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, 1998

                                  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 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 Form 10-K. [  ]

     State the aggregate market value of the voting stock held by
non-affiliates of the Registrant as of December 31, 1998:  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 in 1990 known as LIHPRHA (the Low Income

<PAGE>

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, 1998:

<TABLE>
<S>
          <C>                <C>             <C>             <C>
                                                                                                1998
                                             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, 1998:
<TABLE>
<S>
  <C>                          <C>         <C>                      <C>
  Number of Units              Type        Average Size (Sq. Ft.)
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
          29                1 Bedroom                   672
</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           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

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 1998, 1997, 1996,
1995 or 1994.

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>
<S>

                                      Year Ended December 31,
                        <C>        <C>         <C>         <C>         <C>
                        1998       1997        1996        1995        1994

Interest income     $    922    $    424     $  1,455    $    118    $    263

Operating expenses:
  Management fee      40,000      40,000       40,000      40,000      40,000
  Other expenses      19,392      21,731       33,954      15,157      15,226
                      59,392      61,731       73,954      55,157      55,226

Loss before equity
  in income of
  Local Limited
  Partnerships       (58,470)    (61,307)     (72,499)    (55,039)    (54,963)

Equity in income
   of Local Limited
  Partnerships        41,614      33,746      106,919       9,778       6,947

Net income
  (loss)            $(16,856)   $(27,561)    $ 34,420    $(45,261)   $(48,016)

Allocation of net
 income (loss):
  Net income (loss)
  allocated to
  General Partners $    (15)    $    (24)    $     30    $    (39)   $    (42)
  Net income (loss)
  allocated to
  Limited Partners   (16,841)     (27,537)     34,390     (45,222)    (47,974)

                    $(16,856)    $(27,561)   $ 34,420    $(45,261)   $(48,016)

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

Total assets        $ 48,846     $ 37,502     $ 59,063   $    643    $  6,009

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>
                      1998        1997        1996        1995         1994
Urban's share of
  distributions    $ 55,704    $ 30,148    $ 89,970    $  9,778    $  6,947

Advances (made to)
  repaid by
  Local Limited
  Partnerships     $(14,090)   $  3,598    $ 16,949    $    -0-    $    -0-
</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>

$560,833 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, 1998, 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 1998, 1997 and 1996 is summarized as
follows:
<PAGE>


<TABLE>
<S>
                                        <C>            <C>           <C>
                                        1998           1997          1996

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

    Angeles I                        $ (14,090)     $   3,598     $  16,949

Distributions received from
 Partnerships with zero investments:

    Angeles II                          23,369         22,094        45,903
    The Villages                           -0-            -0-        36,013
    Lakewood Apartments                 32,335          8,054         8,054

Equity in income of Local Limited
  Partnerships                       $  41,614       $  33,746     $ 106,919
</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 1994 through 1998.
During 1996, the Partnership incurred additional costs of $18,254 for
consulting service in connection 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.  The Partnership is currently negotiating the sale of Angeles I
and Angeles II.

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         63     Director/President
               John M. Orehek          44     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        63       Chairman of the Board
                John M. Orehek         44       Senior Vice President
                Michael Fulbright      44       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, 1998 and 1997.

       Statements of Income for the years ended December 31, 1998, 1997
       and 1996.

       Statements of Changes in Partners' Capital for the years ended
       December 31, 1998, 1997 and 1996.

       Statements of Cash Flows for the years ended December 31, 1998,
       1997 and 1996.

       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.

       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 1998.

(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: October 1, 1999   By: Paul H. Pfleger
                              Paul H. Pfleger
                              President
                              Interfinancial Real Estate Management Company



Date: October 1, 1999   By: John M. Orehek
                              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.




