U.S. SECURITIES AND EXCHANGE COMMISSION

                         Washington, DC  20549

                              FORM 10-QSB

(Mark One)

   [X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                         EXCHANGE ACT OF 1934

     For the quarterly period ended      JUNE 30, 1997
                                    ------------------------

   [ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

     For the transition period from _____________ to ______________

                Commission file number      0 - 7 0 9 3
                                        ------------------

                    MOD-U-KRAF HOMES, INC.
   -----------------------------------------------------------------
                (Exact name of small business issurer as
                            specified in its charter)

                  VIRGINIA                         54-0893908
   -----------------------------------------------------------------
    (State or other jurisdiction                (IRS Employer
   of incorporation or organization)           Identification No.)

              P. O. BOX 573, ROCKY MOUNT, VIRGINIA    24151
   ------------------------------------------------------------------
                (Address of principal executive offices)

                             (540) 483-0291
   ------------------------------------------------------------------
                      (Issuer's telephone number)

   ------------------------------------------------------------------
          (Former name, former address and former fiscal year,
                     if changed since last report)

     Check whether the issure (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 _____

                  APPLICABLE ONLY TO CORPORATE ISSUERS

     State the  number of  shares  outstanding of  each of the  issuer's
classes of common equity, as of the latest practicable date:   825,649
                                                              ----------

                                   1


                         MOD-U-KRAF HOMES, INC.

                                  INDEX



PART I - FINANCIAL INFORMATION

Balance Sheets                                        2 & 3

Statements of Income                                  4 & 5

Statements of Cash Flows                              6 & 7

Management's Discussion and Analysis                  8

Notes to Financial Information                        9

PART II - OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of
              Security Holders                        10

                                   2                   
                    
                         MOD-U-KRAF HOMES, INC.                  
                      Consolidated Balance Sheets                
                        June 30, 1997 and 1996                   
                    
             ASSETS                                1997        1996
                                               ----------   ----------
CURRENT ASSETS                
  Cash and cash equivalents                    $  830,009   $1,653,941
  Certificates of deposit                         200,000      498,839
  Receivables                                     165,496       41,097
  Inventories (Note 2)                          2,407,174    1,191,708
  Notes receivable, current portion (Note 3)      809,116      813,988
  Prepaid expenses                                 44,764       74,336
  Income taxes receivable                               0       90,986
  Deferred income taxes, current protion           59,215       44,375
                                               ----------   ----------
    Total current assets                        4,515,774    4,409,270
                    
LONG-TERM NOTES RECEIVABLE (Note 3)               179,056      197,958
               
PROPERTY AND EQUIPMENT, at cost less
  accumulated depreciation 1997 $2,268,986;
  1996 $1,893,025. (Note 4)                     4,012,256    3,555,983 
                    
OTHER ASSETS                  
  Deferred income taxes                           420,085      455,443
  Cash surrender value of life insurance          133,846      112,165 
  Reimbursement Account (Note 7)                  232,287      224,946
  Earnings on Unused Bond Proceeds                109,413       97,180
  Bond Issue Costs (Note 7)                        71,330       75,301
                                               ----------   ----------
                                               $9,674,047   $9,128,246 
                                               ==========   ==========
         LIABILITIES AND STOCKHOLDERS' EQUITY                    
                    
CURRENT LIABILITIES                
 Current portion of L-T liabilities(Note 5 & 6)   219,460      220,429
  Accounts payable and other liabilities          607,165      586,494
  Accrued compensation                            192,930      136,044
  Customer deposits                               129,496       95,842
  Income taxes payable                             64,302            0
                                               ----------   ----------
          Total current liabilities             1,213,353    1,038,809

LONG-TERM DEFERRED COMPENSATION (Note 5)          910,365      974,927
POST RETIREMENT BENEFITS (Note 5)                 123,435      120,999
LONG-TERM DEBT (Note 7)                         2,639,755    2,373,582
                                               ----------   ----------
          Total liabilities                     4,886,908    4,508,317
                                               ----------   ----------
STOCKHOLDERS' EQUITY
  Common stock, $1 par value, 2,000,000 shares 
  authorized: shares issued & outstanding
  1997 825,649, 1996 825,649                      825,649      825,649 
  Additional Paid in Capital                      459,671      459,671
  Retained earnings                             3,501,819    3,334,609
                                               ----------   ----------
                                                4,787,139    4,619,929
                                               ----------   ----------
                                               $9,674,047   $9,128,246
                                               ==========   ==========

Accompanying notes are an integral part of these financial statements.


