FORM 10-K

                      SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

(Mark One)

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended December 31, 1996

                               OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from                       to         

Commission File Number:  0-16862

                           CAPITAL SOURCE II L.P.-A                 
(Exact name of registrant as specified in its Agreement of Limited Partnership)

Delaware                                             38-2684691                
(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)

Securities Registered Pursuant to Section 12(b) of the Act:

                                      None

Securities Registered Pursuant to Section 12(g) of the Act:

     Beneficial Assignment Certificates ("BACs") representing the beneficial 
assignment of limited partnership interests.

     Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by the 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      

     Indicate by check mark if disclosure of delinquent filers pursuant to 
Item 405 of Regulation S-K (229.405 of the chapter) is not contained herein, 
and will not be contained, to the best of the registrant's knowledge, in 
definitive proxy or information statements incorporated by reference in Part 
III of this Form 10-K or any amendment to this Form 10-K.  [X]

     BACs are not currently traded in any market.  Therefore, there is no 
market price or average bid and asked price for BACs within the 60 days prior 
to the date of this filing.

                     DOCUMENTS INCORPORATED BY REFERENCE
                                     None















<PAGE>                               -i-
                              TABLE OF CONTENTS

                                                                           Page


                                    PART I
Item 1. Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
Item 2. Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . .   2
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . .   2

                                   PART II

Item 5. Market for Registrant's Common Equity and 
        Related Stockholder Matters . . . . . . . . . . . . . . . . . . . .   3
Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . .   3
Item 7. Management's Discussion and Analysis of Financial Condition and
        Results of Operations . . . . . . . . . . . . . . . . . . . . . . .   4
Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . .   9
Item 9. Changes in and Disagreements With Accountants on Accounting and
        Finacial Disclosure. . . . . . . . . . . . . . . . . . . . . .  . .   9

                                   PART III

Item 10. Directors and Executive Officers of the Registrant . . . . . . . .   9
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . .  10
Item 12. Security Ownership of Certain Beneficial Owners and Management . .  11
Item 13. Certain Relationships and Related Transactions . . . . . . . . . .  11

                                   PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K. . 12

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28










































<PAGE>                               -ii-
                                    PART I

     Item 1.  Business.  Capital Source II L.P.-A (the "Registrant" or the 
"Partnership") was formed in August 1986 under the Delaware Revised Uniform 
Limited Partnership Act to invest principally in federally-insured mortgages 
on multifamily housing properties and to acquire, hold, sell, dispose of and 
otherwise deal with limited partnership interests (the "Partnership Equity 
Investments") in the limited partnerships (the "Operating Partnerships") which 
construct and operate these properties.  The Registrant's investment 
objectives generally are to (i) preserve and protect the Registrant's capital; 
(ii) provide quarterly cash distributions to investors; and (iii) achieve 
increasing current income and long-term capital appreciation through increases 
in income from the Partnership Equity Investments.

     A total of 4,011,101 beneficial assignment certificates representing 
beneficial assignment of limited partnership interests in the Registrant 
("BACs") were sold at $20 per BAC for total capital contributions of 
$80,222,020 prior to the payment of certain organization and offering costs.

     The Registrant originally acquired (i) four mortgage-backed securities 
(the "GNMA Certificates") guaranteed as to principal and interest by the 
Government National Mortgage Association ("GNMA") collateralized by first 
mortgage loans on multifamily housing properties located in three states, (ii) 
a first mortgage loan insured by the Federal Housing Administration (the "FHA 
Loan") on a multifamily housing property located in Charlotte, North Carolina, 
and (iii) Partnership Equity Investments in five limited partnerships which 
own the multifamily housing properties financed by the GNMA Certificates and 
the FHA Loan.  The Partnership has been repaid by GNMA on one of the GNMA 
Certificates and the related property has been deeded to GNMA in lieu of 
foreclosure, thus eliminating the Partnership Equity Investment in this 
property.  Collectively, the remaining GNMA Certificates, the FHA Loan and the 
Partnership Equity Investments are referred to as the "Permanent 
Investments."  A description of the properties financed by the Registrant 
through December 31, 1996, appears in Item 7 hereof.  The Partnership has also 
invested amounts held in its reserve account in certain GNMA securities backed 
by pools of single-family mortgages ("Reserve Investments").

     While principal of and interest on the GNMA Certificates and the FHA Loan 
are ultimately guaranteed by the United States government, the amount of cash 
distributions received by the Registrant from the Partnership Equity 
Investments is a function of the net rental revenues generated by the 
properties owned by the Operating Partnerships.  Net rental revenues from a 
multifamily apartment complex depend on the rental and occupancy rates of the 
property and on the level of operating expenses.  Occupancy rates and rents 
are directly affected by the supply of, and demand for, apartments in the 
market areas in which a property is located.  This, in turn, is affected by 
several factors such as local or national economic conditions, the amount of 
new apartment construction and interest rates on single-family mortgage 
loans.  In addition, factors such as government regulation (such as zoning 
laws), inflation, real estate and other taxes, labor problems and natural 
disasters can affect the economic operations of a property.

     In each city in which the Registrant's properties are located, such 
properties compete with a substantial number of other apartment complexes.  
Apartment complexes also compete with single-family housing that is either 
owned or leased by potential tenants.  The principal method of competition is 
to offer competive rental rates.  The Registrant's properties also compete by 
emphasizing regular maintenance and property amenities.

     The Registrant believes that each of its properties is in compliance in 
all material respects with federal, state and local regulations regarding 
hazardous waste and other environmental matters and the Registrant is not 
aware of any environmental contamination at any of such properties that would 
require any material capital expenditure by the Registrant for the remediation 
thereof.  

     The Registrant is engaged solely in the business of providing financing 
for the acquisition and improvement of multifamily real estate.  Accordingly, 
the presentation of information about industry segments is not applicable and 
would not be material to an understanding of the Registrant's business taken 
as a whole.





<PAGE>                               -1-
     The Registrant has no employees.  Certain services are provided to the 
Registrant by employees of an affiliate of the managing general partner of the 
Registrant, and the Registrant reimburses such affiliate for such services at 
cost.  The Registrant is not charged and does not reimburse for the services 
performed by managers and officers of the managing general partner of the 
general partner of the Registrant.

     Item 2.  Properties.  The Registrant does not directly own or lease any 
physical properties.  However, by virtue of Partnership Equity Investments in 
the Operating Partnerships, the Registrant indirectly owns the four 
multifamily apartment projects described in the following table:

<TABLE>
<CAPTION>
                                                                        Average                    
                                                         Number     Square Feet             Federal
Property Name                  Location                of Units        Per Unit           Tax Basis
--------------------------     -------------------     --------     -----------     ---------------
<S>                            <C>                     <C>          <C>             <C>
Crane's Landing                Winter Park, FL              252            751      $     8,921,467
Delta Crossing                 Charlotte, NC                178            880            5,189,382
Monticello Apartments          Southfield, MI               106          1,027            4,262,805
The Ponds at Georgetown        Ann Arbor, MI                134          1,002            5,725,082
                                                       --------                     ---------------
                                                            670                     $    24,098,736
                                                       ========                     ===============
</TABLE>

     Depreciation is taken on each property on a straight-line basis over the 
estimated useful lives of the various components of the properties ranging 
from five to 40 years. 

     The average annual occupancy rate and average effective rental rate per 
unit for each of the properties for each of the last five years are listed in 
the following table:
<TABLE>
<CAPTION>
                                                1996         1995         1994         1993         1992
                                           ----------   ----------   ----------   ----------   ----------
<S>                                        <C>          <C>          <C>          <C>          <C>
CRANE'S LANDING
Average Occupancy Rate                           94%           89%          90%          96%          95%
Average Effective Annual Rental Per Unit      $6,954        $6,327       $6,322       $6,718       $6,609

DELTA CROSSING
Average Occupancy Rate                           92%           94%          95%          92%          87%
Average Effective Annual Rental Per Unit      $7,097        $6,866       $6,380       $5,691       $5,328

MONTICELLO APARTMENTS
Average Occupancy Rate                           96%           99%          97%          95%          88%
Average Effective Annual Rental Per Unit      $8,804        $8,630       $8,287       $8,000       $7,363

THE PONDS AT GEORGETOWN
Average Occupancy Rate                           95%           95%          95%          90%          88%
Average Effective Annual Rental Per Unit      $9,515        $9,174       $8,955       $8,398       $7,970
</TABLE>

     In the opinion of the Partnership's management, each of the properties is 
adequately covered by insurance.  For additional information concerning the 
properties, see "Management's Discussion and Analysis of Financial Condition 
and Results of Operations" and Note 6 to the Partnership's Financial 
Statements.  A discussion of general competitive conditions to which these 
properties are subject is included in Item 1 hereof.

     Item 3.  Legal Proceedings.  There are no material pending legal 
proceedings to which the Registrant is a party or to which any of its property 
is subject.

     Item 4.  Submission of Matters to a Vote of Security Holders.  No matter 
was submitted during the fourth quarter of 1996 to a vote of the Registrant's 
security holders.





<PAGE>                                2
                                    PART II

     Item 5.  Market for Registrant's Common Equity and Related Stockholder 
Matters.

     (a)	Market Information.  The BACs are subject to various transfer 
restrictions imposed to prevent the Registrant from being treated as a 
publicly traded partnership for federal income tax purposes and, accordingly, 
there is no public trading market for the BACs.

     (b)	Investors.  The approximate number of BAC Holders on December 31, 
1996, was 5,772.

     (c)	Distributions.  Cash distributions are being distributed on a monthly 
basis to the record holders of BACs as of the last day of each month.  Total 
cash distributions paid or accrued to BAC Holders during the fiscal years 
ended December 31, 1996, and December 31, 1995, equaled $3,248,992 and 
$3,248,992, respectively.  The cash distributions paid per BAC during the 
fiscal years ended December 31, 1996, and December 31, 1995, were as follows:

<TABLE>
<CAPTION>
                                    Per BAC                
                      Year Ended              Year Ended
                   December 31, 1996       December 31, 1995
                   -----------------       -----------------
<S>                <C>                     <C>              
Income                 $   .3947               $   .4266    
Return of Capital          .4153                   .3834    
                   -----------------       -----------------
Total                  $   .8100               $   .8100    
                   =================       =================
</TABLE>

     See Item 7, Management's Discussion and Analysis of Financial Condition 
and Results of Operations, for information regarding the sources of funds 
used for cash distributions and for a discussion of factors, if any, which may 
adversely affect the Registrant's ability to make cash distributions at the 
same levels in 1997 and thereafter.

     Item 6.  Selected Financial Data.  Set forth below is selected financial 
data for the Registrant.  The information set forth below should be read in 
conjunction with the Financial Statements and Notes thereto filed in response 
to Item 8 hereof.

