UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities  Exchange
 Act of 1934


For the period ended     September 30, 1998                                  


[ ] 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  0-13520                                           


                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
             (Exact name of registrant as specified in its charter)


             Massachusetts                              04-2828131        
     (State or other jurisdiction of                (I.R.S. Employer
       incorporation or organization)                Identification No.)


 27  Christina  Street,  Suite  203,  Newton,  MA 02161  
(Address  of  principal executive offices) (Zip Code)


Registrant's telephone number, including area code  (617) 244-2242       



                   Former address, if changed from last report


  Indicate  by check  mark  whether  the  registrant  (1) has filed all  reports
required to be filed by Sections 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

                            Exhibits Index on Page 14

                                  Page 1 of 15



<PAGE>





                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                                      INDEX



                                                                      Page

Part I:  Financial Information

Item 1. Financial Statements:

        Balance Sheets, September 30, 1998 and December 31, 1997      3-4

        Statements of Operations for the Three Months
          Ended September 30, 1998, and 1997 and the Nine Months
          Ended September 30, 1998 and 1997                             5

        Statements of Cash Flows for the Nine Months Ended
          September 30, 1998, and 1997                                  6

        Notes to Financial Statements                                7-10

Item 2. Management's Discussion and Analysis of Financial
        Condition and Results of Operations                         11-13

Part II:  Other Information

Item 6.  Exhibits and Reports on Form 8-K                              14




                                        2



<PAGE>


<TABLE>
<CAPTION>
                       LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                           (A Massachusetts Limited Partnership)

                                      BALANCE SHEETS


                                                (Unaudited)              (Audited)
                                             September 30, 1998       December 31, 1997
                                             ------------------       -----------------

<S>                                          <C>                       <C>
Assets

Current assets:

  Cash and cash equivalents                    $     52,228              $     65,685 
                                               ------------              ------------
                                                                     
                                                                     
     Total current assets                            52,228                    65,685
                                                                     
Long-term notes and accrued interest                                   
  receivable                                        155,348                   143,485
                                                                       
Investments in local limited                                           
  partnerships                                    1,905,259                  2,019,77
                                               ------------              ------------             
     Total assets                              $  2,112,835              $  2,228,945
                                               ============              ============
                                                                       
                                      
                                  (continued)

                                       3
<PAGE>
<CAPTION>
                       LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                           (A Massachusetts Limited Partnership)

                                BALANCE SHEETS (continued)

                                                (Unaudited)              (Audited)
                                             September 30, 1998       December 31, 1997
                                             ------------------       -----------------
<S>                                          <C>                       <C>
Liabilities and Partners' Deficit                                      
                                                                       
Current liabilities:                                                   
  Accounts payable to affiliates               $    148,773              $     75,271
  Accounts payable                                    6,651                     1,410
  Accrued expense                                      --                      16,000
  Accrued interest payable                          351,987                   370,165
                                               ------------              ------------
                                                                       
     Total current liabilities                      507,411                   462,846
                                                                       
Purchase money notes                             13,328,867                11,544,195
                                               ------------              ------------
                                                                       
     Total liabilities                           13,836,278                12,007,041
                                               ------------              ------------
                                                                       
Partners' deficit:                                                     
  General partners:                                                  
     Capital contributions                            4,202                     4,202
     Capital distributions                              (28)                      (22)
     Accumulated losses                            (217,997)                 (198,550)
                                               ------------              ------------
                                                   (213,823)                 (194,370)
                                               ------------              ------------
                                                                       
  Limited partners (21,566 Units at                                  
       September  30, 1998 and 21,576 Units                              
       at December 31, 1997):                                           
     Capital contributions (net of                                     
       offering costs of $1,134,440)              9,649,520                 9,649,520
     Capital distributions                           (2,771)                   (2,211)
     Accumulated losses                         (21,156,369)              (19,231,035)
                                               ------------              ------------
                                                (11,509,620)               (9,583,726)
                                               ------------              ------------
                                                                       
     Total partners' deficit                    (11,723,443)               (9,778,096)
                                               ------------              ------------
                                                                       
     Total liabilities and partners'                                
       deficit                                 $  2,112,835              $  2,228,945
                                               ============              ============
                                                             



   The accompanying notes are an integral part of these financial statements.

