Securities and Exchange Commission
                             Washington, D.C. 20549

                                    Form 10-Q


[X]  Quarterly Report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934.

      For the quarterly period ended June 30, 1998

                                       OR

[_]  Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934.

      For the transition period from _______________ to ______________

                         Commission File Number: 0-13091

                         Impac Commercial Holdings, Inc.
             (Exact name of registrant as specified in its charter)

                 Maryland                            33-0745075
      (State or other jurisdiction of              (I.R.S. Employer
        incorporation or organization)            Identification No.)

               20371 Irvine Avenue
        Santa Ana Heights, California                     92707
    (Address of Principal Executive Offices)            (Zip Code)


       Registrant's telephone number, including area code: (714) 556-0122

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

                                                   Name of each exchange on
                  Title of each class                 Which registered
    ---------------------------------------- -----------------------------------
           Common Stock $0.01 par value             American Stock Exchange


     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

      On August 11, 1998, the aggregate market value of the voting stock held by
non-affiliates of the registrant was approximately $115.8 million,  based on the
closing  sales price of the Common Stock on the  American  Stock  Exchange.  For
purposes of the  calculation  only,  in addition to  affiliated  companies,  all
directors and executive  officers of the registrant have been deemed affiliates.
The number of shares of Common Stock and Class A Common Stock  outstanding as of
August 11, 1998 was 9,562,084 and 456,916, respectively.



                    Documents incorporated by reference: None

<PAGE>

                         IMPAC COMMERCIAL HOLDINGS, INC.

                         1998 FORM 10-Q QUARTERLY REPORT

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                           <C>  

                          PART I. FINANCIAL INFORMATION

   Item 1.   CONSOLIDATED FINANCIAL STATEMENTS - IMPAC COMMERCIAL                                              Page #
             HOLDINGS, INC.

             Consolidated Balance Sheets, June 30, 1998 and December 31, 1997                                        3

             Consolidated Statements of Operations, For the Three Months Ended June 30, 1998 and 1997
             and For the Six Months Ended June 30, 1998 and For the Period from January 15, 1997
             (commencement of operations) through June 30, 1997                                                      4

             Consolidated Statements of Cash Flows, For the Six Months Ended June 30, 1998 and
             For the Period from January 15, 1997 (commencement of operations) through June 30, 1997                 5

             Notes to Consolidated Financial Statements                                                              6

   Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND                                        11
             RESULTS OF OPERATIONS

   Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                             16

                           PART II. OTHER INFORMATION

   Item 1.   LEGAL PROCEEDINGS                                                                                      17

   Item 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS                                                              17

   Item 3.   DEFAULTS UPON SENIOR SECURITIES                                                                        17

   Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                    17

   Item 5.   OTHER INFORMATION                                                                                      17

   Item 6.   EXHIBITS AND REPORTS ON FORM 8-K                                                                       17

             SIGNATURES                                                                                             18

</TABLE>







<PAGE>

<TABLE>


                          PART I. FINANCIAL INFORMATION

ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS

                 IMPAC COMMERCIAL HOLDINGS, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                    (dollars in thousands, except share data)

<CAPTION>
                                                                                              June 30,          December 31,
                                                                                                1998                1997
                                                                                         -----------------   ------------------ 
<S>                                                                                     <C>                  <C>

                                         ASSETS
Cash and cash equivalents                                                                $         12,957   $           15,908
Investment securities available-for-sale                                                           17,895               19,353
Residual interest in securitizations, held-for-trading                                             10,322                9,936
Loan receivables:
     Commercial Mortgages held-for-investment                                                     367,341               62,790
     Finance receivables                                                                           71,669               95,711
     CMO collateral                                                                                11,019                4,255
     Allowance for loan losses                                                                       (682)                (564)
                                                                                         -----------------  -------------------
          Net loan receivables                                                                    449,347              162,192
Due from affiliates                                                                                13,186                1,592
Premises and equipment, net                                                                         8,051                3,857
Investment in Impac Commercial Capital Corporation                                                  3,306                4,182
Accrued interest receivable                                                                           770                1,361
Other assets                                                                                        6,247                  458
                                                                                         -----------------  -------------------
                                                                                         $        522,081   $          218,839
                                                                                         =================  ===================

                          LIABILITIES AND STOCKHOLDERS' EQUITY
Warehouse line agreements                                                                $        361,434   $           90,374
CMO borrowings                                                                                     10,726                4,176
Reverse repurchase agreements                                                                       6,929                9,841
Due to affiliates                                                                                   5,231                8,067
Other liabilities                                                                                   8,332                3,139
                                                                                         -----------------  -------------------
          Total liabilities                                                                       392,652              115,597

Stockholders' Equity:
Preferred Stock; $.01 par value; 10,000,000 shares authorized; no shares
   issued and outstanding at June 30, 1998 and December 31, 1997                                       --                   --
Common Stock; $.01 par value; 46,000,000 shares authorized; 9,562,084 and 7,344,789
   shares issued and outstanding at June 30, 1998 and December 31, 1997                                96                   73
Class A Common Stock; $.01 par value; 4,000,000 shares authorized; 456,916 and
   674,211 shares issued and outstanding at June 30, 1998  and December 31, 1997                        5                    7
Additional paid-in-capital                                                                        133,128              104,761
Accumulated other comprehensive loss                                                                 (394)                (160)
Cumulative dividends declared                                                                     (11,066)              (4,250)
Retained earnings                                                                                   7,660                2,811
                                                                                         -----------------  -------------------
          Total stockholders' equity                                                              129,429              103,242
                                                                                         -----------------  -------------------
                                                                                         $        522,081   $          218,839
                                                                                         =================  ===================





                  See accompanying notes to consolidated  financial statements.
</TABLE>
<PAGE>
<TABLE>


                              IMPAC COMMERCIAL HOLDINGS, INC. AND SUBSIDIARY
                                  CONSOLIDATED STATEMENTS OF OPERATIONS
                        (dollars in thousands, except earnings per share data)

<CAPTION>
 
                                                                                                               For the period
                                                                                                                from January
                                                                                                              January 15, 1997
                                                                                                               (commencement)
                                                         For the Three     For the Three     For the Six        of operations)
                                                         Months Ended       Months Ended     Months Ended          Through
                                                            June 30,          June 30,          June 30,           June 30,
                                                              1998              1997              1998               1997
                                                       ----------------  ----------------  ---------------  -------------------
<S>                                                    <C>               <C>              <C>              <C>
Revenues:
    Interest income                                    $        8,704    $          986    $      14,478    $          1,353
    Equity in net loss of Impac Commercial
     Capital Corporation                                         (423)                -             (876)                  -
    Rental and other income                                       318                 -              426                   -
                                                       ----------------  ----------------  ---------------  ------------------
                                                                8,599               986           14,028               1,353
                                                       ----------------  ----------------  ---------------  ------------------


