UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C.  20549
                                    FORM 10-K
      
      
  [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 No.: 33-60662
      
      
                     FUND AMERICA INVESTORS CORPORATION
           (Exact name of registrant as specified in its charter)
      
                  Delaware                       84-1070310
       (State or other jurisdiction of       (I.R.S. Employer
        incorporation or organizaiton       identification number)
      
      
    6400 S. Fiddlers Green Circle, Suite 1200A,  Englewood, Colorado 80111
                    (Address of principal executive offices)
      
        Registrant's telephone number including area code: (303) 290-6024
      
        Securities registered pursuant to Section 12(b) of the Act:  None
        Securities registered pursuant to Section 12(g) of the Act:  None
      
      
       Indicate by check mark whether the registrant (1) has filed all
  reports required to be filed by Section 13 or 15(d) of the Securities
  Exchange Act of 1934 during the preceding 12 months (or for such shorter
  period that the registrant was required to file such reports) and (2)
  has been subject to such filing requirements for the past 90 days.   
  [X]  Yes    [ ] No
      
       Indicate by check mark if disclosure of delinquent filers pursuant
  to Item 405 of Regulation S-K is not contained herein, and will not 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-K or any amendment to this Form 10-K.   X
      
       State the aggregate market value of the voting stock held by
  non-affiliates of the registrant:  As of    December 31, 1998:  $0.00.
     
       The number of shares outstanding of the Registrant's $0.01 par
  value common stock, as of March 30, 1999, was 1,000 shares.
      
                  DOCUMENTS INCORPORATED BY REFERENCE
                                 None.
      

</PAGE>
<PAGE>

                                PART I
      
      
  ITEM 1.      BUSINESS
  ------       --------
      
       Fund America Investors Corporation (the "Company") was incorporated
  in the State of Delaware on October 19, 1987 as a limited purpose finance
  corporation.  The Company was established to engage in activities relating
  to mortgage loans or mortgage loan certificates including other securities
  which are backed by mortgage loans (the "Collateral").  The Collateral is
  issued and/or guaranteed by agencies which include Government National 
  Mortgage Association securities ("GNMA Certificates"), Federal National
  Mortgage Association securities ("FNMA Certificates") and Federal Home Loan
  Mortgage Corporation securities ("FHLMC Certificates") collectively referred
  to as ("Agency Certificates") or other entities ("Private Mortgage-Backed
  Securities").  Among the Company's authorized business purposes, its primary
  activity is the issuance of bonds in one or more series of collateralized
  mortgage obligations ("CMO's") which are secured by the Collateral.  To issue
  such bonds, the Company may acquire, hold, sell or pledge the Collateral, but
  typically these activities are transacted through trusts beneficially owned
  and created by the Company. 
      
       The Company may not, either directly or indirectly through a beneficially
  owned trust, engage in any business or investment activity other than (1)
  issuing and selling bonds; (2) investing cash balances on an interim basis
  in high quality short-term securities; (3) purchasing, owning, holding,
  pledging or selling the Collateral or other mortgage-related assets; and
  (4) engaging in other activities which are necessary or convenient to accomp-
  lish the foregoing and are incidental thereto.
      
       To date, the Company or certain trusts established by the Company
  have issued nine bond offerings totaling $1,508,989,338 (the "Bonds"). 
    
       The Bonds that are issued directly by the Company are direct obligations
  of the Company, (see Note 2 of Notes to Financial Statements for a further
  discussion).  Payments to the bondholders are payable from the principal and
  interest payments received on the Collateral payments.  For the benefit of
  the bondholders, all Collateral related to the Bonds has been pledged to a
  trustee.  The Bonds are considered CMO's under generally accepted accounting
  principles.  
      
       At December 31, 1997, the Company had $141 million of registered and
  unissued CMOs remaining on its Registration Statement No. 33-60662.  It was
  determined in 1997 that the Registration Statement required some updating in
  order to be utilized and that management anticipated the issuance of the
  remaining unissued CMOs after the update was completed.  During 1998, the
  Company proceeded with its plans to update the Registration Statement by
  filing an amendment to it on September 22, 1998.  
      
       After filing the amendment, the Company received many comments from the
  Securities and Exchange Commission ("SEC").  To respond to all the SEC
  comments, it was estimated that the Company will have to spend an additional
  $50,000 to $100,000 above the costs already incurred of $26,368 for filing
  the amendment.  As of December 31, 1998, management has determined that it
  is not economically feasible to follow through on updating the Registration
  Statement.  In accordance with SFAS No. 121 "Impairment of Long-Lived Assets
  to be Disposed Of," the deferred offering costs remaining from 1997 plus the
  additional offering costs incurred in 1998, a total of $65,271, have been
  charged to operations in 1998.  The remaining unissued securities, however, 
  will not be deregistered at this time.  Management believes that it may be
  economically feasible to finish the update at some point in the future.
      