                                   3                   
                    
                         MOD-U-KRAF HOMES, INC.                  
                      Consolidated Balance Sheets                
                  June 30, 1997 and December 31, 1996            
                    
          ASSETS                                   1997        1996
                                               ----------   ----------
CURRENT ASSETS                
  Cash and cash equivalents                    $  830,009   $1,077,270
  Certificates of deposit                         200,000      200,000
  Receivables                                     165,496       52,928
  Inventories (Note 2)                          2,407,174    2,358,346
  Notes receivable, current portion (Note 3)      809,116      796,721
  Prepaid expenses                                 44,764       65,940
  Income taxes receivable                               0       46,123
  Deferred income taxes, current protion           59,215       43,255
                                               ----------   ----------
    Total current assets                        4,515,774    4,640,583
                    
LONG-TERM NOTES RECEIVABLE (Note 3)               179,056      192,906
               
PROPERTY AND EQUIPMENT, at cost less
 accumulated depreciation 
 1997 $2,268,986;1996 $2,085,797.(Note 4)       4,012,256    3,893,831 

OTHER ASSETS
  Deferred income taxes                           420,085      442,884
  Cash surrender value of life insurance          133,846      116,227
  Reimbursement Account (Note 7)                  232,287      152,706
  Earnings on Unused Bond Proceeds                109,413      105,474
  Bond Issue Costs (Note 7)                        71,330       73,310
                                               ----------   ----------
                                               $9,674,047   $9,617,921
                                               ==========   ==========

         LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Current portion of L-T liabilities(Note 5 & 6)  219,460      216,490
  Accounts payable and other liabilities          607,165      525,228
  Accrued compensation                            192,930      201,121
  Customer deposits                               129,496      293,655
  Income taxes payable                             64,302            0
                                               ----------   ----------
          Total current liabilities             1,213,353    1,236,494

LONG-TERM DEFERRED COMPENSATION (Note 5)          910,365      942,108
POST RETIREMENT BENEFITS (Note 5)                 123,435      138,588
LONG-TERM DEBT (Note 7)                         2,639,755    2,639,755
                                               ----------   ----------
          Total liabilities                     4,886,908    4,956,945
                                               ----------   ----------
STOCKHOLDERS' EQUITY
  Common stock, $1 par value, 2,000,000 shares
  authorized: shares issued & outstanding
  1996 825,649, 1995 825,649                      825,649      825,649
  Additional Paid in Capital                      459,671      459,671
  Retained earnings                             3,501,819    3,375,656
                                               ----------   ----------
                                                4,787,139    4,660,976
                                               ----------   ----------
                                               $9,674,047   $9,617,921
                                               ==========   ==========

Accompanying notes are an integral part of these financial statements.


                                  4
                    
                        MOD-U-KRAF HOMES, INC.              
                   Consolidated Statement of Income         
            Quarters Ended June 30, 1997 and June 30, 1996
                    
                    
                                                  1997        1996
                                               ----------   ----------
Net Sales                                      $5,061,167   $3,434,875
  Cost of Sales                                 3,818,873    2,552,378
                                               ----------   ----------
                                                1,242,294      882,497
Selling, General and Administrative
 Expenses                                         913,883      635,119
                                               ----------   ----------
  Income/<Loss> from Operations                   328,411      247,378

Deferred Compensation Expense                      20,877       22,072
Post Retirement Benefits Expense                   (2,690)      (8,094)