Expenses:
   Interest expense on warehouse line and
      reverse repurchase agreements                             4,716               297            7,035                 371
   Interest expense on other borrowings                           349                 6              746                  91
   Interest expense on borrowings from   
      Impac Warehouse Lending Group                                 -               220                -                 340
   Provision for loan losses                                       69                20              118                  33
   General and administrative and other expense                   430                 5              620                   9
   Management advisory fees                                       217                 -              379                   -
   Professional services                                          145               119              281                 179
   Stock compensation expense                                       -                 -                -               2,697
                                                       ----------------  ----------------  ---------------  ------------------
                                                                5,926               667            9,179               3,720
                                                       ----------------  ----------------  ---------------  ------------------
Net earnings (loss)                                    $        2,673    $          319    $       4,849    $         (2,367)
                                                       ================  ================  ===============  ==================

Weighted average shares outstanding - basic                     8,111                (1)           8,066                  (1)
                                                       ================                    ===============
Weighted average shares outstanding - diluted                   8,122                (1)           8,089                  (1)
                                                       ================                    ===============
Net earnings  per share--basic and diluted             $         0.33                (1)   $        0.60                  (1)
                                                       ================                    ===============



(1)   Earnings per share and weighted average shares for periods prior to ICH's initial public offering on August 8,
      1997 are not shown.



                    See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>

<TABLE>

                 IMPAC COMMERCIAL HOLDINGS, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

<CAPTION>
                                                                                                       For the period from
                                                                                                        January 15, 1997
                                                                                For the Six             (commencement of
                                                                                Months ended           operations) through
                                                                               June 30, 1998              June 30, 1997
                                                                          ------------------------- -----------------------

<S>                                                                       <C>                        <C>  
Cash flows from operating activities:
   Net earnings (loss)                                                     $                 4,849   $              (2,367)
   Adjustments to reconcile net earnings (loss) to net cash
        (used in) provided by operating activities:
   Equity in net loss of Impac Commercial Capital Corporation                                  876                      --
   Stock compensation expense                                                                   --                   2,697
   Provision for loan losses                                                                   118                      33
   Depreciation                                                                                201                      --
   Net change in accrued interest on receivables                                               591                    (249)
   Net change in other assets and liabilities                                               (5,095)                 (1,058)
   Net change in due from affiliates and due to affiliates                                 (14,430)                     --
                                                                          ------------------------- -----------------------
     Net cash (used in) provided by operating activities                                   (12,890)                   (944)
                                                                          ------------------------- -----------------------
Cash flows from investing activities:
   Net change in Commercial Mortgages held-for-investment                                 (304,551)                (17,380)
   Net change in finance receivables                                                        24,042                 (31,169)
   Net change in CMO collateral                                                             (6,764)                     --
   Principal reductions on investment securities available-for-sale                          1,224                      --
   Purchase of residual interest in securitizations                                             --                 (10,098)
   Principal reductions on residual interest in securitizations                               (386)                     99
   Purchase of premises and equipment                                                         (457)                     --
                                                                          ------------------------- -----------------------
     Net cash used in investing activities                                                (286,892)                (58,548)
                                                                          ------------------------- -----------------------
Cash flows from financing activities:
   Net change in warehouse line and reverse repurchase agreements                          268,148                  37,863
   Net change in other affiliated borrowings                                                    --                  16,309
   Net change in CMO borrowings                                                              6,550                      --
   Issuance of Common Stock                                                                 28,388                       6
   Issuance of promissory notes                                                                 --                  15,000
   Dividends paid                                                                           (6,255)                     --
                                                                          ------------------------- -----------------------
     Net cash provided by financing activities                                             296,831                  69,178
                                                                          ------------------------- -----------------------
Net change in cash and cash equivalents                                                     (2,951)                  9,686
Cash and cash equivalents at beginning of period                                            15,908                      --
                                                                          ------------------------- -----------------------

Cash and cash equivalents at end of period                                $                 12,957  $                9,686
                                                                          ========================= =======================
Supplementary information:
   Interest paid                                                          $                  6,976  $                   --

Non-cash transactions:
   Increase in accumulated other comprehensive loss                       $                    234  $                   --
   Conversion of promissory notes to ICH Preferred stock                  $                     --  $               15,000
   Dividends declared and unpaid                                          $                  3,609  $                   --





              See accompanying notes to consolidated  financial statements.

</TABLE>

<PAGE>


                 IMPAC COMMERCIAL HOLDINGS, INC. and SUBSIDIARY
                   Notes to Consolidated Financial Statements


     Unless the context otherwise requires,  references herein to the "Company"'
     refer to Impac Commercial Holdings, Inc. (ICH) and its subsidiaries IMH/ICH
     Dove Street,  LLC (Dove) and Impac Commercial Capital  Corporation  (ICCC),
     collectively. References to ICH refer to Impac Commercial Holdings, Inc. as
     a separate  entity from Dove or ICCC. ICH was  incorporated  in Maryland in
     February 1997 under the name Imperial Credit Commercial Holdings,  Inc. and
     in June 1997 ICH changed  its name to IMH  Commercial  Holdings,  Inc. By a
     vote of stockholders on January 28, 1998, a name change to Impac Commercial
     Holdings, Inc. was approved.

     1. Basis of Financial Statement Presentation

     The accompanying  consolidated  financial  statements have been prepared in
     accordance with generally accepted accounting principles (GAAP) for interim
     financial information and with the instructions to Form 10-Q and Rule 10-01
     of Regulation S-X. Accordingly,  they do not include all of the information
     and footnotes  required by GAAP for complete financial  statements.  In the
     opinion of management,  all  adjustments  (consisting  of normal  recurring
     adjustments)  considered  necessary  for  a  fair  presentation  have  been
     included.  Operating  results for the six-month  period ended June 30, 1998
     are not necessarily  indicative of the results that may be expected for the
     year ending  December 31, 1998.  The  accompanying  consolidated  financial
     statements  should be read in conjunction with the  consolidated  financial
     statements  and related notes  included in the  Company's  Annual Report on
     Form 10-K for the year ended December 31, 1997.