 
</PAGE>
<PAGE>

     
  ITEM 2.      PROPERTIES
  ------       ----------
      
               The Company has no material physical properties.
      

  ITEM 3.      LEGAL PROCEEDINGS
  ------       -----------------      

               None.
      

  ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  ------       ---------------------------------------------------

               No matters were submitted to the security holders during the
               fourth quarter of the fiscal year ended December 31, 1998.
      
     

                                 PART II
      

  ITEM 5.      MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
  ------       -----------------------------------------------------
               STOCKHOLDER MATTERS
               -------------------

       There is no established public trading market for the Company's
  common stock and no dividends have been declared or paid.  All of the
  Company's common stock is owned by a sole shareholder.
      

<TABLE>

  ITEM 6.      SELECTED FINANCIAL DATA
  ------       -----------------------
<CAPTION>
                                      Year Ended December 31, 
                          ----------------------------------------------------
                           1998        1997        1996       1995       1994
                         --------    --------    --------   --------   --------
<S>                     <C>         <C>         <C>        <C>        <C>

Income Statement Data: 
  Revenue                $  4,565    $  4,533    $  9,653   $ 11,791   $ 13,230 
  Net income(loss)        (95,023)   (102,682)    (25,191)   (65,830)   (74,658)
  Net income(loss) per
    share of common stock      (1)         (1)         (1)        (1)        (1)
 
Balance Sheet Data: 
  Total assets             63,258     156,172     258,749    329,033    555,769 
  Shareholder's
    equity                 61,043     156,066     258,749    283,939    549,769
  
      
  (1)  Not presented, as all shares of common stock are held by a sole
       shareholder.


</TABLE>
</PAGE>
<PAGE>


      
  ITEM 7.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
  ------       -------------------------------------------------
               CONDITION AND RESULTS OF OPERATIONS
               -----------------------------------
      
  1.      General
          -------

       As more fully described below, the Company or certain established
  trusts have issued nine series of registered CMO's aggregating $1,508,989,338
  in initial issuance amount.  As of December 31, 1998, six series of CMO's
  remain outstanding.  The following list consists of only those outstanding
  series shown with the initial issuance amounts.
         
                           Initial 
      Trust     Series     Amount           Collateral
      -----     ------     ------------     ---------------------------------
      n/a       1991-1     $350,000,000     GNMA Certificates
      
      n/a       1991-2     $150,000,000     GNMA Certificates
      
      n/a       1993-1     $ 66,040,000     GNMA Certificates and FNMA
                                            Certificates
      
       I        1993-2     $117,350,000     FNMA Certificates and FHLMC
                                            securities; Private Mortgage-Backed
                                            securities; cash, other mortgage-
                                            backed securities or certain United
                                            States Treasury securities
      
       IV       1993-5     $ 20,249,338     FNMA Stripped Mortgage-Backed
                                            Security ("FNMA SMBS") held in the
                                            form of a FNMA Guaranteed MBS
                                            Pass-Through Certificate and
                                            included in FNMA SMBS Trust
                                            000240-CL
      
       IV       1993-6     $ 50,350,000     FNMA and FHLMC securities; certain
                                            CMO's issued by Trust IV, Series
                                            1993-5; cash, other mortgage-backed
                                            securities or certain United States
                                            Treasury securities
      
       To date, the Company has issued four CMO offerings totaling $966,040,000
  ("the FAIC Bonds").  The FAIC Bonds are a direct obligation of the Company
  and have been structured to be payable from the principal of and interest
  on the collateral pledged to the Trustee for the benefit of the Bondholders.
  In addition, the Company established four trusts which issued five CMO offer-
  ings totaling $542,949,338 (the "FAIT Bonds").  The FAIT Bonds are a direct
  obligation of each related trust which have been structured to be payable
  from the principal of and interest on the collateral pledged to the Indenture
  Trustee for the benefit of the Bondholders.  The FAIC Bonds and the FAIT Bonds
  constitute Collateralized Mortgage Obligations ("CMO's) as defined b  Finan-
  cial Accounting Standards Board Technical Bulletin 85-2 ("TB 85-2").  In gen-
  eral, TB 85-2 provides that CMO's are presumed to be borrowing transactions
  and should be recorded as liabilities in the financial statements of the
  issuer.  However, a CMO is not accounted for as a borrowing transaction if,
  (a) all but a nominal portion of the future economic benefits inherent in the
  associated collateral has been passed to the Bondholders and (b) no affiliate
  of the issuer can be required to make any future payments with respect to the
  obligation.  The FAIC Bonds and the FAIT Bonds meet the exceptions set forth
  above and therefore, the borrowings and the related collateral were eliminated
  from the financial statements, and all other costs associated with the of-
  fering transactions were charged to expense during the issuance period. 
      

