<PAGE>1      

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-K

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

For the fiscal year ended     December 31, 1998
                              ------------------

Commission file number             33-94694
                              -----------------

                  CRIIMI MAE FINANCIAL CORPORATION
-----------------------------------------------------------------
           (Exact name of registrant as specified in charter)

             Maryland                            52-1931369
-------------------------------------      ----------------------
  (State or other jurisdiction of           (I.R.S. Employer
   incorporation or organization)            Identification No.)

11200 Rockville Pike, Rockville, Maryland           20852
-----------------------------------------  ----------------------
(Address of principal executive offices)          (Zip Code)

                      (301) 816-2300
-----------------------------------------------------------------
(Registrant's telephone number, including area code)

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

                            NONE
----------------------------------------------------------------
                       (Title of Class)

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

                            NONE
-----------------------------------------------------------------
                       (Title of class)









                    Page 1 of 16 pages


<PAGE>2



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

         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 this
Form 10-K. [X]

As of March 28, 1999, 1,000 shares of common stock were outstanding.

                 DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------------------------------------

     Form 10-K Parts                     Document
     ----------------                    ---------

     I, II, III and IV                   Current Reports on Form 8-K filed
                                         with the Commission on January 16,
                                         1998, February 13, 1998, March 17,
                                         1998, April 15, 1998, May 15, 1998,
                                         June 15, 1998, July 15, 1998, August
                                         13, 1998, September 15, 1998,
                                         October 16, 1998, November 16, 1998
                                         and December 15, 1998.


<PAGE>3



                        CRIIMI MAE FINANCIAL CORPORATION

                         1998 ANNUAL REPORT ON FORM 10-K


                                TABLE OF CONTENTS

                                     PART I
                                     ------

                                                                  Page
                                                                  ----

Item 2.   Properties.............................................. 4
Item 3.   Legal Proceedings....................................... 4
Item 4.   Submission of Matters to a Vote
            of Security Holders................................... 4

                                     PART II
                                     -------
Item 5.   Market for the Registrant's Common Stock
            and Related Stockholder Matters....................... 4
Item 9.   Changes in and Disagreements with Accountants
            on Accounting and Financial Disclosure................ 4

                                    PART III
                                    --------
Item 13.  Certain Relationships and Related
            Transactions.......................................... 5


                                     PART IV
                                     -------


Item 14.  Exhibits, Financial Statement Schedules, and
            Reports on Form 8-K................................... 5

Signatures........................................................ 6








<PAGE>4



                                     PART I

ITEM 2.   PROPERTIES

          The information  required by item 2 is incorporated  herein by
reference  to the  Current  Reports  on Form 8-K filed  with the  Commission  on
January 16, 1998,  February 13, 1998,  March 17, 1998,  April 15, 1998,  May 15,
1998, June 15, 1998, July 15, 1998, August 13, 1998, September 15, 1998, October
16, 1998, November 16, 1998 and December 15, 1998 and to the Accountant's Report
and the Annual  Compliance  Statement  filed in response to Item 14 of this Form
10- K.

ITEM 3.   LEGAL PROCEEDINGS

          Not applicable.

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

          No matters were submitted to the security  holders to be voted on
during the fourth quarter of 1998.

                                     PART II

ITEM 5.   MARKET FOR THE REGISTRANT'S COMMON STOCK AND
            RELATED STOCKHOLDER MATTERS

          The Registrant's  1,000 shares of authorized  Common Stock are
held by CRIIMI MAE Inc. (CRIIMI MAE), are not traded and have no trading market.

          As of December 31, 1998  Collateralized  Mortgage  Obligations
(Bonds),  with  a  face  value  of  $154,840,830  and a  fair  market  value  of
$159,611,323,  were outstanding. The Bonds are held by 23 Bondholders. The Bonds
trade on the over-the-counter market.

          Reference  is made to the  Current  Reports  on Form 8-K filed
with the  Commission  on January 16, 1998,  February  13, 1998,  March 17, 1998,
April 15, 1998,  May 15, 1998,  June 15, 1998,  July 15, 1998,  August 13, 1998,
September  15, 1998,  October 16, 1998,  November 16, 1998 and December 15, 1998
for  information  concerning  payments of principal and interest on the Bonds to
Bondholders  and  dividends  paid to CRIIMI MAE as the sole  shareholder  of the
Registrant.

