U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)
    (X)     ANNUAL  REPORT  PURSUANT  TO SECTION 13 OR 15 (D) OF THE  SECURITIES
            EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1998
                                       OR
    ( )     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
            EXCHANGE ACT OF 1934 - For the Transition period from _____ to ____


                         Commission File Number: 0-17600

            Common Goal Health Care Participating Mortgage Fund L.P.
        Exact name of small business issuer as specified in its charter)

            Delaware                       52-1475268
  (State or other Jurisdiction          (I.R.S. Employer
       of incorporation or           Identification Number)
         organization)

                     Main Street Penn Yan, New York      14527
               Address of principal executive offices) (Zip Code)

                                 (315) 536-5985
                           (Issuer's telephone number)

Securities registered under Section 12(b) of the Exchange Act:  None

Securities   registered  under  Section  12(g)  of  the  Exchange  Act:
Limited Partnership Interests

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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 [ ]

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this Form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements,  incorporated  by  reference  in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

Issuer's revenues for the fiscal year ended December 31, 1998 were $239,436.

The aggregate sales price of the units of Limited  Partnership  Interest held by
non-affiliates  of the  Registrant as of March 31, 1999 was  $19,114,110  (1,577
investors).  As of March 31,  1999,  there was no market for these  Units and no
market is expected to develop.  The  aggregate  sales price is  accordingly  not
necessarily indicative of the price at which these Units would trade.

                  DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Prospectus of the Registrant  dated February 20, 1987, and filed
pursuant to Rule 424(b) and Rule 424(c)  under the  Securities  Act of 1933,  as
amended,  are  incorporated  by reference into Part III of this Annual Report on
Form 10-KSB.



<PAGE>



                                PART I

Item 1.    Description of Business.

General.

Common Goal Health Care Participating Mortgage Fund L.P. (the "Partnership") was
organized on August 20, 1986 as a limited partnership under the Delaware Revised
Uniform Limited  Partnership Act. The Partnership's  general partners are Common
Goal Capital Group,  Inc.  ("Common Goal" or the "Managing General Partner") and
Common  Goal   Limited   Partnership   I  (the   "Minority   General   Partner")
(collectively, the "General Partners"). With limited exceptions, Common Goal has
exclusive  control over the business of the Partnership,  including the right to
manage the Partnership's  assets. The Partnership  commenced  operations on July
21, 1987 after having accepted subscriptions for more than the requisite minimum
of 116,000  depositary  units  representing  beneficial  assignments  of limited
partnership  interests (the "Depositary  Units") in a public offering registered
with the U.S.  Securities  and  Exchange  Commission  on Form S-11 (the  "Public
Offering"). The Partnership raised a total of $19,129,110 in the Public Offering
which  terminated on February 20, 1989. On June 25, 1990,  the Managing  General
Partner caused all holders of Depositary Units to be admitted to the Partnership
as  Limited  Partners  holding  units  of  limited  partnership  interests  (the
"Units").

The Partnership's  primary business was to invest in or make mortgage loans (the
"Mortgage  Loans"),  comprised  of a mix of first  and  junior  Mortgage  Loans,
secured by health  care-related real properties owned by unaffiliated  entities.
The  Partnership  did not own or acquire real property.  The Partnership has one
Mortgage Loan which remained  outstanding as of March 31, 1999. The  Partnership
does not  intend  to make  additional  Mortgage  Loans  and its  last  remaining
Mortgage Loan matures in January 2000. See "Existing Mortgage Loan" below.

The Partnership's  objectives in making  investments of the type described above
were:  (i) to preserve and protect the  Partnership's  capital;  (ii) to provide
quarterly  distributions  from  investment  income;  and  (iii) to  provide  for
potential long-term  appreciation of its Mortgage Loan investments,  principally
through  participation payable at maturity of the Mortgage Loan or upon the sale
or  refinancing  of  the  underlying  property  (the  "Participation").  Because
Participation in facility  appreciation is paid only upon maturity of a Mortgage
Loan or a sale of the underlying  facility,  cash  distributions  as a result of
Participation  on the one  remaining  Mortgage Loan are not expected to commence
until  repayment or  maturity.  It is not an  objective  of the  Partnership  to
provide tax-sheltered income.

Funds held  pending  distribution  may be  invested by the  Partnership,  at the
direction  of  the  Managing  General  Partner,   in  United  States  government
securities,  certificates  of deposit of United States banks with a net worth of
at least  $20,000,000,  repurchase  agreements  covering the  securities  of the
United  States  government  or  governmental  agencies,   bankers'  acceptances,
commercial paper rated A-1 or better by Moody's Investors  Service,  Inc., money
market  funds having  assets in excess of  $100,000,000,  interest-bearing  time
deposits  in  banks  and  thrift   institutions  or  any  combination  of  these
investments.

The  Partnership is conducting and intends to continue to conduct its operations
so that it will not become subject to regulation  under the  Investment  Company
Act of  1940.  Generally,  the  term  "investment  company"  might  include  the
Partnership if, after a one-year period,  the  Partnership,  among other things,
were to be  engaged  primarily,  or were to hold  itself  out as  being  engaged
primarily, or were to propose to engage primarily, in the business of investing,
reinvesting or trading in securities, or if it were to have more than 40% of its
total assets, excluding cash and government securities,  invested in "investment
securities" as that term is defined in the  Investment  Company Act of 1940. The
Partnership does not currently meet this test.

Types of Mortgage  Loans.  The  Partnership's  Mortgage Loans are secured by fee
interests (or other beneficial interests essentially equivalent to a mortgage on
real property).  All real estate underlying Mortgage Loans is used in the health
care industry,  particularly  real estate used as nursing home and  intermediate
care facilities.

Other  Operating  and  Investment  Policies.  In 1990,  Common  Goal Health Care
Pension  and  Income  Fund  L.P.  II   ("Common   Goal  II"),   an   affiliated,
publicly-offered   limited  partnership  with  investment  objectives  that  are
substantially  identical  to  those  of  the  Partnership  and  the  Partnership
participated in a ten-year second mortgage loan in the original principal amount
of $3,430,114 to an unaffiliated third party through a joint venture between the
Partnership and Common Goal II (the "Joint Venture Loan").  At December 31, 1998
and 1997, the Partnership's  mortgage loans receivable included one loan with an
outstanding balance of approximately $1,568,000,  representing the Partnership's
participation  in the remaining  $1,618,254 of the loan. See "Existing  Mortgage
Loan" below.  The Managing General Partner will attempt to resolve any conflicts
of interest  that may arise with respect to the Joint Venture Loan by exercising
the good faith required of fiduciaries. Such conflicts, if any, will be resolved
in the best judgment of the Managing General Partner.

Federal Income Taxes.  The Partnership is not subject to federal income taxes as
the  liability  for  such  taxes  is  that  of  the  Partners  rather  than  the
Partnership.

Existing Mortgage Loan.

