SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549


                             FORM 10-K SB


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


For the fiscal year ended                             Commission File No.
December 31, 1998                                            33-66260-A


                   FEDERAL MORTGAGE MANAGEMENT, INC.
          (Exact name of registrant as specified in its charter)


               Florida                                       65-0381142
------------------------------                 ---------------------------
State or other jurisdiction of                 IRS Employer Identification
incorporation or organization                               Number

         1800 Second Street, Suite 780, Sarasota, Florida  34236
         -------------------------------------------------------
           (Address of principal executive offices, zip code)

                               941-954-2328
                               ------------
          (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) filed all reports required to 
be filed by Section 13 or 15(b) 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 report(s), and (2) has been subject to such filing 
requirements for the past 90 days.  
/X/ Yes / /  No.

As of December 31, 1998 the Company has 156 secured promissory Notes Payable 
(Notes) with a total of $2,688,400 principal balance outstanding.  As 
indicated, the Company is a Company organized pursuant to Florida law.  The 
Company had total revenues of $246,860 in 1998.

PART I 

Item 1.	Description of Business

FEDERAL MORTGAGE MANAGEMENT, INC., (the "Company") was organized under the 
Florida General Corporation Act in December 1992.  The Company was initially
capitalized by the issuance of 100,000 shares of Common Stock, $.01 par 
value.  As of the December 31, 1998, such 100,000 shares are held 
beneficially by the Gaeton S. Della Penna Revocable Living Trust, dtd. June
1, 1992, as amended.  Mr. Della Penna has paid a nominal cash consideration 
of $1,000 for such shares.  

The Company was formed and capitalized for the principal purpose of acquiring 
and dealing in mortgage loans secured by first liens on residential real 
estate.  The Company may also originate real estate mortgage loans, and/or 
acquire federally insured instruments of deposit and/or debt securities 
issued by the United States and instrumentalitys thereof.  The Purchase of 
mortgage loans and insured instruments of deposit have been acquired in 
accordance with a specific acquisition policy described in the registration 
statement.  The Company utilized the net proceeds of the Notes in 
acquiring the Portfolio and Federal Instruments.  The payment of the periodic
principal and interest obligations of the Portfolio Loans, as well as 
Portfolio Loan payoff prior to maturity is and will be the source of funds 
utilized by the Company with which to meet the interest obligation of the 
Notes.  The Portfolio Loans will involve maturities which are in excess of 
the maturities of the Notes of all Series.  The principal obligation of 
each Series maturity of Notes is expected by the Company to be funded by the
scheduled principal and interest payments of the Portfolio mortgages, by the 
early payoff of Portfolio Loans and, when necessary, the disposition by the 
Company of a portion of the Portfolio.

In accordance with the acquisition policy (the "Acquisition Policy"), the 
Company purchases mortgage loans which are secured by a first priority lien on
real estate and incertain instances unimproved real estate, in accordance 
with the Acquisition Policy.  The Company may originate mortgage loans.  The 
mortgage loans have varying maturity dates from 10 to 30 years with interest 
rates ranging from 9% to 18%.

In order for a mortgage loan to be considered for acquisition by the Company 
for its Portfolio, such mortgage loan must be a first lien and have a principal 
balance which is not in excess of 90% of the fair market value of the
underlying collateral real estate securing the mortgage loan.  Such fair 
market value must be substantiated at a time contemporaneous to the intended
acquisition of the mortgage loan by expert sources of appraisal.  All 
appraisals must be completed by state licensed or certified appraisers.  
Alternative to such loan to value ratio, a mortgage loan may be acquired for 
the Company Portfolio at an acquisition cost which does not exceed 80% of the 
fair market value of the underlying property, which fair market value shall 
also be determined as a result of independent expert sources of appraisal.  
As of December 31, 1998, the portfolio of mortgage loans held by the Company
met this criteria.

The Company may on a case by case basis acquire real estate mortgage loans 
which are secured by first liens on unimproved real estate provided that the 
unpaid principal of any such mortgage loan acquired does not exceed 50% of 
the fair market value of such unimproved real estate determined 
contemporaneous to the acquisition of such loan by the Company as a result of
expert appraisal.  It is also subject to the condition that at no 
time during the term of existence of the Company shall the aggregate 
principal balance of Portfolio mortgages secured by unimproved real estate 
exceed 10% of the aggregate principal balance of all mortgage loans held in 
the Companys Portfolio.  At December 31, 1998, the Companys portfolio of 
mortgage loans did not include any mortgage loans secured by unimproved real
estate.

