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, 1998 or

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

For the transition period from               to

Commission File Number:  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, 1998       Dec. 31, 1997
                                                                                             --------------      --------------
<S>                                                                                          <C>                 <C>
Assets
 Cash and temporary cash investments, at cost which
  approximates market value (Note 4 and Note 7)                                              $  20,732,149       $   7,879,934
 Investment in real estate, net of accumulated depreciation (Note 5)                            88,672,383          64,267,471
 Investment in tax-exempt mortgage bonds, at estimated fair value (Note 6)                            -             13,006,526
 Interest receivable                                                                               161,869             108,623
 Other assets                                                                                    2,211,569           1,860,968
                                                                                             --------------      --------------
                                                                                             $ 111,777,970       $  87,123,522
                                                                                             ==============      ==============
Liabilities and Partners' Capital
 Liabilities
  Accounts payable (Note 9)                                                                  $   2,709,350       $   1,861,162
  Bonds payable (Note 7)                                                                        39,941,949          27,035,000
		Mortgage loan payable	(Note 7)																																																																	5,754,470																-			
  Due to Jefferson Place L.P.                                                                    2,400,000           2,400,000
  Distribution payable (Note 3)                                                                    351,163             329,051
                                                                                             --------------      --------------
                                                                                                51,156,932          31,625,213
                                                                                             --------------      --------------
 Partners' Capital
  General Partner                                                                                   19,208               7,037
  Beneficial Unit Certificate Holders
  ($11.63 per BUC in 1998 and $10.65 in 1997)                                                   60,601,830          55,491,272
                                                                                             --------------      --------------
                                                                                                60,621,038          55,498,309
                                                                                             --------------      --------------
                                                                                             $ 111,777,970       $  87,123,522
                                                                                             ==============      ==============

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        For the Nine        For the Nine
                                                     Quarter Ended       Quarter Ended        Months Ended        Months Ended
                                                    Sept. 30, 1998      Sept. 30, 1997      Sept. 30, 1998      Sept. 30, 1997
                                                    ---------------     ---------------     ---------------     ---------------
<S>                                                 <C>                 <C>                 <C>                 <C>
Income
 Rental income                                      $    3,413,418     $     2,572,960     $ 	   9,760,354      $   	6,597,118
 Mortgage bond investment income                           			-				            314,348             839,201           1,368,296
 Contingent interest income                                   -                    -           						 -                290,520
 Interest income on temporary cash investments             495,924             	 4,684             883,829              33,550
                                                    ---------------     ---------------     ---------------     ---------------
                                                         3,909,342	          2,891,992          11,483,384           8,289,484
                                                    ---------------     ---------------     ---------------     ---------------
Expenses
 Real estate operating expenses                          1,614,811           1,328,263           4,615,358           3,133,642
 Depreciation                                              614,274             508,834           1,842,821        	  1,319,045
 Interest expense                                          579,667             246,601           1,621,556             793,722
 General and administrative expenses (Note 9)              352,414             342,279           1,045,825             881,442
	Realized loss on disposition of mortgage	bond																-														3,000,000																-														3,000,000
                                                    ---------------     ---------------     ---------------     ---------------
                                                         3,161,166           5,425,977           9,125,560        	  9,127,851
                                                    ---------------     ---------------     ---------------     ---------------
Net income                                          $   	 748,176    		 $   (2,533,985)     $    2,357,824    	 $   	 (838,367)
                                                    ===============     ===============     ===============     ===============
Net income allocated to:
 General Partner                                    $       13,624      $        9,749      $       42,006      $       31,902
 BUC Holders                                           		  734,552          (2,543,734)          2,315,818          	 (870,269)
                                                    ---------------     ---------------     ---------------     ---------------
                                                    $   		 748,176      $   (2,533,985)     $    2,357,824      $   		(838,367)
                                                    ===============     ===============     ===============     ===============
Net income, basic and diluted, per BUC              $          .14      $         (.49)     $          .44      $     	  	(.16)
                                                    ===============     ===============     ===============     ===============
Weighted average number of BUCs outstanding              5,212,167           5,212,167           5,212,167           5,212,167
                                                    ===============     ===============     ===============     ===============
</TABLE>

AMERICA FIRST APARTMENT INVESTORS, L.P.
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                                  
                                                                                 
                                                           General						Beneficial Unit	
                                                           Partner      Certificate Holders          Total
                                                    ---------------     ---------------     ---------------
<S>                                                 <C>                 <C>                 <C>
Partners' Capital (excluding net unrealized
 holding losses):
Balance at December 31, 1997                                 7,037          61,239,746          61,246,783
Net income                                                  42,006           2,315,818           2,357,824
Cash distributions paid or accrued (Note 3)
 Income                                                    (29,835)         (1,110,913)         (1,140,748)
 Return of capital                                            -             (1,842,821)         (1,842,821)
                                                    ---------------     ---------------     ---------------
                                                            19,208        	 60,601,830          60,621,038
                                                    ---------------     ---------------     ---------------
Net unrealized holding losses:
Balance at December 31, 1997                                  -        	    (5,748,474)         (5,748,474)
Net change (Note 6)                                           -              5,748,474           5,748,474
                                                    ---------------     ---------------     ---------------
                                                              -                   -                   -
                                                    ---------------     ---------------     ---------------
Balance at September 30, 1998                       $       19,208   			$   60,601,830      $   60,621,038
                                                    ===============     ===============     ===============

