UNITED STATES

                 SECURITIES AND EXCHANGE COMMISSION

                      Washington, D.C. 20549

                            FORM 10-K

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

                   For the fiscal year ended December 31, 1997

                                      OR

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

       For the transition period from _________ to ________.

                    Commission File Number 2-43162

                   URBAN IMPROVEMENT FUND LIMITED             
        (Exact name of registrant as specified in its charter)

          California                                          95-6448384     
State or other jurisdiction of                           (I.R.S. Employer   
incorporation or organization                           Identification No.)

1201 Third Avenue, Suite 5400, Seattle, Washington          98101 3076    
     (Address of principal executive offices)               (ZIP code)    

Registrant's telephone number, including area code:         (206) 622-9900

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 and (2) has been subject to such
filing requirements for the past 90 days.  Yes XXX           No      .


Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to Form 10-K. [  ]

State the aggregate market value of the voting stock held by
non-affiliates of the Registrant as of December 31, 1997:  No established
market value.

<PAGE>

                                     PART I
Item 1.  Business

     (a) General Development of Business   Urban Improvement Fund
Limited, a California limited partnership (the "Registrant"), was
formed in 1972 for the purpose of investing, through Local Limited
Partnerships (LLP's), in federally and state-assisted low and moderate
income housing projects.  Units of Limited Partnership Interest were sold
in a public offering to investors who required tax shelter for income from
other sources.  The Registrant acquired equity interests as a limited
partner in ten (10) such projects.  Four of these projects were sold through
trustee's sales (foreclosures by the Secretary of Housing and Urban
Development).  One of these properties, Mott Haven Apartments VI, was
assigned to HUD.

Despite the efforts of the General Partner, the owners and managers of
Mott Haven Apartments VI to preserve the development and provide
decent and affordable housing, the financial stability of the development is
threatened by the imminent expiration of the Section 8 loan management
set-aside contracts and the likelihood that they will not be renewed on this
property for federal budget and policy reasons.  HUD, the owners and the
General Partner of Mott Haven Apartments VI believe that it is in the best
interests of the development and its tenants that the projects be renovated
and reconfigured, and that such result can best be accomplished through
replacement of the existing management and ownership structure with
community-based owners and managers.  The General Partner has taken
steps to transfer the property of Mott Haven Apartments VI to HUD.
<PAGE>

The Alms Hill Partnership is still in existence with a note receivable for
the sales proceeds of the property.  The remaining four (4) properties plus
the Alms Hill Partnership are described in Item 2 hereof.

     (b) Financial Information about Industry Segment - The Registrant
is engaged in only one line of business.

     (c) Narrative Description of Business - The real estate business
is highly competitive.  The Registrant competes with numerous
established apartment owners and real estate developers of low-income
housing having greater financial resources. There is additional risk of
new construction occurring in areas where the Registrant has invested in
existing government-assisted housing projects.  

The outlook for subsidized housing is not determinable, given existing and
proposed federal legislation.

     (d) Financial information about foreign and domestic operations
and export sales   The Registrant's income is entirely dependent upon
revenues received from the limited partnerships in which it is a limited
partner.  Investment in federally-assisted housing is subject to significant
regulations.  These regulations limit, among other things, the amount of
return allowed on the initial equity investment, the manner in which such
properties may be sold, and the persons to whom such properties may be
sold. In 1987, fearing the loss of affordable housing units, Congress
passed emergency legislation which prohibited prepayment of all FHA
insured Section 236 or Section 221(d)(3) mortgages.  Congress passed
additional legislation
<PAGE>

in 1990 known as LIHPRHA (the Low Income Housing Preservation and
Resident Homeownership Act).  However, by 1995, Congress had
determined the program was too expensive to continue.  In March 1996,
Congress changed the compensation program, severely limited funding,
and restored the property owners' right to prepay the FHA mortgages and
change the use of the properties under legislation known as the Housing
Opportunity Program Extension Act of 1996.  The General Partner of the
Partnership has initiated steps to ensure that the Local Limited
Partnerships comply with the provisions of LIHPRHA and subsequent
legislation.  See financial information in Item 6, Selected Financial Data,
in this report.

Item 2.  Properties
     The Registrant owns equity interests as a Limited Partner in the
following real estate projects as of December 31, 1997:

<TABLE>
<S>                           <C>             <C>                <C>
                                                                                                1997
                                            No. of             Percent of
          Name                Type           Units             Occupancy

Angeles Apts. No. 1
Los Angeles, California     236 Rehab.    94 Residential           99%

Angeles Apts. No. 2
Los Angeles, California     236 Rehab.    109 Residential          93%

Lakewood Apts
Vinton, Virginia            236 New       108 Residential          99%

The Villages                221(d)(3)     250 Residential          94%
Waco, Texas                 New
</TABLE>

    Mortgage indebtedness associated with each project is shown in
Schedule XI of this report.
<PAGE>

The following property was assigned to HUD at December 31, 1997:
<TABLE>
<S>                               <C>            <C>             <C>                 <C>
Mott Haven Apts. VI           236 Rehab.    184 Residential       99%
New York, New York                          1 Commercial
</TABLE>

    The following is a description of each of the above listed properties:
ANGELES APARTMENTS NUMBER 1 consists of 94 residential units
located in the southwest area of Los Angeles, California.  The project
includes five two-story rehabilitated buildings with stucco exteriors.

<TABLE>
<S>
        <C>                         <C>                           <C>
    Number of Units                 Type                 Average Size (Sq. Ft.)
         80                       Efficiency                      414
         14                        1 Bedroom                      618
</TABLE>

ANGELES APARTMENTS NUMBER 2 consists of 109 residential units
located in the southwest area of Los Angeles, California.  The project
includes five rehabilitated two- and three-story buildings with stucco
exteriors.

<TABLE>
<S>
                   <C>                  <C>                  <C>

             Number of Units           Type           Average Size (Sq. Ft.)
                   80                 Efficiency             413
</TABLE>

LAKEWOOD APARTMENTS consists of 108 residential units located on
Route #24 in Vinton, Virginia.  The project includes nine two and one-half
story buildings with wood siding.

<TABLE>
<S>
                  <C>                 <C>                     <C>
            Number of Units           Type           Average Size (Sq. Ft.)
                  72                2 Bedroom                 895
                  36                3 Bedroom                 948
</TABLE>
<PAGE>

THE VILLAGES is a 250-unit residential apartment project located at
29th Street and East Burelson in Waco, Texas.  The project consists of
thirty-five two-story buildings.

<TABLE>
<S>
              <C>                  <C>                    <C>
        Number of Units           Type           Average Size (Sq. Ft.)
              80                  1 Bedroom                 667
             119                  2 Bedroom                 826
              51                  3 Bedroom                 999
</TABLE>

The Registrant sold its equity interest as a limited partner in the
following real estate project through a resyndication during August 1983:

ALMS HILL APARTMENTS contained 200 residential and 10 commercial units
located in the northeast section of Cincinnati, Ohio.  The structure is
a ten-story rehabilitated brick and masonry building.
<TABLE>
<S>
        <C>                    <C>                    <C>
    Number of Units           Type           Average Size (Sq. Ft.)

          20               Efficiency                  405
         137               1 Bedroom                   650
          43               2 Bedroom                   775
          10               Commercial                2,175
</TABLE>

The following property was assigned to HUD during 1997:

MOTT HAVEN APARTMENTS VI consists of 184 residential units and
one commercial unit located in the Bronx, New York City, New York. 
The project includes twelve five- or six-story rehabilitated brick 
buildings.

<TABLE>
<S>
                 <C>               <C>                      <C>
          Number of Units           Type           Average Size (Sq. Ft.)
                1                Efficiency                 320
               46                1 Bedroom                  490
               76                2 Bedroom                  715
               32                3 Bedroom                  905
               29                4 Bedroom                  970
                1                Commercial                 905
</TABLE>
<PAGE>

Item 3.  Legal Proceedings
There are no material legal proceedings pending at the time, other than
ordinary routine litigation incidental to the Partnership's business,
including the Local Limited Partnerships in which the Partnership is a
limited partner.  

Item 4.  Submission of Matters to a Vote of Security Holders  No matters
were submitted during the fourth quarter of the fiscal year covered by this
report to a vote of security holders through the solicitation of proxies or
otherwise.
<PAGE>

                                   PART II
Item 5.  Market for the Registrant's Securities and Related Security Holder
         Matters

    (a)  There is not a ready market for the transfer of limited partnership
interests.  Limited partnership interests may be transferred between
individuals with the consent of the General Partner.