Management has entered into a business arrangement with HomeVestors of America,
Inc. ("HomeVestors"), a Delaware corporation domiciled in Dallas, Texas. 
HomeVestors is an originator of first lien residential mortgages either 
directly or through its affiliates, and has implemented a national franchise 
program.  Such program is establishing a network of individuals and companies 
which will buy and sell residential real estate with a focus on sales to 
credit impaired buyers.  In connection with such sales, originated mortgage 
loans on such real estate will meet the Acquisition Policy of the Corporation.
For such arrangement, the Corporation has advanced an effective good faith 
retainer in the amount of $200,000.  As of February 15, 1999, this amount has
been paid back to the Company.  HomeVestors has granted the Corporation and 
its affiliates a first right of refusal on interim first lien residential 
mortgage financings created by HomeVestors.  HomeVestors paid the Corporation 
12% interest per annum on this sum on a quarterly basis for a period of two 
years.  Mr. Della Penna, the President owns approximately 13% of the 
outstanding Common Stock of HomeVestors.  Interest payments on the notes and
other distributions will be made in accordance with the registration statement.

The Acquisition Policy permits the Company to utilize an amount not in excess of
10% of its available net proceeds for the acquisition of Federal Instruments.
Federal Instruments are defined  as insured deposit and certificate accounts
issued by financial institutions such as banks, savings banks and savings and
loan  associations whose accounts are insured to the maximum amount by the 
Federal Deposit Insurance Company or debt instruments issued by the United 
States or instrumentalities, thereof.  At December 31, 1998, the Company did
not own Certificates of Deposits.

Sources of Loan Purchase.  The Company acquires its residential mortgage loans 
from insured financial or deposit institutions, from the sellers of the 
collateral real property securing the mortgage loan (or agents thereof), 
credit unions, pension funds, insurance companies, mortgage bankers and 
businesses which are involved in the purchase, rehabilitation and resale of
residential real estate and associated underlying mortgages.

Portfolio Servicing.  The responsibility of servicing the residential mortgage 
loan Portfolio of the Company is vested in the management.  In connection with 
such Portfolio servicing, management is responsible for the collection of all 
principal and interest payments due under the terms of the Portfolio loans 
for the Company and management is also responsible for collection procedures 
with respect to mortgage loans which are in a default status, including 
foreclosure of the collateral property and the sale thereof, the acquisition 
and disposition of Portfolio mortgage loans and, when appropriate, the 
elimination of origination deficiencies in non standard loans which 
otherwise involve acceptable credit and payment histories.

From inception, management engaged the services of Federal Mortgage Investors, 
Ltd. (FMIL), an affiliate, as its servicing agent.  In return, the Company 
paid FMIL a servicing fee of .5% of the principal balance of the Companys 
portfolio of mortgage loans, computed and paid monthly.  In the year ended 
December 31, 1998, the Company paid $567 in servicing fees to FMIL.  

Portfolio turnover policy.  The Company engages in the business of acquiring
and selling mortgage loan portfolios.  It is managements intent to turn the 
entire portfolio over at least three times a year.  

Competition.  The Company encounters competition in its efforts to acquire 
acceptable mortgage loans for its Portfolio.  Numerous investment entities 
presently exist which are in the continuous business of acquiring residential
real estate loans from the sources intended to be utilized by the Company.  
The basis of this competition in Portfolio loan acquisition is related to the 
ability of the Company to thoroughly identify sources of loan purchases, the 
ability of the Company to rapidly and effectively evaluate mortgage loan 
acquisition candidates and the price that the Company is able and willing 
to pay for acceptable residential mortgage loans within its Portfolio 
Acquisition Policy guidelines.  However, the Company has a relationship with 
an affiliate of Mr. Della Penna, specifically HomeVestors of America, Inc. in 
Dallas, Texas which is anticipated to be one of the largest sources of 
interim financing mortgage loans as well as B, C and D credit mortgage
origination sources in the United States.

Trust Indenture.

The Prospectus dated December 21, 1993, for the offering of the Notes, as well 
as the Note instrument itself, the Company agreed to perfect a first security 
lien for the collective benefit of all Noteholders with respect to all items 
of "Eligible Collateral", a term which is defined in the Prospectus.  
Essentially, eligible collateral consists of residential real estate first 
mortgage loans (the "Portfolio"), debt instruments of the United States 
government and insured certificate of deposit accounts ("Federal 
Instruments"), cash received as a result of principal and interest payments 
made on Portfolio loans or received on loan payoff or sale of loans and 
Federal Instruments, and real estate owned as a result of Portfolio loan 
foreclosures, if any.