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 Nine        For the Nine
                                                                                              Months Ended        Months Ended
                                                                                            Sept. 30, 1998      Sept. 30, 1997
                                                                                            ---------------     ---------------
<S>                                                                                         <C>                 <C>
Cash flows from operating activities
 Net income	(loss)                                                                     					$    2,357,824      $  		 (838,367)
  Adjustments to reconcile net income to net cash
   provided by operating activities
				Depreciation                                                                              			1,842,821      			  1,319,045
				Amortization                                                                                			114,029             123,695
				Loss on disposition of mortgage bond																																																														-														3,000,000
    (Increase) decrease in interest	receivable                                                     (53,246)            121,538
    (Increase) decrease in other assets                                                           (199,401)            357,938
    Increase (decrease) in accounts payable                                                     			848,188          	  (51,026)
                                                                                            ---------------     ---------------
 Net cash provided by operating activities                                                       4,910,215           4,032,823
                                                                                            ---------------     ---------------
Cash flows from investing activities
 Real estate capital improvements                                                                   (3,135)           (626,066)
 Acquisition of real estate                                                                    (20,490,128)        (12,482,277)
 Proceeds from disposition of mortgage bond                                                     18,755,000  								12,200,000
                                                                                            ---------------     ---------------
 Net cash used in investing activities   														                                         (1,738,263)         		(908,343)
                                                                                            ---------------     ---------------
Cash flows from financing activities
 Distributions paid                                                                             (2,961,457)         (2,961,459)
 Bond issuance costs paid                                                                         (265,229)       	   (601,895)
 Net borrowings on line of credit                                                                     -          	  (2,626,329)
 Proceeds from issuance of bonds payable                                                        13,090,000           3,450,000
 Principal payments on bonds payable                                                              (183,051)            (80,000)
                                                                                            ---------------     ---------------
 Net cash provided by (used in) financing activities                                          	  9,680,263          (2,819,683)
                                                                                            ---------------     ---------------
Net increase in cash and temporary cash investments                                             12,852,215             304,797
Cash and temporary cash investments at beginning of period                                       7,879,934           2,021,860
                                                                                            ---------------     ---------------
Cash and temporary cash investments at end of	period                                        $   20,732,149      $    2,326,657
                                                                                            ===============     ===============
Supplemental disclosure of cash flow information:
 Cash paid during the period for interest                                                   $    1,339,946  	   $      692,847
                                                                                            ===============     ===============
Supplemental schedule of non-cash investing activities
 Settlement of mortgage bond for real estate                                                $         -         $    8,760,000
	Due to Jefferson Place L.P. 																																																																																								2,400,000
                                                           																												     ===============     ===============
Supplemental disclosure of non-cash financing activity
	Acquisition of real estate through assumption of mortgage note payable																					$				5,754,470						$										-					
																																																																																												===============     ===============

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
SEPTEMBER 30, 1998
(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
multifamily residential properties and other types of commercial real estate
and interests therein.  The Partnership commenced operations on August 20,
1996, when it 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 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,
    1997.  In the opinion of management, all normal and recurring adjustments
    necessary to present fairly the financial position at September 30, 1998,
    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 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
    property is periodically reviewed and adjusted when there are significant
    declines in the estimated net realizable value (see Note 2D).

    Depreciation of real estate is based on the estimated useful life of the
    property (27-1/2 years on multifamily residential apartments and 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.

 C) 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.


<PAGE>                               - 4 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(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.

 D) Fair Value of Real Estate
    The fair value of the real estate is based on management's best estimate
    of the net realizable value of the properties which may differ from the
    ultimate values realized from these properties.  The net realizable value
    of the properties is determined based on the discounted estimated future
    cash flows from the properties, including estimated sales proceeds.  The
    calculation of discounted estimated future cash flows includes certain
    variables such as the assumed inflation rates for rents and expenses,
    capitalization rates and discount rates.  These variables are supplied to
    the Partnership by an independent real estate appraisal firm based upon
    local market conditions for each property.  In certain cases, additional
    factors such as the replacement value of the property or comparable sales
    of similar properties are also taken into consideration.

 E) 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.

 F) Temporary Cash Investments
    Temporary cash investments are invested in short-term debt securities
    purchased with an original maturity of three months or less.

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

 H) Comprehensive Income
    In the first quarter of 1998, the Partnership adopted Statement of
    Financial Accounting Standards No. 130, "Reporting Comprehensive Income"
    (SFAS 130).  SFAS 130 requires the display and reporting of comprehensive
    income, which includes all changes in Partners' Capital with the exception
    of additional investments by partners or distributions to partners.
    Comprehensive income for the Partnership includes net income and the
    change in net unrealized holding losses on investments charged or credited
    to Partners' Capital.  Comprehensive income for the quarter and nine months
    ended September 30, 1998, compared to the same periods in 1997 was as
			 follows:

<TABLE>
<CAPTION>
                                                           For the             For the        For the Nine        For the Nine
																																																					Quarter Ended       Quarter Ended        Months Ended        Months Ended
                                                    Sept. 30, 1998      Sept. 30, 1997      Sept. 30, 1998      Sept. 30, 1997
                                                    ---------------     ---------------     ---------------     ---------------
<S>                                                 <C>                 <C>                 <C>                 <C>
Net income                                          $    		748,146      $   (2,533,985)      $    2,357,824      $  	  (838,367)
Change in net unrealized holding gains														     5,748,474                -             	 5,748,474                -
                                                    ---------------     ---------------     ---------------     ---------------
Comprehensive income                                $    6,496,620      $   (2,533,985)      $    8,106,298      $     (838,367)
																																																				===============     ===============     ===============     ===============
</TABLE>

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.




