**Exhibit
      31.2**




**CERTIFICATION
      PURSUANT TO SECTION 302**


**OF
      THE SARBANES-OXLEY ACT OF 2002**




I,
      James
      E. Parker, certify that:




1.  I
      have
      reviewed this Annual Report on Form 10-QSB of KH Funding Company;


2.  Based
      on
      my knowledge, this quarterly report does not contain any untrue statement of
      a
      material fact or omit to state a material fact necessary to make the statements
      made, in light of the circumstances under which such statements were made,
      not
      misleading with respect to the period covered by this quarterly
      report;


3.  Based
      on
      my knowledge, the financial statements, and other financial information included
      in this quarterly report, fairly present in all material respects the financial
      condition, results of operations and cash flows of the registrant as of, and
      for, the periods presented in this quarterly report;


4.  The
      registrant's other certifying officer and I are responsible for establishing
      and
      maintaining disclosure controls and procedures (as defined in Exchange Act
      Rules
      13a-14 and 15d -14) for the registrant and we have:


(a)
      designed such disclosure controls and procedures to ensure that material
      information relating to the registrant, including its consolidated subsidiaries,
      is made known to us by others within those entities, particularly during the
      period in which this quarterly report is being prepared;


(b)
      evaluated the effectiveness of the registrant's disclosure controls and
      procedures as of a date within 90 days prior to the filing date of this
      quarterly report (the "Evaluation Date");


(c)
      disclosed in this report any change in the small business issuer's internal
      control over financial reporting that occurred during the small business
      issuer's most recent fiscal quarter (the small business issuer's fourth fiscal
      quarter in the case of an annual report) that has materially affected, or is
      reasonably likely to materially affect, the small business issuer's internal
      control over financial reporting; and


(d)
      presented in the quarterly report our conclusions about the effectiveness of
      the
      disclosure controls and procedures based on our evaluation as of the Evaluation
      Date.


5.  The
      registrant's other certifying officer and I have disclosed, based on our most
      recent evaluation, to the registrant's auditors and the audit committee of
      registrant's board of directors (or persons performing the equivalent
      functions):


(a)
      all
      significant deficiencies in the design or operation of internal controls which
      could adversely affect the registrant's ability to record, process, summarize
      and report financial data and have identified for the registrant's auditors
      any
      material weaknesses in internal controls; and


(b)
      any
      fraud, whether or not material, that involves management or other employees
      who
      have a significant role in the registrant's internal controls.





Dated:
                May 15, 2006
            /s/
                James E. ParkerJames
                E. ParkerChief
                Financial Officer and
                Treasurer