FORM 10-K/A

               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, 1996
                               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 86 pages.













































ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND  RESULTS OF OPERATIONS.

General

Net loss and loss per limited partnership unit were $(2,514,000)
and $(64.91) for the year ended December 31, 1996 down from
$(2,776,000) and $(71.68) in 1995 and up from $(1,286,000) and
$(33.21) in 1994.  The decrease in loss in 1996 is primarily the
result of a decrease in the provision for possible losses which
was partially offset by an increase in share of losses in
unconsolidated investees.  The increase in loss in 1995 is
primarily the result of an increase in share of losses in
unconsolidated investees.

Liquidity and Capital Resources

At December 31, 1996, the Partnership had $1,712,000 in cash and
interest-bearing deposits.  Additional sources of funds are
future operations of real estate owned, sale of real estate owned
and payoffs of existing loans.  The Partnership also had
$1,066,000 in nonperforming loans which had reached maturity as
of December 31, 1996, however, none of these loans is considered
to be a near term source of cash.  As of December 31, 1996, all
real estate owned is classified as held for sale and the
Partnership was currently marketing $11,360,000 in real estate
owned.  The Partnership had no unfunded loan commitments to
nonaffiliates at December 31, 1996.  The Partnership funded
advances on loans to affiliates during 1996 totaling $1,044,000
and received payoffs and paydowns on loans to nonaffiliates
totaling $163,000.  During 1996, the Partnership funded $273,000
of capital expenditures for real estate owned and received
proceeds from the sale of real estate owned of $190,000.

The Partnership's notes payable commitments for 1997 consist of
interest and principal payments due of approximately $2,563,000.
The note payable secured by the Upland Shopping Center totaling
$2,455,000 matures May 1, 1997.  The Partnership does not
presently have sufficient capital reserves to make this balloon
payment and meet operating commitments.  However, the Partnership
has a letter of intent from the lender to extend this note until
November 1, 2001.  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
$185,000 payable in 1997, 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 Development, Inc.,
("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.
However, although no new mortgage investments shall be made, the
general partners expect that the cash proceeds from future
mortgage reductions and the sale of real estate owned will be
retained by the Partnership until such time as the Partnership
has sufficient cash to fulfill the operating requirements of the
real estate owned by the Partnership.

Results of Operations

Due to the downturn in the real estate industry in California and
its impact on the Partnership's borrowers, most of the
Partnership's loans to nonaffiliates have been converted into
nonperforming loans and/or real estate owned through
foreclosures.  As a result, interest income on loans to
affiliates and nonaffiliates, including fees, decreased
substantially during 1996, 1995 and 1994.  Interest income on
loans to affiliates, including fees was $100,000 for 1996 and
$41,000 for 1995 related to the Silverwood joint venture.  There
was no interest income on loans to affiliates for 1994 due to the
fact that there were no loans to affiliates in 1994.  Interest
income on loans to nonaffiliates, including fees, was $100,000 in
1996, $78,000 in 1995 and $186,000 in 1994.  Interest income on
loans to nonaffiliates increased in 1996 primarily due to the
restructure and payment of interest on two loans.  Interest
income on loans to nonaffiliates decreased in 1995 due to payoffs
of existing loans and increases in loans on nonaccrual.

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 $2,597,000,
$3,412,000 and $2,319,000 as of December 31, 1996, 1995 and 1994,
respectively.

The real estate owned balance before allowance for possible
losses at December 31, 1996, 1995 and 1994 was $11,360,000,
$12,349,000 and $13,820,000, respectively.  During 1995 and 1994,
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
operations.  All of the Partnership's real estate owned 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 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.  The
adoption of SFAS 121 did not have a significant impact on the
Partnership's financial statements.

Had all accrued interest been recorded throughout 1996, 1995 and
1994 on the affiliated and nonaffiliated nonaccrual loans,
interest income would have increased by $261,000, $646,000 and
$543,000, respectively, for those periods.


Real estate loans receivable, earning represents four loans
totaling $700,000 which are performing but classified as
impaired.  The four loans have been restructured and are reduced
by deferred liabilities and allowances of $321,000.  Real estate
loans receivable, nonearning represents three past due or
renegotiated loans totaling $1,066,000.  These loans are reduced
by $950,000 in deferred profit and allowances.  Most of the
borrowers have little or no equity in the underlying collateral
for the loans and as a result, these loans represent an
investment in real estate.  Therefore, these loans are carried on
the balance sheet at the fair value of the underlying real estate
collateral or have been fully reserved.

Real estate loans receivable from unconsolidated investees,
earning and nonearning represent property taken back by the
Partnership and transferred to unconsolidated corporations 50
percent owned by the Partnership.

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,
1996 are summarized below:

During 1988, the Partnership recorded an equity participation
note with an original committed amount of $350,000 secured by a
second trust deed on a 160-unit apartment complex in Riverside,
California.  The loan was on nonaccrual due to past due interest.
The complex was 82 percent leased, and due to low rental rates
and slow payments, the first trust deed holder filed a notice of
default on April 12, 1995 and completed a judicial foreclosure
during 1996.  The loan had been recorded with a deferred profit
liability equal to the principal balance of the loan and the
foreclosure had no impact on the Partnership's income statement.

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, 1996 are $375,000 and
$107,000 respectively.  The Partnership has recorded a reduction
of $62,000 against the $375,000 principal balance which
represents previously nonaccrued interest and has also recorded a
$289,000 deferred profit in connection with this loan.
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 the major tenant, the
borrower has been unable to make monthly interest payments.
Management has worked out a forbearance agreement with the
borrower for net cash flow monthly payments.  The remaining
interest due has been placed on nonaccrual.  The principal
balance and nonaccrued interest at December 31, 1996 are
$460,000, and $111,000, respectively.  The Partnership had
recorded a $367,000 allowance for losses related to this loan as
of December 31, 1996.

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.  The Partnership classified the loan as an insubstance
foreclosure at December 31, 1993.  Given the depressed value of
the property and the amount of the delinquent bonds and taxes,
the Partnership has been negotiating with the borrower in an
attempt to discount the note to facilitate a sale or have the
borrower deed the property to the Partnership.  Should the
negotiations not be completed and the property be lost to a tax
sale, management has established a $293,000 allowance for losses
related to this loan as of December 31, 1996.  The principal
balance and nonaccrued interest at December 31, 1996 are $293,000
and $163,000, 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, an affiliate.
These two loans reflect the majority of the cost basis of lots
contributed to Silverwood.  LCR's only source of repayment of
these notes are proceeds from the sale of the fully developed
lots.  Management has estimated the proceeds for repayment of
these two notes to be less than the original principal balance of
the loans.  As a result, the loans have been placed on
nonaccrual.  The principal balance and participating principal
balance and nonaccrued interest balances at December 31, 1996 are
$1,250,000 and $293,000 and $1,055,000 and $240,000,
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 1994, 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 Centennial Mortgage Income Fund II ("CMIF II"), an
affiliate, and the Partnership and entered into a joint venture
agreement entitled Silverwood with Home Devco to construct and
sell single-family homes at the project.  The joint venture began
constructing a model home complex at the project in June 1995.
Construction commenced in September 1995 on Phase I at the
project.  At December 31, 1996, the Partnership holds a 50
percent participation in three notes due from Silverwood
consisting of a land development loan, a model home loan and a
home construction loan with a combined disbursed balance of
$1,787,000.  The Partnership's disbursed balance of the
$3,265,700 development loan at December 31, 1996 is $977,000.
The Partnership's disbursed balance of the $490,000 model loan at
December 31, 1996 is $239,000.  At December 31, 1996, the
Partnership's disbursed balance of the $1,034,000 Phase I
construction loan is $571,000.  The Phase I construction loan
matured July 1, 1996 and the Partnership is in the process of
extending this note.  As discussed in note 5 of Notes to
Consolidated Financial Statements, the Partnership had reduced
the carrying value of the land development loan by $256,000, the
remainder of its share of losses in unconsolidated investees.

Sales volumes of new homes in the Lancaster area have continued
to decline 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 to realize
from the buildout of homes at the project.  Additionally,
Silverwood closed escrow on only two homes during 1996, far less
than originally anticipated.  As a result of these factors, LCR
recorded a $2,516,000 and $1,077,000 provision for losses on real
estate investments during 1996 and 1995, respectively.

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, 1996 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 generated net
operating income before debt service of $431,000 during 1996 and
its carrying value before allowance for possible losses was
$4,628,000 at December 31, 1996.  The property is encumbered by a
note of $2,455,000, secured by a first trust deed on the
property.  The Partnership oversees the management and leasing of
the property which is currently 98 percent leased.  Management is
currently marketing the property for sale and hopes to sell this
property during 1997.  The Partnership had recorded a $921,000
allowance for losses related to this property as of December 31,
1996.

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 is encumbered by a
$900,000, 12 percent fixed interest rate note payable secured by
a first trust deed on the property.  The note requires monthly
interest-only payments, and the balance is due April 1, 1998.
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, 1996, 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 subject center is 43 percent leased and
the property generated net operating income of $35,000 during
1996.  The center is being marketed for sale and has been in
escrow twice.  However, both of those sales were not finalized.
The net carrying value before allowance for possible losses at
December 31, 1996 is $2,600,000 and the Partnership had recorded
a $1,665,000 allowance for losses related to this project.

