FORM 10-Q

               SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C.  20549


 X   Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
 Act of 1934

For the quarterly period ended March 31, 1997 or

     Transition report pursuant to Section 13 or 15(d) of the Securities 
Exchange Act of 1934

For the transition period from               to              

Commission File Number:  0-20737

             AMERICA FIRST APARTMENT INVESTORS, L.P.
     (Exact name of registrant as specified in its charter)

Delaware                                                47-0797793            
(State or other jurisdiction                            (IRS Employer 
of incorporation or organization)                       Identification No.)


Suite 400, 1004 Farnam Street, Omaha, Nebraska          68102       
(Address of principal executive offices)                (Zip Code)


(402) 444-1630                              
(Registrant's telephone number, including area code)


     Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.

                YES   X                  NO     



































<PAGE>                               - i -
Part I.  Financial Information
  Item 1.  Financial Statements
AMERICA FIRST APARTMENT INVESTORS, L.P.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                                              Mar. 31, 1997       Dec. 31, 1996
                                                                                             --------------      --------------
<S>                                                                                          <C>                 <C>
Assets
 Cash and temporary cash investments, at cost which                                                                            
  approximates market value (Note 4)                                                         $   1,859,891       $   2,021,860
 Investment in tax-exempt mortgage bonds, at estimated fair value (Note 5)                      31,566,526          31,566,526
 Investment in real estate, net of accumulated depreciation (Note 6)                            29,962,742          30,199,846
 Interest receivable                                                                               226,531             186,320
 Other assets                                                                                      677,617             948,849
                                                                                             --------------      --------------
                                                                                             $  64,293,307       $  64,923,401
                                                                                             ==============      ==============
Liabilities and Partners' Capital
 Liabilities                                                                                                                   
  Accounts payable (Note 9)                                                                  $     994,698       $   1,454,694
  Bonds payable (Note 7)                                                                         6,120,000           2,750,000
  Line of Credit (Note 8)                                                                          134,200           3,584,200
  Distribution payable (Note 3)                                                                    329,051             329,051
                                                                                             --------------      --------------
                                                                                                 7,577,949           8,117,945
                                                                                             --------------      --------------
 Partners' Capital
  General Partner										     																																																																					6,466               4,038
  Beneficial Unit Certificate Holders
  ($10.88 per BUC in 1997 and $10.90 in 1996)                                                			56,708,892          56,801,418
                                                                                             --------------      --------------
                                                                                                56,715,358          56,805,456
                                                                                             --------------      --------------
                                                                                             $  64,293,307       $  64,923,401
                                                                                             ==============      ==============
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>




































<PAGE>                               - 1 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                   For the             For the
                                                                                             Quarter Ended       Quarter Ended
                                                                                             Mar. 31, 1997       Mar. 31, 1996
                                                                                            ---------------     ---------------
<S>                                                                                         <C>                 <C>
Income
 Mortgage bond investment income                                                            $      632,504      $      594,905
 Rental income                                                                                   1,692,818           1,297,401
 Interest income on temporary cash investments                                                       5,988              11,063
                                                                                            ---------------     ---------------
                                                                                                 2,331,310           1,903,369
                                                                                            ---------------     ---------------
Expenses
 General and administrative expenses (Note 9)                                                      270,085             229,081
 Real estate operating expenses                                                                    666,024             717,406
 Depreciation                                                                                      332,889             308,092
 Interest expense										   																																																																					165,257	               -
                                                                                            ---------------     ---------------
                                                                                                 1,434,255           1,254,579
                                                                                            ---------------     ---------------
Net income                                                                                  $      897,055      $      648,790
                                                                                            ===============     ===============
Net income allocated to:
 General Partner                                                                            $       12,299      $        9,569
 BUC Holders                                                                                       884,756             639,221
                                                                                            ---------------     ---------------
                                                                                            $      897,055      $      648,790
                                                                                            ===============     ===============
Net income per BUC                                                                          $          .17      $          .12
                                                                                            ===============     ===============
Weighted average number of BUCs outstanding                                                      5,212,167           5,245,623
                                                                                            ===============     ===============
</TABLE>                  

AMERICA FIRST APARTMENT INVESTORS, L.P.
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
FOR THE QUARTER ENDED MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                                  Beneficial Unit
                                                                                 Certificate Holders
                                                           General           
                                                           Partner           # of BUCs              Amount               Total
                                                    ---------------     ---------------     ---------------     ---------------
<S>                                                 <C>                  <C>                  <C>               <C>
Partners' Capital (excluding net unrealized
 holding losses):
Balance at December 31, 1996                        $        4,038           5,212,167      $   65,549,892      $   65,553,930
Net income                                                  12,299                -                884,756             897,055
Cash distributions paid or accrued (Note 3)
 Income                                                     (9,871)               -               (644,393)           (654,264)
 Return of capital                                            -                   -               (332,889)           (332,889)
                                                    ---------------     ---------------     ---------------     ---------------
                                                             6,466           5,212,167          65,457,366          65,463,832
                                                    ---------------     ---------------     ---------------     ---------------
Net unrealized holding losses:
Balance at December 31, 1996 and March 31, 1997               -                   -             (8,748,474)         (8,748,474)
                                                    ---------------     ---------------     ---------------     ---------------
Balance at March 31, 1997                           $        6,466     	     5,212,167      $   56,708,892      $   56,715,358
                                                    ===============     ===============     ===============     ===============