  (b)  Holders 
<TABLE>
<S>
      <C>                 <C>                    <C>                   <C>
    Title of        Name & Address of          Amount and Nature of   % of   
     Class          Be neficial Owner          Beneficial Ownership   Class

 General Partner   Interfinancial Real                5 Units         100%  
 Interest          Estate Management Co.              ($5,000)
                   1201 Third Avenue, Suite 5400
                   Seattle, Washington 98101 3076

Limited Partner      350 Limited Partners             5,830 Units     100% 
  Interest                                            ($5,830,000)
</TABLE>

The Registrant has no officers or directors.  Interfinancial Real Estate
Management Company, the General Partner of the Registrant, is a
corporation. 

    (c)  There were no distributions to partners during 1997, 1996, 1995,
1994 or 1993.

Item 6.  Selected Financial Data

These statements do not include all disclosures required under generally
accepted accounting principles; however, when read in conjunction with
the related financial statements and notes thereto included under Item 8,
the statements include all generally accepted accounting principles
disclosures for the latest three years.
<PAGE>

<TABLE>

                                    Year Ended December 31,               
<S>                      <C>          <C>        <C>      <C>       <C>
                         1997        1996       1995      1994      1993  

Interest income      $    424     $  1,455   $    118   $    263  $    380

Operating expenses:
 Management fee         40,000      40,000     40,000     40,000    40,000
 Other expenses         21,731      33,954     15,157     15,226    17,807
                        61,731      73,954     55,157     55,226    57,807

Loss before equity
in income of Local
Limited Partnerships   (61,307)     (72,499)  (55,039)   (54,963)  (57,427)

Equity in income of
Local Limited
Partnerships            33,746      106,919     9,778      6,947    39,081

Net income (loss)     $(27,561)    $ 34,420  $(45,261)  $(48,016) $(18,346)

Allocation of net
income (loss):
Net income (loss)
 allocated to
 General Partners     $    (24)    $     30  $    (39)  $    (42) $    (17)
 Net income (loss)
 allocated to
 Limited Partners      (27,537)      34,390   (45,222)   (47,974)  (18,329)

                      $(27,561)    $ 34,420  $(45,261)  $(48,016) $(18,346)

Net financial
 reporting income 
(loss) per unit:
General partnership
 units  (5 units
 outstanding
 allocated
 to General
 Partner)            $     (5)     $      6  $    (8)   $     (8) $     (3)
Limited partnership
 units (5,830 units
 outstanding
 allocated to
 Limited
 Partners)           $     (5)     $      6  $     (8)   $     (8) $     (3)

Total assets         $  7,247      $ 59,063  $    643    $  6,009  $ 11,425

Long term 
obligations          $    -0-      $    -0-  $    -0-    $    -0-  $    -0-

Cash distributions   $    -0-      $    -0-  $    -0-    $    -0-  $    -0-
</TABLE>
<PAGE>

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

The Partnership has followed the practice of investing available funds not
used in the purchase of properties or in operations into short-term
investments.  Interest income resulted from such short-term investments.
The Partnership is dependent upon interest earned and the distributions
and repayment of advances from Local Limited Partnerships for cash flow. 
As shown in the table below, the Partnership has received distributions in
recent years.  This trend is expected to continue.  The Partnership has
advanced funds and received repayments of such advances from selected
Local Limited Partnerships.  The General Partner believes these net
advances will not significantly affect the operations of the Partnership. 

<TABLE>
<S>                     <C>       <C>          <C>         <C>         <C>
                       1997       1996        1995        1994         1993  

Urban's share of
distributions      $ 30,148    $ 89,970    $  9,778    $  6,947     $ 29,466

Advances (made to)
  repaid by
  Local Limited
  Partnerships     $  3,598    $ 16,949    $    -0-    $    -0-     $  9,615
</TABLE>

Under the terms of the Limited Partnership Agreement (as amended), the
Partnership is required to pay the General Partner an annual management
fee equal to three- tenths of one percent of invested assets or $64,325.
(The fee will not be more than fifty percent of the Partnership's annual net
cash flow, as defined, subject to an annual minimum of $40,000.)  This fee
was not payable during the first six years unless annual tax deductions
plus cash distributions aggregated $550 per unit on a cumulative basis. 
The required level of tax deductions was not achieved and, accordingly,
the fee was not paid for those years.  However, fees of $240,000 were
recorded as a liability to the General Partner.  Management fees payable
totaling
<PAGE>

$550,833 payable to the General Partner for subsequent years have been
accrued because cash flow was not sufficient to pay the fees.  The
Partnership will also pay the General Partner a liquidation fee for the sale
of projects.  The liquidation fee is the lesser of (i) ten percent of the net
proceeds to the Partnership from the sale of a project(s) or (ii) one percent
of the sales price plus three percent of the net proceeds after deducting an
amount sufficient to pay long-term capital gains taxes.  No part of such fee
shall accrue or be paid unless:  (i) the Limited Partners' share of the
proceeds has been distributed to them, (ii) the Limited Partners shall have
first received an amount equal to their invested capital attributable to the
project(s) sold, and (iii) the Limited Partners have received an amount
sufficient to pay long-term capital gains taxes from the sale of the
project(s), if any, calculated at the maximum rate then in effect.

At December 31, 1997, the Partnership had investments in four active real
estate limited partnerships as a Limited Partner.  The Partnership carries
such investments on the equity method of accounting.  The Partnership
discontinues recording losses for financial reporting purposes when its
investment in a particular Local Limited Partnership is reduced to zero,
unless the Partnership intends to commit additional funds to the Local
Limited Partnership.  At year- end, all of the investments were reduced to
zero.  The equity in income in Local Limited Partnerships resulted from
either Local Limited Partnerships, whose investments have not been
reduced to zero, reporting income from operations and/or Local Limited
Partnerships, whose investments have been reduced to zero, who paid
distributions or repaid an advance.  Additional advances to Local Limited
Partnerships, after an investment is reduced to zero, are recorded as losses. 
The components of the Partnership's equity in net income of the Local
Limited Partnerships for 1997, 1996 and 1995 is summarized as follows:
<PAGE>

<TABLE>
<S>                                                <C>             <C>            <C>
                                                   1997            1996            1995  

Net repayments from (advances to)
Partnerships with zero investments:

    Angeles I                                   $   3,598        $  16,949       $     -0-

Distributions received from
Partnerships with zero investments:

    Angeles II                                     22,094            45,903             -0-
    The Villages                                      -0-            36,013             -0-
    Lakewood Apartments                             8,054             8,054        9,778

Equity in income of Local Limited 
  Partnerships                                  $  33,746         $ 106,919    $   9,778
</TABLE>

The actual combined losses of Local Limited Partnerships will
generally decrease as depreciation and interest decreases and the projects
achieve stable operations. Much of the rental revenue of the Local Limited
Partnerships is dependent on subsidy.  The rents have increased for
inflation and operating costs.  In recent years, several Local Limited
Partnerships have increased operating expenses to fund repairs and
maintenance on the properties.  Such repairs are limited by available cash
flow.  The distributions to the Partnership from Local Limited
Partnerships are the result of the profitable operations of these projects.

Operating expenses have remained constant from 1992 through 1997. 
During 1996, the Partnership incurred additional costs of $18,254 for
consulting service inconnection with LIHPHRA and the transfer of the
property of Mott Haven Apartments VI to HUD.
<PAGE>

    Liquidity

The Partnership is dependent upon distributions from its investments
in Local Limited Partnerships for cash flow.  The Partnership may not be
able to generate sufficient cash flow from operations or from distributions
from its interests in Local Limited Partnerships to pay future obligations
as they become due without additional financing or advances from the
General Partner.  The General Partner is under no obligation to advance
additional funds to the Partnership.  The General Partner is monitoring the
operations of the Local Limited Partnerships to ensure that sufficient cash
will be received from the Local Limited Partnerships to sustain operations. 
The General Partner anticipates it will receive adequate distributions from
the Local Limited Partnerships to maintain operations.

    Capital Resources

The General Partner believes that situations may arise where it would
be advantageous to the Partnership to exchange properties in a tax-free
transaction.  The Partnership's basis in its properties has been reduced
through depreciation deductions and other losses to levels substantially
below the amount of debt secured by the properties.  Additionally, the
rental properties owned and operated by the Local Limited Partnerships
have typically computed depreciation for financial reporting purposes
using the straight-line method over the estimated economic useful life of
the property.  For income tax reporting purposes, depreciation generally
has been computed over the same or shorter periods using accelerated
methods.  As a result, the carrying values of the Partnership's investments
in Local Limited Partnerships are substantially greater for financial
reporting purposes than for income tax reporting purposes.  Upon sale or
other disposition of a property by the Local Limited Partnership, the gain
recognized by the Partnership for income tax reporting purposes may be
substantially greater than the gain recorded for financial reporting
purposes.
<PAGE>

Accordingly, if the Properties are sold, the Partners, in all likelihood,
would recognize taxable gain in excess of the cash available for
distribution.  If sale proceeds are reinvested in a manner which permits the
original sale to be treated as a like-kind exchange, the Partners can defer
this gain until the new property is sold.  Additionally, the Partnership will 
receive the benefit of any cash flow or appreciation in value of the new
property.  If reinvestments were made, it is likely that the acquired
properties would be conventional, multi-family residential projects.  The
Partnership has had inquiries about the sale or exchange of properties in its
portfolio, but no offers have been made.