23 Acres in Riverside, California

The Partnership took a grant deed in consideration of its note
secured by a third trust deed on the property during the second
quarter of 1992 and paid off the second deed of trust.  The
property was encumbered by a 13.75 percent fixed rate note
payable secured by a first trust deed of $650,000 payable to
another financial institution which matured August 1, 1992.
During 1993 and 1994, management has attempted to negotiate with
the FDIC as successor to the financial institution to payoff or
restructure the terms of the note secured by the first trust deed
and was not successful resulting in the FDIC commencing
foreclosure proceedings on the property.  The foreclosure was
completed in 1996 and management established an allowance for
losses sufficient to cover the loss which was incurred as a
result of the foreclosure of this property.

5 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
Partnership has recorded an insubstance foreclosure on these 12
condominiums.  The borrower signed over control to the second
trust deed holder in December 1992, the second trust deed holder,
an affiliate, abandoned the property and the Partnership now
controls the property.  The condominiums are located adjacent to
the beach.  The values of beach front property have been hard hit
in the local market due to the excess supply of this type of
property.  The Partnership has declined to assume any of the
original builder's liabilities which would be required should the
Partnership accept a deed in lieu of foreclosure on the property.
However, the Partnership does receive 100 percent of all sales
proceeds net of selling costs.  As of December 31, 1996, the
Partnership had sold seven condominiums and is attempting to sell
the remaining units.  The carrying value before allowance for
possible losses at December 31, 1996 is $1,310,000.  Gain on sale
of the condominiums recorded in 1996 was $23,000.  The
Partnership had recorded a $381,000 allowance for losses related
to this project.

Interest on Interest-Bearing Deposits

Interest earned on interest-bearing deposits was $85,000 in 1996,
$102,000 in 1995 and $63,000 in 1994.  The decrease in interest
on interest-bearing deposits in 1996 is principally due to a
decrease in average cash balances.  The increase in interest on
interest-bearing deposits in 1995 is principally due to an
increase 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 1996, 1995 and
1994 consists of operating revenues of $780,000, $784,000 and
$771,000, respectively, primarily from the Upland Shopping Center
and the auto retail center in Corona.

Provision for Possible Losses

The provision for possible losses was $40,000 in 1996, $836,000
in 1995 and $807,000 in 1994.  The 1996 provision relates
primarily to the 19 acres in Sacramento, the loan secured by the
auto center in San Bernardino, the auto retail center in Corona
offset by a reduction in 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.  The
1994 provision relates primarily to the auto retail center in
Corona, the loan secured by a third trust deed on a mini-storage
facility in Citrus Heights and the loan secured by a pad in
Corona.

Management believes that the allowance for possible losses at
December 31, 1996 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 $2,304,000 for 1996,
$1,803,000 for 1995 and $408,000 for 1994.  The 1996 share of
losses consists primarily of provisions for losses on real estate
investments recorded by LCR and BKS related to the 179 lots in
Lancaster and the 283 acres in Bakersfield and to 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 has now written off
its investment in BKS completely and its remaining net carrying
value of its investment in LCR had been reduced to $1,531,000 as
of December 31, 1996.

Operating expenses from operations of real estate owned were
$259,000 for 1996, $265,000 for 1995 and $274,000 for 1994.

These expenses were associated with the auto retail center in
Corona and the Upland Shopping Center.

Operating expenses from operations of real estate owned paid to
affiliates were $55,000 for 1996, $54,000 for 1995 and $56,000
for 1994.  The expenses consist of property management fees paid
to affiliates of the general partners.

Expenses associated with non-operating real estate owned were
$226,000 in 1996, $254,000 in 1995 and $263,000 in 1994.  The
expenses relate to the 19 acres in Sacramento, the 23 acres in
Riverside, the condominiums in Oxnard, the 179 lots in Lancaster
and the 283 acres in Bakersfield.  These costs include property
taxes of $108,000, $106,000 and $106,000 during 1996, 1995 and
1994, respectively.  The 179 lots in Lancaster and the 283 acres
in Bakersfield were transferred to unconsolidated investees in
1994.  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 1996, 1995 and 1994
consists of $23,000, $115,000 and $111,000, respectively, for the
Upland Shopping Center.  The decrease for 1996 is due to the
adoption of SFAS 121.

Interest expense was $476,000 for 1996, $430,000 for 1995 and
$497,000 for 1994.  The interest expense for 1996, 1995 and 1994
relates to the underlying debt on the Upland Shopping Center and
the 19 acres in Sacramento.  The increase for 1996 is due to the
addition of extension fee expense and decreased principal
reductions on the underlying debt on the Upland Shopping Center.
The decrease for 1995 is due to the increase of principal on
nonaccrual on the underlying inter-company debt secured by the 19
acres in Sacramento.

General and administrative expenses, affiliates totaled $218,000
for 1996, $167,000 for 1995 and $179,000 for 1994.  These
expenses are primarily salary allocation reimbursements paid to
affiliates for the management of the Partnership's assets.  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
$100,000 for 1996, $79,000 for 1995 and $80,000 for 1994.  The
increase for 1996 is primarily due to moving expenses, increased
office expenses and outside services.

Mortgage investment servicing fees paid to affiliates decreased
to $4,000 in 1996 from $48,000 in 1995 and $52,000 in 1994.
These fees consist of amounts paid to Centennial Corporation and
CMIF, Inc., an affiliate of the general partners, for servicing
the Partnership's loan portfolio.  During 1996, the Partnership
no longer incurs mortgage investment servicing fees for servicing
the Partnership's real estate owned portfolio.  The decrease for
1995 is primarily due to the decrease in size of the
Partnership's loan portfolio.














































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:  CENTENNIAL CORPORATION
     General Partner


/s/Joel H. Miner
_________________________________
Joel H. Miner
Chief Financial Officer                            August 4, 1997





































        CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                      A Limited Partnership






                          ANNUAL REPORT



















                            Form 10-K/A
                Consolidated Financial Statements
                 Items 8, 14(a)(1) and 14(a)(2)
                 December 31, 1996, 1995 and 1994
           (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, 1996 and 1995..............................   F-4

  Consolidated Statements of Operations --
  Years ended December 31, 1996, 1995 and 1994............   F-7

  Consolidated Statements of Partners' Equity --
  Years ended December 31, 1996, 1995 and 1994............   F-9

  Consolidated Statements of Cash Flows --
  Years ended December 31, 1996, 1995 and 1994............   F-10

  Notes to Consolidated Financial Statements .............   F-16

Schedules

  Schedule III - Consolidated Real Estate Owned and
  Accumulated Depreciation and Amortization. .............   F-41

  Schedule IV - Mortgage Loans on Real Estate.............   F-46

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

Exhibit 21

                      LCR DEVELOPMENT, INC.
                    A California Corporation

            Index to Consoldiated Financial Statements

Consolidated Financial Statements                            Page

  Independent Auditors' Report............................   F-57

  Consolidated Balance Sheets --
  December 31, 1996 and 1995..............................   F-58

                               F-1
  Consolidated Statements of Operations --
  Years ended December 31, 1996, 1995 and 1994............   F-60

  Consolidated Statements of Stockholders' Equity (Deficit)
  Years ended December 31, 1996, 1995 and 1994............   F-61

  Consolidated Statements of Cash Flows --
  Years ended December 31, 1996, 1995 and 1994............   F-62

  Notes to Consolidated Financial Statements..............   F-65







































                               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, 1996 and 1995, and the results of their
operations and their cash flows for each of the years in the
three-year period ended December 31, 1996 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 21, 1997


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

                   Consolidated Balance Sheets

<TABLE>
<CAPTION>

                   December 31, 1996 and 1995

<S>                              <C>               <C>
   Assets                             1996              1995
-----------------------------------------------------------------
Cash and cash
  equivalents (note 5)            $  1,712,000      $  2,947,000
Short-term investments                     ---           103,000

Real estate loans
  receivable, earning                  700,000           714,000
Real estate loans
  receivable, nonearning             1,066,000         1,368,000
Real estate loans receivable
  from unconsolidated investees,
  earning (note 5)                         ---           667,000
Real estate loans receivable
  from unconsolidated investees,
  nonearning (note 5)                1,531,000         2,044,000
-----------------------------------------------------------------
                                     3,297,000         4,793,000

Less allowance for possible
  loan losses (note 3)                 982,000           957,000
-----------------------------------------------------------------
Net real estate loans receivable     2,315,000         3,836,000

Real estate owned, held for
  sale, less accumulated
  depreciation of $517,000
  in 1995 (notes 6 and 7)           10,050,000        10,799,000
Real estate owned, held
  for sale, insubstance
  foreclosed (note 6)                1,310,000         1,550,000
-----------------------------------------------------------------
                                    11,360,000        12,349,000





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

                   Consolidated Balance Sheets
                          (Continued)
<CAPTION>
                   December 31, 1996 and 1995

<S>                              <C>               <C>
   Assets                             1996              1995
-----------------------------------------------------------------
  Less allowance for possible
   losses on real estate
   owned (note 4)                    4,101,000         4,523,000
-----------------------------------------------------------------
    Net real estate owned            7,259,000         7,826,000

Accrued interest receivable              4,000            18,000
Other assets                           104,000           112,000
-----------------------------------------------------------------
                                 $  11,394,000     $  14,842,000
=================================================================



























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

                   Consolidated Balance Sheets
                          (Continued)

<CAPTION>

                   December 31, 1996 and 1995

<S>                                  <C>           <C>
  Liabilities and Partners' Equity       1996          1995
-----------------------------------------------------------------
Notes payable (note 7)               $  3,355,000   $  4,010,000
Notes payable to affiliates (note 5)       74,000         90,000
Accounts payable and
  accrued liabilities                      23,000         51,000
Interest and property taxes
  payable on real estate owned                ---         11,000
Interest payable to affiliates on
  notes secured by real estate            220,000        171,000
Payable to affiliates                       1,000          4,000
Deferred profit on equity participation   289,000        559,000
-----------------------------------------------------------------
   Total liabilities                    3,962,000      4,896,000

