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 September 30, 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>
                                                                                              Sept. 30, 1997       Dec. 31, 1996
                                                                                             --------------      --------------
<S>                                                                                          <C>                 <C>
Assets
 Cash and temporary cash investments, at cost which                                                                            
  approximates market value (Note 4)                                                         $   2,326,657       $   2,021,860
 Investment in tax-exempt mortgage bonds, at estimated fair value (Note 5)                      13,006,526          31,566,526
 Investment in real estate, net of accumulated depreciation (Note 6)                            50,749,144          30,199,846
 Interest receivable                                                                                64,782             186,320
 Other assets                                                                                    1,069,111             948,849
                                                                                             --------------      --------------
                                                                                             $  67,216,220       $  64,923,401
                                                                                             ==============      ==============
Liabilities and Partners' Capital
 Liabilities                                                                                                                   
  Accounts payable (Note 9)                                                                  $   1,403,668       $   1,454,694
  Bonds payable (Note 7)                                                                         6,120,000           2,750,000
  Line of Credit (Note 8)                                                                          957,871           3,584,200
  Due to Jefferson Place L.P. (Note 5)                                                           2,400,000
  Distribution payable (Note 3)                                                                    329,051             329,051
                                                                                             --------------      --------------
                                                                                                11,210,590           8,117,945
                                                                                             --------------      --------------
 Partners' Capital
  General Partner										     																																																																					6,325               4,038
  Beneficial Unit Certificate Holders
  ($10.74 per BUC in 1997 and $10.90 in 1996)                                                		 55,999,305          56,801,418
                                                                                             --------------      --------------
                                                                                                56,005,630          56,805,456
                                                                                             --------------      --------------
                                                                                             $  67,216,220       $  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 AND COMBINED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
                                                           For the             For the        For the Nine        For the Nine
                                                     Quarter Ended       Quarter Ended        Months Ended        Months Ended
                                                    Sept. 30, 1997      Sept. 30, 1996      Sept. 30, 1997      Sept. 30, 1996
                                                                            (Combined)                              (Combined)
                                                    ---------------     ---------------     ---------------     ---------------
<S>                                                 <C>                 <C>                 <C>                 <C>
Income
 Mortgage bond investment income                    $      314,348      $      483,668      $    1,368,296      $    1,600,221
 Contingent interest income                                   -                   -                290,520                -
 Rental income                                           2,572,960           1,481,936           6,597,118           4,201,506
 Interest income on temporary cash investments               4,684              12,542              33,550              37,112
                                                    ---------------     ---------------     ---------------     ---------------
                                                         2,891,992           1,978,146           8,289,484           5,838,839
                                                    ---------------     ---------------     ---------------     ---------------
Expenses
 General and administrative expenses (Note 9)              342,279             335,636             881,442             870,677
 Real estate operating expenses                          1,328,263             803,398           3,133,642           2,271,354
 Depreciation                                              508,834             286,715           1,319,045             870,258
 Interest expense                                          246,601              37,953             793,722              68,315
 Realized loss on disposition of mortgage
  bond (Note 5)                                          3,000,000                -              3,000,000                -
                                                    ---------------     ---------------     ---------------     ---------------
                                                         5,425,977           1,463,702           9,127,851           4,080,604
                                                    ---------------     ---------------     ---------------     ---------------
Net income (loss)                                   $   (2,533,985)     $      514,444      $     (838,367)     $    1,758,235
                                                    ===============     ===============     ===============     ===============
Net income (loss) allocated to:
 General Partner                                    $        9,749      $        8,012      $       31,902      $       26,285
 BUC Holders                                            (2,543,734)            506,432            (870,269)           1,731,950
                                                    ---------------     ---------------     ---------------     ---------------
                                                    $   (2,533,985)     $      514,444      $     (838,367)     $    1,758,235
                                                    ===============     ===============     ===============     ===============
Net income (loss) per BUC                           $         (.49)     $          .10      $         (.16)     $          .33
                                                    ===============     ===============     ===============     ===============
Weighted average number of BUCs outstanding              5,212,167           5,212,167           5,212,167           5,234,471
                                                    ===============     ===============     ===============     ===============
</TABLE>                  