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>







<PAGE>                               - 2 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                   For the             For the
                                                                                             Quarter Ended       Quarter Ended
                                                                                             Mar. 31, 1997       Mar. 31, 1996
                                                                                            ---------------     ---------------
<S>                                                                                         <C>                 <C>   
Cash flows from operating activities                                                                                           
 Net income                                                                                 $      897,055      $      648,790
  Adjustments to reconcile net income to net cash 
   provided by operating activities
    Depreciation                                                                                   332,889             308,092
    Amortization                                                                                    39,440                -
    Decrease (increase) in interest receivable                                                     (40,211)             10,373
    Decrease (increase) in other assets                                                            408,831             (59,177)
    Increase (decrease) in accounts payable                                                       (459,996)             60,457
                                                                                            ---------------     ---------------
 Net cash provided by operating activities                                                       1,178,008             968,535
                                                                                            ---------------     ---------------
Cash flows from investing activities
 Real estate capital improvements                                                                  (78,731)            (41,570)
 Acquisition of real estate                                                                        (17,054)               -
                                                                                            ---------------     ---------------
 Net cash used in investing activities                                                             (95,785)            (41,570)
                                                                                            ---------------     ---------------
Cash flows from financing activities
 Proceeds from issuance of tax-exempt refunding bonds                                            3,450,000                -
 Net repayments on line of credit                                                               (3,450,000)               -
 Distributions paid                                                                               (987,153)           (993,489)
 Bond issuance costs paid                                                                         (177,039)               -
 Principal paid on bonds payable                                                                   (80,000)	              -
                                                                                            ---------------     ---------------
 Net cash used in financing activities                                                          (1,244,192)           (993,489)
                                                                                            ---------------     ---------------
Net decrease in cash and temporary cash investments                                               (161,969)            (66,524)
Cash and temporary cash investments at beginning of period                                       2,021,860           1,912,560 
                                                                                            ---------------     ---------------
Cash and temporary cash investments at end of period                                        $    1,859,891      $    1,846,036 
                                                                                            ===============     ===============
Supplemental disclosure of cash flow information:
 Cash paid during the period for interest                                                   $      158,784      $         -
                                                                                            ===============     ===============

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>




























<PAGE>                               - 3 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)

1. Organization

America First Apartment Investors, L.P. (the Partnership) was formed on March 
7, 1996, under the Delaware Revised Uniform Limited Partnership Act for the 
purpose of acquiring, holding, operating, selling or otherwise dealing with 
multi-family residential properties and other types of commercial real estate 
and interests therein.  The Partnership commenced operations on August 20, 
1996, when it was merged with America First Tax Exempt Mortgage Fund 2 Limited 
Partnership (the Prior Partnership).  Under the terms of the Merger agreement, 
the Partnership was the surviving partnership and effectively took over the 
operations of the Prior Partnership.  Unit holders of the Prior Partnership 
received one Beneficial Unit Certificate (BUC) of the Partnership for each BUC 
they held in the Prior Partnership as of the record date.  The Prior 
Partnership was terminated under the provisions of the Prior Partnership's 
Partnership Agreement.  The Partnership will terminate on December 31, 2016, 
unless terminated earlier under the provisions of its Partnership Agreement.  
The General Partner of the Partnership is America First Capital Associates 
Limited Partnership Four (AFCA 4).

2. Summary of Significant Accounting Policies

 A) Financial Statement Presentation
    The accompanying 1997 consolidated financial statements include the 
    accounts of the Partnership.  Financial statements for 1996 include the 
    accounts of the Prior Partnership.

    The consolidated financial statements include the accounts of the 
    Partnership and its subsidiaries.  All significant intercompany 
    transactions and accounts have been eliminated in consolidation.

    The consolidated financial statements of the Partnership are prepared 
    without audit on the accrual basis of accounting in accordance with 
    generally accepted accounting principles.  The consolidated financial 
    statements should be read in conjunction with the consolidated and 
    combined financial statements and notes thereto included in the 
    Partnership's Annual Report on Form 10-K for the year ended December 31, 
    1996.  In the opinion of management, all normal and recurring adjustments 
    necessary to present fairly the financial position at March 31, 1997, and 
    results of operations for all periods presented have been made.