The Partnership has made no material commitments for capital
expenditures.

Item 8.  Financial Statements and Supplementary Data  The response to
this item is submitted in a separate section of this report.

Item 9.  Change In and Disagreements with Accountants on Accounting
and Financial Disclosure

There have been no disagreements with accountants on any matters of
accounting principles or practices or financial statement disclosure.
<PAGE>

                              PART III
Item 10.  Directors and Executive Officers of the Registrant 

    (a)  The General Partner of the Registrant is Interfinancial Real Estate
Management Company.  The Registrant does not have directors as such. 
The following is a listing of the Directors of the General Partner of the
Registrant.  These Directors are elected to serve one-year terms and until
their successors are duly elected and qualified as directors.
<TABLE>
<S>             <C>              <C>               <C>
                Name             Age              Office             
           Paul H. Pfleger        62        Director/President
           John M. Orehek         43        Director/Senior Vice President
</TABLE>

    (b)  The General Partner of the Registrant is Interfinancial Real Estate
Management Company.  The Registrant does not have executive officers
as such.  The following is a listing of the executive officers of the General
Partner of the Registrant. These executive officers are elected to serve
one-year terms and will continue to serve until their successors are duly
elected and qualified as executive officers.

<TABLE>
<S>                    <C>               <C>                 <C>
                      Name               Age                Office
                 Paul H. Pfleger          62         Chairman of the Board
                 John M. Orehek           43         Senior Vice President
                 Michael Fulbright        43         Secretary
</TABLE>

    (c)  The Registrant has no employees.
    (d)  There are no family relationships between any directors or
         executive officers.
    (e)  The principal occupation and employment of each of the executive 
         officers and directors of the General Partner are as follows:
<PAGE>

Paul H. Pfleger, President/Director.  Mr. Pfleger organized and was
Chairman of the Board of Security Properties Inc. (formerly Security
Pacific, Inc.) from 1969 to the present, except for a period between 1984
and 1986.  Farmers Savings acquired Security Properties Inc. as a
wholly-owned subsidiary during 1984 and sold the company back to the
original owners during 1987.  The major line of business of Security
Properties Inc. is the administration of previously syndicated, subsidized
multifamily residential real estate.  Mr. Pfleger was first elected an
officer and director of the General Partner, Interfinancial Real Estate
Management Company, in July 1981 and has maintained his dual status since
that time.

Mr. Pfleger is the General Partner in over 280 properties with
approximately 38,000 housing units throughout the United States.

John M. Orehek, Senior Vice President.  Mr. Orehek is the Chief
Executive Officer and President of Security Properties Investment Inc. 
From 1982 to 1987, he was employed by Security Properties Inc. (SPI) as
President of First Columbia Corporation, its affiliated broker/dealer, and
Senior Vice President of SPI.  From 1987 to 1991, when he rejoined SPI,
he was President of Hallmark Capital Partners, Ltd., a Seattle real estate
development corporation.  From 1979 to 1982 he was a member of the tax
department in the Cleveland, Ohio and Seattle, Washington offices of
Arthur Andersen & Co., Certified Public Accountants.  He received a B.S.
degree in Economics from Allegheny College, Meadville, Pennsylvania
and a law degree from Case Western Reserve University School of Law. 
Mr. Orehek was first elected a director of the General Partner,
Interfinancial Real Estate Management Company, during 1992.
<PAGE>

Michael Fulbright, Secretary.  Mr. Fulbright is General Counsel for
Security Properties Inc.  He joined the Company in 1989 as Special
Counsel responsible for new development activities and sales and
financing transactions in the syndication portfolio.  Prior to joining SPI,
he was a partner at Tousley Brain, a Seattle law firm that specializes in
commercial real estate matters.  His practice there included representation
of lenders, institutional investors and commercial developers.  He received
a Masters of Business Administration degree from Texas A&M and a law
degree from the University of Washington.  He is a member of the
Washington State Bar Association.  Mr. Fulbright was first elected an
officer of the General Partner, Interfinancial Real Estate Management
Company, during 1994.

    (f)  Section 20 of the Amended Certificate and Agreement of Limited
Partnership of the Registrant provides for the indemnification of the
General Partner and its designees and nominees against liability resulting
from errors in judgment or any acts or omissions, whether or not
disclosed, unless caused by a breach of fiduciary duty of such parties to
the Registrant or its limited partners.  None  of the officers or directors of
the General Partner of the registrant have filed a petition under the federal
bankruptcy laws or any state insolvency act, nor have they been engaged
in any acts over the past five years that would impair their ability or
integrity as directors or executive officers of the General Partner of the
registrant.
<PAGE>

Item 11.  Executive Compensation
    (a)  The Registrant does not pay any salary or other remuneration to the
officers of the General Partner of the Registrant.

    (b)  The Registrant has no plan or arrangement to pay any salary or
other remuneration to the officers in the future.

    (c)  There are no options, warrants, rights or any other such
remuneration available to the General Partner of the Registrant.

    (d)  The Registrant will not pay any salary or other remuneration to the
directors of the General Partner of the Registrant.

    (e)  There are no retirement benefit plans or other remuneration that
would result from the resignation, retirement, termination or any other
change in control of any officer or director of the General Partner of the
Registrant.
<PAGE>

Item 12.  Security Ownership of Certain Beneficial Owners and
Management

    (a)  Security Ownership of Certain Beneficial Owners

  (b)  Holders
<TABLE>
<S>
      <C>                 <C>                         <C>            <C>
   Title of        Name & Address of         Amount and Nature of   % of 
     Class         Beneficial Owner          Beneficial Ownership  Class  

General Partner    Interfinancial Real               5 Units         100%  
   Interest        Estate Management Co.             ($5,000)
                   1201 Third Avenue, Suite 5400
                   Seattle, Washington 98101 3076
</TABLE>

    (b)  No officers or directors of the General Partner of the Registrant own
a Partnership interest.

    (c)  No change in control of the Registrant is anticipated.

Item 13.  Certain Relationships and Related Transactions

    (a)  There are no transactions in which the directors or officers of the
General Partner or security holder of the Registrant have a material
interest.

  (b)    There are no transactions in which the directors of the General
Partner have a material interest.

    (c)  There is no indebtedness of the management of the General Partner
of the Registrant to the Registrant.
<PAGE>

                                    PART IV

Item 14. Exhibits, Financial Statements, Schedules and Reports on Form
8-K.
(a) 1. Financial Statements:

         Report of independent certified public accountants.

         Balance Sheets at December 31, 1997 and 1996.

         Statements of Income for the years ended December 31, 1997, 1996
         and 1995.

         Statements of Changes in Partners' Capital for the years ended
         December 31, 1997, 1996 and 1995.

       Statements of Cash Flows for the years ended December 31, 1997,
       1996 and 1995.

       Notes to Financial Statements.

(a) 2. Financial Statement Schedules:

    IV Indebtedness of and to Related Parties

    XI Real Estate and Accumulated Depreciation and Amortization of
       Local Limited Partnerships.

    All other schedules are omitted because they are not applicable or the    
    required information is included in the financial statements or the notes 
    thereto.

                  FINANCIAL STATEMENTS OF UNCONSOLIDATED
             SUBSIDIARIES FIFTY PERCENT OWNED PERSONS OR OTHER
                  UNCONSOLIDATED PERSONS ACCOUNTED FOR ON THE
                                 EQUITY METHOD

Separate financial statements of the four limited partnerships accounted  
for on the equity method have been omitted because combined financial
statements are included in Note 5 to the financial statements.

(a) 3. Exhibits

       1.A.  Form of proposed Selling Brokers' Agreement, incorporated by
             reference from Registration Statement on Form S-11 filed 1972.
<PAGE>

       3.A.  Amended Certificate and Agreement of Limited  Partnership,
             incorporated by reference from Registration Statement on
             Form S-11 filed 1972.
<PAGE>

       3.B.  Amendment to Certificate of Limited Partnership, incorporated
             by reference from  Registration Statement on Form S-11 filed
             1972.

       4.A.  Subscription agreement for use prior to effective date of
             Registration Statement, incorporated by reference from 
             Registration Statement on Form S-11 filed 1972.

       4.B.  Application form to subscribe for Units, incorporated by
             reference from Registration Statement on Form S-11 filed 1972.