     The  operations of ICH have been  presented in the  consolidated  financial
     statements  for the three  months  ended June 30, 1998 and 1997 and for the
     six months  ended June 30,  1998 and for the period  from  January 15, 1997
     (commencement of operations)  through June 30, 1997  (Commencement  Period)
     and include  the  financial  results of ICH as a  stand-alone  entity,  the
     financial  results  of  ICH's  equity  interest  in net  loss  in ICCC as a
     stand-alone  entity,  subsequent to ICH's initial public  offering (IPO) on
     August 8, 1997, and the financial results of Dove.

     The Company is entitled  to 95% of the  earnings or losses of ICCC  through
     its ownership of all of the  non-voting  preferred  stock of ICCC. As such,
     the Company  records its investment in ICCC using the equity method.  Under
     this method,  original investments are recorded at cost and adjusted by the
     Company's  share of earnings or losses.  The results of  operations of ICCC
     are included in the results of operations for ICH as "Equity in net loss of
     ICCC." Gain or loss on the sale of loans or  securities  by ICCC to ICH are
     deferred and amortized or accreted over the estimated  life of the loans or
     securities using the interest method.

     2. Organization

     ICH is a recently  formed  specialty  commercial  property  finance company
     which  has  elected  to be taxed at the  corporate  level as a real  estate
     investment  trust (REIT) for federal income tax purposes,  which  generally
     allows the Company to pass through income to  stockholders  without payment
     of federal  income tax at the  corporate  level  provided  that the company
     distributes  95% of its taxable  income to  stockholders.  Impac  Mortgage
     Holdings,  Inc. (IMH)  capitalized  ICH with $15.0 million in cash in March
     1997. As of June 30, 1998, IMH owned 937,084, or 9.8%, of ICH voting Common
     Stock and 456,916 shares, or 100%, of ICH non-voting Class A Common Stock.

     3. Summary of Significant Accounting Policies

     Method of Accounting

     The consolidated  financial statements are prepared on the accrual basis of
     accounting in accordance with GAAP. The preparation of financial statements
     in conformity with GAAP requires  management to make significant  estimates
     and assumptions  that affect the reported amounts of assets and liabilities
     at the  date of the  financial  statements  and  the  reported  amounts  of
     revenues and expenses  during the reporting  period.  Actual  results could
     differ from those estimates.
<PAGE>

     New Accounting Statements

     In June 1997, the Financial  Accounting Standards Board issued Statement of
     Financial  Accounting  Standards (SFAS) No. 130,  "Reporting  Comprehensive
     Income",  which is effective for fiscal years  beginning after December 15,
     1997  and  requires   restatement  of  earlier  financial   statements  for
     comparative purposes.  SFAS No. 130 establishes standards for reporting and
     the display of  comprehensive  income and its  components  in the financial
     statements.  SFAS No. 130  requires  that items  meeting the  criteria of a
     component  of  comprehensive  income  (such as gains or losses  on  certain
     investments    in   debt    and    equity    securities    classified    as
     available-for-sale), be shown in the financial statements as adjustments to
     reported net earnings to arrive at a disclosure  of  comprehensive  income.
     SFAS No.  130  provides  informative  disclosure  but does not and will not
     impact previously reported or future net earnings and earnings per share.

     The following table represents comprehensive income (in thousands):
<TABLE>
<CAPTION>

                                                                                                        For the
                                                                                                       period from
                                                                                                    January 15, 1997
                                                                                   For the Six       (commencement
                                                      For the Three Months         Months Ended       of operations)
                                                          Ended June 30,             June 30,        through June 30,
                                                     1998              1997            1998              1997
                                               ---------------- --------------  -----------------  ------------------
<S>                                            <C>             <C>             <C>                 <C>  


Net earnings                                   $         2,673  $          319  $         4,849    $         (2,367)
Accumulated other comprehensive loss                       196               -             (234)                 -
                                               ---------------  ==============  ================   ==================
     Comprehensive income                      $         2,869  $          319  $         4,615    $         (2,367)
                                               ===============  ==============  ================   ==================

</TABLE>

      In June 1997,  the  Financial  Accounting  Standards  Board (FASB)  issued
     Statement  of  Financial  Standards  (SFAS)  No.  131,  "Disclosures  about
     Segments of an Enterprise and Related  Information."  SFAS 131  establishes
     standards  for the way that public  enterprises  report  information  about
     operating  segments  in  annual  financial  statements  and  requires  that
     selected  information about those operating segments be reported in interim
     financial   statements.   This  statement  supersedes  SFAS  14  "Financial
     Reporting  for  Segments of a Business  Enterprise."  SFAS No. 131 requires
     that all public  enterprises  report financial and descriptive  information
     about its reportable operating segments.  Operating segments are defined as
     components  evaluated  regularly by the chief  operating  decision maker in
     deciding  how to allocate  resources  and in  assessing  performance.  This
     statement is effective for fiscal years  beginning after December 15, 1997.
     In the initial year of  application,  comparative  information  for earlier
     years should be restated.

     In June 1998,  the (FASB) issued SFAS No. 133,  "Accounting  for Derivative
     Instruments and Hedging  Activities."  SFAS No. 133 establishes  accounting
     and  reporting  standards for  derivative  instruments,  including  certain
     derivative instruments embedded in other contracts,  (collectively referred
     to as derivatives) and for hedging  activities.  It requires that an entity
     recognize all  derivatives as either assets or liabilities in the statement
     of  financial  position and measure  those  instruments  at fair value.  If
     certain conditions are met, a derivative may be specifically  designated as
     (a) a hedge of the  exposure  to changes in the fair value of a  recognized
     asset or liability or an unrecognized  firm commitment,  (b) a hedge of the
     exposure to variable cash flows of a forecasted transaction, or (c) a hedge
     of  the  foreign  currency  exposure  of a  net  investment  in  a  foreign
     operation, an unrecognized firm commitment, an available-for-sale security,
     or a foreign-currency-denominated forecasted transaction.