Partners' equity (deficit)
  -- 38,729 limited partnership
  units outstanding in 1996 and 1995
    General partners                     (525,000)      (525,000)
    Limited partners                    7,957,000     10,471,000
-----------------------------------------------------------------
    Total partners' equity              7,432,000      9,946,000

Contingencies (note 8)
-----------------------------------------------------------------
                                     $ 11,394,000   $ 14,842,000
=================================================================

</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, 1996, 1995 and 1994

<S>                    <C>          <C>          <C>
                          1996          1995          1994
-----------------------------------------------------------------
Revenue:
Interest on loans
  to affiliates,
  including fees
  (note 5)            $   100,000    $   41,000     $      ---
Interest on loans to
  nonaffiliates,
  including fees          100,000        78,000         186,000
Interest on
  interest-bearing
  deposits (note 5)        85,000       102,000          63,000
Gain on sale of property   40,000       154,000          76,000
Income from operations
  of real estate owned    780,000       784,000         771,000
-----------------------------------------------------------------
    Total revenue       1,105,000     1,159,000       1,096,000
-----------------------------------------------------------------
Expenses:
Provision for
  possible losses
  (notes 3 and 4)          40,000       836,000         807,000
Share of losses
  in unconsolidated
  investees (note 5)    2,304,000     1,803,000         408,000
Operating expenses
  from operations
  of real estate owned    259,000       265,000         274,000
Operating expenses
  from operations of
  real estate owned
  paid to affiliates
  (note 5)                 55,000        54,000          56,000
Expenses associated
  with non-operating
  real estate owned       226,000       254,000         263,000



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

               Consolidated Statements of Operations
                         (Continued)
<CAPTION>

             Years ended December 31, 1996, 1995 and 1994

<S>                    <C>          <C>            <C>
                          1996          1995             1994
-----------------------------------------------------------------
Depreciation and
  amortization expense     23,000       115,000         111,000
Interest expense          476,000       430,000         497,000
General and
  administrative,
  affiliates (note 5)     218,000       167,000         179,000
General and
  administrative,
  nonaffiliates           100,000        79,000          80,000
Mortgage investment
  servicing fees paid
  to affiliates (note 5)    4,000        48,000          52,000
-----------------------------------------------------------------
    Total expenses      3,705,000     4,051,000       2,727,000
-----------------------------------------------------------------
Net loss before
  minority interest   $(2,600,000)  $(2,892,000)    $(1,631,000)

Minority
  interest (note 5)        86,000       116,000         345,000
-----------------------------------------------------------------
  Net loss            $(2,514,000)  $(2,776,000)    $(1,286,000)
=================================================================
Net loss per limited
  partnership unit    $    (64.91)  $    (71.68)    $    (33.21)
=================================================================

</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, 1996, 1995 and 1994

<S>                   <C>            <C>            <C>
                                                        Total
                         General        Limited        Partners'
                         Partners       Partners         Equity
-----------------------------------------------------------------
Balance (deficit) at
  December 31, 1993   $  (525,000)   $ 14,533,000   $ 14,008,000

Net loss                      ---      (1,286,000)    (1,286,000)
-----------------------------------------------------------------
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
=================================================================

</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, 1996, 1995 and 1994

<TABLE>
<CAPTION>

<S>                <C>            <C>            <C>
                          1996           1995          1994
-----------------------------------------------------------------
Cash flows from
 operating
 activities:
  Net loss         $  (2,514,000)  $  (2,776,000)  $  (1,286,000)
  Adjustments to
   reconcile net
   loss to net cash
   used in operating
   activities:
     Amortization
      of unearned
      loan fees           (2,000)            ---          (1,000)
     Depreciation
      and amortization    23,000         115,000         111,000
     Provision for
      possible losses     40,000         836,000         807,000
     Interest accrued to
      principal on loans
      to affiliates     (195,000)        (47,000)            ---
     Minority interest   (86,000)       (116,000)       (345,000)
     Gain on sale
      of real
      estate owned       (40,000)       (154,000)        (76,000)
     Equity in losses
      of unconsolidated
      investees        2,304,000       1,803,000         408,000
Changes in assets
  and liabilities:
   (Increase) decrease
    in accrued interest
    receivable            14,000          24,000         (15,000)
   (Increase) decrease
    in other assets       (5,000)        (34,000)         37,000
   Decrease in accounts
    payable and accrued
    liabilities          (28,000)         (4,000)        (34,000)

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

             Consolidated Statements of Cash Flows
                          (Continued)
         Years ended December 31, 1996, 1995 and 1994

<CAPTION>
<S>                <C>            <C>            <C>
                          1996           1995          1994
-----------------------------------------------------------------
   Increase in interest
    and property taxes
    payable on real
    estate owned           4,000           3,000          19,000
   Increase (decrease) in
    payable to affiliates (3,000)         (5,000)          4,000
   Increase (decrease)
    in interest payable
    to affiliates on
    notes secured by
    real estate           49,000          (1,000)            ---
   Deferred profit
    recognized               ---             ---         (75,000)
-----------------------------------------------------------------
     Net cash used in
      operating
      activities        (439,000)       (356,000)       (446,000)
-----------------------------------------------------------------
Cash flows from
  investing activities:
   Principal collected
    on loans             163,000         288,000         515,000
   Advances on loans
    made to customers        ---             ---        (161,000)
   Advances on
    loans made to
    affiliates        (1,044,000)       (429,000)     (1,442,000)
   Proceeds from
    sale of real
    estate owned         190,000       1,285,000         681,000
   Capital
    expenditures for
    real estate owned   (273,000)        (58,000)       (187,000)





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

             Consolidated Statements of Cash Flows
                          (Continued)

         Years ended December 31, 1996, 1995 and 1994

<CAPTION>
<S>                     <C>            <C>            <C>
                            1996           1995          1994
-----------------------------------------------------------------
(Increase) decrease
    in short-term
    investments          103,000        (103,000)            ---
-----------------------------------------------------------------
    Net cash provided
     by (used in)
     investing
     activities         (861,000)        983,000        (594,000)
-----------------------------------------------------------------
Cash flows from
  financing activities:
   Proceeds from
    notes payable
    to affiliates         70,000          62,000          36,000
   Repayment of
    notes payable         (5,000)         (9,000)         (8,000)
-----------------------------------------------------------------
   Net cash
    provided by
    financing
    activities            65,000          53,000          28,000
-----------------------------------------------------------------
Net increase
  (decrease) in
  cash and cash
  equivalents         (1,235,000)        680,000      (1,012,000)
Cash and cash
  equivalents at
  beginning of year    2,947,000       2,267,000       3,279,000
-----------------------------------------------------------------
Cash and cash
  equivalents
  at end of year   $   1,712,000   $   2,947,000   $   2,267,000
=================================================================



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

             Consolidated Statements of Cash Flows
                          (Continued)
         Years ended December 31, 1996, 1995 and 1994

<CAPTION>
<S>                <C>            <C>            <C>
                          1996           1995          1994
-----------------------------------------------------------------
Supplemental
  schedule of
  cash flow
  information:
   Cash paid during
    the year for:
      Interest      $    400,000    $    401,000    $    393,000
-----------------------------------------------------------------
Supplemental
  schedule of
  noncash investing
  and financing
  activities:
Increase in real
  estate owned
  through foreclosure
  of real estate
  loans receivable  $        ---    $        ---    $    540,000
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             ---             ---








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

             Consolidated Statements of Cash Flows
                          (Continued)

         Years ended December 31, 1996, 1995 and 1994

<CAPTION>
<S>                <C>            <C>            <C>
                          1996           1995          1994
-----------------------------------------------------------------
Decrease in interest
  and taxes payable
  on real estate
  owned and real
  estate owned
  resulting from
  foreclosure             15,000             ---             ---
Decrease in real
  estate owned and
  related allowance
  for losses resulting
  from partial write-
  down or charge-off
  of property            437,000         293,000       1,029,000
Decrease in real
  estate owned through
  transfer of
  ownership (note 5)         ---             ---       6,443,000
Decrease in
  allowance for
  losses resulting
  from partial
  charge-off of
  loans receivable
  and real estate
  owned upon
  transfer of
  ownership (note 5)         ---             ---       2,009,000









                               F-14
        CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                     A Limited Partnership

             Consolidated Statements of Cash Flows
                          (Continued)
         Years ended December 31, 1996, 1995 and 1994

<CAPTION>
<S>                <C>            <C>            <C>
                          1996           1995          1994
-----------------------------------------------------------------
Decrease in notes
  payable through
  transfer of
  ownership (note 5)         ---             ---       1,104,000
Decrease in
  interest and
  property taxes
  payable on real
  estate owned
  through transfer
  of ownership (note 5)       ---            ---         326,000
Increase in real
  estate loans from
  affiliates through
  transfer of
  ownership (note 5)          ---            ---       3,004,000
Decrease in
  real estate
  owned and notes
  payable to
  affiliates due
  to retroactive
  reduction in
  note balance                ---            ---         120,000
Decrease in
  accrued interest
  receivable through
  renegotiation of loan       ---            ---          20,000
Decrease in real
  estate loans and
  related allowance for
  losses resulting from
  partial write-down
  or charge-off               ---        233,000          15,000

</TABLE>

  See accompanying notes to consolidated financial statements
                               F-15
        CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                     A Limited Partnership

           Notes to Consolidated Financial Statements

                 December 31, 1996, 1995, 1994

(1)  Summary of Significant Accounting Policies

Business

Centennial Mortgage Income Fund (the "Partnership") has
historically 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, 1996, a majority of the loans secured by
operating properties have been repaid to the Partnership.
However, during recent years, real estate market values for
undeveloped land in California have 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, 1994 was $13,820,000 decreasing
to $12,349,000 at year end 1995 and $11,360,000 at year end 1996.