       5.A.  Opinion and Consent of Counsel, incorporated by reference from
             Registration Statement on Form S-11 filed 1972.

       8.A.  Opinion and Consent of Tax Counsel, incorporated by reference
             from Registration Statement on Form S-11 filed 1972.

      10.A.  Copy of Agreement between Registrant, the General Partner
             and Income-Equities Corporation with respect to certain
             commitments made on behalf of the Registrant, incorporated
             by reference from Registration Statement on Form S-11 filed 1972.

      10.B.  Copy of Management Agreement between the Registrant and
             Income-Equities Corporation incorporated by reference from
             Registration Statement on Form S-11 filed 1972.

(b) Reports on Form 8-K

    There were no reports on Form 8-K filed during the last quarter of 1997.

(c) Exhibits

    Form 12b-25

(d) Financial Statement Schedules:

    IV Indebtedness of and to Related Parties

    XI Real Estate and Accumulated Depreciation and Amortization of
       Local Limited Partnerships.

All other schedules are omitted because they are not applicable or the
required information is included in the financial statements or the notes
thereto.
<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, on its behalf by the undersigned, thereunto duly authorized.

           (REGISTRANT)  URBAN IMPROVEMENT FUND LIMITED - 1972
                         BY:  INTERFINANCIAL REAL ESTATE MANAGEMENT
                         COMPANY




Date:  July 29, 1998
By:    Paul H. Pfleger
       President
       Interfinancial Real Estate Management Company 



Date:  July 29, 1998
By:    John M. Orehek
       Senior Vice President
       Interfinancial Real Estate Management Company 


Pursuant to the requirements 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 and on the dates indicated.



Date:  July 29, 1998
By:    Paul H. Pfleger, Director
       Interfinancial Real Estate Management Company



Date:  July 29, 1998
By:    John M. Orehek, Director
       Interfinancial Real Estate Management Company.
<PAGE>

                  URBAN IMPROVEMENT FUND LIMITED
                       SEATTLE, WASHINGTON

                    ANNUAL REPORT ON FORM 10-K
           ITEM 8, ITEM 14(a)(1) AND (2) AND ITEM 14(d)
            FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
             LIST OF FINANCIAL STATEMENTS AND FINANCIAL
                        STATEMENT SCHEDULES
                  YEAR ENDED December 31, 1997
<PAGE>

URBAN IMPROVEMENT FUND LIMITED
(A Limited Partnership)
Form 10-K   Items 14(a)(1) and (2)
Form 10-K   Item 14(d)


INDEX TO FINANCIAL STATEMENTS


The following financial statements of Urban Improvement Fund Limited
are included in Item 8 and Item 14(a)(1)

    Independent auditors' report       . . . . . . . . . . . . . . . . F-3

    Balance sheets at December 31, 1997 and 1996       . . . . . . . . F-4

    Statements of income for the years ended December 31, 1997,
    1996 and 1995.                                               . . . F-5

    Statements of changes in partners' capital (deficit) for the
    years ended December 31, 1997, 1996 and 1995. . . .                F-6

    Statements of cash flows for the years ended December 31, 1997,
    1996 and 1995.                                             . . . . F-7

    Notes to financial statements. . . . . . . . . . . .         . . . F-8


The following financial statement schedules of Urban Improvement Fund
Limited are included in Item 14(a)(2) and 14(d):

    IV.  Indebtedness of and to Related Parties. . . . . . . .   . . .F-22

    XI.  Real Estate and Accumulated Depreciation of
           Local Limited Partnerships. . . . . . . . . . . .       . .F-23

All other schedules are omitted because they are not applicable or the
required information is included in the financial statements or the notes
thereto.


                  FINANCIAL STATEMENTS OF UNCONSOLIDATED
            SUBSIDIARIES FIFTY PERCENT OWNED PERSONS OR OTHER
                 UNCONSOLIDATED PERSONS ACCOUNTED FOR ON THE
                              EQUITY METHOD

Separate financial statements of the four limited partnerships accounted
for on the equity method have been omitted because combined financial
statements are included in Note 5 to the financial statements.
<PAGE>


                      INDEPENDENT AUDITORS' REPORT


To the Partners
Urban Improvement Fund Limited - 1972

We have audited the accompanying balance sheets of Urban Improvement
Fund, Limited (a Limited Partnership) as of December 31, 1997 and 1996,
and the related statements of changes in partners' capital (deficit), income
and cash flows for the years ended December 31, 1997, 1996 and 1995
and the related schedules listed in Item 14(a)2 of the annual report on
Form 10-K of Urban Improvement Fund Limited for the years ended
December 31, 1997, 1996 and 1995.  These financial statements and
financial statement schedules are the responsibility of the Partnership's
management.  Our responsibility is to express an opinion on these
financial statements and financial statement schedules based on our
audits.  We did not audit two in 1997 and 1996 and three in 1995 of the
financial statements of Urban Improvement Fund Limited's Local Limited
Partnership investments whose combined financial statements are shown
in Note 5.  These statements were audited by other auditors whose reports
have been furnished to us, and our opinion, to the extent it relates to the
amounts included for these Local Limited Partnership investments, is
based solely on the reports of the other auditors.  Urban Improvement
Fund Limited's investment in these partnerships has been reduced to zero.

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
and the reports of other auditors provide a reasonable basis for our
opinion.

In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material
respects, the financial position of Urban Improvement Fund Limited as of
December 31, 1997 and 1996, and the results of its operations and its cash
flows for the years ended December 31, 1997, 1996 and 1995, in
conformity with generally accepted accounting principles.  In addition, in
our opinion, based upon our audits and the reports of other auditors, the
financial statement schedules referred to above, when considered in
relation to the basic financial statements taken as a whole, present fairly, in
all material respects, the information required therein.

The accompanying financial statements have been prepared assuming that
Urban Improvement Fund Limited will continue as a going concern.  As
discussed in Note 2 to the financial statements, the Partnership's difficulty
in generating sufficient cash flows to pay its obligations and its net capital
deficiency raises substantial doubt about its ability to continue as a going
concern.  Management's plans in regard to these matters are also described
in Note 2.  The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.




Atlanta, Georgia
April 27, 1998
<PAGE>

URBAN IMPROVEMENT FUND LIMITED 
(A Limited Partnership)

BALANCE SHEETS



ASSETS
<TABLE>
<S>                                      <C>                       <C>
                                                 December 31,
                                         1997                     1996

Cash and cash equivalents           $    7,247                $   59,063 
Due from affiliates                     30,255                       -0- 
Investments in and advances
to Local Limited Partnerships
accounted for on the equity
method - Note 5                            -0-                       -0- 

                                    $   37,502                  $ 59,063 




              LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)


Accounts payable                    $      -0-                 $  4,000 
Management fee payable
 Note 4 (Schedule IV)                  790,833                  780,833 
Advance from General
 Partner (Schedule IV)                 558,586                  558,586 
Distribution payable                       641                      641 
                                     1,350,060                1,344,060 
 
Partners' capital (deficit) - Note 3
General Partners - 5 partnership
units authorized, issued and
outstanding                             (1,127)                  (1,103)
Limited Partners - 5,830 partnership
units authorized, issued and
outstanding                         (1,311,431)              (1,283,894)
                                    (1,312,558)              (1,284,997)
Commitments and contingent
liabilities - Notes 2 and 4         $   37,502               $   59,063 
</TABLE>

The Notes to Financial Statements are an integral part of these Statements.
<PAGE>

URBAN IMPROVEMENT FUND LIMITED
(A Limited Partnership)

STATEMENTS OF INCOME

<TABLE>
<S>                             <C>                <C>               <C>
                                         Year Ended December 31, 
                               1997               1996               1995

Interest income            $      424        $    1,455       $      118 

Expenses:
 Management fees - Note 4      40,000            40,000           40,000 
 Other expenses                21,731            33,954           15,157 
                               61,731            73,954           55,157 
Loss before equity in 
income of Local Limited
Partnerships                  (61,307)          (72,499)         (55,039)
Equity in income of
Local Limited
Partnerships - Note 5          33,746           106,919            9,778 

Net income (loss)          $  (27,561)       $   34,420       $  (45,261)

Allocation of net
income (loss):
Net income (loss)
allocated to General
Partners                   $      (24)       $       30       $      (39)
Net income (loss)
allocated to Limited
Partners                      (27,537)           34,390          (45,222)

                           $  (27,561)       $   34,420         $(45,261)
Net financial reporting
income (loss) per unit:
 General partnership
 units (5 units
 outstanding allocated
 to General Partner)       $       (5)       $       6          $     (8)
 Limited partnership units
 (5,830 units outstanding
 allocated to Limited
 Partners)                 $       (5)       $       6          $     (8)
</TABLE>