Non-operating Income/<Expenses>                     1,614       32,023
                                               ----------   ----------

  Income/<Loss> Before Income Taxes               311,838      265,423

Federal and State Income Taxes                    107,985       81,016
Deferred Income Tax Adjustment                      9,896       15,807
                                               ----------   ----------
  Income Taxes                                    117,881       96,823
                                               ----------   ----------

    Net Income / <Loss>                        $  193,957   $  168,600
                                               ==========   ===========

Earnings per share:                
            Net Income / <Loss>                $     0.23   $     0.20
                                               ==========   ===========

Depreciation Included in Above Cost            $  120,275   $   45,492
                                               ==========   ===========
                    
Accompanying notes are an integral part of these financial statements.
                    

                                   5                   
                    
                        MOD-U-KRAF HOMES, INC.              
                   Consolidated Statement of Income         
            Six Months Ended June 30, 1997 and June 30, 1996
                    
                    
                                                  1997         1996
                                               ----------   ----------
Net Sales                                      $8,254,265   $5,020,649
  Cost of Sales                                 6,389,450    3,844,968
                                               ----------   ----------
                                                1,864,815    1,175,681
Selling, General and Administrative
 Expenses                                       1,538,665    1,063,392
                                               ----------   ----------
  Income/<Loss> from Operations                   326,150      112,289

Deferred Compensation Expense                      42,060       44,429
Post Retirement Benefits Expense                   (5,261)      (4,107)

Non-operating Income/<Expenses>                    (2,342)      62,986
                                               ----------   ----------

  Income/<Loss> Before Income Taxes               287,009      134,953

Federal and State Income Taxes                    104,467       39,455
Deferred Income Tax Adjustment                      6,839        8,421
                                               ----------   ----------
  Income Taxes                                    111,306       47,876
                                               ----------   ----------

    Net Income / <Loss>                        $  175,703   $   87,077
                                               ==========   ==========

Earnings per share:
            Net Income / <Loss>                $     0.21   $     0.11
                                               ==========   ==========

Depreciation Included in Above Cost            $  220,647   $   91,271
                                               ==========   ==========

Accompanying notes are an integral part of these financial statements.
                    

                                    6                  
                    
                         MOD-U-KRAF HOMES, INC.        
                  Consolidated Statement of Cash Flows      
                 Quarters Ended June 30, 1997 and 1996      
                    
                                                  1997         1996
OPERATING ACTIVITIES                           ----------   ----------
  Net Income/<Loss>                            $  193,957   $  168,600
  Noncash <income> expenses included 
      in income or <loss>:
    Depreciation and amortization                 120,275       45,492
    Deferred income taxes                           9,896       15,807
    Loss (gain) on sale of equipment               (6,691)        (170)
    Increase in cash value of life insurance      (16,105)     (15,133)
    Adjustments to deferred compensation           (7,440)     (13,540)
    Adjustments to post retirement benefits       (14,736)     (11,361)
  <Increase> decrease in:
    Trade receivables                             (90,798)     (10,055)
    Inventories                                   689,712      382,440
    Prepaid Expenses                               25,821      (15,938)
    Income taxes receivable                             0      (90,986)
  <Decrease> increase in:
    Accounts payable and other Liabilities       (303,932)     165,482
    Accrued compensation                          (67,104)     (27,610)
    Customer deposits                             (13,394)      22,960
    Income taxes payable                          114,830      (49,416)
                                               ----------   ----------
  Net cash provided by (used in)
      operations                                  634,291      566,572
                                               ----------   ----------
INVESTING ACTIVITIES
  Proceeds from sale of property & equipment        6,858          875
  Purchase of plant & equipment net of
    debt incurred 1997 $0, 1996 $499,966         (145,733)    (218,736)
  <Increase> decrease in notes receivable
   arising from sales                             129,608      140,588
  <Increase> decrease in certificates of deposit        0      195,147
                                               ----------   ----------
  Net cash provided by (used in)
     investing activities                          (9,267)     117,874
                                               ----------   ----------
FINANCING ACTIVITIES
  Cash dividends paid                             (24,769)     (24,769)
  Debt issue costs, net of debt incurred
    1997 $0, 1996 $151                                990      (33,318)
  Funding of reimbursement account                (40,069)     (37,500)
  Earnings on unused bond proceeds                 (2,018)     (12,951)
                                               ----------   ----------
  Net cash provided by (used in)
     financing activities                         (65,866)    (108,538)
                                               ----------   ----------
    Net increase (decrease) in cash               559,158      575,908
CASH
  Beginning                                       270,851    1,078,033
                                               ----------   ----------
  Ending                                       $  830,009   $1,653,941
                                               ==========   ==========
SUPPLEMENTAL DISCOLOSRES OF CASH FLOW INFORMATION
  Cash payments for:
    Interest                                   $   27,815   $        0 
    Income taxes                               $   19,650   $  122,626