AMERICA FIRST APARTMENT INVESTORS, L.P.
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 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 (loss)                                           31,902                -               (870,269)           (838,367)
Cash distributions paid or accrued (Note 3)
 Income                                                    (29,615)               -                   -                (29,615)
 Return of capital                                            -                   -             (2,931,844)         (2,931,844)
                                                    ---------------     ---------------     ---------------     ---------------
                                                             6,325           5,212,167          61,747,779          61,754,104
                                                    ---------------     ---------------     ---------------     ---------------
Net unrealized holding losses:
Balance at December 31, 1996                                  -                   -             (8,748,474)         (8,748,474)
Net change (realized loss)                                    -                   -              3,000,000           3,000,000
                                                    ---------------     ---------------     ---------------     ---------------
                                                              -                   -             (5,748,474)         (5,748,474)
                                                    ---------------     ---------------     ---------------     ---------------
Balance at September 30, 1997                       $        6,325     	     5,212,167      $   55,999,305      $   56,005,630
                                                    ===============     ===============     ===============     ===============

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

<PAGE>                               - 2 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                                              For the Nine        For the Nine
                                                                                              Months Ended        Months Ended
                                                                                            Sept. 30, 1997      Sept. 30, 1996
																																																																																																																				(Combined)
                                                                                            ---------------     ---------------
<S>                                                                                         <C>                 <C>   
Cash flows from operating activities                                                                                           
 Net income (loss)                                                                          $     (838,367)     $    1,758,235
  Adjustments to reconcile net income to net cash 
   provided by operating activities
    Depreciation                                                                                 1,319,045             870,258
    Amortization                                                                                   123,695                -
    Loss on disposition of mortgage bond                                                         3,000,000                -
    Decrease in interest receivable                                                                121,538              32,919
    Decrease in other assets                                                                       357,938              69,164
    Increase (decrease) in accounts payable                                                        (51,026)             72,376
                                                                                            ---------------     ---------------
 Net cash provided by operating activities                                                       4,032,823           2,802,952
                                                                                            ---------------     ---------------
Cash flows from investing activities
 Real estate capital improvements                                                                 (626,066)           (155,617)
 Acquisition of real estate                                                                    (12,482,277)         (2,056,119)
 Proceeds from disposition of mortgage bond                                                     12,200,000                -
                                                                                            ---------------     ---------------
 Net cash used in investing activities                                                            (908,343)         (2,211,736)
                                                                                            ---------------     ---------------
Cash flows from financing activities
 Net borrowings on line of credit                                                               (2,626,329)               -    
 Proceeds from issuance of tax-exempt refunding bonds                                            3,450,000           2,750,000
 Distributions paid                                                                             (2,961,459)         (2,976,244)
 Bond issuance costs paid                                                                         (601,895)           (193,968)
 Principal paid on bonds payable                                                                   (80,000)	              -
 Purchase of units                                                                                    -               (294,270)
                                                                                            ---------------     ---------------
 Net cash used in financing activities                                                          (2,819,683)           (714,482)
                                                                                            ---------------     ---------------
Net increase (decrease) in cash and temporary cash investments                                     304,797            (123,266)
Cash and temporary cash investments at beginning of period                                       2,021,860           1,912,560 
                                                                                            ---------------     ---------------
Cash and temporary cash investments at end of period                                        $    2,326,657      $    1,789,294 
                                                                                            ===============     ===============
Supplemental disclosure of cash flow information:
 Cash paid during the period for interest                                                   $      692,847      $       53,184
                                                                                            ===============     ===============
Supplemental schedule of non-cash investing and financing activities:
 Settlement of mortgage bond for real estate                                                $    8,760,000      $         -
 Due to Jefferson Place L.P.                                                                     2,400,000                -





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

















<PAGE>                               - 3 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 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 
    combined accounts of the Partnership from August 20, 1996 (the Merger 
    Date), through September 30, 1996, and the accounts of the Prior 
    Partnership from January 1, 1996, until the Merger Date.

