Form 10-QSB



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

     For the quarterly period ending June 30, 1998

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

     For the transition period from _________ to _________


               Commission file number 333-10109


             UNITED MORTGAGE TRUST


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

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



                  1701 N. GREENVILLE, SUITE 403
                     RICHARDSON TX 75081
                      (972) 705-9805




     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 
___


<PAGE>
UNITED MORTGAGE TRUST
INDEX TO FORM 10-QSB
                                                 Page Number


PART I  -- FINANCIAL INFORMATION . . . . . . . . . . . . . 3

Item 1. Financial Statements . . . . . . . . . . . . . . . 3

     Balance Sheets
        June 30, 1998 and December 31, 1997 . . . . . . . F1

     Statements of Operations
        Three and Six Months Ending June 30, 1998
        and 1997. . . . . . . . . . . . . . . . . . . . . F2

     Statements of Cash Flows
        Six Months Ending June 30, 1998 and 1997 . . . . .F3

     Notes to Financial Statements . . . . . . . . . . . . 4

Item 2. Management's Discussion and Analysis 
  of Financial Condition and Results of Operations . . . . 6

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

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

SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . 10

<PAGE>
PART I  -- FINANCIAL INFORMATION

ITEM 1. Financial Statements

<TABLE>
Balance Sheets
June 30, 1998 and December 31, 1997
<CAPTION>

                                           June 30,      December 31,
1998             1997
                                          (unaudited)     (audited)
ASSETS
<S>                                        <C>          <C>
Cash                                       $  187,039   $       248
Investment in first lien mortgage notes     5,744,322     2,722,036
Interim mortgage loans                      1,774,911       877,275
Accrued interest receivable                    64,436        38,746
Receivable from affiliate (Note 4)             24,510        12,116
Equipment, less accumulated depreciation
     of $996 and $736, respectively             2,206         1,850
Other assets                                    7,996         2,337

Total Assets                               $7,805,420    $3,654,608

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
  Note payable (Note 3)                    $  318,193    $  138,000
  Dividend payable                             68,988        33,799
  Accounts payable & accrued liabilities           56           883

      Total Liabilities                    $  387,237    $  172,682

Shareholders' equity:
  Shares of beneficial interest; $.01 par 
    Value; 100,000,000 shares authorized
    421,417 and 202,508 shares
    outstanding                            $    4,214    $    2,025
  Additional paid-in capital                7,383,577     3,467,964
  Retained earnings                            30,392        11,937

      Total Shareholders' Equity		 $7,418,183    $3,481,926

Total                                      $7,805,420    $3,654,608
<FN>
See accompanying notes to financial statements.
Page F1
</FN>
</TABLE>

<TABLE>
Statements of Operations
For the Three Months and Six Months Ended
June 30, 1998 and 1997
<CAPTION>
                             Three Months Ended      Six Months Ended
                                 June 30,                June 30,
                             1998          1997      1998        1997
                           (unaudited) (unaudited) (audited) (audited)
<S>                        <C>         <C>         <C>       <C>
Revenues:
  Interest income          $222,756    $    907    $386,872  $  1,463

Expenses:
  Salaries and wages         18,619      16,148      35,066    32,595
  General and 
    administrative           66,423       7,135      95,389     8,718
  Interest expense            6,160       1,408       9,806     1,408
  Expense reimburse-
    ment from affiliate
    (Note 4)                (73,125)        --     (108,939)      --
                             18,077      24,691      31,322    42,721

Net income (loss)          $204,679    $(23,784)   $355,550  $(41,258)

Net income (loss) per
  share of beneficial
  interest                    $0.53      $(2.38)      $1.08    $(4.13)

Weighted average shares
  outstanding               386,179      10,000     328,818    10,000
<FN>
See accompanying notes to financial statements.
Page F2
</FN>
</TABLE>

<TABLE>
Statements of Cash Flows
For the Six Months Ending June 30, 1998 and 1997
<CAPTION>

                                                      June 30,     June 30,
                                                        1998         1997
                                                    (unaudited)  (unaudited)
<S>                                                <C>           <C>
Cash flows from operating activities:
  Net income (loss)                                 $   355,550  $   (41,258)
  Adjustments to reconcile net income
    to net cash provided by operating 
    activities:
      Depreciation and amortization                         350          (10)
      Amortization of discount on mortgage notes        (23,509)          --
      Accrued interest receivable                       (25,690)         137
      Other assets                                       (6,365)      (1,600)
      Accounts payable and accrued liabilities             (827)      20,946
        Net cash provided by operating activities:  $   299,509   $  (21,785)