The  Joint  Venture  Loan.  On  September  7,  1989,  the  Partnership  funded a
short-term  mortgage loan (the "Joint Venture Loan" or the "Honeybrook Loan") in
the  original   principal  amount  of  $3,370,000,   to  two  Tennessee  limited
partnerships (individually, a "Borrower" and collectively, the "Borrowers"). One
of  the  Tennessee  limited   partnerships  owns  a  100-bed  skilled  care  and
intermediate  care  facility and the other  limited  partnership  owns a 101-bed
retirement and assisted care facility,  both of which are located in Honeybrook,
Pennsylvania   (collectively,   the  "Facilities").   The  Honeybrook  Loan  was
originally  secured by a second  mortgage on the skilled and  intermediate  care
facility and by  collateral  assignments  of 100% of the general  partners'  and
limited partners' interests in each Borrower. The security interest was taken in
the Borrower that owns the retirement and assisted care facility  insofar as the
facility  is  subject  to a HUD  regulatory  agreement  which  prohibits  junior
encumbrances on the facility.  The security  interest is subject and subordinate
to all applicable HUD  regulations.  When the  Honeybrook  Loan was funded,  the
loan-to-value ratio was approximately 89%. The Partnership elected to extend the
original  term of the  Honeybrook  Loan and assigned its  obligation to make the
long-term  loan to a newly created joint venture with Common Goal II (the "Joint
Venture Loan"). The Joint Venture Loan was made on or about August 1, 1990, with
the Partnership making a $3,430,114  contribution at that time to fund the Joint
Venture Loan. In 1991, Common Goal II contributed  $95,600,  thereby  decreasing
the  Partnership's  contribution  by that amount.  The Borrowers  made a $30,000
repayment of principal in 1991, bringing the Partnership's  contribution down to
$3,304,514 at December 31, 1991 and in December 1992 made a principal paydown of
$211,514 to bring the balance to $3,093,000  on December 31, 1992.  The $211,514
was received on January 7, 1993 and  reclassified as a short term receivable for
year end 1992. An additional $70,000 was paid down on the principal on March 29,
1993.

On November 3, 1993,  Life Care Centers of America,  Inc.  ("Life  Care") paid a
total of  $1,746,790  in a  restructuring  of the  Joint  Venture  Loan.  Of the
$1,691,477 allocated to the Partnership, $1,455,336 was applied to principal and
$145,534 to a Prepayment  Penalty.  A Refinance  Fee of $72,750 was  negotiated,
while Gross Revenue,  Basic  Interest and Additional  Interest were taken as set
forth in the loan  documents.  The  Partnership's  balance has been paid down to
$1,567,664  while the Common Goal II balance has also been paid down to $50,590.
In connection with the repayment of principal, the Partnership agreed to release
its mortgage on the skilled care and  intermediate  care facility.  Life Care or
its affiliates operate the retirement and assisted care facility,  which secures
the Joint Venture Loan.

The Joint Venture Loan is guaranteed by Life Care and by the beneficial owner of
the  Borrowers.  In connection  with the  negotiation  of the Refinance Fee, two
individual guarantors who are no longer employees of the Borrowers were released
from their  guaranty  obligations.  As of December  31,  1998,  Life Care had an
audited net worth in excess of [$91,000,000],  a substantial amount of which was
illiquid.  A substantial portion of the net worth of the individual guarantor is
also illiquid.

The table set forth below  provides  information  concerning the basic terms and
conditions of the Mortgage Loan made and currently held by the Partnership as of
the date of this report.

                       Common Goal Existing Mortgage Loan

                                  Joint Venture

                                      Loan

Date of Loan             8/1/90

Type of Loan             Second Mortgage

Outstanding Principal
 Amount                  $1,567,664 (1)

Base Interest Rate       13.7% (2)

Maturity                 1/1/2000

Type of                  Collateral assignment of
Property/Location        borrower's interests in
of Property              101-bed retirement and
Securing Loan            assisted care facility in
                         Honeybrook, PA


(1)   This  amount  reflects  the funding  provided to the Joint  Venture by the
      Partnership.

(2)   This loan currently  requires payment of additional  interest at a rate of
      1.95% of gross  revenues from the  Facilities in excess of $1,694,000  per
      annum.  This provision is currently the subject of negotiation as a result
      of the  refinancing  of this loan and the  release of the Joint  Venture's
      lien  on  one  of  the  Facilities.  The  Partnership  believes  that  the
      negotiations  will not have a material  effect on the amount of additional
      interest  received.  The loan also provides for payment of a participation
      equal to 30% of the first  $1,000,000 of increase in the fair market value
      (or  gross  sales  price)  of  the  Facilities   over  aggregate   secured
      indebtedness  (including the Joint Venture Loan) as of the date of funding
      of the Joint Venture Loan and 17% of the balance of any such increase.  As
      a result of the  refinancing  of this loan,  the fair market  value of the
      retirement and assisted care facility has been deemed to be $6,400,000 for
      the purpose of calculating the participation. The participation is payable
      upon sale,  refinancing  of a senior  mortgage  loan or at maturity of the
      Joint  Venture Loan with the fair market  values to be  determined at that
      time.

Partnership Allocation of Income and Loss and Distribution.

Net Income and Net Loss. Net income (except with respect to a Disposition, which
includes any Partnership transaction not in the ordinary course of its business,
including,  without  limitation,   collections  of  principal  payments,  equity
participation  payments,  prepayments,  prepayment penalties,  sales, exchanges,
foreclosures or other  dispositions  of Mortgage Loans held by the  Partnership,
recoveries of damage awards and  insurance  proceeds  (other than the receipt of
subscriptions  for Units,  all forms of interest  payments  when due on Mortgage
Loans or business or rental  interruption  insurance  proceeds)) and net loss of
the  Partnership  are  allocated  98% to Limited  Partners and 2% to the General
Partners.  Net income  arising from a  Disposition  is allocated  98% to Limited
Partners and 2% to the General  Partners to the extent of any negative  balances
in the  capital  accounts  of the  Limited  Partners,  and then 100% to  Limited
Partners in an amount necessary to bring the Limited  Partners' capital accounts
up to an amount equal to their Original Contributions, which means the amount of
$10.00 for each Unit less the return of any amount of uninvested funds returned,
as defined in the prospectus, plus the 11% per annum preferred cumulative return
thereon (less  previous  distributions  to the Limited  Partners in repayment of
such  amounts).  The  remainder of such net income shall be allocated 85% to the
Limited Partners and 15% to the General Partners.

Distributions  of Cash From  Operations.  Distributions  of  Adjusted  Cash From
Operations,  defined as all receipts of interest payments on Mortgage Loans less
cash receipts used to pay operating  expenses and to repurchase  any Units (Cash
Flow) less any  amount  set aside for the  restoration  or  creation  of working
capital  reserves,  are  distributed  98% to the Limited  Partners and 2% to the
General Partners, and are apportioned quarterly among Limited Partners of record
as of the record date declared  within 30 days after the end of each quarter and
are paid  quarterly.  No  distributions  of Adjusted Cash From  Operations  with
respect  to any  calendar  year  are  made to the  General  Partners  until  the
following occurs:

     First,  distributions  to the  Limited  Partners  equal  to  the 8%  annual
     cumulative  return on their  Adjusted  Contributions,  defined as  Original
     Contributions  attributable  to a  Unit,  reduced  by  the  total  of  cash
     distributed  from Disposition  Proceeds and from working capital  reserves,
     for such year (plus any amounts accrued from prior years) have been made to
     the Limited Partners; and

     Second,  payment of all previously  subordinated  management  fees, if any,
     have been made.

Thereafter,  all previously subordinated amounts payable to the General Partners
with  respect  to their 2%  interest  are paid in full to the  extent  funds are
available,  and if not  available,  are  deferred  and paid  out of  Disposition
Proceeds, defined as receipts from Dispositions net of related expenses, amounts
necessary for the payment of debts and  obligations of the  Partnership  and any
amount set aside for working capital  reserves.  The Partnership has been making
distributions  to the  Limited  Partners  in excess of the 8% annual  cumulative
return on Adjusted Contributions.

