<PAGE>







                         UNITED STATES
                SECURITIES & EXCHANGE COMMISSION
                     WASHINGTON, D.C.  20549
                            FORM 10-K405

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

  For the year ended December 31, 1997       Commission File No. 33-76642

                    RAY ELLISON MORTGAGE ACCEPTANCE CORP.
                    -------------------------------------
          (Exact name of registrant as specified in its charter)

 Incorporated in Texas                               74-2337351
 ----------------------------             ------------------------------
 State or other jurisdiction of           (I.R.S. Employer Identification
 incorporation or organization)            Number)

               70 N.E. Loop 410, Suite 545  San Antonio, Texas 78216
        -------------------------------------------------------------
           (Address of principal executive offices)  (Zip Code)

     Registrant's telephone number, including area code:  (210) 342-1085
                                                           --------------

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

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

  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
  filing requirements for the past 90 days.

                            Yes  X   No
                                ---     ----

  Aggregate  market  value  of  voting  stock  held  by  non-affiliates  of  the
  registrant at March 19, 1998:
                                 None

   Number of shares of Common Stock outstanding at March 19, 1998:
                             10,000 shares

<PAGE>



Item 1. Business


        Ray Ellison Mortgage Acceptance Corp. ("REMAC") was incorporated in
     the State of Texas on October 1, 1984 and is a wholly-owned subsidiary
     of Ray Ellison Mortgage Investment Corp. ("REMIC"). Ray Ellison
     Industries, Inc. is the parent company of REMIC and the ultimate
     corporate parent of REMAC. REMAC's principal office is located at 70 NE
     Loop 410, Suite 545, San Antonio, Texas  78216.  Its telephone number
     is (210)342-1085.

        REMAC was  organized  for the purpose of  facilitating  the financing of
     long-term  residential  mortgage loans and does not intend to engage in any
     business  or   investment   activities   other  than  issuing  and  selling
     GNMA-Collateralized  Bonds and  acquiring,  owning,  holding,  pledging and
     dealing with GNMA  securities to be pledged as  collateral  for such Bonds,
     together with any activities incidental to the foregoing. Substantially all
     of the  assets of REMAC  consist of the GNMA  securities  pledged to secure
     specific series of its GNMA-Collateralized Bonds. REMAC's term of existence
     is not limited under its Articles of Incorporation.

        Article Three of REMAC's Articles of Incorporation  limits the nature of
     the  business  to be  conducted  by REMAC to (a)  issuing  and  selling its
     GNMA-Collateralized  Bonds,  notes  or  other  obligations  which  a  Texas
     corporation  is  authorized  to  issue,  which  Bonds  shall  be rated by a
     nationally  recognized  investment  rating  agency and given that  agency's
     highest bond rating, (b) buying, selling, holding, transferring,  pledging,
     assigning,  refinancing or otherwise  dealing in GNMA  securities,  and (c)
     doing  anything else required or suitable and  convenient to accomplish the
     foregoing.


Item 2. Properties

        The Company neither owns nor leases any buildings or real estate.


Item 3. Legal Proceedings

     The Company is not involved in any pending  litigation,  nor is the Company
aware of any proceedings contemplated by governmental authorities.

Item 4. Submission of Matters to a Vote of Security Holders

        Not Applicable.


Item 5. Market for the Registrant's Common Stock and Related Security
Holder Matters

     All of REMAC's  outstanding  common stock is owned by Ray Ellison  Mortgage
Investment Corp. Accordingly, there is no market for its common stock.

     During the year ended  December  31,  1995,  the Company  declared and paid
$2,000,000 in cash  dividends.  REMAC did not pay any dividends in 1996 or 1997.
On March 2, 1998, the Company declared and paid a dividend of $5,000,000.

<TABLE>
Item 6.  Selected Financial Data
<CAPTION>

                                 In Thousands of Dollars
                    -------------------------------------------------
                      1997       1996       1995      1994      1993
<S>                 <C>        <C>        <C>       <C>       <C>
Interest Income     $29,785    $30,701    $35,245    $30,928   $32,636

Interest Expense     29,250     30,186     34,757     30,524    31,599

Total Assets        390,153    434,009    459,002    476,666   365,326

Bonds Payable       365,130    418,427    429,652    491,864   357,160

</TABLE>

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

                     Year ended December 31, 1997

     As of  December  31,  1997,  the  Company  has  completed  the  issuance of
ninety-one Series of its GNMA-Collateralized Bonds (Bonds). Each Series of Bonds
has been  assigned  a bond  rating of AAA by  Standard  & Poors  Ratings  Group.
Proceeds  from the sale of each Series of Bonds have been used by the Company to
purchase  GNMA  (Government  National  Mortgage  Association)   securities  from
affiliated  companies.  The GNMA securities  purchased are pledged as collateral
for one or more Series of the Company's Bonds.


     From time to time, the Company has substituted or deposited additional GNMA
securities to below-market  Bond Series in accordance with the Indentures  under
which the Bonds are issued.  Management  anticipates  that such  substitution or
deposit  of  additional   GNMA  securities  in  these  Bond  Series  will  defer
redemptions in the Bond series affected.

     Additionally,  from time to time the Company has  substituted  or withdrawn
GNMA securities securing above-market Bond Series to the extent permitted by the
Indentures.  Management  anticipates  that such  substitutions or withdrawals of
GNMA securities will accelerate redemptions in the Bond Series affected.

     As of December 31, 1997, the Company has exercised its option to redeem its
Series 1985A  through 1985K Bonds,  its Series 1986A  through  1986J Bonds,  its
Series 1987A  through 1987F Bonds,  its Series 1988A  through  1988M Bonds,  its
Series 1989A and Series 1989B Bonds,  its Series 1990A through 1990H Bonds,  its
Series 1991A  through  1991J Bonds,  and its Series 1992B  through  1992D Bonds.
These  calls  produced  significant  gains  for the  Company.  The  Company  has
exercised  its option to redeem  GMNA-Collateralized  Bond Series  whenever  the
Series were  callable and the interest  rate on the series was above the current
market interest rate.  Management  anticipates calling any above-market interest
rate Bond Series at the earliest date permitted under the respective  prospectus
supplement for such Bond Series.