  2.     The Year 2000 Issue
         -------------------

       With the year 2000 approaching, potential computer failures and errors
  may occur due to problems with the computerized recognition of date codes.
  The Year 2000 ("Y2K") issue addresses potential problems that may be encoun-
  tered with date-related transactions on systems that have historically recog-
  nized years using two digits versus four digits. For example, these systems
  may recognize "00" as the year 1900 instead of 2000.  This could potentially
  affect computerized operations that rely on date calculations or are date
  sensitive.     


</PAGE>
<PAGE>

       All operations of the Company are essentially driven by the issuance of
  CMO's. In order to assess and determine potential Y2K issues within the oper-
  ations, the Company has separated operations into three sections, the regis-
  tration of CMO's, the issuance of CMO's, and the administrative operations.

       The preparation, filing, and follow-up of the registration and issuance
  processes are typically out-sourced to third-party service providers that
  specialize in these services. The Company is requesting confirmation from
  its third-party service providers that their systems are Y2K compliant. The
  Company has received assurance of Y2K compliance from some of its third-party
  service providers.  In addition, the Company is still continuing its efforts
  to receive assurance from its other third-party service providers.    
      
       The Company, in conjunction with its facilities provider, The Chotin
  Group Corporation ("TCG"), a related party, has assessed the third area of
  the Company's operations, administrative systems. TCG provides the Company
  with office facilities and administrative functions.  TCG has assessed its
  internal systems and has developed a Y2K Compliance Plan. Currently, TCG is
  in the process of implementing the plan, which involves updating and upgrading
  all of TCG's internal systems that were determined to not be Y2K compliant.
  The Company will closely monitor TCG's progress.    
      
       Due to the fact that all operational systems are hired out, the Company
  does not expect to incur any direct costs for Y2K compliance or remediation
  that would materially affect its financial condition.  The potential risk to
  the Company, however, would be a delay in its operations of registering CMO's
  and issuing CMO's.  Delays may be caused by the Company's reliance on third-
  party service providers who handles out-sourced operations and who are not
  Y2K compliant.  To resolve this issue, the Company will consider out-sourcing
  operations to other third-party service providers who confirm their Y2K
  compliance.    
      
       If the necessary updates to TCG's systems are not made on a timely
  basis, or if third-party service providers are not Y2K ready, Y2K problems
  could have a material adverse effect on the Company's operations.  Without
  a reasonably complete upgrade and testing of systems that may be vulnerable
  to problems, the Company does not have a reasonable basis to conclude that
  the Year 2000 compliance issue will not likely have an operational impact
  on the Company.  In addition, without a reasonable conclusive basis, reported
  financial information will not necessarily be indicative of future operating
  results or future financial condition.  
      
 
  3.       Liquidity and Capital Resources
           -------------------------------

       Over the next 12 months, the Company expects to fund ongoing overhead
  from working capital reserves and any potential updates to the Registration
  Statement from working capital reserves and borrowings from its sole share-
  holder.  As of December 31, 1998, $500,000 was available under a line of
  credit provided by the Company's sole shareholder.
      

  4.       Results of Operations
           --------------------- 
     
       The Company does not have any significant assets other than cash held
  for operations.  Major operating activity is initiated from the issuance of
  CMO's or the preparation in registering CMO's to be issued. Costs incurred
  with registering CMO's are capitalized until such time the CMO's are issued
  in an offering or evaluated for impairment. 
      
       Net income may fluctuate from period to period based on the use the 
  Company's registered and unissued CMO's.  The Company generally charges the
  issuer of a series of CMO's a flat fee and a proportionate share of deferred
  costs associated with its registration statement. 
      
       Typically, periods reporting net income are the result of issuance fees
  earned by the Company for the use of its shelf registration.  Conversely, in
  periods reflecting net losses, no issuance fees were earned and the loss was
  the result of fixed general and administrative expenses and impairments, if
  any.
  

</PAGE>
<PAGE>

    
       An evaluation of long-lived assets at December 31, 1998 and December 31,
  1997 resulted in an impairment of the Company's deferred offering costs.  As
  described in Item 1, the Company charged the remaining deferred offering costs
  of $65,271 to operations in 1998.  Deferred offering costs of $72,769 in 1997
  were charged to operations because the costs were determined to be in excess
  of accepted market pass-through costs.    
      