Cash flows from investing activities:
  Investment in first lien mortgage notes           $(2,923,125)  $ (102,070)
  Principal receipts on first lien mortgage notes        17,972           20
  Investment in interim mortgage notes                 (897,635)          --
  Loan acquisition costs                                (93,625)          --
        Net cash used in investing activities:      $(3,896,413)  $ (102,050)

Cash flows from financing activities:
  Proceeds from issuance of shares of 
    beneficial interest                             $ 3,917,801           --
  Offering costs                                             --      (52,426)
  Net borrowings on note payable                        180,194      163,469
  Receivable from affiliate                             (12,394)          --
  Dividends                                            (301,906)          --
        Net cash provided by financing activities:  $ 3,783,695   $  111,043

Net increase (decrease) in cash                         186,791      (12,792)

Cash at beginning of period                                 248       13,051

Cash at end of period                               $   187,039   $      259 

Interest paid                                       $     6,160   $       --
<FN>
See accompanying note to financial statements.

Page F3
</FN>
</TABLE>


                   UNITED MORTGAGE TRUST
               Notes to Financial Statements
                     June 30, 1998

1. Description of Business

The Company

     United Mortgage Trust ("UMT" or the "Company") is a 
Maryland real estate investment trust which intends to 
qualify as a real estate investment trust under federal 
income tax laws. The advisor to the Company is Mortgage 
Trust Advisors, Inc. (the "Advisor"), a Texas corporation. 
The Company invests in the following types of Mortgage 
Investments: (1) first lien, fixed rate mortgages secured 
by single family residential property throughout the United 
States ("Residential Mortgages"), and (2) loans of 12 
months or less in term, made to borrowers for the purchase, 
renovation and sale of single family homes ("Interim 
Mortgages"). Such loans will be originated by others to the 
Company's specifications or to specifications approved by 
the Company. Most, if not all, of such loans are not 
insured or guaranteed by a federally owned or guaranteed 
mortgage agency. 

     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, 1997 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 and six months ending June 30, 1998 are not 
necessarily indicative of the results that may be expected 
for the year ending December 31, 1998.

3. Notes Payable

     On March 27, 1998 the Company renewed and increased 
its Revolving Loan Agreement (the "Agreement") with Abrams 
Centre National Bank (the "Bank"), wherein the Company can 
borrow up to $500,000 on a revolving basis for a term of 
one year from the date of the Agreement. Interest on the 
outstanding principal balance of the loan is paid monthly 
at a varying rate per annum of one and one-half percent (1-
1/2%) in excess of the Bank's prime rate of interest. The 
borrowing base in the Agreement is an amount equal to fifty 
percent (50%) of the aggregate unpaid principal of the 
Collateral pledged to the Bank. Collateral for the 
Agreement is $1,000,000 unpaid principal balance of 
residential mortgages owned by the Company. As security for 
the prompt satisfaction of all obligations of the 
Agreement, the Company agreed to assign, transfer and set 
over to the Bank all of its right, title and interest in 
and to the Collateral. As of June 30, 1998 the outstanding 
balance of the Revolving Line of Credit was $318,193. The 
Company used the funds to purchase Mortgage Investments.

4. Related Party Transactions

     In 1997 UMT entered into a Funding Agreement with the 
Advisor whereby the Advisor agreed to fund the Company's 
general and administrative expenses. In connection with 
this Agreement, the Company received $73,125 and $108,939 
in expense reimbursements for the three months and six 
months ending June 30, 1998, respectively. In consideration 
of the Agreement, the Company contributed to the Advisor an 
amount equal to one-half of one percent (.5%) of the 
Company's average invested assets for the immediately 
preceding month.

     The Company also paid the Advisor Acquisition Fees of 
$57,724 and $93,625 during the three months and six months 
ending June 30,1998,respectively, calculated at 3% of the 
unpaid principal balance of the Residential Mortgages as of 
the purchase date.

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF 
OPERATION

Results of Operations

     During the quarter ending June 30, 1998 UMT purchased 
30 Residential Mortgages secured by single family, 
residential property in Texas, with an unpaid principal 
balance of $1,196,675 as of the purchase dates of the 
notes. The Residential Mortgages were acquired for 
$1,116,085, or 93.27% of the outstanding unpaid principal 
balance of the notes, as of the purchase date. They had a 
blended annual interest rate of 11.52%, a current annual 
yield of 12.35% and an investment-to-value ratio of 81.11% 
(the Company's investment in the note divided by the value 
of the home that is security for the note.) On average, the 
notes had an unpaid principal balance $39,889 and a term 
remaining of 327 months. Twenty-two of the notes were 
acquired from South Central Mortgage, Inc. and eight were 
acquired from private individuals. This compares to the 
quarter ending June 30, 1997, during which time UMT owned 
one Residential Mortgage with an unpaid principal balance 
of $29,990, interest of 11.50%, a current annual yield of 
12.34% and a loan-to-investment ratio of 78.41%, as of the 
purchase date of the mortgage note. The note had an unpaid 
principal balance of $27,834, a term remaining of 356 
months and was acquired for 92.81% of the unpaid principal 
balance as of the purchase date.