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
            ACCOUNTING AND FINANCIAL DISCLOSURE

          None.



          


<PAGE>5



                                    PART III

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     (a)  Transactions with management and others.

          During 1998,  CRIIMI MAE was paid  $530,519 by the  Registrant
          for  interest  expense  due to  CRIIMI  MAE  on  the  Mortgage
          Interest  Strip  Certificates  that were issued in conjunction
          with the Bonds.

                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
            REPORTS ON FORM 8-K


     (c)     Exhibits

                                                                Sequentially
   Exhibit No.   Description                                    Numbered Page
   -----------   -----------                                    -------------

     4.          Indenture,  dated  as of  October  1,  1995,
                 among CRIIMI MAE Financial  Corporation  and
                 State  Street  Bank and  Trust  Company,  as
                 Trustee.   (Incorporated   by  reference  to
                 Exhibit 2 to the Current  Report on Form 8-K
                 filed with the Commission on October 24, 1995).      --


     10.1        Master Servicing Agreement, dated as of October
                 11, 1995, among CRIIMI MAE Financial Corporation,
                 as Issuer, CRIIMI MAE Services Limited Partnership,
                 as Master Servicer, State Street Bank and Trust
                 Company, as Lead, and State Street Bank and Trust
                 Company, as Trustee. (Incorporated by reference to
                 Exhibit 3 to the Current Report on Form 8-K filed
                 with the Commission on October 24, 1995).            --

     99.1        Report of Independent Public Accountants on Applying
                 Agreed-upon procedures. (filed herewith).             8

     99.2        Annual Report for 1998 (filed herewith).             12

     99.3        Management's Assertion (filed herewith).             15

     99.4        Annual Compliance Statement (filed herewith).        16






<PAGE>6



                                   SIGNATURES

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

                                     CRIIMI MAE FINANCIAL CORPORATION
                                     (Registrant)

March 22, 1999                     /s/ William B. Dockser
-----------------                  -----------------------------
DATE                               William B. Dockser
                                   Chairman of the Board and
                                     Principal Executive Officer








<PAGE>7



                  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:

March 22, 1999                     /s/ William B. Dockser
---------------------              ----------------------------
DATE                               William B. Dockser
                                   Chairman of the Board and
                                     Principal Executive Officer



March 22, 1999                     /s/ H. William Willoughby
---------------------              ----------------------------
DATE                               H. William Willoughby
                                   Director, President and
                                     Secretary



March 22, 1999                     /s/ Brian Hanson
---------------------              ----------------------------
DATE                               Brian Hanson
                                   Senior Vice President



March 22, 1999                     /s/ Bruce Lane
---------------------              ----------------------------
DATE                               Bruce Lane
                                   Director








<PAGE>8



                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



CRIIMI MAE Financial Corporation
11200 Rockville Pike
Rockville, MD  20852

State Street Bank and Trust Company
Two International Place
Boston, MA  02110

We have  performed  the  procedures  enumerated  below,  which were agreed to by
CRIIMI MAE Financial  Corporation (the "Issuer") and State Street Bank and Trust
Company  (collectively,   the  "Specified  Users"),  solely  to  assist  you  in
evaluating the Issuer's compliance,  as set forth in the accompanying management
assertion,  with the Indenture agreement among CRIIMI MAE Financial  Corporation
as Issuer and State Street Bank and Trust  Company as Trustee  dated  October 1,
1995 and the  accuracy of the Issuer's  records for the year ended  December 31,
1998. This  agreed-upon  procedures  engagement was performed in accordance with
standards established by the American Institute of Certified Public Accountants.
The  sufficiency  of  these  procedures  is  solely  the  responsibility  of the
specified users of the report. Consequently, we make no representation regarding
the  sufficiency  of the procedures  described  below either for the purpose for
which this report has been  requested or for any other purpose.  However,  it is
our understanding that these procedures are sufficient for your purposes.