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").

                               F-16
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 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 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.

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 their 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) 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.  These amounts may be adjusted
subject to the provisions of the Partnership Agreement.  In order
to properly reflect the economic effect of the allocations


                               F-17
discussed above, the Partnership has allocated financial
statement net earnings (losses) 95 percent to the limited
partners and 5 percent to the general partners through 1992.
Based upon the various 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 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

Effective January 1, 1995, the Partnership adopted Statement of
Financial Accounting Standards No. 114, "Accounting by Creditors
for Impairment of a Loan" ("SFAS 114"), as amended by Statement
of Financial Accounting Standards No. 118, "Accounting by
Creditors for Impairment of a Loan - Income Recognition and
Disclosures" ("SFAS 118").  Under SFAS 114, a loan is impaired
when it is "probable" that a creditor will be unable to collect
all amounts due (i.e. both principal and interest) according to
the original contractual terms of the loan agreement.  The
measurement of impairment may be based on (i) the present value
of the expected future cash flows of the impaired loan discounted
at the loan's original effective interest rate, (ii) the
observable market price of the impaired loan, or (iii) the fair
value of the collateral of a collateral-dependent loan.  SFAS 114
does not apply to large groups of smaller balance homogeneous
loans that are collectively evaluated for impairment.  The
adoption of SFAS 114, as amended by SFAS 118, had no material
impact on the Partnership's consolidated financial statements.
The Partnership reclassified a loan totaling $291,000 which was


                               F-18
formerly classified as insubstance foreclosure net of related
notes payable, accrued interest and property taxes at December
31, 1994, to impaired loans receivable at December 31, 1995.  The
Partnership's previously existing policy of measuring loan
impairment was consistent with methods prescribed in these
standards.

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.

Real Estate Owned

During 1995 and 1994, 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


                               F-19
the assets less costs to sell.  SFAS 121 requires that assets to
be disposed of not be depreciated while they are held for
disposal.  The Partnership considered all real estate owned as
held for sale during 1996 and is actively marketing all
properties using third party brokers and in house sales staff.

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.

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.  During 1994, $75,000 was
recognized as revenue to the extent cash was received.  No
deferred profit was recognized during 1995 and 1996.

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-20
<TABLE>
<S>                               <C>                <C>                 <C>
Current Temporary Differences      Partnership          Corporations
Total
--------------------------------------------------------------------------------
----------
GAAP loss for the year
  ended December 31, 1996          $(1,848,000)       $   (666,000)
$(2,514,000)
Provision for losses                  (662,000)            265,000
(397,000)
Charge-offs deductible
  for tax purposes                  (1,300,000)                ---
(1,300,000)
Accrued expenses deducted
  using the cash method                    ---             262,000
262,000
Deferred profit previously taxable    (270,000)                ---
(270,000)
Carrying costs expensed
  for books and capitalized
  for tax purposes                         ---             254,000
254,000
Depreciation                          (104,000)            (37,000)
(141,000)
Minority interest share of
  losses not taxable                       ---             (86,000)
(86,000)
Share of losses in unconsolidated
 investees not deductible              352,000                 ---
352,000
Interest income accrued
  for tax, not for GAAP               (121,000)                ---
(121,000)
--------------------------------------------------------------------------------
----------
Taxable loss for the year
  ended December 31, 1996          $(3,953,000)        $    (8,000)
$(3,961,000)
================================================================================
==========
Taxable loss allocable to
  General Partners                 $       ---
================================================================================
==========
Taxable loss per
  limited partner unit             $   (102.07)
================================================================================
==========
</TABLE>


                                           F-21
<TABLE>
                                                December 31, 1996
-----------------------------------------------------------------
<S>                                 <C>            <C>

Cumulative Temporary Differences     Partnership    Corporations
-----------------------------------------------------------------
Provision for losses                $  2,284,000    $  2,799,000
Charge-offs on foreclosures not
  deductible for tax purposes          2,235,000             ---
Deferred profit previously taxable       289,000             ---
Accrued expenses not deducted for tax
  purposes using the cash basis              ---       1,616,000
Carrying costs expensed for books
  and capitalized for tax purposes           ---       1,090,000
Depreciation                            (104,000)       (159,000)
Net operating loss carryforwards             ---         223,000
Interest income accrued for
  tax, not for GAAP                      220,000             ---
Minority interest
  in losses not taxable                      ---        (715,000)
Share of losses in
  unconsolidated investees
  not deductible                       2,563,000             ---
-----------------------------------------------------------------
Total cumulative
  temporary differences             $  7,487,000    $  4,854,000
=================================================================

</TABLE>

The cumulative temporary partnership differences shown above,
which total approximately $193.00 per limited partnership unit,
should reverse when the Partnership liquidates its investments.
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
investees is a temporary difference since the Partnership holds
approximately $4,092,000 in notes receivable from these
investees, a portion of which could be charged to bad debt
expense should these investees liquidate their single property
holdings at current carrying values.

                               F-22
In addition, as of December 31, 1996, the Partnership held
approximately $6,467,000 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 $125.00
per limited partnership unit.

The subsidiary corporations are subject to taxation and account
for income taxes under Statement of Financial Accounting
Standards No. 109 "Accounting for Income Taxes" ("SFAS 109").
SFAS 109 requires 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
corporations' assets and liabilities.  No benefit for net
operating losses or cumulative differences related to the
corporations 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 profits in
excess of operating loss carryforwards available.  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.

Short-term Investments

Short-term investments include certificates of deposits with
original maturities greater than 90 days but less than one year.

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 1996, 1995 and 1994.

Use of Estimates

The preparation of financial statements in conformity with
generally accepted accounting principles requires management to

                               F-23
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 1996, 1995 and 1994,
the Partnership has recognized gains on the sale of real estate
owned as the gains are determinable and the earnings process is
complete.

(2)  Fair Value of Financial Instruments

Statement of Financial Accounting Standard 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.

Short-term Investments

The carrying amount is estimated to be fair value because the
funds were invested at current market rates within one month of
the balance sheet date.

                               F-24
Accrued Interest Receivable, Accounts Payable and Accrued
Liabilities and Interest and Property Taxes 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 in accordance
with SFAS 114 and SFAS 118, as discussed in note 1, the loans are
carried at the fair value of the underlying real estate
collateral.

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. Therefore, the carrying
value of these instruments is estimated to be fair value.

(3)  Allowance for Possible Loan Losses

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

<TABLE>
<CAPTION>
<S>                    <C>            <C>           <C>
                           1996           1995         1994
-----------------------------------------------------------------
Balance at
  beginning of year      $  957,000    $1,157,000    $   999,000
Transfer to allowance
  for possible losses
  on real estate owned          ---           ---       (116,000)
Loans charged-off               ---      (233,000)       (15,000)
Provision for
  possible loan losses       25,000        33,000        289,000
-----------------------------------------------------------------
Balance at end of year   $  982,000    $  957,000    $ 1,157,000
=================================================================
</TABLE>
                               F-25
At December 31, 1996, the carrying value of loans that are
considered to be impaired under SFAS 114 totaled $3,297,000 (of
which $2,597,000 were on nonaccrual status).  At December 31
1996, the allowance for possible loan losses determined in
accordance with the provisions of SFAS 114, related to loans
considered to be impaired under SFAS 114 totaled $982,000.  One
of the loans receivable is recorded with a corresponding deferred
profit liability of $289,000.  There were five loans to
unconsolidated investees considered impaired under SFAS 114 for
which there is no related allowance for possible loan losses at
December 31, 1996.  However, as discussed in note 5, the
unconsolidated investees have recorded an allowance for losses of
$3,898,000 and the Partnership's proportionate share of the
losses in unconsolidated investees reflects this allowance.
There was a $1,044,000 and $1,000 investment in impaired loans
for the years ended December 31, 1996 and 1995, respectively.
For the years ended December 31, 1996 and 1995, the Partnership
recognized interest income on these impaired loans of $169,000
and $13,000, respectively.  There was no interest income
recognized on impaired loans for the year ended December 31,
1994.  There was no interest income recognized using the cash
basis method of income during the years ended December 31, 1996,
1995 and 1994.  If these loans had been current throughout their
terms, interest income would have increased by approximately
$261,000, $646,000 and $543,000 for the years ended December 31,
1996, 1995 and 1994, 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>
                         1996            1995            1994
-----------------------------------------------------------------
Balance at
  beginning of year   $  4,523,000    $  4,013,000   $ 6,417,000
Transfer from allowance
  for possible loan losses     ---             ---       116,000
Provision for losses        15,000         803,000       518,000
Real estate owned
  charged-off             (437,000)       (293,000)   (3,038,000)
-----------------------------------------------------------------
Balance at
  end of year         $  4,101,000    $  4,523,000   $ 4,013,000
=================================================================
</TABLE>
                               F-26
The 1996 provision for losses contains a $15,000 provision for
the auto retail center in Corona, California, a $250,000
provision for the 19 acres in Sacramento offset by a $250,000
recovery for the Upland Shopping Center.