    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 September 30, 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 AND COMBINED FINANCIAL STATEMENTS
September 30, 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 $1,434,743 at 
September 30, 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 September 30, 1997, 33,456 BUCs had been 
acquired at a cost of $294,070 (none during the quarter or nine months ended 
September 30, 1997).












<PAGE>                               - 5 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(UNAUDITED)

5. Investment in Tax-Exempt Mortgage Bonds

Descriptions of the tax-exempt mortgage bonds owned by the Partnership during 
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%   $           -    (3)

 Nonperforming:(2)
   Jefferson Place                          Olathe, KS                  352          12/01/10       8.5%               -    (4)
   Avalon Ridge                             Renton, WA                  356          09/01/11       8.5%         18,755,000
                                                                                                           -----------------
                                                                                                                 18,755,000
   Unrealized holding losses                                                                                     (5,748,474)
                                                                                                           -----------------
  Balance at September 30, 1997 (at estimated fair value)                                                  $     13,006,526
                                                                                                           =================
</TABLE>


<TABLE>
<S>                                                                                                       <C>
Reconciliation of the carrying amount of the mortgage bonds is as follows:

  Balance at December 31, 1996                                                                             $     31,566,526
   Settlement of mortgage bond for real estate                                                                   (8,760,000)(3)
   Disposition of mortgage bond                                                                                 (12,800,000)(4)
   Change in unrealized holding losses (realized loss)                                                            3,000,000 (4)
                                                                                                           -----------------
  Balance at September 30, 1997                                                                            $     13,006,526
                                                                                                           =================
</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 
    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 $710,702 ($174,862 for the quarter ended September 30, 1997). 

(3) 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 Partnership 
    entered into a Settlement Agreement with the owner of Jackson that 
    provided for the Partnership to acquire Jackson at appraised value on May 
    7, 1997.  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), an affiliated fund, 
    representing payment of the outstanding balance of its Participating Loan 
    on Jackson; (ii) $69,480 to PREP representing contingent interest income 
    on its Participating Loan; (iii) $371,220 to AFCA 4 and $88,780 to the 
    general partner of PREP representing due and unpaid administrative fees; 
    (iv) $290,520 to the Partnership representing contingent interest income 
    on the tax-exempt mortgage bonds; and (v) $360,000 to the owner of 
    Jackson.  These disbursements were funded with borrowings on the 
    Partnership's Line of Credit.  The Partnership also incurred costs of 
    $18,096 in conjunction with the acquisition.



<PAGE>                               - 6 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
SEPTMEBER 30, 1997
(UNAUDITED)

(4) On July 30,1997, the limited partnership which owns Jefferson Place
    (Jefferson L.P.) received proceeds of $12,200,000 from the offering of 
    multi-family housing revenue refunding bonds collateralized by Jefferson 
    Place and The Retreat.  The Partnership, in turn, received $12,200,000 
    from Jefferson Place L.P. representing full payment of its $12,800,000 in 
    tax-exempt mortgage bonds on Jefferson Place.  As a result, the 
    Partnership realized a loss of $3,000,000.  Concurrently, the unrealized 
    holding losses related to the investment in tax-exempt mortgage bonds, 
    which is a separate component of partners' capital, was reduced by 
    $3,000,000.  In addition to receiving $12,200,000 in cash which resulted 
    in a liability to Jefferson Place L.P. of $2,400,000, the Partnership also 
    received a $3,500,000 subordinate note representing past due interest on 
    the $12,800,000 tax-exempt mortgage bonds.  The Partnership did not record 
    this past due interest as management considered its collectability to be 
    doubtful.  Interest on the subordinate note, at the rate of 8.5%, is 
    payable monthly solely out of excess cash flow generated by Jefferson 
    Place.  Final payment of all outstanding principal and interest is due 
    July 1, 2023.  All payments due under the $3,500,000 note are subordinate 
    to payments due under the $12,200,000 in tax-exempt mortgage bonds.  The 
    Partnership has not recorded the subordinate note on its balance sheet due 
    to it doubtful collectability.  Any interest and principal payments 
    received under the terms of the subordinate note will be recorded as 
    income when received.