By:  Paul H. Pfleger                                    October 1, 1999
     Paul H. Pfleger, Director                          Date
     Interfinancial Real Estate Management Company




By:  John M. Orehek                                     October 1, 1999
     John M. Orehek, Director                           Date
     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, 1998
<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, 1998 and 1997 . . . . . . . . . . F-4

    Statements of income
       for the years ended December 31, 1998, 1997 and 1996. . . . . F-5

    Statements of changes in partners' capital (deficit)
       for the years ended December 31, 1998, 1997 and 1996. . . . . F-6

    Statements of cash flows
       for the years ended December 31, 1998, 1997 and 1996. . . . . 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-24

    XI.  Real Estate and Accumulated Depreciation of
         Local Limited Partnerships. . . . . . . . . . . . . . . .  F-25

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, 1998 and 1997,
and the related statements of changes in partners' capital (deficit), income
and cash flows for the years ended December 31, 1998, 1997 and 1996
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, 1998, 1997 and 1996.  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 1998 and 1997 of the financial statements eof
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, 1998 and 1997, and the results of its operations and its cash
flows for the years ended December 31, 1998, 1997 and 1996, 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
May 31, 1999
<PAGE>

URBAN IMPROVEMENT FUND LIMITED
(A Limited Partnership)

BALANCE SHEETS



                                                 ASSETS
<TABLE>
<S>
                                          <C>                        <C>
                                                    December 31,
                                          1998                       1997

Cash and cash equivalents             $    1,176                 $    7,247
Due from affiliates                       15,335                     30,255
Distributions receivable                  32,335                        -0-
Investments in and advances
 to Local Limited Partnerships
 accounted for on the equity
 method - Note 5                             -0-                        -0-

                                       $  48,846                 $   37,502
</TABLE>


              LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

<TABLE>
<S>
                                       <C>                       <C>
Accounts payable                       $   18,200                $      -0-
Management fee payable -
  Note 4 (Schedule IV)                    800,833                   790,833
Advance from General Partner
  (Schedule IV)                           558,586                   558,586
Distribution payable                          641                       641
                                        1,378,260                 1,350,060

Partners' capital (deficit) - Note 3
 General Partners - 5 partnership
 units authorized, issued and
 outstanding                               (1,142)                   (1,127)
 Limited Partners - 5,830
 partnership units authorized,
 issued and outstanding                (1,328,272)               (1,311,431)
                                       (1,329,414)               (1,312,558)
Commitments and contingent
 liabilities - Notes 2 and 4
                                      $    48,846                $   37,502
</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,
                                   1998               1997            1996

Interest income                $      922         $      424      $    1,455

Expenses:
 Management fees - Note 4          40,000             40,000          40,000
 Other expenses                    19,392             21,731          33,954
                                   59,392             61,731          73,954
Loss before equity in
 income of Local Limited
 Partnerships                     (58,470)           (61,307)        (72,499)
Equity in income of
 Local Limited
 Partnerships - Note 5             41,614             33,746         106,919

Net income (loss)              $  (16,856)        $  (27,561)     $   34,420

Allocation of net income (loss):
 Net income (loss) allocated
   to General Partners         $      (15)        $      (24)     $       30
 Net income (loss) allocated
   to Limited Partners            (16,841)           (27,537)         34,390

                               $  (16,856)        $  (27,561)     $   34,420
Net financial reporting income
 (loss) per unit:
  General partnership units
   (5 units outstanding
   allocated to
   General Partner)            $       (3)        $       (5)     $        6
  Limited partnership units
   (5,830 units outstanding
   allocated to Limited
   Partners)                   $        (3)       $        (5)    $        6
</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 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)

Net loss - 1998                        (15)        (16,841)          (16,856)

Partners' capital (deficit)
  at December 31, 1998          $    (1,142)   $(1,328,272)      $(1,329,414)
</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,
                                   1998            1997             1996
CASH FLOWS FROM
OPERATING ACTIVITIES:
  Net income (loss)           $  (16,856)      $  (27,561)       $   34,420
 Adjustments to reconcile
 net income (loss) to net
 cash used by operating
 activities:
  Equity in net income
   of Local Limited
   Partnerships                  (41,614)         (33,746)         (106,919)
  Increase in accounts
   receivable and
   distribution receivable       (17,415)             -0-               -0-
  Increase (decrease) in
   accounts payable,
   management fees
   payable and payable
   to affiliates                  28,200          (24,255)            24,000
    Total adjustments            (30,829)         (58,001)           (82,919)
     Net cash used by
      operating activities       (47,685)         (85,562)           (48,499)

CASH FLOWS FROM
 INVESTING ACTIVITIES:
  Current year distributions
   received                       55,704           30,148             89,970
  Net repayments from Local
   Limited Partnerships          (14,090)           3,598             16,949
    Net cash provided by
     investing activities         41,614           33,746            106,919