Accompanying notes are an integral part of these financial statements.


                                    7                  
                    
                         MOD-U-KRAF HOMES, INC.        
                  Consolidated Statement of Cash Flows      
                 Six Months Ended June 30, 1997 and 1996         
                    
                                                  1997         1996
OPERATING ACTIVITIES                           ----------   ----------
  Net Income/<Loss>                            $  175,703   $   87,077
  Noncash <income> expenses included
      in income or <loss>:
    Depreciation and amortization                 220,647       91,268
    Deferred income taxes                           6,389        8,421
    Loss (gain) on sale of equipment               (8,107)        (170)
    Increase in cash value of life insurance      (17,619)     (16,725)
    Adjustments to deferred compensation          (29,165)     (26,796)
    Adjustments to post retirement benefits       (14,761)     (13,037)
  <Increase> decrease in:
    Trade receivables                            (112,569)      79,129
    Inventories                                   (48,828)     177,059
    Prepaid Expenses                               21,176       (6,831)
    Income taxes receivable                             0      (90,986)
  <Decrease> increase in:
    Accounts payable and other Liabilities         83,069      247,737
    Accrued compensation                           (9,324)    (113,931)
    Customer deposits                            (164,159)      72,528
    Income taxes payable                          110,425     (159,196)
                                               ----------   ----------
  Net cash provided by (used in)
      operations                                  212,877      335,547
                                               ----------   ----------
INVESTING ACTIVITIES
  Proceeds from sale of property & equipment        5,813          875
  Purchase of plant & equipment net of
    debt incurred 1997 $0, 1996 $1,141,750       (337,019)    (260,078)
  <Increase> decrease in notes receivable
  arising from sales                                1,455      135,998 
  <Increase> decrease in certificates of deposit        0      190,161 
                                               ----------   ----------
  Net cash provided by (used in)
     investing activities                        (329,751)      66,956
                                               ----------   ----------
FINANCING ACTIVITIES
  Cash dividends paid                             (49,539)     (49,538)
  Debt issue costs, net of debt incurred
    1997 $0, 1996 $2,271                            1,980      (13,044)
  Funding of reimbursement account                (79,581)     (75,000)
  Earnings on unused bond proceeds                 (4,010)     (37,718)
                                               ----------   ----------
  Net cash provided by (used in)
     financing activities                        (131,150)    (175,300)
                                               ----------   ----------
    Net increase (decrease) in cash              (248,024)     227,203
CASH
  Beginning                                     1,078,033    1,426,738
                                               ----------   ----------
  Ending                                       $  830,009   $1,653,941
                                               ==========   ==========
SUPPLEMENTAL DISCOLOSRES OF CASH FLOW INFORMATION
  Cash payments for:
    Interest                                   $   53,610   $        0 
    Income taxes                               $   19,650   $  190,245

Accompanying notes are an integral part of these financial statements.