6. Investment in Real Estate

During 1997, the Partnership acquired two multi-family properties, The Retreat 
and Jackson Park Place.  The Retreat was financed primarily from proceeds from 
the Partnership's line of credit.  Jackson Park Place was conveyed to the 
Partnership through a deed in lieu of foreclosure (see Note 5).

The Partnership's investment in real estate is comprised of the following at 
September 30, 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         3,935,126            5,231,128
  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)               Port Orange, FL           120            647,000         2,616,648            3,263,648
  The Retreat(5)                       Atlanta, GA               226          1,800,000         7,365,987            9,165,987
  Jackson Park Place                   Fresno, CA                296          1,400,000        10,658,096           12,058,096
                                                                                                              -----------------
                                                                                                                    59,748,383
  Less accumulated depreciation                                                                                     (8,999,239)
                                                                                                              -----------------
  Balance at September 30, 1997                                                                               $     50,749,144
                                                                                                              =================
</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 serves as collateral for $12,200,000 of multi-family revenue 
    refunding bonds issued on Jefferson Place as described in Note 5.







<PAGE>                               - 7 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(UNAUDITED)

7.  Bonds Payable

Bonds payable were originated by the Partnership through the issuance of 
tax-exempt refunding bonds.  Bonds payable at September 30, 1997, consists 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 September 30, 1997				 																																																																						$   6,120,000
																																																																																																								=============
</TABLE>

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 (9% as 
of September 30, 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 $957,871 against the Line of Credit and had $14,042,129 of 
available unused credit as of September 30, 1997 (see note 10).  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 $1,060,377 ($276,190 for 
the quarter ended September 30, 1997).  AFCA 4 or an affiliate also paid 
$314,236 ($100,041 for the quarter ended September 30, 1997) 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 and the acquisition of 
real estate.  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 $247,728 ($134,628 for the quarter ended 
September 30, 1997).  AFCA 4 also received administrative fees of $371,220 in 
conjunction with the Jackson Park Place Settlement Agreement described in Note 
5.  AFCA 4 did not receive any other administrative fees from property owners 
during 1997.




<PAGE>                               - 8 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(UNAUDITED)

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.  The amount of such fees paid to AFCA 4 during 1997 was 
$112,277 (none for the quarter ended September 30, 1997).

The general partner of the property partnership which owns Jefferson Place was 
principally owned by an employee of an affiliate of AFCA 4 through July 30, 
1997.  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.  On July 30, 1997, the Partnership acquired the 
general partnership interest in the property partnership.

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, Park at Countryside (beginning in January 
1997), The Retreat (beginning in April 1997) and Jackson Park Place (beginning 
in May 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 $436,401 
($165,173 for the quarter ended September 30, 1997) in 1997.

10. Subsequent Event

On October 24, 1997, the Partnership acquired Post Trace Apartments, a 
260-unit multi-family housing property located in Norcross, Georgia.  The 
property was acquired at a cost of $14,016,629, including acquisition costs, 
and was financed with 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>                               - 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.  The Prior Partnership subsequently 
acquired five of the properties through foreclosure or deed in lieu of 
foreclosure and one tax-exempt mortgage bond was prepaid in full.  During 
1996, the Prior Partnership acquired Phase I of the Park at Fifty Eight 
Apartments.  

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.