Distributions  of Disposition  Proceeds.  The Managing  General  Partner has the
right to reinvest or distribute all Disposition Proceeds, through the end of the
eleventh year after the date of the Prospectus. Non-liquidating distributions of
Disposition Proceeds are distributed in the following order of priority,  except
as otherwise required by law:

     First,  100% to the  Limited  Partners  until  the  Limited  Partners  have
     received an amount which, when added to prior  distributions of Disposition
     Proceeds and cash from reserves attributable  thereto,  equals the Original
     Contributions of the Limited Partners;

     Second,  100% to the  Limited  Partners  until  each  Limited  Partner  has
     received an amount which, when added to all prior  distributions to Limited
     Partners from all sources (including prior distributions in satisfaction of
     the 8% annual  cumulative  return but excluding  distributions  pursuant to
     above),  equals  the 11% per  annum  preferred  cumulative  return on their
     Adjusted  Contributions,  (calculated  from the first  day of the  calendar
     quarter   succeeding  the  quarter  in  which  Capital   Contributions  are
     received);

     Third,  100% to the General  Partners until they have been paid 100% of the
     subordinated  portion,  if any, of (a) the  Partnership  Management Fee, if
     any, and then (b) their 2% interest in Adjusted Cash From Operations; and

     Fourth,  the remainder,  85% to the Limited Partners and 15% to the General
     Partners.

Dissolution and Returns of Principal. Since it was the intention of the Managing
General Partner to liquidate the Partnership's assets between 1999 and 2004, the
Managing  General Partner will not reinvest loan proceeds in new Mortgage Loans.
The  Partnership's  last remaining  Mortgage Loan, the Joint Venture Loan,  will
mature on January 1,  2000.  The  Partnership  intends  to  commence  an orderly
liquidation thereafter.

Proceeds from the liquidation  shall be applied and distributed in the following
order:

     First, to the payment of creditors of the Partnership but excluding secured
     creditors whose obligations will be assumed or otherwise transferred on the
     liquidation of Partnership assets; and

     Second,  after allowance for the expenses of liquidation and the setting up
     of any  reserves  for  contingencies  which the  Managing  General  Partner
     considers  necessary,  to the  General  Partners  and  Limited  Partners in
     proportion  to and to the extent of the positive  balances in their capital
     accounts,  after net income or loss  arising  from a  Disposition  has been
     allocated,  with any excess being  distributed in accordance with the order
     of priority for non-liquidating distributions.

Notwithstanding  anything to the contrary,  the Managing General Partner has the
right to defer  liquidation if, in the opinion of the Managing  General Partner,
the sale of  Partnership  assets  in  liquidation  would  result  in a  material
underrealization on the Partnership's  assets. The Managing Partner also has the
right to determine the rate at which  returns of principal  (returns of Original
Contribution) are distributed to the limited partners.

Item 2. Description of Property.

        The Partnership owned no real property as of December 31, 1998.

Item 3. Legal Proceedings.

        The Partnership is not a party to any litigation.

Item 4. Submission of Matters to a Vote of Security Holders.

        No matters were submitted to a vote of security  holders during the last
        quarter of 1998.

                                PART II

Item 5. Market for Units of Limited  Partnership  Interest  and Related Security
        Holder Matters.

The Units are not readily transferable.  There is no public market for the Units
and it is not currently  expected that any will develop.  There are restrictions
upon the  transferability  of Units,  including the requirement that the General
Partners  consent to any  transferee  becoming a substituted  Unitholder  (which
consent  may be  granted  or  withheld  at the sole  discretion  of the  General
Partners).  In addition,  restrictions  on transfer  may be imposed  under state
securities laws.

The Revenue Act of 1987 contains  provisions which may have an adverse impact on
investors in certain "publicly traded  partnerships." If the Partnership were to
be classified as a "publicly  traded  partnership,"  income  attributable to the
Units  would  be   characterized  as  portfolio  income  and  the  gross  income
attributable  to Units  acquired by tax-exempt  entities after December 17, 1987
would be unrelated business income, with the result that the Units could be less
marketable.  The General Partners will, if necessary,  take appropriate steps to
ensure that the Partnership will not be deemed a "publicly traded partnership."

At  March  31,  1999,   1,911,411  Units  were  outstanding  and  were  held  by
approximately 1577 holders of record.

The Partnership  made  distributions to Limited Partners of $572,651 or $.30 per
Unit  during  1998,   $829,446,   or  $.43  per  unit  during  1997.   Principal
distributions of $1,361,360 ($.71 per Unit) were disbursed in January, April and
October 1997,  respectively.  The Partnership does not intend to make additional
Mortgage Loans.

Item 6. Management's Discussion and Analysis or Plan of Operation.

Liquidity and Capital Resources.  Common Goal Health Care Participating Mortgage
Fund L.P., a Delaware  limited  partnership (the  "Partnership"),  was formed to
make mortgage  loans  secured by real  property  comprised of a mix of first and
junior Mortgage Loans, secured by health care related properties.

Partnership  assets decreased to $1,835,800 at December 31, 1998 from $2,204,339
at December 31, 1997. The decrease from 1997 to 1998 ($368,539 or  approximately
17%) resulted primarily from a decrease of cash and cash equivalents by $352,355
which with interest income received of $255,620  allowed the partnership to make
distributions to the limited partners of $572,651,  and the fact that there were
no  repayments  of Mortgage  Loan  receivables.  As of December  31,  1998,  the
Partnership's  loan  portfolio  consisted of one mortgage  loan,  the  aggregate
outstanding principal balance of which was $1,567,664.

The  Partnership  structured  its  Mortgage  Loans to  provide  for  payment  of
quarterly  distributions  from investment  income. The interest derived from the
Mortgage  Loans,  repayments of Mortgage Loans and interest earned on short-term
investments contribute to the Partnership's  liquidity.  These funds are used to
make  cash  distributions  to  Limited  Partners,  and to pay  normal  operating
expenses as they arise.  Reference is made to "Item 1.  Description of Business"
and the "Notes to the Financial  Statements" in "Item 7.  Financial  Statements"
for further information regarding such Mortgage Loan investments.

The Partnership's  balance of cash and cash equivalents at December 31, 1998 and
1997 was $241,487 and $593,842  respectively,  which consisted of operating cash
and working capital  reserves.  The decrease in cash and cash  equivalents  from
December  31,  1997  resulted  from a  payment  of  $572,691  ($.30 per Unit) in
dividend  distributions  to  limited  partners  which  was  offset  by income of
$158,558.  The Partnership is required to maintain  reserves not less than 1% of
gross  offering  proceeds (not less than  $191,291),  but currently  maintains a
reserve in excess of that amount,  $241,487 at December 31, 1998.  The amount of
cash and cash equivalents  currently  maintained by the Partnership is primarily
the result of proceeds from the repayment of mortgage loans.

The  Partnership's  success and the resultant  rate of return to  Unitholders is
dependent  upon,  among other  things,  the  continued  ability of the remaining
borrowers to pay the current interest,  additional interest and principal on the
Mortgage Loans.

As a result of the loan payoffs to date, the Partnership's  rates of return have
been and will  continue to be impacted,  as  discussed in Results of  Operations
below.