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

 B) Investment in Tax-Exempt Mortgage Bonds
    Investment securities are classified as held-to-maturity, 
    available-for-sale, or trading.  Investments classified as 
    available-for-sale are reported at fair value with any unrealized gains or 
    losses excluded from earnings and reflected as a separate component of 
    partners' capital.  Subsequent increases and decreases in the net 
    unrealized gain/loss on the available-for-sale securities are reflected as 
    adjustments to the carrying value of the portfolio and adjustments to the 
    component of partners' capital.  The Partnership does not have investment 
    securities classified as held-to-maturity or trading. The carrying value 
    of tax-exempt mortgage bonds is periodically reviewed and adjusted when 
    there are significant changes in the estimated net realizable value of the 
    underlying collateral.










<PAGE>                               - 4 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)

    

    Accrual of mortgage bond investment income is excluded from income when, 
    in the opinion of management, collection of related interest is doubtful. 
    This interest is recognized as income when it is received.

 C) Investment in Real Estate
    The Partnership's investment in real estate consists of property acquired 
    through foreclosure or deed in lieu of foreclosure and other real estate 
    acquired.  Each real estate property acquired is recorded at the lower of 
    cost or estimated net realizable value.  The carrying value of each real 
    estate property acquired is periodically reviewed and adjusted when there 
    are significant declines in the estimated net realizable value.

    Depreciation of real estate is based on the estimated useful life of the 
    property (27-1/2 years on multifamily residential apartments or 31-1/2 
    years on The Exchange at Palm Bay) using the straight-line method.  
    Depreciation of real estate improvements on The Exchange at Palm Bay is 
    based on the term of the related tenant lease using the straight-line 
    method.  
  
 D) Income Taxes
    No provision has been made for income taxes since Beneficial Unit 
    Certificate (BUC) Holders are required to report their share of the     
    Partnership's taxable income for federal and state income tax purposes.

 E) Temporary Cash Investments
    Temporary cash investments are invested in federally tax-exempt securities 
    purchased with an original maturity of three months or less.

 F) Net Income per BUC
    Net income per BUC has been calculated based on the weighted average 
    number of BUCs outstanding during each period presented.

3. Partnership Income, Expenses and Cash Distributions

The Partnership Agreement contains provisions for the distribution of Net 
Operating Income, Net Sale Proceeds and Liquidation Proceeds and for the 
allocation of income and expenses for tax purposes among AFCA 4 and BUC 
Holders.

Cash distributions included in the financial statements represent the actual 
cash distributions made during each period and the cash distributions accrued 
at the end of each period.

4. Partnership Reserve Account

The Partnership maintains a reserve account which totaled $1,184,504 at March 
31, 1997. The reserve account was established to maintain working capital for 
the Partnership and is available to supplement distributions to investors or 
for any other contingencies related to the ownership of the mortgage bonds, 
real estate acquired and the operation of the Partnership, including the 
acquisition of additional properties.  

On July 10, 1996, management announced its intent to utilize a portion of the 
reserve account to purchase up to a total of 50,000 BUCs of the Partnership in 
open market transactions.  Through March 31, 1997, 33,456 BUCs had been 
acquired at a cost of $294,070 (none during the quarter ended March 31, 1997).













<PAGE>                               - 5 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)

5. Investment in Tax-Exempt Mortgage Bonds

Descriptions of the tax-exempt mortgage bonds owned by the Partnership at 
March 31, 1997, are as follows:

<TABLE>
<CAPTION>
                                                                                                     Base
                                                                         Number      Maturity    Interest            Carrying
  Property Name                               Location                 of Units   	      Date        Rate(1)           Amount
  ----------------------------------          --------------------     --------   -------------   --------    -----------------
  <S>                                         <C>                      <C>        <C>             <C>         <C>
  Performing:
   Jackson Park Place                         Fresno, CA                  296          09/01/11       8.5%    $      8,760,000
                                                                                                              -----------------
  Nonperforming:(2)
   Jefferson Place                            Olathe, KS                  352          12/01/10       8.5%          12,800,000
   Avalon Ridge                               Renton, WA                  356          09/01/11       8.5%          18,755,000
                                                                                                              -----------------
                                                                                                                    31,555,000
                                                                                                              -----------------
                                                                                                                    40,315,000
  Unrealized holding losses                                                                                         (8,748,474)
                                                                                                              -----------------
  Balance at March 31, 1997 (at estimated fair value)                                                         $     31,566,526
                                                                                                              =================
</TABLE>

(1) In addition to the base interest rate shown, the bonds bear additional 
    contingent interest as defined in each revenue note which, when combined 
    with the interest shown, is limited to a cumulative, noncompounded amount 
    not greater than 13% per annum.  The Partnership did not receive any 
    additional contingent interest in 1997.
(2) Nonperforming bonds are bonds which are not fully current as to interest 
    payments.  The amount of foregone interest on nonperforming bonds for 1997 
    was $224,190.



