       The Company reported a net loss for the year ended December 31, 1998 of
  $95,023 as compared to a net loss of $102,682 for the year ended December 31,
  1997 and net loss of $25,191 for the year ended December 31, 1996.  The Comp-
  any did not issue any bonds during these three reporting periods.  In 1998,
  the net loss reported included an operating loss of $29,752 and an asset im-
  pairment charge of $65,271.  In 1997, the net loss reported included an oper-
  ating loss of $29,913 and an asset impairment charge of $72,769. 
      


  5.       Forward Looking Statements
           --------------------------
  
       The statements contained in this Item 7 and Item 7A that are not
  historical facts, including, but not limited to, statements that can be 
  identified by the use of forward-looking terminology such as "may," "will,"
  "expect," "anticipate," "estimate" or "continue" or the negative thereof
  or other variations thereon or comparable terminology, are forward-looking
  statements within the meaning of the Private Securities Litigation Reform
  Act of 1995, and involve a number of risks and uncertainties.  The actual
  results of the future events described in such forward-looking statements 
  could differ materially from those stated in such forward-looking statements.
  Among the factors that could cause actual results to differ materially are:
  the Y2K preparedness of the Company's third-party service providers, the
  market for mortgage-backed securities, competition, government regulation
  and possible future litigation.
      


  ITEM 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  -------      ----------------------------------------------------------
      
       CMO's that are issued either by the Company or a trust formed by the
  Company constitute debt obligations of the Company or the applicable trust
  and do not represent an ownership interest in the Company or such trust.
  As described in Item 7, assets or Collateral securing payments to Bondholders
  are not treated as assets of the Company. 
  
      
       Disclosures required in this Item 7A are intended to clarify a regis-
  trant's exposures to market risk associated with activities in derivative
  financial instruments, other financial instruments, and derivative commodity
  instruments. The purpose of this section is to disclose the material effects
  on earnings, fair values, and cash flows that are inherent to potential mar-
  ket risk exposure.  Potential market risk associated with CMO's issued under
  the Company's registration statement will not have a material effect on the
  Company's earnings or cash flow since the CMO's do not represent an interest
  in the Company.  In addition, the Company has no public common equity; all
  common stock in the Company is held by one shareholder.  Therefore, material
  effects of potential market risk exposure on CMO's issued from the Company
  will not have any significant impact on the Company.   
      
      
</PAGE>
<PAGE> 

     
  ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  ------        -------------------------------------------
      
                        INDEPENDENT AUDITORS' REPORT
      
      
      
      
      
  Board of Directors and Shareholder
  Fund America Investors Corporation
  Englewood, Colorado
     
      
  We have audited the accompanying balance sheets of Fund America Investors
  Corporation as of December 31, 1998 and 1997, and the related statements of
  operations, shareholder's equity, and cash flows for each of the three years
  in the period ended December 31, 1998.  These financial statements are the
  responsibility of the Company'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 signifi-
  cant estimates made by management, as well as evaluating the overall financial
  statement presentation.  We believe that our audits provide a reasonable basis
  for our opinion.
      
  In our opinion, such financial statements present fairly, in all material
  respects, the financial position of the Company as of December 31, 1998 and
  1997, and the results of its operations and its cash flows for each of the
  three years in the period ended December 31, 1998 in conformity with generally
  accepted accounting principles.
  
      
      
      
      
      
  DELOITTE & TOUCHE  LLP
      
  Denver, Colorado
  March 15, 1999
      
      
 
</PAGE>
<PAGE>
<TABLE>
     
  
                      FUND AMERICA INVESTORS CORPORATION
                                Balance Sheets


<CAPTION>
                                                     December 31,
                                               -----------------------
                                                 1998           1997
                                               --------       --------
<S>                                           <C>            <C>
 Assets
  Cash and cash equivalents (Note 2)           $ 63,258       $117,269 
  Deferred offering costs (Note 2)                    -         38,903
                                               --------       --------  
  Total assets                                 $ 63,258       $156,172 
                                               ========       ========  

 Liabilities - Accounts payable                $  2,215       $    106 
                                               --------       --------  
  
Shareholder's equity
  Common stock, par value $.01 per share;
    10,000 shares authorized; 1,000 shares
    issued and outstanding                           10             10
  Additional paid-in capital                    369,990        369,990
  Accumulated deficit                          (308,957)      (213,934)
                                               --------       --------
  Shareholder's equity - net                     61,043        156,066
                                               --------       --------
  Total liabilities and
    shareholder's equity                       $ 63,258       $156,172
                                               ========       ========



  See notes to financial statements
    

</TABLE>
</PAGE>
<PAGE>
<TABLE>



                       FUND AMERICA INVESTORS CORPORATION
                           Statements of Operations