(5)  Transactions with Affiliates

Under the provisions of the Partnership Agreement, CC and CMIF,
Inc., an affiliate of the general partners, are 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 $9,000 of mortgage investment servicing fees
payable to CMIF, Inc. in 1994, and $11,000 of such fees were paid
in 1994.  The Partnership incurred $4,000, $48,000 and $43,000 of
mortgage investment servicing fees payable to CC in 1996, 1995
and 1994 of which $10,000, $53,000 and $34,000 were paid in 1996,
1995 and 1994.

Under the provisions of the Partnership Agreement, the general
partners are to receive compensation for their services in
supervising the affairs of the Partnership.  This partnership
management compensation shall be equal to 10 percent of the cash
available for distribution, as defined in the Partnership
Agreement.  The general partners will not receive this
compensation until the limited partners have received a 12
percent per annum cumulative return on their adjusted invested
capital; however, the general partners are entitled to receive a
minimum 5 percent interest in cash available for distribution in
any year until the provision has been met.  Adjusted invested
capital is defined as the original capital invested less
distributions from mortgage reductions.  Under this provision,
payments to the general partners have been limited to 5 percent
of cash available for distribution as the limited partners have
not received their 12 percent per annum cumulative return.  Under
this provision of the Partnership Agreement, no distributions
were paid to the general partners in 1996, 1995 or 1994.

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

                               F-27
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.

A summary of these real estate loans receivable from
unconsolidated investees 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
A summary of these real estate loans receivable from
unconsolidated investees as of December 31, 1995 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        595,000       460,000

50 percent interest
  in note receivable
  secured by a first
  trust deed from BKS     1,947,000      1,613,000       334,000

50 percent interest
  in development loan
  secured by a first
  trust deed from
  Silverwood                352,000            ---       352,000

50 percent interest
  in construction loan
  secured by a first
  trust deed from
  Silverwood                161,000            ---       161,000

50 percent interest
  in construction loan
  secured by a first
  trust deed from
  Silverwood                154,000            ---       154,000
-----------------------------------------------------------------
Totals                  $ 4,919,000    $ 2,208,000   $ 2,711,000

</TABLE>






                               F-29
In February 1994, the Partnership assigned its 50 percent
interest in a construction loan secured by a second trust deed,
which was participated with CMIF II, to LCR in order to
facilitate LCR's foreclosure of 179 lots in Lancaster,
California.  In anticipation of this foreclosure, LCR purchased
the underlying note secured by a first trust deed on the property
with funds provided by a $1,250,000 unsecured note payable to the
Partnership by LCR.  CMIF II also assigned its 50 percent
interest in the construction loan secured by a second trust deed
to LCR.  In exchange for the assignments of their notes secured
by a second trust deed, the Partnership and CMIF II each received
a 50 percent interest in an unsecured note due from LCR with a
principal balance of $2,115,000 as of December 31, 1996 and 1995,
respectively.  The Partnership has not accrued its share of
interest on these unsecured notes which was approximately
$533,000 and $401,000 as of December 31, 1996 and 1995,
respectively.

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.  LCR has contributed the 179 lots 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 and the contribution of
these lots to the joint venture has no effect on the financial
position of 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, 1996 and
1995 and for the years ended December 31, 1996, 1995 and 1994:














                               F-30
                     LCR Development, Inc.
                  Consolidated Balance Sheets
<TABLE>
<CAPTION>

<S>                         <C>                <C>
                            December 31,          December 31,
  Assets                        1996                   1995
-----------------------------------------------------------------
Restricted cash             $    10,000         $       ---

Real estate owned             6,492,000           5,263,000
Less allowance for
  losses on real
  estate investments          3,898,000           1,390,000
-----------------------------------------------------------------
Net real estate owned         2,594,000           3,873,000

Organization costs                1,000               2,000
-----------------------------------------------------------------
                            $ 2,605,000         $ 3,875,000
=================================================================

  Liabilities and Stockholders' Equity (Deficit)
-----------------------------------------------------------------
Notes payable
  to affiliates:
    CMIF                    $ 4,092,000         $ 2,973,000
    CMIF II                   2,360,000           2,092,000
-----------------------------------------------------------------
Total notes payable           6,452,000           5,065,000

Accounts payable
  and accrued liabilities        11,000               1,000
Interest payable to
  affiliates
  on real property              845,000             509,000
Payable to affiliates            16,000               1,000
-----------------------------------------------------------------
Total liabilities             7,324,000           5,576,000

Stockholders' equity
  (deficit)                  (4,719,000)         (1,701,000)
-----------------------------------------------------------------
                            $ 2,605,000         $ 3,875,000
=================================================================
</TABLE>


                               F-31
                   LCR Development, Inc.
            Consolidated Statement of Operations

<TABLE>
<CAPTION>

           Years ended December 31, 1996, 1995 and 1994

<S>                    <C>            <C>           <C>
                           1996           1995          1994
-----------------------------------------------------------------
Housing sales          $   233,000    $       ---    $       ---

Cost of housing sales      238,000            ---            ---
Provision for
  losses on
  real estate owned      2,516,000      1,077,000        313,000
Selling and
  marketing expenses       184,000            ---            ---
General and
  administrative           162,000         (3,000)         3,000
-----------------------------------------------------------------
Operating loss          (2,867,000)    (1,074,000)      (316,000)
Interest expense           151,000            ---        313,000
-----------------------------------------------------------------
Net (loss)             $(3,018,000)   $(1,074,000)   $  (629,000)
=================================================================
Interest not included
  in share of losses      (336,000)      (197,000)      (313,000)
-----------------------------------------------------------------
Allocable net loss     $(2,682,000)   $  (877,000)   $  (316,000)
=================================================================
Share of losses
  recorded             $(1,966,000)   $  (438,000)   $  (158,000)
=================================================================

</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.




                               F-32
<TABLE>
<CAPTION>
        Difference of Allocation of Share of Losses
<S>                                   <C>
                                           1996
-----------------------------------------------------------------
The Partnership's 50 percent share
  of LCR's stockholders' deficit
  at December 31, 1996                 $(2,361,000)

Cumulative interest payable by LCR
  to the Partnership not accrued as
  income by the Partnership                425,000

Loans receivable considered as part
  of the Partnership's investment        4,092,000

Disproportionate loss allocation          (625,000)
-----------------------------------------------------------------
Net loans receivable                   $ 1,531,000
=================================================================

</TABLE>

As discussed above, the Partnership holds 50 percent of the stock
of BKS with CMIF II.  In 1994, the Partnership and CMIF II
assigned to BKS their 50 percent interest in a note receivable
secured by a first trust deed on a 283 acre residential tract in
Bakersfield, California.  BKS foreclosed on this property on
August 8, 1994.  In exchange for their assignments, the
Partnership and CMIF II each received a 50 percent interest in a
new note from BKS secured by a first trust deed on the property.
The Partnership ceased accruing interest on this new note on
January 1, 1995.  Bonds and taxes accrued on the property
increased from $1,605,000 at December 31, 1995 to $2,085,000 at
December 31, 1996 and the bond holders have commenced foreclosure
proceedings on the property.  Management has elected to abandon
the property due to the fact that land values have not increased.
The balance of bonds and unpaid property taxes are now
approximately equal to the value of the property.  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.  Therefore, during 1996, the Partnership recorded
its share of losses in connection with BKS ($338,000) which
results in the Partnership's investment in BKS, including loans,
having a zero balance.

                               F-33
The balance sheet and statements of operations of BKS have not
been consolidated in the Partnership's financial statements.  The
Partnership accounted for its investment in this corporation
using the equity method.  The following represents condensed
financial information for BKS at December 31, 1995 and for the
years ended December 31, 1995 and 1994:


                      BKS Development, Inc.
                         Balance Sheet
<TABLE>
<CAPTION>
<S>                          <C>                  <C>

                                                   December 31,
  Assets                                              1995
-----------------------------------------------------------------
Cash                                               $     1,000

Real property                                        5,200,000
Less allowance for losses
  on real estate investments                         2,693,000
-----------------------------------------------------------------
Net real estate owned                                2,507,000
-----------------------------------------------------------------
                                                   $ 2,508,000
=================================================================

  Liabilities and Stockholders' Deficit
-----------------------------------------------------------------
Bonds payable                                      $   899,000
Notes payable to affiliates                          3,893,000
Interest and property taxes
   payable on real property                            943,000
-----------------------------------------------------------------
Total liabilities                                    5,735,000

Stockholders' deficit                               (3,227,000)
-----------------------------------------------------------------
                                                   $ 2,508,000
=================================================================

</TABLE>






                               F-34
                     BKS Development, Inc.
                   Statements of Operations

<TABLE>
<CAPTION>
         Years ended December 31, 1995 and 1994

<S>                             <C>               <C>
                                     1995              1994
-----------------------------------------------------------------
Interest and
   property tax
   expense                      $     35,000       $   499,000
Provision
   for losses                      2,693,000               ---
General and
  administrative                         ---             2,000
-----------------------------------------------------------------
Net income (loss)               $ (2,728,000)      $  (501,000)
=================================================================
Share of losses
  recorded                      $ (1,364,000)      $   (250,000)
=================================================================

</TABLE>

At the time of the foreclosure by LCR and BKS discussed above,
the Partnership had accounted for its interests in the notes
secured by a second trust deed and first trust deed as having
been insubstance foreclosed.  A summary of the effects of the
foreclosures on the Partnership's balance sheet during 1994 is as
follows:

















                               F-35
<TABLE>
<CAPTION>
<S>                    <C>           <C>            <C>
                            LCR          BKS            TOTAL
-----------------------------------------------------------------
Decrease in real
  estate owned          $ 2,543,000    $ 3,900,000    $ 6,443,000
Increase in
  real estate loans       1,057,000      1,947,000      3,004,000
Decrease in allowance
  for possible losses
  on real estate owned      709,000      1,300,000      2,009,000
Decrease in notes payable   655,000        449,000      1,104,000
Decrease in interest
  and property
  taxes payable             122,000        204,000        326,000

</TABLE>

The Partnership reimburses the general partner and its affiliates
for expenses incurred on behalf of the Partnership for services
such as salaries, legal, accounting, property management and
other such services.  The general partners and affiliates of the
general partners charged $273,000, $221,000 and $235,000 for such
services in 1996, 1995 and 1994, respectively.