     4. Net Earnings per Share

     Effective  December 31, 1997, the Company  adopted SFAS No. 128,  "Earnings
     per Share".  SFAS 128 replaces the  previously  reported  primary and fully
     diluted  earnings  per share with  basic and  diluted  earnings  per share.
     Unlike  primary  earning per share,  basic  earnings per share excludes any
     dilutive  effects of stock  options.  Diluted  earnings  per share are very
     similar to the previously  reported fully diluted earnings per share. Basic
     net earnings  per share are  computed on the basis of the weighted  average
     number of shares  outstanding  for the period.  Dilutive  net  earnings per
     share are  computed on the basis of the weighted  average  number of shares
     and common equivalent shares outstanding for the period.
<PAGE>
     The  following  tables  represent  the  computation  of basic  and  diluted
     earnings  per share for the three and six months  ended  June 30,  1998 (in
     thousands, except per share data):

<TABLE>
<CAPTION>


                                                                                               For the Three
                                                                                                Months Ended
                                                                                               June 30, 1998
                                                                                          -------------------------
<S>                                                                                      <C>                      

         Numerator:
              Numerator for basic earnings per share--
                   Net earnings                                                           $                  2,673
                                                                                          -------------------------

         Denominator:
              Denominator for basic earnings per share--
                 Weighted average number of common shares
                    outstanding during the period                                                            8,111
                 Net effect of dilutive stock options                                                           11
                                                                                          -------------------------

              Denominator for diluted earnings per share                                                     8,122
                                                                                          =========================

              Net earnings per share--basic                                               $                   0.33
                                                                                          =========================

              Net earnings per share--diluted                                             $                   0.33
                                                                                          =========================



                                                                                                For the Six
                                                                                                Months Ended
                                                                                               June 30, 1998
                                                                                          -------------------------

         Numerator:
              Numerator for basic earnings per share--
                   Net earnings                                                           $                  4,849
                                                                                          -------------------------

         Denominator:
              Denominator for basic earnings per share--
                 Weighted average number of common shares
                   outstanding during the period                                                             8,066
                 Net effect of dilutive stock options                                                           23
                                                                                          -------------------------
              Denominator for diluted earnings per share                                                     8,089
                                                                                          =========================

              Net earnings per share--basic                                               $                   0.60
                                                                                          ========================

              Net earnings per share--diluted                                             $                   0.60
                                                                                          =========================

</TABLE>

     5. Investment in Impac Commercial Capital Corporation

     The Company is entitled  to 95% of the  earnings or losses of ICCC  through
     its ownership of all of the  non-voting  preferred  stock of ICCC. As such,
     the Company  records its investment in ICCC using the equity method.  Under
     this method,  original investments are recorded at cost and adjusted by the
     Company's share of earnings or losses. Gain or loss on the sale of loans or
     securities  by ICCC to ICH are deferred and  amortized or accreted over the
     estimated life of the loans or securities using the interest method.



<PAGE>



     The following is financial  information for ICCC for the periods  presented
     (in thousands):
<TABLE>
<CAPTION>

                                 BALANCE SHEETS
                                                                                         June 30,           December 31,
                                                                                           1998                 1997
                                                                                    -----------------  --------------------
<S>                                                                                <C>                <C>  
                                         ASSETS
     Cash                                                                           $          8,018   $             2,273
     Commercial Mortgages held-for-sale                                                       79,696               106,654
     Premises and equipment, net                                                                 654                   381
     Due from affiliates                                                                           6                 1,538
     Other assets                                                                              3,840                 1,789
                                                                                    -----------------  --------------------
                                                                                    $         92,214   $           112,635
                                                                                    =================  ====================
                          LIABILITIES AND SHAREHOLDERS' EQUITY
     Warehouse line agreements                                                      $         78,040   $           104,219
     Due to affiliates                                                                         8,178                   758
     Other liabilities                                                                         2,516                 3,255
                                                                                    -----------------  --------------------
          Total liabilities                                                                   88,734               108,232
                                                                                    -----------------  --------------------

     Shareholders' Equity:
     Preferred stock; no par value; 50,000 shares authorized; 9,500 shares issued
        and outstanding at June 30, 1998 and December 31, 1997                                 2,875                 2,875
     Common stock; no par value; 50,000 shares authorized; 500 shares issued
        and outstanding at June 30, 1998 and December 31, 1997                                     1                     1
     Contributed capital                                                                         150                   150
     Retained earnings                                                                           454                 1,377
                                                                                    -----------------  --------------------
          Total shareholders' equity                                                           3,480                 4,403
                                                                                    -----------------  --------------------

                                                                                    $         92,214   $           112,635
                                                                                    =================  ====================
</TABLE>
<TABLE>
<CAPTION>

                            STATEMENTS OF OPERATIONS

                                                                                                            For the period from
                                                                                                              January 15, 1997
                                                     For the Three       For the Three      For the Six       (commencement of
                                                      Months Ended        Months Ended       Months Ended   operations) through
                                                        June 30,            June 30,           June 30,           June 30,
                                                          1998               1997               1998                1997
                                                    -----------------  ------------------  ---------------   -------------------
<S>                                                <C>                <C>                  <C>              <C>  
Revenues:
   Interest income                                  $         3,357     $          225      $      6,203      $           231      
   Loan servicing income                                         11                 18                29                   20
   Other income                                                 252                 19               318                   19
                                                    ------------------  ------------------  ----------------  -------------------
                                                              3,620                262             6,550                  270
                                                    ------------------  ------------------  ----------------  -------------------
Expenses:
   Interest expense on warehouse line
      and reverse repurchase agreements                       3,453                204             6,171                  204
   Interest on borrowings from affiliates                       168                  6               369                   11
   General, administrative and other expense                    627                203             1,232                  329
   Professiona1 services                                        142                116               375                  179
   Provision for repurchases                                      -                 21                 -                   21
                                                    ------------------  ------------------  ----------------  -------------------
                                                              4,390                550             8,147                  744
                                                    ------------------  ------------------  ----------------  -------------------
Loss before income tax benefit                                 (770)              (288)           (1,597)                (474)

Income tax benefit                                             (325)              (198)             (674)                (198)
                                                    ----------------    ------------------  ----------------  -------------------
   Net loss                                         $          (445)     $         (90)     $       (923)     $          (276)    
                                                    ==================  ==================  ================  ===================
</TABLE>
<PAGE>

     6. Stockholders' Equity

     The Company  completed a secondary  common stock offering,  which closed in
     June 1998. The Company raised additional  capital of $29.1 million,  net of
     underwriting discounts and before other expenses, as stockholders purchased
     2,000,000 shares of common stock at a price of $15.3125 per share.

     On June 8, 1998,  the Company  declared a second  quarter  dividend of $3.6
     million,  or $0.45 per share.  This  dividend  was paid on July 15, 1998 to
     stockholders  of record on June 19,  1998.  On April 1, 1998,  the  Company
     declared a first quarter dividend of $3.2 million, or $0.40 per share. This
     dividend was paid on April 24, 1998 to  stockholders  of record on April 9,
     1998.