     The Company  anticipates  that receipts from the GNMA  securities  securing
each outstanding  series of Bonds together with reinvestment  income thereon and
funds  available in any expense funds which may be established  for such series,
will  be  adequate  to  meet  the  Company's  cash  flow   requirements  to  pay
administrative  expenses  and the  principal  of and  interest on each series of
Bonds as they become due. The Company does not have, nor does management  expect
that the  Company  will  have,  any  significant  source of cash flow other than
capital  contributions  from its parent and/or  advances from its affiliates and
receipts on  collateral  securing  Bonds which have been or may be issued by the
Company.

     Because  each  series of  outstanding  Bonds is secured by GNMA  securities
paying  interest and  principal at specified  rates backed by existing  pools of
mortgage loans,  and because payment on outstanding  Bonds issued by the Company
are at fixed interest rates, management does not expect that changes in economic
factors will significantly  affect the Company's ability to meet its obligations
as they come due.

     All GNMA securities are classified as  available-for-sale  as of January 1,
1994.  Accordingly,  GNMA securities are reflected on the  accompanying  balance
sheet at fair value,  with the unrealized gains and losses,  net of tax reported
in a separate category of shareholders'  equity. The Company wishes to emphasize
that  due  to the  nature  of its  business,  the  GNMA  securities  carried  as
available-for-sale  collateralize  GNMA-collateralized bonds, and the securities
are not salable before the bonds are callable, at some future date. In addition,
the market value of GNMA securities  fluctuates  significantly as interest rates
change;  therefore,  the market  values of the GNMA  securities as of the future
redemption  dates  may  vary  significantly  from  the  current  date,  and  the
realization of the unrealized gains is not assured. When market is such that the
value of GNMA  securities  is less than  amortized  cost,  the  Company  has the
expectation  that they would be held to maturity as  collateral  for the related
GNMA-collateralized  Bonds, or until the market value rose, whichever is sooner,
and the Company would not realize any unrealized losses. Thus, no tax benefit is
recognized for unrealized losses for the Company's investment in GNMA's.

 Item 8.  Financial Statements and Supplementary Data:

        See Next Page

<PAGE>


                      Ray Ellison Mortgage Acceptance Corp.

                              Financial Statements


                  Years Ended December 31, 1997, 1996, and 1995




                                    Contents

Report of Ernst & Young LLP, Independent Auditors .........................1


Financial Statements

Balance Sheets ............................................................2
Statements of Operations ..................................................3
Statements of Changes in Stockholder's Equity .............................4
Statements of Cash Flows ..................................................5
Notes to Financial Statements .............................................6


<PAGE>

               Report of Ernst & Young LLP, Independent Auditors


Board of Directors
Ray Ellison Mortgage Acceptance Corp.

We  have  audited  the  accompanying  balance  sheets  of Ray  Ellison  Mortgage
Acceptance  Corp., a wholly owned subsidiary of Ray Ellison Mortgage  Investment
Corp.,  as of  December  31,  1997  and  1996,  and the  related  statements  of
operations,  changes  in  stockholder's  equity,  and cash flows for each of the
three years in the period ended December 31, 1997.  These  financial  statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Ray Ellison Mortgage Acceptance
Corp. at December 31, 1997 and 1996,  and the results of its  operations and its
cash flows for each of the three years in the period ended  December 31, 1997 in
conformity with generally accepted accounting principles.


March 13, 1998
San Antonio, Texas

                                                  Ernst & Young LLP

<PAGE>
<TABLE>


Ray Ellison Mortgage Acceptance Corp.

Balance Sheets

<CAPTION>
                                                            December 31
                                                        1997          1996
                                                 ------------------------------                                           
<S>                                              <C>             <C>
Assets
Cash                                             $      91,465   $      51,880
Accrued interest receivable                          2,201,245       2,530,080
Underwriting fees and bond issuance expenses        12,672,555      15,007,701
Requisite funds on deposit                             188,314         133,797

Note receivable from affiliate                       4,820,652       3,513,806

Investment in GNMA securities                      368,468,267     422,240,456
   Plus (less):
     Fair value adjustment                          16,480,560       7,404,177
     Unamortized discount                          (14,769,194)    (16,872,575)
                                               --------------------------------
                                                   370,179,633     412,772,058
                                               --------------------------------

Total assets                                     $ 390,153,864   $ 434,009,322
                                               ================================
                                               

Liabilities and Stockholder's Equity
Liabilities:
   Accounts payable                              $      31,713   $      30,000
   Accrued interest                                  2,169,492       2,500,552
   Bonds payable                                   365,130,000     418,427,000
   Deferred tax liability                            5,382,153       2,265,287
                                               --------------------------------
Total liabilities                                  372,713,358     423,222,839

Stockholder's equity:
   Common stock, $1.00 par value, 10,000 shares
     authorized, issued and outstanding                 10,000          10,000
   Contributed capital                               2,317,619       2,122,681
   Unrealized gains on available for sale
     securities, net of tax                         10,877,170       4,886,757
   Retained earnings                                 4,235,717       3,767,045
                                               --------------------------------
Total stockholder's equity                          17,440,506      10,786,483
                                               --------------------------------

Total liabilities and stockholder's equity       $ 390,153,864   $ 434,009,322
                                               ================================
</TABLE>


See accompanying notes.
<PAGE>
<TABLE>

Ray Ellison Mortgage Acceptance Corp.