     During the six months ending June 30, 1998 UMT 
purchased 73 Residential Mortgages secured by single 
family, residential property in Texas, with an unpaid 
principal balance of $3,120,822 as of the purchase dates of 
the notes. The Residential Mortgages were acquired for 
$2,923,125, or 93.66% of the outstanding unpaid principal 
balance of the notes, as of the purchase date. They had a 
blended annual interest rate of 11.51%, a current annual 
yield of 12.29% and an investment-to-value ratio of 83.11% 
(the Company's investment in the note divided by the value 
of the home that is security for the note.) On average, the 
notes had an unpaid principal balance $42,752 and a term 
remaining of 333 months. Fifty-five of the notes were 
acquired from South Central Mortgage, Inc. and eighteen 
were acquired from private individuals. This compares to 
the six months ending June 30, 1997, during which time UMT 
owned one Residential Mortgage with an unpaid principal 
balance of $29,990, interest of 11.50%, a current annual 
yield of 12.34% and a loan-to-investment ratio of 78.41%, 
as of the purchase date of the mortgage note. The note had 
an unpaid principal balance of $27,834, a term remaining of 
356 months and was acquired for 92.81% of the unpaid 
principal balance as of the purchase date.

     UMT's total portfolio of Residential Mortgages as of 
June 30, 1998 consisted of 145 Residential Mortgages with 
an aggregate unpaid principal balance of $5,944,680 as of 
the purchase dates of the notes. The Residential Mortgages 
were acquired for an aggregate sum of $5,558,651, or for 
93.50% of the outstanding principal balance of the notes as 
of the purchase date. The Residential Mortgages had a 
blended annual interest rate of 11.45%, a current annual 
yield of 12.25% and an investment-to-value ratio of 83.13%. 
On average the notes had an unpaid principal balance of 
$40,998 and a term remaining of 321 months.

     As of June 30, 1998 the Company had investments in 64 
Interim Mortgages for an aggregate total of $1,774,911. The 
Interim Mortgages had terms of no greater than 12 months 
and were made to borrowers for the purchase, renovation and 
sale of single family homes. These loans, which are first 
lien mortgage notes secured by properties in Texas, had a 
blended interest rate of 14.27% and investment-to-values of 
no greater than 50%. UMT had no Interim Mortgages during 
the quarter ending June 30, 1997.

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

     The Company's Residential Mortgages and Interim 
Mortgages generated $222,756 of interest income during the 
quarter ending June 30, 1998. Expenses of $91,202 were 
offset by reimbursement from the Advisor of $73,125. During 
the quarter the Company realized net income of $204,679 and 
earnings per share of $.53. This compares to interest 
income during the quarter ending June 30, 1997 of $907 and 
expenses of $24,691, resulting in a net loss of $23,784 or 
$2.38 per share.

     For the six months ending June 30, 1998 Residential 
Mortgages and Interim Mortgages generated $386,872 of 
interest income. Expenses of $140,261 were offset by 
reimbursement from the Advisor of $108,939. During the six-
month period the Company realized net income of $355,550 
and earnings per share of $1.08. This compares to interest 
income during the six months ending June 30, 1997 of $1,463 
and expenses of $42,721, resulting in a net loss of $41,258 
or $4.13 per share.

Capital Resources and Liquidity

     During the quarter ending June 30, 1998 UMT added 69 
new shareholders increasing the total number of 
shareholders to 300. The Company issued 93,723 shares of 
beneficial interest thereby increasing the outstanding 
shares to 421,417. Gross Offering Proceeds increased by 
$1,874,460 resulting in aggregate Gross Offering Proceeds 
of $8,428,340. The Gross Offering Proceeds for the quarter 
ending June 30, 1998 were distributed as follows: 
$1,677,337 to the Company as Net Offering Proceeds; 10% or 
$187,446 to the Selling Group Manager for Selling 
Commissions; 0.5% or $9,372 to the Selling Group Manager 
for Due Diligence Fees; and $305 to the Escrow Agent as 
compensation for distributing interest accrued to 
subscribers. This compares to the quarter ending June 30, 
1997 when UMT had one shareholder, its Advisor, Mortgage 
Trust Advisors, Inc. and had been initially capitalized 
with $200,000 from the sale to the Advisor of 10,000 shares 
of beneficial interest.