During 1996, 1995 and 1994, the Partnership maintained interest-
bearing deposits with Sunwest Bank, an affiliate of the general
partners.  The balances at December 31, 1996, 1995 and 1994 were
$534,000, $280,000 and $8,000, respectively.  Interest earned on
such deposits for 1996, 1995 and 1994 was $22,000, $5,000 and
$16,000, respectively.

The Partnership owns an interest in Grand Plaza, the corporation
which owns the auto retail center in Corona, California jointly
with an affiliated entity, Centennial Mortgage Income Fund III
("CMIF III").  At December 31, 1996, the ownership percentages
are 86.7 for the Partnership and 13.3 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 includes $557,000 and $508,000
at December 31, 1996 and 1995, respectively, and the Partnership
had recorded $420,000 and $370,000, 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 14 percent

                               F-36
fixed and matured October 1, 1996.  The Partnership is in the
process of extending this note.

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, 1996, 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, 1996 and 1995 includes $452,000 and $383,000,
respectively, and the Partnership had recorded $295,000 and
$260,000, 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, 1997.

<TABLE>

(6)  Real Estate Owned

<CAPTION>
Real estate owned consists of the following:
                                     (dollars in thousands)
<S>                               <C>              <C>
                                   December 31,     December 31,
                                      1996             1995
-----------------------------------------------------------------
1.  Shopping Center in Upland, CA    $   4,628       $   5,106
2.  19 acres in Sacramento, CA           2,822           2,618
3.  Auto retail center in Corona, CA     2,600           2,580
4.  23 acres in Riverside, CA              ---           1,012
5.  5 condominiums in Oxnard, CA         1,310           1,550
-----------------------------------------------------------------
Subtotal                                11,360          12,866
Less accumulated depreciation              ---             517
-----------------------------------------------------------------
Total real estate owned              $  11,360       $  12,349
=================================================================
</TABLE>

At December 31, 1996 and 1995, property number 5 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-37
At December 31, 1996, the properties held for sale are presented
net of accumulated depreciation as required by SFAS 121.

In accordance with SFAS 121, the Partnership carries real estate
owned, held for sale, at the lower of carrying amount, or fair
value less costs to sell.  The estimated fair values were
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
third parties in a sales transaction and sales proceeds could
differ substantially from estimated fair values.

The Partnership leases its operating properties under several non-
cancelable operating lease agreements.  Future minimum rents to
be received as of December 31, 1996, are as follows:

<TABLE>
<CAPTION>
                                  (dollars in thousands)
<S>                                   <C>

Years ending December 31,
-----------------------------------------------------------------
1997                                   $   684
1998                                       643
1999                                       568
2000                                       438
2001                                       422
Thereafter                               2,536
-----------------------------------------------------------------
                                       $ 5,291
=================================================================

</TABLE>














                               F-38
<TABLE>

(7) Notes Payable

<CAPTION>

Notes payable consist of the following:
                                    (dollars in thousands)
<S>                              <C>             <C>
                                  December 31,    December 31,
                                     1996            1995
-----------------------------------------------------------------
Note payable secured by
  shopping center in
  Upland, CA with interest
  and principal payments due
  monthly of $24,000; interest
  rate of 11.25 percent fixed,
  maturing May 1, 1997            $ 2,455          $ 2,460

Note payable secured by
  19 acres in Sacramento, CA
  with interest only payments
  due monthly; interest rate of
  12 percent fixed, maturing
  March 1, 1998                       900              900

Note payable secured by 23
  acres in Riverside, CA;
  interest rate of 13.75
  percent fixed,
  matured August 1, 1992              ---              650
-----------------------------------------------------------------
  Total notes payable             $ 3,355          $ 4,010
=================================================================
</TABLE>

The note payable secured by the Upland Shopping Center totaling
$2,455,000 becomes due in 1997.  The Partnership has a letter of
intent from the lender for a five year extension on this note.
No principal is payable in 1997 on the note secured by the 19
acres in Sacramento.  The balance of $900,000 is due in 1998.







                               F-39
The Partnership acquired the 23 acres in Riverside by deed in
lieu of foreclosure, subject to the note payable discussed above.
In the third quarter of 1993, the lender filed a notice of
default and commenced judicial foreclosure proceedings on the
property.   The original borrower on the note payable negotiated
with the lender to perfect a nonjudicial foreclosure on the
property.  The foreclosure was completed in 1996.  Management
established an allowance for losses sufficient to cover the loss
which was incurred as a result of the foreclosure of this
property.

(8)  Contingencies

There are no 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-40
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership


Schedule III
<TABLE>
                            Consolidated Real Estate Owned and
                        Accumulated Depreciation and Amortization
                                    December 31, 1996

<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           $ 2,455,000          $  4,903,000        $
(275,000)
19 acres in Sacramento                  900,000             2,567,000
255,000
Auto Retail Center in Corona                ---             2,533,000
67,000
5 Condominiums in Oxnard                    ---             1,154,000
156,000
--------------------------------------------------------------------------------
----------
                                    $ 3,355,000          $ 11,157,000        $
203,000
================================================================================
==========









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


Schedule III

                            Consolidated Real Estate Owned and
                        Accumulated Depreciation and Amortization
                                       (Continued)
                                    December 31, 1996

<CAPTION>
                   Gross Amount at Which
                   Carried on Books (F3)
<S>                   <C>             <C>         <C>              <C>      <C>
                                                  Accumulated               Life
On Which
                     Real Estate                Depreciation &       Date
Depreciation
Property                Owned          Total    Amortization<F4>   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
Auto Retail Center
  in Corona            2,600,000     2,600,000           ---     December 1991
None
5 Condominiums
  in Oxnard            1,310,000     1,310,000           ---     December 1992
(F2)   None
---------------------------------------------------------------
                     $11,360,000   $11,360,000    $      ---
===============================================================






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


Schedule III

                            Consolidated Real Estate Owned and
                        Accumulated Depreciation and Amortization
                                       (Continued)
                                    December 31, 1996

<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 $12,577,000 at December
31, 1996;

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

</FN>


</TABLE>








                       See accompanying independent auditors' report.
                                           F-43
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership


Schedule III
<TABLE>
                            Consolidated Real Estate Owned and
                        Accumulated Depreciation and Amortization
                                       (Continued)
                                    December 31, 1996

<CAPTION>

The following is a summary of consolidated real estate owned for the years ended
December 31, 1996, 1995, and 1994.

<S>                                     <C>               <C>              <C>
                                             1996             1995
1994
--------------------------------------------------------------------------------
----------
Balance at beginning of year            $ 12,866,000      $ 14,232,000      $
21,701,000
Additions during period:
  Acquisitions through foreclosures              ---               ---
540,000
  Improvements                               273,000            58,000
187,000
Deductions during period:
  Real estate sold                          (150,000)       (1,131,000)
(605,000)
  Real estate foreclosed                    (665,000)              ---
(4,553,000)
  Charge-offs                               (437,000)         (293,000)
(3,038,000)
--------------------------------------------------------------------------------
----------
Balance at year end                     $ 11,887,000      $ 12,866,000      $
14,232,000
================================================================================
=========






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


Schedule III

                            Consolidated Real Estate Owned and
                        Accumulated Depreciation and Amortization
                                       (Continued)
                                    December 31, 1996


<CAPTION>

The following is a summary of accumulated depreciation and amortization of
consolidated real estate owned for the years ended December 31, 1996, 1995, and
1994.


<S>                                     <C>               <C>              <C>
                                          1996               1995
1994
--------------------------------------------------------------------------------
----------
Balance at beginning of year           $  517,000         $  412,000        $
307,000
Additions                                  10,000            105,000
105,000
--------------------------------------------------------------------------------
----------
Balance at year end                    $  527,000         $  517,000        $
412,000
================================================================================
==========

</TABLE>








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


Schedule IV
<TABLE>
<CAPTION>
                              Mortgage Loans on Real Estate
                                    December 31, 1996

<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

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

First Trust Deed
$2,500 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-46
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership


Schedule IV
<CAPTION>
                              Mortgage Loans on Real Estate
                                       (Continued)
                                    December 31, 1996

<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, 1996
$374,000

55 percent
  interest in                                                             $805 P
+ I
  Second Trust Deed
monthly
  on single-family
balloon
  residence in
payment of
  Sacramento, CA               5% fixed          May 1, 1998
$141,000

Unsecured Note related
  to 177 lots in                                                           P + I
due at
  Lancaster, CA             7.75% fixed      December 1, 1997
maturity





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


Schedule IV
<CAPTION>
                              Mortgage Loans on Real Estate
                                       (Continued)
                                    December 31, 1996

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

50 percent interest
  in unsecured
  note related to
  177 lots in                                                              P + I
due at
  Lancaster, CA             7.75% fixed      December 1, 1997
maturity