The Notes to Financial Statements are an integral part of these Statements.
<PAGE>

URBAN IMPROVEMENT FUND LIMITED
(A Limited Partnership)

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)

<TABLE>
<S>                             <C>                <C>              <C>
                              General            Limited
                              Partner            Partners          Total

Partners' capital (deficit)
 at January 1, 1995       $    (1,094)         $(1,273,062)     $(1,274,156)

Net loss - 1995                   (39)             (45,222)         (45,261)

Partners' capital (deficit)
at December 31, 1995           (1,133)          (1,318,284)      (1,319,417)

Net income - 1996                  30               34,390           34,420 

Partners' capital (deficit)
at December 31, 1996           (1,103)          (1,283,894)      (1,284,997)

Net loss - 1997                   (24)             (27,537)         (27,561)

Partners' capital (deficit)
at December 31, 1997      $    (1,127)         $(1,311,431)     $(1,312,558)

</TABLE>

The Notes to Financial Statements are an integral part of these Statements.
<PAGE>

URBAN IMPROVEMENT FUND LIMITED
(A Limited Partnership)

STATEMENTS OF CASH FLOWS

<TABLE>
<S>
                                     <C>            <C>             <C>
                                           Year ended December 31,
                                     1997           1996            1995
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss)                $  (27,561)     $   34,420     $  (45,261)
 Adjustments to reconcile
 net income  (loss) to net
 cash used by operating
 activities:
  Equity in net income of
  Local Limited Partnerships        (33,746)       (106,919)        (9,778)
  Increase (decrease) in accounts
  payable, management fees
  payable and payable to
  affiliates                        (24,255)         24,000         40,000
    Total adjustments               (58,001)        (82,919)        30,222
      Net cash used by
      operating activities          (85,562)        (48,499)       (15,039)

CASH FLOWS FROM
INVESTING ACTIVITIES:
 Current year distributions
 received                            30,148         89,970          9,778
  Net repayments from Local
    Limited Partnerships              3,598         16,949            -0-
      Net cash provided by
      investing activities           33,746        106,919           9,778

CASH FLOWS FROM
FINANCING ACTIVITIES:
 Decrease in distribution
 payable                               -0-            -0-            (105)
     Net cash used by
     financing activities              -0-            -0-            (105)

NET INCREASE (DECREASE) 
 IN CASH AND  CASH
 EQUIVALENTS                       (51,816)        58,420          (5,366)

CASH AND CASH
EQUIVALENTS 
AT BEGINNING
OF YEAR                             59,063            643           6,009 

CASH AND CASH
EQUIVALENTS
AT END OF YEAR                  $    7,247      $  59,063      $      643 
</TABLE>

The Notes to Financial Statements are an integral part of these Statements
<PAGE>

Note 1 - Organization and Accounting Policies

  Organization

Urban Improvement Fund Limited (the Partnership) was formed under the
California Uniform Limited Partnership Act on February 22, 1972, for the
principal purpose of investing in other limited partnerships (Local Limited
Partnerships), which own federal and state-assisted housing projects.  The
Partnership issued 5,830 units of limited partnership interest pursuant to a
public offering of such units which terminated on December 31, 1972. 
The Partnership also issued five units of general partnership interest to
Interfinancial Real Estate Management Company (the General Partner). 
For income tax and financial reporting purposes, profits and losses are
allocated .08659 percent to the General Partner and 99.91341 percent to
the limited partners.

  Investment in Local Limited Partnerships

As of December 31, 1997, the Partnership has investments in four active
real estate limited partnerships (Local Limited Partnerships), which are
accounted for on the equity method (Note 5).  The investment account
represents the sum of the capital investment, advances and unamortized
cost of acquisition less the Partnership's share of losses since the date of
acquisition.  The Partnership discontinues recognizing losses and
amortizing cost of acquisition under the equity method when the
investment in a particular Local Limited Partnership is reduced to zero,
unless the Partnership intends to commit additional funds to the Local
Limited Partnership.  Repayment of advances and cash distributions by the
Local Limited Partnerships after the Partnership's investment has been
reduced to zero are recognized as income by the Partnership in the year
received.  Additional advances to a Local Limited Partnership, after an
investment is reduced to zero, are recognized as losses.

Initial rent-up fees paid by the Partnership to the General Partner, deducted
when paid for income tax purposes (Note 2), are capitalized as costs of
acquisition of the Local Limited Partnerships for financial reporting
purposes.  These costs and other costs of acquisition are amortized using
the straight-line method over the lives (fifteen to forty years) of the Local
Limited Partnerships' properties.  Amortization is discontinued when the
investment is reduced to zero.
<PAGE>

Note 1 - Organization and Accounting Policies - Continued

The Partnership has an investment in one limited partnership that sold its
real estate during 1983.  This partnership (Alms Hill Apartments, Ltd.)
holds a note receivable for a portion of the sales proceeds.  The sale of the
property was recognized on the cost recovery method to first recognize the
recovery of the asset value, then recognize the gain as the proceeds are
received.  Interest will accrue at eighteen percent on the unpaid principal
balance of $500,000.  Unpaid interest and principal was due August 1,
1993.  The due date was extended for an additional five-year term to
August 1, 1998, at which time the due date may be extended for an
additional five year term at the option of the maker of the installment
obligation.  During the extension period, interest will accrue only to the
extent of surplus cash.  Payments after 1989 can only be made from cash
flow of the Local Limited Partnership, as defined in its partnership
agreement.  No cash flow payments have been made.

The Partnership's equity in net income of the Local Limited Partnerships is
summarized as follows:

<TABLE>
<S>                                       <C>           <C>            <C>
                                         1997           1996          1995  
Repayments from (advances to) 
Partnerships with zero investments:
 Angeles I                             $  3,598       $ 16,949     $    -0-

Distributions received from Partnerships
with zero investments:
 The Villages                               -0-         36,013          -0-
 Lakewood Apartments                      8,054          8,054        9,778
 Angeles II                              22,094         45,903          -0-

Equity in income of Local Limited
Partnerships                           $ 33,746       $106,919     $  9,778
</TABLE>

Significant accounting policies followed by the Local Limited
Partnerships are summarized in Note 5.

    Taxes on Income

No provision for taxes on income is required in the financial statements
since all taxable income or loss of the Partnership is allocated to the
partners for inclusion in their respective tax returns.

    Use of Estimates

The preparation of financial statements requires the use of estimates and
assumptions.  Actual results could differ from those estimates.
<PAGE>

Note 1 - Organization and Accounting Policies - Continued

    Cash Equivalents

Marketable securities that are highly liquid and have maturities of three
months or less at the date of purchase are classified as cash equivalents.

Note 2 - Future Operations

The Partnership's cash flow is insufficient to meet its current obligations,
and the Partnership may not be able to generate sufficient cash flow to pay
its obligations as they become due without additional financing or
advances from the General Partner.  The General Partner is under no
obligation to commit additional funds to the Partnership.  However, the
General Partner is monitoring the operations of the Local Limited
Partnerships to ensure that sufficient cash will be received from the Local
Limited Partnerships to sustain operations. 

Note 3 - Reconciliation Between Net Income (Loss) and Partners' Capital   
         (Deficit)  For Financial Reporting Purposes and Income Tax           
         Reporting Purposes 

A reconciliation of the Partnership's income (loss) for financial reporting
purposes and the Partnership's income (loss) for income tax reporting
purposes follows:
<TABLE>
<S>                                      <C>            <C>            <C>
                                                    December 31,
                                        1997            1996           1995
Net income (loss) for financial
reporting purposes                   $ (27,561)      $  34,420     $ (45,261)
Equity in deductions taken by
Local Limited Partnerships for
income tax reporting purposes          156,748         (68,628)      374,945 
Other accrual adjustments               10,000          20,000        40,000 
Net income (loss) as reported on
the federal income tax return        $ 139,187       $ (14,208)    $ 369,684 
</TABLE>

A reconciliation of partners' capital (deficit) for financial reporting
purposes and partners' capital (deficit) for income tax reporting purposes
follows:
<PAGE>

<TABLE>
<S>                                    <C>             <C>             <C>
                                                   December 31,
                                        1997           1996          1995
Partners' capital (deficit) for
  financial reporting purposes       $(1,312,558)  $(1,284,997)  $(1,319,417)
Commissions and offering
  expenses capitalized for 
  income tax reporting
  purposes and charged to
  capital for financial
  reporting purposes                    641,492       641,492        641,492
Equity in cumulative losses
  of Local Limited
  Partnerships for income tax
  reporting purposes in excess
  of losses for financial
  reporting purposes                 (6,724,287)   (6,881,035)    (6,812,407)
Other adjustments                       743,333       733,333        713,333
Partners' capital (deficit) as
  reported on the federal income
  tax return                        $(6,652,020)  $(6,791,207)   $(6,776,999)
</TABLE>

