care Center in                   544,000
  San Bernardino, CA    None         (54% - 294,000)    288,000
None

                                           F-46
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership

Schedule IV
<CAPTION>
                              Mortgage Loans on Real Estate
                                       (Continued)
                                    December 31, 1997
<S>                <C>             <C>           <C>                <C>
                                                                       Principal
Amount
                                      Face           Carrying            of Loan
Subject
                                    Amount of        Amount of            to
Delinquent
Description         Prior Liens     Mortgages     Mortgages (F1)     Principal
or Interest
--------------------------------------------------------------------------------
----------
Note secured by:

Second Trust Deed
  on 32,341 s.f.      1st T.D.
  Retail Center          of
  in Corona, CA      $6,100,000         376,000        376,000
376,000

55 percent
  interest in
  Second Trust Deed
  on Single-Family    1st T.D.
  Residence in          of              150,000
  Sacramento, CA      $278,000       (55% - 83,000)     85,000
85,000

Unsecured Note related
  to 179 lots in
  Lancaster, CA      $3,266,000       1,250,000      1,250,000
1,250,000





                                           F-47
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership

Schedule IV
<CAPTION>
                              Mortgage Loans on Real Estate
                                       (Continued)
                                    December 31, 1997

<S>                <C>             <C>           <C>                <C>
                                                                       Principal
Amount
                                      Face           Carrying            of Loan
Subject
                                    Amount of        Amount of            to
Delinquent
Description         Prior Liens     Mortgages     Mortgages (F1)     Principal
or Interest
--------------------------------------------------------------------------------
----------
Note secured by:

50 percent interest
  in unsecured
  note related to
  179 lots in                        2,115,000
  Lancaster, CA         None        (50% - 1,057,000)  1,055,000
1,055,000

First Trust Deed
  on 7.83 acres
  of vacant land
  in Perris, CA         None           343,000           294,000
294,000

50 percent interest
  in First Trust
  Deed on 165 lots                   3,266,000
  in Lancaster, CA      None     (50% - 1,636,000)     1,212,000
1,212,000




                                           F-48
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership

Schedule IV
<CAPTION>
                              Mortgage Loans on Real Estate
                                       (Continued)
                                    December 31, 1997

<S>                <C>             <C>           <C>                <C>
                                    Face           Carrying       Principal
Amount of Loan
                                    Amount of        Amount of      Subject to
Delinquent
Description         Prior Liens     Mortgages     Mortgages (F1)     Principal
or Interest
--------------------------------------------------------------------------------
----------
Note secured by:
50 percent interest in First
  Trust Deed on four single
  single family homes in               490,000
  Lancaster, CA           None    (50% -  245,000)     239,000
239,000

50 percent interest in
  First Trust Deed on one
  single family home                   804,000
  in Lancaster, CA        None    (50% - 402,000)      170,000
170,000

First Trust Deed on eight single
  family homes in Lancaster, CA        870,000         752,000
---

First Trust Deed on single
  family home in Lancaster, CA          90,000          90,000
---

Loss from unconsolidated investee                   (2,686,000)
(2,686,000)
Unearned interest and discounts                       (401,000)
(143,000)
--------------------------------------------------------------------------------
----------
                                   $ 7,787,000     $ 3,847,000            $
2,313,000
================================================================================
==========
                                           F-49
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership

Schedule IV
<CAPTION>
                              Mortgage Loans on Real Estate
                                       (Continued)
                                    December 31, 1997


<FN>
<F1>  Aggregate cost for Federal Income Tax purpose is $8,258,000 at December
31, 1997.
</FN>























                                           F-50
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership

Schedule IV

                              Mortgage Loans on Real Estate
                                       (Continued)
                                    December 31, 1997

<CAPTION>

The following is a summary of activity for the years ended December 1997, 1996
and 1995.

<S>                                     <C>               <C>              <C>
                                             1997             1996
1995
--------------------------------------------------------------------------------
----------
Balance at beginning of year            $  3,297,000      $  4,793,000      $
6,641,000
  Additions during period:
  New mortgage loans/disbursements           991,000         1,044,000
429,000
  Other - Interest reserve, amortization
    and transfer from accrued interest        39,000           197,000
47,000
Deductions during period:
  Collections of principal                  (355,000)         (163,000)
(288,000)
Charge-offs                                    ---            (270,000)
(233,000)
  Losses from unconsolidated investees      (125,000)       (2,304,000)
(1,803,000)
--------------------------------------------------------------------------------
----------
Balance at year end                     $  3,847,000      $  3,297,000      $
4,793,000
================================================================================
=========
</TABLE>






                       See accompanying independent auditors' report.
                                           F-51

                          Exhibit 21
                      LCR DEVELOPMENT, INC.