<PAGE>                               - 6 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)

6. Investment in Real Estate

The Partnership's investment in real estate is comprised of the following at 
March 31, 1997:

<TABLE>
<CAPTION>
                                                                                                 Building
                                                               Number                                 and             Carrying
  Property Name                        Location               of Units   	         Land      Improvements               Amount
  ---------------------------------    --------------------   --------     -------------   ---------------    -----------------
  <S>                                  <C>                    <C>          <C>             <C>                <C>
  Covey at Fox Valley(1)               Aurora, IL                216       $  1,320,000    $   10,028,338     $     11,348,338
  The Exchange at Palm Bay             Palm Bay, FL           72,002(2)       1,296,002         3,387,791            4,683,793
  The Park at Fifty Eight(3)(4)	       Chattanooga, TN           196            231,113         4,122,226            4,353,339
  Shelby Heights (4)                   Bristol, TN               100            175,000         2,952,847            3,127,847
  Coral Point(1)                       Mesa, AZ                  336          2,240,000         8,960,000           11,200,000 
  Park at Countryside(4),(5)           Port Orange, FL           120            647,000         2,615,508            3,262,508
                                                                                                              -----------------
                                                                                                                    37,975,825
  Less accumulated depreciation                                                                                     (8,013,083)
                                                                                                              -----------------
  Balance at March 31, 1997                                                                                   $     29,962,742
                                                                                                              =================
</TABLE>

(1) Property is encumbered as described in Note 8.
(2) Represents square feet.
(3) Property consists of Phase II (96 units acquired through foreclosure) and 
    Phase I (100 units purchased on May 16, 1996).
(4) Property is encumbered as described in Note 7.
(5) Property was acquired on December 30 1996.

7.  Bonds Payable

Bonds payable were originated by the Partnership through the issuance of 
tax-exempt refunding bonds.  Bonds payable at March 31, 1997, consisted of the 
following:

<TABLE>
<CAPTION>

                        Effective Final     
                        Interest  Maturity                                      Annual            	         	Carrying
Collateral              Rate      Date      Payment Schedule                    Payments    		      				       Amount	
----------------------- --------- --------  ----------------------------------- ---------------------   -------------
<S>                     <C>       <C>       <C>                                 <C>                     <C>
The Park at Fifty Eight 6.65%     3/1/2021  semiannual payments of              range from $224,000     $   2,670,000
 					    																																		principal and/or interest           to $228,000
                                            are due each March 1 and September 1

Shelby Heights and						6.10%     3/1/2022  semiannual payments of              range from $266,000     $   3,450,000      
 Park at Countryside                        principal and/or interest           to $276,000
                                            are due each March 1 and September 1																								-------------

Balance at March 31, 1997																																																																															$   6,120,000
																																																																																																								=============
</TABLE>













<PAGE>                               - 7 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)

8. Line of Credit

The Partnership has a $15 million revolving loan credit agreement (the Line of 
Credit) with The First National Bank of Boston (the Bank).  The Line of Credit 
provides interim financing for the acquisition of multifamily residential 
properties.  It expires on December 19, 1997; however, the maturity date may 
be extended one year if certain conditions are met.  The Line of Credit bears 
interest, which is payable monthly, at 1/2% above the Bank's base rate (8.75% 
as of March 31, 1997).  In addition, the Partnership pays a facility fee of 
1/4 of 1% on the unused portion of the line which is payable quarterly in 
arrears.  The Line of Credit is collateralized by Covey at Fox Valley and 
Coral Point;  however, the Partnership may substitute other real estate owned 
as collateral, subject to the approval of the Bank.  The Partnership had 
borrowings of $134,200 against the Line of Credit and had $14,865,800 of 
available unused credit as of March 31, 1997.  The Line of Credit contains 
covenants which include, among others, restrictions on the amount of 
indebtedness the Partnership may incur and minimum debt service coverage 
requirements.

9. Transactions with Related Parties

Substantially all of the Partnership's general and administrative expenses are 
paid by AFCA 4 or an affiliate and reimbursed by the Partnership.  The amount 
of such expenses reimbursed to AFCA 4 during 1997 was $350,527.  AFCA 4 or an 
affiliate also paid $72,420 in costs capitalized by the Partnership during 
1997 which were reimbursed by the Partnership.  The capitalized costs were 
incurred in connection with the offering of multifamily housing revenue 
refunding bonds described in Note 7.  The reimbursed expenses are presented on 
a cash basis and do not reflect accruals made at quarter end.  