                                       8

                              MOD-U-KRAF HOMES, INC

                      Management's Discussion and Analysis
                        of the Second Quarter Statements

    Net sales for the second quarter of 1997 were $5,061,167 as compared
to $3,434,875 for the second quarter of 1996, a 47% increase.  Sales for
the first six months of 1997 were  $8,254,265 as compared to  $5,020,649
in 1996 for an increase in sales volume of 64%.

    Cost of Sales was 75.45% of net sales for the second quarter of 1997
and  74.31% for the  second quarter  of 1996.   For the first six months
cost of sales was 77.41% for 1997  compared to 76.58% for 1996.   We are
experiencing unfavorable  variances in  our production  labor and  manu-
facturing expense in our new production facility.   We are still working
to stabilize our  production  crews and  raise our  production volume to
absorb the additional overhead.

    Selling, General and Administrative expenses was 18.06% of net sales
for the second quarter of 1997 and  18.49% for the same quarter of 1996.
They were 18.64% for the first six months of 1997 compared to 21.18% for
the same period in 1996.

    The net income for the second quarter of 1997 is  $193,957  compared
to net income of $168,600 for the second quarter of 1996.  This is $0.23
per share for the second quarter of 1997 and $.20 per share for the same
period in 1996.  Net income for the first six months is  $175,703, $0.21
common share for 1997, compared to $87,077, $0.11 per common share,  for
1996.

    There are no other significant variances.

    There have  been  no  material  changes  in  liquidity  and  capital
resources for the first six months of 1997.

                                   9

                         MOD-U-KRAF HOMES, INC.
                    NOTES TO FINANCIAL INFORMATION

1.  The financial information furnished herein is not certified, but re-
    flects all adjustments,  consisting only of normal recurring adjust-
    ments which are,  in the opinion of management,  necessary to a fair
    statement of the results for the  quarter ended  June 30, 1997.  The
    results for the quarter ended  June 30, 1997 are not necessarily in-
    dicative of results to be expected for the entire year.  The housing
    industry is seasonal  in nature and  revenues to the  Company during
    the period April 1 to September 30 are normally greater than revenue
    during the balance of the year.

    Both  primary & fully  diluted net income per common share are based
    on the weighted average number of shares of common stock outstanding
    during each year and common stock equivalents of dilutive stock 
    options.

2.  Inventories
    The components of inventories are as follows     1997         1996
                                                     ----         ----
    Raw Materials                                 1,063,900      677,495
    Work-In-Progress                                235,857       78,396
    Finished Goods                                  828,340       83,575
    Land and Units held for sale                    279,077      352,242
                                                  ---------    ---------
                                                  2,407,174    1,191,708
                                                  =========    =========

3.  Notes Receivable                                 1997         1996
                                                     ----         ----
    Various mortgage notes receivable secured by 
     deeds of trust                                 165,244      172,795
    Various construction loans(all current)         794,476      800,037
    Demand note receivabe with interest payable
     quarterly at 9%, unsecured                       9,125       11,575
    Life insurance note receivable from an
     officer of the Company(non-interest bearing)     2,452        5,039
    Note receivable from the President, payable
     in annual principal installments of $5,625
      with interest at 5.03%                         16,875       22,500
                                                  ---------    ---------
                                                    988,172    1,011,946
        Less current portion                        809,116      813,988
                                                  ---------    ---------
                                                    179,056      197,958
                                                  =========    =========

4.  Property and Equipment                           1997         1996
                                                     ----         ----
    Land and improvements                           773,539      270,970
    Buildings                                     2,948,351    1,076,311
    Manufacturing equipment                       1,981,950    1,076,147
    Other furniture, fixtures and equipment         577,402      393,598
                                                  ---------    ---------
                                                  6,281,242    2,817,026
        Less accumulated depreciation            (2,268,986)  (1,893,025)
    Construction in progress                              0    2,631,982
                                                  ---------    ---------
                                                  4,012,256    3,555,983
                                                  =========    =========
 
5.  Deferred Compensation, Related Parties           1997         1996
                                                     ----         ----
    Present Value of deferred compensation
    benefits payable  to the widow of O.Z. Oliver
    at $6,311 monthly until the earlier of her
    death or Sept. 2006, discounted at 8.50% in
    1997 and 1996.                                  483,921      516,972