Note 4 - Management of Urban Improvement Fund Limited

Under the terms of the Limited Partnership Agreement (as amended), the
Partnership is required to pay the General Partner an annual management
fee equal to three- tenths of one percent of invested assets or $64,325.
(The fee will not be more than fifty percent of the Partnership's annual net
cash flow as defined, subject to an annual minimum of $40,000.)  This fee
was not payable during the first six years unless annual tax deductions
plus cash distributions aggregated $550 per unit on a cumulative basis. 
The required level of tax deductions was not achieved and,  accordingly,
the fee was not paid for those years.  However, fees of $240,000 were
recorded as a liability to the General Partner.  Management fees totaling
$550,833 payable to the General Partner for subsequent years have been
accrued because cash flow was not sufficient to pay the fees.  The
Partnership will also pay the General Partner a liquidation fee for the sale
of projects.  The liquidation fee is the lesser of (i) ten percent of the net
proceeds to the Partnership from the sale of a project(s) or (ii) one percent
of the sales price plus three percent of the net proceeds after deducting an
amount sufficient to pay long-term capital gains taxes.   No part of such
fee shall accrue or be paid unless:  (i) the limited partners' share of the
proceeds has been distributed to them, (ii) the limited partners shall have
first received an amount equal to their invested capital attributable to the
project(s) sold, and (iii) the limited partners have received an amount
sufficient to pay long-term capital gains taxes from the sale of the
project(s), if any, calculated at the maximum rate then in effect.
<PAGE>

Note 4 - Management of Urban Improvement Fund Limited - Continued

The General Partner of the Partnership is a corporation in which Paul H.
Pfleger has a majority interest.  Partnership Services, Inc. (PSI), another
corporation in which Paul H. Pfleger is a majority shareholder, has
contracted with the General Partner and the Partnership to provide certain
management and other services to any projects in which the Partnership
has an interest.  No fees were paid to PSI during 1997, 1996 or 1995.  In
addition, as shown in the following table, PSI has become the General
Partner in two of the Local Limited Partnerships in which the Partnership
has investments:

<TABLE>
<S>                                                   <C>
                                                Date PSI Became
Local Limited Partnership                        General Partner

Angeles Apartments Associates, No. 1             December 1975

Angeles Apartments Associates, No. 2             December 1975
</TABLE>

Note 5 - Investments in and Advances to Local Limited Partnerships           
         Accounted for on the Equity Method

The Partnership has 83.44 percent to 98 percent interests in profits and
83.44 percent to 100 percent interests in losses of the Local Limited
Partnerships.  Investments in these Local Limited Partnerships were made
in installments based typically on the stage of completion and/or
occupancy.

Investments in and advances to the Local Limited Partnerships accounted
for on the equity method are as follows: 
<TABLE>
<S>                      <C>                   <C>               <C>
                                            Equity In
                       Capital               Income
                     Contributions           (Losses)          Subtotal
December 31, 1997:
Angeles No. 1         $  216,629          $  (312,667)      $   (96,038) 
Angeles No. 2            203,570             (401,885)         (198,315)
Lakewood Apts             28,645             (616,646)         (588,001)
The Villages              88,463           (1,370,248)       (1,281,785)

                      $  537,307          $(2,701,446)      $(2,164,139)
</TABLE>
<TABLE>
<S>                     <C>             <C>            <C>            <C>
                     Equity In                     Unamortized
                     Losses Not                      Costs of
                     Recorded        Advances      Acquisition       Total 
December 31, 1997:
Angeles No. 1       $   57,075       $ (3,598)      $   42,561     $    -0-
Angeles No. 2          143,387          3,574           51,354          -0-
Lakewood Apts          524,294            -0-           63,707          -0-
The Villages         1,172,058            -0-          109,727          -0-

                    $1,896,814       $    (24)      $  267,349     $    -0-
</TABLE>

<PAGE>

Note 5 -Investments in and Advances to Local Limited Partnerships
        Accounted for on the Equity Method - Continued
<TABLE>
<S>
                       <C>                     <C>                <C>
                                            Equity In
                      Capital                Income
                    Contributions           (Losses)            Subtotal
December 31, 1996:

Angeles No. 1        $  216,629           $  (335,778)       $  (119,149)
Angeles No. 2           225,664              (419,272)          (193,608) 
Lakewood Apts            36,699              (670,450)          (633,751)
The Villages             88,463            (1,283,223)        (1,194,760)

                     $  567,455           $(2,708,723)       $(2,141,268)
</TABLE>

<TABLE>
<S>                       <C>             <C>           <C>            <C>
                      Equity In                      Unamortized
                      Losses Not                       Costs of
                       Recorded        Advances      Acquisition       Total 
December 31, 1996:

Angeles No. 1        $   76,588       $    -0-        $   42,561    $    -0-
Angeles No. 2           138,680          3,574            51,354         -0-
Lakewood Apts           570,044            -0-            63,707         -0-
The Villages          1,085,033            -0-           109,727         -0-

                     $1,870,345       $  3,574        $  267,349    $    -0-
</TABLE>

The combined balance sheets of the Local Limited Partnerships accounted
for on the equity method at December 31, 1997 and 1996 and the related
combined statements of operations, changes in partners capital (deficit),
cash flows and selected footnote disclosures from the audited financial
statements of the Local Limited Partnerships for the years ended
December 31, 1997, 1996 and 1995 are summarized as follows:
<PAGE>

Note 5 - Investments in and Advances to Local Limited Partnerships           
         Accounted for on the Equity Method - Continued

COMBINED BALANCE SHEETS OF LOCAL LIMITED PARTNERSHIPS

                             Assets
<TABLE>
<S>                                        <C>                <C>
                                                December 31,
                                          1997                1996

Cash                                   $   134,274       $   196,457 
Cash in escrow and other
 restricted funds                        1,015,708         1,014,575 
Accounts receivable                        107,640             9,957 
Prepaid expenses                            43,272            46,624 
Other assets (net of accumulated
 amortization)                              39,870            41,954 
                                         1,340,764         1,309,567 

Property on the basis of cost:
 Land                                      504,203           504,203 
 Buildings and improvements              9,281,703         8,752,334 
                                         9,785,906         9,256,537 
  Less accumulated
    depreciation                        (7,005,646)       (6,712,551)
                                         2,780,260         2,543,986 

                                       $ 4,121,024       $ 3,853,553 
</TABLE>

                         Liabilities and Partners' Capital (Deficit)
<TABLE>
<S>                                      <C>                 <C>
Mortgage notes payable                 $ 5,291,142       $ 5,467,487 
Accounts payable and
  accrued expenses                         167,676           137,290 
Advances from Urban
Improvement Fund Limited                       -0-             3,574 
Notes payable                              812,118           371,970 
Tenants' security and
  other deposits                            79,541            77,135 
                                         6,350,477         6,057,456 
Partners' capital (deficit)
  per accompanying
  statements                            (2,229,453)       (2,203,903)

                                       $ 4,121,024       $ 3,853,553 
</TABLE>
<PAGE<

Note 5 - Investments in and Advances to Local Limited Partnerships           
         Accounted for on the Equity Method - Continued

COMBINED STATEMENTS OF OPERATIONS OF LOCAL LIMITED PARTNERSHIPS
<TABLE>
<S>                     <C>                  <C>                    <C>
                                   Year Ended December 31
                        1997                 1996                  1995
REVENUE:
  Net rental income   $3,181,674           $4,628,178          $4,805,244 
  Financial income        28,952               37,536              42,713 
  Other income            47,815               57,364              53,572 
    Total revenue      3,258,441            4,723,078           4,901,529 

EXPENSES:
  Administrative         647,253              753,077             840,321 
  Utilities              669,767            1,077,002           1,062,615 
  Operating            1,073,360            1,587,296           1,345,235 
  Taxes and insurance    363,915              833,331             814,873 
  Financial              200,176              267,134             269,240 
  Depreciation           293,095              505,508             525,461 
  Other                    4,950                2,574               2,445 
   Total expenses      3,252,516            5,025,922           4,860,190 

Income (loss) before
 gain on transfer of
 property to HUD           5,925             (302,844)             41,339 

Gain on transfer of
 property to HUD             -0-            4,146,899                 -0- 

Net income            $    5,925           $3,844,055          $   41,339 
</TABLE>

Amortization of capitalized interest was $18,446 in 1997 and $32,716 in
1996 and 1995.
<PAGE>

Note 5 - Investments in and Advances to Local Limited Partnerships           
         Accounted for on the Equity Method - Continued