First Trust Deed
Interest only
  on 7.83 acres
balloon
  of vacant land
payment of
  in Perris, CA               15% fixed        June 1, 1993
$292,000

50 percent interest
  in First Trust
  Deed on 166 lots                                                        P + I
due at
  in Lancaster, CA            Prime + 1%      August 1, 1997
maturity





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


Schedule IV
<CAPTION>
                              Mortgage Loans on Real Estate
                                       (Continued)
                                    December 31, 1996

<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 seven
  single family homes                                                     P + I
due at
  in Lancaster, CA            Prime + 1%      July 1, 1996
maturity









                                           F-49
                         CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership

Schedule IV
<CAPTION>
                              Mortgage Loans on Real Estate
                                       (Continued)
                                    December 31, 1996

<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         $  460,000      $  460,000             $
460,000

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

Third Trust Deed     1st T.D. of
  on Mini-Storage    $2,950,000
  Facility in        2nd T.D. of
  Citrus Heights, CA   $608,000          72,000          65,000
None

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-50
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership


Schedule IV
<CAPTION>
                              Mortgage Loans on Real Estate
                                       (Continued)
                                    December 31, 1996
<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        374,000        375,000
375,000

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)    81,000
81,000

Unsecured Note related
  to 177 lots in
  Lancaster, CA       $3,266,000     1,250,000         1,250,000
1,250,000




                                           F-51
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership


Schedule IV
<CAPTION>
                              Mortgage Loans on Real Estate
                                       (Continued)
                                    December 31, 1996

<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      1st T.D.
  177 lots in            of          2,115,000
  Lancaster, CA       $3,266,000    (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           293,000
293,000

50 percent interest
  in First Trust
  Deed on 166 lots                   3,266,000
  in Lancaster, CA      None     (50% - 1,636,000)       977,000
977,000



                                           F-52
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership

Schedule IV
<CAPTION>
                              Mortgage Loans on Real Estate
                                       (Continued)
                                    December 31, 1996

<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 First Trust Deed
  on four single
  family homes in                      490,000
  Lancaster, CA         None      (50% -  245,000)       239,000
239,000

50 percent interest
  in First Trust Deed
  on seven single
  family homes in                      804,000
  Lancaster, CA         None      (50% -  402,000)       571,000
571,000

Loss from unconsolidated investees                    (2,561,000)
(2,561,000)

Unearned interest and discounts                         (403,000)
(143,000)
--------------------------------------------------------------------------------
----------
                                   $ 9,171,000       $ 3,297,000
$2,597,000
================================================================================
==========

                                           F-53
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership


Schedule IV
<CAPTION>
                              Mortgage Loans on Real Estate
                                       (Continued)
                                    December 31, 1996


<FN>
<F1>  Aggregate cost for Federal Income Tax purpose is $7,705,000 at December
31, 1996.
</FN>






















                                           F-54
                     CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES
                                  A Limited Partnership

Schedule IV

                              Mortgage Loans on Real Estate
                                       (Continued)
                                    December 31, 1996

<CAPTION>

The following is a summary of activity for the years ended December 1996, 1995,
and 1994.

<S>                                     <C>               <C>              <C>
                                             1996             1995
1994
--------------------------------------------------------------------------------
----------
Balance at beginning of year            $  4,793,000      $  6,641,000      $
3,489,000
  Additions during period:
  New mortgage loans/disbursements         1,044,000           429,000
1,603,000
  Other - Interest reserve, amortization
    and transfer from accrued interest       197,000            47,000
23,000
Loans transferred from real estate owned         ---               ---
3,004,000
Deductions during period:
  Collections of principal                  (163,000)         (288,000)
(515,000)
  Foreclosures                                   ---               ---
(540,000)
  Charge-offs                               (270,000)         (233,000)
(15,000)
  Losses from unconsolidated investees    (2,304,000)       (1,803,000)
(408,000)
--------------------------------------------------------------------------------
----------
Balance at year end                     $  3,297,000      $  4,793,000      $
6,641,000
================================================================================
=========
</TABLE>




                       See accompanying independent auditors' report.
                                           F-55
                          Exhibit 21
                      LCR DEVELOPMENT, INC.

                    A California Corporation


            Index to Consolidated Financial Statements


Consolidated Financial Statements                            Page

  Independent Auditors' Report ...........................   F-57

  Consolidated Balance Sheets --
  December 31, 1996 and 1995..............................   F-58

  Consolidated Statements of Operations --
  Years ended December 31, 1996, 1995 and 1994............   F-60

  Consolidated Statements of Stockholders' Equity (Deficit)
  Years ended December 31, 1996, 1995 and 1994............   F-61

  Consolidated Statements of Cash Flows --
  Years ended December 31, 1996, 1995 and 1994............   F-62

  Notes to Consolidated Financial Statements .............   F-65























                               F-56
                   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, 1996 and 1995 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, 1996.  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, 1996 and 1995, and the results of their operations and their
cash flows for each of the years in the three-year period ended
December 31, 1996 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
1997.  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
April 18, 1997, except as to the first paragraph of Note 6,
which is as of July 29, 1997
                               F-57
                      LCR Development, Inc.
                   Consolidated Balance Sheets
<TABLE>
<CAPTION>

<S>                               <C>             <C>
                                   December 31,     December 31,
  Assets                               1996             1995
-----------------------------------------------------------------
Restricted cash                    $    10,000      $       ---

Real estate owned (note 5)           6,492,000        5,263,000
Less allowance for losses on
  real estate investments (note 4)   3,898,000        1,390,000
-----------------------------------------------------------------
Net real estate owned                2,594,000        3,873,000

Organization costs                       1,000            2,000
-----------------------------------------------------------------
                                   $ 2,605,000      $ 3,875,000
=================================================================

  Liabilities and Stockholders' Equity (Deficit)
-----------------------------------------------------------------
Notes payable to affiliates:
  CMIF                             $ 4,092,000      $ 2,973,000
  CMIF II                            2,360,000        2,092,000
-----------------------------------------------------------------
Total notes payable (note 7)         6,452,000        5,065,000

Accounts payable
  and accrued liabilities               11,000            1,000
Interest payable to affiliates         845,000          509,000
Payable to affiliates (note 6)          16,000            1,000
-----------------------------------------------------------------
Total liabilities                    7,324,000        5,576,000













                               F-58
                      LCR Development, Inc.
                   Consolidated Balance Sheets
                         (Continued)

</TABLE>
<TABLE>
<CAPTION>

<S>                               <C>             <C>
  Liabilities and                   December 31,     December 31,
    Stockholders' Equity (Deficit)      1996             1995
-----------------------------------------------------------------
Stockholders' equity (deficit)
  Common stock, no par value;
  300 shares authorized;
  300 shares issued and
  outstanding in 1996 and 1995           3,000            3,000
  Accumulated deficit               (4,722,000)      (1,704,000)
-----------------------------------------------------------------
    Total stockholders'
      equity (deficit)              (4,719,000)      (1,701,000)

Commitments (note 9)
-----------------------------------------------------------------
                                   $ 2,605,000      $ 3,875,000
=================================================================
</TABLE>























  See accompanying notes to consolidated financial statements
                               F-59
                   LCR Development, Inc.
               Consolidated Statements of Operations
<TABLE>
<CAPTION>
           Years ended December 31, 1996, 1995 and 1994

<S>                      <C>          <C>          <C>
                           1996           1995         1994
-----------------------------------------------------------------
Housing sales             $   233,000  $       ---  $       ---

Cost of housing sales         238,000          ---          ---
Provision for
  losses on real
  estate owned (note 4)     2,516,000    1,077,000      313,000
Selling and
  marketing expenses          184,000          ---          ---
General and
  administrative              162,000       (3,000)       3,000
-----------------------------------------------------------------
Operating loss             (2,867,000)  (1,074,000)    (316,000)
Interest expense (note 5)     151,000          ---      313,000
-----------------------------------------------------------------
Loss before income taxes  $(3,018,000) $(1,074,000) $  (629,000)
-----------------------------------------------------------------
Income taxes (note 8)             ---          ---          ---
-----------------------------------------------------------------
Net loss                  $(3,018,000) $(1,074,000) $  (629,000)
=================================================================
Net loss per common share $   (10,060) $    (3,580) $    (2,097)
=================================================================
Weighted average
  number of common
  shares outstanding              300          300          300
=================================================================
</TABLE>












  See accompanying notes to consolidated financial statements
                               F-60
                      LCR Development, Inc.
      Consolidated Statements of Stockholders' Equity (Deficit)

<TABLE>
<CAPTION>

         Years ended December 31, 1996, 1995 and 1994

<S>                   <C>            <C>            <C>
                                                        Total
                                                    Stockholders'
                       Common        Accumulated       Equity
                        Stock          Deficit        (Deficit)
-----------------------------------------------------------------
Balance (deficit) at
  December 31, 1993   $     3,000    $     (1,000)  $      2,000

Net loss                      ---        (629,000)      (629,000)
-----------------------------------------------------------------
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)
=================================================================

</TABLE>














  See accompanying notes to consolidated financial statements
                               F-61
                      LCR Development, Inc.
                Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>