<PAGE>


     ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                       RESULTS OF OPERATIONS

     Certain information contained in the following Management's  Discussion and
     Analysis  of  Financial  Condition  and  Results of  Operations  constitute
     forward-looking  statements  within  the  meaning  of  Section  27A  of the
     Securities Act of 1933, as amended,  and Section 21e of the Exchange Act of
     1934, as amended,  which can be  identified  by the use of  forward-looking
     terminology such as "may," "will,"  "expect,"  "anticipate,"  "estimate" or
     "continue"  or  the  negatives  thereof  or  other  variations  thereon  or
     comparable terminology.

     GENERAL

     ICH was  incorporated in the state of Maryland on February 3, 1997. ICH was
     formed to seek opportunities in the commercial mortgage market.  Commercial
     mortgage  assets  include  mortgage  loans on  condominium-conversions  and
     mortgage loans on commercial  properties,  such as industrial and warehouse
     space,  office  buildings,  retail  space and  shopping  malls,  hotels and
     motels, nursing homes, hospitals,  multifamily,  congregate care facilities
     and senior  living  centers  (collectively,  "Commercial  Mortgages").  The
     Company  operates  the  Long-Term   Investment   Operations  which  invests
     primarily in mortgage loans and  mortgage-backed  securities  ("MBSs").  To
     date,  the  Long-Term  Investment  Operations  has  invested  primarily  in
     Commercial   Mortgages   and   mortgage-backed   securities  on  commercial
     properties  ("CMBSs").  The Company also engages in the Conduit Operations,
     ICCC,  which  originates,  purchases  and sells or  securitizes  Commercial
     Mortgages.  ICCC operates three divisions: the ConduitExpress Division, the
     CommercialExpress Division and the CondoSelect Division.

     BUSINESS OPERATIONS

     Long-Term Investment Operations:

     During  the six  months  ended  June 30,  1998,  the  Long-Term  Investment
     Operations,  conducted  by  ICH,  acquired  $325.6  million  of  Commercial
     Mortgages as compared to $17.5  million of  Commercial  Mortgages  acquired
     during the Commencement  Period.  Commercial  Mortgages purchased from ICCC
     during  the  first six  months  of 1998  consisted  of  $308.6  million  of
     fixed-rate   mortgages   ("FRMs")  and  $19.8  million  of  adjustable-rate
     mortgages   ("ARMs")  secured  by  first  liens  on  commercial   property.
     Commercial  Mortgages  purchased  from ICCC  during the first six months of
     1998 consisted of $206.1 million of ConduitExpress loans, $109.6 million of
     CommercialExpress  loans and $12.7 million of CondoSelect loans. As of June
     30, 1998, the Long-Term  Investment  Operations portfolio of mortgage loans
     consisted of $367.3 million of Commercial Mortgages held-for-investment and
     $11.0  million of  mortgage  loans held as  collateral  for  Collateralized
     Mortgage Obligations ("CMOs") of which 17.6% were FRMs and 82.4% were ARMs.
     The  weighted  average  coupon  of  the  Long-Term  Investment   Operations
     portfolio  of  Commercial  Mortgages  was  8.14%  at  June  30,  1998.  The
     delinquency  rate  of  Commercial  Mortgages  in the  long-term  investment
     portfolio was zero at June 30, 1998. In addition,  the Long-Term Investment
     Operations had outstanding finance receivables of $71.7 million, investment
     securities  available-for  sale of $17.9  million and residual  interest in
     securitizations of $10.3 million at June 30, 1998.

     Conduit Operations:

     The  Conduit   Operations,   conducted  by  ICCC,  supports  the  Long-Term
     Investment  Operations  of the  Company by  supplying  ICH with  Commercial
     Mortgages for its long-term investment portfolio. In acting as the mortgage
     conduit for the Company,  ICCC originated  $181.9 million of ConduitExpress
     loans  during the first six  months of 1998 as  compared  to $24.1  million
     during the Commencement Period. The  CommercialExpress  Division originated
     $106.3  million  during  the first six months of 1998 as  compared  to $1.9
     million during the Commencement Period. The CondoSelect Division originated
     $12.7  million  during  the first six  months of 1998 and none  during  the
     Commencement  Period.  ICCC's servicing  portfolio increased 766% to $452.8
     million as of June 30,  1998 as  compared  to $52.3  million as of June 30,
     1997. The loan delinquency rate of Commercial Mortgages in ICCC's servicing
     portfolio was zero at June 30, 1998.

<PAGE>



     RESULTS OF OPERATIONS; IMPAC COMMERCIAL HOLDINGS, INC.
     THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THREE MONTHS ENDED 
     JUNE 30, 1997

     Net Earnings

     Net earnings  for the three  months  ended June 30, 1998  increased to $2.7
     million as compared  $319,000 for the three months ended June 30, 1997. The
     increase in net earnings  was  primarily  attributed  to an increase in net
     interest  income earned on Commercial  Mortgages,  investment  and residual
     securities,  and  finance  receivables  partially  offset by an increase in
     general and  administrative  expenses and  management  advisory  fees.  The
     significant  increase in the  Company's  net  earnings for the three months
     ended June 30, 1998 as compared to the three  months ended June 30, 1997 is
     due to the Company's growth over the past 12 months.

     Revenues

     Revenues for the three months ended June 30, 1998 increased to $8.6 million
     as compared to  $986,000  for the three  months  ended June 30,  1997.  The
     increase is  primarily  due to an increase  in  interest  income  earned on
     Commercial    Mortgages    held-for-investment,    investment    securities
     available-for-sale,  residual interests in securitizations, CMO collateral,
     and  finance  receivables  (collectively,   "Commercial  Mortgage  Assets")
     partially offset by equity in net loss of ICCC of $423,000.

     Interest  income for the three months ended June 30, 1998 increased to $8.7
     million as compared to $986,000  for the three  months ended June 30, 1997.
     Such an  increase  is  attributed  to an  increase  in  average  Commercial
     Mortgage  Assets to $347.4 million for the three months ended June 30, 1998
     as compared to $36.3 million for the three months ended June 30, 1997.

     The Company  recorded equity in net loss of ICCC for the three months ended
     June 30, 1998 of $423,000.  The Company has a 95% economic interest in ICCC
     through its  ownership of 100% of the  preferred  stock of ICCC,  which was
     acquired in August 1997. As the preferred  stock of ICCC was contributed to
     the Company in August 1997, the Company did not record any investment in or
     equity in net earnings or loss for the three months ended June 30, 1997.

