Form 10-QSB



     [ x ] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF
              THE SECURITIES EXCHANGE ACT OF 1934

         For the quarterly period ending March 31, 2001

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

         For the transition period from _________ to _________


                  Commission file number 000-32409


                       UNITED MORTGAGE TRUST


          (Exact Name of Registrant as Specified in its
                      Governing Instruments)

     (a Maryland trust)        (IRS Employer Identification
                                     Number 75-6496585)



                    5740 Prospect Avenue
                        Suite 1000
                    Dallas, Texas 75206
                      (214) 237-9305



     Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 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 ___

                               (i)



UNITED MORTGAGE TRUST
INDEX TO FORM 10-QSB
                                                      Page Number

PART I  -- FINANCIAL INFORMATION . . . . . . . . . . . . . .2

Item 1. Financial Statements . . . . . . . . . . . . . . . .2

     Balance Sheets
        March 31, 2001 and December 31, 2000. . . . . . . . 2

     Statements of Income
        Three Months ending March 31, 2001 and 2000. . . . .3

     Statements of Cash Flows
        Three Months Ending March 31, 2001 and 2000. . . . .4

     Notes to Financial Statements. . . . . . . .  . . . . .5

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

PART II -- OTHER INFORMATION . . . . . . . . . . . . . . . 10

Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . 10

SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . .11

Accountants' Review Report . . . . . . . . . . . . . . . . 13








                                 1


PART I  -- FINANCIAL INFORMATION


                         UNITED MORTGAGE TRUST
                            BALANCE SHEETS
                   March 31, 2001 and December 31, 2000

                                           March 31,       December 31,
                                             2001              2000
                                         (unaudited)        (audited)
                                         ------------------------------
ASSETS

Cash                                       $    79,817      $   200,912
Investment in residential mortgages
  and contracts for deed                    36,189,365       33,419,399
Interim mortgages                            8,575,107        6,453,111
Accrued interest receivable                    727,575          667,513
Receivable from affiliates                      89,033          105,765
Equipment, less accumulated depreciation
  of 2,426 and $2,296, respectively              2,286            2,415
Other assets, less accumulated
  Amortization of $8,370                       207,133           56,971
                                           -----------       ----------
Total Assets                               $45,870,316      $40,906,086
                                           -----------       ----------
LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
  Line of credit (Note 3)                  $ 5,370,000      $ 7,000,000
  Dividend payable                             363,281          308,239
  Accounts payable & accrued
    liabilities                                273,569            3,606
                                           -----------       ----------
      Total Liabilities                    $ 6,006,850      $ 7,311,845
                                           -----------       ----------
Shareholders' equity:
  Shares of beneficial interest; $.01 par
    Value; 100,000,000 shares authorized
      2,250,677 and 1,884,043 shares
    outstanding                            $    22,506      $    18,840
  Additional paid-in capital (Note 4)       39,912,906       33,541,746
  Retained earnings (deficit)                 ( 71,946)          33,655
                                           -----------       ----------
      Total Shareholders' Equity           $39,863,466      $33,594,241
                                           -----------       ----------
Total Liabilities & Shareholders Equity    $45,870,316      $40,906,086
                                           -----------       ----------

See accompanying notes to financial statements.

                                 2



                           UNITED MORTGAGE TRUST
                            STATEMENTS OF INCOME
            For the Three Months Ended March 31, 2001 and 2000

                                                      March 31,
                                                2001          2000
                                            (unaudited)    (unaudited)

Income:
  Interest income                           $1,202,798      $816,341
  Gain on sale of notes                                        4,018
                                            ----------       -------
                                            $1,202,798       820,359
                                            ----------       -------
Expense:
  Salaries and wages (Note 4)                    --           33,979
  General and administrative (Note 4)           57,720        76,507
  Interest expense                             180,727       128,528
  Expense reimbursement from
    affiliate (Note 4)                           --          (54,188)
  Management Fee (Note 4)                       51,882          --
                                            ----------       -------
                                               285,330       184,826
                                            ----------       -------
Net income                                  $  917,469      $635,533
                                            ==========       =======
Net income per share of beneficial
  interest                                       $0.45         $0.49
                                            ==========       =======

Weighted average shares outstanding          2,046,859     1,289,010
                                            ==========     =========



See accompanying notes to financial statements.