<PAGE>                               - 5 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(UNAUDITED)

4. Partnership Reserve Account

The Partnership maintains a reserve account which totaled $12,446,704 at 
September 30, 1998. 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 real 
estate acquired and the operation of the Partnership, including the 
acquisition of additional properties.

5. Investment in Real Estate

The Partnership's investment in real estate is comprised of the following:
<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         3,993,084            5,289,086
  The Park at Fifty Eight(1)   	       Chattanooga, TN           196            231,113         4,122,226            4,353,339
  Shelby Heights(1)                    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(1)               Port Orange, FL           120            647,000         2,616,648            3,263,648
  The Retreat(3)                       Atlanta, GA               226          1,800,000         7,315,697            9,115,697
  Jackson Park Place(1)                Fresno, CA                296          1,400,000        10,709,534           12,109,534
  Park Trace Apartments(1)             Norcross, GA              260          2,246,000        11,789,810           14,035,810
		Littlestone at Village Green (1)					Gallatin, TN														200												508,000									9,949,572											10,457,572
		St. Andrews	at Westwood Apartments			Orlando, FL															259										1,642,000								14,150,113  				     15,792,113	
                                                                                                              -----------------
                                                                                                                   100,092,984
  Less accumulated depreciation                                                                                    (11,420,601)
                                                                                                              -----------------
  Balance at September 30, 1998                                                                               $     88,672,383
                                                                                                              =================
</TABLE>
(1) Property is encumbered as described in Note 7.
(2) Represents square feet.
(3) Property serves as collateral for $12,200,000 of multifamily revenue
    refunding bonds issued on Jefferson Place.  The Partnership is an
    affiliate of the general partner of the partnership which owns Jefferson
    Place.

6. Investment in Tax-Exempt Mortgage Bonds

On May 1, 1998, the Partnership sold its tax-exempt mortgage bond which was
collateralized by Avalon Ridge Apartments in Renton, Washington.  The
tax-exempt mortgage bond was sold for $18,755,000 plus accrued interest.  The
net unrealized holding loss of $5,748,474 on such bond was eliminated thus
Partners' Capital was increased by the same amount.




















<PAGE>                               - 6 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(UNAUDITED)

7.  Bonds Payable and Mortgage Loan Payable

Bonds payable were originated by the Partnership through the issuance of 
tax-exempt refunding bonds.  The mortgage loan payable was assumed from a 
third party in connection with the acquisition of Village Green Apartments.  
Bonds payable and the mortgage loan payable consists of the following at 
September 30, 1998:

<TABLE>
<CAPTION>

                        Effective Final
                        Interest  Maturity                                      Annual            	         	Carrying
Collateral              Rate      Date      Payment Schedule                    Payments    		      				       Amount
----------------------- --------- --------  ----------------------------------- ---------------------   -------------
<S>                     <C>       <C>       <C>                                 <C>                     <C>
Bonds Payable:
The Park at Fifty Eight   6.65%   3/1/2021  semiannual payments of              range from $224,000     $  2,620,000
 					    																																		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        3,380,000
 Park at Countryside                        principal and/or interest           to $276,000
                                            are due each March 1 and September 1

Covey at Fox Valley       5.30%  11/1/2007  semiannual payments of              $586,000 in 1998,         12,410,000
 and Park Trace Apartments                  interest are due each May 1         $658,000 thereafter
                                            and November 1

Jackson Park Place        5.80%  12/1/2027  monthly payment of                  $611,901                   8,441,949
                                            principal and interest
                                            are due the 1st of each month

Coral Point(1)            4.96%   3/1/2008  semiannual payments of              $325,016 in 1998,									13,090,000												
                                            interest are due each               $650,033 thereafter					-------------														
                                            March 1 and September 1                                     	 39,941,949 
																																																																																																								-------------
Mortgage Loan Payable:
Village Green Apartments  7.68%		9/15/2005	 Monthly payment of 																	$542,921																			5,754,470
																																												principal and interest																																						-------------
																																												are due the 15th of each month																														
                                                                                                        
Balance at September 30, 1998				  																																														 			                   $ 45,696,419
																																																																																																								=============
</TABLE>
(1) Bonds are also collateralized by $6,571,000 in cash.

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 
may provide interim financing for the acquisition of multifamily residential 
properties.  It expires on December 19, 1998.  The Line of Credit bears 
interest, which is payable monthly, at 1/2% above the Bank's base rate (which 
base rate was 8.5% as of September 30, 1998).  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.  Because the Partnership had no collateral 
pledged at September 30, 1998, the Partnership's borrowing base under the Line 
of Credit was zero.  The Partnership may provide collateral for the Line of 
Credit, subject to the approval of the Bank, to change its borrowing base.  
The Partnership did not have any borrowings against the Line of Credit at 
September 30, 1998.  The Line of Credit contains convenants which include, 
among others, restrictions on the amount of indebtedness the Partnership may 
incur and minimum debt service coverage requirements.







<PAGE>                               - 7 -
AMERICA FIRST APARTMENT INVESTORS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(UNAUDITED)

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 1998 was $801,836 ($183,098 for 
the quarter ended September 30, 1998).  AFCA 4 or an affiliate also paid 
$187,390 ($36,707 for the quarter ended September 30, 1998) in costs 
capitalized by the Partnership during 1998 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 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 in 1998 was $334,124 ($111,374 for the quarter ended September
30, 1998.

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.  AFCA 4 earned acquisition fees of $323,980 during the 
quarter and nine months ended September 30, 1998.

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 (through April 1998), Park at Countryside, The 
Retreat, Jackson Park Place and Park Trace Apartments.  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 $504,390 in 1998 ($157,559 for the quarter 
ended September 30, 1998).





