 
Item 2.	Properties

At December 31, 1998, the significant assets of the Company were constituted by 
the first lien residential mortgage loans, and interim financing and other 
real estate in the amount of $124,913.  The mortgaged properties included in 
the loan portfolio at December 31, 1998, are located in Kansas and Texas. 
  

Item 3.	Legal Proceedings

The Company was not a party to any litigation for the period ended December 
31, 1998, nor is any litigation or claim threatened.

Item. 4	Submission of Matters to a Vote of Security Holders
Not applicable


PART II

Item 5.	Market for Common Equity and Related Stockholder Matters


The Registrant conducted a public offering of its Secured Promissory Notes 
designated as its Series 1993A Notes and realized approximate net proceeds from 
such sale of $3,614,625.  Such public offering concluded September 30, 1994. 
The 1993A Series of Secured Promissory Notes of the Registrant were 
classified into four sub-Series as indicated by the table presented below:

                           		Principal	  	Annual    	Principal	
		                           Amount	      Term to	   Note	      Amount
	Series	                     Authorized	  Maturity	  Rate    	   Sold   	

	1993A-I                    	$  500,000  	24 months  7.25%	   	 $   273,000
	1993A-II	                      750,000	  36 months  7.75		         239,500
	1993A-III	                   1,000,000	  48 months  8.50	       	1,000,000
	1993-IV              	       2,750,000	  60 months  9.00		       2,470,000

The Registrant has repaid all of the principal and interest obligation of the 
sub-Series 1993A-I, 1993A-II and 1993A-III,  the principal and interest 
obligation represented by the outstanding 1993A-IV sub-Series was due 
December 21, 1998.  The aggregate principal amount due in such sub-Series 
as of February 16, 1999 is $2,661,700.

Circumstances precluded the Registrant from meeting the obligation represented 
by the 1993A-IV Notes on the due date thereof and the Registrant is in default.

Of the aggregate principal amount represented by such 1993A-IV sub-Series of 
Notes, $1,945,200 of such principal amount is held by holders believed to be
residents of the State of Florida (the Outstanding Notes and Qualified 
Holders, respectively). 

Pursuant to a document styled Offering Document Relating to Note Exchange (the 
Exchange Document), the Registrant has solicited the Holders to accept in 
full payment of such Outstanding Notes substitute Promissory Notes in like 
principal and interest amounts but incorporating a maturity date of June 21, 
2002 (the New Notes).  The Exchange Offer will be conducted by the Registrant 
until April 16, 1999 unless extended by the Registrant as permitted by the 
terms of the Exchange Offer.  The Exchange Offer is made exclusively by the 
Exchange Document which contains all information believed material 
by the Registrant in order to permit Holders to make an informed decision as
to whether to accept the Exchange Offer or to pursue such remedies that such 
Holders have as a result of the terms of issuance of the Outstanding Notes.

The Exchange Offer is being made by the Registrant without registration of the 
New Notes under the Securities Act of 1933, as amended, or the Florida 
Securities and Investor Protection Act, as amended (the Act and FIPA, 
respectively) in reliance upon the exemption from registration under the Act 
as set forth in Section 3(a)(11) thereof and Rule 147 promulgated thereunder 
and the transactional exemption provided by Chapter 517.061(5) of FIPA.

As a separate and distinct transaction, an affiliate of the Registrant, Federal 
Mortgage Management II, Inc. is offering to exchange its Subordinated Secured 
Promissory Notes, First Series (the Subordinated Notes), for the 1993A-IV 
sub-Series of Notes held by persons who are not residents of the State of 
Florida (Non-Florida Holders).  The Subordinated Notes of Federal Mortgage 
Management II, Inc. will be offered in like principal amount and with the 
same interest rates as the Notes held by such Non-Florida Holders.  Such 
Exchange Offer was made in an informational letter with exhibits and 
attachments directed to such Non-Florida Holders and dated February 17, 1999.  
Of the 1993A-IV sub-Series of Notes which are outstanding, $716,500 principal 
amount thereof is held by approximately 25 holders who are not residents of 
the State of Florida.