Statements of Operations

<CAPTION>
                                             Year Ended December 31
                                      1997            1996            1995 
                                -----------------------------------------------
<S>                              <C>             <C>               <C>

Income:
   Interest income               $ 29,784,733    $ 30,700,648      $35,244,826
   Amortization of discount         1,903,889       1,786,809        1,619,167
   Gain on sales of GNMA
     securities                     1,350,942       1,027,836        4,963,307
                                -----------------------------------------------
                                   33,039,564      33,515,293       41,827,300

Expense:
   Interest expense                29,249,560      30,186,780       34,756,988
   Amortization of underwriting
     fees and bond issuance
     expenses                       2,802,082       2,254,593        4,853,388
   General and administrative
                                      293,416         312,378          399,620
                                -----------------------------------------------
                                   32,345,058      32,753,751       40,009,996
                                -----------------------------------------------
Income before taxes                   694,506         761,542        1,817,304

Income tax expense (benefit):
     Current taxes                    194,938         342,970          (71,059)
     Deferred taxes                    30,896               -          420,851
                                -----------------------------------------------
                                      225,834         342,970          349,792
                                -----------------------------------------------


Net income                       $    468,672    $    418,572      $ 1,467,512
                                ===============================================
</TABLE>

See accompanying notes.


<PAGE>

<TABLE>

Ray Ellison Mortgage Acceptance Corp.

Statements of Changes in Stockholder's Equity          
<CAPTION>

                                                                  Unrealized
                                                                   Gains and
                                                                  (Losses)on      
                          Common Stock                           Available for                         Total
                      ----------------------  Contributed      Sale Securities,    Retained            Equity
                       Shares      Dollars        Capital          Net of Tax       Earnings          (Deficit)
                      ---------------------------------------------------------------------------------------------
<S>                    <C>        <C>          <C>               <C>               <C>              <C>

Balance
   December 31,        10,000     $ 10,000     $  1,982,062      $ (24,491,230)    $   3,880,961    $ (18,618,207)
   1994
     Net income             -            -                -                  -         1,467,512        1,467,512
     Dividends paid         -            -                -                  -        (2,000,000)      (2,000,000)
     Return of             
       capital              -            -          (71,059)                 -                 -          (71,059)
     Change in
       unrealized
       gains and
       (losses)on
       available for       
       sale securities
       net of taxes         -            -                -         38,918,841                 -       38,918,841
                      ---------------------------------------------------------------------------------------------
Balance
   December 31,        10,000       10,000        1,911,003         14,427,611         3,348,473       19,697,087
   1995
     Net income             -            -                -                  -           418,572          418,572
     Contribution
       of capital           -            -          211,678                  -                 -          211,678
     Change in
       unrealized
       gains and
       (losses)on       
       available for      
       sale securities       
       net of taxes         -            -                -         (9,540,854)                -       (9,540,854)
                      ---------------------------------------------------------------------------------------------
Balance
   December 31, 1996   10,000       10,000        2,122,681          4,886,757         3,767,045       10,786,483
     Net income                                                                          468,672          468,672
     Contribution
       of capital           -            -          194,938                  -                 -          194,938
     Change in
       unrealized
       gains and
       (losses)on      
       available for                                               
       sale securities 
       net of taxes         -           -                 -          5,990,413                 -        5,990,413  
                      ---------------------------------------------------------------------------------------------

Balance
   December 31, 1997   10,000     $ 10,000     $  2,317,619      $  10,877,170     $   4,235,717    $  17,440,506
                      =============================================================================================
</TABLE>


See accompanying notes.
<PAGE>

Ray Ellison Mortgage Acceptance Corp.

Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                  Year Ended December 31
                                                         1997              1996               1995
                                                  ----------------------------------------------------
<S>                                               <C>                  <C>             <C>   
Operating Activities
Net income                                        $      468,672       $   418,572     $    1,467,512
Adjustments to reconcile net income to net
   cash provided by operating activities:
     Income tax                                          225,834           342,970            349,792
     Amortization of discount                         (1,903,889)       (1,786,809)        (1,619,167)
     Amortization of underwriting fees and
       bond issuance expenses                          2,802,082         2,254,593          4,853,388
     Gain on sale of GNMA securities                  (1,350,942)       (1,027,836)        (4,963,307)
     Changes in operating assets and
       liabilities:
       Accrued interest receivable                       328,835            87,171            453,142
       Accounts payable                                    1,713             5,147            (52,390)
       Accrued interest payable                         (331,060)          (79,016)          (270,160)
                                                  ----------------------------------------------------
Net cash provided by operating activities                241,245           214,792            218,810

Investing Activities
Net increase in notes receivable
    with affiliates                                   (1,306,846)       (2,269,527)        (1,737,977)
Principal payments received on GNMA securities
                                                      39,397,934        36,679,137         30,826,502
Purchase of GNMA securities                          (12,091,679)      (35,685,120)       (56,859,573)
Proceeds from sale of GNMA securities                 27,617,384        13,506,736         93,410,859
                                                  ----------------------------------------------------
Net cash provided by investing activities             53,616,793        12,231,226         65,639,811

Financing Activities
Cash dividend to parent                                        -                 -         (2,000,000)
Net (increase) decrease in requisite funds
   on deposit                                            (54,517)          253,020           (155,207)
Increase in underwriting fees and bond
   issuance expenses                                    (466,936)       (1,426,114)        (1,538,981)
Proceeds from sales of bonds                          12,500,000        37,000,000         38,225,000
Redemption of bonds payable                          (65,797,000)      (48,225,000)      (100,437,000)
                                                  ----------------------------------------------------
Net cash(used in) financing activities               (53,818,453)      (12,398,094)       (65,906,188)
                                                  ---------------------------------------------------- 
Change in cash                                            39,585            47,924            (47,567)

Cash at beginning of year                                 51,880             3,956             51,523
                                                  ----------------------------------------------------
Cash at end of year                               $       91,465       $    51,880     $        3,956
                                                  ====================================================
</TABLE>

See accompanying notes.


<PAGE>
Ray Ellison Mortgage Acceptance Corp.

Notes to Financial Statements

December 31, 1997, 1996, and 1995


1.  Significant Accounting Policies

Nature of Business

Ray Ellison Mortgage Acceptance Corp. (Company) is in the business of purchasing
GNMA securities for investment financed by the issuance of bonds to the public.