<CAPTION>
                                          Year Ended December 31,
                                     ---------------------------------
                                       1998         1997        1996
                                     --------     --------    --------
<S>                                 <C>          <C>         <C>
 Revenue
  Interest income                    $  4,565     $  4,533    $  6,053
  Miscellaneous Income                      -            -       3,600
                                     --------     --------    --------  
  Total revenue                         4,565        4,533       9,653
                                     --------     --------    --------  

 Expenses
  General and administrative           10,317       10,446      10,844
  Management fees (Note 5)             24,000       24,000      24,000
  Impairment of long-lived    
    assets (Note 2)                    65,271       72,769           -
                                     --------     --------    --------
  Total expenses                       99,588      107,215      34,844
                                     --------     --------    --------
  
  Net loss                           $(95,023)   $(102,682)   $(25,191)
                                     ========    =========    ========
  


See notes to financial statements


</TABLE>
</PAGE>
<PAGE>
<TABLE>
 
 
                         FUND AMERICA INVESTORS CORPORATION
                         Statements of Shareholder's Equity
                    Years ended December 31, 1998, 1997 and 1996
  

<CAPTION>
                       Common Stock       
                   -------------------    Additional
                   Number of     Par      Paid-in     Accumulated  Shareholder's
                    Shares      Value     Capital       Deficit     Equity-Net
                   ---------   -------   ----------   -----------  -------------
<S>                <C>          <C>      <C>          <C>           <C>
 Balance at
  January 1, 1996    1,000       $ 10     $ 369,990    $ (86,061)    $ 283,939 
 Net loss                -          -             -      (25,191)      (25,191)
                   -------     ------     ---------    ---------     ---------
  
 Balance at
  December 31, 1996  1,000         10       369,990     (111,252)      258,748 
 Net loss                -          -             -     (102,682)     (102,682)
                   -------     ------     ---------    ---------     ---------

 Balance at
  December 31, 1997  1,000         10       369,990     (213,934)      156,066 
 Net loss                -          -             -      (95,023)      (95,023)
                   -------     ------     ---------    ---------     ---------
  
 Balance at
  December 31, 1998  1,000       $ 10     $ 369,990    $(308,957)    $  61,043
                   =======     ======     =========    =========     =========



  See notes to financial statements

</TABLE>
</PAGE>
<PAGE>
<TABLE>



                       FUND AMERICA INVESTORS CORPORATION
                            Statements of Cash Flows
 

<CAPTION>
                                           Year Ended December 31,
                                   -----------------------------------------
                                      1998            1997           1996
                                   ----------      ----------     ----------
<S>                               <C>             <C>            <C>

 Net cash flows from operating
     activities:
  Net loss                         $ (95,023)      $(102,682)     $ (25,191)
  Adjustments:
    Impairment of deferred
       offering costs                 65,271          72,769              -
  Changes in asset and liabilities:
    Accounts payable                   2,109             106        (40,094)
                                   ---------       ---------      ---------
  Net cash used in operating
      activities                     (27,643)        (29,807)       (65,285)
  
  
  Cash flows used in investing
     activities-
    Deferred offering costs          (26,368)              -              -
                                   ---------       ---------      ---------  

  Net decrease in cash 
      and cash equivalents           (54,011)        (29,807)       (65,825) 
  
  Cash and cash equivalents
      at beginning of year           117,269         147,076        212,361
                                   ---------       ---------      ---------
  
  Cash and cash equivalents
      at end of year               $  63,258       $ 117,269      $ 147,076
                                   =========       =========      =========  


  See notes to financial statements


</TABLE>
</PAGE>
<PAGE>




                       FUND AMERICA INVESTORS CORPORATION
                         Notes to Financial Statements
      
  Note 1.      The Company
      
       Fund America Investors Corporation (the "Company") was incorporated
  in the State of Delaware on October 19, 1987 as a limited purpose finance
  corporation.  The Company was established to engage in activities relating
  to mortgage loans or mortgage loan certificates including other securities,
  which are backed by mortgage loans (the "Collateral").  The Collateral is
  issued and/or guaranteed by agencies which include Government National
  Mortgage Association securities ("GNMA Certificates"), Federal National
  Mortgage Association securities ("FNMA Certificates") and Federal Home Loan
  Mortgage Corporation securities ("FHLMC Certificates") collectively referred
  to as ("Agency Certificates") or other entities ("Private Mortgage-Backed
  Securities").  Among the authorized business activities, the main focus is
  the issuance of bonds in one or more series of collateralized mortgage
  obligations ("CMO's") which are secured by the Collateral.  To issue these
  bonds, the Company may acquire, hold, sell or pledge the Collateral, but 
  typically these activities are transacted by beneficially owned trusts
  created by the Company. 
      