NET INCREASE (DECREASE)
 IN CASH AND CASH
 EQUIVALENTS                      (6,071)         (51,816)            58,420

CASH AND CASH
 EQUIVALENTS AT
 BEGINNING OF YEAR                 7,247           59,063                643

CASH AND CASH
 EQUIVALENTS AT
 END OF YEAR                  $    1,176        $   7,247         $   59,063
</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, 1998, 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 was extended for an additional
five year term.  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>
                                         1998           1997           1996
 Repayments from (advances to)
  Partnerships with zero investments:
    Angeles I                          $(14,090)     $  3,598      $  16,949

 Distributions received from
 Partnerships with zero investments:
   The Villages                             -0-           -0-         36,013
   Lakewood Apartments                   32,335         8,054          8,054
   Angeles II                            23,369        22,094         45,903

 Equity in income of Local
  Limited Partnerships                 $ 41,614      $ 33,746       $106,919
</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>
                                      1998           1997            1996

Net income (loss) for financial
  reporting purposes              $   (16,856)   $   (27,561)   $    34,420
Equity in deductions
 taken  by Local Limited
 Partnerships for income
 tax reporting purposes               281,120        156,748        (68,628)
Other accrual adjustments              40,000         10,000         20,000
Net income (loss) as reported
 on the federal income tax
 return                           $   304,264    $   139,187     $  (14,208)
</TABLE>

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

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

<TABLE>
<S>
                                  <C>              <C>             <C>
                                               December 31,
                                  1998             1997             1996
Partners' capital (deficit)
 for financial reporting
 purposes                     $(1,329,414)     $(1,312,558)    $(1,284,997)
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                      (6,443,167)      (6,724,287)    (6,881,035)
Other adjustments                 783,333          743,333        733,333
Partners' capital
 (deficit) as reported
 on the federal
 income tax return            $(6,347,756)     $(6,652,020)   $(6,791,207)
</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 $560,833
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 1998, 1997 or 1996.  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, 1998:
Angeles No. 1          $  216,629          $  (312,668)      $   (96,039)
Angeles No. 2             180,201             (281,868)         (101,667)
Lakewood Apts              (3,690)            (585,495)         (589,185)
The Villages               88,463           (1,364,775)       (1,276,312)

                       $  481,603          $(2,544,806)      $(2,063,203)
</TABLE>

<TABLE>
<S>
                      <C>             <C>            <C>              <C>
                      Equity In                      Unamortized
                      Losses Not                      Costs of
                      Recorded        Advances       Acquisition       Total
December 31, 1998:
Angeles No. 1        $   42,985       $ 10,493       $   42,561     $    -0-
Angeles No. 2            46,739          3,574           51,354          -0-
Lakewood Apts           525,478            -0-           63,707          -0-
The Villages          1,166,585            -0-          109,727          -0-

                     $1,781,787       $ 14,067       $  267,349     $    -0-
</TABLE>

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

<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>

The combined balance sheets of the Local Limited Partnerships accounted
for on the equity method at December 31, 1998 and 1997 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, 1998, 1997 and 1996 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,
                                        1998                       1997

Cash                               $   188,213                 $    134,274
Cash in escrow and other
  restricted funds                     749,541                    1,015,708
Accounts receivable                     77,498                      107,640
Prepaid expenses                        29,432                       43,272
Other assets (net of
  accumulated amortization)             37,785                       39,870
                                     1,082,469                    1,340,764

Property on the basis of cost:
  Land                                 504,203                      504,203
  Buildings and improvements        10,037,839                    9,281,703
                                    10,542,042                    9,785,906
  Less accumulated depreciation     (7,318,855)                  (7,005,646)
                                     3,223,187                    2,780,260

                                   $ 4,305,656                  $ 4,121,024


                  Liabilities and Partners' Capital (Deficit)

Mortgage notes payable             $ 5,102,066                  $ 5,291,142
Accounts payable and
 accrued expenses                      111,172                      167,676
Notes payable                        1,136,875                      812,118
Tenants' security and
 other deposits                         79,538                       79,541
                                     6,429,651                    6,350,477

Partners' capital (deficit)
 per accompanying
 statements                         (2,123,995)                  (2,229,453)