Basis of Presentation

The Company was  incorporated  in the state of Texas on October 1, 1984 and is a
wholly owned subsidiary of Ray Ellison Mortgage Investment Corp. (REMIC).

Underwriting Fees, Bond Issuance Expenses, and Unamortized Discount

The Company  amortizes the underwriting  fees and bond issuance  expenses (fees)
and the discount on GNMA (Government National Mortgage  Association)  securities
by the level  yield  method.  Underwriting  fees and bond  issuance  expenses at
December  31, 1997 and 1996 are  reported  net of  accumulated  amortization  of
$7,335,916 and $5,628,116,  respectively.  Any unamortized underwriting fees and
bond  issuance  expenses  remaining  upon  redemption of the bonds are expensed.

Fair Values of Financial Instruments

The fair values of the Company's GNMA securities and bonds payable are estimated
based on quoted  market  prices.  The  carrying  values  of all other  financial
instruments reported in the balance sheets approximate fair values.

GNMA Securities

The Company's GNMA securities are categorized as available for sale  securities,
as  defined  by  the  Statement  of  Financial   Accounting  Standards  No.  115
"Accounting for Certain Investments in Debt and Equity  Securities."  Unrealized
holding gains and losses are  reflected as a net amount in a separate  component
of  stockholders'  equity until  realized.  The adjusted  carrying  value of the
specific  securitiy  sold  is  used to  compute  gain  or  loss  on the  sale of
securities. Declines in value other than temporary declines are adjusted against
the security with a charge to the results of operations.
<PAGE>

Ray Ellison Mortgage Acceptance Corp.

Notes to Financial Statements (continued)

December 31, 1997, 1996, and 1995


1.  Significant Accounting Policies (continued)

Comprehensive Income

In June 1997, the FASB issued Statement of Financial  Accounting Standard (SFAS)
No. 130, "Reporting Comprehensive Income". The statement provides that all items
that are required to be recognized under  accounting  standards as comprehensive
income be reported  in a financial  statement  that is  displayed  with the same
prominence  as other  finacial  statements.  Comprehensive  income  includes net
income as well as certain  items that are  reported  directly  within a separate
component  of  stockholder's  equity,  such as  unrealized  gains and  losses on
available for sale securities, and bypass net income. The provisions of SFAS No.
130 are  effective  for 1998.  The  adoption  of this  standard  will not impact
financial position or results of operations.

Use of Estimates

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

2.  Requisite Funds on Deposit

The Company is required to deposit certain  requisite funds with the Trustee for
each series of bonds under the terms of the Indenture. The Company's obligations
to establish such requisite  funds may be satisfied by either cash or letters of
credit.

As of December 31, 1997 and 1996,  cash in the amount of $188,314 and  $133,797,
respectively,  had been  deposited  with the  Trustee to satisfy  the  Company's
obligations relative to such requisite funds.

3.  Assets Subject to Lien

Substantially  all of the assets of the Company are pledged as security  for the
long-term bonds payable.
<PAGE>
Ray Ellison Mortgage Acceptance Corp.

Notes to Financial Statements (continued)

December 31, 1997, 1996, and 1995


4.  Bonds Payable

The Company has filed six shelf  registrations  authorizing a total  issuance of
$1,600,000,000  in long-term  bonds.  The long-term bonds payable of the Company
are issued in series as follows:
<TABLE>
<CAPTION>

                                Face                                             Bonds Outstanding
                              of Bonds      Interest     Maturity                 December 31
  Series     Issued           at Issue        Rate         Date             1997               1996
----------------------------------------------------------------------------------------------------------
 <S>        <C>            <C>               <C>        <C>            <C>             <C>

 1985A      02/27/85       $   11,559,000    11.500%    03/28/2015     $            -  $           -
 1985B      03/28/85           10,337,000    12.000     04/28/2015                  -              -
 1985C      04/24/85           10,343,000    11.850     12/28/2015                  -              -
 1985D      05/20/85           13,714,000    11.450     07/28/2016                  -              -
 1985E      06/26/85           12,784,000    10.750     08/28/2016                  -              -
 1985F      07/25/85           10,004,000    10.625     09/28/2016                  -              -
 1985G      08/28/85            9,223,000    10.750     10/28/2016                  -              -
 1985H      09/26/85            9,106,000    10.500     11/28/2016                  -              -
 1985I      10/24/85           11,753,000    10.875     12/28/2016                  -              -
 1985J      11/26/85            8,720,000    10.400     01/28/2017                  -              -
 1985K      12/26/85            8,923,000    10.250     02/28/2017                  -              -
 1986A      01/28/86            9,380,000     9.750     03/28/2017                  -              -
 1986B      02/27/86           19,512,000     9.750     04/28/2017                  -              -
 1986C      03/26/86            9,204,000     9.375     05/28/2017                  -              -
 1986D      04/23/86            9,989,000     8.500     06/28/2017                  -              -
 1986E      06/26/86           10,650,000     9.250     08/28/2017                  -              -
 1986F      07/24/86           20,600,000     9.000     09/28/2017                  -              -
 1986G      08/28/86           20,990,000     9.000     10/28/2017                  -              -
 1986H      09/25/86           14,153,000     8.625     11/28/2017                  -              -
 1986I      11/25/86           10,002,000     8.625     01/28/2018                  -              -
 1986J      12/30/86            9,390,000     8.250     02/28/2018                  -              -  
 1987A      07/30/87           17,500,000     9.000     09/28/2018                  -              -  
 1987B      08/27/87           18,000,000     9.000     10/28/2018                  -              -  
 1987C      09/30/87           10,000,000     9.500     11/28/2018                  -              -  
 1987D      10/29/87           15,000,000     9.750     12/31/2018                  -              -  
 1987E      11/25/87           16,000,000    10.000     01/31/2019                  -              -  
 1987F      11/25/87           16,655,000     9.500     01/31/2019                  -              -  
 1988A      01/27/88           15,000,000     9.500     03/31/2019                  -              -  
 1988B      02/25/88           13,925,000     9.000     04/30/2019                  -              -  
 1988C      02/25/88           10,000,000     8.500     04/30/2019                  -              -  
 1988D      03/30/88           14,950,000     8.750     05/31/2019                  -              -  
 1988E      05/26/88           18,000,000     9.125     07/31/2019                  -              -  
 1988F      06/23/88           33,000,000     9.375     08/31/2019                  -              -  
 1988G      06/23/88           14,000,000     9.450     08/31/2019                  -              -
<PAGE>                                                                                             
                                                                                                   