<PAGE>                               - 8 -
     Item 2.  Management's Discussion and Analysis of Financial Condition and
														Results of Operations

Liquidity and Capital Resources

The Partnership's principal capital resources at September 30, 1998 consisted 
of ten apartment complexes and one office/warehouse facility which had a 
combined depreciated cost of $88,672,383 as of that date.  The following table 
sets forth certain information regarding the Partnership's real estate as of 
September 30, 1998:

<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            294             99%
Covey at Fox Valley                    Aurora, IL                           216            205             95%
The Park at Fifty Eight                Chattanooga, TN                      196            189             96%
Shelby Heights                         Bristol, TN                          100             93             93%
Coral Point                            Mesa, AZ                             336            325             97%
Park at Countryside                    Port Orange, FL                      120            119             99%
The Retreat                            Atlanta, GA                          226            224             99%
Park Trace Apartments                  Norcross, GA                         260            250             96%
Littlestone at Village Green 										Gallatin, TN																									200												185													93%
St. Andrews at Westwood Apartments					Orlando, FL																										259												252													97%
                                                                        ----------     ----------     -----------
                                                                          2,209          2,136             97%
                                                                        ==========     ==========     ===========
The Exchange at Palm Bay               Palm Bay, FL                      72,002(1)      60,900(1)          85%
                                                                        ==========     ==========     ===========
</TABLE>
(1) Represents square feet.

Five of the apartment complexes and the office/warehouse facility were 
acquired by the Partnership through a merger with America First Tax Exempt 
Mortgage Fund 2 Limited Partnership (the Prior Partnership) on August 20, 
1996.  The Partnership also acquired three tax-exempt mortgage bonds secured 
by additional apartment complexes as a result of the merger.  The total 
principal balance of these bonds equaled $40,315,000.  During 1997, the 
Partnership acquired The Retreat, Park Trace Apartments and Jackson Park Place 
Apartments.  Jackson Park Place Apartments was acquired through delivery of a 
deed in lieu of foreclosure of the tax-exempt bonds that the Partnership held 
on this property.  In addition, during 1997 the Partnership was repaid on one 
of its tax-exempt mortgage bonds.  In May 1998, the Partnership sold its 
remaining tax-exempt bond.  The Partnership acquired Littlestone at Village 
Green and St. Andrews at Westwood Apartments in September 1998.  The purchase 
price paid for Village Green Apartments was $10,457,572 and for St. Andrews at 
Westwood Apartments was $15,792,113.

The principal sources of funds used by the Partnership to finance the 
acquisition of additional apartment complexes are:  (i) proceeds from the 
issuance of tax exempt mortgage bonds secured by the Partnership's existing 
and/or the acquired apartment complexes, (ii) a $15 million revolving line of 
credit (the Line of Credit) with First National Bank of Boston (the Bank), 
(iii) the net proceeds from the sale or disposition of tax-exempt bonds 
acquired in the merger with the Prior Partnership and (iv) the assumption of 
existing indebtedness on properties acquired.

The Partnership has borrowed a total of $40,205,000 through the 
issuance of five tax-exempt mortgage bonds.  As of September 30, 1998, the 
aggregate outstanding principal balances of these bonds equaled $39,941,949.  
The principal of two of the bonds do not amortize and are due in full at 
maturity.  Maturity dates range from November 2007 to December 2027.  These 
bonds bear interest at rates ranging from 4.96% to 6.65% per annum.  Each bond 
is a "non-recourse" obligation that is secured by a first mortgage or deed of 
trust on one or two of the Partnership's apartment complexes.  Principal and 
interest payments on the bonds are made solely from the net cash flow and/or 
net sale or refinancing proceeds of the mortgaged properties.





<PAGE>                               - 9 - 
The Partnership has also assumed a taxable mortgage loan in connection with 
the acquisition of Village Green Apartments.  As of September 30, 1998, the 
outstanding balance of this mortgage loan was $5,754,470.  This mortgage loan 
bears interest at the rate of 7.68% per annum.  In addition to interest, the 
loan requires monthly payments of principal through maturity on September 15, 
2005.

The Line of Credit may also be drawn upon by the Partnership to provide 
interim financing for the acquisition of apartment complexes.  The Line of 
Credit will expire in December 1998.  The Partnership did not have any 
outstanding borrowings under the Line of Credit as of September 30, 1998.  Any 
borrowings under the Line of Credit bear interest at 1/2% above the Bank's base
rate (which base rate was 8.5% per annum as of September 30, 1998).  Because 
the Partnership had no collateral pledged at September 30, 1998, the 
Partnership's borrowing base under the Line of Credit was zero.  The 
Partnership may provide collateral for the Line of Credit, subject to the 
approval of the Bank, to change its borrowing base.  The Line of Credit 
agreement contains various covenants, including restrictions on the total 
indebtedness of the Partnership and minimum debt service coverage requirements.

In May 1998, the Partnership sold its tax-exempt mortgage bond secured by 
Avalon Ridge Apartments in Renton, Washington.  The net cash proceeds realized 
by the Partnership from the sale of this bond were 
$18,755,000.  