Pursuant to the terms of the Limited Partnership Agreement, AFCA 4 is entitled 
to an administrative fee from the Partnership based on the original amount of 
the mortgage bonds which were foreclosed on and the purchase price of any 
additional properties acquired by the Partnership.  The amount of such fees 
paid to AFCA 4 during 1997 was $56,550.  AFCA 4 did not receive administrative 
fees from property owners during 1997.

Pursuant to the terms of the Limited Partnership Agreement, AFCA 4 is entitled 
to receive a property acquisition fee from the Partnership in connection with 
the identification, evaluation and acquisition of additional properties and 
the financing thereof.  No such fees were paid to AFCA 4 during 1997.

The general partner of the property partnership which owns Jefferson Place is 
principally owned by an employee of an affiliate of AFCA 4.  Such employee has 
a nominal interest in the affiliate.  AFCA 4 and an affiliated mortgage fund 
also own small interests in the general partner.  The general partner has a 
nominal interest in the property partnership's profits, losses and cash flow 
which is subordinate to the interest of the Partnership and the mortgage 
bond.  The general partner did not receive cash distributions from the 
partnership in 1997. 

An affiliate of AFCA 4 was retained to provide property management services 
for Covey at Fox Valley, The Park at Fifty Eight, Shelby Heights, Coral Point, 
Jefferson Place, Avalon Ridge and Park at Countryside (beginning in January 
1997).  The fees for services provided represent the lower of (i) costs 
incurred in providing management of the property, or (ii) customary fees for 
such services determined on a competitive basis and amounted to $125,799 in 
1997.

10.  Subsequent Events

On April 10, 1997, the Partnership acquired The Retreat Apartments, a 226-unit 
multifamily housing property located in Atlanta, Georgia.  The property was 
acquired at a cost of $9,094,433 and was financed primarily from proceeds from 
the Partnership's Line of Credit.  The Partnership anticipates obtaining 
permanent financing for the property through the offering of certain of its 
tax-exempt bonds.




<PAGE>                               - 8 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)


In accordance with the terms of the Loan Agreement underlying the $8,760,000
in tax-exempt mortgage bonds collateralized by Jackson Park Place (Jackson),
the Partnership exercised its option to require the owner of Jackson to prepay
the tax-exempt mortgage bonds.  The owner of Jackson, however, was unable to 
obtain financing to prepay the tax-exempt mortgage bonds.  As a result, the
Partnership entered into a Settlement Agreement with the owner of Jackson 
pursuant to which Jackson was conveyed to the Partnership on May 7, 1997, 
through a deed in lieu of foreclosure.  In accordance with the terms of the 
Loan Agreement, the following disbursements were made:  (i) $2,100,000 to 
America First Participating/Preferred Equity Mortgage Fund (PREP) representing
payment of the outstanding balance of its Participating Loan on Jackson; 
(ii) $69,480 to PREP representing contingent interest on its Participating 
Loan; (iii) $460,000 to AFCA 4 representing due and unpaid administrative fees;
and (iv) $360,000 to the owner of Jackson.  These disbursements were funded 
with borrowings on the Partnership's Line of Credit.  As a result of the 
acquisition, the Partnership recognized contingent interest income of $290,520
on the tax-exempt mortgage bonds.





















































<PAGE>                               - 9 -
     Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations

Liquidity and Capital Resources

America First Tax Exempt Mortgage Fund 2 (the Prior Partnership) originally 
acquired nine tax-exempt mortgage bonds, the proceeds of which were used to 
provide construction and/or permanent financing for eight multifamily housing 
properties and one commercial property.  During 1988, one tax-exempt mortgage 
bond was prepaid in full.  On May 16, 1996, the Partnership acquired Phase I 
of the Park at Fifty Eight Apartments and on December 30, 1996, the 
Partnership acquired Park at Countryside.  At March 31, 1997, the Partnership 
continued to hold three of these tax-exempt mortgage bonds with a carrying 
value, at estimated fair value, of $31,566,526 and six real estate properties 
acquired with a depreciated cost of $29,962,742.

On August 20, 1996, the Prior Partnership merged with America First Apartment 
Investors, L.P. (the Partnership).  Under the terms of the merger agreement, 
the Partnership was the surviving partnership and effectively took over the 
operations of the Prior Partnership.  Unit holders of the Prior Partnership 
received one Beneficial Unit Certificate (BUC) of the New Partnership for each 
BUC they held in the Prior Partnership as of the record date.  The Prior 
Partnership was terminated under the provisions of the Prior Partnership's 
Partnership Agreement.