       The Company will not, either directly or indirectly through a benefici-
  ally owned trust, engage in any business or investment activity other than
  (1) issuing and selling bonds; (2) investing cash balances on an interim 
  basis in high quality short-term securities; (3) purchasing, owning, holding,
  pledging or selling the Collateral or other mortgage-related assets; and (4)
  engaging in other activities which are necessary or convenient to accomplish
  the foregoing and are incidental thereto.
      
  Note 2.      Summary of Significant Accounting Policies
      
       In general, CMO's are presumed to be borrowing transactions and are to
  be recorded as liabilities in the financial statements of the issuer.  How-
  ever, a CMO is not accounted for as a borrowing transaction if (a) all but
  a nominal portion of the future economic benefits inherent in the associated
  collateral has been passed to the Bondholders and (b) no affiliate of the
  issuer can be required to make any future payments with respect to the oblig-
  ation.  The Company meets these conditions and therefore, the borrowings and 
  the related collateral were eliminated from the financial statements, and all
  other costs associated with the offering transaction were charged to expense
  during the reporting period.
      
       Costs of registering securities are deferred.  As the Bonds are issued
  from the registered securities, costs are charged to operations.  The charge
  is based on the ratio of bonds to securities registered but previously
  unissued.
      
       Fees from the bond transactions are recognized as revenue when the
  transactions close.  All expenses of the transaction, including a portion
  of deferred offering costs, are charged to operations. 
      
       For purposes of reporting cash flows, cash and cash equivalents include
  demand deposit accounts.
      
       Net income (loss) per share is not presented, as all shares of common
  stock are held by a sole shareholder.
      
       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 at
  the date of the financial statements, and the reported amount of revenues
  and expenses during the reporting period.  Actual results could differ from
  those estimates.
 

</PAGE>
<PAGE>

     
  Note 2.      Continued
      
       SFAS No. 107 "Disclosure About Fair Value of Financial Instruments,"
  requires disclosure of fair value information about financial instruments,
  whether or not recognized in the balance sheet.  The Company's financial
  instruments include: cash and cash equivalents, and accounts payable.  The 
  carrying amount of these assets and liabilities approximates their fair value.
      
       SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
  Long-Lived Assets to be Disposed Of" requires companies to evaluate long-
  lived assets for impairment whenever events or changes in circumstances
  indicate that the carrying amount of an asset may not be recoverable.  If
  a long-lived asset is identified as impaired, the value of the asset must
  be reduced to its fair value.  The Company's deferred offering costs are
  considered long-lived assets under this pronouncement.  An evaluation of 
  the Company's deferred offering costs was performed to determine the fair
  value as of December 31, 1998.  The fair value of the Company's deferred
  offering cost was determined to be zero, as discussed below.   
      
       During 1998, the Company proceeded with its plans to update the
  registration statement and paid for additional deferred offering costs in]
  the amount of $26,368 to file an amendment with the SEC.  After taking addi-
  tional estimated costs of $50,000 to $100,000 into account in order to address
  the SEC comments, management has determined that it is not economically feas-
  ible to follow through on updating the Registration Statement.  Therefore, in
  accordance with SFAS No. 121, the Company is charging the remaining deferred
  offering costs including the additional costs incurred in 1998, a total of
  $65,271, to operations at December 31, 1998.  For the year ended December 31,
  1997, the Company charged $72,769 to operations as an impairment after evalu-
  ating deferred offering costs.
      
       SFAS No. 125, "Accounting for Transfers and Servicing of Financial
  Assets and Extinguishments of Liabilities", requires certain accounting
  and reporting for securitizations of mortgage loans, mortgage backed secur-
  ities and other mortgage collateral.  There was no effect on the financial
  position or results of operations of the Company as a result of SFAS No. 125.
  The Company does not expect SFAS No. 125 to change the accounting of issuances
  for future securizations, to the extent such issuances are structured similar-
  ly to past transactions.
  

  Note 3.      Income Taxes
      
       Under the S Corporation guidelines of the Internal Revenue Code as
  amended, the Company has elected to be treated substantially as a partnership
  for income tax purposes.  As a result, the sole shareholder reports any tax-
  able income or loss of the Company on his individual tax return.  Accordingly,
  no provision for federal income taxes has been recorded in the financial
  statements.
      
 
  Note 4.      Line Of Credit 
      
       The Company has a $500,000 revolving line of credit with its sole
  shareholder.  The credit line is unsecured, bears interest at 2% above the
  base rate used for lending established by a bank (7.75% at December 31, 1998),
  is payable on demand and is subordinate and junior to the Bonds.  As of
  December 31, 1998, $500,000 was available under the line of credit.  
      