                                   $ 4,305,656                  $ 4,121,024
</TABLE>

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
                                 1998             1997               1996
REVENUE:
  Net rental income           $3,096,731        $3,181,674        $4,628,178
  Financial income                47,446            28,952            37,536
  Other income                    62,338            47,815            57,364
    Total revenue              3,206,515         3,258,441         4,723,078

EXPENSES:
  Administrative                 597,638           647,253           753,077
  Utilities                      675,411           669,767         1,077,002
  Operating                      921,988         1,073,360         1,587,296
  Taxes and insurance            339,185           363,915           833,331
  Financial                      187,441           200,176           267,134
  Depreciation                   313,209           293,095           505,508
  Other                            8,591             4,950             2,574
   Total expenses              3,043,463         3,252,516         5,025,922

Income (loss) before
 gain on transfer of
 property to HUD                 163,052             5,925          (302,844)

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

Net income                    $  163,052         $    5,925       $3,844,055
</TABLE>

Amortization of capitalized interest was $18,446 in 1998, $18,446 in 1997
and $32,716 in 1996.

<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, 1996      $(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)

Net income (loss) -
 1998                     156,640          1,747         4,665        163,052

Distributions - 1998      (55,704)          (576)       (1,314)       (57,594)

Partners' capital
 (deficit) at
 December 31, 1998     $(2,063,203)    $ (49,052)    $ (11,740)   $(2,123,995)
</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
                                 1998              1997              1996
CASH FLOWS FROM
 OPERATING ACTIVITIES:
  Net income                 $  163,052        $    5,925       $ 3,844,055
  Adjustments to reconcile
   net income to net cash
   provided by operating
   activities:
    Gain on transfer of
     property to HUD                -0-                -0-        (4,146,899)
    Depreciation                313,209            293,095           505,508
    Decrease (increase) in
     escrows and other
     restricted funds,
     receivables, prepaid
     expenses and
     other assets                312,234           (93,381)              417
      Increase (decrease) in
       accounts payable,
       accrued expenses,
       tenant security
       deposit liability
       and other liabilities      (56,507)          32,793            64,657
          Total adjustments       568,936          232,507        (3,576,317)
            Net cash provided
             by operating
              activities          731,988          238,432           267,738

CASH FLOWS FROM
 INVESTING ACTIVITIES:
  Capital expenditures           (756,136)        (529,369)         (108,039)

CASH FLOWS FROM
 FINANCING ACTIVITIES:
  Mortgage principal
   payments                       (189,076)       (176,345)         (164,454)
  Distributions paid               (57,594)        (31,475)          (94,445)
  Advance from (repayment
   to) general partner                 -0-             -0-           (25,000)
  Advances from (repayments
   to) affiliates net               14,067          (3,574)          (16,949)
  Increase in notes payable        310,690         440,148            49,649
    Net cash provided (used) by
     financing activities           78,087         228,754          (251,199)

NET INCREASE
 (DECREASE) IN CASH                 53,939         (62,183)          (91,500)

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

CASH BALANCE AT
 END OF YEAR                    $  188,213      $  134,274       $   196,457

SUPPLEMENTAL INFORMATION
 REGARDING INTEREST
 PAYMENTS IS AS FOLLOWS:
  Interest paid                 $  165,069      $  169,689       $   181,178
</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
                                        1998            1997          1996
Combined net income for
 financial reporting purposes      $   163,052      $    5,925    $3,844,055

Differences between
 depreciation for income
 tax reporting purposes
 and depreciation for
 financial reporting purposes          164,651         174,447       382,858

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

Accrual adjustments
 for financial
 reporting purposes                      9,235            3,326      (30,388)

Combined net income as
 reported on the federal
 income tax returns                  $ 336,938       $  183,698   $   49,626
</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
                                     1998            1997           1996
Combined partners' capital
 (deficit) for financial
 reporting purposes             $(2,123,995)     $(2,229,453)    $(2,203,903)

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

Carrying costs during
 construction capitalized
 for financial reporting
  purposes, excess of
 depreciation for income
 tax reporting purposes and
  accrual adjustments for
 financial reporting purposes      (601,085)         (688,932)      (799,275)
Combined partners' capital
 (deficit) as reported on the
 federal income tax return s    $(2,725,080)      $(2,918,385)   $(7,150,077)
</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
$5,102,066 at December 31, 1998 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>
                         1999                         $  202,739
                         2000                             217,508
                         2001                             233,135
                         2002                             249,988
                         2003                             268,033
                         Beyond                         3,930,663

                                                       $5,102,066
</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, 1997 and 1998 in the amount of
$814,554.  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, 1998, approximately $686,000 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 1998 and 1997, the Local Limited Partnerships received
approximately $2,125,000 and $2,158,000, 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:

<TABLE>
<S>
    <C>                                                      <C>
    Assets transferred:

    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, 2003.  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.