The following table shows the various occupancy levels of the properties 
financed or owned by the Partnership at March 31, 1997:

<TABLE>
<CAPTION>
                                                                                                       Number      Percentage
                                                                                        Number       of Units        of Units
Property Name                          Location                                       of Units       Occupied        Occupied
-------------------------------        -----------------------                       ----------     ----------     -----------
<S>                                    <C>                                           <C>            <C>            <C>
Jackson Park Place                     Fresno, CA                                          296            260             88%
Jefferson Place                        Olathe, KS                                          352            342             97%
Avalon Ridge                           Renton, WA                                          356            288             81%
Covey at Fox Valley(1)                 Aurora, IL                                          216            206             95%
The Park at Fifty Eight(3)             Chattanooga, TN                                     196            193             98%
Shelby Heights(1)                      Bristol, TN                                         100             89             89%
Coral Point(1)                         Mesa, AZ                                            336            320             95%
Park at Countryside(4)                 Port Orange, FL                                     120            113             94%
                                                                                     ----------     ----------     -----------
                                                                                         1,972          1,811             92%
                                                                                     ==========     ==========     ===========
The Exchange at Palm Bay(1)           Palm Bay, FL                                      72,002(2)      40,718(2)          57%
                                                                                     ==========     ==========     ===========
</TABLE>

(1) Property acquired through foreclosure or deed in lieu of foreclosure.
(2) Represents square feet.
(3) Property consists of Phase II (96 units acquired through foreclosure) and 
    Phase I (100 units purchased on May 16, 1996).
(4) Property acquired on December 30, 1996.

The principal amounts of the tax-exempt mortgage bonds do not amortize over 
their terms.  The tax-exempt mortgage bonds provide for the payment of base 
interest at a fixed rate.  In addition, the Partnership may earn contingent 
interest based on a participation in the net cash flow and net sale or 
refinancing proceeds from the real estate collateralizing the tax-exempt 
mortgage bonds.  The base interest payments received on the tax-exempt 
mortgage bonds and net rental income earned on properties owned represent the 
principal sources of the Partnership's income and distributable cash.  The 
Partnership has not received any contingent interest on its mortgage bonds 
during 1997. The Partnership also earns income on temporary cash investments.  
The Partnership may draw on reserves to pay operating expenses or to 
supplement cash distributions to Beneficial Unit Certificate (BUC) Holders.  







<PAGE>                               - 10 -
The Partnership has a $15 million revolving loan credit agreement (the Line of 
Credit) with the First National Bank of Boston (the Bank).  The Line of Credit 
provides interim financing for the acquisition of multifamily residential 
properties.  The Line of Credit bears interest at 1/2% above the Bank's base 
rate (8.75% as of March 31, 1997).  The Line of Credit expires on December 19, 
1997; however, the maturity date may be extended one year if certain conditions 
are met.  The Partnership had borrowings of $134,200 against the Line of Credit 
and had $14,865,800 of available unused credit as of March 31, 1997.  The Line 
of Credit contains covenants which include, among others, restrictions on the 
amount of indebtedness the Partnership may incur and minimum debt service 
coverage requirements.  The Partnership intends to repay borrowings under the 
Line of Credit through the refunding of existing tax-exempt bonds that are 
associated with certain properties acquired in foreclosure.

On March 13, 1997, the Partnership raised $3,450,000 through the offering of 
multifamily housing revenue refunding bonds on Shelby Heights.  The bonds were 
rated "AA" by Standard and Poor's Corporation, bear interest at an effective 
rate of 6.1% and have a 25-year maturity.  Proceeds from the offering were 
used to pay down borrowings on the Line of Credit.

On April 10, 1997, the Partnership acquired The Retreat Apartments, a 226-unit 
multifamily housing property located in Atlanta, Georgia.  The property was 
acquired at a cost of $9,094,433 and was financed primarily from proceeds from 
the Partnership's Line of Credit.  The Partnership anticipates obtaining 
permanent financing for the property through the offering of certain of its 
tax-exempt mortgage bonds.

During the quarter ended March 31, 1997, $242,791 of undistributed principal 
payments was placed in reserves.  The total amount held in reserves at March 
31, 1997, was $1,184,504.  Future distributions to BUC Holders will depend 
upon the amount of base and contingent interest and net rental income the 
Partnership receives, the size of reserves established by the Partnership and 
the extent to which withdrawals are made from reserves.  

The Partnership believes that cash provided by operating activities and, if 
necessary, withdrawals from the Partnership's reserves will be adequate to 
meet its short-term and long-term liquidity requirements, including the 
payments of distributions to BUC Holders.  Under the terms of its Partnership 
Agreement, the Partnership has the authority to enter into short-term and 
long-term debt financing arrangements.  The Partnership is not authorized to 
issue additional BUCs to meet short-term and long-term liquidity requirements.