  Note 5.      Related Party Transactions
      
       The Company has engaged in various related party transactions as
  discussed below.  Accordingly, the accompanying financial statements are
  not necessarily indicative of the financial position that would exist or
  the results of operations that would have occurred if the transactions had
  been with unaffiliated entities.  
      

</PAGE>
<PAGE>

  Note 5.      Continued
     
       The sole shareholder of the Company is also President and a Director
  of The Chotin Group Corporation and Fund America Management Corporation
  ("FAMC").  In April 1989, the Company entered into a management agreement
  with The Chotin Group Corporation (the "Facilities Manager") through the
  period ended December 31, 1998.  This agreement has been subsequently renewed
  and modified by the parties.  Under the terms of the new agreement, the Fac-
  ilities Manager is required to provide facilities use and other services
  necessary for the Company to manage its business affairs.   The management
  fees paid as a result of this arrangement amounted to $24,000 for each of
  the three years in the period ended December 31, 1998.
      
       As of December 31, 1998, services under three remaining management
  agreements continue to be administered by FAMC for the Company.  The terms 
  of each management agreement provide for the performance of certain adminis-
  trative functions under separate bond indentures related to each of these
  three remaining CMO issuances.  All annual fees for these services performed
  by FAMC are paid by each series' Trustee directly to FAMC. 
      

  Note 6.      CMO Information
      
       At December 31, 1998 and 1997, the outstanding principal balance of the
  Bonds were as follows:
 

     Trust            Series                1998             1997
     -----            -------------    ------------     ------------   
     N/A              Series 91-1      $ 26,992,447     $ 40,214,936 
     N/A              Series 91-2         7,777,836       11,505,594 
     N/A              Series 93-1        17,135,253       26,365,338 
     Trust I          Series 93-2        56,499,262       70,335,977 
     Trust IV         Series 93-5        12,360,073       15,039,373 
     Trust IV         Series 93-6        23,939,323       31,228,433 
                                       ------------     ------------

     Totals                            $144,704,194     $194,689,651 
                                       ============     ============


      
  ITEM 9.      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING 
  ------       -----------------------------------------------------------
               AND FINANCIAL DISCLOSURE
               ------------------------      
       
               None.
      
      
</PAGE>
<PAGE>
      


                                      PART III
      
  ITEM 10.     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
  -------      --------------------------------------------------    
  Name                    Position                                      Age
  ----------------        --------------------------------------        ---
  Steven B. Chotin        Director, Chairman, Chief Executive 
                          Officer and President                          51
  Howard J. Glicksman     Director, Vice President and Assistant
                          Secretary                                      53
  M. Garrett Smith        Director                                       37
  Helen M. Dickens        Director, Vice President, and Secretary        45
  Kenneth S. Birnbaum     Vice President                                 54
  Annel Henderson         Principal Accounting Officer, and Controller   37
        
  
       Steven B. Chotin, 51, has been a Director and the Chairman, Chief
  Executive Officer and President of the Company since its inception. 
  Mr. Chotin has been President of The Chotin Group Corporation, a
  financial service firm, since July 1984. Mr. Chotin was a director of
  American Southwest Financial Corporation and of American Southwest
  Finance Co., Inc. from 1982 to 1994.  Mr. Chotin may be deemed to be a
  "promoter" within the meaning of Rule 405 under the Securities Act of
  1933, as amended (the "Act").
      
       Howard J. Glicksman, 53, has been a Director of the Company since
  1995, Vice President since 1993 and Assistant Secretary since 1989. 
  Mr. Glicksman has been Vice President since 1993, Assistant Secretary
  and General Counsel since 1989 of The Chotin Group Corporation.  Prior
  to joining The Chotin Group Corporation, Mr. Glicksman was a partner in
  the Denver, Colorado law firm of Glicksman, Woodrow & Shaner.  He
  currently holds bar and association memberships in Colorado and New York. 
      
       M. Garrett Smith, 37, is currently Executive Vice President and
  Chief Financial Officer of Pioneer Natural Resources Company, a
  Dallas-based company.  Mr. Smith has been associated with Pioneer's
  top financial group for eight years, most recently serving as Senior
  Vice President - Corporate Acquisitions.  Previously Mr. Smith was a
  partner with BTC Partners, a financial consultant to MESA, Inc.
  
       Helen M. Dickens, 45, has been a Director of the Company since
  1995, Vice President and Secretary of the Company since 1989.  Ms.
  Dickens is also Vice President and Chief Operations Officer of The
  Chotin Group Corporation, positions she has held since 1989.  Prior to
  joining The Chotin Group Corporation, Ms. Dickens served as Assistant
  Corporate Secretary and Assistant to the Chairman of the Board and
  President of Uniwest Financial Corp., a non-diversified savings and
  loan holding company.  
      