                    A California Corporation


            Index to Consolidated Financial Statements


Consolidated Financial Statements                            Page

Independent Auditors' Report .............................   F-53

Consolidated Balance Sheets --
 December 31, 1997 and 1996...............................   F-54

Consolidated Statements of Operations --
   Years ended December 31, 1997, 1996 and 1995...........   F-56

Consolidated Statements of Stockholders' Equity (Deficit)
   Years ended December 31, 1997, 1996 and 1995...........   F-57

Consolidated Statements of Cash Flows --
   Years ended December 31, 1997, 1996 and 1995...........   F-58

Notes to Consolidated Financial Statements ...............   F-60






















                              F-52
                   INDEPENDENT AUDITORS' REPORT

The Board of Directors
LCR Development, Inc.:

We have audited the consolidated balance sheets of LCR
Development, Inc. and subsidiary (the "Company") as of December
31, 1997 and 1996 and the related statements of operations,
stockholders' equity (deficit) and cash flows for each of the
years in the three-year period ended December 31, 1997.  These
consolidated financial statements are the responsibility of the
Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of LCR Development, Inc. and subsidiary as of December
31, 1997 and 1996, and the results of their operations and their
cash flows for each of the years in the three-year period ended
December 31, 1997 in conformity with generally accepted
accounting principles.

The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going
concern.  As discussed in Note 2 to the consolidated financial
statements, the Company has suffered recurring losses from
operations and has various notes payable scheduled to mature in
1998.  These items raise substantial doubt about the Company's
ability to continue as a going concern.  Management's plans in
regard to these matters are also described in Note 2.  The
consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

                              KPMG Peat Marwick LLP
Orange County, California
March 11, 1998

                              F-53
                      LCR Development, Inc.
                   Consolidated Balance Sheets
<TABLE>
<CAPTION>

<S>                               <C>             <C>
                                   December 31,     December 31,
  Assets                               1997             1996
-----------------------------------------------------------------
Cash                               $    11,000      $       ---
Restricted cash                         20,000           10,000

Real estate owned (note 5)           6,950,000        6,492,000
Less allowance for losses on
  real estate investments (note 4)   4,063,000        3,898,000
-----------------------------------------------------------------
Net real estate owned                2,887,000        2,594,000

Organization costs                       1,000            1,000
-----------------------------------------------------------------
                                   $ 2,919,000      $ 2,605,000
=================================================================

  Liabilities and Stockholders' Equity (Deficit)
-----------------------------------------------------------------
Notes payable to affiliates:
  CMIF                             $ 4,679,000      $ 4,092,000
  CMIF II                            2,250,000        2,360,000
-----------------------------------------------------------------
Total notes payable (note 7)         6,929,000        6,452,000

Accounts payable
  and accrued liabilities               38,000           11,000
Interest payable to affiliates       1,377,000          845,000
Payable to affiliates (note 6)          75,000           16,000
-----------------------------------------------------------------
Total liabilities                    8,419,000        7,324,000












                              F-54
                      LCR Development, Inc.
                   Consolidated Balance Sheets
                         (Continued)

</TABLE>
<TABLE>
<CAPTION>

<S>                               <C>             <C>
  Liabilities and                   December 31,     December 31,
    Stockholders' Equity (Deficit)      1997             1996
-----------------------------------------------------------------
Stockholders' equity (deficit)
  Common stock, no par value;
  300 shares authorized;
  300 shares issued and
  outstanding in 1997 and 1996           3,000            3,000
  Accumulated deficit               (5,503,000)      (4,722,000)
-----------------------------------------------------------------
    Total stockholders'
      equity (deficit)              (5,500,000)      (4,719,000)

Contingencies (note 9)
-----------------------------------------------------------------
                                   $ 2,919,000      $ 2,605,000
=================================================================
</TABLE>























  See accompanying notes to consolidated financial statements
                              F-55
                   LCR Development, Inc.
               Consolidated Statements of Operations
<TABLE>
<CAPTION>
           Years ended December 31, 1997, 1996 and 1995