                                 3



                         UNITED MORTGAGE TRUST
                       STATEMENTS OF CASH FLOWS
               For the Three Months Ended March 31, 2001 and 2000


                                                       March 31,
                                                  2001         2000
                                              (unaudited)  (unaudited)
                                              -----------------------
Cash flows from operating activities:
  Net income                                  $  917,469   $  635,533
  Adjustments to reconcile net income
    to net cash provided by operating
    activities:
      Depreciation and amortization                  340          130
      Net amortization of discount on
        mortgage investments                        (718)     (15,785)
      Changes in assets and liabilities:
        Accrued interest receivable              (60,062)    (192,114)
        Other assets                            (150,162)        --
        Accounts payable and accrued
          liabilities                            269,938        5,600
          Net cash provided by operating      ----------    ---------
            activities:                          976,805      433,364
                                              ----------    ---------
Cash flows from investing activities:
  Investment in residential mortgages
    and contracts for deed                    (3,259,290)  (2,517,366)
  Principal receipts on residential
    mortgages and contracts for deed             489,831      273,794
  Investment in interim mortgages             (4,615,286)  (1,720,929)
  Principal receipts on interim mortgages      2,493,290    1,586,572
  Loan acquisition costs (Note 4)                  --         (73,795)
        Net cash used in investing            ----------   ----------
         activities:                          (4,891,455)  (2,451,724)
                                              ----------   ----------
Cash flows from financing activities:
  Proceeds from issuance of shares of
    beneficial interest                        6,374,826    2,747,668
  Net borrowings on credit line               (1,630,000)       --
  Receivable from affiliate                       16,732      (26,422)
  Dividends                                     (968,003)    (637,541)
        Net cash provided by financing        ----------   ----------
          activities:                          3,793,555    2,083,705
                                              ----------   ----------
Net increase in cash                            (121,095)      65,345

Cash at beginning of period                      200,912       14,331
                                              ----------   ----------
Cash at end of period                         $   79,817    $  79,676
                                              ----------   ----------
Interest paid                                 $  180,727    $ 128,528
                                              ----------   ----------

See accompanying note to financial statements.

                             4

                   UNITED MORTGAGE TRUST
               Notes to Financial Statements
                     March 31, 2001

1. Description of Business

The Company

     United Mortgage Trust is a real estate investment trust (a "REIT")
administered by its Advisor, UMT Advisors, Inc., ("UMTA"). It invests
in residential mortgages, contracts for deed and interim mortgage
loans. Most, if not all, of the mortgages and contracts for deed that
are purchased are not insured or guaranteed by a federally owned or
guaranteed mortgage agency. Approximately 75% involve borrowers who do
not satisfy all of the income ratios, credit record criteria, loan-to-
value ratios, employment history and liquidity requirements of
conventional mortgage financing.

     Operations commenced on March 5, 1997 when approval was given by
the Securities and Exchange Commission for the Company's initial public
offering of shares. The Company is currently offering up to 2,500,000
shares at an offering price of $20 per share.

2. Basis of Presentation

     The accompanying unaudited financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB of
Regulation S-B. They do not include all information and footnotes
required by generally accepted accounting principles for complete
financial statements. However, except as disclosed herein, there has
been no material change in information disclosed in the notes to the
financial statements for the year ending December 31, 2000 included in
the Company's 10-KSB filed with the Securities and Exchange Commission.
The interim unaudited financial statements should be read in
conjunction with those financial statements. In the opinion of
management, all adjustments considered necessary for a fair
presentation, consisting solely of normal recurring adjustments, have
been made. Operating results for the three months ending March 31, 2001
are not necessarily indicative of the results that may be expected for
the year ending December 31, 2001.

3. Line-of-Credit

     The Company has a twelve-month credit facility with a maximum
borrowing limit of $7,000,000, which expires on August 22, 2001. The
line-of-credit is collateralized with the assignment of certain
Residential Mortgages.  Interest is fixed at 10.5%. The outstanding
balance on the line of credit at March 31, 2001 was $5,370,000
compared to $5,000,000 for the 2000-quarter.