     Expenses

     Expenses for the three months  ended June 30, 1998  increased  785% to $5.9
     million as compared to $667,000  for the three  months ended June 30, 1997.
     The  increase  is  primarily  due  an  increase  in  interest   expense  on
     borrowings,  general and  administrative  and other expenses and management
     advisory  fees.  Interest  expense for the three months ended June 30, 1998
     increased  to $5.1  million as compared to  $523,000  for the three  months
     ended June 30, 1997 as average  borrowings,  which include  warehouse  line
     agreements, reverse repurchase agreements and CMO borrowings,  increased to
     $285.0  million  for the three  months  ended June 30,  1998 as compared to
     $24.7  million  for the three  months  ended  June 30,  1997.  General  and
     administrative  and other  expenses  increased  to  $430,000  for the three
     months ended June 30, 1998 as compared to $5,000 for the three months ended
     June 30, 1997 due to a  significant  increase in  operations in the past 12
     months. Management advisory fees increased to $217,000 for the three months
     ended June 30, 1998 as compared to zero for the three months ended June 30,
     1997. The Company incurs  management  advisory fee expense  pursuant to the
     Management  Agreement with RAI Advisors,  LLC ("RAI").  The Company did not
     record a  management  advisory fee for the three months ended June 30, 1997
     as the  Company's  operations  were in a  formative  stage,  and thus,  the
     threshold  when RAI would  earn a fee  (return on equity  greater  than the
     average Ten Year U.S. Treasury rate plus 2%) was not reached

<PAGE>

     RESULTS OF OPERATIONS; IMPAC COMMERCIAL HOLDINGS, INC.
     SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE PERIOD FROM JANUARY 15,
     1997 (COMMENCEMENT OF OPERATIONS) THROUGH JUNE 30, 1997

     Net Earnings

     Net  earnings  for the six months  ended June 30,  1998  increased  to $4.8
     million as  compared  to a net loss of $2.4  million  for the  Commencement
     Period.  The net loss for the Commencement  Period was primarily the result
     of  the  issuance  by  ICH of  stock  that  resulted  in a  one-time  stock
     compensation  expense of $2.7  million.  Excluding  the stock  compensation
     expense,  ICH would have earned $330,000 for the Commencement  Period.  The
     increase in net earnings  was  primarily  attributed  to an increase in net
     interest  income earned on  Commercial  Mortgages,  investment  securities,
     residual  interest in  securitizations  and finance  receivables  partially
     offset  by an  increase  in  equity  in  net  loss  of  ICCC,  general  and
     administrative  expenses and  management  advisory  fees.  The  significant
     increase in the  Company's  net  earnings for the six months ended June 30,
     1998 as compared  to the  Commencement  Period is the result the  Company's
     growth over the past 12 months as the  Company  had only been in  operation
     for approximately five months as of June 30, 1997.

     Revenues

     Revenues  for the six months  ended June 30, 1998  increased  900% to $14.0
     million as  compared  to $1.4  million  for the  Commencement  Period.  The
     increase is primarily due to higher net interest  income due to an increase
     in Commercial  Mortgage  Assets  partially  offset by equity in net loss of
     ICCC of $876,000.

     Interest  income for the six months ended June 30, 1998  increased to $14.5
     million as compared to $1.4 million for the  Commencement  Period.  Such an
     increase is attributed to an increase in average Commercial Mortgage Assets
     to $280.7  million  for the six months  ended June 30,  1998 as compared to
     $24.3 million for the Commencement Period.

     The Company  recorded  equity in net loss of ICCC for the six months  ended
     June 30, 1998 of $876,000.  The Company has a 95% economic interest in ICCC
     through  its  ownership  of 100% of the  preferred  stock of ICCC which was
     acquired in August 1997. As the preferred  stock of ICCC was contributed to
     the Company in August 1997, the Company did not record any investment in or
     equity in net earnings or loss for the Commencement Period.

     Expenses

     Expenses  for the six months  ended June 30,  1998  increased  149% to $9.2
     million as  compared  to $3.7  million  for the  Commencement  Period.  The
     increase is primarily  due an increase in interest  expense on  borrowings,
     general and administrative and other expenses and management  advisory fees
     offset by a decrease in stock  compensation  expense.  Interest expense for
     the six months ended June 30, 1998 increased to $7.8 million as compared to
     $802,000 for the Commencement Period as average  borrowings,  which include
     warehouse  line   agreements,   reverse   repurchase   agreements  and  CMO
     borrowings,  increased to $214.9  million for the six months ended June 30,
     1998 as compared to $17.2 million for the Commencement Period.  General and
     administrative  and other expenses increased to $620,000 for the six months
     ended June 30, 1998 as compared to $9,000 for the  Commencement  Period due
     to a significant  increase in operations in the past 12 months.  Management
     advisory fees  increased to $379,000 for the six months ended June 30, 1998
     as  compared  to zero  for the  Commencement  Period.  The  Company  incurs
     management  advisory fee expense pursuant to the Management  Agreement with
     RAI.  The  Company  did  not  record  a  management  advisory  fee  for the
     Commencement Period as the Company's  operations were in a formative stage,
     and thus,  the return on equity was less than the threshold  when RAI would
     earn a fee  (return  on  equity  greater  than the  average  Ten Year  U.S.
     Treasury  rate  plus  2%)  was  not  reached.  Stock  compensation  expense
     decreased as the Company  incurred a one-time charge of $2.7 million in the
     Commencement Period as a result of the issuance of founder's stock.
<PAGE>
     Liquidity and Capital Resources

     The Company's  principal  liquidity  requirements result from funding needs
     arising  from  the  acquisition  of  mortgage  loans  and   mortgage-backed
     securities by the Long-Term  Investment  Operations,  at the ICH level, and
     the origination or purchase of Commercial  Mortgages  held-for-sale  by the
     Conduit  Operations,  at the ICCC level. The Company's  ability to meet its
     long-term  liquidity  requirements  is subject to the renewal of its credit
     and  repurchase  facilities  and/or  obtaining  other sources of financing,
     including  additional debt or equity from time to time. Any decision by the
     Company's  lenders and/or  investors to make additional  funds available to
     the Company in the future will depend upon a number of factors, such as the
     Company's  compliance with the terms of its existing  credit  arrangements,
     the  Company's  financial  performance,  industry and market  trends in the
     Company's  various  businesses,  the  general  availability  of  and  rates
     applicable to financing and  investments,  such lenders' and/or  investors'
     own  resources  and  policies  concerning  loans and  investments,  and the
     relative attractiveness of alternative investment or lending opportunities.