<S>                      <C>          <C>          <C>
                           1997           1996         1995
-----------------------------------------------------------------
Housing sales             $   834,000  $   233,000  $       ---

Cost of housing sales         852,000      238,000          ---
Provision for
  losses on real
  estate owned (note 4)       207,000    2,516,000    1,077,000
Selling and
  marketing expenses          131,000      184,000          ---
General and
  administrative               64,000      162,000       (3,000)
-----------------------------------------------------------------
Operating loss               (420,000)  (2,867,000)  (1,074,000)
Interest expense (note 5)     361,000      151,000          ---
-----------------------------------------------------------------
Loss before income taxes  $  (781,000) $(3,018,000) $(1,074,000)
-----------------------------------------------------------------
Income taxes (note 8)             ---          ---          ---
-----------------------------------------------------------------
Net loss                  $  (781,000) $(3,018,000) $(1,074,000)
=================================================================
Net loss per common share
  -basic and diluted      $    (2,603) $   (10,060) $    (3,580)
=================================================================
Weighted average
  number of common
  shares outstanding              300          300          300
=================================================================
</TABLE>











  See accompanying notes to consolidated financial statements
                              F-56
                      LCR Development, Inc.
      Consolidated Statements of Stockholders' Equity (Deficit)

<TABLE>
<CAPTION>

         Years ended December 31, 1997, 1996 and 1995

<S>                   <C>            <C>            <C>
                                                        Total
                                                    Stockholders'
                       Common        Accumulated       Equity
                        Stock          Deficit        (Deficit)
-----------------------------------------------------------------
Balance (deficit) at
  December 31, 1994   $     3,000    $   (630,000)  $   (627,000)

Net loss                      ---      (1,074,000)    (1,074,000)
-----------------------------------------------------------------
Balance (deficit) at
  December 31, 1995         3,000      (1,704,000)    (1,701,000)

Net loss                      ---      (3,018,000)    (3,018,000)
-----------------------------------------------------------------
Balance (deficit) at
  December 31, 1996         3,000      (4,722,000)    (4,719,000)

Net loss                      ---        (781,000)      (781,000)
-----------------------------------------------------------------
Balance (deficit) at
  December 31, 1997   $     3,000    $ (5,503,000)  $ (5,500,000)
=================================================================

</TABLE>














  See accompanying notes to consolidated financial statements
                              F-57
                      LCR Development, Inc.
                Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>

           Years ended December 31, 1997, 1996 and 1995

<S>                   <C>            <C>            <C>
                           1997           1996          1995
-----------------------------------------------------------------
Cash flows from
 operating activities:
  Net loss             $  (781,000)   $(3,018,000)   $(1,074,000)
  Adjustments to
   reconcile net
   loss to cash
   used in operating
   activities:
     Provision for
      possible losses      207,000      2,516,000      1,077,000
Changes in assets
  and liabilities:
   Decrease in
    organization costs         ---          1,000            ---
   Increase in
    real estate owned     (500,000)    (1,237,000)    (1,497,000)
   Increase in
    interest payable       532,000        336,000        197.000
   Increase in accounts
    payable and accrued
    liabilities             27,000         10,000          1,000
   Increase in payable
    to affiliates           59,000         15,000          1,000
-----------------------------------------------------------------
     Net cash used in
 operating activities     (456,000)      (1,377,000)  (1,295,000)
-----------------------------------------------------------------
Cash flows from
  investing activities-
  Increase in
    restricted cash        (10,000)       (10,000)           ---
-----------------------------------------------------------------






                              F-58
                      LCR Development, Inc.
                Consolidated Statements of Cash Flows
                          (Continued)

         Years ended December 31, 1997, 1996 and 1995

<CAPTION>
<S>                <C>            <C>            <C>
                          1997           1996          1995
-----------------------------------------------------------------
Cash flows from
  financing activities-
   Advances received
    on notes payable       477,000      1,387,000      1,293,000
-----------------------------------------------------------------
Net increase (decrease)
  in cash                   11,000            ---         (2,000)
Cash at beginning
  of year                      ---            ---          2,000
-----------------------------------------------------------------
Cash at
  end of year           $   11,000     $      ---      $     ---
=================================================================


Supplemental
  schedule of
  noncash
  investing and
  financing activities:
  Decrease in real
    estate owned and
    related allowance
    for losses due to
    sale of real estate
    owned               $   42,000     $    8,000      $     ---