In addition to making property acquisitions, the Partnership requires cash to 
pay its operating expenses and for periodic distributions to its BUC holders.  
On September 1, 1998, the Partnership increased the annual distribution rate 
from $.75 per BUC ($.0625 per month) to $.80 per BUC ($.0667) effective with 
the September distribution payable in October.  The following table sets forth 
information regarding cash distributions paid to BUC holders during the 
periods shown:

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, 1998        Sept. 30, 1997
                                                                                         ---------------       ---------------
<S>                                                                                      <C>                   <C>
Regular monthly distributions
	Income                                                                                  $        .2131       $          -  
	Return of capital                                                                           					.3536                 .5625
                                                                                         ---------------       ---------------
                                                                                         $        .5667        $        .5625
                                                                                         ===============       ===============
Distributions
	Paid out of current and prior undistributed cash flow                                   $        .5667      $   		     .5625
                                                                                         ===============       ===============
</TABLE>

The principal sources of cash available for the payment of expenses and 
distributions are:  (i) net rental revenues generated by the Partnership's real 
estate, (ii) interest income earned on temporary investments and (iii) amounts 
held in the Partnership's reserves.  As of September 30, 1998, the amount held 
by the Partnership in the reserve equaled $12,446,704.  During the nine months 
ended September 30, 1998, a total of $877,796 ($230,856 during the quarter 
ended September 30, 1998) of undistributed income was added to the reserve.  
Future distributions to BUC holders will depend on the amount of net rental 
income and interest income earned the Partnership and the amount available in 
the reserve.  The Partnership believes that the cash provided by net rental 
income and interest income, supplemented, if necessary, by withdraws from its 
reserve, will be adequate to meet its projected short-term and long-term 
liquidity requirements.  Under the terms of its Partnership Agreement, the 
Partnership has the authority to enter into short-term and long-term debt 
financing arrangements.  However, the Partnership currently does not 
anticipate entering into such arrangements for purposes of paying expenses and 
making distributions.  However, in connection with the acquisition of 
additional real estate, the Partnership does expect to borrow additional 
amounts through the issuance of tax-exempt mortgage bonds or through the 
assumption of existing taxable mortgage debt.  The Partnership is not 
authorized to issue additional BUCs to meet short-term or long-term liquidity 
requirements.
<PAGE>                               - 10 -

Asset Quality

It is the policy of the Partnership to make a periodic review of its real
estate and adjust, when necessary, the carrying value of such real estate.
Each real estate property held by the Partnership is recorded at the lower of
cost or net realizable value.  The carrying value of each real estate property
owned by the Partnership 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, 1998, indicated that the real estate recorded on the 
balance sheet at September 30, 1998, required no adjustments to the current 
carrying amount.

Results of Operations

The tables below compare the results of operations for each period shown.

<TABLE>
<CAPTION>
                                                                              For the             For the            Increase
                                                                        Quarter Ended       Quarter Ended           (Decrease)
                                                                       Sept. 30, 1998     	Sept. 30, 1997           From 1997
                                                                       ---------------     ---------------     ---------------
<S>                                                                    <C>                 <C>                 <C>
Rental income                                                          $    3,413,418      $    2,572,960      $    	 840,458
Mortgage bond investment income                                               			-          				 	314,348   			   	  (314,348)
Interest income on temporary cash investments                                 495,924            	 	4,684           	 491,240
                                                                       ---------------     ---------------     ---------------
                                                                            3,909,342           2,891,992         		1,017,350
                                                                       ---------------     ---------------     ---------------
Real estate operating expenses                                              1,614,811           1,328,263             286,548
Depreciation                                                                  614,274             508,834           	 105,440
Interest expense                                                              579,667             246,601          	  333,066
General and administrative expenses                                           352,414             342,279            	 10,135
Realized loss on disposition of mortgage bond																																				-														3,000,000										(3,000,000)
																																																																							---------------     ---------------     ---------------
                              																																													 3,161,166	          5,425,977        	 (2,264,811)
                                                                       ---------------     ---------------     ---------------
Net income                                                             $   			748,176    	  $  (2,533,985)    	$ 		 3,282,161
                                                                       ===============     ===============     ===============
</TABLE>
<TABLE>
<CAPTION>
                                                                         For the Nine        For the Nine            Increase
                                                                         Months Ended        Months Ended           (Decrease)
                                                                       Sept. 30, 1998       Sept. 30, 1997          From 1997
                                                                       ---------------     ---------------     ---------------
<S>                                                                    <C>                 <C>                 <C>
Rental income                                                          $    9,760,354      $    6,597,118      $    3,163,236
Mortgage bond investment income                                               839,201           1,368,296            (529,095)
Contingent interest                                                              -                290,520            (290,520)
Interest income on temporary cash investments                                 883,829              33,550             850,279
                                                                       ---------------     ---------------     ---------------
                                                                           11,483,384           8,289,484           3,193,900
                                                                       ---------------     ---------------     ---------------
Real estate operating expenses                                              4,615,358           3,133,642           1,481,716
Depreciation                                                                1,842,821           1,319,045            	523,776
Interest expense                                                            1,621,556         	 	 793,722             827,834
General and administrative expenses                                         1,045,825             881,442             164,383
Realized loss on disposition of mortgage bond																																				-														3,000,000										(3,000,000)
                                                                       ---------------     ---------------     ---------------
                                                                            9,125,560           9,127,851          			 (2,291)
                                                                       ---------------     ---------------     ---------------
Net income                                                             $    2,357,824      $   	 (838,367)     $ 			3,196,191
                                                                       ===============     ===============     ===============
</TABLE>