           Years ended December 31, 1996, 1995 and 1994

<S>                   <C>            <C>            <C>
                           1996           1995          1994
-----------------------------------------------------------------
Cash flows from
 operating activities:
  Net loss             $(3,018,000)   $(1,074,000)   $  (629,000)
  Adjustments to
   reconcile net
   loss to cash
   provided by (used
   in) operating
   activities:
     Provision for
      possible losses    2,516,000      1,077,000        313,000
Changes in assets
  and liabilities:
   (Increase) decrease in
    organization costs       1,000            ---         (2,000)
   Increase in
    interest payable       151,000            ---        312,000
   Increase in accounts
    payable and accrued
    liabilities             10,000          1,000            ---
   Increase in payable
    to affiliates           15,000          1,000            ---
-----------------------------------------------------------------
     Net cash provided by
      (used in) operating
      activities          (325,000)         5,000         (6,000)
-----------------------------------------------------------------
Cash flows from
  investing activities:
   Capital
    expenditures for
    real estate owned   (1,104,000)    (1,207,000)      (401,000)
   Proceeds from sale
    of real estate owned   233,000            ---            ---
   Increase in
    restricted cash        (10,000)           ---            ---
-----------------------------------------------------------------

                               F-62
                      LCR Development, Inc.
                Consolidated Statements of Cash Flows
                          (Continued)

         Years ended December 31, 1996, 1995 and 1994

<CAPTION>
<S>                <C>            <C>            <C>
                          1996           1995          1994
-----------------------------------------------------------------
    Net cash used in
     investing
     activities           (881,000)    (1,207,000)      (401,000)
-----------------------------------------------------------------
Cash flows from
  financing activities-
   Advances received
    on notes payable     1,206,000      1,200,000        407,000
-----------------------------------------------------------------
Net decrease
  in cash                      ---         (2,000)           ---
Cash at beginning
  of year                      ---          2,000           2,000
-----------------------------------------------------------------
Cash at
  end of year           $      ---     $      ---      $    2,000
=================================================================






















                               F-63
                      LCR Development, Inc.
                Consolidated Statements of Cash Flows
                          (Continued)

         Years ended December 31, 1996, 1995 and 1994

<CAPTION>
<S>                <C>            <C>            <C>
                          1996           1995          1994
-----------------------------------------------------------------
Supplemental
  schedule of
  noncash
  investing and
  financing activities:
   Increase in real
    estate owned and
    related notes
    payable to
    affiliates as a
    result of transfer
    of ownership        $      ---    $      ---    $ 3,365,000
   Increase in real
    estate owned
    as a result of
    capitalized interest   366,000       290,000            ---
   Decrease in real
    estate owned and
    related allowance
    for losses due to
    sale of real estate
    owned                    8,000           ---            ---
   Increase in notes
    payable to
    affiliates as a
    result of
    capitalized interest   181,000        93,000            ---
   Increase in interest
    payable to affiliates
    as a result of
    capitalized interest   185,000       197,000            ---

</TABLE>





  See accompanying notes to consolidated financial statements
                               F-64
                      LCR DEVELOPMENT, INC.
            Notes to Consolidated Financial Statements

                 December 31, 1996, 1995, 1994

(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

During 1995 and 1994, LCR 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 less 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
operations.


                               F-65
Effective January 1, 1996, LCR 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 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.

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
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes" ("SFAS 109").  SFAS 109 requires 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.

(2)  Ability to Continue as a Going Concern

LCR and Silverwood were formed to own and develop the 179 lots in
Lancaster, California.  During 1994 and 1995, operations did not
generate sufficient cash to cover current obligations as the
project was still being developed.  During 1996, operations did
not generate sufficient cash to cover current obligations due to
the lack of sales of homes.  Sales volumes of new homes in the
Lancaster area have continued to decline since 1995 while sales



                               F-66
prices have remained relatively flat and construction costs have
increased.  The note payable originally secured by the nine lots
in Lancaster (Phase I) which matured July 1, 1996 has been
extended to allow sufficient time for the sale of the balance of
the homes.  Based on representations by the general partners of
CMIF and CMIF II, the $2,115,000, the $1,250,000 and the
$1,748,000 notes payable to CMIF and CMIF II which all mature
during 1997 will be extended indefinitely while the project is
being developed.  However, if LCR's and Silverwood's financial
condition worsens significantly, these intentions could change.
Phase II at the project is currently under development.  Prior to
commencing additional phases, management will reevaluate its
investment alternatives including, but not limited to, the
cessation of construction and holding of the lots for investment
or the bulk sale of the remaining lots.  Management is
continuously monitoring all aspects of the project and its impact
on LCR, CMIF and CMIF II.

(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.

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.

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.



                               F-67
(4)  Allowance for Possible Losses on Real Estate Owned

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

<TABLE>

<S>                      <C>           <C>            <C>
                            1996              1995         1994
-----------------------------------------------------------------
Balance at
  beginning of year      $1,390,000    $  313,000    $      ---
Real estate owned
  charged-off                (8,000)          ---           ---
Provision for losses      2,516,000     1,077,000       313,000
-----------------------------------------------------------------
Balance at
  end of year            $3,898,000    $1,390,000    $  313,000
=================================================================
</TABLE>

(5)  Real Estate Owned

Real estate owned balances at December 31, 1996, 1995 and 1994
were $6,492,000, $5,263,000 and $3,766,000, respectively.  The
property was transferred to LCR in 1994 at CMIF and CMIF II's
cost, with a balance of $3,365,000.  Capitalized interest for the
years ended December 31, 1996 and 1995 totaled $366,000 and
$290,000, respectively.  There was no capitalized interest for
1994.  No interest was paid for the years ended December 31,
1996, 1995 and 1994.  Sales of real estate owned were $233,000
for the year ended December 31, 1996.  There were no sales of
homes for the years ended December 31, 1995 and 1994.   Charge-
offs recorded in 1996 were $8,000.  There were no charge-offs
recorded for the years ended December 31, 1995 and 1994.  Total
interest incurred for the years ended December 31, 1996, 1995 and
1994 was $517,000, $290,000 and $313,000, respectively.

In accordance with SFAS 121, LCR carries real estate owned, held
for sale, at the lower of carrying amount, or fair value less
costs to sell.  The estimated fair value was 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 third parties in a
sales transaction and sales proceeds could differ substantially
from estimated fair values.



                               F-68
(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 $160,000, $143,000 and $5,000 of
these costs to Home Devco and affiliates for the years ended
December 31, 1996, 1995 and 1994, respectively.  Through December
31, 1996, fees paid have exceeded amounts payable under the
agreement by $50,000, however, management believes that these
fees are appropriate based on the completed project and has
temporarily reduced the amount being paid to Home Devco to $5,000
per month effective January 1, 1997.

Funds have been advanced from 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, 1996 and 1995 were
$16,000 and $1,000, respectively.

(7) Notes Payable to Affiliates

<TABLE>
<CAPTION>

Notes payable to affiliates consist of the following:
                                    (dollars in thousands)
<S>                               <C>             <C>
                                   December 31,    December 31,
                                      1996            1995
-----------------------------------------------------------------
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 December 1, 1997          $ 2,115          $ 2,115






                               F-69
Notes payable to affiliates consist of the following:
                       (continued)
                                    (dollars in thousands)
<S>                               <C>             <C>
                                   December 31,    December 31,
                                      1996            1995
-----------------------------------------------------------------
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 December 1, 1997            1,250            1,250

Note payable to CMIF
  and CMIF II secured by
  first trust deed on 166
  lots in Lancaster, CA
  with principal and interest
  due at maturity; interest
  at Prime + 1%; maturing
  August 1, 1997                       1,748              896

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              416

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%; matured
  July 1, 1996                          855               388
-----------------------------------------------------------------
  Total notes payable               $ 6,452           $ 5,065
=================================================================
</TABLE>



                               F-70
Future principal payments to be paid as of December 31, 1996 are
as follows:

<TABLE>
<CAPTION>

                                 (dollars in thousands)
Years ending December 31,
<S>                           <C>
-----------------------------------------------------------------
1996                           $  855
1997                            5,113
1998                              484
-----------------------------------------------------------------
                               $6,452
=================================================================
</TABLE>

The note payable originally secured by a first trust deed on 9
lots in Lancaster which matured July 1, 1996 has been extended
indefinitely (see note 2).

(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>
                           1996           1995          1994
-----------------------------------------------------------------
Income tax benefit at
 the statutory rate    $(1,026,000)   $  (365,000)   $  (214,000)
State tax benefit, net
 of Federal tax benefit   (184,000)       (66,000)       (38,000)
Valuation allowance      1,204,000        430,000        252,000
Other                        6,000          1,000            ---
-----------------------------------------------------------------
Total                          ---            ---            ---
=================================================================
</TABLE>

                               F-71
As of December 31, 1996, LCR and Silverwood have net operating
loss carryforwards of approximately $211,000, expiring at various
dates through 2011.

The components of the consolidated net deferred tax asset at
December 31, 1996, 1995 and 1994 are as follows:

<TABLE>
<CAPTION>
<S>                   <C>            <C>            <C>
                           1996           1995          1994
-----------------------------------------------------------------
Net operating loss
 carryforwards         $    78,000    $       ---    $     2,000
Provision for losses
 on real estate          1,563,000        557,000        125,000
Capitalized interest        (1,000)        46,000        125,000
Interest not
 deductible until paid     185,000         79,000            ---
Section 263A expenses       61,000            ---            ---
-----------------------------------------------------------------
                         1,886,000        682,000        252,000
-----------------------------------------------------------------
Less valuation
 allowance              (1,886,000)      (682,000)      (252,000)
-----------------------------------------------------------------
                       $       ---    $       ---    $       ---
=================================================================

</TABLE>

The net increases in the total valuation allowances for the years
ended December 31, 1996 and 1995 was an increase of $1,204,000
and $430,000, 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-72
(9)  Commitments

During the first quarter of 1997, Silverwood signed a contract
with a subcontractor for $231,000.










































                               F-73