                                 5



4. Related Party Transactions

     In 1997 the Company entered into a Funding Agreement with its
former Advisor whereby the Advisor agreed to fund the Company's general
and administrative expenses. In consideration of the Agreement, the
Company contributed to the Advisor an amount equal to one-half of one
percent annually (.5%) of the Company's average invested assets for the
immediately preceding month. In connection with that Agreement, the
Company received $54,188 in expense reimbursements during the three
months ending March 31, 2000. The agreement expired on December 31,
2000 when the Company entered into an Advisory Agreement with its new
Advisor, UMTA. Under the terms of the new agreement UMTA assumed the
day-to-day operations of the Company and generally, the day-to-day
expenses associated with running the Company are born by UMTA. The
Company is charged a monthly management fee that equaled $51,882 for
the quarter ending March 31, 2001. The new management fee is equal to
1/12th of 1/2 of 1% of the first $50,000,000 of income producing assets
(which will increase to 1/12th of 1% when income producing assets
exceeds $50,000,000.)

     Under the terms of the Advisory Agreement the Company paid
Acquisition Fees to the Advisor for providing services related to
identifying and purchasing loans. The former Advisory Agreement called
for the fee to be calculated at 3% of the unpaid principal balance of
each Residential Mortgages and Contracts for Deed purchased by the
Company. Under the new Advisory Agreement 3% of Net Proceeds are paid
to UMTA for those services (Net Proceeds are Gross Proceeds less
selling concessions.) Fees paid during the 2001 quarter were $197,016
and $73,795 during the 2000 quarter.

     The Company has a Mortgage Servicing Agreement with SCMI,
incurring service fees of $44,162 and $28,317 during the three months
ending March 31, 2001 and 2000.


                                 6



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

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDING MARCH 31, 2001

     We were formed on July 12, 1996, however our business operations
commenced in March 1997 when the Securities and Exchange Commission
issued an order of registration for our initial public offering of
Shares.

     The following table sets forth certain information about the
Mortgage Investments that we purchased during the periods set forth
below.
                                            Three Months Ending
                                                 March 31,
                                        2001                 2000
                                        -------------------------
RESIDENTIAL MORTGAGES
Purchase price                          $1,702,000     $1,456,000
Total number                                    38             30
Number purchased from affiliates                 7             20
Number purchased from other sources             31             10
Blended interest rate                       11.95%         11.35%
Aggregate principal balance             $1,717,000     $1,516,000
Average principal balance                  $45,000        $50,500
Remaining term in months (1)                   319            353
Current yield (1)                           12.06%         11.82%
Investment-to-value ratio (1)(2)            77.92%         84.00%

CONTRACTS FOR DEED
Purchase price                          $1,509,000     $1,367,000
Total number                                    30             29
Number purchased from affiliates                 0              9
Number purchased from other sources             30             20
Blended interest rate                       11.59%         11.86%
Aggregate principal balance             $1,511,000     $1,378,000
Average principal balance                  $50,000        $47,500
Remaining term in months (1)                   329            355
Current yield (1)                           11.61%         11.95%
Investment-to-value ratio (1)(2)            83.74%         89.60%

FORECLOSURE RESALE
Unpaid principal balance new loan       $  650,000     $  432,000
Unpaid principal balance FCL loan       $  624,000     $  398,000
Total number                                    14              9
Blended interest rate new loan              12.75%         12.00%
Blended interest rate FCL loan              11.79%         11.63%
Average principal balance new loan         $46,000        $48,000
Average principal balance FCL loan         $44,000        $44,000
Remaining term in months new loan (1)          358            359
Remaining term in months FCL loan (1)          357            337
Current yield new loan (1)                  12.67%         12.00%
Current yield FCL loan (1)                  12.13%         12.13%
Investment-to-value ratio new loan(1)(2)    93.25%         84.52%
Investment-to-value ratio (1)(2)            86.94%         85.37%

                                 7
INTERIM MORTGAGES
Portfolio beginning balance at 12/31    $6,453,000     $4,200,000
Portfolio ending balance at 3/31        $8,575,000     $4,334,000
Net increase in portfolio
  from prior period                     $2,122,000     $  134,000
Total number participated in
  during period                                296            145
Number purchased from affiliates               296            145
Number purchased from other sources              0              0
Blended interest rate                       12.75%         12.75%
Remaining term in months less than              12             12
Current yield at year-end (1)               12.93%         12.93%
Investment-to-value ratio (1)(2)               54%            52%

(1) These amounts were determined at the time the Mortgage Investments
were purchased.