The Subordinated Notes have not been registered under the Act or FIPA in 
reliance upon exemptions provided by the Act and FIPA which relate to 
transactions by an issuer not involving any public offering in that the 
Outstanding Notes held by Non-Florida Holders constitutes a small number of 
holders and the Exchange Offer with respect to such holders is being 
conducted by Federal Mortgage Management II, Inc. without any general 
solicitation.

At December 31, 1998, all of the outstanding voting equity securities of the 
Company constituted by 100,000 shares of Common Stock, $.01 par value, were 
held of record and beneficially by the Gaeton S. Della Penna Revocable Living 
Trust, dtd. June 1, 1992, as amended.  Mr. Della Penna is the promoter and 
sole director and officer of the Company. 

 There is no present market for the Common Stock of the Company.


Item 6.		Selected Financial Data

The following table reflects the significant revenue and expense items for 
the years ended December 31, 1998 and 1997, and the related increase in each:

<TABLE>
<CAPTION>


REVENUE	                                     1998           1997  	    Increase/
		                                           ----           ----       Decrease
<S>                                        <C>           <C>          <C>                           
Interest income-residential 
mortgage loans	                            $  24,487     	$220,693 	   $(196,206)
Interest income	                              21,000 	       7,180 		     13,820 
Other income	                                201,373 	      10,203 	     191,170 
	                                           --------     	--------    	---------
     Total Revenue	                          246,860	      238,076	        8,784

EXPENSES
Bad debts expense	                            41,981 	     259,499 	    (253,518)
Commissions	                                     750 	      13,588 	     (12,838)
Consulting	                                   25,523 	      15,539 	     	(9,984)
Interest	                                    239,592	      324,258 	     (84,666)
Loss on write-offs - ORE	                      ---   	     244,609 	    (244,609)
Management Fees	                              10,235 	      20,520 	     (10,285)
Office expense	                                  398 	       7,272 	     	(6,874)
Rent	                                          ---   	      11,459 	     (11,459)
Salaries and wages	                            ---   	      23,143 	     (23,143)
Service fees	                                    567 	       5,189 	      (4,622)
Taxes	                                           479 	       4,399 	     	(3,920)
Travel and entertainment	                      ---   	       4,142 	     	(4,142)

</TABLE>

The Company had an increase in operating revenue of $8,784 for the year ended 
December 31, 1998, as compared to the same period in 1997.  This increase is 
due primarily to an increase of $200,000 in other income and relates to the 
reversal of the allowance for uncollectible accounts.

Most all expense categories decreased substantially for the year ended December 
31, 1998 as compared to the same period ended 1997.  These decreases were due 
to the effect of the principal payments to note holders in the amount of 
$1,000,000 in December 1997 which resulted in fewer funds available for 
investment, the clean up of the mortgage portfolio during fiscal 1997 and the 
write off and losses sustained from that clean up; and managements cost 
cutting approach.

Item 7.		Management's Discussion and Analysis and Plan of Operations

Scheduled principal and interest payments on portfolio loans at December 31, 
1998, represent an annualized rate of return of approximately 15% on the 
basis of the Company costs in acquiring such portfolio loans and an 
annualized rate of return of approximately 15% (stated rate) on the basis of 
the unpaid principal balance of the portfolio loans at December 31, 1998.

At December 31, 1998, the portfolio of the Company consisted of mortgage notes 
with a carrying value of $134,193.  The following table shows the mortgage 
notes at face value and carrying value which takes into consideration the 
discount and allowance for losses:

                            Principal   	Allowance
Face Value      Discount	   Payments    	For Losses		 Carrying Value

$96,770	        ($5,158)    	($672)	     ($3,000)		   $87,940

At December 31, 1998, the underlying real estate collateral of the Companys 
portfolio of mortgage loans have an appraised value of approximately $188,591, 
or a carrying value to appraised value ratio of 69 to 1.  The collateral real 
estate securing such loans as of December 31, 1998, was residential real 
estate.  The Company held no unimproved real estate loans as of December 31, 
1998.

There was 1 mortgage loan with a carrying value of $33,281 that was delinquent
(in terms of scheduled principal and interest payments) as of December 31, 
1998.  This loan represents 25% of the carrying value of the portfolio. 

As shown in the accompanying financial statements, the Corporation incurred a 
net loss of $232,301 during the year ended December 31, 1998, and as of that 
date, the Companys current liabilities exceeded its current assets by 
$2,410,659.  The ability of the Corporation to continue as a going concern is 
dependent on obtaining additional capital and financing.  The financial 
statements do not include any adjustments that might be necessary if the 
Corporation is unable to continue as a going concern. 
 