Note 8 - Year 2000 Risk Assessment and Action Plan

The Partnership is aware of the current concerns throughout the business
community of reliance upon computer software that does not properly
recognize the year 2000 in date formats, often referred to as the "Year
2000 Problem."  The Year 2000 Problem is the result of software being
written using two digits rather than four digits to define the applicable year
(i.e., "98" rather than "1998").  A failure by a business to properly identify
and correct a Year 2000 Problem in its operations could result in system
failures or miscalculations.  In turn, this could result in disruptions of
operations, including, among other things, a temporary inability to process
transactions, or otherwise engage in routine business transactions on a
day-to-day basis.
<PAGE>

Note 8 - Year 2000 Risk Assessment and Action Plan - Continued

Operations of the Partnership are not dependent upon the successful
operation on a daily basis of its computer software programs.  The
Partnership relies upon software purchased from third-party vendors rather
than internally-generated software.  In its analysis of software, and based
upon its ongoing discussions with these vendors, a plan of action has been
put in place by the Partnership to minimize its risk exposure to the Year
2000 Problem.  The properties that the Partnership has invested in may be
dependent upon the successful operation on a daily basis of its computer
software programs.  The Partnership has not been informed by any of
these properties that they are not Year 2000 compliant.
<PAGE>

URBAN IMPROVEMENT FUND LIMITED
(A Limited Partnership)

SCHEDULE IV

INDEBTEDNESS OF RELATED PARTIES


<TABLE>
<S>
                            <C>       <C>         <C>        <C>       <C>
                                                December 31,
                                       1998                   1997
                            1998      Change       1997      Change    1996
Advances to (repayment
  from) Local Limited
  Partnerships

Angeles No. 1            $ 10,492   $14,090    $(3,598)   $(3,598)  $     -0-
Angeles No. 2               3,574       -0-      3,574        -0-       3,574

                         $ 14,066   $14,090    $   (24)   $(3,598)  $   3,574
</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,
                                          1998                       1997
Indebtedness to general partner:

  Management fee payable to
   General Partner                      $  800,833                $ 790,833

   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, 1998

<TABLE>
<S>
 <C>                                  <C>                      <C>
                                                               Outstanding
                    Description                                 Mortgage
Partnership/Location                 No. of Units                Balance
Angeles Apartments Assoc. No.1
  Los Angeles, California           94 apartments             $   906,050
Angeles Apartments Assoc. No.2
  Los Angeles, California          109 apartments               1,083,338
Lakewood Apartments
  Vinton, Virginia                 108 apartments               1,172,525
The Villages, Ltd.
  Waco, Texas                      250 apartments               1,940,153

                                                              $ 5,102,066
</TABLE>
<TABLE>
<S>
 <C>                           <C>      <C>           <C>      <C>
                                        Buildings
                                           and                 Accumulated
Partnership/Location            Land    Improvement    Total   Depreciation
Angeles Apartments Assoc. No.1
  Los Angeles, California     $144,046  $2,851,437   $2,995,483  $(1,278,695)
Angeles Apartments Assoc. No.2
  Los Angeles, California      108,917   2,145,084    2,254,001   (1,561,033)
Lakewood Apartments
  Vinton, Virginia              59,882   1,742,260    1,802,142   (1,410,038)
The Villages, Ltd.
  Waco, Texas                  191,358   3,299,058    3,490,416   (3,069,089)

                              $504,203 $10,037,839  $10,542,042  $(7,318,855)
</TABLE>

<TABLE>
<S>
<C>                             <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
 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
   Acquisitions           -0-        756,136       756,136         313,209

Balance at
 December 31, 1998   $504,203    $10,037,839   $10,542,042     $ 7,318,855
</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 $9,925,000.