During 1996, the Partnership acquired Park at Countryside and during 1997 the 
Partnership acquired The Retreat.  In addition, Jackson Park Place was 
conveyed to the Partnership during 1997 through a deed in lieu of 
foreclosure.  At September 30, 1997, the Partnership continued to hold one 
tax-exempt mortgage bond with a carrying value, at estimated fair value, of 
$10,606,526 and eight real estate properties acquired with a depreciated cost 
of $50,749,144.

The following table shows the various occupancy levels of the properties 
financed or owned by the Partnership at September 30, 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(1)                  Fresno, CA                                          296            289             98%
Jefferson Place(2)                     Olathe, KS                                          352            340             97%
Avalon Ridge                           Renton, WA                                          356            343             96%
Covey at Fox Valley(1)                 Aurora, IL                                          216            202             94%
The Park at Fifty Eight(3)             Chattanooga, TN                                     196            189             96%
Shelby Heights(1)                      Bristol, TN                                         100             91             91%
Coral Point(1)                         Mesa, AZ                                            336            322             96%
Park at Countryside                    Port Orange, FL                                     120            120            100%
The Retreat                            Atlanta, GA                                         226            214             95%
                                                                                     ----------     ----------     -----------
                                                                                         2,198          2,110             96%
                                                                                     ==========     ==========     ===========
The Exchange at Palm Bay(1)           Palm Bay, FL                                      72,002(4)      42,839(4)          60%
                                                                                     ==========     ==========     ===========
</TABLE>

(1) Property acquired through foreclosure or deed in lieu of foreclosure.
(2) The Partnership's investment consists of a $3,500,000 subordinate note.
(3) Property consists of Phase II (96 units acquired through foreclosure) and 
    Phase I (100 units purchased on May 16, 1996).
(4) Represents square feet.

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.  During 1997, the 
Partnership also received contingent interest of $290,520 on its Jackson Park 
Place mortgage bond.  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 (9% as of September 30, 1997).  The Line of Credit expires on December 
19, 1997; however, the maturity date may be extended up to one year if certain 
conditions are met.  The Partnership anticipates meeting all of the conditions 
necessary to extend the Line of Credit and intends to extend the maturity date 
unless it can complete the refunding of certain of its tax-exempt bonds prior 
to December 19, 1997.  The Partnership had borrowings of $957,871 against the 
Line of Credit and had $14,042,129 of available unused credit as of September 
30, 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.

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 Partnership entered into a Settlement 
Agreement with the owner of Jackson that provided for the Partnership to 
acquire Jackson at appraised value on May 7, 1997.  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), an affiliated fund, representing payment of the outstanding balance of 
its Participating Loan on Jackson; (ii) $69,480 to PREP representing 
contingent interest income on its Participating Loan; (iii) $371,220 to AFCA 4 
and $88,780 to the general partner of PREP representing due and unpaid 
administrative fees; (iv) $290,520 to the Partnership representing contingent 
interest income on the tax-exempt mortgage bonds; and (v) $360,000 to the 
owner of Jackson.  These disbursements were funded with borrowings on the 
Partnership's Line of Credit.  The Partnership also incurred costs of $18,096 
in conjunction with the acquisition.