Results of  Operations.  The  Partnership  was  organized in August 1986.  As of
December 31, 1998,  the  Partnership  had one  remaining  Mortgage  Loan.  Since
commencement of operations in July of 1987, the Partnership  invested  available
funds  (funds not invested in Mortgage  Loans) in  short-term  investments.  The
interest earned on these  investments has been and is expected to continue to be
less  than  the  interest  rates  achievable  on  Mortgage  Loans  made  by  the
Partnership.

During the years ended  December  31,  1998 and 1997,  the  Partnership  had net
income of  $158,558  and  $149,220,  based on total  revenues  of  $239,436  and
$280,134  and  total  expenses  of  $80,878  and  $130,914,   respectively.  The
Partnership's  net income per Limited Partner Unit was $.08 per Unit in 1998 and
in 1997. The Partnership's  distributions,  including  returns of principal,  to
Limited Partners were $.30 per Unit in 1998 and $1.14 per Unit in 1997. The 1997
distribution   included  $1,361,360  in  principal  payments  ($.71  per  Unit).
Eliminating the effect of the principal repayments to the Limited Partners,  the
dividend  distributions  to Limited Partners were $.30 per Unit in 1998 and $.43
per Unit in 1997.

The distributions may not remain at the present level (9.256% financial capital)
as a result of loan payoffs.  The General  Partners are currently  reviewing the
distribution  policy and the matters of the additional  reserves now being held.
The Partnership receives a lesser rate of return from its short-term investments
than it would  receive from the loans,  thereby  reducing  funds  available  for
distribution.

Expenses  decreased in 1998 by $50,036 primarily because of a decrease of $7,626
in  management  fees caused by the drop in  mortgage  balances  being  serviced.
Expenses also decreased in 1998 by $13,516 in  professional  fees and a decrease
of $28,894 in miscellaneous expenses.

Additionally,  under the terms of the Partnership agreement,  the Partnership is
required to  reimburse  the  Managing  General  Partner  for  certain  operating
expenses  paid on behalf of the  Partnership.  In 1998 and  1997,  the  Managing
General  Partner  was  reimbursed  by the  Partnership  for  $54,566 and $93,763
respectively.  The Managing  General Partner believes that such charges have not
adversely affected the current yield to the Limited Partners.

Year 2000 Compliance.

Information   provided  within  this  note  constitute  a  year  2000  readiness
disclosure pursuant to the provisions of the Year 2000 Information Readiness and
Disclosure Act.

The year 2000  issue is the  result  of  computer  programs  being  written  and
microchips  being  programmed  using two digits  rather  than four to define the
applicable year. If not corrected, any program having time-sensitive software or
equipment  incorporating  embedded microchips may recognize a date using "00" as
the year 1900 rather than the year 2000 or may not  recognize the year 2000 as a
leap year. This could result in a variety of problems including miscalculations,
loss of data and  failure  of  entire  systems.  Critical  areas  that  could be
affected  are  accounts  receivable,  accounts  payable,  general  ledger,  cash
management,   computer  hardware,   telecommunications  and  property  operating
systems.

The Partnership receives quarterly interest payments from a single borrower. The
Partnership  is in the process of obtaining  documentation  related to year 2000
readiness from its outside  vendors,  including its banks.  The  Partnership has
received  documentation  from an outside  vendor  that  maintains  its books and
records,  indicating  that the vendors is year 2000  compliant.  The Partnership
expects  to  complete  the  documentation  phase  by  September  30,  1999.  The
Partnership  expects to complete a contingency  plan by September 30, 1999.  The
Partnership believes that based on the status of the Partnership's portfolio and
its limited number of transactions,  aside from catastrophic  failures of banks,
governmental  agencies,  etc.,  it  could  carry  out  substantially  all of its
critical  administrative  and accounting  operations on a manual basis or easily
convert to systems that are year 2000 ready.

Some  statements in this Form 10-KSB are forward  looking and actual results may
differ materially from those stated. As discussed herein, among the factors that
may affect actual results are changes in the financial condition of the borrower
and/or anticipated changes in expenses or capital expenditures.


Item 7. Financial Statements.

        See Financial Statements.





<PAGE>


       COMMON GOAL HEALTH CARE PARTICIPATING MORTGAGE FUND L.P.







                           Table of Contents

                                                                  Page

Independent Auditors' Reports.....................................F - 1

Financial Statements

     Balance Sheet................................................F - 3

     Statements of Income.........................................F - 4

     Statements of Partners' Capital..............................F - 5

     Statements of Cash Flows.....................................F - 6

Notes to Financial Statements.....................................F - 7



<PAGE>







                     INDEPENDENT AUDITORS' REPORT



To the Partners
Common Goal Health Care
 Participating Mortgage Fund L.P.
Penn Yan, New York


We have  audited  the  accompanying  balance  sheet of Common  Goal  Health Care
Participating  Mortgage Fund L.P. (a Delware limited partnership) as of December
31, 1998, and the related statements of income, partners' capital and cash flows
for the year then ended.  These financial  statements are the  responsibility of
the management of Common Goal Health Care  Participating  Mortgage Fund L.P. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of Common  Goal  Health Care
Participating Mortgage Fund L.P. as of December 31, 1998, and the results of its
operations  and cash flows for the year then ended in conformity  with generally
accepted accounting principles.

As  discussed  in Note 2 to the  financial  statements.  Common Goal Health Care
Participating  Mortgage  Fund L.P.  has its primary  asset  concentrated  in one
mortgage loan.



                                /s/ Ehrhardt Keefe Steiner & Hottman PC
                                    Ehrhardt Keefe Steiner & Hottman PC

April 1, 1999
Denver, Colorado
                                      F - 1

<PAGE>









                     Independent Auditors' Report




The Partners
Common Goal Health Care
  Participating Mortgage Fund, L.P.:


We have  audited  the  accompanying  balance  sheets of Common  Goal Health Care
Participating  Mortgage  Fund,  L.P.  (a  Delaware  limited  partnership)  as of
December 31, 1997 and 1996, and the related statements of operations,  partners'
capital,  and cash flows for each of the years in the  three-year  period  ended
December 31, 1997.  These  financial  statements are the  responsibility  of the
Partnership's  management.  Our responsibility is to express an opinion on these
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 financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of Common  Goal  Health Care
Participating  Mortgage  Fund,  L.P. as of December  31, 1997 and 1996,  and the
results  of its  operations  and its cash  flows  for  each of the  years in the
three-year  period  December 31, 1997, in  conformity  with  generally  accepted
accounting principles.




                           /s/ KPMG LLP
                               KPMG LLP

Denver, Colorado
March 16, 1998









                                     F - 2
<PAGE>



            COMMON GOAL HEALTH CARE PARTICIPATING MORTGAGE FUND L.P.

                                  Balance Sheet
                                December 31, 1998


                                     Assets

Cash and cash equivalents ...............................     $  241,487
Accrued interest receivable .............................         26,649
Mortgage loan receivable (Note 2) .......................      1,567,664
                                                              ----------

                                                              $1,835,800
                                                              ========== 

                        Liabilities and Partners' Capital

Accounts payable and accrued expenses ...................     $    4,000
Due to affiliates .......................................         74,657
                                                              ----------
   Total liabilities ....................................         78,657
                                                              ----------

Partners' capital
   General partners .....................................         67,204
   Limited partners .....................................      1,689,939
                                                              ----------
      Total partners' capital ...........................      1,757,143
                                                              ----------

                                                              $1,835,800
                                                              ==========

                       See notes to financial statements.