Item 8.	Financial Statements and Supplementary Data

Included in the Annual Report on Form 10K-SB as Exhibit 1 are the audited 
financial statements specified in Instruction (a) to Item 7.


Item 9.	Changes in and Disagreements with Accountants on Accounting and 
        Financial Disclosure

NOT APPLICABLE

PART III

Item 10.	Directors, Executive Officers, Promoters and Control Persons; 
         Compliance with Section 16(a) of the Exchange Act

The day-to-day business and affairs of the Company are managed and carried out 
the by President.  Mr. Guy S. Della Penna serves as the sole director and 
President of Federal Mortgage Management, Inc.  Information concerning Mr. 
Della Penna is presented below:

Mr. Della Penna, age 46, has been a resident of Sarasota, Florida since 1980 
is the founder and President of Capital Management Group, Inc.  Capital 
Management Group, Inc. was organized by Mr. Della Penna in 1989.  Under the 
auspices of Capital Management Group, Inc., Mr. Della Penna has provided 
financial and tax consulting and advisory services to individuals and 
corporate entities.  Capital Management Group, Inc. also acts as general 
agent for various insurance companies.  Mr. Della Penna is a General Securities 
Principal and Financial and Operations Principal pursuant to NASD Rules.  
Additionally, at December 31, 1996, Mr. Della Penna was the majority 
shareholder, director and officer of Executive Securities, Inc., the manager 
of the Note offering.  Mr. Della Penna has been active in the financial 
industry for approximately 19 years.  During the period April 1980 to January
1986, Mr. Della Penna served as the Assistant to the Chairman of the Board of 
Snelling & Snelling, Inc., as well as Assistant Treasurer.  Snelling & Snelling,
Inc. is a franchiser of an employee recruitment business.  While with such 
firm, Mr. Della Penna also served as a member of the Executive, Acquisition
and Pension and Profit Sharing committees.  Mr. Della Penna also served as 
the personal business manager and financial advisor to the Snelling family 
and affiliated entities and in such capacity, was responsible for cash 
management, tax and investment analysis and commitments.  The Snelling family 
are the principal shareholders of Snelling & Snelling, Inc.  During the 
period April, 1978 through February 1980, Mr. Della Penna was an associated 
person of Lehman Brothers, New York, New York, where he was involved in the 
structuring, documentation and marketing of tax exempt financings issued by 
state and local governments.  Mr. Della Penna holds a Bachelor of Science 
degree in Business Administration from Ithaca College, Ithaca, New York and 
received a Master of Business Administration degree in Finance from the State 
University of New York, Albany, New York.

Item 11.	Executive Compensation

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
			                                 Long Term Compensation	
                    	Annual Compensation                  	Awards	      Payouts	

(a)             	  (b)	  (c)	    (d)	   (e)	    (f)	         (g)       	 (h)	      (i)
<S>	               <C>	  <C>	    <C>	   <C>	    <C>	         <C>	        <C>	      <C>
				                                    Other	               Securities
Name				                                Annual	 Restricted	  Under-		              All Other
and				                                 Compen-	Stock	       lying	LTIP	           Compen-
Principal				                           sation	 Award(s)	    Options/	   Payouts	  sation
Position	          Year	 Salary	 Bonus 	     		              SARs 
---------	         ----	 ------	 -----	------	  ----------  	----------	-------	   ---------

Guy S. Della Penna											
President/CEO	
                   1994			            	$150,977							
                   1995				             157,643
                   1996				              81,157
                   1997				              20,520
                   1998				              10,235	

</TABLE>

Item 12.	Security Ownership of Certain Beneficial Owners and Management

As of December 31, 1998, the Gaeton S.  Della Penna Revocable Living Trust, 
dtd. June 1, 1992, as amended, owns 100% of the outstanding shares of common 
stock.

Item 13.	Certain Relationships and Related Transactions


Management fees of $10,235 and $20,520 were paid in 1998 and 1997, respectively,
to an affiliated company, Capital Mortgage Management.  Mr. Della Penna is 
the 100% stockholder of this affiliated Company.  

For the year ended December 31, 1998, the Company utilized office space of an 
affiliate for which it paid $11,459.


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

NOT APPLICABLE

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

FEDERAL MORTGAGE MANAGEMENT, INC.



By:  Guy S. Della Penna

     	-----------------


March 1999