On July 30,1997, the limited partnership which owns Jefferson Place     
(Jefferson Place L.P.) received proceeds of $12,200,000 from the offering of 
multi-family housing revenue refunding bonds collateralized by Jefferson Place 
and The Retreat.  The Partnership, in turn, received $12,200,000 from 
Jefferson Place L.P. representing full payment of its $12,800,000 in 
tax-exempt mortgage bonds on Jefferson Place.  As a result, the Partnership 
realized a loss of $3,000,000.  Concurrently, the unrealized holding losses 
related to the investment in tax-exempt mortgage bonds, which is a separate 
component of partners' capital, was reduced by $3,000,000.  Proceeds from the 
offering were utilized by the Partnership primarily to pay down the Line of 
Credit.  In addition to receiving $12,200,000 in cash which resulted in a 
liability to Jefferson Place L.P. of $2,400,000, the Partnership also received 
a $3,500,000 subordinate note representing past due interest on the 
$12,800,000 tax-exempt mortgage bonds.  The Partnership did not record this 
past due interest as management considered its collectability to be doubtful.  
Interest on the subordinate note, at the rate of 8.5%, is payable monthly 
solely out of excess cash flow generated by Jefferson Place.  Final payment of 
all outstanding principle and interest is due July 1, 2023.  All payments due 
under the $3,500,000 note are subordinate to payments due under the 
$12,200,000 in tax-exempt mortgage bonds.  The Partnership has not recorded 
the subordinate note on its balance sheet due to it doubtful collectability.  
Any interest and principle payments received under the terms of the 
subordinate note will be recorded as income when received.

On October 24, 1997, the Partnership acquired Post Trace Apartments, a 
260-unit multi-family housing property located in Norcross, Georgia.  The 
property was acquired at a cost of $14,016,629, including acquisition costs, 
and was financed with 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.

During the nine months ended September 30, 1997, $519,219 of undistributed 
income was placed in reserves (a net amount of $12,302 was withdrawn from 
reserves for the quarter ended September 30, 1997).  The total amount held in 
reserves at September 30, 1997, was $1,434,743.  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.  


<PAGE>                               - 11 -
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 Nine          For the Nine
                                                                               		  							 Months Ended          Months Ended
                                                                                         Sept. 30, 1997        Sept. 30, 1996
                                                                                                                   (Combined)
                                                                                         ---------------       ---------------
<S>                                                                                      <C>                   <C>
Regular monthly distributions
 Income (loss)                                                                           $         -           $        .3962
 Return of capital                                                                                .5625                 .1663
                                                                                         ---------------       ---------------
                                                                                         $        .5625        $        .5625
                                                                                         ===============       ===============
Distributions
 Paid out of current and prior undistributed cash flow                                   $        .5625        $        .5625
                                                                                         ===============       ===============
</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 is 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.  

Internal property valuations and reviews performed during the nine months 
ended September 30, 1997, indicated that the mortgage bonds and real estate 
recorded on the balance sheet at September 30, 1997, required no adjustments 
to their current carrying amounts.

Other than the Jefferson Place transaction described under Liquidity and 
Capital Resources, the overall status of the Partnership's other mortgage bond 
and real estate owned has generally remained constant since June 30, 1997.

Results of Operations

The tables below compare the results of operations for each period shown.  
Results of operations for 1996 include the combined accounts of the 
Partnership from August 20, 1996 (the Merger Date), through September 30, 
1996, and the accounts of the Prior Partnership from January 1, 1996, until 
the Merger Date.