                                     F - 3

<PAGE>


            COMMON GOAL HEALTH CARE PARTICIPATING MORTGAGE FUND L.P.

                              Statements of Income


                                               For the Years Ended
                                                   December 31,
                                             -------------------------
                                                1998          1997
                                             ----------     ----------
Revenue
  Interest income ......................     $  239,436     $  280,134
                                             ----------     ----------
    Total revenues .....................        239,436        280,134
                                             ----------     ----------

Expenses
  Professional fees ....................         48,703         62,219
  Fees to affiliates
    Management .........................         22,870         30,496
    Mortgage servicing .................          3,919          3,919
  Other ................................          5,386         34,280
                                                 80,878        130,914
                                             ----------     ----------

Net income .............................     $  158,558     $  149,220
                                             ==========     ==========

Net income allocated to general partners     $    3,171     $    2,983
Net income allocated to limited partners        155,387        146,237
                                             ----------     ----------

                                             $  158,558     $  149,220
                                             ==========     ==========

Basic earnings per limited partner unit      $      .08     $      .08
                                             ==========     ==========

Weighted average limited partner units
 outstanding ...........................      1,911,411      1,911,411
                                             ==========     ==========

                       See notes to financial statements.

                                     F - 4


<PAGE>

            COMMON GOAL HEALTH CARE PARTICIPATING MORTGAGE FUND L.P.

                         Statements of Partners' Capital
                 For the Years Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>


                                                                               Total
                                              General         Limited         Partners'
                                              Partners        Partners         Capital
                                            -----------     -----------      -----------

<S>                                         <C>             <C>              <C>        
Balance at December 31, 1996 ..........     $    61,050     $ 4,151,772      $ 4,212,822

Distributions to limited partners
 ($.43 per unit) ......................            --          (829,446)        (829,466)

Return of principal to limited partners
 ($.71 per unit) ......................            --        (1,361,360)      (1,361,360)

Net income ............................           2,983         146,237          149,220
                                            -----------     -----------      -----------

Balance at December 31, 1997 ..........          64,033       2,107,203        2,171,236

Distributions to limited partners ($.30            --          (572,651)        (572,651)
per unit)

Net income ............................           3,171         155,387          158,558
                                            -----------     -----------      -----------

Balance at December 31, 1998 ..........     $    67,204     $ 1,689,939      $ 1,757,143
                                            ===========     ===========      ===========
</TABLE>


<PAGE>



            COMMON GOAL HEALTH CARE PARTICIPATING MORTGAGE FUND L.P.

                            Statements of Cash Flows

<TABLE>
<CAPTION>


                                                        For the Years Ended
                                                             December 31,
                                                     ----------------------------
                                                         1998             1997
                                                     -----------      -----------

<S>                                                  <C>              <C>
Cash flows from operating activities
   Net income ..................................     $   158,558      $   149,220
   Adjustments to reconcile net income to net
    cash provided by operating activities -
      Decrease in due from affiliates ..........            --              2,664
      Decrease (increase) in interest and
       other receivables .......................          16,184          (30,515)
      Decrease in accounts payable and accrued
       expenses ................................            --             (7,150)
      Increase in due to affiliates ............          45,554           16,562
                                                     -----------      -----------
                                                          61,738          (18,439)
                                                     -----------      -----------
           Net cash provided by operating
            activities .........................         220,296          130,781
                                                     -----------      -----------

Cash flows from financing activities
   Distributions and returns of principal
    to partners ................................        (572,651)      (2,190,806)
                                                     -----------      -----------
           Net cash used in financing activities        (572,651)      (2,190,806)
                                                     -----------      -----------

Net decrease in cash and cash equivalents ......        (352,355)      (2,060,025)

Cash and cash equivalents, beginning of year ...         593,842        2,653,867
                                                     -----------      -----------

Cash and cash equivalents, end of year .........     $   241,487      $   593,842
                                                     ===========      ===========
</TABLE>


Supplemental disclosure of cash flow information:  Interest paid was $0 for 1998
      and 1997.

      Income taxes paid were $0 for 1998 and 1997.

                       See notes to financial statements.

                                     F - 6


<PAGE>


       COMMON GOAL HEALTH CARE PARTICIPATING MORTGAGE FUND L.P.

                     Notes to Financial Statements


Note 1 - Organization and Summary of Significant Accounting Policies

Common Goal Health Care Participating  Mortgage Fund L.P. (the  Partnership),  a
Delaware  Limited  Partnership,  was formed on August 20,  1986 to invest in and
make  mortgage  loans to third parties and  affiliates  involved in health care.
Having sold more than the specified minimum of 116,000 units  ($1,160,000),  the
Partnership  commenced  operations on July 21, 1987. The Partnership's  offering
terminated on February 20, 1989, with the Partnership  having sold the specified
maximum of 1,912,911  units  ($19,129,110).  There is no active  public  trading
market for the units. At December 31, 1998, there were 1,577 unit holders.

The General  Partners  include  Common Goal Capital  Group,  Inc.,  the Managing
General  Partner,  and Common Goal Limited  Partnership I, the Minority  General
Partner. Under the terms of the Partnership agreement,  the General Partners are
not required to make any additional capital  contributions  except under certain
limited circumstances upon termination of the Partnership.

Under the term of the  Partnership  agreement,  the  Partnership  reimbursed the
General Partners for certain offering and  organizational  expenses  incurred in
connection with the issuance and distribution of the units in an amount fixed at
3.5% of gross  offering  proceeds.  These offering and  organizational  expenses
excluded   broker/dealer   selling  commissions  and  included  accountable  due
diligence expense  reimbursements.  Broker/dealer selling commissions of 9.5% of
gross proceeds were also paid by the Partnership.  Common Goal Securities,  Inc.
(CGSI), an affiliate acting as managing dealer,  received selling commissions of
2% of the gross offering  proceeds and an additional  7.5% of the purchase price
of all units sold directly by CGSI.  Additionally,  CGSI was  reimbursed for all
expenses  incurred in  connection  with the offering and also received an amount
equal to .5% of the gross offering proceeds for accountable  expenses.  Offering
and organizational expenses were recorded as a reduction of partners' capital.

Use of Estimates

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.

For entities  investing in and making mortgage loans to businesses in the health
care industry,  certain  inherent  risks may increase the  possibility of actual
results  differing from  management's  estimates.  These inherent risks include,
among other things, the following:

o    Substantial  dependence  on  revenues  derived  from  reimbursement  by the
     Federal Medicare and state Medicaid programs;

o    Government  regulation,   government  budgetary  constraints  and  proposed
     legislative and regulatory changes; and

                                     F - 7
<PAGE>




Note 1 - Organization and Summary of Significant  Accounting  Policies 
(continued)

o    Lawsuits alleging malpractice and related claims.

Partnership Management Fees and Operating Expenses

Under the terms of the Partnership agreement, the Partnership is required to pay
a quarterly  management  fee to the Managing  General  Partner equal to .75% per
annum of adjusted contributions,  as defined. Additionally, a mortgage servicing
fee  equal to .25% per  annum of the  Partnership's  outstanding  mortgage  loan
principal amount is to be paid to Common Goal Mortgage Company,  an affiliate of
the General Partners.

Additionally,  under the terms of the Partnership agreement,  the Partnership is
required to  reimburse  the  Managing  General  Partner  for  certain  operating
expenses  paid on behalf  of the  Partnership.  In 1998,  the  Managing  General
Partner was reimbursed by the  Partnership  for $54,566 of these  expenses.  The
remaining expenses were paid directly by the Partnership.