<PAGE>                               - 11 -

Rental income increased for the quarter and nine months ended September 30, 
1998, compared to the same periods in 1997.  The increase for the quarter was 
primarily attributable to:  (i) a $560,000 increase resulting from the 
acquisition of Park Trace Apartments in October 1997; (ii) a $24,000 increase 
resulting from the acquisition of Jackson Park Place in the settlement of the 
mortgage bond secured by this property in May 1997; (iii) a $95,000 increase 
in rental income at Coral Point due primarily to an increase in occupancy (iv) 
a $86,000 increase resulting from the acquisition of The Retreat in April 
1997; (v) a $61,000 increase resulting from an increase in leased space at The 
Exchange at Palm Bay; and (vi) a $14,000 increase in rental income at the 
Partnership's other properties.  The increase for the nine months was 
primarily attributable to:  (i) a $1,491,000 increase resulting from the 
acquisition of Park Trace Apartments in October 1997; (ii) a $627,000 increase 
resulting from the acquisition of Jackson Park Place in the settlement of the 
mortgage bond secured by this property in May 1997; (iii) a $569,000 increase 
resulting from the acquisition of The Retreat in April 1997; (iv) a $224,000 
increase in rental income at Coral Point due primarily to an increase in 
occupancy (v) a $174,000 increase resulting from an increase in leased space 
at The Exchange at Palm Bay; and (vi) a $78,000 increase in rental income at 
the Partnership's other properties.

As a result of the May 1, 1998 sale of the tax exempt mortgage bond 
collateralized by Avalon Ridge and the July 1997 disposition of the tax-exempt 
mortgage bond secured by Jefferson Place the Partnership did not earn 
mortgage bond investment income during the quarter ended September 30, 1998 
whereas the Partnership earned $314,348 of such income during the comparable 
period of 1997.

Mortgage bond investment income decreased for the nine months ended September 
30, 1998, compared to the same period in 1997.  The decrease is primarily 
attributable to:  (i) a $525,000 decrease resulting from the disposition of 
the tax-exempt mortgage bond secured by Jefferson Place in July 1997; (ii) a 
$249,000 decrease resulting from the acquisition of Jackson Park Place in 
settlement of the mortgage bond for real estate in May 1997; partially offset 
by (iii) a $205,000 increase in cash flow received from the tax-exempt bond 
secured by Avalon Ridge which was sold on May 1, 1998.

The Partnership earned contingent interest income of $290,520 for the nine 
months ended September 30, 1997, in conjunction with the acquisition of 
Jackson Park Place in settlement of the mortgage bond in May 1997.  No such 
income was earned for nine month period ended September 30, 1998.

Real estate operating expenses increased for the quarter ended September 30, 
1998, compared to the same period in 1997.  This increase is attributable to:  
(i) a $206,000 increase resulting from the acquisition of Park Trace 
Apartments in October 1997; (ii) a $25,000 increase resulting from the 
acquisition of The Retreat in April 1997; and (iii) a $56,000 overall increase 
in real estate operating expenses at the Partnerships other properties.

Excluding property tax refunds of approximately $180,000 received during the 
quarter ended March 31, 1997, real estate operating expenses increased 
$1,301,716 for the nine months ended September 30, 1998, compared to the same 
period in 1997.  This increase is attributable to:  (i) a $655,000 increase 
resulting from the acquisition of Park Trace Apartments in October 1997; (ii) 
a $306,000 increase resulting from the acquisition of Jackson Park Place in 
May 1997; (iii) a $287,000 increase resulting from the acquisition of The 
Retreat in April 1997; and (iv) a $54,000 increase in real estate operating 
expenses at the Partnerships other properties.

Depreciation expense increased for the quarter and nine months ended September 
30, 1998, compared to the same periods in 1997.  The increase for the quarter 
is primarily attributable to the acquisition of Park Trace Apartments in 
October 1997.  The increase for the nine months is primarily attributable to:  
(i) a $321,000 increase resulting from the acquisition of Park Trace 
Apartments in October 1997; (ii) a $129,000 increase resulting from the 
acquisition of Jackson Park Place in May 1997; (iii) a $67,000 increase 
resulting from the acquisition of The Retreat in April 1997; and (iv) a $7,000 
increase in depreciation expense on the Partnership's other properties.







<PAGE>                               - 12 -

Interest expense increased for the quarter and nine months ended September 30, 
1998, compared to the same periods in 1997.  This increase is attributable to 
interest expense of $295,000 and $934,000 incurred for the quarter and nine 
months ended September 30, 1998, respectively, on bonds payable of $20,915,000 
which were issued in December 1997 and interest of $170,000 and $340,000 
incurred for the quarter and nine months ended September 30, 1998, on bonds 
payable of $13,090,000 issued in April 1998.  The increase in interest expense 
for the quarter was partially offset by a decrease in interest of $132,000 due 
primarily to the reduction of the average amount borrowed by the Partnership 
on its Line of Credit used to acquire new properties.  Contributing to the 
increase for the nine months ended September 30, 1998, compared to the same 
period in 1997, was an increase in interest expense of $46,000 incurred on 
bonds payable issued in March 1997 which was partially offset by a decrease of 
$492,000 in interest expense on the Partnership's Line of Credit.

Interest income on temporary cash investments increased for the quarter and
nine months ended September 30, 1998, compared to the same periods in 1997 due
primarily to an increase in the average reserve balance. Additions made to the
Partnership reserves during 1997 and 1998 were attributable primarily to the
temporary investment of proceeds from the offerings of multifamily housing
revenue refunding bonds and proceeds received from the disposition of the
Avalon Ridge mortgage bond.

General and administrative expenses for the quarter were essentially unchanged 
from those incurred during the same period of 1997.  The increase in general 
and administrative expenses for the nine months ended September 30, 1998, 
compared to the same period in 1997 is primarily due to:  (i) an increase of 
approximately $86,000 in administrative fees resulting from the acquisition of 
additional properties during 1997 and (ii) net increases of approximately 
$78,000 in other general and administrative expenses.