     Prior to the IPO, the Long-Term  Investment  Operations was funded by $15.0
     million in investments  and $900,000 in borrowings from IMH and a warehouse
     line  agreement  from a third party  lender.  ICCC was funded by affiliated
     borrowings and by $500,000 from the issuance of preferred stock. Subsequent
     to the IPO, the Long-Term Investment  Operations and the Conduit Operations
     have been funded through  borrowings  from  warehouse  line  agreements and
     reverse repurchase agreements,  borrowings from affiliated companies, sales
     of Commercial Mortgages and proceeds from the issuance of capital stock.

     ICH,  as a  stand-alone  entity,  entered  into  committed  warehouse  line
     agreements with two investment  banks, one of which expires in May 1999 and
     one of which expires in February 1999 (unless  terminated  earlier),  which
     provide  up  to  an  aggregate  of  $600.0  million  (of  which  $200.0  is
     uncommitted) to finance ICH's operations as needed.  Terms of the warehouse
     line  agreements  require  that  the  Commercial  Mortgages  be  held by an
     independent  third party custodian,  which gives the Company the ability to
     borrow  against the  collateral as a percentage of the fair market value of
     the Commercial Mortgages. The borrowing rates are expressed in basis points
     over the one-month  LIBOR or Eurodollar  Rate. The margins on the warehouse
     line  agreements are based on the type of mortgage  collateral used and the
     loan  amounts  generally  range from 75% to 92% of the fair market value of
     the  collateral.  As of June 30, 1998,  an aggregate of $361.4  million was
     outstanding under the warehouse line agreements.

     ICH has entered  into  reverse  repurchase  agreements  whereby ICH pledges
     specific CMBSs as collateral to secure short-term loans. The interest rates
     on the loans are based on the  one-month  LIBOR plus a margin  depending on
     the type of  collateral.  As of June 30, 1998,  amounts  outstanding on the
     reverse repurchase agreements were $6.9 million.

      In August 1997, ICH entered into a revolving  credit  arrangement with IMH
     whereby ICH agreed to advance to IMH up to maximum amount of $15.0 million.
     The  agreement  expired on August 8,  1998.  Advances  under the  revolving
     credit arrangement were at an interest rate and maturity  determined at the
     time of each advance with interest and principal  paid monthly.  As of June
     30, 1998 and December 31, 1997, there were no amounts outstanding under the
     credit  arrangement.  Interest  income  recorded  by ICH for the six months
     ended June 30, 1998 and the Commencement Period related to such advances to
     IMH was approximately $203,000 and none, respectively.

     In August 1997, ICH entered into a revolving  credit  arrangement  with IMH
     whereby IMH agreed to advance to ICH up to maximum amount of $15.0 million.
     The  agreement  expired on August 8,  1998.  Advances  under the  revolving
     credit arrangement were at an interest rate and maturity  determined at the
     time of each advance with interest and principal  paid monthly.  As of June
     30, 1998 and December  31, 1997,  ICH's  outstanding  borrowings  under the
     credit  arrangement  were  none and $9.1  million,  respectively.  Interest
     expense  recorded  by ICH related to such  borrowings  from IMH for the six
     months ended June 30, 1998 and the  Commencement  Period was  approximately
     $43,000 and none respectively.

     ICCC has entered into warehouse line  agreements  with ICH which provide up
     to an aggregate of $900.0 million to finance  ICCC's  operations as needed.
     Terms  of  the  warehouse  line  agreements  require  that  the  Commercial
     Mortgages be held by an independent third party custodian,  which gives the
     Company the ability to borrow against the collateral as a percentage of the
     fair market value of the Commercial  Mortgages.  The borrowing rates on the
     warehouse line agreements are at the prime rate which was 8.50% at June 30,
     1998.  The margins on the warehouse  line  agreements  are up to 90% of the
     fair market value of the collateral. Management believes that the warehouse
     line agreements will be sufficient to handle the Company's liquidity needs.
     As of June 30, 1998 and December  31,1997,  amounts  outstanding  on ICCC's
     warehouse  line  agreements  with ICH were $71.7 million and $95.7 million,
     respectively.
<PAGE>
     ICCC has entered into an  uncommitted  warehouse line agreement with IMH to
     provide  financing as needed.  The margins on the warehouse  line agreement
     are at 8% of the fair market value of the collateral. The interest rates on
     the  borrowings  are  indexed to the prime  rate.  As of June 30,  1998 and
     December 31,1997,  outstanding amounts on the warehouse line agreement were
     $6.4 million and $8.5 million, respectively.

     ICH has entered  into a line of credit with  Imperial  Bank to borrow up to
     $10.0 million  dollars for general  working  capital  purposes at the prime
     rate plus .25%. As of June 30, 1998 there were no borrowings outstanding on
     the line.

     In June 1998,  the  Company  raised net  proceeds of $29.1  million  (after
     underwriting discounts and before offering expenses) from a public offering
     of  2,000,000  shares of common  stock at a price of  $15.3125  per  share.
     Underwriting  discount  and  commissions  were $1.5 million and other total
     expenses were approximately $600,000.

     During the six months  ended June 30, 1998 and the period from  January 15,
     1997 (commencement of operations) through December 31, 1997, ICCC sold zero
     and $73.4 million,  respectively,  to third party investors and sold $325.6
     million  and  $58.4  million,  respectively,  in  principal  of  Commercial
     Mortgages to ICH.

     For the six months  ended June 30, 1998 and the  Commencement  Period,  net
     cash  used in  operating  activities  was  $(12.9)  million  and  $944,000,
     respectively.  Net cash used in  operating  activities  for the six  months
     ended June 30, 1998 was  primarily the result of a net increase in due from
     affiliates  and due to  affiliates  balances  of  $14.4  million.  Net cash
     provided by operating  activities for the Commencement Period was primarily
     affected  by $2.7  million  in stock  compensation  expense  related to the
     issuance of 300,000 shares of ICH Common Stock.

     For the six months  ended June 30, 1998 and the  Commencement  Period,  net
     cash used in investing  activities  was $286.9  million and $58.5  million,
     respectively.  Net cash used in  investing  activities  for the six  months
     ended  June  30,  1998  was  primarily  the  result  of a net  increase  in
     Commercial Mortgages  held-for-investment  of $304.6 million. Net cash used
     in investing  activities  for the  Commencement  Period was  primarily  the
     result of a net increase in finance receivables of $31.2 million.