<TABLE>
<CAPTION>
                                                       For the         For the         For the         For the         For the
                                                    Year Ended      Year Ended      Year Ended      Year Ended      Year Ended
                                                 Dec. 31, 1996   Dec. 31, 1995   Dec. 31, 1994   Dec. 31, 1993   Dec. 31, 1992
                                                 -------------   -------------   -------------   -------------   ------------- 
<S>                                              <C>             <C>             <C>             <C>             <C>           
Rental income                                    $   4,854,898   $   4,656,371   $   4,529,975   $   4,442,657   $   5,674,854 
Interest income on temporary cash investments                                                                                 
  and U.S. government securities                       168,311         218,077         195,309         372,655         154,918
Mortgage-backed securities income                       91,982    	    123,033          78,153         259,294         389,217
Other income                                           161,805         144,967         161,039         254,238         131,853
Gain on sale of mortgage-backed securities                -             15,670            -               -               -   
Unusual item - gain on disposition of                                                                                         
  Brookridge assets and related liabilities               -	      	       -               -               -          3,953,659
Expenses (including depreciation)                   (3,678,376)     (3,432,024)     (3,526,029)     (3,674,507)     (4,687,491)
Minority interest in losses of                                                                                                
  operating partnerships                                   608           2,220           3,582           6,243          13,306
                                                 -------------   -------------   -------------   -------------   -------------
Net income                                       $   1,599,228   $   1,728,314   $   1,442,029   $   1,660,580   $   5,630,316 
                                                 =============   =============   =============   =============   =============
Net income per BAC                               $         .39   $         .43   $         .36   $         .41   $        1.39
                                                 =============   =============   =============   =============   =============
Cash distributions per BAC                       $       .8100   $       .8100   $       .8100   $      4.0702   $      1.0429
                                                 =============   =============   =============   =============   =============
Total assets                                     $  28,106,422   $  29,795,170   $  31,262,819   $  33,356,335   $  48,954,681 
                                                 =============   =============   =============   =============   =============
</TABLE>



<PAGE>                               -3-
     Item 7.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations.

Liquidity and Capital Resources

The Partnership originally acquired: (i) four GNMA Certificates which are 
guaranteed as to principal and interest by the Government National Mortgage 
Association (GNMA) collateralized by first mortgage loans on multifamily 
housing properties located in three states; (ii) an FHA Loan which is insured 
as to principal and interest by the Federal Housing Administration (FHA) on a 
multifamily housing property; and (iii) Partnership Equity Investments in five 
Operating Partnerships which own the multifamily properties financed by the 
GNMA Certificates and the FHA Loan.  During 1992, one of the properties was 
deeded to GNMA in lieu of foreclosure, thus eliminating the Partnership Equity 
Investment in this property.  In March 1993, the GNMA Certificate related to 
this property was paid in full.  Collectively, the remaining GNMA 
Certificates, the FHA Loan, and the Partnership Equity Investments are 
referred to as the "Permanent Investments".  The Partnership has also invested 
amounts held in its reserve account in certain GNMA securities backed by pools 
of single-family mortgages (Reserve Investments).  The obligations of GNMA 
and FHA are backed by the full faith and credit of the United States 
government.

The FHA Loan, GNMA Certificates and Partnership Equity Investments in 
Operating Partnerships represent the Partnership's principal assets as shown 
in the Parent Company Only Financial Information in Note 6 to the financial 
statements.  The parent company information is presented using the equity 
method of accounting for the investment in Operating Partnerships.  Generally 
accepted accounting principles, however, require that the Partnership's 
financial statements consolidate the Operating Partnerships, since the 
Partnership holds a majority ownership interest in each Operating Partnership, 
and can influence decisions of the general partners in certain circumstances.  

The following FHA Loan and GNMA Certificates were owned by the Partnership at 
December 31, 1996.  Interest income from the FHA Loan and GNMA Certificates 
is the primary source of cash available for distribution to investors.

<TABLE>
<CAPTION>
                                                 Guaranteed              Interest               Maturity              Carrying
Property Name                                 or Insured by                  Rate                   Date                 Value
----------------------------------          ---------------             ---------           ------------          ------------
<S>                                         <C>                         <C>                 <C>                   <C>         
Crane's Landing                                        GNMA                 8.75%             12-15-2030          $ 10,277,303
Delta Crossing                                          FHA                 9.10%             10-01-2030             6,568,139
Monticello Apartments                                  GNMA                 8.75%             11-15-2029             5,356,138
The Ponds at Georgetown                                GNMA                 9.00%             12-15-2029             5,091,155
Pools of single-family properties                      GNMA                 7.58% (1)       2008 to 2009             1,171,079
                                                                                                                  ------------
                                                                                                                  $ 28,463,814
                                                                                                                  ============
</TABLE>
(1)Represents yield to the Partnership.























<PAGE>                               -4-
DISTRIBUTIONS

Cash distributions paid or accrued per BAC were as follows:
<TABLE>
<CAPTION>
                                                                               For the             For the             For the 
                                                                            Year Ended          Year Ended          Year Ended
                                                                         Dec. 31, 1996       Dec. 31, 1995       Dec. 31, 1994
                                                                        --------------      --------------      --------------
<S>                                                                     <C>                 <C>                 <C>           
Regular monthly distributions                                                                                                  
  Income                                                                $        .3947      $        .4266      $        .3559
  Return of capital                                                              .4153               .3834               .4541
                                                                        --------------      --------------      --------------
                                                                        $        .8100      $        .8100      $        .8100
                                                                        ==============      ==============      ==============
Distributions                                                                                                                 
  Paid out of cash flow                                                 $        .6019      $        .6497      $        .6055
  Paid out of reserves                                                           .2081               .1603               .2045
                                                                        --------------      --------------      --------------
                                                                        $        .8100      $        .8100      $        .8100
                                                                        ==============      ==============      ==============
</TABLE>

Regular monthly distributions to BAC Holders consist primarily of interest 
received on the FHA Loan, GNMA Certificates and the Reserve Investments.  
Additional cash for distributions is received from other investments.  The 
Partnership may draw on reserves to pay operating expenses or to supplement 
cash distributions to investors.  The Partnership is permitted to replenish 
reserves with cash flows in excess of distributions paid.  During 1996, 
$843,139 was withdrawn from reserves to supplement regular monthly cash 
distributions.  The total amount held in reserves at December 31, 1996, was 
$2,856,608 of which $1,171,079 was invested in mortgaged-backed 
securities.

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 BAC Holders.  The Partnership has no other 
internal or external sources of liquidity.  Under the terms of its Partnership 
Agreement, the Partnership is not authorized to enter into short- or long-term 
debt financing arrangements or issue additional BACs to meet short-term and 
long-term liquidity requirements.

Asset Quality 

The FHA Loan and GNMA Certificates owned by the Partnership are guaranteed as 
to principal and interest by FHA and GNMA, respectively.  The obligations of 
FHA and GNMA are backed by the full faith and credit of the United States 
government.  The Partnership Equity Investments, however, are not insured or 
guaranteed.  The value of these investments is a function of the value of the 
real estate owned by the Operating Partnerships.
























<PAGE>                               -5-
The following table shows the occupancy levels of the properties financed by 
the Partnership as of December 31, 1996:

<TABLE>
<CAPTION>
                                                                                                    Number          Percentage
                                                                                Number            of Units            of Units
 Property Name                               Location                         of Units            Occupied            Occupied
 ------------------------------------        ------------------              ---------          ----------         -----------
 <S>                                         <C>                             <C>                <C>                <C>        
 Crane's Landing                             Winter Park, FL                       252                 240                 95%
 Delta Crossing                              Charlotte, NC                         178                 160                 90%
 Monticello Apartments                       Southfield, MI                        106                 104                 98%
 The Ponds at Georgetown                     Ann Arbor, MI                         134                 130                 97%
                                                                             ---------          ----------         -----------
                                                                                   670                 634                 95%
                                                                             =========          ==========         ===========
</TABLE>

Crane's Landing

Crane's Landing, located in Winter Park, Florida, is a 252-unit complex with 
one-, two- and three-bedroom apartments on fourteen acres of land.  Average 
occupancy was 94% during 1996, compared to 89% during 1995.  As a result, 
rental income increased approximately 10% in 1996, compared to 1995.  The 
increase in rental income was partially offset by increases of approximately 
40% in repairs and maintenance expenses and property improvements, 31% in 
management fees and 15% in administrative expenses.  As a result, net cash 
flow generated by this property, before debt service, increased approximately 
6.9% in 1996, compared to 1995.  The property generated cash flow in excess of 
debt service and was current on its mortgage obligations during 1996.

Delta Crossing

Delta Crossing is a 178-unit apartment complex located in Charlotte, North 
Carolina.  Average occupancy was 92% in 1996, compared to 94% in 1995.  
Despite the slightly lower average occupancy rate, rental income increased 
approximately 3% in 1996, compared to 1995.  This increase is due primarily to 
rental rate increases.  The increase in rental income was offset by increases 
of approximately 39% in administrative expenses, 19% in repairs and 
maintenance expenses and 13% in salary expenses.  As a result, net cash flow 
generated by this property, before debt service, decreased approximately 2.5% 
in 1996, compared to 1995.  However, the property generated cash flow in 
excess of debt service and was current on its mortgage obligations during 1996.

Monticello Apartments

Monticello Apartments, located in Southfield, Michigan, contains 106 rental 
units.  Average occupancy was 96% in 1996, compared to 99% in 1995.  Despite 
the slightly lower average occupancy rate, rental income increased 
approximately 2% in 1996, compared to 1995.  This increase is due primarily to 
rental rate increases.  The increase in rental income, was offset by increases 
of approximately 32% in utility expenses and 14% in repairs and maintenance 
expenses and property improvements.  As a result, net cash flow 
generated by this property, before debt service, decreased approximately 2.9% 
in 1996, compared to 1995.  However, the property generated cash flow in 
excess of debt service and was current on its mortgage obligations during 1996.



















<PAGE>                               -6-
The Ponds at Georgetown

The Ponds at Georgetown consists of 134 apartments located in Ann Arbor, 
Michigan.  Average occupancy was 95% in 1996 and 1995.  In the past, the 
property has relied heavily on university students, who are generally 
short-term tenants.  Recently, aggressive marketing strategies have been 
implemented which target more long-term tenants, resulting in a stabilization 
in the property's occupancy.  However, the persistent sluggishness of the Ann 
Arbor rental market is preventing the property from generating sufficient cash 
flow from operations to fully pay its mortgage obligations, and the mortgage 
on the property remains in default.  Despite the default, the Partnership has 
continued to receive full payments with respect to the GNMA Certificate, due 
to the co-insurer's (a private mortgage lender's) funding of the deficits.  
The co-insurer has the option to suspend its funding of the property's 
deficits and assign its mortgage to GNMA, which would result in a return to 
the Partnership of the outstanding principal balance of the GNMA Certificate 
and the possible loss of the Partnership Equity Investment in the property.  
To date, the co-insurer has not indicated plans to suspend funding of the 
property's deficits.  There can be no assurance, however, that the co-insurer 
will not make such an election in the future if the property remains in 
default.  In addition to the mortgage being in default, the property is 
approximately $566,000 delinquent on its property taxes.  A tax sale of the 
property is scheduled for May, 1997; however, the Partnership is exploring a 
number of alternatives with the mortgage holder to determine the best course 
of action to take.  Excluding interest, net cash flow generated by the 
property in 1996 approximated that of 1995.