During the quarter and nine months ended September 30, 1997, the Partnership 
realized a $3,000,000 loss on the disposition of its tax-exempt mortgage bond 
secured by Jefferson Place.

Year 2000

The Partnership does not own or operate its own computer system and owns no 
business or other equipment.  However, the operation of the Partnership's 
business relies on the computer system and other equipment maintained by 
America First Companies L.L.C., the parent company of its general partner 
("America First").  In addition, the Partnership has business relationships 
with a number of third parties whose ability to perform their obligations to 
the Partnership depend on such systems and equipment.  Some or all of these 
systems and equipment may be affected by the inability of certain computer 
programs and embedded circuitry to correctly recognize dates occurring after 
December 31, 1999.  America First has adopted a plan to deal with this 
so-called "Year 2000 problem" with respect to its information technology 
("IT") systems, non-IT systems and third party business relationships.

State of Readiness

The IT system maintained by America First consists primarily of personal 
computers, most of which are connected by a local area network.  All 
accounting and other record keeping functions relating to the Partnership that 
are conducted in house by America First are performed on this PC-LAN system.  
America First does not own or operate any "mainframe" computer systems.  The 
PC-LAN system runs software programs that America First believes are 
compatible with dates after December 31, 1999.  America First has engaged a 
third party computer consulting firm to review and test its PC-LAN system to 
ensure that it will function correctly after that date and expects that this 
process, along with any necessary remediation, will be completed by March 31, 
1999.  America First believes any Year 2000 problems relating to its IT 
systems will resolved without significant operational difficulties.  However, 
there can be no assurance that testing will discover all potential Year 2000 
problems or that it will not reveal unanticipated material problems with the 
America First IT systems that will need to be resolved.








<PAGE>                               - 13 -

Non-IT systems include embedded circuitry such as microcontrollers found in 
telephone equipment, security and alarm systems, copiers, fax machines, mail 
room equipment, heating and air conditioning systems and other infrastructure 
systems that are used by America First in connection with the operation of the 
Partnership's business.  America First is reviewing its non-IT systems along 
with the providers that service and maintain these systems, with initial 
emphasis being placed on those, such as telephone systems, which have been 
identified as necessary to America First's ability to conduct the operation of 
the Partnership's business activities.  America First expects that any 
necessary modification or replacement of such "mission critical" systems will 
be accomplished by mid-1999.

The Partnership has no control over the remediation efforts of third parties 
with which it has material business relationships and the failure of certain 
of these third parties to successfully remediate their Year 2000 issues could 
have a material adverse effect on the Partnership.  Accordingly, America First 
has undertaken the process of contacting each such third party to determine 
the state of their readiness for Year 2000.  Such parties include, but are not 
limited to, the Partnership's transfer and paying agent and the financial 
institutions with which the Partnership maintains accounts.  America First has 
received initial assurances from certain of these third parties that their 
ability to perform their obligations to the Partnership are not expected to be 
materially adversely affected by the Year 2000 problem.  America First will 
continue to request updated information from these material third parties in 
order to assess their Year 2000 readiness.  If a material third party vendor 
is unable to provide assurance to America First that it is, or will be, ready 
for Year 2000, America First intends to seek an alternative vendor to the 
extent practical.

Costs

All of the IT systems and non-IT systems used to conduct the Partnership's 
business operations are owned or leased by America First.  Under the terms of 
its partnership agreement, neither America First nor the Partnership's general 
partner may be reimbursed by the Partnership for expenses associated with 
their computer systems or other business equipment.  Therefore, the costs 
associated with the identification, remediation and testing of America First's 
IT and non-IT systems will be paid by America First rather than the 
Partnership.  The Partnership will bear its proportionate share of the costs 
associated with surveying the Year 2000 readiness of third parties.  However, 
the Partnership's share of the costs associated with these activities is 
expected to be insignificant.  Accordingly, the costs associated with 
addressing the Partnership's Year 2000 issues are not expected to have a 
material effect on the Partnership's results of operations, financial position 
or cash flow.

Year 2000 Risks

The Partnership's general partner believes that the most reasonably likely 
worst-case scenario will be that one or more of the third parties with which 
it has a material business relationship will not have successfully dealt with 
its Year 2000 issues and, as a result, is unable to provide services or 
otherwise perform its obligations to the Partnership.  For example, if the 
Partnership's transfer and paying agent experiences Year 2000-related 
difficulties, it may cause delays in making distributions to BUC holders or in 
the processing of trading of BUCs.  It is also possible that one or more of 
the IT and non-IT systems of America First will not function correctly, and 
that such problems may make it difficult to conduct necessary accounting and 
other record keeping functions for the Partnership.  However, based on 
currently available information, the general partner does not believe that 
there will be any protracted systemic failures of the IT or non-IT systems 
utilized by America First in connection with the operation of the 
Partnership's business.












<PAGE>                               - 14 -

Contingency Plans

Because of the progress which America First has made toward achieving Year 
2000 readiness, the Partnership has not made any specific contingency plans 
with respect to the IT and non-IT systems of America First.  In the event of a 
Year 2000 problem with its IT system, America First may be required to 
manually perform certain accounting and other record-keeping functions.  
America First plans to terminate the Partnership's relationships with material 
third party service providers that are not able to represent to America First 
that they will be able to successfully resolve their material Year 2000 issues 
in a timely manner.  However, the Partnership will not be able to terminate 
its relationships with certain third parties, who may experience Year 2000 
problems.  The Partnership has no specific contingency plans for dealing with 
Year 2000 problems experienced with these third parties.