    Present Value of deferred compensation
    benefits payable to Robert K. Fitts at $5,560
    monthly until his death after which the
    benefits are payable to his spouse until the
    earlier of her death or July 2007, discounted
    at 8.50% in 1997 and 1996.                      488,614      512,683

    Present value of estimated post-retirement
    benefits other than pensions discounted at
    8.50% in 1997 and 1996.                         130,725      136,700
                                                  ---------    ---------
                                                  1,103,260    1,166,355
        Less Current Maturities                      69,460       72,821
                                                  ---------    ---------
                                                  1,033,800    1,093,534
                                                  =========    =========

6.  Long-Term Debt

    On July 12, 1995, the IDA of Franklin County, VA issued bonds in the
    amount of   $3,000,000 to finance the constructin of a manufacturing
    facility.    The Series 1995 variable  Rate Demand Indutrial Revenue
    Bonds are secured by the Company's irrevocable Letter of Credit with
    Crestar Bank. The letter of credit agreement subjects the Company to
    certain financial and operating covenants,  all of which the Company
    was in compliance wiht at year end.  Crestar Bank holds a first lien
    and  security interest on  the facility.   The bonds are  payable in
    annual principal amounts of $150,000 through 2015. The interest rate
    was  4.25% at June 30, 1997.

    The  Company has entered into an  agreement of sale to  purchase the
    facility from the IDA.  The Company's obligation under the Agreement
    of Sale is equal to the required principal and  interest payments on
    the bonds and is payable in monthly installments currently estimated
    at $22,000.  The monthly payments are deposited into a Reimbursement
    Account with  Crestar Bank and used to  pay all principal,  interest
    and fees related to the Bonds.   The Company also agreed to maintain
    an additional required deposit in the Reimbursement Account equal to
    55 days of interest at 15.0% on the bonds.  As of June 30, 1997, the
    Reimbursement Account balance was as follows:

         Required prepaid interest deposit        $ 67,811
         Unused monthly principal deposits         150,000
         Earnings                                   14,476
                                                  --------
                                                  $232,287

    The Company's policy is to reflect the  balance of the Reimbursement
    Account  as an asset  until the  funds are  used by the  trustee for
    payment of bond obligations,  at which time the  Company reduces its
    obligations under the asset sale agreement.

    As of June 30, 1997, $2,939.755 of the bond proceeds have been drawn
    from the  trustee.   The Company's  obligation under the  asset sale
    agreement is reflected at the amount of bond proceeds that have been
    drawn.  Any unused proceeds will be for early retirement of bonds.

    Amounts earned on bond proceeds prior to their  being drawn from the
    trustee  are to be  applied  to principal  reduction in  the future.
    these earnings amounted to $106,413 at June 30, 1997.

    Debt issue costs will be amortized over the life of the bonds.

7.  The Board Of Directors of  Mod-U-Kraf Homes, Inc. on  August 6, 1997
    declared a  $.03 per share  cash dividend on all shares  outstanding
    on August 22, 1997 and to be paid on September 5, 1997.

8.  The Company uses the annualized method in its computation of Federal
    Income Taxes.

9.  Revenues are recorded when the houses are  delivered for  sales made
    on account.  Cash sales paid in advance are recorded when produced.



                               10

                      MOD-U-KRAF HOMES, INC.

                        OTHER INFORMATION


                              NONE



                               11

                      MOD-U-KRAF HOMES, INC.

                           SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                    MOD-U-KRAF HOMES, INC.
                                    ------------------------------------
                                    (Registrant)


Date:    August 8, 1997


                                    s/Dale H. Powell
                                    ------------------------------------
                                    Dale H. Powell
                                    President and Chairman of the Board


                                    s/Jeffrey L. Boudreaux
                                    ------------------------------------
                                    Jeffrey L. Boudreaux
                                    Controller