COMBINED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
(DEFICIT) OF LOCAL LIMITED PARTNERSHIPS
<TABLE>
<S>                      <C>            <C>          <C>           <C>
                       Urban
                    Improvement        Other
                       Fund           Limited       General
                      Limited         Partners      Partners       Total
Partners' capital 
 (deficit) at
 January 1, 1995   $(5,690,550)      $(51,442)     $(242,882)    $(5,984,874)

Net income (loss)-
  1995                  40,781          5,530         (4,972)         41,339 

Distributions -
  1995                  (9,778)          (100)          (100)         (9,978)

Partners' capital
 (deficit) at
 December 31, 1995   (5,659,547)      (46,012)       (247,954)    (5,953,513)

Net income (loss)-
  1996                3,608,249          (418)        236,224      3,844,055 

Distributions - 1996    (89,970)       (1,705)         (2,770)       (94,445)

Partners' capital
(deficit) at
December 31, 1996    (2,141,268)      (48,135)        (14,500)    (2,203,903)

Net income (loss) -
  1997                    7,277        (1,773)            421          5,925 

Distributions - 1997    (30,148)         (315)         (1,012)       (31,475)

Partners' capital
(deficit) at
December 31, 1997    $(2,164,139)    $ (50,223)     $ (15,091)    (2,229,453)
</TABLE>
<PAGE>

Note 5 - Investments in and Advances to Local Limited Partnerships           
         Accounted for on the Equity Method - Continued

STATEMENTS OF CASH FLOWS OF LOCAL LIMITED PARTNERSHIPS
<TABLE>
<S>                                <C>             <C>               <C>
                                          Year Ended December 31
                                  1997             1996              1995
CASH FLOWS FROM
OPERATING ACTIVITIES:
 Net income                  $    5,925        $ 3,844,055       $   41,339 
 Adjustments to reconcile
 net income to net cash
 provided by operating
 activities:
  Gain on transfer of
  property to HUD                  -0-          (4,146,899)            -0-
  Depreciation                 293,095             505,508         525,461 
  Decrease (increase) in
  escrows and other
  restricted funds,
  receivables, 
  prepaid expenses
  and other assets             (93,381)                417          24,780 
  Increase (decrease) in
   accounts payable,
   accrued expenses,
   tenant security
   deposit liability and
   other liabilities            32,793              64,657         (27,206)
    Total adjustments          232,507          (3,576,317)        523,035 
    Net cash provided
    by operating 
    activities                 238,432             267,738         564,374 

CASH FLOWS FROM
INVESTING ACTIVITIES:
 Capital expenditures         (529,369)           (108,039)       (208,125)

CASH FLOWS FROM
FINANCING ACTIVITIES:
 Mortgage principal
 payments                     (176,345)           (164,454)        (237,232)
 Distributions paid            (31,475)            (94,445)          (9,978)
 Advance from (repayment
 to) general partner               -0-             (25,000)          25,000 
 Repayments of advances
  from affiliates - net         (3,574)            (16,949)             -0- 
  Increase in notes payable    440,148              49,649              -0- 
  Net cash provided
 (used) by financing
 activities                    228,754            (251,199)        (222,210)

NET INCREASE
 (DECREASE) IN CASH            (62,183)            (91,500)          134,039 

CASH BALANCE AT
 BEGINNING OF YEAR             196,457             287,957           153,918 

CASH BALANCE AT
 END OF YEAR                $  134,274         $   196,457        $  287,957 


SUPPLEMENTAL INFORMATION REGARDING INTEREST  
PAYMENTS IS AS FOLLOWS:
    Interest paid           $  169,689         $   181,178        $  212,888 
</TABLE>
<PAGE>

Note 5 - Investments in and Advances to Local Limited Partnerships           
         Accounted for on the Equity Method - Continued

A reconciliation between combined net income for financial reporting
purposes and the combined net income for income tax reporting purposes
follows:

<TABLE>
<S>                               <C>                <C>            <C>
                                          Year Ended December 31
                                  1997              1996           1995
Combined net income
for financial reporting
purposes                     $    5,925          $3,844,055    $   41,339 

Differences between
depreciation for income
tax reporting purposes 
and depreciation for financial
reporting purposes              174,447             382,858      338,707 

Gain on transfer of property
 to HUD                             -0-          (4,146,899)         -0- 

Accrual adjustments
 for financial
 reporting purposes               3,326             (30,388)      20,165 

Combined net income
as reported on the 
federal income tax returns   $  183,698          $   49,626   $  400,211 
</TABLE>

A reconciliation of combined partners' capital (deficit) for financial
reporting purposes and combined partners' capital (deficit) for income tax
reporting purposes follows:

<TABLE>
<S>                               <C>                <C>             <C>
                                            Year Ended December 31
                                  1997               1996            1995
Combined partners' capital
(deficit) for financial
reporting purposes            $(2,229,453)       $(2,203,903)     (5,953,513)

Gain on transfer of
property  to HUD                     -0-          (4,146,899)            -0- 

Carrying costs during
construction capitalized
for financial reporting
purposes, excess of
depreciation for
income tax reporting
purposes and accrual
adjustments for financial
reporting purposes              (688,932)          (799,275)      (1,060,003)

Combined partners'
capital (deficit)
as reported on the 
federal income 
tax returns                  $(2,918,385)       $(7,150,077)     $(7,013,516)
</TABLE>
<PAGE>

Note 5 - Investments in and Advances to Local Limited Partnerships           
         Accounted for on the Equity Method - Continued

  Cost of Buildings

For financial reporting purposes, the Local Limited Partnerships generally
capitalized all project costs, including payments to the general partners,
interest, taxes, carrying costs and operating expenses offset by incidental
rental income, up to the cutoff date for cost certification purposes.  For
income tax reporting purposes, certain of these amounts were deducted
when paid.

  Depreciation of Properties

For financial statement purposes, depreciation is generally computed using
the straight-line method over useful lives of twenty-five to forty years,
from the date of completion of the building or rehabilitation.  For income
tax reporting purposes, buildings are depreciated over generally shorter
periods on various accelerated methods, and certain rehabilitation costs
were amortized using the straight-line method over sixty months under the
provisions of Section 167(k) of the Internal Revenue Code.  The Section
167(k)  rehabilitation costs for the Local Limited Partnerships have been
fully depreciated for income tax reporting purposes.

Certain expenses related to organization of the Local Limited Partnerships
have been deferred and are being amortized for financial statement
purposes using the straight-line method over periods of twenty to forty
years.

  Mortgage Notes Payable

The Partnerships have mortgages which are payable to or are insured by
the Department of Housing and Urban Development (HUD) totaling
$5,291,142 at December 31, 1997 and $5,467,487 at December 31, 1996. 
The mortgage notes payable are secured by deeds of trust on rental
property and bear interest at the rate of seven percent per annum.  The
mortgages will generally be repaid in monthly installments of principal
and interest of $46,124 over periods of forty years.  HUD makes interest
assistance payments on the mortgages insured under Section 236 which
effectively reduce the mortgage payments to those required for mortgages
carrying a one percent interest rate.
<PAGE>

Note 5 - Investments in and Advances to Local Limited Partnerships           
         Accounted for on the Equity Method - Continued

The scheduled principal reductions for the next five years are as follows:
<TABLE>
<S>                                 <C>                          <C>
                                    1998                   $    189,092
                                    1999                        202,759
                                    2000                        217,508
                                    2001                        233,135
                                    2002                        249,988
                                    Beyond                    4,198,660

                                                             $5,291,142
</TABLE>

  Notes Payable

Notes payable include residual receipts notes of $322,321 that are payable
to the former General Partner of two Local Limited Partnerships.  The
residual receipts are non-interest bearing, subordinated to allocable
distributions to partners and are due after liquidation of the HUD-insured
mortgages.  A Local Limited Partnership has a low interest rate flexible
subsidy note payable received in 1996 and 1997 in the amount of
$489,797.  The note will be due fifteen years from the final closing or
upon refinancing.

  National Housing Act Subsidies and Restrictions

Under terms of the regulatory agreements with HUD, the Local Limited
Partnerships cannot make cash distributions to partners of the Local
Limited Partnerships in excess of six percent per annum of stated equity in
the respective projects.  Such distributions are cumulative but can only be
paid from "surplus cash," as defined in the agreements.  The Local Limited
Partnerships must deposit all cash in excess of the distributable amounts
into residual receipts funds which are under the control of the mortgagees,
and from which disbursements must be approved by HUD.  As of
December 31, 1997, approximately $674,000 could be paid to partners of
the Local Limited Partnerships as surplus cash becomes available.

Under terms of the regulatory agreements, the Local Limited Partnerships
are required to make monthly deposits into replacement funds which are
under the control of the mortgagees.  Such deposits commence with the
initial principal payments on the mortgage loans.  Expenditures from the
replacement funds must be approved by HUD.