All forecasts, estimates or other statements in this report relating to the 
Year 2000 readiness of the Partnership and its affiliates are based on 
information and assumptions about future events.  Such "forward-looking 
statements" are subject to various known and unknown risks and uncertainties 
that may cause actual events to differ from such statements.  Important 
factors upon which the Partnership's Year 2000 forward-looking statements are 
based include, but are not limited to, (a) the belief of America First that 
the software used in IT systems is already able to correctly read and 
interpret dates after December 31, 1999 and will require little or any 
remediation; (b) the ability to identify, repair or replace mission critical 
non-IT equipment in a timely manner, (c) third parties' remediation of their 
internal systems to be Year 2000 ready and their willingness to test their 
systems interfaces with those of America First, (d) no third party system 
failures causing material disruption of telecommunications, data transmission, 
payment networks, government services, utilities or other infrastructure, (e) 
no unexpected failures by third parties with which the Partnership has a 
material business relationship and (f) no material undiscovered flaws in 
America First's Year 2000 testing process.

Forward Looking Statements

This report contains forward looking statements that reflect management's
current beliefs and estimates of future economic circumstances, industry
conditions, the Partnership's performance and financial results.  All
statements, trend analysis and other information concerning possible or
assumed future results of operations of the Partnership and the real estate
investments it has made (including, but not limited to, the information
contained in "Management's Discussion and Analysis of Financial Condition and
Results of Operations"), constitute forward-looking statements.  BUC holders
and others should understand that these forward looking statements are subject
to numerous risks and uncertainties and a number of factors could affect the
future results of the Partnership and could cause those results to differ
materially from those expressed in the forward looking statements contained
herein.

     Item 3.  Quantitative and Qualitative Disclosures About Market Risk.
The requirements of Item 3 of Form 10-Q are not applicable to the Partnership
prior to its Annual Report on Form 10-K for the year ending December 31, 1998.






















<PAGE>                               - 15 -
PART II.  OTHER INFORMATION

     Item 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits

               3.   Articles of Incorporation and Bylaws of America First
                    Fiduciary Corporation Number Eight (incorporated by
                    reference to Form S-11 Registration Statement filed May 8,
                    1986, with the Securities and Exchange Commission by
                    America First Tax Exempt Mortgage Fund 2 Limited
                    Partnership (Commission File No. 33-5521)).

               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).

               4(c) Agreement of Merger, dated March 28, 1996, between the
                    Registrant and America First Tax Exempt Mortgage Fund 2
                    Limited Partnership (incorporated by reference to Exhibit
                    4.3 to Amendment No. 1 to Registration Statement on Form
                    S-4 (Commission File No. 333-2920) filed by the Registrant
                    on May 17, 1996).

              10(a) 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 September 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)).

              10(b) $12,410,000 Promissory Note, dated December 11, 1997,
                    from Park Trace Apartments Limited Partnership to the City
                    of Aurora, Illinois (The Covey at Fox Valley Apartment
                    Project) Series 1997 (incorporated herein by reference to
                    Form 10-K dated December 31, 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)).

              10(c) Loan Agreement, dated December 1, 1997, between Park
                    Trace Apartments Limited Partnership and City of Aurora,
                    Illinois (The Covey at fox Valley Apartment Project)
                    Series 1997 (incorporated herein by reference to Form 10-K
                    dated December 31, 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)).

              10(d) Indenture of Trust, dated December 1, 1997, between City
                    of Aurora, Illinois and UMB Bank, National Association
                    (The Covey at Fox Valley Apartment Project) Series 1997
                    (incorporated herein by reference to Form 10-K dated
                    December 31, 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)).

              10(e) Revolving Credit Loan Agreement, dated December 19,
                    1996, between America First Apartment Investors, L.P.
                    and The First National Bank of Boston (incorporated
                    herein by reference to Form 10-K dated December 31, 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)).




<PAGE>                              - 16 -
              10(f) $1,385,000 Promissory Note, dated April 2, 1998, from
                    Arizona Coral Point Apartments Limited Partnership to The
                    Industrial Development authority of the county of Maricopa
                    (Coral Point Apartments Project) Series 1998A and 1998B.
                    (incorporated herein by reference to Form 10-Q dated
																			 June	30, 1998 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)) 

              10(f) $11,705,000 Promissory Note, dated April 2, 1998, from
                    Arizona Coral Point Apartments Limited Partnership to The
                    Industrial Development authority of the county of Maricopa
                    (Coral Point Apartments Project) Series 1998A and 1998B.
                    (incorporated herein by reference to Form 10-Q dated
																			 June	30, 1998 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)) 

              10(g) Loan Agreement, dated March 1, 1998, between The
                    Industrial Development Authority of the County of Maricopa
                    and Arizona Coral Point Apartments Limited Partnership
                    (Coral Point Apartments Project) Series 1998A and 1998B.
                    (incorporated herein by reference to Form 10-Q dated
																			 June	30, 1998 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)) 

              10(h) Indenture of Trust, dated March 1, 1998, between The
                    Industrial Development Authority of the County of Maricopa
                    and UMB Bank, N.A. (Coral Point Apartments Project) Series
                    1998A and 1998B.  (incorporated herein by reference to Form
																			 10-Q dated June	30, 1998 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 filed the following report on Form 8-K during
               the quarter for which this report is filed:

               Item Reported    Financial Statements Filed   Date of Report

               2. Acquisition          Yes                   May 1, 1998
                  or Disposition
                  of Assets






























<PAGE>                              - 17 -
	                                  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, 1998     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>                               - 18 -