(2) The investment-to-value ratio is determined at the time a Mortgage
Investment is acquired and is determined by dividing the amount paid
to acquire that Mortgage Investment by the value of the underlying
real estate that is security for that Mortgage Investment.

     As of March 31, 2001 our mortgage portfolio in the aggregate
consisted of 562 Residential Mortgages, 224 Contracts for Deed and 230
Interim Mortgages. As of the dates of purchase, the portfolio had an
unpaid principal balance of $44,822,000, and was purchased for a
discounted price of $43,867,000 (97.87% of the unpaid principal
balance). The average loan in the portfolio had a blended interest
rate of 11.89%, a current annual yield of 12.15%, an investment-to-
value ratio of 81.40%, an unpaid principal balance of $44,000, and a
term remaining of 339 months for Residential Mortgages and Contracts
for Deed and less than 12 months for Interim Mortgages.

     By comparison as of March 31, 2000, our mortgage portfolio in the
aggregate consisted of 390 Residential Mortgages, 158 Contracts for
Deed and 98 Interim Mortgages. As of the dates of purchase, the
portfolio had an unpaid principal balance of $28,800,000, and was
purchased for a discounted price of $27,900,000 (96.88% of the unpaid
principal balance). The average loan in the portfolio had a blended
interest rate of 11.70%, a current annual yield of 12.08%, an
investment-to-value ratio of 77.00%, an unpaid principal balance of
$44,600, and a term remaining of 342 months for Residential Mortgage
and Contracts for Deed and less than 12 months for Interim Mortgages,.

     All of the properties that are security for the Residential
Mortgages and Interim Mortgages were located in Texas. Each of the
properties was adequately covered by a mortgagee's title insurance
policy and hazard insurance.

                                 8



     During the three-month periods ending March 31, 2001 and 2000 our
Mortgage Investments generated $1,203,000 and $820,000 of total
income, which represented a 47% increase. The rise was attributed to
the significant addition of Mortgage Investments purchased using Net
Offering Proceeds derived from the sale of our Shares during the year
preceding the current period.

     Operating Expenses in the 2001 quarter of $110,000 represented a
96% increase over the comparative period's $56,000. The increase was
attributed to a 56% increase in loan servicing fees from $28,000 in
the 2000 quarter to $44,000 in the 2001 quarter, which is commensurate
with the 50% increase in the value of our portfolio, and a 86% rise in
other general and administrative expenses from $28,000 in the 2000
period to $52,000 in the 2001 period. Operating expenses as a
percentage of net income were 11.95% and 8.86% and as a percentage of
Average Invested Assets were .25% and  .20% during the quarters ending
March 31, 2001 and 2000, respectively.

     Interest expense for the 2001 quarter was $181,000 compared to
$129,000 during the 2000 quarter representing a 41% increase. The
increased interest expense was commensurate with higher borrowing on
our credit line, which for most of the quarter had an outstanding
balance of $7,000,000 being paid down during the month of March to its
level at quarter's end.

     Net income of $917,000 and $636,000 for the quarters ending March
31, 2001 and 2000, respectively, represented a 44% increase due to a
significantly larger loan portfolio producing interest income.
Earnings per weighted average share were $0.45 and $0.49 for the 2001
and 2000 quarters, respectively.

    Dividends declared and paid per share of beneficial interest for
the three-month periods ending March 31, 2001 and 2000 were $0.50 per
share for both periods. Dividends paid during both quarters were at a
10% annualized rate of return for our shareholders.