</TABLE>










  See accompanying notes to consolidated financial statements
                              F-59


                      LCR DEVELOPMENT, INC.
            Notes to Consolidated Financial Statements

                 December 31, 1997, 1996, 1995

(1)  Summary of Significant Accounting Policies

Organization

During 1993, LCR Development, Inc. ("LCR") was formed by
Centennial Mortgage Income Fund ("CMIF") and Centennial Mortgage
Income Fund II ("CMIF II") to own and operate one of their real
estate assets, 179 single family lots in Lancaster, California.
During 1994, Silverwood Homes, a California general partnership
("Silverwood"), was formed between LCR and Home Devco, Inc.
("Home Devco") for the purpose of constructing single family
homes at the real estate project located in Lancaster.  LCR
contributed the 179 single family lots to the partnership in
exchange for a capital contribution credit of $2,571,594 and Home
Devco contributed $100 in cash.  As LCR has contributed a 99.9
percent interest, Silverwood has been consolidated in the
accompanying consolidated financial statements.  All significant
intercompany balances and transactions including the
aforementioned contribution, have been eliminated in
consolidation.  LCR is entitled to a cumulative priority interest
in cash available for distribution from the sale of homes equal
to $19,381 per lot.  Home Devco is acting as the general
contractor in the construction of homes at the project and is
entitled to fifty percent of any cash available for distribution
from the sale of homes after LCR has received distributions equal
to its priority interest.  Home Devco is also entitled to
reimbursement of onsite supervision costs and certain general and
administrative costs.

Real Estate Owned

Long-lived assets to be disposed of are reported at the lower of
carrying amount or fair value less costs to sell.  An impairment
loss shall be measured as the amount by which the carrying amount
of the assets exceed the fair value of the assets less costs to
sell.






                              F-60

Revenue Recognition

LCR recognizes revenue from sales of real estate when
construction is completed, an adequate down payment has been
received and title to the property sold has been transferred to
the buyer.

Income Taxes

LCR is subject to taxation and accounts for income taxes under an
asset and liability approach to establishing deferred tax assets
and liabilities for the temporary differences between the
financial reporting basis and the tax basis of the corporation's
assets and liabilities.

Use of Estimates

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 amount of revenue and expenses during the reporting
period.  Actual results could differ from those estimates.

Reclassifications

Certain amounts in the 1996 and 1995 consolidated financial
statements have been reclassified to conform to the 1997
presentation.

(2)  Ability to Continue as a Going Concern

LCR and Silverwood had $8,419,000 in total liabilities
outstanding as of December 31, 1997 and had only $2,919,000 in
net assets.  Most of these liabilities are payable to CMIF and
CMIF II who have periodically agreed to extend this debt over the
past two years.  It is uncertain as to whether CMIF and CMIF II
will continue to grant such extensions.  Without such future
extensions, it is probable that LCR and Silverwood would lose
substantially all of their assets through foreclosure and would
be unable to continue operations.

As of December 31, 1997 , Silverwood's real estate owned
consisted of a single project in Lancaster, California with 157
undeveloped lots, 4 model homes, and 9 substantially completed
production homes available for sale.
                              F-61
Subsequent to December 31, 1997, Silverwood entered into an
agreement to sell its remaining undeveloped lots to an unrelated
party. The agreement provides that Silverwood will receive a cash
downpayment of $500,000 and carry back a note from the buyer
secured by a deed of trust on the property in the amount of
$1,070,000.  It is estimated that Silverwood will incur
approximately $103,000 in selling costs in connection with the
sale.  If this transaction closes, all of the net proceeds from
the sale, including the note receivable carried back from the
buyer, will be used to partially repay the $2,154,000 note
originally secured by 179 lots in Lancaster as shown in note 7.
The remaining balance of the note will then be secured by a
second trust deed on the remaining 8 homes in Phase II.

Management believes that the remaining homes owned by Silverwood
will be sold in 1998 and that 100% of the proceeds from such
sales will be used to repay secured debt.  There will be
insufficient proceeds to repay all of the secured debt and there
will be no source of funds for LCR and Silverwood to repay its
unsecured debt.  Accordingly, it is probable that LCR and
Silverwood will cease operations during 1998 and be unable to
repay all of its debt.  Management believes that it has made
adjustments in the financial statements to reflect the probable
outcome of these uncertainties.