       Kenneth S. Birnbaum, 54, has been Vice President of the Company since
  1993.  Mr. Birnbaum is Vice President of The Chotin Group Corporation,
  a position he has held since 1990.  He is also the Manager of The Chotin
  Group Corporation's Washington, D.C., office.  Prior to joining The
  Chotin Group Corporation, Mr. Birnbaum was General Counsel of Bracy
  Williams & Company, a government affairs firm specializing in advising
  corporations on federal, financial, energy and transportation-related
  legislative and administrative matters.   He is currently a member of
  the bar of the District of Columbia.
      
       Annel Henderson, 37, has been the Controller of the Company since 1992
  and the Principal Accounting Officer since 1995.  Mrs. Henderson has been
  the Controller of The Chotin Group Corporation since 1992.  Prior to 1992,
  she was Accounting Manager of Community Holdings Corporation.
     
       Directors and Executive Officers are elected annually for a one-year
  term.
 

</PAGE>
<PAGE>

     
  ITEM 11.     EXECUTIVE COMPENSATION
  -------      ----------------------      
       As of December 31, 1998, no executive officer had received any compensa-
  tion exceeding $100,000. 
     
       The Company has not paid any compensation pursuant to plans or any other
  compensation arrangement.  The Company pays its outside director a monthly fee
  of $150.00.  No other officers or directors receive any compensation for their
  services.
      
 
  ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
  -------      --------------------------------------------------------------
  

                                                  Amount and
                                                  Nature Of              
  Title        Name and Address                   Beneficial        Percent of
  of Class     of Beneficail Owner                Ownership(1)        Class
  --------     ------------------------------     ------------      ----------
  
  Common       Steven B. Chotin                      1,000             100%
               6400 S. Fiddler's Green Circle
               Suite 1200
               Englewood, CO  80111
      

  (1)  Amount of such shares with respect to which persons indicated have the
       right to acquire beneficial ownership as specified in Rule 13d-3(d)(1)
       under the Securities Exchange Act of 1934:  Zero.
      
 

  ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  -------      ----------------------------------------------
      
       The information relating to this Item is incorporated herein by  refer-
  ence to Item 8, "Financial Statements and Supplementary Data" under Note 5
  "Related Party Transactions."
      
 

</PAGE>
<PAGE>

     
      
                                   PART IV
      
      
  ITEM 14.     EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORT ON FORM 8-K
  -------      -----------------------------------------------------------------

  ( a ) (1)    Financial Statements
               -  Independent Auditors' Report
               -  Balance Sheets at December 31, 1998 and 1997
               -  Statements of Operations for the Years Ended December
                  31, 1998, 1997 and 1996
               -  Statements of Shareholder's Equity  for  the Years Ended
                  December 31, 1998, 1997 and 1996
               -  Statements of Cash Flows for the Years Ended December
                  31, 1998, 1997 and 1996
               -  Notes to Financial Statements 
      
  ( a ) (2)    Financial Statement Schedules
      
               The financial statement schedules have been omitted because
               they are inapplicable.
      
  ( b )        Reports on Form 8-K
      
               None.
         
  ( c )        Exhibits
      
               Exhibit 27. Financial Data Schedule




</PAGE>
<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.
      
                                   FUND AMERICA INVESTORS CORPORATION
                                   (Registrant)
      
      
  Date:   March 30, 1999           By:  /s/ Helen  M. Dickens
          --------------                ---------------------
                                         Helen M. Dickens
                                         Vice President
      

       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 indicated on the date above.
      
      
  /s/ Steven B. Chotin      Director, Chairman,              March 30, 1999
  Steven B. Chotin          Chief Executive          
                            Officer and President
                            (Principal Executive Officer)
            
   /s/ Helen M. Dickens     Director, Vice President and     March 30, 1999
   Helen M. Dickens         Treasurer (Principal
                            Financial Officer)
              
   /s/ Howard J. Glicksman  Director, Vice President         March 30, 1999
   Howard J. Glicksman      And Assistant Secretary  
    
   /s/ Garrett Smith        Director                         March 30, 1999
   Garrett Smith
    
   /s/ Kenneth S. Birnbaum  Vice President                   March 30, 1999
   Kenneth S. Birnbaum
    
   /s/ Annel Henderson      Principal Accounting             March 30, 1999
   Annel Henderson          Officer                  
         


</PAGE>
<PAGE>


      
  SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
  SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
  PURSUANT TO SECTION 12 OF THE ACT.
      
      
       Since the Company has a sole shareholder, the Company has not sent and
  will not send an annual report or proxy material to its shareholder.