Distributions

Cash distributions paid or accrued per BUC were as follows:
<TABLE>
<CAPTION>
                                                                                                For the               For the
                                                                               		  							Quarter Ended         Quarter Ended
                                                                                          Mar. 31, 1997         Mar. 31, 1996
                                                                                         ---------------       ---------------
<S>                                                                                      <C>                   <C>
Regular monthly distributions
 Income                                                                                  $        .1236        $        .1288
 Return of capital                                                                                .0639                 .0587
                                                                                         ---------------       ---------------
                                                                                         $        .1875        $        .1875
                                                                                         ===============       ===============
Distributions
 Paid out of current and prior undistributed cash flow                                   $        .1875        $        .1875
                                                                                         ===============       ===============
</TABLE>

Asset Quality 

It is the policy of the Partnership to make a periodic review of the real 
estate collateralizing the Partnership's mortgage bonds and real estate 
acquired and adjust, when necessary, the carrying value of the mortgage bonds 
and each real estate property acquired.  Mortgage bonds are classified as 
available-for-sale and are therefore recorded at the estimated fair value of 
the underlying collateral.  Each real estate property acquired is recorded at 
the lower of cost or estimated net realizable value.  The carrying value of 
the mortgage bonds is adjusted when there are significant changes in the 
estimated net realizable value of the underlying collateral for the bonds.  
The carrying value of each real estate property acquired is adjusted when 
there are significant declines in the estimated net realizable value.  
<PAGE>                               - 11 -
Internal property valuations and reviews performed during the quarter ended 
March 31, 1997, indicated that the mortgage bonds and real estate recorded on 
the balance sheet at March 31, 1997, required no adjustments to their current 
carrying amounts.

In accordance with the terms of the Loan Agreement underlying the $8,760,000
in tax-exempt mortgage bonds collateralized by Jackson Park Place (Jackson),
the Partnership exercised its option to require the owner of Jackson to prepay
the tax-exempt mortgage bonds.  The owner of Jackson, however, was unable to 
obtain financing to prepay the tax-exempt mortgage bonds.  As a result, the
Partnership entered into a Settlement Agreement with the owner of Jackson 
pursuant to which Jackson was conveyed to the Partnership on May 7, 1997, 
through a deed in lieu of foreclosure.  In accordance with the terms of the 
Loan Agreement, the following disbursements were made:  (i) $2,100,000 to 
America First Participating/Preferred Equity Mortgage Fund (PREP) representing
payment of the outstanding balance of its Participating Loan on Jackson; 
(ii) $69,480 to PREP representing contingent interest on its Participating 
Loan; (iii) $460,000 to AFCA 4 representing due and unpaid administrative fees;
and (iv) $360,000 to the owner of Jackson.  These disbursements were funded 
with borrowings on the Partnership's Line of Credit.  As a result of the 
acquisition, the Partnership recognized contingent interest income of $290,520
on the tax-exempt mortgage bonds.

The overall status of the Partnership's other mortgage bonds and real estate 
owned has generally remained constant since December 31, 1996.

Results of Operations

The table below compares the results of operations for each period shown.  
Results of operations for 1996 include the accounts of the Prior Partnership.

<TABLE>
<CAPTION>
                                                                              For the             For the            Increase
                                                                        Quarter Ended       Quarter Ended           (Decrease)
                                                                        Mar. 31, 1997       Mar. 31, 1996           From 1996
                                                                       ---------------     ---------------     ---------------
<S>                                                                    <C>                 <C>                 <C>
Mortgage bond investment income                                        $      632,504      $      594,905      $       37,599
Rental income                                                               1,692,818           1,297,401             395,417
Interest income on temporary cash investments                                   5,988              11,063              (5,075)
                                                                       ---------------     ---------------     ---------------
                                                                            2,331,310           1,903,369             427,941
                                                                       ---------------     ---------------     ---------------
General and administrative expenses                                           270,085             229,081              41,004
Real estate operating expenses                                                666,024             717,406             (51,382)
Depreciation                                                                  332,889             308,092              24,797
Interest expense                                                              165,257                -                165,257
                                                                       ---------------     ---------------     ---------------
                                                                            1,434,255           1,254,579             179,676
                                                                       ---------------     ---------------     ---------------
Net income                                                             $      897,055      $      648,790      $      248,265
                                                                       ===============     ===============     ===============
</TABLE>

Mortgage bond investment income increased for the quarter ended March 31, 
1997, compared to the same period in 1996 as a result of an increase in the 
cash flow received from Avalon Ridge of approximately $25,000, and an increase 
in cash flow received from Jefferson Place of approximately $13,000.

Rental income increased for the quarter ended March 31, 1997, compared to the 
same period in 1996.  This increase is attributable to:  (i) a $182,000 
increase from Park at Countryside resulting from the acquisition of 
this property in December 1996; (ii) a $123,000 increase from The Park at 
Fifty Eight resulting primarily from the acquisition of Phase I of this 
property in May 1996; (iii) a $64,000 increase due to a slight increase in 
average occupancy and rental rate increases at certain properties acquired by 
the Partnership in foreclosure; and (iv) a $26,000 increase from The Exchange 
at Palm Bay due to an increase in average leased space during 1997. 







