Exhibit 31.2



CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002



I, Louise B.
Sehman, certify that:



1. I have reviewed this quarterly 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 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 small business issuer as of, and for, the periods presented in this report;



4. The small business issuers other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:



a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under
our supervision to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared;



b) Evaluated the effectiveness of the small
business issuers disclosure controls and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



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



5. The small business issuers other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to
the small business issuers auditors and the audit committee of the small business issuers board of directors (or persons performing the equivalent functions):



a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the small business issuers ability to record, process, summarize and report financial information; and



b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
business issuers internal control over financial reporting.



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|Dated May 14, 2004 |  |  |  | /s/    Louise B. Sehman                                          
|                   |  |  |  |                                                                  
|                   |  |  |  | Louise B. Sehman Chief Financial Officer, Secretary and Treasurer