     As of March 31, 2001, 3.29% of our Mortgage Investments were in
default compared to 4.6% at the 2000-quarter's end. During the March
31, 2001 quarter, recoursed loans accounted for 1.75% and non-
recoursed were 1.54% of the 3.29%. During the comparable period all
loans were recoursed. Sellers of mortgage loans that do not meet all
of our underwriting criteria are required to provide recourse to us,
which may require them to replace or repurchase any non-performing note
and reimburse us for any interest, escrows, foreclosure, eviction, and
property maintenance costs. Recourse agreements can limit losses
associated with defaulted loans.

                                 9



CAPITAL RESOURCES AND LIQUIDITY FOR THE THREE MONTHS ENDING MARCH 31,
2001 AND 2000

     We utilize funds made available from the sale of our Shares,
funds made available on our bank line of credit and repayment of
principal on our Residential Mortgages and Contracts for Deed to
purchase Mortgage Investments.

                                                  THREE-MONTH PERIODS
                                                    ENDING MARCH 31,
                                             2001                    2000
                                             ----------------------------

Shares issued                                    366,874          153,716
Number of new shareholders                           123               67
Gross offering proceeds                      $ 7,337,000       $3,074,000
Net offering proceeds (after deduction
  of selling commissions and fees)           $ 6,374,826       $2,747,000
Principal receipts from Residential
  Mortgages and Contracts for Deed           $   490,000       $  274,000
Principal receipts from Interim Mortgages    $ 2,493,000       $1,587,000
Net borrowing from credit line               $(1,630,000)      $   -0-

     As of March 31 2001, we had sold an aggregate of 2,240,911 shares
of beneficial interest during the offering resulting in Gross Offering
Proceeds of $44.82 million and Net Offering Proceeds to us of $39.91
million. By comparison at the end of the 2000-quarter we had sold
1,329,260 shares resulting in Gross Offering Proceeds of $26.59
million and Net Offering Proceeds to us of $23.79 million. Total
shares outstanding at the end of the two comparable periods were
2,250,911 and 1,339,260.

      The Trustees approved and we entered into a new twelve-month
credit facility with a new lender in the amount of $7,000,000, which
will expire on August 22, 2001. The line-of-credit was
collateralized with the assignment of certain Residential Mortgages.
Interest is fixed at 10.5%. The line-of-credit was utilized to
acquire and warehouse Mortgage Investments as they become available.
The line-of-credit was reduced as new offering proceeds are
received. The outstanding loan balance at March 31, 2001 was
$5,370,000 and at March 31, 2000 was $5,000,000. The Company is
currently renegotiating the loan to lower the interest rate to
reflect the recent drop in interest rates.

PART II - OTHER INFORMATION

Item 6. Exhibits

None

                                 10




SIGNATURES

     In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, there under duly authorized.


                                    UNITED MORTGAGE TRUST
                                        (Registrant)



Date:  May 14, 2001                /S/Christine A. Griffin
                                      Christine A. Griffin
                                           President



                                 11




REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



Board of Directors
United Mortgage Trust


We have reviewed the accompanying balance sheets of United Mortgage
Trust as of March 31, 2001 and the related statements of income and
cash flows for the three months then ending. These financial statements
are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants.  A review of
interim financial information consists principally of analytical
procedures applied to financial data and making inquiries of persons
responsible for financial and accounting matters.  It is substantially
less in scope than an audit in accordance with generally accepted
auditing standards, the objective of which is the expression of an
opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications
that should be made to the accompanying financial statements in order
for them to be in conformity with generally accepted accounting
principles.

We have previously audited, in accordance with generally accepted
auditing standards, the balance sheet of United Mortgage Trust as of
December 31, 2000 and the related statements of earnings and cash flows
for the year then ending (not presented separately herein), and in our
report dated February 5, 2001, we expressed an unqualified opinion on
those financial statements.  In our opinion, the information set forth
in the accompanying balance sheet as of December 31, 2000 is fairly
stated, in all material respects, in relation to the balance sheet from
which it has been derived.

                                     Jackson & Rhodes P.C.

Dallas, Texas
May 11, 2001