During our  engagement,  we were  furnished  with or referred  to the  following
documents:

- The Indenture agreement
- The Payment Date  Statements  for each of the  months  in the year  beginning
      January 1, 1998 which  represent all such Payment Date  Statements for the
      year ended December 31, 1998, as provided by the Specified Users
- Collateral information attached to the Payment Date Statements listed
      above, as provided by the Specified Users
- The CRIIMI MAE Financial Corporation,  7% Collateralized Mortgage Obligations,
      Annual Report for 1998 (the "Annual Report") as attached to this letter





<PAGE>9



Procedures to Comply with Section 8.4(b) of the Indenture
---------------------------------------------------------

We read such  provisions of the Indenture  agreement as we deemed  necessary for
purposes of this letter.  We also read each of the Payment Date  Statements  for
the months listed above and performed the following procedures:

      1.          We agreed the Scheduled Principal distributions for the
                  Mortgages and the GNMAs as detailed in the Principal
                  Distribution Detail table to the collateral information
                  attached to the Payment Date Statement.  We agreed the
                  Principal Prepayments for the Mortgages and the GNMAs as
                  detailed in the Principal Distribution Detail table to the
                  collateral information attached to the Payment Date
                  Statement.  We verified with the Issuer that there were no
                  FHA Insurance Proceeds or Realized Losses during the period
                  covered by the Payment Date Statement.  We also tested the
                  clerical accuracy of the Net Principal Distribution.

      2.          For the Payment Date  Statements  listed above,  we agreed the
                  Beginning Balance as detailed in the Interest Payable on Bonds
                  table to the Actual  Ending  Balance of the bonds  detailed in
                  the prior month's Payment Date Statement.  We recalculated the
                  Interest  Payable  based  on the  Beginning  Balance  and  the
                  Interest Rate on the Bonds of 7%.

We performed the  calculations  as set forth in this letter in  accordance  with
Section 8.4(b) of the Indenture and found the  calculations of the trustee to be
in agreement with those recomputed by us within $2.00.

No exceptions were found as a result of applying the above procedures.

Procedures Related to the 1998 Annual Report
--------------------------------------------

1.       We read the Annual Report.

2.       We tested the Annual Report for mathematical accuracy.

3.       We agreed the amounts  disclosed  for  Scheduled  Principal,  Principal
         Prepayments,  FHA Insurance Proceeds, Realized Losses and Net Principal
         Distribution  as stated in the Principal  Distribution  Detail table of
         the Annual  Report to the sum of the stated  amounts as detailed in the
         Payment Date Statements.

4.       We agreed the amounts  disclosed for Interest  Amount,  Interest  Strip
         Amount  and  Net  Interest  Distribution  as  stated  in  the  Interest
         Distribution Detail table of the Annual Report to the sum of the stated
         amounts as detailed in the Payment Date Statements.


<PAGE>10


5.       We agreed the amounts  disclosed  for the Beginning  Balance,  Interest
         Rate and  Interest  Payable  as stated in the  Interest  Payable on the
         Bonds table of the Annual Report to amounts  detailed in the applicable
         Payment Date Statement.

6.       We agreed the Actual Beginning  Balance,  Actual Principal  Payable and
         the  Actual  Ending  Balance  as stated  in the  Principal  Balance  of
         Collateral  table of the Annual Report to the sum of the stated amounts
         as detailed in the Payment Date Statements.

7.       We agreed  the  Beginning  Balance,  Principal  Payable  and the Ending
         Balance as  detailed  in the  Principal  Balance of Bonds  table of the
         Annual  Report to  amounts  detailed  in the  applicable  Payment  Date
         Statement.

8.       We agreed the Number,  Stated  Principal  Balance and Unpaid  Principal
         Balance  delinquent  for One  Month,  Two  Months,  Three  Months + and
         Foreclosures as detailed in the Delinquent  Mortgage Loans table of the
         Annual  Report  to the  stated  amounts  in  the  latest  Payment  Date
         Statement.

9.       We agreed the Months Delinquent,  Loan Number, Stated Principal Balance
         and Status of Foreclosures as detailed in the Delinquent Mortgage Loans
         Detail  table of the Annual  Report to the detail  stated in the latest
         Payment Date Statement.

10.      We agreed  the Loan  Number,  Nature  of  Liquidation,  Final  Recovery
         Determination,  FHA  Proceeds  and  Realized  Loss as  detailed  in the
         Liquidation  table of the  Annual  Report to the  detail  stated in the
         latest Payment Date Statement.