Partnership Allocation of Income and Loss and Distributions

Net Income and Net Losses

Net income (except with respect to a Disposition, as defined, which includes any
Partnership  transaction not in the ordinary  course of its business,  including
without  limitation,  collections of principal  payments,  equity  participation
payments,  prepayments,  prepayment penalties,  sales,  exchanges,  foreclosures
other  dispositions  of Mortgage  Loans held by the  Partnership,  recoveries of
damage awards and insurance  proceeds  (other than the receipt of  subscriptions
for Units, all forms of interest payments when due on Mortgage Loans or business
or rental  interruption  insurance  proceeds) and net loss of the Partnership is
allocated 98% to Limited Partners and 2% to the General Partners.

Net income arising from a Disposition  is allocated 98% to Limited  Partners and
2% to the General Partners to the extent of any negative balances in the capital
accounts of the Limited Partners, and then 100% to Limited Partners in an amount
necessary to bring the Limited  Partners' capital accounts up to an amount equal
to their original  contributions,  as defined,  which means the amount of $10.00
for each unit less the return of any amount of  uninvested  funds  returned,  as
defined,  plus the 11% per  annum  preferred  cumulative  return  thereon  (less
previous  distributions  to the Limited  Partners in repayment of such amounts).
Remaining  net income is  allocated  85% to the Limited  Partners  and 5% to the
General Partners.


<PAGE>




Note 1 - Organization and Summary of Significant Accounting Policies (continued)

Partnership Allocation of Income and Loss and Distributions (continued)

Net Income and Net Loss (continued)

Distributions  of  adjusted  cash from  operations,  defined as all  receipts of
interest  payments on mortgage  loans less cash  receipts  used to pay operating
expenses and to  repurchase  any units (cash flow) less any amount set aside for
the restoration or creation of working capital reserves,  are distributed 98% to
the  limited  partners  and 2% to the  general  partners,  and  are  apportioned
quarterly among limited partners of record as of the record date declared within
30 days after the end of each quarter and are paid quarterly.  No  distributions
of adjusted cash from  operations  with respect to any calendar year are made to
the general partners until the following occurs:

    First,  distributions  to the  limited  partners  equal  to  the  8%  annual
    cumulative  return on their  adjusted  contributions  , defined as  original
    contributions  attributable  to  a  unit,  reduced  by  the  total  of  cash
    distributed from disposition proceeds and from working capital reserves, for
    such year (plus any amounts  accrued from prior years) have been made to the
    limited partners; and

    Second,  payments of all previously  subordinated  management  fees, if any,
    have been made.

Thereafter,  all previously subordinated amounts payable to the general partners
with  respect  to their 2%  interest  are paid in full to the  extent  funds are
available,  and if not  available,  are  deferred  and paid  out of  disposition
proceeds, defined as receipts from dispositions net of related expenses, amounts
necessary for the payment of debts and  obligations of the  partnership  and any
amount set aside for working capital  reserves.  The partnership has been making
distributions  to the  limited  partners  in excess of the 8% annual  cumulative
return on adjusted contributions.

Distributions of Disposition Proceeds

The  managing  general  partner  has the right to  reinvest  or  distribute  all
disposition proceeds, through the end of the eleventh year after the date of the
prospectus which is 1987. Non-liquidating  distributions of disposition proceeds
are distributed in the following order of priority, except as otherwise required
by law:

    First, 100% to the limited partners until the limited partners have received
    an amount which, when added to prior  distributions of disposition  proceeds
    and  cash  from   reserves   attributable   thereto,   equals  the  original
    contributions of the limited partners;



<PAGE>




Note 1 - Organization and Summary of Significant Accounting Policies (continued)

Distributions of Disposition Proceeds (continued)

    Second, 100% to the limited partners until each limited partner has received
    an amount which,  when added to all prior  distributions to limited partners
    from all sources  (including  prior  distributions in satisfaction of the 8%
    annual  cumulative  return but excluding  distributions  pursuant to above),
    equals  the 11% per annum  preferred  cumulative  return  on their  adjusted
    contributions,  (calculated  from  the  first  day of the  calendar  quarter
    succeeding the quarter in which capital contributions were received);

    Third,  100% to the general  partners  until they have been paid 100% of the
    subordinated portion, if any, of (a) the partnership management fee, if any,
    and then (b) their 2% interest in adjusted cash from operations; and

    Fourth,  the remainder,  85% to the limited partners and 15% to the
    general partners.

Dissolution and Returns of Principal

Since it was the  intention of the  managing  general  partner to liquidate  the
Partnership's  assets between 1999 and 2004, the managing  general  partner will
not  reinvest  loan  proceeds in new  mortgage  loans.  The  partnership's  last
remaining mortgage loan, the joint venture loan, will mature on January 1, 2000.
The partnership expects to commence an orderly liquidation in thereafter.

Proceeds from the  liquidation  will be applied and distributed in the following
order:

    First, to the payment of creditors of the partnership but excluding  secured
    creditors whose obligations will be assumed or otherwise  transferred on the
    liquidation of partnership assets; and

    Second,  after  allowance for the expenses of liquidation and the setting up
    of any  reserves  for  contingencies  which  the  managing  general  partner
    considers  necessary,  to the  general  partners  and  limited  partners  in
    proportion  to and to the extent of the positive  balances in their  capital
    accounts,  after net  income or loss  arising  from a  disposition  has been
    allocated, with any excess being distributed in accordance with the order of
    priority for non-liquidating distributions.

Notwithstanding  anything to the contrary,  the managing general partner has the
right to defer  liquidation if, in the opinion of the managing  general partner,
the sale of  partnership  assets  in  liquidation  would  result  in a  material
underrealization on the Partnership's  assets. The managing general partner also
has the right to determine  the rate at which  returns of principal  (returns of
original contributions) are distributed to the limited partners.


<PAGE>




Note 1 - Organization and Summary of Significant Accounting Policies (continued)

Allowance for Losses

An allowance  for loan losses is  provided,  if  necessary,  at a level
which the  partnership's  management  considers  adequate based upon an
evaluation  of known and inherent  risks in the loan  portfolio.  There
was no allowance for losses at December 31, 1998.

Federal Income Taxes

No income tax  provision has been  included in the  financial  statements  since
income or loss of the  Partnership is required to be reported by the partners on
their respective income tax returns. Net income for financial reporting purposes
did not differ  from net income for  federal  income tax  purposes  for the year
ended December 31, 1998 and 1997.

Basic Earnings Per Limited Partner Unit

Basic  earnings  per  limited  partner  unit is computed  based on the  weighted
average  limited  partner units  outstanding  for the year dividend into the net
income applicable to the Limited Partners.

There were no dilutive limited partnership units during 1998 or 1997.

Cash and Cash Equivalents

The partnership  classifies all short-term  investments with maturities of three
months or less at the date of purchase as cash equivalents.

Concentration of Credit Risk

The  Partnership's  financial  instruments that are exposed to concentrations of
credit risk consist  primarily of cash and cash  equivalents,  accrued  interest
receivable  and a mortgage  loan  receivable.  The  Partnership  maintains  cash
balances in bank deposit accounts which, at times, may exceed federally  insured
limits.  At  December  31,  1998,  the  Partnership's  cash and cash  equivalent
balances were in excess of such limits by approximately $125,000.