Results of Operations

The table below compares the results of operations for each year 
shown.
<TABLE>
<CAPTION>
                                                                               For the             For the             For the
                                                                            Year Ended          Year Ended          Year Ended
                                                                         Dec. 31, 1996       Dec. 31, 1995       Dec. 31, 1994
                                                                        --------------      --------------      --------------
<S>                                                                     <C>                 <C>                 <C>            
Rental income                                                           $    4,854,898      $    4,656,371      $    4,529,975
Interest income on temporary cash investments                                                                                 
  and U.S. government securities                                               168,311             218,077             195,309
Mortgage-backed securities income                                               91,982             123,033              78,153
Other income                                                                   161,805             144,967             161,039
Gain on sale of mortgage-backed securities                                        -                 15,670                -   
                                                                        --------------      --------------      --------------
                                                                             5,276,996           5,158,118           4,964,476
                                                                        --------------      --------------      --------------
Real estate operating expenses                                               2,384,690           2,134,277           2,173,229
Depreciation                                                                   692,383             704,155             780,143
Property development and management fees                                           314              28,769              35,780
General and administrative expenses                                                                                           
  Investor servicing                                                           265,836             221,174             209,689
  Professional fees                                                             38,224              40,234              32,142
  Other expenses                                                                19,734              10,119               9,181
Asset management and partnership administration fees                           166,000             166,000             166,000
Amortization                                                                   111,195             127,296             119,865
                                                                        --------------      --------------      --------------
                                                                             3,678,376           3,432,024           3,526,029
                                                                        --------------      --------------      --------------
Minority interest in losses of operating partnerships                              608               2,220               3,582
                                                                        --------------      --------------      --------------
Net income                                                              $    1,599,228      $    1,728,314      $    1,442,029
                                                                        ==============      ==============      ==============
</TABLE>












<PAGE>                               -7-
<TABLE>
<CAPTION>
                                                                              Increase            Increase 
                                                                            (Decrease)          (Decrease)
                                                                             From 1995           From 1994 
                                                                        --------------      -------------- 
<S>                                                                     <C>                 <C>            
Rental income                                                           $      198,527      $      126,396 
Interest income on temporary cash investments                                                                                 
  and U.S. government securities                                               (49,766)             22,768
Mortgage-backed securities income                                              (31,051)             44,880
Other income                                                                    16,838             (16,072)
Gain on sale of mortgage-backed securities                                     (15,670)             15,670
                                                                        --------------      --------------
                                                                               118,878             193,642
                                                                        --------------      --------------
Real estate operating expenses                                                 250,413             (38,952)
Depreciation                                                                   (11,772)            (75,988)
Property development and management fees                                       (28,455)             (7,011)
General and administrative expenses                                                                       
  Investor servicing                                                            44,662              11,485 
  Professional fees                                                             (2,010)              8,092
  Other expenses                                                                 9,615                 938
Asset management and partnership administration fees                              -                   -    
Amortization                                                                   (16,101)              7,431 
                                                                        --------------      --------------
                                                                               246,352             (94,005)
                                                                        --------------      --------------
Minority interest in losses of operating partnerships                           (1,612)             (1,362)
                                                                        --------------      --------------
Net income                                                              $     (129,086)     $      286,285
                                                                        ==============      ==============
</TABLE>

Rental income is recognized net of any vacancy losses and rental concessions 
offered.  Rental income, net of real estate operating expenses, depreciation, 
and amortization, decreased $24,013 from 1995 to 1996.  The decrease was due 
to an increase in real estate operating expenses resulting from higher repairs 
and maintenance expenses and property improvements and administrative 
expenses.  The increase in real estate operating expenses was partially offset 
by an increase in rental income due primarily to an increase in the average 
occupancy of Crane's Landing and rental rate increases in certain markets.  
Also contributing to the partial offsetting of the increase in real estate 
operating expenses was a decrease in depreciation due to certain personal 
property becoming fully depreciated and a decrease in amortization due to 
certain costs becoming fully depreciated.  See the discussion of each property 
in the Asset Quality section for additional information.

Rental income, net of real estate operating expenses, depreciation, and 
amortization, increased $233,905 from 1994 to 1995.  The increase was due to 
an increase in rental rates in certain markets, a decrease in operating 
expenses due primarily to a decrease in capital improvement and administrative 
expenses and a decrease in depreciation due to certain personal property 
becoming fully depreciated.  

Interest income on temporary cash investments and U.S. government securities 
decreased $49,766 from 1995 to 1996, due to withdrawals made from the 
Partnership's reserves to supplement distributions to BAC Holders.  Interest 
income on temporary cash investments and U.S. government securities increased 
$22,768 from 1994 to 1995, due to the acquisition of additional U.S. 
government securities in March 1995.  The effect of the additional 
acquisitions was partially offset by the elimination of interest earned on 
other temporary cash investments which were liquidated in order to purchase 
the additional U.S. government securities and to supplement cash distributions 
to investors.  

Mortgage-backed securities income decreased $31,051 from 1995 to 1996, due to 
the continued amortization of the principal balances of the Partnership's 
mortgage-backed securities.  Mortgage-backed securities income increased 
$44,880 from 1994 to 1995, due to the acquisition of additional 
mortgage-backed securities during the second quarter of 1994.  

Other income consists of income such as corporate unit rentals, garage 
rentals, washer/dryer and vending income earned by the properties.  Other 
income increased $16,838 from 1995 to 1996 and decreased $16,072 from 1994 to 
1995 due to fluctuations in the rentals and/or usage of such items.
<PAGE>                               -8-

During 1995, the Partnership sold a portion of its mortgage-backed securities 
and realized a gain of $15,670 on the sale.

Property development and management fees decreased $28,455, from 1995 to 1996, 
and $7,011, from 1994 to 1995, due to a decrease in the amount of such income 
earned by the general partners of the Operating Partnerships in accordance with 
their respective partnership agreement.

Investor servicing expenses, increased $44,662 from 1995 to 1996 and $11,485 
from 1994 to 1995, due primarily to an increase in salaries and related 
expenses.  Professional fees decreased $2,010 from 1995 to 1996 and increased 
$8,092 from 1994 to 1995, as a result of a variations in the amount of legal 
and accounting fees associated with the Operating Partnerships.  Other 
expenses increased $9,615 from 1995 to 1996 due to increases in travel and 
other miscellaneous expenses.

     Item 8.  Financial Statements and Supplementary Data.  The Financial 
Statements and supporting schedules of the Registrant are set forth in Item 14 
hereof and are incorporated herein by reference.

     Item 9.  Changes in and Disagreements With Accountants on Accounting and 
Financial Disclosure.  There were no disagreements with the Registrant's 
independent accountants on accounting principles and practices or financial 
disclosure during the fiscal years ended December 31, 1996 and 1995.  

                                   PART III

     Item 10.  Directors and Executive Officers of Registrant.  The Registrant 
has no directors or officers.  The general partners of the Registrant are 
America First Capital Source II, L.L.C., (the "America First General Partner") 
which is controlled by America First Companies L.L.C. ("America First"), and 
Insured Mortgage Equities II L.P., (the "IME II General Partner") 
(collectively, the America First General Partner and the IME II General 
Partner are referred to as the "General Partners").

	    The following individuals are the officers of the America First General 
Partner and the officers and managers of America First, and each serves for a 
term of one year.

<TABLE>
<CAPTION>
Name                      Position Held                                    Position Held Since
-----------------------   ----------------------------------            -----------------------
<S>                       <C>                                           <C>
Michael B. Yanney	        Chairman of the Board, President,                       1984
                          Chief Executive Officer and 
                          Manager of America First

                          Chairman and Chief Executive                            1991
                          Officer of the America First
                          General Partner

Stewart Zimmerman	        President of the America First                          1991
                          General Partner

Michael Thesing	          Vice President, Secretary and                           1984
                          Treasurer of America First

                          Vice President, Secretary and                           1991
                          Treasurer of the America First
                          General Partner

William S. Carter, M.D.   Manager of America First                                1994

George Kubat              Manager of America First                                1994

Martin A. Massengale      Manager of America First                                1994

Alan Baer                 Manager of America First                                1994

Gail Walling Yanney       Manager of America First                                1996

Mariann Byerwalter        Manager of America First                                1997
</TABLE>

<PAGE>                               -9-
	    Michael B. Yanney, 63, is the Chairman and President of America First 
Companies L.L.C.  From 1977 until the organization of the first such fund in 
1984, Mr. Yanney was principally engaged in the ownership and management of 
commercial banks.  Mr. Yanney also has investments in private corporations 
engaged in a variety of businesses.  From 1961 to 1977, Mr. Yanney was 
employed by Omaha National Bank and Omaha National Corporation (subsequently 
merged into FirsTier Financial, Inc.), where he held various positions, 
including the position of Executive Vice President and Treasurer of the 
holding company.  Mr. Yanney also serves as a member of the boards of 
directors of Burlington Northern Santa Fe Corporation, Forest Oil Corporation, 
MFS Communications Company, Inc., C-Tec Corporation, Mid-America Apartment 
Communities, Inc. and PKS Information Services, Inc..

	    Stewart Zimmerman, 52, has been Executive Vice President of affiliates of 
the America First General Partner since January 1989.  In addition, Mr. 
Zimmerman has served as a consultant to affiliates of the America First 
General Partner beginning in September 1985.  From September 1986 though 
September 1988, he served as a director and managing director of Security 
Pacific Merchant Bank and was responsible for ongoing sales, trading and 
finance group activities.  Prior thereto, he served in various capacities with 
E.F. Hutton & Company Inc. and with Lehman Brothers, where he was responsible 
for sales and trading of mortgage-backed securities.  From 1968 to 1972, Mr. 
Zimmerman was an officer with Zenith Mortgage Company and Zenith East, a 
national mortgage banking and brokerage firm engaged in the servicing of 
single-family and multifamily residential mortgages as well as the financing 
of real estate properties throughout the United States.

	    Michael Thesing, 42, has been Vice President and Chief Financial Officer 
of affiliates of America First Companies L.L.C. since July 1984.  From January 
1984 until July 1984 he was employed by various companies controlled by Mr. 
Yanney.  He was a certified public accountant with Coopers & Lybrand from 1977 
through 1983.

	    William S. Carter, M.D., 70, is a retired physician.  Dr. Carter 
practiced medicine for 30 years in Omaha, Nebraska, specializing in 
otolaryngology (disorders of the ears, nose and throat).

	    George Kubat, 51, is the President and Chief Executive Officer of 
Phillips Manufacturing Co., an Omaha, Nebraska, based manufacturer of drywall 
and construction materials.  Prior to assuming that position in November 1992, 
Mr. Kubat was a certified public accountant with Coopers & Lybrand in Omaha, 
Nebraska, from 1969.  He was the tax partner in charge of the Omaha office 
from 1981 to 1992.  Mr. Kubat currently serves on the board of directors of 
Sitel Corporation, American Business Information, Inc., and G.B. Foods 
Corporation.