<PAGE>                               - 12 -
<TABLE>
<CAPTION>
                                                                              For the             For the            Increase
                                                                        Quarter Ended       Quarter Ended           (Decrease)
                                                                       Sept. 30, 1997      Sept. 30, 1996           From 1996
                                                                                               (Combined)
                                                                       ---------------     ---------------     ---------------
<S>                                                                    <C>                 <C>                 <C>
Mortgage bond investment income                                        $      314,348      $      483,668      $     (169,320)
Rental income                                                               2,572,960           1,481,936           1,091,024
Interest income on temporary cash investments                                   4,684              12,542              (7,858)
                                                                       ---------------     ---------------     ---------------
                                                                            2,891,992           1,978,146             913,846
                                                                       ---------------     ---------------     ---------------
General and administrative expenses                                           342,279             335,636               6,643
Real estate operating expenses                                              1,328,263             803,398             524,865
Depreciation                                                                  508,834             286,715             222,119
Interest expense                                                              246,601              37,953             208,648
Realized loss on disposition of mortgage bond                               3,000,000                -              3,000,000
                                                                       ---------------     ---------------     ---------------
                                                                            5,425,977           1,463,702           3,962,275
                                                                       ---------------     ---------------     ---------------
Net income (loss)                                                      $   (2,533,985)     $      514,444      $   (3,048,429)
                                                                       ===============     ===============     ===============
</TABLE>
<TABLE>
<CAPTION>
                                                                         For the Nine        For the Nine           Increase
                                                                         Months Ended        Months Ended           (Decrease)
                                                                       Sept. 30, 1997      Sept. 30, 1996           From 1996
                                                                                               (Combined)
                                                                       ---------------     ---------------     ---------------
<S>                                                                    <C>                 <C>                 <C>
Mortgage bond investment income                                        $    1,368,296      $    1,600,221      $     (231,925)
Contingent interest income                                                    290,520                -                290,520
Rental income                                                               6,597,118           4,201,506           2,395,612
Interest income on temporary cash investments                                  33,550              37,112              (3,562)
                                                                       ---------------     ---------------     ---------------
                                                                            8,289,484           5,838,839           2,450,645
                                                                       ---------------     ---------------     ---------------
General and administrative expenses                                           881,442             870,677              10,765
Real estate operating expenses                                              3,133,642           2,271,354             862,288
Depreciation                                                                1,319,045             870,258             448,787
Interest expense                                                              793,722              68,315             725,407
Realized loss on disposition of mortgage bond                               3,000,000                -              3,000,000
                                                                       ---------------     ---------------     ---------------
                                                                            9,127,851           4,080,604           5,047,247
                                                                       ---------------     ---------------     ---------------
Net income (loss)                                                      $     (838,367)     $    1,758,235     $    (2,596,602)
                                                                       ===============     ===============     ===============
</TABLE>

Mortgage bond investment income decreased for the quarter and nine months 
ended September 30, 1997, compared to the same periods in 1996.  Approximately 
$186,000 of such decrease for the quarter and $310,000 for the nine months is 
due to the settlement of the Jackson Park Place mortgage bond for real 
estate.  Also contributing to the decrease was a decrease of approximately 
$158,000 for the quarter and $150,000 for the nine months in cash flow 
received from Jefferson Place due to the disposition of the mortgage bond.  
These decreases were partially offset by increases in cash flow received from 
Avalon Ridge of approximately $175,000 and $228,000 for the quarter and nine 
months ended September 30, 1997, respectively.  The increase in cash flow 
received from Avalon Ridge is due primarily to increases in average occupancy 
of 14% and 12% for the quarter and nine months ended September 30, 1997, 
respectively, compared to the same periods in 1996.

The Partnership earned contingent interest income of $290,520 for the nine 
months ended September 30, 1997, in conjunction with the settlement of the 
Jackson Park Place mortgage bond for real estate.  No such income was earned 
for the nine month period ended September 30, 1996.






<PAGE>                               - 13 - 
Rental income increased for the quarter and nine months ended September 30, 
1997, compared to the same periods in 1996.  The increase for the quarter is 
attributable to:  (i) an increase of approximately $1,024,000 due to the 
acquisitions of Park at Countryside in December 1996, The Retreat in April 
1997, and Jackson Park Place in May 1997; (ii) an increase of approximately 
$26,000 from The Park at Fifty Eight due primarily to an increase in average 
occupancy; and (iii) net increases of approximately $41,000 generated by the 
Partnership's other properties.  The increase for the nine months is 
attributable to:  (i) an increase of approximately $2,024,000 due to the 
acquisitions of Park at Countryside, The Retreat, and Jackson Park Place; (ii) 
an increase of approximately $209,000 from The Park at Fifty Eight due 
primarily to the acquisition of Phase I of this property in May 1996; and 
(iii) an increase of approximately $163,000 due to an increase in the average 
occupancy and rental rate increases at Covey at Fox Valley, Coral Point, 
Shelby Heights and The Exchange at Palm Bay. 