The entire accrued interest  receivable and mortgage loan receivable  balance at
December  31,  1998 are from a ten year,  13.7%  mortgage  loan  provided by the
Partnership  to Honey Brook  Medical  Investors,  Ltd. In order to mitigate  the
potential  credit risk,  the  Partnership  has also  obtained a guaranty from an
unrelated entity.


<PAGE>




Note 1 - Organization and Summary of Significant Accounting Policies (continued)

Recently Issued Accounting Pronouncements

In June 1997, the FASB issued  Statement of Financial  Accounting  Standards No.
130, "Reporting  Comprehensive  Income" (SFAS 130), which establishes  standards
for  reporting  and  display  of  comprehensive   income,   its  components  and
accumulated balances.  Comprehensive income is defined to include all changes in
equity except those resulting from  investments by owners and  distributions  to
owners.  Among  other  disclosures,  SFAS 130  requires  that all items that are
required to be recognized  under current  accounting  standards as components of
comprehensive  income,  be reported in a financial  statement  that is displayed
with the same prominence as other financial statements.  Currently the Company's
only component,  which would comprise  comprehensive  income,  is its results of
operations.

Also, in June 1997, the FASB issued Statement of Financial  Accounting Standards
No. 131,  "Disclosures about Segments of an Enterprise and Related  Information"
(SFAS 131), which supersedes Statement of Financial Accounting Standards No. 14,
"Financial   Reporting  for  Segments  of  a  Business   Enterprise."  SFAS  131
establishes standards for the way that public companies report information about
operating  segments in annual  financial  statements  and requires  reporting of
selected  information about operating  segments in interim financial  statements
issued to the public.  It also establishes  standards for disclosures  regarding
products and services,  geographic areas and major  customers.  SFAS 131 defines
operating  segments as components of a company  about which  separate  financial
information  is  available  that is evaluated  regularly by the chief  operating
decision  maker  in  deciding  how  to  allocate   resources  and  in  assessing
performance.

SFAS  No.'s 130 and 131 are  effective  for  financial  statements  for  periods
beginning  after  December 15, 1997,  and require  comparative  information  for
earlier periods to be restated.

In February of 1998, the FASB issued Statement of Financial Accounting Standards
No.  132,  "Employers'  Disclosures  about  Pensions  and  Other  Postretirement
Benefits" (SFAS No. 132),  which supercedes SFAS No.'s 87, 88, and 106. SFAS No.
132 addresses  disclosure only and is effective for fiscal years beginning after
December 15, 1997. Restatement of disclosures for prior periods is required. The
adoption of SFAS No. 132 will have no current impact on the Company's  financial
statements,  as no  prior  disclosures  under  SFAS  No.  87,  88,  or 106  were
applicable.

In June of 1998, the FASB issued Statement of Financial Accounting Standards No.
133,  "Accounting for Derivative  Instruments and Hedging  Activities"(SFAS  No.
133).  SFAS  No.  133  addresses  the  accounting  for  derivative  instruments,
including  certain  derivative  instruments  embedded  in other  contracts,  and
hedging  activities.  SFAS No. 133 is effective  for all fiscal  quarters of all
fiscal years beginning after June 15,1999.  Initial  application of SFAS No. 133
shall be as of the  beginning  of an  entity's  fiscal  quarter,  on that  date,
hedging  relationships  shall  be  designated  anew  and  documented  under  the
provisions  of this  statement.  The  adoption  of SFAS  No.  133  shall  not be
retroactively  applied.  This statement currently has no impact on the financial
statements  of  the  Company,  as the  Company  does  not  hold  any  derivative
instruments or participate in any hedging activities.


<PAGE>




Note 2 - Mortgage Loan Receivable

Mortgage loan receivable as of December 31, 1998 is as follows:

                         Basic                                    Face and
                       Interest      Maturity         Prior       Carrying
    Description          Rate          Date           Liens         Amount
-------------------   ----------  ---------------   ----------    ----------
Honey Brook loan         13.7%    January 1, 2000   $8,810,000    $1,567,664


The Honey Brook loan is a second  mortgage loan secured by a health care related
real property.  Interest is payable monthly and the principal  balance is due at
maturity.  The loan provides for the payment of additional  interest  based upon
gross revenues of the property and the payment of a participation interest equal
to a percentage of the increase in the fair value of the underlying  facility at
maturity or  redemption,  or pursuant to any sale of the  facility,  as defined.
Participation  interests  are  recorded as revenue  when they are  determinable,
generally at maturity or  redemption  of the loan or pursuant to any sale of the
facility. The property is subject to a first mortgage lien.

In 1990,  Common Goal Health Care  Pension and Income Fund L.P. II  ("Commission
Goal II"), an affiliated,  publicly-offered  limited partnership with investment
objectives that are substantially  identical to those of the partnership and the
partnership  participated  in a ten-year  second  mortgage  loan in the original
principal  amount of $3,430,114 to an  unaffiliated  third party through a joint
venture  between the  Partnership and Common Goal II (the "Joint Venture Loan").
At December  31, 1998,  the  Partnership's  mortgage  loan  receivable  included
$1,567,664,  representing  the  partnership's  participation  of  96.87%  in the
remaining $1,618,254 principal balance of the loan.

All property  securing the  Partnership's  mortgage loan at December 31, 1998 is
located in Pennsylvania.


Note 3 - Fair Value of Financial Instruments

The  fair  value  of  the  Partnership's  participation  in  the  mortgage  loan
receivable differed from its carrying value as follows:

                                                    Carrying        Fair
                                                      Value         Value
                                                    ----------    ----------


December 31, 1998                                   $1,567,664    $1,614,678
                                                    ==========    ==========

The Partnership  estimates the fair value of its  participation in mortgage loan
receivable by discounting future cash flows using an appropriate interest rate.


<PAGE>




Note 3 - Fair Value of Financial Instruments (continued)

The carrying amounts at December 31, 1998 for cash and cash equivalents, accrued
interest receivable, other receivables, due from and to affiliates, and accounts
payable and  accrued  expenses  approximated  their fair values due to the short
maturity of these instruments.






<PAGE>

Item  8.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure.

On March 20, 1999, the Partnership  engaged  Ehrhardt Keefe Steiner & Hottman PC
as its independent auditors for the 1998 fiscal year. Reports on Form 8-K, 8-K/A
and Form 8-K/A-2 reporting the event were filed on March 24, 1999, April 2, 1999
and  April 9,  1999  respectively.  There  were no  disagreements  on  financial
statement  disclosures or accounting matters covering the prior two fiscal years
up through March 20, 1999 audited by the  predecessor  auditors.

                               PART III

Item 9. Directors Executive Officers,  Promoters and Control Persons, Compliance
With Section 16(a) of the Exchange Act.