	    Martin A. Massengale, 63, is President Emeritus of the University of 
Nebraska, Director of the Center for Grassland Studies and Foundation 
Distinguished Professor.  Prior to becoming President in 1991, he served as 
Interim President from 1989, as Chancellor of the University of Nebraska 
Lincoln from 1981 until 1990 and as Vice Chancellor for Agriculture and 
Natural Resources from 1976 to 1981.  Prior to that time, he was a professor 
and associate dean of the College of Agriculture at the University of 
Arizona.  Dr. Massengale currently serves on the board of directors of Woodmen 
Accident & Life Insurance Company and IBP, Inc..

	    Alan Baer, 74, is presently Chairman of Alan Baer & Associates, Inc., a 
management company located in Omaha, Nebraska.  He is also Chairman of Lancer 
Hockey, Inc., Baer Travel Services, Wessan Telemarketing, Total Security 
Systems, Inc. and several other businesses.  Mr. Baer is the former Chairman 
and Chief Executive Officer of the Brandeis Department Store chain which, 
before its acquisition, was one of the larger retailers in the Midwest.  Mr. 
Baer has also owned and served on the board of directors of several banks in 
Nebraska and Illinois.

	    Gail Walling Yanney, 61, is a retired physician.  Dr. Walling practiced 
anesthesia and was most recently the Executive Director of the Clarkson 
Foundation until October of 1995.  In addition, she was a director of FirsTier 
Bank, N.A., Omaha prior to its merger with First Bank, N.A..  Ms. Yanney is 
the wife of Michael B. Yanney.






<PAGE>                               -10-
	    Mariann Byerwalter, 36, is Vice President of Business Affairs and Chief 
Financial Officer of Stanford University.  Ms. Byerwalter was Executive Vice 
President of AFEH and EurekaBank from 1988 to January 1996.  Ms. Byerwalter 
was Chief Financial Officer and Chief Operating Officer of AFEH, and Chief 
Financial Officer of EurekaBank from 1993 to January 1996.  She was an officer 
of BankAmerica Corporation and its venture capital subsidiary from 1984 to 
1987.  She served as Vice President and Executive Assistant to the President 
of Bank of America and was a Vice President in the bank's Corporate Planning 
and Development Department, managing several acquisitions and divestitures.  
During 1986, Ms. Byerwalter managed five divestitures, representing a total 
purchase price of over $100 million with assets aggregating more than $5.0 
billion.

     The following individuals are the director and officers of CSII Housing, 
Inc. ("CSII"), the corporate general partner of the IME II General Partner, 
and each serves for a term of one year.

                                   Director

Name	                       Position Held			                Position Held Since
----------------            ------------------------        -------------------
Paul Abbott	                Director		                             1989

                                   Officers

Name	                       Position Held			                Position Held Since
----------------            ------------------------        -------------------
Paul Abbott	                President, Chief		                     1989
                           		Operating Officer,
                           		Chief Financial Officer

Donald E. Petrow	           Vice President	                       	1992

Elizabeth I. Rubin          Vice President                         1992

     Paul L. Abbott, 51, is a Managing Director of Lehman Brothers Inc. 
("Lehman"), which he joined in 1988.  At Lehman, Mr. Abbott is responsible for 
the investment management of residential, commercial and retail real estate.  
Prior to joining Lehman, Mr. Abbott was a real estate consultant and, from 
1983 to 1987, was a senior officer of The Daseke Group, Inc., a privately held 
company specializing in the syndication of private real estate limited 
partnerships.  From 1974 to 1983, Mr. Abbott was an officer of two life 
insurance companies and a director of an insurance agency subsidiary.

     Donald E. Petrow, 40, is a First Vice President of Lehman.  Since March 
1989, he has been responsible for the investment management and restructuring 
of various investment portfolios, including but not limited to, federally 
insured mortgages, tax exempt bonds, residential real estate, cable and 
energy.  From November 1981 to February 1989, Mr. Petrow, as Vice President of 
Lehman, was involved in investment banking activities relating to partnership 
finance and acquisition.  Prior to joining Lehman, Mr. Petrow was employed in 
accounting and equipment leasing firms.  Mr. Petrow holds a B.S. Degree in 
accounting from Saint Peters College and an M.B.A. in Finance from Pace 
University.

     Elizabeth I. Rubin is a Vice President of Lehman in the Diversified Asset 
Group.  Ms. Rubin joined Lehman in April 1992.  Prior to joining Lehman, she 
was employed, from September 1988 to April 1992, by the accounting firm of 
Kenneth Leventhal and Co.   Ms. Rubin is a Certified Public Accountant and 
received a B.S. degree from the State University of New York at Binghamton in 
1988.

     Certain officers and directors of the corporate general partner of the 
IME II General Partner are now serving (or in the past have served) as officers 
or directors of entities which act as general partners of a number of real 
estate limited partnerships which have sought protection under the provisions 
of the Federal Bankruptcy Code.  The partnerships which have filed bankruptcy 
petitions own real estate which has been adversely affected by the economic 
conditions in the market in which the real estate is located and, 
consequently, the partnerships sought the protection of the bankruptcy laws to 
protect the partnerships' assets from loss through foreclosure.





<PAGE>                               -11-
     Item 11.  Executive Compensation.  The Registrant does not have any 
directors or officers.  None of the directors or officers of the General 
Partners or the managers or officers of America First receive compensation 
from the Registrant and neither General Partner receives reimbursement from 
the Registrant for any portion of their salaries.  Remuneration paid by the 
Registrant to the General Partners pursuant to the terms of its agreement of 
limited partnership during the period ending December 31, 1996, is described 
in Note 4 to the Notes to the Financial Statements filed in response to Item 8 
hereof.

     Item 12.  Security Ownership of Certain Beneficial Owners and Management. 

     (a) No person is known by Registrant to own beneficially more than 5% of 
the BACs.

     (b)	No director or officers of the General Partners or managers or 
officers of America First own any BACs.

     (c)	The IME II General Partner shall assume all authority and 
responsibility for the management of the Registrant in the event Mr. Yanney 
ceases to be a member or the chief executive officer of the America First 
General Partner.  There exists no other arrangement known to the Registrant 
the operation of which may at any subsequent date result in a change in 
control of the Registrant.

     Item 13.  Certain Relationships and Related Transactions.  The members of 
the America First General Partner are America First Companies L.L.C and Mr. 
Yanney.  The general partner of the IME II General Partner is CSII, which is 
an affiliate of IME II.  Except as described herein, the Registrant is not a 
party to any transaction or proposed transaction with either General Partner 
or with any person who is (i) a member, director or executive officer of the 
America First General Partner or manager or officer of America First or CSII, 
(ii) a nominee for election as a director or manager of the America First 
General Partner or a manager of America First or CSII, (iii) an owner of more 
than 5% of the BACs or (iv) a member of the immediate family of any of the 
foregoing persons.

     During 1996, the Registrant paid or reimbursed the General Partners 
$313,049 for certain costs and expenses incurred in connection with the 
operation of the Registrant, including legal and accounting fees and investor 
communication costs, such as printing and mailing charges.  See Note 4 to 
Notes to Consolidated Financial Statements filed in response to Item 8 hereof 
for a description of these costs and expenses.

     The Operating Partnership's general partners provide various on-site 
property development and management services.  Property development and 
management fees were $314 for 1996.

     The General Partners are entitled to receive an asset management and 
partnership administrative fee equal to 0.5% of invested assets per annum, the 
first $50,000 of which shall be paid each year with the balance payable only 
during such years that a 6.5% annual return has been paid to investors on a 
noncumulative basis.  An additional fee of 0.5% of invested assets will be 
paid in those years that an 11.5% annual return has been paid to investors on 
a cumulative basis.  Any unpaid amounts will accrue and be payable only after 
a 11.5% annual return to investors has been paid on a cumulative basis and the 
investors have received the return of their capital contributions.  During 
1996, the General Partners earned, and the Registrant incurred $166,000 in 
such asset management and partnership administration fees.  

     The Registrant has entered into a property management agreement with 
America First Properties Management, L.L.C. (the "Manager") with respect to 
the day-to-day operation of The Ponds at Georgetown, effective in November, 
1996.  Such property management agreement provides that the Manager is entitled 
to receive a management fee equal to a stated percentage of the gross revenues 
generated by the property under management.  Management fees payable to the 
Manager are 3% of gross revenues.  Because the Manager is an affiliate of the 
General Partner the management fees payable by the Registrant to the Manager 
may not exceed the lesser of (i) the rates that the Registrant would pay an 
unaffiliated manager for similar services in the same geographic location or 
(ii) the Manager's actual cost for providing such services.  During the year 
ended December 31, 1996, the Registrant paid the Manager property management 
fees of $4,933.



<PAGE>                               -12-
	                                   PART IV

     Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8 K.
(a) The following documents are filed as part of this report:

     1.	Financial Statements.  The following financial statements are included 
in response to Item 8 of this report:

   		Independent Accountants' Report 

     Consolidated Balance Sheets of the Registrant as of December 31, 1996, 
     and December 31, 1995.

     Consolidated Statements of Income of the Registrant for the years ended 
     December 31, 1996, December 31, 1995, and December 31, 1994.

     Consolidated Statements of Partners' Capital of the Registrant for the 
     years ended December 31, 1996, December 31, 1995, and December 31, 1994.

     Consolidated Statements of Cash Flows of the Registrant for the years 
     ended December 31, 1996, December 31, 1995, and December 31, 1994.

     Notes to Consolidated Financial Statements of the Registrant.

     Schedule III Real Estate and Accumulated Depreciation for the years ended 
     December 31, 1996, and December 31, 1995.

     2.	Financial Statement Schedules.  The information required to be set 
forth in the financial statement schedules is included in the Financial 
Statements filed in response to Item 8 hereof.

     3.	Exhibits.  The following exhibits were filed as required by Item 14(c) 
of this report.  Exhibit numbers refer to the paragraph numbers under Item 601 
of Regulation S-K:

          4(a).	Agreement of Limited Partnership of Capital Source II L.P.-A 
     (incorporated herein by reference from Exhibit A of the Prospectus 
     contained in the Registrant's Post Effective Amendment No. 4 dated 
     February 5, 1987, to the Registration Statement on Form S-11 (Commission 
     File No. 0-16862)).

          4(b).	Beneficial Assignment Certificate (incorporated by reference 
     from Exhibit 10(a) to the Registrant's Amendment No. 2 dated January 27, 
     1987, to the Registration Statement on Form S-11 (Commission File No. 0-
     16862)).

          24.	Power of Attorney.

     (b) The Registrant did not file any reports on Form 8-K during the last 
quarter of the period covered by this report.


























<PAGE>                               -13-
Independent Accountants' Report

To the Partners
Capital Source II L.P.-A:

We have audited the accompanying consolidated balance sheets of Capital Source 
II L.P.-A and subsidiaries as of December 31, 1996 and 1995, and the related 
consolidated statements of income, partners' capital and cash flows for each 
of the three years in the period ended December 31, 1996.  These consolidated 
financial statements are the responsibility of the Fund's management.  Our 
responsibility is to express an opinion on these consolidated financial 
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the consolidated financial 
statements are free of material misstatement.  An audit includes examining, on 
a test basis, evidence supporting the amounts and disclosures in the 
consolidated financial statements.  An audit also includes assessing the 
accounting principles used and significant estimates made by management, as 
well as evaluating the overall consolidated financial statement presentation.  
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the financial position of Capital 
Source II L.P.-A and subsidiaries as of December 31, 1996 and 1995, and the 
results of their operations and their cash flows for each of the three years 
in the period ended December 31, 1996, in conformity with generally accepted 
accounting principles.