11.      We agreed  the  Aggregate  P&I  Advances,  Aggregate  unreimbursed  P&I
         Advances,  Interest on P&I Advances Paid to Master  Servicer,  Interest
         accrued on  unreimbursed  P&I  Advances  as stated in the P&I  Advances
         table of the Annual Report to the stated amounts detailed in the latest
         Payment Date Statement.

12.      We agreed  the  Aggregate  Realized  Losses  incurred  as stated in the
         Realized  Losses table of the Annual Report to the stated amount in the
         latest Payment Date Statement.

13.      We agreed the Master  Servicing Fee and the Trustee Fee detailed in the
         Fees  table  of the  Annual  Report  to the sum of the  stated  amounts
         disclosed in the Payment Date Statements.

We considered  differences of less than $2.00 to be immaterial and, as such, are
not reported as exceptions herein.

No exceptions were found as a result of applying the above procedures, except it
is noted that in Step #3 above,  that the  prepayment  amounts  detailed  in the
Monthly Payment Date Statements includes the prepayment amount and the principal
due for the month that the prepayment was made.  The Annual  Report's  Principal
Prepayments  column  includes  only  the  prepayment  amount.  Accordingly,  the
Principal Payment and Principal Prepayment per the Monthly Payment Date



<PAGE>11


Statements amounts did not agree to such amounts in the Annual Report.  However,
we  noted  that  the  combined  sum  of  all  Principal  Payment  and  Principal
Prepayments per the Monthly Payment Date Statement agreed to the combined sum of
the Principal Payment and Principal Prepayment amounts in the Annual Report.

We were not engaged to, and did not,  perform an  examination,  the objective of
which  would  be  the  expression  of  an  opinion  on  management's  assertion.
Accordingly,  we do not express  such an opinion.  Had we  performed  additional
procedures,  other matters might have come to our attention that would have been
reported to you.

This  report is intended  solely for the  information  and use of the  specified
users and is not  intended  to be and  should  not be used by anyone  other than
these specified parties.


Washington, D.C.
March 22, 1999




<PAGE>12


CRIIMI MAE Financial Corporation
7.00% Collateralized Mortgage Obligations
Annual Report for 1998

<TABLE><CAPTION>

Principal Distribution Detail

                     Scheduled               Principal               FHA Insurance           Realized        Net Principal
                      Principal             Prepayments                Proceeds               Losses         Distribution
                    -------------          --------------            -------------           --------        -------------
<S>                 <C>                    <C>                       <C>                     <C>             <C>
Mortgages           $2,417,615.42          $21,857,832.83            $        0.00           $   0.00        $24,275,448.25
GNMA                $  561,511.18            6,731,567.20                      N/A           $   0.00        $ 7,293,078.38
Total               $2,979,126.60          $28,589,400.03            $        0.00           $   0.00        $31,568,526.63



Interest Distribution Detail

                                                     Interest                Interest Strip                Net Interest
                                                      Amount                     Amount                    Distribution
                                                   --------------            -------------                 --------------
<S>                                                <C>                       <C>                           <C>
Mortgages                                          $ 9,771,608.13            $  530,519.01                 $ 9,241,089.12
GNMA                                               $ 5,684,797.45                      N/A                 $ 5,684,797.45
Total                                              $15,456,405.58            $  530,519.01                 $14,925,886.57


Interest Payable on Bonds
                                                                                                             
                                         Beginning                Interest              Interest                              
                                          Balance               Rate (Fixed)             Payable              
                                      ---------------           ------------          --------------        
                                      <C>                       <C>                   <C>  
                                      $186,409,356.63                  7.00%          $12,040,004.51        

</TABLE>

<TABLE><CAPTION>

Balance Information
-------------------
Principal Balance of Collateral
                                                   Actual Beginning               Actual Principal            Actual Ending
                                                       Balance                         Payable                   Balance
                                                   ----------------               ----------------           ---------------
<S>                                                <C>                            <C>                        <C>
Mortgages                                          $ 116,596,731.87               $  24,275,448.25           $ 92,321,283.62
GNMA                                               $  76,684,256.30               $   7,293,078.38           $ 69,391,177.92
Total                                              $ 193,280,988.17               $  31,568,526.63           $161,712,461.54