The Partnership does not have directors or officers.  The following is a list of
the officers and directors of the Managing General Partner as of March 31, 1999:


Name                       Age     Position
Albert E. Jenkins III       51     Chairman of the Board, Chief
                                   Executive Officer, President,
                                   Treasurer and Director
Richard R.  Wood            75     Director
William Jasper              82     Director

Albert E.  Jenkins  III is the  President  and Chief  Executive  Officer  of the
Managing   General   Partner  as  well  as  the  Executive  Vice  President  and
Secretary/Treasurer  of Common Goal Mortgage  Company.  He is also President and
Chief Executive Officer of Common Goal Capital Group, Inc. II ("CG Capital Group
II"), the managing general partner of Common Goal Health Care Pension and Income
Fund L.P. II, a Delaware limited  partnership  which commenced a public offering
of its  securities  in January  1990.  Mr.  Jenkins also serves on the boards of
directors  of the  above-referenced  corporations.  Mr.  Jenkins is a co-general
partner of Common Goal Limited Partnership I and Common Goal Management Company.
Mr. Jenkins is also  President,  Chief  Executive  Officer and a director of St.
Catherine's  of  Seneca,  Inc.,  St.  Catherine's  Care  Center of  Tiffin,  St.
Catherine's  Care  Center of  Bloomville  and St.  Catherine's  Care  Centers of
Fostoria.  In  addition,  Mr.  Jenkins  is  President  and  a  director  of  St.
Catherine's  Health Care  Management,  Inc. and St.  Catherine's Care Centers of
Washington Court House Inc. Mr. Jenkins has been a licensed  securities salesman
since 1971 and an investment  advisor  registered under the Investment  Advisers
Act of 1940 since 1978.

Richard R. Wood is a director of the Managing  General Partner and is president,
a director and owner of 80% of the outstanding stock of Renwood Properties, Inc.
Mr. Wood is also a co-general partner of Common Goal Limited Partnership I and a
director of Common Goal Capital Group Inc. II, the managing  general  partner of
Common Goal II. In  addition,  Mr. Wood is a member of the board of directors of
the St.  Catherine's  affiliated  companies which currently own five health care
facilities  in Ohio.  Mr. Wood has,  either  individually  or  together  with or
through  Renwood,  sponsored 31 prior private  limited  partnerships  which have
acquired real estate. These partnerships have raised approximately  $30,762,525,
with  approximately 81% of the properties  acquired being  government-subsidized
low income  housing  projects for families and the elderly and  handicapped.  In
addition, Mr. Wood is a controlling  shareholder of Renwood, Inc. and several of
the  Renwood  companies,  which act as  co-general  partners  of  certain of the
above-referenced  syndications.  He is currently a member of the National Leased
Housing  Association,  Council for Rural Housing and the Real Estate  Investment
Association.  Mr.  Wood  received a B.A.  from  Harvard  University  in 1943 and
attended Massachusetts Institute of Technology from 1947-1948.

William E. Jasper,  Jr. is a director of Common Goal Capital Group,  Inc. II and
has been a member of the Board of Directors of Madison  Square  Federal  Savings
Bank  since  1964.  Prior to 1980,  when Mr.  Jasper  retired,  he had served as
president of a multi-line insurance agency and brokerage. Mr. Jasper is a Deputy
Regional Director for a fraternal organization that is dedicated to the Maryland
Special Olympics which provides  health-care training and specialized sports for
the mentally  handicapped.  Mr. Jasper  attended  Baltimore City College and has
taken numerous  extended courses at Loyola College and Johns Hopkins  University
in real estate,  appraisals,  inspections,  financial  planning,  mortgages  and
management.

Item 10.   Executive Compensation.

The Partnership has no executive  officers or directors.  The Partnership is not
required to pay the officers and  directors of the General  Partners any current
nor any proposed  compensation in such capacities.  However,  the Partnership is
required to pay certain  fees,  make  distributions  and allocate a share of the
profits or losses of the Partnership to the General  Partners as described under
the caption "Management Compensation" on pages 9 through 13 of the Partnership's
Prospectus,  which  description is incorporated  herein by reference.  Set forth
below are the fees,  compensation  and other  reimbursements  paid or accrued to
Common Goal and its Affiliates for the year ended December 31, 1998.

                           Capacities in
                        which Compensation
     Name of Affiliate     was Received      Remuneration

     Common Goal           Management fee    $22,870

     Common Goal Mortgage  Mortgage loan     $ 3,919
     Company               servicing fees

No form of non-cash remuneration was paid by the Partnership.

For further  information on compensation paid to Common Goal and its Affiliates,
see "Management Compensation" on pages 9-13 of the Prospectus.

Item 11. Security Ownership of Certain Beneficial Owners and Management.

The  Partnership,  as an entity,  does not have any  directors or officers.  The
following is information concerning Unit ownership as of December 31, 1998.

To the best  knowledge  of the  Partnership,  no person owns more than 5% of the
outstanding Units.  Messrs.  Jenkins and Wood each own less than 1% of the total
outstanding  Units  and all  officers  and  directors  of the  Managing  General
Partner,  as a group, own less than 1% of the total outstanding  Units. No other
officer or director of the Managing General Partner owns any Units.

Item 12.   Certain Relationships and Related Transactions.

The  Partnership  entered  into the Joint  Venture  Loan with Common Goal II, an
affiliated,  publicly-offered limited partnership.  On August 1, 1990, the joint
venture made a $3,430,114 loan to an unaffiliated  third party, which loan had a
remaining  principal  balance of  $1,618,254  at December 31, 1998.  For further
information concerning this Mortgage Loan, see "Item 1. Description of Business"
- "Existing Mortgage Loan" - "The Joint Venture Loan.

"The  Partnership  engages  the  services of Common Goal  Mortgage  Company,  an
affiliate of the General Partners,  in connection with servicing  Mortgage Loans
for which Common Goal  Mortgage  Company is paid a fee.  See Item 10,  Executive
Compensation, for the information concerning such fees.

Item 13.   Exhibits and Reports on Form 8-K.

(a)  (1) Financial Statements

          The  response to this  portion of Item 13 is  submitted  as a separate
          section of this report, commencing on page F-1.

     (2)  Financial Statement Schedules

           Not applicable.

     (3)  Exhibits

          See response to Item (c), below.

(b)  Reports on Form 8-K

     The  Partnership  did not file any  reports on Form 8-K during the  quarter
     ended December 31, 1998.

(c)  Exhibits

     The following exhibits are included herein or incorporated by reference:

     Number

     3.1  Second  Amended  and  Restated  Agreement  of Limited  Partnership  of
          Registrant  dated as of February 1, 1987  (incorporated  by  reference
          from the  Registrant's  Registration  Statement (File No. 33- 8531) on
          Form S-11 filed under the Securities Act of 1933, as amended)

     3.2  Pages 9-13 of the  Registrant's  final  prospectus  dated February 20,
          1987, as filed with the Securities and Exchange Commission pursuant to
          Rule  424(b)   under  the   Securities   Act  of  1933,   as  amended.
          (incorporated   by  reference  from  the   Registrant's   Registration
          Statement  (File No. 33- 8531) on Form S-11 filed under the Securities
          Act of 1933, as amended)



<PAGE>


                              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.

                               COMMON GOAL  HEALTH  CARE  PARTICIPATING
                               MORTGAGE FUND L.P.

                               By:  Common Goal  Capital  Group,  Inc.,
                                    General Partner

                               By:/s/ Albert E. Jenkins
                                 Albert E. Jenkins III
                                 Chairman and Chief Executive Officer

Date: April 15, 1999

Pursuant to the requirements of the Securities 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.

         Name                  Position                 Date

/s/ Albert E.  Jenkins   Chairman (Principal    April 15, 1999
Albert E.  Jenkins III    Executive Officer),
                          President,
                          Principal Financial
                          and Accounting
                          Officer and
                          Director of
                          Managing General
                          Partner

/s/ Richard R.  Wood     Director of Managing  April 15, 1999
Richard R.  Wood          General Partner

/s/ William E. Jasper,Jr.
                          Director of Managing  April 15, 1999
William E.  Jasper, Jr.   General Partner

(A Majority of the Board of Directors of the Managing General Partner)