Ray Ellison Mortgage Acceptance Corp.
                                                                                                  
Notes to Financial Statements (continued)

December 31, 1997, 1996, and 1995

 
4.  Bonds Payable (continued)

                                Face                                             Bonds Outstanding
                              of Bonds      Interest     Maturity                 December 31
  Series     Issued           at Issue        Rate         Date             1997               1996
-----------------------------------------------------------------------------------------------------
 1988H      07/28/88       $   15,000,000     9.125     09/30/2019     $            -  $           -
 1988I      08/25/88           25,000,000     9.375     10/31/2019                  -              -
 1988J      08/25/88           22,000,000     9.200     10/31/2019                  -              -
 1988K      09/29/88           17,000,000     9.150     11/30/2019                  -              -
 1988L      10/27/88           20,000,000     9.100     12/31/2019                  -              -
 1988M      11/23/88           30,000,000     9.000     01/31/2020                  -              -
 1989A      01/25/89           22,000,000     9.500     03/31/2020                  -              -
 1989B      01/25/89           17,000,000     9.600     03/31/2020                  -              -
 1990A      05/24/90            5,000,000     9.500     05/31/2021                  -              -
 1990B      08/30/90           15,150,000     9.000     08/31/2021                  -              -
 1990C      09/27/90           10,000,000     9.100     09/30/2021                  -              -
 1990D      09/27/90           10,000,000     9.000     09/30/2021                  -              -
 1990E      10/25/90           10,000,000     9.150     10/31/2021                  -              -
 1990F      10/25/90           14,500,000     9.050     10/31/2021                  -              -
 1990G      11/21/90           15,000,000     9.000     11/30/2021                  -              -
 1990H      12/27/90            8,000,000     8.500     12/31/2021                  -              -
 1991A      02/21/91            9,000,000     8.100     02/28/2022                  -              -
 1991B      03/28/91            5,000,000     8.100     03/31/2022                  -              -
 1991C      04/25/91            6,000,000     8.150     04/30/2022                  -              -
 1991D      05/30/91           12,650,000     8.150     05/31/2022                  -              -
 1991E      06/27/91           28,500,000     8.500     06/30/2022                  -              -
 1991F      07/25/91           18,000,000     8.450     07/31/2022                  -              -
 1991G      08/29/91           18,000,000     8.000     08/31/2022                  -              -
 1991H      09/26/91           14,000,000     7.875     09/30/2022                  -              -
 1991I      11/27/91           13,000,000     7.500     11/30/2022                  -              -
 1991J      12/23/91            7,000,000     7.500     12/31/2022                  -              -
 1992A      03/26/92           21,000,000     7.250     03/31/2023         12,313,000     13,207,000
 1992B      04/23/92            6,500,000     7.400     04/30/2023                  -      4,325,000
 1992C      05/28/92           17,500,000     7.600     05/31/2023                  -     10,366,000
 1992D      06/25/92           24,000,000     7.400     06/30/2023                  -     16,129,000
 1992E      07/30/92           19,000,000     7.150     07/31/2023          9,565,000     10,776,000
 1992F      08/27/92            8,000,000     6.600     08/31/2023          4,422,000      4,775,000
 1992G      11/25/92           47,250,000     7.000     11/30/2023         34,881,000     37,796,000
 1992H      12/23/92           23,600,000     7.100     12/31/2023         16,919,000     18,632,000
 1992I      12/23/92           14,300,000     7.050     12/31/2023         10,283,000     11,345,000
 1993A      01/28/93           24,000,000     7.000     01/31/2024         17,478,000     18,730,000
 1993B      12/22/93           21,000,000     6.000     12/31/2024         18,846,000     19,815,000
 1994A      01/27/94           15,000,000     6.000     01/31/2025         12,538,000     13,399,000
 1994B      02/24/94           13,000,000     6.000     02/28/2025         11,139,000     11,927,000


<PAGE>


Ray Ellison Mortgage Acceptance Corp.

Notes to Financial Statements (continued)

December 31, 1997, 1996, and 1995


4.  Bonds Payable (continued)

                                Face                                         Bonds Outstanding
                              of Bonds      Interest     Maturity                December 31
  Series     Issued           at Issue        Rate         Date              1997              1996
------------------------------------------------------------------------------------------------------

 1994C      03/24/94       $   10,000,000     6.500     03/31/2025     $    8,564,000  $   9,453,000
 1994D      05/26/94           19,500,000     7.400     05/31/2025         15,206,000     16,895,000
 1994E      05/26/94           13,950,000     7.500     05/31/2025         10,883,000     12,169,000
 1994F      06/23/94           16,000,000     7.300     06/30/2025         12,658,000     13,842,000
 1994G      07/28/94           16,500,000     7.125     07/31/2025         12,849,000     14,236,000
 1994H      07/28/94           24,150,000     7.500     07/31/2025         20,015,000     21,904,000
 1994I      08/25/94           16,050,000     7.500     08/31/2025         12,804,000     13,986,000
 1994J      09/29/94           18,600,000     7.500     09/30/2025         14,241,000     16,330,000
 1994K      11/23/94           15,000,000     8.000     11/30/2025         10,320,000     12,467,000
 1994L      12/28/94           15,000,000     8.100     12/31/2025         10,936,000     12,260,000
 1994M      12/28/94           16,500,000     8.000     12/31/2025         11,304,000     13,156,000
 1995A      02/23/95            8,000,000     8.000     02/28/2026          5,612,000      6,823,000
 1995B      03/30/95           21,000,000     7.500     03/31/2026         15,872,000     18,225,000
 1995C      05/25/95            9,225,000     7.100     05/31/2026          8,010,000      8,741,000
 1996A      4/25/96            12,500,000     7.000     04/30/2027         11,791,000     12,371,000
 1996B      05/30/96           15,500,000     7.000     05/31/2027         14,706,000     15,372,000
 1996C      09/26/96            9,000,000     7.100     09/30/2027          8,747,000      8,975,000
 1997A      04/24/97           12,500,000     7.000     04/30/2028         12,228,000              -
                           ---------------                          ----------------------------------