Real estate operating expenses increased for the quarter and nine months ended 
September 30, 1997, compared to the same periods in 1996.  The increase for 
the quarter is attributable to:  (i) an increase of approximately $480,000 due 
to the acquisitions of Park at Countryside, The Retreat, and Jackson Park 
Place; and (ii) a net increase of approximately $45,000 in various real estate 
operating expenses at the Partnership's other properties, primarily property 
improvements at Covey at Fox Valley and The Park at Fifty Eight.  Excluding 
property tax refunds of $180,000 received by Covey at Fox Valley during the 
quarter ended March 31, 1997, real estate operating expenses increased 
approximately $1,042,000 for the nine months ended September 30, 1997, 
compared to the same period in 1996.  This increase is attributable to:  (i) 
an increase of approximately $987,000 due to the acquisitions of Park at 
Countryside, The Retreat, and Jackson Park Place; (ii) an increase of 
approximately $26,000 at The Park at Fifty Eight due primarily to the 
acquisition of Phase I of this property; (iii) a net increase of approximately 
$114,000 in various real estate operating expenses at the Partnership's other 
properties, primarily at Coral Point; partially offset by (iv) non-recurring 
leasing commissions of $85,000 incurred at the Exchange at Palm Bay during the 
nine months ended September 30, 1996. 

Depreciation expense increased for the quarter and nine months ended September 
30, 1997, compared to the same periods in 1996, primarily attributable to 
property acquisitions made during 1996 and 1997 and to real estate capital 
improvements made at the Exchange at Palm Bay during 1996 and 1997.

Interest expense incurred during the quarter and nine months ended September 
30, 1997, consisted of interest incurred on the Line of Credit and bonds 
payable.  The Partnership did not have a Line of Credit during such periods in 
1996 and therefore incurred no interest expense thereon.  Interest expense 
incurred during 1997 on bonds payable consisted of interest on bonds issued in 
May 1996 and March 1997.  During 1996 the Partnership only incurred interest 
expense on bonds issued in May 1996.

The decrease in interest income on temporary cash investments for the quarter 
and nine months ended September 30, 1997, compared to the same periods in 1996 
is primarily due to a decrease in the balance of and average interest rate 
earned on the Partnership reserves during 1997.

General and administrative expenses increased for the quarter and nine months 
ended September 30, 1997, compared to the same periods in 1996.  The increase 
for the quarter is attributable to:  (i) an increase in administrative fees of 
approximately $78,000 due to the acquisition of new properties during 1996 and 
1997; (ii) an increase in salaries and related expenses of approximately 
$29,000; (iii) net increases in other general and administrative expenses of 
approximately $3,000; partially offset by (iv) non-recurring costs of 
approximately $103,000 incurred in 1996 in conjunction with the merger of the 
Partnership with the Prior Partnership.  The increase for the nine months is 
attributable to:  (i) an increase in salaries and related expenses of $97,000; 
(ii) an increase in administrative fees of approximately $78,000 as described 
above; (iii) net increases in other general and administrative expenses of 
approximately $14,000; partially offset by (iv) non-recurring costs of 
approximately $178,000 incurred in 1996 in conjunction with the merger 
described above.

During the quarter and nine months ended September 30, 1997, the Partnership 
realized a loss of $3,000,000 on the disposition of its tax-exempt mortgage 
bond on Jefferson Place (see discussion under Liquidity and Capital Resources).


<PAGE>                               - 14 -
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)).

              10(d) Settlement Agreement among the Registrant and Jackson Park 
                    Place, Artel Farms, Inc., and David A. Dyck dated April 
                    11, 1997 (incorporated herein by reference to Form 10-Q 
                    dated June 30, 1997 filed pursuant to Section 13 or 15(d) 
                    of the Securities Exchange Act of 1934 by America First 
                    Apartment Investors, L.P. (Commission File No. 0-20737)).

          (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>                               - 15 -
	                                  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:  November 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>                               - 16 -