(3)  Fair Value of Financial Instruments

Statement of Financial Accounting Standard No. 107 "Disclosures
About Fair Value of Financial Instruments"  ("SFAS 107"),
requires that LCR discloses estimated fair values for its
financial instruments as well as the methods and significant
assumptions used to estimate fair values.  The following
information does not purport to represent the aggregate net fair
value of LCR.

The following methods and assumptions were used by LCR in
estimating the fair value of each class of financial instrument.

Cash and Restricted Cash

The carrying amount, which is cost, is assumed to be the fair
value.

Notes Payable to Affiliates and Interest Payable to Affiliates

The fair value is not determinable due to their related party
nature and terms.


                              F-62
Accounts Payable and Accrued Liabilities and Payable to
Affiliates

The carrying value is considered to be equal to the fair value of
these liabilities as they are short-term in nature.

(4)  Allowance for Losses on Real Estate Owned

Changes in the allowance for losses on real estate owned are as
follows:

<TABLE>

<S>                      <C>           <C>            <C>
                            1997              1996         1995
-----------------------------------------------------------------
Balance at
  beginning of year      $3,898,000    $1,390,000    $  313,000
Real estate owned
  charged-off               (42,000)       (8,000)          ---
Provision for losses        207,000     2,516,000     1,077,000
-----------------------------------------------------------------
Balance at
  end of year            $4,063,000    $3,898,000    $1,390,000
=================================================================
</TABLE>

(5)  Real Estate Owned

Real estate owned consists of the following:

<TABLE>

<S>                                    <C>            <C>
                                              1997        1996
-----------------------------------------------------------------
Residential lots held
  for  development                       $5,340,000   $5,177,000
Model home complex                          478,000      470,000
Production homes under
  construction and held for sale          1,132,000      845,000
-----------------------------------------------------------------
Sub-total                                 6,950,000    6,492,000
Less: allowance for losses               (4,063,000)  (3,898,000)

Net real estate owned                    $2,887,000   $2,594,000
=================================================================
</TABLE>
                             F-63
Interest incurred, paid and capitalized during the three years
ended December 31,1997 was as follows:

<TABLE>

<S>                      <C>           <C>            <C>
                            1997              1996         1995
-----------------------------------------------------------------
Interest incurred        $  568,000    $  517,000    $  290,000
Interest capitalized       (207,000)     (366,000)     (290,000)
-----------------------------------------------------------------
Interest expense         $  361,000    $  151,000    $      ---
=================================================================

Interest paid            $      ---    $      ---    $       ---
</TABLE>

(6) Transactions with Affiliates

The general partners of CMIF and CMIF II beneficially own a
controlling interest in Home Devco.  Under the provisions of the
Partnership Agreement, Home Devco is entitled to receive from LCR
reimbursement of onsite supervision costs and certain general and
administrative costs equal to 3 percent of budgeted gross
proceeds or a maximum of $20,000 per month.  Home Devco is
entitled to receive a minimum fee of $7,500 per month under the
agreement, as amended.  LCR paid $60,000, $160,000 and $143,000
of these costs to Home Devco and affiliates for the years ended
December 31, 1997, 1996 and 1995, respectively.  Through December
31, 1997, fees paid have exceeded amounts payable under the
agreement by $20,000.  Management has temporarily reduced the
amount being paid to Home Devco to $2,500 per month effective
January 1, 1998.

Funds have been advanced from CMIF and CMIF II to meet operating
expenses and fund options on the prospective home sales.  Once
the sales have been completed, the advances are to be repaid from
sales proceeds.  The balances at December 31, 1997, 1996 and 1995
were $76,000, $16,000 and $1,000, respectively.










                              F-64
(7) Notes Payable to Affiliates

<TABLE>
<CAPTION>

Notes payable to affiliates consist of the following:

<S>                               <C>             <C>
                                   December 31,    December 31,
                                      1997            1996
-----------------------------------------------------------------
Unsecured note payable to
  CMIF and CMIF II related
  to 179 lots in
  Lancaster, CA with
  principal and interest
  payable at maturity
  interest rate of 7.75% fixed,
  maturing June 30, 1998          $ 2,115,000       $ 2,115,000

Unsecured note payable to CMIF
  related to 179 lots in
  Lancaster, CA with
  principal and interest
  payable at maturity;
  interest rate of 7.75% fixed
  maturing June 30, 1998            1,250,000         1,250,000