                           $1,372,291,000                              $  365,130,000  $ 418,427,000
                           ===============                          ==================================
</TABLE>

The remaining bonds may be redeemed at the option of the Company, in whole or in
part,  at any time after the fourth  anniversary  of their  issuance.  To ensure
sufficient funds to meet debt service  requirements,  the Indenture provides for
redemption if the payments to be made on the GNMA  securities  will be less than
the debt service requirements. The amounts of bonds to be redeemed are dependent
on a number  of  factors  such as: 1)  prepayments  on the GNMA  securities,  2)
interest earned on requisite  funds, 3) deposit or substitution of collateral in
lieu of bond redemption,  and 4) requests for redemption by bondholders.  In all
redemptions  described above, the redemption price will be 100% of the principal
amount  of the  bonds  to be  redeemed  plus  interest  accrued  to the  date of
redemption.

Cash paid for interest was  $29,580,620,  $30,265,796,  and  $35,027,148 for the
years ended December 31, 1997, 1996, and 1995, respectively.
<PAGE>


Ray Ellison Mortgage Acceptance Corp.

Notes to Financial Statements (continued)

December 31, 1997, 1996, and 1995


5.  Related Party Transactions

The Company was  organized to  facilitate  the  financing of long-term  mortgage
loans  through the issuance  and sale of  GNMA-collateralized  bonds.  The bonds
issued represent obligations solely of the Company and are not guaranteed by any
of its affiliates.

The Company entered into a revolving note receivable with an affiliated  company
on October 31, 1992 for $20,000,000.  The note is due on demand, or if no demand
is made,  on December 31, 1998.  Interest is due monthly at the prime rate.  The
balance  outstanding  relating  to this note at  December  31, 1997 and 1996 was
$4,820,652 and $3,513,806, respectively.

Notes and advances to affiliated  companies  bear interest at the current market
rates. Net interest income earned from affiliates for advances totaled $333,322,
$157,463, and $48,240 in 1997, 1996, and 1995, respectively.

Net interest expense incurred in connection with revolving notes payable totaled
$-0-, $-0-, and $19,155 in 1997, 1996, and 1995, respectively.

GNMA  securities are purchased and sold through an affiliated  company at a cost
which approximates market.

<PAGE>


Ray Ellison Mortgage Acceptance Corp.

Notes to Financial Statements (continued)

December 31, 1997, 1996, and 1995


5.  Related Party Transactions (continued)

None of the  directors or executive  officers of the Company  receive any direct
remuneration  from the  Company;  however,  certain of the  Company's  executive
officers  participate in an employment  agreement with the Company's  parent and
other affiliated companies.  The agreement provides that such executive officers
are  entitled  to  a  percentage  of  corporate   distributions   based  on  the
accumulation of certain cash and cash equivalents of the Company over an imputed
base return to the stockholder.

General and administrative services for the Company including accounting, legal,
and other administrative  functions are provided by affiliated  companies.  Fees
for general and administrative services were $112,124, $162,643, and $197,500 in
1997, 1996, and 1995, respectively.

6.  Stockholder's Equity 

During  the  year  ended  December  31,  1995,  the  Company  declared  and paid
$2,000,000  in cash  dividends.  The Company  declared  and paid  $5,000,000  in
dividends on March 2, 1998.

7.  Federal Income Taxes

The  Company  files a  consolidated  federal  income tax return with its parent.
Under its legal tax sharing  agreement with its parent,  current  federal income
tax paid by the Company is based on the  relationship  of the Company's  taxable
income to the total taxable income of all profitable members of the consolidated
group.  Current federal income tax expense is allocated to profitable members of
the  consolidated  group only if the  consolidated  group has a current  federal
income tax expense.  Any taxes allocated to the Company under this agreement are
payable to the parent.


<PAGE>


Ray Ellison Mortgage Acceptance Corp.

Notes to Financial Statements (continued)

December 31, 1997, 1996, and 1995


7.  Federal Income Taxes (continued)

FAS 109 requires the recognition of income taxes among members of a consolidated
group as if each member had filed a separate  return.  The Company's  income tax
expense under its legal tax sharing  agreement varies from that recognized under
FAS 109. Charges and credits to contributed  capital or retained earnings result
from applying the  provisions of FAS 109 when cash payments or receipts of taxes
are not  required  to be made to or from the parent  under the legal tax sharing
agreement.  During the years ended  December 31, 1997,  1996,  and 1995 a return
(contribution) of capital of $(194,938),  $(211,678),  and $71,059 respectively,
was recorded to reflect the income tax benefit  that must be recorded  under FAS
109 but will not be  received  (paid) from (to) the parent  under the  Company's
legal tax sharing agreement.

Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes  and the amounts  used for income tax  purposes.  The only  significant
components  of the  Company's  deferred tax assets and  liabilities  relate to a
deductible  temporary  difference  of $867,599 and $988,759 at December 31, 1997
and 1996, respectively, resulting from an excess of tax basis on GNMA securities
over that  recorded  for  financial  reporting  purposes  and a book gain of
$16,480,560  and  $7,404,177 at December 31, 1997 and 1996,  resulting  from the
adjustment to fair value of the Company's investment in GNMAs.