Omaha, Nebraska	       						
March 26, 1997						                /s/Coopers & Lybrand L.L.P.










To the Partners
Capital Source II L.P.-A:

Our report on the consolidated financial statements of Capital Source II 
L.P.-A and subsidiaries is included in this Form 10-K.  In connection with our 
audit of such consolidated financial statements, we have also audited the 
related consolidated financial statement schedule listed in Item 14.

In our opinion, the consolidated financial statement schedule referred to 
above, when considered in relation to the basic financial statements taken as 
a whole, present fairly, in all material aspects, the information required to 
be included therein.



Omaha, Nebraska	       						
March 26, 1997						                /s/Coopers & Lybrand L.L.P.















<PAGE>                               -14-
CAPITAL SOURCE II L.P.-A
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                             Dec. 31, 1996       Dec. 31, 1995
                                                                                            --------------      --------------
<S>                                                                                         <C>                 <C>            
Assets                                                                                                                        
  Investment in real estate:                                                                                                   
    Land                                                                                    $    2,800,750      $    2,800,750
    Buildings                                                                                   23,055,361          22,994,698
    Personal property                                                                            1,597,666           1,495,374
                                                                                            --------------      --------------
                                                                                                27,453,777          27,290,822
    Less accumulated depreciation                                                               (5,664,440)         (4,989,699)
                                                                                            --------------      --------------
    Net investment in real estate                                                               21,789,337          22,301,123
                                                                                                                              
  Cash and temporary cash investments, at cost                                                                                
    which approximates market value (Note 5)                                                     2,430,937             757,381
  Escrow deposits and property reserves                                                            771,061             828,470
  Investment in U.S. government securities (Note 5)                                                   -              2,512,500
  Investment in mortgage-backed securities (Note 5)                                              1,171,079           1,326,114
  Interest and other receivables                                                                    23,125              59,367
  Deferred mortgage issuance costs net of accumulated                                                                         
    amortization of $681,197 in 1996 and $570,002 in 1995                                        1,700,654           1,811,849
  Other assets                                                                                     220,229             198,366
                                                                                            --------------      --------------
                                                                                            $   28,106,422      $   29,795,170
                                                                                            ==============      ==============
Liabilities and Partners' Capital (Deficit)                                                                                    
  Liabilities                                                                                                                   
    Accounts payable and accrued expenses                                                   $      874,562      $      852,710
    Distribution payable (Note 3)                                                                  546,968             546,968
    Due to general partners and their affiliates (Note 4)                                        1,099,709           1,084,619
                                                                                            --------------      --------------
                                                                                                 2,521,239           2,484,297
                                                                                            --------------      --------------
  Minority interest                                                                                206,460             207,068
                                                                                            --------------      --------------
  Partners' Capital (Deficit)                                                                                                  
    General Partners                                                                              (312,671)           (295,420)
    Limited Partners ($6.41 per BAC in 1996 and $6.83 in 1995)                                  25,691,394          27,399,225
                                                                                            --------------      --------------
                                                                                                25,378,723          27,103,805
                                                                                            --------------      --------------
                                                                                            $   28,106,422      $   29,795,170
                                                                                            ==============      ==============

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

























<PAGE>                               -15-
CAPITAL SOURCE II L.P.-A
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
                                                                               For the             For the             For the 
                                                                            Year Ended          Year Ended          Year Ended
                                                                         Dec. 31, 1996       Dec. 31, 1995       Dec. 31, 1994
                                                                        --------------      --------------      --------------
<S>                                                                     <C>                 <C>                 <C>            
Income                                                                                                                        
  Rental income                                                         $    4,854,898      $    4,656,371      $    4,529,975
  Interest income on temporary cash investments                                                                                 
    and U.S. government securities                                             168,311             218,077             195,309
  Mortgage-backed securities income                                             91,982             123,033              78,153
  Other income                                                                 161,805             144,967             161,039
  Gain on sale of mortgage-backed securities                                      -                 15,670                -   
                                                                        --------------      --------------      --------------
                                                                             5,276,996           5,158,118           4,964,476
                                                                        --------------      --------------      --------------
Expenses                                                                                                                      
  Real estate operating expenses                                             2,384,690           2,134,277           2,173,229
  Depreciation                                                                 692,383             704,155             780,143
  Property development and management fees (Note 4)                                314              28,769              35,780
  General and administrative expenses (Note 4)                                                                                
    Investor servicing                                                         265,836             221,174             209,689
    Professional fees                                                           38,224              40,234              32,142
    Other expenses                                                              19,734              10,119               9,181
  Asset management and partnership administration fees (Note 4)                166,000             166,000             166,000
  Amortization                                                                 111,195             127,296             119,865
                                                                        --------------      --------------      --------------
                                                                             3,678,376           3,432,024           3,526,029
                                                                        --------------      --------------      --------------
Minority interest in losses of operating partnerships                              608               2,220               3,582
                                                                        --------------      --------------      --------------
Net income                                                              $    1,599,228      $    1,728,314      $    1,442,029
                                                                        ==============      ==============      ==============
Net income allocated to:                                                                                                      
  General Partners                                                      $       15,992      $       17,283      $       14,420
  Limited Holders                                                            1,583,236           1,711,031           1,427,609
                                                                        --------------      --------------      --------------
                                                                        $    1,599,228      $    1,728,314      $    1,442,029
                                                                        ==============      ==============      ==============
Net income per BAC                                                      $          .39      $          .43      $          .36
                                                                        ==============      ==============      ==============

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





























<PAGE>                               -16-
CAPITAL SOURCE II L.P.-A
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
FROM DECEMBER 31, 1993 TO DECEMBER 31, 1996
<TABLE>
<CAPTION>

                                                                               General             Limited                    
                                                                              Partners            Partners               Total
                                                                        --------------      --------------      --------------
<S>                                                                     <C>                 <C>                 <C>            
Partners' Capital (Deficit) (excluding net unrealized holding gains)                                                          
  Balance at December 31, 1993                                          $     (262,274)     $   30,680,614      $   30,418,340
  Net income                                                                    14,420           1,427,609           1,442,029
  Cash distributions paid or accrued (Note 3)                                  (32,818)         (3,248,992)         (3,281,810)
                                                                        --------------      --------------      --------------
  Balance at December 31, 1994                                                (280,672)         28,859,231          28,578,559
  Net income                                                                    17,283           1,711,031           1,728,314
  Cash distributions paid or accrued (Note 3)                                  (32,818)         (3,248,992)         (3,281,810) 
                                                                        --------------      --------------      --------------
  Balance at December 31, 1995                                                (296,207)         27,321,270          27,025,063
  Net income                                                                    15,992           1,583,236           1,599,228
  Cash distributions paid or accrued (Note 3)                                  (32,818)         (3,248,992)         (3,281,810) 
                                                                        --------------      --------------      --------------
                                                                              (313,033)         25,655,514          25,342,481
                                                                        --------------      --------------      --------------
Net unrealized holding gains                                                                                                  
  Balance at December 31, 1994                                                    -                   -                   -   
  Net change                                                                       787              77,955              78,742
                                                                        --------------      --------------      --------------
  Balance at December 31, 1995                                                     787              77,955              78,742
  Net change                                                                      (425)            (42,075)            (42,500)
                                                                        --------------      --------------      --------------
                                                                                   362              35,880              36,242
                                                                        --------------      --------------      --------------
Balance at December 31, 1996                                            $     (312,671)     $   25,691,394      $   25,378,723
                                                                        ==============      ==============      ==============

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





































<PAGE>                               -17-
CAPITAL SOURCE II L.P.-A
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                               For the             For the             For the
                                                                            Year Ended          Year Ended          Year Ended
                                                                         Dec. 31, 1996       Dec. 31, 1995       Dec. 31, 1994
                                                                        --------------      --------------      --------------
<S>                                                                     <C>                 <C>                 <C>            
Cash flows from operating activities                                                                                           
  Net income                                                            $    1,599,228      $    1,728,314      $    1,442,029 
  Adjustments to reconcile net income to net cash                                                                             
    from operating activities                                                                                                 
      Depreciation and amortization                                            803,578             831,451             900,008
      Amortization of discount on government securities                         (9,400)            (25,076)               (664) 
      Loss on disposition of assets                                                282                -                   -   
      Property development and management fees                                     314              28,769              35,780 
      Minority interest in losses of operating partnerships                       (608)             (2,220)             (3,582) 
      Gain on sale of mortgage-backed securities                                  -                (15,670)               -   
      Decrease (increase) in interest and other receivables                     36,242             (27,405)             (2,012)
      Decrease (increase) in escrow deposits and property reserves              57,409             (12,887)            136,576
      Decrease (increase) in other assets                                      (21,863)            (79,536)             19,396 
      Increase in accounts payable and accrued expenses                         21,852             119,621             122,916
      Increase (decrease) in due to operating partnerships'                                                                   
        general partners and their affiliates                                   14,776            (139,065)           (408,849)
                                                                        --------------      --------------      --------------
    Net cash provided by operating activities                                2,501,810           2,406,296           2,241,598 
                                                                        --------------      --------------      --------------
Cash flows from investing activities                                                                                           
  Disposition (acquisition) of U.S. government securities                    2,500,000          (2,468,945)               -    
  Principal payments on mortgage-backed securities                             134,435             178,420              60,676
  Acquisition of buildings and construction in progress                        (78,587)            (34,527)            (15,811)
  Acquisition of personal property                                            (102,292)           (100,757)            (74,596)
  Disposition (acquisition) of mortgage-backed securities                         -                470,667          (1,959,280)
  Increase in deferred costs                                                      -                   -                (13,559)
                                                                        --------------      --------------      --------------
    Net cash provided by (used in) investing activities                      2,453,556          (1,955,142)         (2,002,570)
                                                                        --------------      --------------      --------------
Cash flow used in financing activity                                                                                           
  Distributions                                                             (3,281,810)         (3,281,810)         (3,281,810)
                                                                        --------------      --------------      --------------
Net increase (decrease) in cash and temporary cash investments               1,673,556          (2,830,656)         (3,042,782)
Cash and temporary cash investments at beginning of year                       757,381           3,588,037           6,630,819 
                                                                        --------------      --------------      --------------
Cash and temporary cash investments at end of year                      $    2,430,937      $      757,381      $    3,588,037 
                                                                        ==============      ==============      ==============
Supplemental disclosure of noncash investing activities:                                                                      
  Disposition of buildings                                              $       17,924      $         -         $         -
                                                                        ==============      ==============      ==============

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























<PAGE>                               -18-
CAPITAL SOURCE II L.P.-A
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

1. Organization

Capital Source II L.P.-A (the Partnership) was formed on August 22, 1986, 
under the Delaware Revised Uniform Limited Partnership Act.  The General 
Partners of the Partnership are Insured Mortgage Equities II L.P. and America 
First Capital Source II, L.L.C. (the General Partners).  