Note payable to CMIF
  and CMIF II secured by
  first trust deed on
  lots (originally 179 lots,
  165 and 166 lots at December 31,
  1997 and 1996, respectively)
  in Lancaster, CA
  with principal and interest
  due at maturity; interest
  at Prime + 1%; maturing
  August 1, 1999                    2,154,000         1,748,000

Note payable to CMIF and
  CMIF II secured by first
  trust deed on 4 lots in
  Lancaster, CA with
  principal and interest
  due at maturity; interest
  at Prime +1%;
  maturing July 1, 1998               484,000           484,000

                              F-65
Notes payable to affiliates consist of the following:
                       (continued)

<S>                               <C>             <C>
                                   December 31,    December 31,
                                      1997            1996
-----------------------------------------------------------------

Note payable to CMIF and
  CMIF II originally
  secured by first trust
  deed on 9 lots in
  Lancaster, CA with
  principal and interest
  due at maturity; interest
  at Prime + 1%; maturing
  July 1, 1998                        174,000            855,000

Note payable to CMIF
  originally secured by first
  trust deed on 9 lots in
  Lancaster , CA with principal
  and interest due at maturity;
  interest at Prime + 1%; maturing
  July 1, 1998                        752,000                ---

-----------------------------------------------------------------
  Total notes payable             $ 6,929,000        $ 6,452,000
=================================================================
</TABLE>

Future principal payments to be paid as of December 31, 1997 are
as follows:

<TABLE>
<CAPTION>


Years ending December 31,
<S>                           <C>
-----------------------------------------------------------------
1998                           $4,775,000
1999                            2,154,000
-----------------------------------------------------------------
                               $6,929,000
=================================================================
</TABLE>


                              F-66
(8) Income Taxes

LCR and Silverwood file separate Federal and State income tax
returns.  LCR and Silverwood have been consolidated for the
following schedules.

A reconciliation of income tax expense (benefit) at the Federal
statutory rate of 34% to LCR's and Silverwood's provision for
taxes is as follows:

<TABLE>
<CAPTION>

<S>                   <C>            <C>            <C>
                           1997           1996          1995
-----------------------------------------------------------------
Income tax benefit at
 the statutory rate    $  (266,000)   $(1,026,000)   $  (365,000)
State tax benefit, net
 of Federal tax benefit    (48,000)      (184,000)       (66,000)
Valuation allowance        308,000      1,204,000        430,000
Other                        6,000          6,000          1,000
-----------------------------------------------------------------
Total                          ---            ---            ---
=================================================================
</TABLE>
As of December 31, 1997, LCR and Silverwood have net operating
loss carryforwards of approximately $420,000, expiring at various
dates through 2012.




















                              F-67
The components of the consolidated net deferred tax asset at
December 31, 1997, 1996 and 1995 are as follows:

<TABLE>
<CAPTION>
<S>                   <C>            <C>            <C>
                           1997           1996          1995
-----------------------------------------------------------------
Net operating loss
 carryforwards         $   156,000    $    78,000    $       ---
Provision for losses
 on real estate          1,629,000      1,563,000        557,000
Capitalized interest        38,000         (1,000)        46,000
Interest not
 deductible until paid     291,000        185,000         79,000
Section 263A expenses       80,000         61,000            ---
-----------------------------------------------------------------
                         2,194,000      1,886,000        682,000
-----------------------------------------------------------------
Less valuation
 allowance              (2,194,000)    (1,886,000)      (682,000)
-----------------------------------------------------------------
                       $       ---    $       ---    $       ---
=================================================================
</TABLE>

The net change in the total valuation allowances for the years
ended December 31, 1997 and 1996 was an increase of $308,000 and
$1,204,000, respectively.  In assessing the realizability of
deferred tax assets, management considers whether it is more
likely than not that some portion or all of the deferred tax
assets will not be realized.  The ultimate realization of
deferred tax assets is dependent upon the generation of future
taxable income during the periods in which those temporary
differences become deductible.

Based upon the losses of LCR and Silverwood, management has
determined that part or all of the consolidated deferred tax
assets may not be realized in the future.  Accordingly,
management has provided a valuation allowance against the value
of the deferred tax asset.








                              F-68



(9) Contingencies

There are no material pending legal proceedings other than
ordinary routine litigation incidental to LCR's business.  Based
on part of advice of legal counsel, management does not believe
that the results of any of these matters will have a material
impact on LCR's financial position or results of operations.






































                              F-69