     For the six months  ended June 30, 1998 and the  Commencement  Period,  net
     cash provided by financing activities was $296.8 million and $69.2 million,
     respectively.  Net cash provided by financing activities for the six months
     ended June 30, 1998 and the Commencement Period was primarily the result of
     an increase in net  borrowings  on  warehouse  line and reverse  repurchase
     agreements  of $268.1  million and $37.9  million,  respectively.  Net cash
     provided  by  financing  activities  for the  Commencement  Period was also
     affected by the issuance of promissory notes of $15.0 million.

     Inflation

     The  Financial  Statements  and Notes  thereto  presented  herein have been
     prepared  in  accordance  with  GAAP,  which  require  the  measurement  of
     financial  position and operating  results in terms of  historical  dollars
     without  considering the changes in the relative  purchasing power of money
     over time due to  inflation.  The impact of  inflation  is reflected in the
     increased costs of the Company's  operations.  Unlike industrial companies,
     nearly all of the assets and  liabilities  of the Company's  operations are
     monetary in nature.  As a result,  interest  rates have a greater impact on
     the Company's operations' performance than do the effects of general levels
     of inflation.  Inflation affects the Company's operations primarily through
     its effect on interest rates, since interest rates normally increase during
     periods of high  inflation and decrease  during  periods of low  inflation.
     During periods of increasing  interest rates, demand for mortgage loans and
     a  borrower's  ability  to qualify  for  mortgage  financing  in a purchase
     transaction may be adversely affected.

     The Company's  operations may also be affected in a declining interest rate
     environment which, generally, results in increased prepayments through loan
     payoffs.  Accelerated  prepayments  have the effect of decreasing  the fair
     market value of certain  related  investment  securities  which  contain an
     interest  component  and  increasing  the fair market value of  subordinate
     securities with only a principal component.
<PAGE>
     Year 2000 Compliance

     The Company is  currently  in the  process of  evaluating  its  information
     technology  infrastructure  for the Year  2000  ("Y2000")  compliance.  The
     Company has  identified  both  Information  Technology  ("IT")  systems and
     non-IT systems and contacted  vendors in regards to this issue.  In regards
     to IT systems,  the Company plans to upgrade  software  applications  where
     possible or replace existing systems if required. Regarding non-IT systems,
     workstations  and  fileservers are currently being tested and software that
     is non-compliant with Y2000 is being replaced. Acquisitions of workstations
     and  fileservers  are  compliant  with  Y2000.  Management  has  approved a
     proposal  to bring its  telecommunications  system  into  Y2000  compliance
     during 1998.  All new  workstations  are being  internally  tagged as being
     compliant with Y2000.  The Company expects to be Y2000 compliant by the end
     of the first quarter of 1999. The Company does not believe that the cost to
     modify its  information  technology  infrastructure  to be  material to its
     financial  condition  or  results  of  operations,  nor  does  the  Company
     anticipate  any material  disruption  of its  operations as a result of any
     failure by the Company to be compliant.  However, there can be no assurance
     that there will not be a delay in, or increased costs  associated with, the
     need to address the Year 2000 issue. The Company also relies,  directly and
     indirectly,  on other  business  such as  third  party  service  providers,
     creditors and financial  organizations and governmental  entities.  Even if
     the Company's computer systems are not materially adversely affected by the
     Year 2000 issue, the Company's  business and operations could be materially
     adversely affected by disruptions in the operations of the enterprises with
     which the Company interacts.

     Transactions with Related Parties

     RAI Advisors,  LLC ("RAI"),  an affiliated  company of IMH, has  contracted
     with  Stephan  Peers,  a  Director  of IMH  and  ICH,  to  perform  various
     consulting  services as an  independent  contractor for the benefit of IMH,
     ICH, or any of their  subsidiaries or affiliates  (the "Impac  Companies").
     All costs associated with the consulting arrangement with Mr. Peers will be
     charged by RAI  proportionately to the appropriate Impac Company based upon
     time spent.

     ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Not applicable.


<PAGE>



     PART II.  OTHER INFORMATION

     ITEM 1: LEGAL PROCEEDINGS

     The Company is not a party to any material legal proceedings.

     ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

     Not applicable.

     ITEM 3: DEFAULTS UPON SENIOR SECURITIES

     Not applicable.

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

     Not applicable.

     ITEM 5: OTHER INFORMATION

     Stockholder Proposals

     Stockholders  are  hereby  notified  that if  they  wish a  proposal  to be
     included in the Company's Proxy Statement and form of proxy relating to the
     1999 annual  meeting of  stockholders,  they must deliver a written copy of
     their proposal no later than February 15, 1999.  Proposals must comply with
     the proxy rules relating to stockholder proposals, in particular Rule 14a-8
     under the Securities Exchange Act of 1934 (the "Exchange Act"), in order to
     be included in the  Company's  proxy  materials.  Stockholders  who wish to
     submit a proposal for consideration at the Company's 1999 annual meeting of
     stockholders,  but who do not wish to submit the proposal for  inclusion in
     the  Company's  proxy  statement  pursuant to Rule 14a-8 under the Exchange
     Act, must, in accordance with the Company's bylaws, deliver a copy of their
     proposal  no later than the close of  business  on May 24, 1999 nor earlier
     than April 24, 1999. In either case, proposals should be delivered to 20371
     Irvine Avenue, Santa Ana Heights,  California 92707, Attention:  Secretary.
     To avoid  controversy  and establish  timely receipt by the Company,  it is
     suggested that  stockholders  send their proposals by certified mail return
     receipt requested.

     Redesignation of Class A Preferred Stock

     On May 8, 1998,  the Company  amended its Charter  reclassifying  4,000,000
     shares of Convertible Class A Preferred Stock to Preferred Stock,  thereby,
     increasing the authorized amount of Preferred Stock to 10,000,000 shares.

     ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K.

     (a)  Exhibits:

            3.1(c)  Articles  of  Amendment  of  Registrant   (incorporated   by
            reference  herein  to  exhibit  3.1(c)  of  Amendment  No.  1 to the
            Registrant's   Registration   Statement   on  Form  S-11  (File  No.
            333-52231) filed June 1, 1998.)

            27 Financial Data Schedule

     (b) Reports on Form 8-K:

            None


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     SIGNATURES


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


IMPAC COMMERCIAL HOLDINGS, INC.




By:  /s/ Richard J. Johnson
Richard J. Johnson
Executive Vice President
and Chief Financial Officer

Date: August 12, 1998


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