The Partnership provided virtually 100% of the debt and equity financing for 
five multifamily rental housing properties.  The Partnership's investment in 
the properties consisted of:  (i) approximately 85% in the form of permanent 
mortgages and/or loans to fund construction, and (ii) the balance to purchase 
up to a 99% limited partnership interest in the Operating Partnerships which 
developed, own and operate the properties.  Each loan is insured or 
guaranteed, in an amount substantially equal to the face amount of the 
mortgage, by the Federal Housing Administration (FHA) or the Government 
National Mortgage Association (GNMA).  The Partnership has been repaid by GNMA 
on one of its GNMA Certificates and the related property has been deeded to 
GNMA in lieu of foreclosure thus eliminating the Partnership's Equity 
Investment.  The four remaining Operating Partnerships are geographically 
located as follows:  (i) two in Michigan; and, (ii) one each in Florida and 
North Carolina.

CS Properties II, Inc. which is owned by affiliates of the General Partners, 
serves as the Special Limited Partner for the Operating Partnerships.  The 
Special Limited Partner has the power, among other things, to remove the 
general partners of the Operating Partnerships under certain circumstances and 
to consent to the sale of the operating partnerships' assets.  

The Partnership will terminate subsequent to the sale of all properties but in 
no event will the Partnership continue beyond December 31, 2035.

2. Summary of Significant Accounting Policies

 A)Method of Accounting
   The consolidated financial statements include the accounts of the 	 	 	
  	Partnership and four subsidiary Operating Partnerships.  The Partnership 
	  is a limited partner with an ownership interest in three of the subsidiary 
	  Operating Partnerships of up to 99%.  The Partnership's ownership interest 
	  in The Ponds at Georgetown L.P. is 68.70%.  The remaining limited partner 
	  interest of 30.29% is owned by Capital Source L.P., an affiliate of the 
	  General Partners.  All significant intercompany accounts and transactions 
	  have been eliminated in consolidation.

   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
   Prior to January 1, 1996, the Partnership's investment in real estate was 
   carried at cost less accumulated depreciation.  On January 1, 1996, the 
   Partnership adopted Statement of Financial Accounting Standards No. 121 
   (FAS 121), "Accounting for the Impairment of Long-Lived Assets and for 
   Long-Lived Assets to be Disposed of."  Among other things, FAS 121 requires 
   that long-lived assets and certain identifiable intangibles to be held and 
   used by an entity be reviewed for impairment whenever events or 
   circumstances indicate that the carrying value of an asset may not be 
   recoverable.  The adoption of FAS 121 did not have a material impact on the 
   consolidated financial statements as the carrying value of each property 
   does not exceed net realizable value.









<PAGE>                               -19-
CAPITAL SOURCE II L.P.-A
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

 C)Investments in U.S. Government Securities and Mortgage-Backed Securities 	
   Investment securities are	classified as held-to-maturity, 
   available-for-sale or trading.  Investments classified as held-to-maturity 
   are carried at amortized cost.  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 trading.  

 D)Depreciation and Amortization
  	Depreciation of real estate is based on the estimated useful life of the 
   properties using the straight-line method.  Deferred mortgage issuance 
   costs are being amortized using the effective yield method over the 
   40 year term of the respective loan.

 E)Revenue Recognition
  	The Operating Partnerships lease multifamily rental units under operating 
   leases with terms of one year or less.  Rental revenue is recognized net 
   of	any vacancy losses and rental concessions offered.

 F)Income Taxes
  	No provision has been made for income taxes since BAC Holders are required 
  	to report their share of the Partnership's income for federal and state 
  	income tax purposes.  The tax basis of the Partnership's assets and 
   liabilities exceeded the reported amounts by $7,345,644 and $7,549,032 at 
   December 31, 1996, and December 31, 1995, respectively.

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

 H)Net Income per Beneficial Assignment Certificate (BAC)
  	Net income per BAC was calculated based on the number of BACs outstanding 	
   (4,011,101) for all periods presented.

 I)New Accounting Pronouncement
   The Financial Accounting Standards Board has issued Financial Accounting 
   Standards No. 128 "Earnings Per Share" (FAS 128).  FAS 128, which is 
   effective for periods ending after December 15, 1997, is not expected to 
   have an impact on the Partnership's computation, presentation or 
   disclosure of earnings per BAC.

3. Partnership Income, Expenses and Cash Distributions

Profits and losses from normal operations and cash available for distribution 
will be allocated 99% to the investors and 1% to the General Partners.  
Certain fees payable to the General Partners will not become due until 
investors have received certain priority returns.  Cash distributions included 
in the consolidated financial statements represent the actual cash 
distributions made during each year and the cash distributions accrued at 
the end of each year.

The General Partners will receive 1% of the net proceeds from any sale of 
Partnership assets.  The General Partners will receive a termination fee equal 
to 3% of all sales proceeds less actual costs incurred in connection with all 
sales transactions, payable only after the investors have received a return of 
their capital contributions and an 11.5% annual return on a cumulative basis.  
The General Partners will also receive a fee equal to 9.1% of all cash 
available for distribution and sales proceeds (after deducting from cash 
available or sales proceeds any termination fee paid therefrom) after 
investors have received a return of their capital contributions and an 11.5% 
annual return on a cumulative basis.







<PAGE>                               -20-
CAPITAL SOURCE II L.P.-A
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

4. Transactions with Related Parties

The General Partners, certain of their affiliates and the operating 
partnerships' general partners have received or may receive fees, 
compensation, income, distributions and payments from the Partnership in 
connection with the offering and the investment, management and sale of the 
Partnership's assets (other than disclosed elsewhere) as follows.

The Operating Partnerships' general partners provide various on-site property 
development and management services.  Property development and management fees 
for the years ended December 31, 1996, 1995 and 1994 amounted to $314, $28,769 
and $35,780, respectively.  Unpaid fees, which are non-interest bearing, are 
included in amounts due to Operating Partnerships' general partners and their 
affiliates on the accompanying consolidated balance sheets and will be paid as 
the Operating Partnerships reach specified performance standards, or upon sale 
of the related property.

The General Partners are entitled to receive an asset management and 
partnership administrative fee equal to 0.5% of invested assets per annum, the 
first $50,000 of which will be paid each year with the balance payable only 
during such years that a 6.5% annual return has been paid to investors on a 
noncumulative basis.  An additional fee equal to 0.5% of invested assets per 
annum will be payable only during those years that an 11.5% annual return has 
been paid to investors on a noncumulative basis.  Any unpaid amounts will 
accrue and be payable only after an 11.5% annual return to investors has been 
paid on a cumulative basis and the investors have received the return of their 
capital contributions.  Asset management and partnership administration fees 
for the years ended December 31, 1996, 1995 and 1994 amounted to $166,000 
for each year.

Amounts due to Operating Partnerships' general partners and their affiliates 
on December 31, 1996 and 1995, is comprised of the following:
<TABLE>
<CAPTION>
                                                                                                      1996                1995
                                                                                            --------------      --------------
<S>                                                                                         <C>                 <C>            
Unpaid property development and management fees                                             $       97,015      $       81,925
Operating deficit and construction loans                                                           874,194             874,194
Unpaid asset management and partnership administrative fees                                        128,500             128,500
                                                                                            --------------      --------------
                                                                                            $    1,099,709      $    1,084,619
                                                                                            ==============      ==============
</TABLE>

Substantially all of the Partnership's general and administrative expenses are 
paid by a General Partner or an affiliate and reimbursed by the Partnership.  
The amount of such expenses reimbursed to the General Partner for the years 
ended December 31, 1996, 1995 and 1994 amounted to $313,049, $281,606 and 
$250,222, respectively.  These amounts are presented on a cash basis and do 
not reflect accruals made at each year end.

An affiliate of America First Capital Source II, L.L.C. has been retained to 
provide property management services for The Ponds at Georgetown beginning in 
November 1996.  The fees for services provided were $4,933 for 1996 and 
represented the lower of costs incurred in providing management of the 
property or customary fees for such services determined on a competitive basis.















<PAGE>                               -21-
CAPITAL SOURCE II L.P.-A
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

5. Partnership Reserve Account

The Partnership maintains a reserve account which consisted of the following 
at December 31, 1996:
<TABLE>
<S>                                                 <C>           
Cash and temporary cash investments                 $    1,685,529
GNMA Certificates                                        1,171,079
                                                    --------------
Balance at end of year                              $    2,856,608
                                                    ==============
</TABLE>

The reserve account was established to maintain working capital for the 
Partnership and is available to supplement distributions to investors or for 
other contingencies related to the ownership of investments and the operation 
of the Partnership.  The GNMA Certificates mature between 2008 and 2009.  

At December 31, 1996, the total amortized cost, gross unrealized holding gains 
and aggregate fair value of available-for-sale securities were $1,134,837, 
$36,242 and $1,171,079, respectively.  At December 31, 1995, the total 
amortized cost, gross unrealized holding losses and aggregate fair value of 
available-for-sale securities were $3,759,872, $78,742 and $3,838,614, 
respectively.

Prior to June 30, 1995, the Partnership classified all investment securities 
as held-to-maturity.  However, during the quarter ending June 30, 1995, the 
Partnership reassessed the appropriateness of the classification of securities 
held in the reserve account.  The Partnership concluded, given the nature of 
the reserve account, it would be more appropriate to classify securities held 
in the reserve account as available-for-sale rather than as held-to-maturity.  
Accordingly, on June 30, 1995, the Partnership transferred all securities held 
in the reserve account from the held-to-maturity classification to the 
available-for-sale classification.  The total amortized cost, gross unrealized 
holding gains and aggregate fair value of the securities transferred were 
$4,283,759, $67,199 and $4,350,958, respectively.

During 1995, the Partnership sold a portion of the securities in the 
available-for-sale portfolio.  The total amortized cost and realized gain for 
sales of securities classified as available-for-sale were $454,997 and 
$15,670, respectively.  

6. Parent Company Financial Information Only

Generally accepted accounting principles require that the Partnership`s 
financial statements consolidate the Operating Partnerships since the 
Partnership holds a majority ownership interest and, through CS Properties II, 
Inc., it can influence decisions of the general partners in certain 
circumstances.  In the consolidated financial statements, the Partnership`s 
investment in FHA Loans and GNMA Certificates is eliminated against the 
related mortgage payable recorded by the operating partnership.  If a mortgage 
loan goes into default and is foreclosed upon by FHA or GNMA, the respective 
agency may, at their discretion, repay the FHA Loan or the GNMA Certificate.  
If this occurs, the Partnership`s investment in the operating partnership 
would be eliminated, resulting in the recognition of a gain on the 
Partnership`s financial statements.  This arises because consolidation 
accounting does not allow the Partnership to stop recording losses from the 
Operating Partnerships when the net investment is reduced to zero.  