     During the six months ending June 30, 1998 UMT added 
128 new shareholders increasing the total number of 
shareholders to 300. The Company issued 218,909 shares of 
beneficial interest thereby increasing the outstanding 
shares to 421,417. Gross Offering Proceeds increased by 
$4,378,180 resulting in aggregate Gross Offering Proceeds 
of $8,428,340. The Gross Offering Proceeds for the six 
months ending June 30, 1998 were distributed as follows: 
$3,917,801 to the Company as Net Offering Proceeds; 10% or 
$437,818 to the Selling Group Manager for Selling 
Commissions; 0.5% or $21,891 to the Selling Group Manager 
for Due Diligence Fees; and $670 to the Escrow Agent as 
compensation for distributing interest accrued to 
subscribers. This compares to the six months ending June 
30, 1997 when UMT had one shareholder, its Advisor, 
Mortgage Trust Advisors, Inc. and had been initially 
capitalized with $200,000 from the sale to the Advisor of 
10,000 shares of beneficial interest.

     During the quarter ending June 30, 1998 UMT used Net 
Offering Proceeds to purchase 30 Residential Mortgages for 
$1,116,084, or for 93.27% of the unpaid principal balance 
of the notes as of the purchase date. Net Offering proceeds 
were used to increase the Interim Mortgage Loan balance 
outstanding from $1,200,785, at March 31, 1998, to 
$1,774,911. Net Offering Proceeds were also used to pay an 
Acquisition Fee of $35,900 to the Advisor, calculated at 3% 
of the unpaid principal balance of the Residential 
Mortgages as of the purchase date. Comparing the quarter 
ending June 30, 1997 UMT used part of the proceeds from its 
initial capitalization to purchase one Residential Mortgage 
for $27,834 or for 92.81% of the unpaid principal balance 
of the note as of the purchase date. No acquisition fee was 
paid to the Advisor in the transaction. There were no 
Interim Mortgage Loans at the quarter ended June 30,1997.

     During the six months ending June 30, 1998 UMT used 
Net Offering Proceeds to purchase 73 Residential Mortgages 
for $2,923,125, or for 93.66% of the unpaid principal 
balance of the notes as of the purchase date. Net Offering 
proceeds were used to increase the Interim Mortgage Loan 
balance outstanding from $877,275, at December 31, 1997, to 
$1,774,911 at June 30, 1998. Net Offering Proceeds were 
also used to pay an Acquisition Fee of $93,625 to the 
Advisor, calculated at 3% of the unpaid principal balance 
of the Residential Mortgages as of the purchase date. 
Comparing the six months June 30, 1997 UMT used part of the 
proceeds from its initial capitalization to purchase one 
Residential Mortgage for $27,834 or for 92.81% of the 
unpaid principal balance of the note as of the purchase 
date. There were no Interim Mortgage Loans at the quarter 
ended June 30,1997.
No acquisition fee was paid to the Advisor in the 
transaction. 

 	UMT declared and paid three dividends to shareholders 
during the quarter ending June 30, 1998. The annualized 
rate-of-return to shareholders was 10.38%. Six dividends 
were declared and paid to shareholder during the six months 
ended June 30, 1998. The annualized rate-of-return to 
shareholders for the six months period was 10.47%. No 
dividends were paid during the six months ending June 30, 
1997.

     On March 27, 1998 UMT renewed and increased its 
Revolving Loan Agreement (the "Agreement") with its lending 
bank (the "Bank") wherein the Company can borrow up to 
$500,000 on a revolving basis for a term of one year from 
the date of the Agreement. Interest on the outstanding 
principal balance of the loan is paid monthly at a varying 
rate per annum, which is one and one-half percent (1-1/2%) 
in excess of the Bank's prime rate of interest. The 
outstanding balance of the line of credit at June 30, 1998 
was $318,193. The Company uses the line of credit to 
purchase Mortgage Investments prior to its two monthly 
closings.

PART II - OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

(a) Reports on Form 8-K

     During the period covered by this report, the Company 
filed reports on Form 8-K dated April 30, 1998 and May 31, 
1998 to report the status of its offering of shares.


SIGNATURES

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


                               UNITED MORTGAGE TRUST
                                   (Registrant)



Date:  July 29, 1998           /S/Christine A. Griffin
                                  Christine A. Griffin
                                      President




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