<PAGE>                               - 12 -
Excluding property tax refunds of approximately $180,000 received by Covey at 
Fox Valley during the quarter ended March 31, 1997, real estate operating 
expenses increased approximately $129,000 for the quarter ended March 31, 
1997, compared to the same period in 1996.  This increase is attributable to:  
(i) a $110,000 increase from Park at Countryside resulting from the acquisition 
of this property in December 1996; (ii) a $61,000 increase from The Park at 
Fifty Eight resulting primarily from the acquisition of Phase I of this 
property in May 1996; (iii) a $40,000 increase due primarily to a slight 
increase in property improvements and repairs and maintenance expenses at 
certain properties; partially offset by (iv) an $82,000 decrease from The 
Exchange at Palm Bay resulting from non-recurring leasing commissions of 
approximately $85,000 incurred in 1996.

Depreciation expense increased for the quarter ended March 31, 1997, compared 
to the same period in 1996 due to: (i) a $24,000 increase from Park at 
Countryside resulting from the acquisition of this property in December 1996; 
(ii) an $18,000 increase from The Park at Fifty Eight resulting from the 
acquisition of Phase I of this property in May 1996; partially offset by (iii) 
a $17,000 decrease in depreciation expense due to certain property becoming 
fully depreciated.

Interest expense of $165,257 was incurred for the quarter ended March 31, 
1997, consisting of interest of $113,053 incurred on the Line of Credit and 
$52,204 incurred on bonds payable.

The decrease in interest income on temporary cash investments for the quarter 
and ended March 31, 1997, compared to the same period in 1996 is primarily due 
to a decrease in the average interest rate earned on the Partnership reserves 
during 1997.

General and administrative expenses increased for the quarter ended March 31, 
1997, compared to the same period in 1996 due primarily to an increase in 
salaries and related expenses.











































<PAGE>                               - 13 -
PART II.  OTHER INFORMATION

     Item 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits

               4(a) Form of Certificate of Beneficial Unit Certificate 
                    incorporated by reference to Exhibit 4.1 to Registration 
                    Statement on Form S-4 (Commission File No. 333-2920) filed 
                    by the Registrant on March 29, 1996).

               4(b) Agreement of Limited Partnership of the Registrant 
                    (incorporated by reference to Exhibit 4(b) to Form 8-K 
                    (Commission File No. 0-20737) filed by the Registrant on 
                    August 23, 1996).
               
              10(a) $18,755,000 Washington State Housing Finance Commission 
                    Multifamily Housing Mortgage Revenue Note (Sunpointe 
                    Apartments Projects) Series 1987 (incorporated herein by 
                    reference to Form 10-K dated December 31, 1987 filed 
                    pursuant to Section 13 or 15(d) of the Securities Exchange 
                    Act of 1934 by America First Tax Exempt Mortgage Fund 2 
                    Limited Partnership (Commission File No. 0-15329)).

              10(b) Lender Loan Agreement and Indenture of Trust among 
                    Washington State Housing Finance Commission, the 
                    Registrant and FirsTier Bank, National Association, dated 
                    September 1, 1987 (incorporated herein by reference to Form 
                    10-K dated December 31, 1987 filed pursuant to Section 13 
                    or 15(d) of the Securities Exchange Act of 1934 by America 
                    First Tax Exempt Mortgage Fund 2 Limited Partnership 
                    (Commission File No. 0-15329)).

              10(c) Construction Loan Agreement between the Registrant and 
                    Sunpointe Associates Limited Partnership, dated September 
                    1, 1987 (incorporated herein by reference to Form 10-K 
                    dated December 31, 1987 filed pursuant to Section 13 or 
                    15(d) of the Securities Exchange Act of 1934 by America 
                    First Tax Exempt Mortgage Fund 2 Limited Partnership 
                    (Commission File No. 0-15329)).

          (b)  Form 8-K

               The registrant did not file a report on Form 8-K during the 
               quarter for which this report is filed.































<PAGE>                               - 14 -
	                                  SIGNATURES

     Pursuant to the requirements 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.

Dated:  May 13, 1997          AMERICA FIRST APARTMENT INVESTORS, L.P.

                              By America First Capital
                                   Associates Limited
                                   Partnership Four, General
                                   Partner of the Registrant

                              By America First Companies L.L.C.,
                                   General Partner of America First Capital
                                   Associates Limited Partnership Four

                              By /s/ Michael Thesing             
                                   Michael Thesing
                                   Vice President and
				   Principal Financial 
			 	   Officer






















































<PAGE>                               - 15 -