The parent company only financial information below represents the condensed 
financial information of the Partnership using the equity method of accounting 
for the investment in Operating Partnerships, rather than the consolidation of 
those partnerships.  Under the equity method of accounting, the Partnership`s 
capital contributions are adjusted to reflect its share of operating 
partnership profits or losses and distributions.  The investment in operating 
partnerships represents the Partnership`s limited partnership interest in the 
accumulated deficits of those Operating Partnerships.  The parent company only 
information is provided to more clearly present the Partnership`s investment 
in the Operating Partnerships.  Since the Partnership is not a general 
partner, it is not obligated to fund the negative balances.  If the 
investments in all Operating Partnerships were eliminated at December 31, 
1996, Partnership capital would increase by $5,198,166 ($1.28 per BAC).
<PAGE>                               -22-
CAPITAL SOURCE II L.P.-A
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

The FHA Loans and the GNMA Certificates are collateralized by first mortgage 
loans on the properties owned by the Operating Partnerships and are guaranteed 
or insured as to principal and interest by FHA or GNMA.  The FHA insured 
mortgage loans are subject to a 1% assignment fee.  The obligations of FHA and 
GNMA are backed by the full faith and credit of the United States government.  

Parent Company Only
Condensed Balance Sheets
<TABLE>
<CAPTION>
                                                                                                      1996                1995
                                                                                            --------------      --------------
<S>                                                                                         <C>                 <C>            
Assets                                                                                                                        
  Cash and temporary cash investments                                                       $    2,430,937      $      757,381
  Investment in U.S. government securities                                                            -              2,512,500
  Investment in FHA Loan                                                                         6,568,139           6,595,251
  Investment in GNMA Certificate                                                                21,895,675          22,142,421
  Investment in operating partnerships                                                          (5,198,166)         (4,674,357)
  Interest receivable                                                                              219,661             246,315
  Other assets                                                                                     225,743             287,899
                                                                                            --------------      --------------
                                                                                            $   26,141,989      $   27,867,410
                                                                                            ==============      ==============
Liabilities and Partners' Capital                                                                                              
  Liabilities                                                                                                                   
    Accounts payable                                                                        $      216,298      $      216,637
    Distribution payable                                                                           546,968             546,968
                                                                                            --------------      --------------
                                                                                                   763,266             763,605
                                                                                            --------------      --------------
  Partners' Capital                                                                             25,378,723          27,103,805
                                                                                            --------------      --------------
                                                                                            $   26,141,989      $   27,867,410
                                                                                            ==============      ==============
</TABLE>
Parent Company Only
Condensed Statements of Income
<TABLE>
<CAPTION>
                                                                                                      1996                1995
                                                                                            --------------      --------------
<S>                                                                                         <C>                 <C>            
Income                                                                                                                        
  Mortgage and mortgage-backed securities interest                                          $    2,520,727      $    2,561,901
  Interest income on temporary cash investments                                                                                
    and U.S. government securities                                                                 147,530             200,678
  Equity in losses of operating partnerships                                                      (523,809)           (554,682)
  Other income                                                                                       6,950               4,650
  Gain on sale of mortgage-backed securities                                                          -                 15,670
                                                                                            ---------------     ---------------
                                                                                                 2,151,398           2,228,217 
Expenses                                                                                                                       
  Operating and administrative                                                                     552,170             499,903
                                                                                            ---------------     ---------------
Net income                                                                                 $     1,599,228     $     1,728,314
                                                                                            ===============     ===============
</TABLE>














<PAGE>                               -23-
CAPITAL SOURCE II L.P.-A
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

Parent Company Only
Condensed Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                                                      1996                1995
                                                                                            --------------      --------------
<S>                                                                                         <C>                 <C>            
Cash flows from operating activities                                                                                           
  Net income                                                                                $    1,599,228      $    1,728,314 
    Adjustments to reconcile net income to net cash                                                                              
      from operating activities                                                                                                  
      Equity in losses of operating partnerships                                                   523,809             554,682
      Amortization                                                                                  62,376              62,376  
      Gain on sale of mortgage-backed securities                                                      -                (15,670)
      Other non-cash adjustments                                                                    16,695             (57,322)
                                                                                            --------------      --------------
    Net cash provided by operating activities                                                    2,202,108           2,272,380 
                                                                                            --------------      --------------
Cash flows from investing activities                                                                                           
  FHA Loan and GNMA Certificate principal payments                                                 253,258             286,952
  Disposition (acquisition) of U.S. government securities                                        2,500,000          (2,468,945)
  Sale of mortgage-backed securities                                                                  -                470,667
  Investment in operating partnerships                                                                -               (109,900)
                                                                                            --------------      --------------
    Net cash provided by (used in) investing activities                                          2,753,258          (1,821,226)
                                                                                            --------------      --------------
Cash flow used in financing activity                                                                                           
  Distributions                                                                                 (3,281,810)         (3,281,810)
                                                                                            --------------      --------------
Net increase (decrease) in cash and temporary cash investments                                   1,673,556          (2,830,656)
Cash and temporary cash investments at beginning of year                                           757,381           3,588,037 
                                                                                            --------------      --------------
Cash and temporary cash investments at end of year                                          $    2,430,937      $      757,381 
                                                                                            ==============      ==============
</TABLE>

7. Fair Value of Financial Instruments

The following methods and assumptions were used by the Partnership in 
estimating the fair value of its financial instruments:

  Cash and temporary cash investments:  Fair value approximates the carrying 
  value of such assets.

  Investment in U.S. government securities and mortgage-backed securities:  
  Fair values are based on amounts obtained from an independent pricing source.

<TABLE>
<CAPTION>
                                                          At December 31, 1996                    At December 31, 1995       
                                                   ----------------------------------      ----------------------------------
                                                         Carrying           Estimated            Carrying           Estimated
                                                           Amount          Fair Value              Amount          Fair Value
                                                   --------------      --------------      --------------      --------------
<S>                                                <C>                 <C>                 <C>                 <C>
Cash and temporary cash investments                $    2,430,937      $    2,430,937      $      757,381      $      757,381
Investment in mortgage-backed securities                1,171,079           1,171,079           1,326,114           1,326,114
Investment in U.S. government securities                     -                   -              2,512,500           2,512,500
</TABLE>  













<PAGE>                               -24-
CAPITAL SOURCE II L.P.-A
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

8. Summary of Unaudited Quarterly Results of Operations
<TABLE>
<CAPTION>
                                                            First              Second               Third              Fourth
From January 1, 1996, to December 31, 1996                Quarter             Quarter             Quarter             Quarter
                                                   --------------      --------------      --------------      --------------
<S>                                                <C>                 <C>                 <C>                 <C>            
Total income                                       $    1,314,149      $    1,302,210      $    1,306,100      $    1,354,537
Total expenses                                           (794,837)           (798,182)           (903,409)         (1,181,948) (1)
Minority interest in losses of                                                                                               
  operating partnerships                                      353                 144                 228                (117)
                                                   --------------      --------------      --------------      --------------
Net income                                         $      519,665      $      504,172      $      402,919      $      172,472
                                                   ==============      ==============      ==============      ==============
Net income per BAC                                 $          .13                 .12      $          .10      $          .04
                                                   ==============      ==============      ==============      ==============
</TABLE>
(1)Real estate operating expenses were higher during the fourth quarter due to 
   adjustments made to certain real estate operating expenses.

<TABLE>
<CAPTION>
                                                            First              Second               Third              Fourth
From January 1, 1995, to December 31, 1995                Quarter             Quarter             Quarter             Quarter
                                                   --------------      --------------      --------------      --------------
<S>                                                <C>                 <C>                 <C>                 <C>            
Total income                                       $    1,202,464      $    1,242,623      $    1,300,739      $    1,412,292
Total expenses                                           (809,277)           (796,965)           (858,907)           (966,875)
Minority interest in losses of                                                                                               
  operating partnerships                                      750                 842                 908                (280)
                                                   --------------      --------------      --------------      --------------
Net income                                         $      393,937      $      446,500      $      442,740      $      445,137
                                                   ==============      ==============      ==============      ==============
Net income per BAC                                 $          .10                 .11      $          .11      $          .11
                                                   ==============      ==============      ==============      ==============
</TABLE>




































<PAGE>                               -25-
SCHEDULE III

CAPITAL SOURCE II L.P.-A
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995

<TABLE>
<CAPTION>
                                                                                                       Life on
                                                                                                         Which
                                            Number                       Date of           Date   Depreciation
Property               Location           of Units   Encumbrances   Construction       Acquired    is Computed
--------------------   ----------------   --------   ------------   ------------   ------------   ------------
<S>                    <C>                <C>        <C>            <C>            <C>            <C>         
Ponds at Georgetown    Ann Arbor, MI           134        (a)               1989            N/A   5 - 40 years
Monticello             Southfield, MI          106        (a)               1989            N/A   5 - 40 years
Delta Crossing         Charlotte, NC           178        (a)               1989            N/A   5 - 40 years
Crane's Landing        Winter Park, FL         252        (a)               1990            N/A   5 - 40 years
</TABLE>
<TABLE>
<CAPTION>
                                                    Costs Capitalized                                                           
                              Intial Cost              Subsequent            Gross Amount at December 31, 1995                  
                            to Partnership           to Acquisition                                                             
                     --------------------------  -----------------------  ----------------------------------------              
                                                                                          Buildings,                            
                                                                                        Improvements                            
                                                                Carrying                and Personal                 Accumulated
                                                                   Costs          Land      Property         Total  Depreciation
Property                     Land      Property  Improvements        (b)           (c)           (d)   (c) and (d)           (e)
-------------------  ------------  ------------  ------------  ---------  ------------  ------------  ------------  ------------
<S>                  <C>           <C>           <C>           <C>        <C>           <C>           <C>           <C>         
Ponds at Georgetown  $    261,440  $    269,094  $  4,246,230  $  55,523  $    396,621  $  4,435,666  $  4,832,287  $  (965,318)
Monticello                402,933       363,117     4,683,322     88,306       411,566     5,126,112     5,537,678   (1,308,186)
Delta Crossing            700,000       461,011     5,580,985     69,565       960,861     5,850,700     6,811,561   (1,222,608)
Crane's Landing           978,902       206,060     8,851,394     72,940     1,031,702     9,077,594    10,109,296   (1,493,587)
                     ------------  ------------  ------------  ---------  ------------  ------------  ------------  ------------
                     $  2,343,275  $  1,299,282  $ 23,361,931  $ 286,334  $  2,800,750  $ 24,490,072  $ 27,290,822  $(4,989,699)
                     ============  ============  ============  =========  ============  ============  ============  ============
</TABLE>




































<PAGE>                               -26-
CAPITAL SOURCE II L.P.-A
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996