The reconciliation of income tax attributable to continuing  operations computed
at the U.S. federal statutory tax rate of 34% to income tax expense is:
<TABLE>
<CAPTION>

                                                 1997         1996       1995
                                           -------------------------------------
<S>                                           <C>          <C>         <C>
Tax expense at U.S. statutory rates           $236,132     $258,925    $617,883
Increase (decrease) in deferred tax asset
  valuation allowance                          (10,298)      84,045    (268,091)
                                           -------------------------------------
                                              $225,834     $342,970    $349,792
                                           =====================================

</TABLE>


<PAGE>


Ray Ellison Mortgage Acceptance Corp.

Notes to Financial Statements (continued)

December 31, 1997, 1996, and 1995


8.  Fair Values of Financial Instruments

The carrying amounts and fair values of the Company's  financial  instruments at
December 31, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>

                                December 31, 1997                  December 31, 1996
                        ---------------------------------------------------------------
                               Carrying        Estimated    Carrying       Estimated
                                Amount         Fair Value    Amount        Fair Value
                        ---------------------------------------------------------------
     <S>                 <C>              <C>             <C>             <C>
                      
     Cash                $      91,465    $     91,465    $      51,880   $      51,880
     Notes receivable
       from affiliates       4,820,652       4,820,652        3,513,806       3,513,806
     GNMA securities
                           353,699,073     370,179,633      405,364,881     412,772,058
     Bonds payable         365,130,000     359,197,701      418,427,000     409,759,040
</TABLE>

The Company is in the business of  purchasing  GNMA  securities  for  investment
financed by the issuance of bonds to the public.  All  securities are pledged as
collateral  for the  bonds  payable.  As  discussed  in Note 4, the bonds can be
redeemed  at the  option of the  Company  after the  fourth  anniversary  of the
particular Bond Series. All bond redemptions are at par; therefore,  the Company
will not  realize  a gain or loss on the  disposition  of the  bonds  under  its
optional call  provisions.  The fair values of the GNMA securities (see Note 1 -
Fair Values of Financial Instruments) fluctuate  significantly as interest rates
change;  therefore,  fair  values  as of the  future  redemption  dates may vary
significantly from those stated above. When the market is such that the value of
GNMA  securities  is less than par,  the Company has the  expectation  that they
would be held to maturity  as  collateral  for the  related  GNMA-collateralized
Bonds,  or until the market  value rose,  whichever  is sooner,  and the Company
would not realize  any  unrealized  losses.  All GNMA  securities  contractually
mature after December 31, 2007. Expected maturities will differ from contractual
maturities  because the issuers of the  securities  may have the right to prepay
obligations without prepayment penalties.








<PAGE>


Ray Ellison Mortgage Acceptance Corp.

Notes to Financial Statements (continued)

December 31, 1997, 1996, and 1995



9.    GNMA Securities


The  amortized  cost,  estimated  market values and gross  unrealized  gains and
losses for GNMA Securities at December 31, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>

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

         Amortized Cost                     $353,699,073         $405,367,881
         Gross Unrealized Gains               16,636,581            9,322,269
         Gross Unrealized (Losses)              (156,021)          (1,918,092)
                                             -----------          ----------- 
         Estimated Market Value             $370,179,633         $412,772,058
                                            ============         ============

</TABLE>
<PAGE>
Item 9.  Disagreements on Accounting and Financial Disclosure.

             None.

Item 10.  Directors and Executive Officers.


     The following is a list of REMAC's directors and executive officers. All of
such directors and executive officers have served in their respective capacities
since the dates described below.
<TABLE>

     <S>                       <C>         <C>
     Name                       Age         Position
     -----------               ----        ---------------------
     Jack Biegler               54         President, Secretary
                                                and Director

     Goodhue W. Smith, III      48         Director

     Locksley Simmons           39         Director, Vice President,
                                           Treasurer, and
                                           Assistant Secretary
</TABLE>

     Jack Biegler is President of Ray Ellison Industries,  Inc. He has, for more
than five  years  prior to the date of this 10-K,  served in  various  executive
financial capacities for affiliates of the Company. Mr. Biegler is the President
of Ray Ellison Mortgage Investment Corp., the parent corporation of the Company.

     Goodhue W. Smith,  III is Secretary and Treasurer of  Duncan-Smith  Co., an
investment  banking  firm,  and has served in that  capacity  for more than five
years prior to the date of this 10-K.

     Locksley Simmons is Vice President of Ray Ellison  Industries,  Inc and has
served in various  financial  positions  for  affiliates of the Company for more
than five years prior to the date of this 10-K.

     Mr.  Biegler was initially  elected as an officer of the Company on October
1, 1984,  and was most recently  reelected on December 31, 1997. Ms. Simmons was
initially elected as Vice President,  Treasurer,  and Assistant Secretary of the
Company on April 11, 1988 and was reelected  December 31, 1997;  Ms. Simmons was
initially  appointed as a Director  for the Company on December  31,  1996;  Mr.
Smith was initially  elected to his position with the Company on March 30, 1990,
and was reelected December 31, 1997, in each case to hold office during the term
for which they are elected and until their successors are elected and qualify in
accordance with the terms of REMAC's Articles of  Incorporation  and the laws of
the State of Texas.

     There are no family  relationships  among or  between  such  directors  and
ex-executive officers.

Item 11. Executive Compensation

     None of the  directors  and  executive  officers of the  Company  presently
receive any direct  remuneration  (other than  reimbursement  of expenses)  from
REMAC.  It is  currently  anticipated  that the  officers  and  directors of the
Company will continue to devote  substantially all of their time to their duties
related to their respective positions with Ray Ellison Industries,  Inc. and its
affiliates.  The officers and directors of the Company will devote such of their
time as may be  necessary  to ensure that REMAC  fulfills  its duties  under the
respective  Indentures governing the Bonds and such other duties as the officers
and directors shall deem necessary to protect the interest of the Bondholders or
which may be  required  by law.  Certain  of the  Company's  executive  officers
participate  in an  employment  agreement  with the  Company's  parent and other
affiliated  companies.  The agreement  provides that such executive officers are
entitled to a percentage of corporate distributions based on the accumulation of
certain cash and cash  equivalents of the Company over an imputed base return to
the shareholder.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

     The  authorized  capital stock of the Company  consists of 10,000 shares of
common stock, par value $1.00 per share,  (the "Common  Stock").  As of the date
hereof, 10,000 shares of Common Stock were issued and outstanding and were owned
by Ray Ellison Mortgage Investment Corp. Such shares may be pledged from time to
time to secure  indebtedness of Ray Ellison Mortgage Investment Corp. and/or its
affiliates.