Principal Balance of Bonds
                                                      Beginning                     Principal                    Ending
                                                       Balance                       Payable                     Balance
                                                   ---------------                --------------             ---------------
                                                   <C>                            <C>                        <C>
                                                   $186,409,356.63                $31,568,526.63             $154,840,830.00
</TABLE>




<PAGE>13


CRIIMI MAE Financial Corporation
7.00% Collateralized Mortgage Obligations
Annual Report for 1998

<TABLE>
<CAPTION>

Delinquency Information
Delinquent Mortgage Loans

                                                One Month         Two Months            Three Months+          Foreclosures
                                                ---------         ----------            -------------          ------------
<S>                                             <C>               <C>                   <C>                    <C>
Number                                                  0                  0                        0                     0
Stated Principal Balance                        $    0.00         $     0.00            $        0.00          $       0.00
Unpaid Principal Balance                        $    0.00         $     0.00            $        0.00          $       0.00


Delinquent Mortgage Loans Detail

                                                                                         Stated
                                                Months            Loan                  Principal               Status of
                                                Delinq.           Number                 Balance               Foreclosure
                                                -------           ------                ---------              -----------
                                                <C>               <C>                   <C>                    <C>
                                                      0                0                $    0.00                        0

Liquidations

                                    Loan              Nature of            Final Recovery                FHA            Realized
                                   Number            Liquidation            Determination              Proceeds           Loss
                                   ------            -----------           --------------              --------         --------
                                   <C>               <C>                   <C>                         <C>              <C>
                                        0                      0                        0              $   0.00         $   0.00
</TABLE>



<PAGE>14


CRIIMI MAE Financial Corporation
7.00% Collateralized Mortgage Obligations
Annual Report for 1998

Other Information

P&I Advances

Aggregate P&I Advances                                    $0.00
Aggregate unreimbursed P&I Advances                       $0.00
Interest on P&I Advances paid to Master Servicer          $0.00
Interest accrued on unreimbursed P&I Advances             $0.00


Realized Losses

Aggregate Realized Losses incurred                        $0.00


Fees

                               Master                          Trustee
                            Servicing Fee                        Fee
                            -------------                     ---------

Mortgages                   $   54,026.55                     $ 9,724.78
GNMA                        $   35,409.33                     $ 6,373.67
Total                       $   89,435.88                     $16,098.45




<PAGE>15


                             MANAGEMENT'S ASSERTION



For the year ended  December 31, 1998, the  mathematical  accuracy of CRIIMI MAE
Financial  Corporation's  Payment Date Statements  provided by State Street Bank
and Trust Company as trustee is correct. CRIIMI MAE Financial Corporation's 1998
Annual Report is mathematically  accurate and the amounts disclosed agree to the
Payment  Date  Statements.  Also,  for the same  period,  CRIIMI  MAE  Financial
Corporation has complied with the Indenture agreement among CRIIMI MAE Financial
Corporation  as Issuer and State Street Bank and Trust  Company as Trustee dated
October 1, 1995.


                                         /s/ Brian Hanson
                                         --------------------------------
                                         Brian Hanson
                                         Senior Vice President 
                                           


                                         /s/ H. Ilene Frank
                                         -----------------------------------
                                         H. Ilene Frank
                                         Assistant Vice President/Controller




<PAGE>16


                           ANNUAL COMPLIANCE STATEMENT

                                 March 31, 1999



Mr. William G. Swan
State Street Bank and Trust Company
225 Franklin Street
Boston, MA  02170

Dear Mr. Swan:

         In accordance  with Section 9.9 of the Indenture dated as of October 1,
1995,  between CRIIMI MAE Financial  Corporation as Issuer and State Street Bank
and Trust  Company as Trustee,  I certify that review of the  activities  of the
Issuer for the period  January 1, 1998 to December  31, 1998 and of the Issuer's
performance under this Indenture has been made under my supervision. To the best
of my  knowledge,  based on such  review,  the Issuer has  fulfilled  all of its
obligations under this Indenture.

                                        Sincerely,



                                        /s/ Brian Hanson
                                        -----------------------------------
                               By:      Brian Hanson 
                                        Senior Vice President