All of the Local Limited Partnerships have entered into rent supplement
and/or Section 8 contracts with HUD to provide financial assistance to
qualified tenants of the apartment units.  Under terms of these contracts,
HUD will pay a portion of the rent on behalf of qualified tenants.  The
maximum dollar amount of these payments is limited by HUD.  A
substantial portion of rental income is collected through these contracts. 
During 1997 and 1996, the Local Limited Partnerships received
approximately $2,158,000 and $3,259,000, respectively, in rent
supplement and Section 8 funds.
<PAGE>

Note 5 - Investments in and Advances to Local Limited Partnerships           
         Accounted for on the Equity Method - Continued

  Management

The Local Limited Partnerships have entered into property management
contracts with various agents under which the agents are paid property
management fees of approximately six percent to eleven and one-half
percent of the gross revenues of the respective projects.  Most of the
agents are affiliated with the General Partners of the Local Limited
Partnerships.

Note 6 - Investment in Mott Haven Associates Number VI

Mott Haven Associates Number VI generated negative cash flows during
1995 and the mortgage note was assigned to HUD.  Despite the efforts of
the General Partners, the owners and managers to preserve the
development and provide decent and affordable housing, the financial
stability of the development is threatened by the imminent expiration of
the Section 8 loan management set-aside contracts and the likelihood that
they will not be renewed on this property for federal budget and policy
reasons.  HUD, the owners and the General Partners believe that it is in the
best interests of the development and its tenants that the projects be
renovated and reconfigured, and that such result can best be accomplished
through replacement of the existing management and ownership structure
with community-based owners and managers.  The property was
transferred to HUD during 1997.

For financial reporting purposes, the Partnership recorded the disposition
of its investment in Mott Haven Associates Number VI during November
1996.  The components of the gain on the transfer of property to HUD are
summarized as follows:

      Assets transferred:
<TABLE>
<S>                <C>                                          <C>
      Cash                                                 $    24,302 
      Cash in escrow and other restricted funds                111,818 
      Accounts receivable                                       36,239 
      Prepaid expenses                                          82,543 
      Other assets
      Property on the basis of cost                          6,088,720 
      Accumulated depreciation                              (5,301,383)
                                                             1,042,239 

      Liabilities transferred:

      Mortgage note payable                                  4,302,212 
      Accounts payable and accrued expenses                    574,318 
      Advance from general partner                             273,000 
      Tenant security and other deposits                        39,608 
                                                             5,189,138 

      Gain on transfer of property to HUD                  $ 4,146,899 
</TABLE>
<PAGE>

Note 6 - Investment in Mott Haven Associates Number Six - Continued

The General Partner believes that if the Partnership did not consent to the
Workout Agreement (transfer of property to HUD), it is more likely than
not that HUD would take the necessary steps to sell the property at a
foreclosure sale during 1997.  Such a foreclosure sale will most probably
not result in the return of any cash to the  Limited Partners but would
result in the recognition of a significant taxable gain by each limited
partner.  The taxable gain for the limited partners or Urban
Improvement Fund Limited in the aggregate is estimated to be
approximately $3,900,000 or approximately $669 for each unit.  This gain
would be passive in nature and could be offset by any suspended passive
loss carryforwards.  It is estimated that the maximum tax due on this gain
would total approximately $1,500,000 for all limited partners or $258 per
unit.

Note 7 - Sale of the Assets of Alms Hill Apartments

The property of Alms Hill Apartments was sold during 1983.  The sales
price of $4,252,781 was composed of $3,206,349 for assumption of the
underlying mortgage, $50,000 in cash, the payment of $75,000 of unpaid
mortgage principal delinquency, a commitment to pay $200,000 for HUD
required renovations, and an installment note of $721,432.  Between 1983
and 1989, $221,432 was paid against principal.

The final installment of $500,000 was due on August 2, 1993 along with
accrued interest.  However, the note could be extended for two additional
five-year periods by the election of the maker of the installment
obligation.  The maker of the note elected to extend the note through
August 1, 1998.  Interest will continue to accrue at eighteen percent per
annum and is payable on the anniversary date of the note to the extent that
the property has distributable cash flow.  During the extension period, any
unpaid interest will not accrue.  The gain on the sale of the real estate was
recognized on the cost recovery method to first recognize the recovery of
the asset value, then recognize the gain as the proceeds are received.

<PAGE>

URBAN IMPROVEMENT FUND LIMITED
(A Limited Partnership)

SCHEDULE IV

INDEBTEDNESS OF RELATED PARTIES

<TABLE>
<S>                     <C>       <C>        <C>       <C>        <C>
                                            December 31,
                                  1997                 1996
                        1997     Change     1996      Change      1995 
Advances to (repayment
  from) Local Limited
  Partnerships

Angeles No. 1        $(3,598)  $(3,598)  $    -0-    $    -0-     $   -0-
Angeles No. 2          3,574       -0-      3,574     (16,949)     20,523 

                     $   (24)  $(3,598)  $  3,574    $(16,949)    $20,523 
</TABLE>

The above advances are included in the balance sheet caption "Investments
in and advances to  Local Limited Partnerships accounted for on the equity
method."  See Note 5 to the financial statements.
<TABLE>
<S>                                           <C>                     <C>
                                                      December 31,
                                             1997                    1996
Indebtedness to general partner:

  Management fee payable to
    General Partner                        $ 790,833             $  780,833

  Advances from General Partner            $ 558,586             $  558,586
</TABLE>
<PAGE>

URBAN IMPROVEMENT FUND LIMITED
(A Limited Partnership)

Schedule XI

REAL ESTATE AND ACCUMULATED DEPRECIATION OF LOCAL LIMITED
PARTNERSHIPS

December 31, 1997


<TABLE>
<S>                                      <C>                  <C>                                   <C>
                                                          Outstanding 
                      Description                           Mortgage
Partnership/Location                 No. of Units           Balance
Angeles Apartments Assoc. No.1
Los Angeles, California              94 apartments        $   935,002
Angeles Apartments Assoc. No.2
Los Angeles, California             109 apartments          1,117,679
Lakewood Apartments
Vinton, Virginia                    108 apartments          1,211,328
The Villages, Ltd.   
Waco, Texas                         250 apartments          2,027,133

                                                          $ 5,291,142
</TABLE>

<TABLE>
<S>                         <C>          <C>           <C>          <C>
                                       Buildings
                                          and                  Accumulated
Partnership/Location        Land      Improvement     Total    Depreciation
Angeles Apartments
 Assoc. No.1
Los Angeles, California   $144,046    $2,151,552  $ 2,295,598  $(1,200,854)
Angeles Apartments
 Assoc. No.2
Los Angeles, California    108,917    2,090,902     2,199,819    (1,478,628)
Lakewood Apartments
Vinton, Virginia            59,882    1,740,191     1,800,073    (1,370,522)
The Villages, Ltd.
Waco, Texas                191,358    3,299,058     3,490,416    (2,955,642)

                          $504,203   $9,281,70 3   $9,785,906   $(7,005,646)
</TABLE>

<TABLE>
<S>                             <C>              <C>              <C>
                                                             Life in Which
                                                              Depreciation
                                                                in Latest
                               Date of                           Income
                            Completion of        Date           Statement
Partnership/Location        Construction       Acquired        is Computed
Angeles Apartments
 Assoc. No.1
Los Angeles, California         1974              1972       10 to 40 years
Angeles Apartments
 Assoc. No.2
Los Angeles, California         1974              1972        5 to 30 years
Lakewood Apartments
Vinton, Virginia                1974              1972        3 to 35 years
The Villages, Ltd.
Waco, Texas                     1974              1972        6 to 25 years
</TABLE>

<TABLE>
<S>                       <C>          <C>            <C>          <C>
                                    Buildings &      Total      Accumulated
                         Land       Improvement      Cost       Depreciation

Balance at
 January 1, 1996       $635,203     $14,604,098    $15,239,301   $11,510,510
 Acquisitions               -0-         105,956        105,956       503,424
Assignment of
 mortgage to HUD
Mott Haven
 Associates No. 6      (131,000)     (5,957,720)    (6,088,720)   (5,301,383)

Balance at
 December 31, 1996      504,203       8,752,334      9,256,537     6,712,551
Acquisitions                -0-         529,369        529,369       293,095

Balance at
 December 31, 1997     $504,203     $ 9,281,703     $9,785,906   $ 7,005,646
</TABLE>

Note - Capital improvements since original construction or rehabilitation
       are not material to the combined financial statements  and, as such,
       are not disclosed separately.  The financial statement category of
       buildings and improvements is composed substantially of cost plus the 
       initial renovation upon acquisition.  The total cost of land and 
       buildings for federal income tax reporting purposes is approximately
       $9,169,000.
<PAGE>