     Set forth below is certain  information as to the  beneficial  ownership of
each class of equity  securities of Ray Ellison Mortgage  Investment  Corp., the
parent  corporation of the Issuer, as of March 15, 1998. 
<TABLE>
<CAPTION>
                                          Amount and       Percent  
                      Name of              Beneficial         of
Title of Class      Beneficial Owner       Ownership (1)    Class
-------------------------------------------------------------------------
<S>                 <C>                   <C>                <C> 
   
Common Stock         Ray Ellison          10,000 Shares      100%
                    Grandchildren
                      Trust (1)
</TABLE>       

     (1) The Ray Ellison  Grandchildren  Trust dated March 3, 1992  beneficially
owns 100% of the outstanding stock of Ray Ellison Mortgage  Investment Corp. and
its wholly-owned subsidiary, Ray Ellison Mortgage Acceptance Corp.



Item 13.  Certain Relationships and Related Transactions.

        Not Applicable.

Item 14. Exhibits, Financial Statement Schedules, and Reports on
            Form 8-K

(a)(1) Financial Statements

       The following financial statements are included in Part II,

       Item 8:
               Report of Independent Auditors
               Balance Sheets - December 31, 1997 and  1996
               Statements of Operations
                        -Years ended December 31, 1997, 1996 and 1995
               Statements of Changes in Stockholder's Equity (Deficit)
                        -Years ended December 31, 1997, 1996, and 1995
               Statements of Cash Flows
                        -Years ended December 31, 1997, 1996, and 1995
               Notes to financial statements



(a)(2) Financial Statement Schedules

        All schedules have been omitted because they are either  inapplicable or
        the required  information has been given in the financial  statements or
        the notes thereto.

(a)(3) Exhibits

 Exhibit Number

    Ex-1        -- Form  of  Underwriting  Agreement  including  form  of  Terms
                Agreement (4).
    Ex-3(i)  -- Articles of Incorporation of the Registrant as originally
                filed. (1)
    Ex-3(ii) -- Bylaws of the  Registrant as currently in  effect.(5)  Ex-4.1 --
    Form of Indenture between the Registrant and Trustee
                (containing Form of Bond).(4)
    Ex-4.2   -- Form of Series Supplement. (2)
             -- Form of Guaranty Agreement (level payment and graduated
                payment) for GNMA I Program ("Summary of Guaranty
                Agreement"). (3)
    Ex-4.3   -- Form of Guaranty Agreement for GNMA II Program ("Schedule
                of Subscribers and GNMA II Contractual Agreement"). (4)
    *Ex-23   -- Consent of experts
    *Ex-27   -- Financial Data Schedule
-----------------------------------

 *   Filed herewith



     1.    Previously   filed  with  the   Commission   as  an  exhibit  to  the
           Registrant's Form S-11 Registration  Statement (File No. 2- 93624) on
           October 4, 1984, and incorporated by reference herein.

     2.    Previously   filed  with  the   Commission   as  an  exhibit  to  the
           Post-Effective   Amendment  No.  1  to  the  Registrant's  Form  S-11
           Registration  Statement  (File No. 2-93624) on February 14, 1985, and
           incorporated by reference herein.

     3.    Previously filed with the Commission as an exhibit to Amendment
           No. 1 to the Registrant's Form S-11 Registration Statement (File
           No. 2-93624) on January 11, 1985, and incorporated by reference
           herein.

     4.    Previously   filed  with  the   Commission   as  an  exhibit  to  the
           Registrant's Form S-11 Registration Statement (File No. 33- 48368) on
           June 4, 1992, and incorporated by reference herein.

     5.    Previously filed with the Commission as an exhibit to the Registrants
           Form 10-Q for the quarter ended June 30, 1995,  and  incorporated  by
           reference herein.

 (b) Reports on Form 8-K

          None

<PAGE>



SIGNATURES

    Pursuant  to the  requirements  of  Section  13 or 15 (d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed by
the undersigned, thereunto duly authorized.

                                             Ray Ellison Mortgage
                                             Acceptance Corp.
                                             (Registrant)

March 19, 1997                           By       /s/Jack Biegler
                                           -----------------------------
                                           Jack Biegler
                                           President, (Principal Executive
                                           Officer) Director, and Secretary


March 19, 1997                           By       /s/Locksley Simmons
                                           ------------------------------
                                           Locksley Simmons, Director
                                           Vice President, Treasurer,
                                           (Chief Financial Officer and
                                           Principal Accounting Officer)
                                           and Assistant Secretary


    Pursuant to the  requirement  of the Securities  Exchange Act of 1934,  this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities indicated on March 19, 1997.

 SIGNATURE                                           CAPACITY
------------                                         ---------

/s/ Jack Biegler                                     Director
----------------
Jack Biegler


/s/Locksley Simmons                                  Director
-------------------
Locksley Simmons


/s/ Goodhue W. Smith, III                            Director
-------------------------
Goodhue W. Smith, III



    Supplemental information to be furnished with reports filed pursuant to
    -----------------------------------------------------------------------
    section 15(d) of the act by registrants, which have not registered
    -----------------------------------------------------------------------
    Securities pursuant to Section 12 of the Act.
    ---------------------------------------------

No annual report or proxy  material has been sent to  Bondholders of Ray Ellison
Mortgage Acceptance Corp. GNMA-Collateralized Bonds, issued in Series.

<PAGE>