<TABLE>
<CAPTION>
                                                                                                       Life on
                                                                                                         Which
                                            Number                       Date of           Date   Depreciation
Property               Location           of Units   Encumbrances   Construction       Acquired    is Computed
--------------------   ----------------   --------   ------------   ------------   ------------   ------------
<S>                    <C>                <C>        <C>            <C>            <C>            <C>         
Ponds at Georgetown    Ann Arbor, MI           134        (a)               1989            N/A   5 - 40 years
Monticello             Southfield, MI          106        (a)               1989            N/A   5 - 40 years
Delta Crossing         Charlotte, NC           178        (a)               1989            N/A   5 - 40 years
Crane's Landing        Winter Park, FL         252        (a)               1990            N/A   5 - 40 years
</TABLE>
<TABLE>
<CAPTION>
                                                    Costs Capitalized                                                           
                              Intial Cost              Subsequent            Gross Amount at December 31, 1996                  
                            to Partnership           to Acquisition                                                             
                     --------------------------  -----------------------  ----------------------------------------              
                                                                                          Buildings,                            
                                                                                        Improvements                            
                                                                Carrying                and Personal                 Accumulated
                                                                   Costs          Land      Property         Total  Depreciation
Property                     Land      Property  Improvements        (b)           (c)           (d)   (c) and (d)           (e)
-------------------  ------------  ------------  ------------  ---------  ------------  ------------  ------------  ------------
<S>                  <C>           <C>           <C>           <C>        <C>           <C>           <C>           <C>         
Ponds at Georgetown  $    261,440  $    269,094  $  4,246,230  $  55,523  $    396,621  $  4,435,666  $  4,832,287  $(1,069,482)
Monticello                402,933       363,117     4,683,322     88,306       411,566     5,126,112     5,537,678   (1,451,691)
Delta Crossing            700,000       461,011     5,687,375     69,565       960,861     5,957,090     6,917,951   (1,418,851)
Crane's Landing           978,902       206,060     8,907,959     72,940     1,031,702     9,134,159    10,165,861   (1,724,416)
                     ------------  ------------  ------------  ---------  ------------  ------------  ------------  ------------
                     $  2,343,275  $  1,299,282  $ 23,524,886  $ 286,334  $  2,800,750  $ 24,653,027  $ 27,453,777  $(5,664,440)
                     ============  ============  ============  =========  ============  ============  ============  ============
</TABLE>






































<PAGE>                               -27-
SCHEDULE III

CAPITAL SOURCE II L.P.-A
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996 and 1995

(a)  The Partnership has no encumbrances against this property.  Encumbrances 
     recorded by the Operating Partnerships are eliminated in the consolidated
     financial statements of the Partnership.

(b)  Carrying costs include legal fees, appraisal fees, title costs and other 
     related professional fees.

(c)  The aggregate cost for Federal income tax purposes is the same as for 
     financial reporting purposes.

(d)  Reconciliation of Real Estate:
<TABLE>
<CAPTION>
                                                                                  1996                1995
                                                                        --------------      --------------
<S>                                                                     <C>                 <C>           
Balance - beginning of year                                             $   27,290,822      $   27,155,538
Acquisitions                                                                   180,879             135,284
Disposition of assets                                                          (17,924)               -   
                                                                        --------------      --------------
Balance - end of year                                                   $   27,453,777      $   27,290,822
                                                                        ==============      ==============
</TABLE>

(e)  Reconciliation of Accumulated Depreciation:
<TABLE>
<CAPTION>
                                                                                  1996                1995
                                                                        --------------      --------------
<S>                                                                     <C>                 <C>           
Balance - beginning of year                                             $    4,989,699      $    4,285,544
Depreciation expense                                                           692,383             704,155
Disposition of assets                                                          (17,642)               -   
                                                                        --------------      --------------
Balance - end of year                                                   $    5,664,440      $    4,989,699
                                                                        ==============      ==============
</TABLE>

































<PAGE>                               -28-
                                  SIGNATURES

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

                           CAPITAL SOURCE II L.P. A

                           By	America First Capital
                            		Source II, L.L.C., General	
                               Partner of the Registrant


                           By	/s/ Michael Thesing                              
                           			Michael Thesing,
                            		Vice President

Date:  March 27, 1997


























































<PAGE>                               -29-
     Pursuant to the requirements of the Securities and Exchange Act of 1934, 
this report has been signed below by the following persons on behalf of the 
Registrant and in the capacities and on the dates indicated.


Date:  March 27, 1997	             By	/s/ Michael B. Yanney*
			                                   Michael B. Yanney,
			                                   Chairman and Chief Executive Officer of 
                                      the America First General Partner
                                      (Principal Executive Officer)

                                      Chairman of the Board, President,
                                      Chief Executive Officer and Manager of
                                      America First Companies L.L.C.


Date:  March 27, 1997	             By	/s/ Michael Thesing
			                                   Michael Thesing, Vice
			                                   President, Secretary and
			                                   Treasurer (Principal Financial Officer) 
                                      of the America First General Partner

                                      Vice President, Secretary and Treasurer
                                      of America First Companies L.L.C.


Date:  March 27, 1997	             By	
			                                   William S. Carter, M.D.
                                      Manager of America First Companies L.L.C.


Date:  March 27, 1997	             By	/s/ George Kubat
			                                   George Kubat
                                      Manager of America First Companies L.L.C.


Date:  March 27, 1997	             By	/s/ Martin A. Massengale
			                                   Martin A. Massengale
                                      Manager of America First Companies L.L.C.


Date:  March 27, 1997	             By	/s/ Alan Baer
			                                   Alan Baer
                                      Manager of America First Companies L.L.C.


Date:  March 27, 1997	             By	/s/ Gail Walling Yanney
			                                   Gail Walling Yanney
                                      Manager of America First Companies L.L.C.

Date:  March 27, 1997	             By	/s/ Mariann Byerwalter
			                                   Mariann Byerwalter
                                      Manager of America First Companies L.L.C.



*By Michael Thesing,
    Attorney in Fact


/s/ Michael Thesing                           
Michael Thesing














<PAGE>                               -30-

































                                  EXHIBIT 24


                               POWER OF ATTORNEY







































<PAGE>                               -31-
                               POWER OF ATTORNEY


     The undersigned hereby appoints Michael Thesing as his agent and 
attorney-in-fact for the purpose of executing and filing all reports on Form 
10-K relating to the year ending December 31, 1996, and any amendments 
thereto, required to be filed with the Securities and Exchange Commission by 
the following persons:

    	America First Tax-Exempt Mortgage Fund Limited Partnership 
    	America First Apartment Investors, L.P.
     America First Participating/Preferred Equity Mortgage Fund and America 
       First Participating/Preferred Equity Mortgage Fund Limited Partnership
    	America First PREP Fund 2 Limited Partnership
    	America First PREP Fund 2 Pension Series Limited Partnership
    	Capital Source L.P.
    	Capital Source II L.P.-A

     IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney 
on the 25th day of March, 1997.


                                                							  /s/ Michael B. Yanney
                                                 							Michael B. Yanney




















































<PAGE>                               -32-
                               POWER OF ATTORNEY

     The undersigned hereby appoints Michael Thesing as his agent and 
attorney-in-fact for the purpose of executing and filing all reports on Form 
10-K relating to the year ending December 31, 1996, and any amendments 
thereto, required to be filed with the Securities and Exchange Commission by 
the following persons:

		   America First Tax-Exempt Mortgage Fund Limited Partnership 
     America First Apartment Investors, L.P. 
     America First Participating/Preferred Equity Mortgage Fund and America 
       First Participating/Preferred Equity Mortgage Fund Limited Partnership
     America First PREP Fund 2 Limited Partnership
     America First PREP Fund 2 Pension Series Limited Partnership
     Capital Source L.P.
     Capital Source II L.P.-A

     IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney 
on the 25th day of March, 1997.


                                                					  /s/ Gail Walling Yanney
                                               							Gail Walling Yanney





















































<PAGE>                               -33-
                               POWER OF ATTORNEY

     The undersigned hereby appoints Michael Thesing as his agent and 
attorney-in-fact for the purpose of executing and filing all reports on Form 
10-K relating to the year ending December 31, 1996, and any amendments 
thereto, required to be filed with the Securities and Exchange Commission by 
the following persons:

		   America First Tax-Exempt Mortgage Fund Limited Partnership 
     America First Apartment Investors, L.P. 
     America First Participating/Preferred Equity Mortgage Fund and America 
       First Participating/Preferred Equity Mortgage Fund Limited Partnership
     America First PREP Fund 2 Limited Partnership
     America First PREP Fund 2 Pension Series Limited Partnership
     Capital Source L.P.
     Capital Source II L.P.-A

     IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney 
on the 25th day of March, 1997.


                                                					  /s/ George Kubat
                                               							George Kubat





















































<PAGE>                               -34-
                               POWER OF ATTORNEY

     The undersigned hereby appoints Michael Thesing as his agent and 
attorney-in-fact for the purpose of executing and filing all reports on Form 
10-K relating to the year ending December 31, 1996, and any amendments 
thereto, required to be filed with the Securities and Exchange Commission by 
the following persons:

     America First Tax-Exempt Mortgage Fund Limited Partnership 
    	America First Apartment Investors, L.P.
     America First Participating/Preferred Equity Mortgage Fund and America 
       First Participating/Preferred Equity Mortgage Fund Limited Partnership
    	America First PREP Fund 2 Limited Partnership
    	America First PREP Fund 2 Pension Series Limited Partnership
    	Capital Source L.P.
    	Capital Source II L.P.-A

     IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney 
on the 25th day of March, 1997.


                                                				 /s/  Martin A. Massengale
                                                				Martin A. Massengale





















































<PAGE>                               -35-
                               POWER OF ATTORNEY

     The undersigned hereby appoints Michael Thesing as his agent and 
attorney-in-fact for the purpose of executing and filing all reports on Form 
10-K relating to the year ending December 31, 1996, and any amendments 
thereto, required to be filed with the Securities and Exchange Commission by 
the following persons:

		   America First Tax-Exempt Mortgage Fund Limited Partnership 
     America First Apartment Investors, L.P. 
     America First Participating/Preferred Equity Mortgage Fund and America 
       First Participating/Preferred Equity Mortgage Fund Limited Partnership
     America First PREP Fund 2 Limited Partnership
     America First PREP Fund 2 Pension Series Limited Partnership
     Capital Source L.P.
     Capital Source II L.P.-A

     IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney 
on the 25th day of March, 1997.


                                                  							        /s/ Alan Baer
                                                         							Alan Baer





















































<PAGE>                               -36-
                               POWER OF ATTORNEY

     The undersigned hereby appoints Michael Thesing as his agent and 
attorney-in-fact for the purpose of executing and filing all reports on Form 
10-K relating to the year ending December 31, 1996, and any amendments 
thereto, required to be filed with the Securities and Exchange Commission by 
the following persons:

		   America First Tax-Exempt Mortgage Fund Limited Partnership 
     America First Apartment Investors, L.P. 
     America First Participating/Preferred Equity Mortgage Fund and America 
       First Participating/Preferred Equity Mortgage Fund Limited Partnership
     America First PREP Fund 2 Limited Partnership
     America First PREP Fund 2 Pension Series Limited Partnership
     Capital Source L.P.
     Capital Source II L.P.-A

     IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney 
on the 25th day of March, 1997.


                                                  			/s/ Mariann Byerwalter
                                                    Mariann Byerwalter





















































<PAGE>                               -37-