</TABLE>

                                        4
<PAGE>

<TABLE>
<CAPTION>

                        LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                           (A Massachusetts Limited Partnership)

                                  STATEMENTS OF OPERATIONS
                                        (Unaudited)


                                   For the Three Months Ended   For the Nine Months Ended
                                        September 30,                  September 30,  
                                  ---------------------------   -------------------------  
                                      1998           1997           1998           1997  
                                  -----------    -----------    -----------    -----------

<S>                              <C>            <C>            <C>            <C>        
Interest income                   $     7,051    $    11,082    $    27,761    $    37,661
                                  -----------    -----------    -----------    -----------

Expenses:

  Interest expense                    687,377        568,723      1,953,114      1,621,465

  General and administrative
    expense                            32,903         33,250         92,095        100,407
                                  -----------    -----------    -----------    -----------

Total expenses                        720,280        601,973      2,045,209      1,721,872
                                  -----------    -----------    -----------    -----------

Loss before equity in local
 limited partnership operations      (713,229)      (590,891)    (2,017,448)    (1,684,211)

Equity in income of
 Local limited partnership
 Investments                           45,692        124,227         72,667        209,087
                                  -----------    -----------    -----------    -----------


Net Loss                          $  (667,537)   $  (466,664)   $(1,944,781)   $(1,475,124)
                                  ===========    ===========    ===========    ===========

Basic net loss per Limited
 Partnership Unit
                                  $    (30.64)   $    (21.41)   $    (89.26)   $    (67.69)
                                  ===========    ===========    ===========    ===========


Units used in computing basic
 net loss per Limited                  21,566         21,576         21,569         21,576
 Partnership Unit                 ===========    ===========    ===========    ===========
 

         The accompanying notes are an integral part of these financial statements.
</TABLE>

                                             5

<PAGE>

                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                    For the Nine Months Ended
                                                          September 30,       
                                                   --------------------------
                                                        1998           1997
                                                        ----           ----
                           
Cash flows from operating activities:                                          
  Cash distributions from local limited
     partnerships                                  $   187,183    $   369,947
  Interest payments on purchase money notes           (186,617)      (369,947)
  Cash paid for Partnership administration
     expenses                                          (29,353)      (120,710)
  Interest received                                     15,896         25,829
                                                   -----------    -----------
      Net cash used in
        operating activities                           (12,891)       (94,881)
                                                   -----------    -----------

Cash Flows from financing activity:
  Capital distributions                                   (566)          -- 
                                                   -----------    -----------  
      Net cash used by financing
        activity                                          (566)          --  
                                                   -----------    -----------

Net decrease in cash and cash equivalents              (13,457)       (94,881)

Cash and cash equivalents at:
  Beginning of period                                   65,685        163,915
                                                   -----------    -----------
  End of period                                    $    52,228    $    69,034
                                                   ===========    ===========


Reconciliation of net loss to net cash used in operating activities:

Net loss                                           $(1,944,781)   $(1,475,123)
Adjustments to reconcile net loss to net
  cash used in operating activities:             
     Share of income of local limited            
       partnership investments                         (72,667)      (209,087)
     Cash distributions from local limited       
       partnerships                                    187,183        369,947
     Interest expense added to purchase money    
       notes, net of discount amortization           1,784,672      1,159,132
     Interest income added to long-term          
       notes receivable, net of discount         
       amortization, and interest received             (11,863)       (11,863)
     Decrease in other current assets                     --               31
     (Decrease) increase in:                     
        Accrued interest payable                       (18,178)        92,385
        Accounts payable to affiliates                  73,502         (7,495)
        Accounts payable                                 5,241          2,792
        Accrued expenses                               (16,000)       (15,600)
                                                   -----------    -----------

     Net cash used in operating
       activities                                  $   (12,891)   $   (94,881)
                                                   ===========    ===========



    The accompanying notes are an integral part of hese financial statements.


                                        6

<PAGE>

                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

1.      Organization of Partnership

        Liberty Housing Partners Limited  Partnership  (the  "Partnership")  was
formed under the Massachusetts Uniform Limited Partnership Act on March 20, 1984
for the primary purpose of investing in other limited partnerships which own and
operate government  assisted  multi-family  rental housing complexes (the "Local
Limited Partnerships").


2.      Significant Accounting Policies

         In the  opinion of the  General  Partner,  the  accompanying  unaudited
financial  statements  contain all normal  recurring  adjustments  necessary  to
present  fairly the financial  position of the  Partnership  as of September 30,
1998. The financial statements,  which do not include all of the information and
footnote  disclosures  required by  generally  accepted  accounting  principles,
should  be  read  in  conjunction  with  the  Partnership's   audited  financial
statements for the year ended December 31, 1997.


3.      Investments in Local Limited Partnerships

        The following is a summary of  cumulative  activity for  investments  in
Local Limited Partnerships since their dates of acquisition:

                                              (Unaudited)       (Audited)
                                              September 30,    December 31,
                                                  1998            1997   
                                              -------------  --------------

Total acquisition cost to the Partnership     $ 9,356,379    $ 9,356,379

    Additional capital contributed by the
        Partnership                                11,425         11,425

    Partnership's share of losses of Local
        Limited Partnerships                   (3,722,901)    (3,744,473)

    Cash distributions received from Local
        Limited Partnerships                   (3,790,739)    (3,603,556)

    Cash distributions received from Local
        Limited Partnerships recognized as
        investment income                          51,095           --   
                                              -----------    -----------

Investments in Local Limited Partnerships     $ 1,905,259    $ 2,019,775
                                              ===========    ===========




                                   (Continued)


                                        7



<PAGE>





                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

3.  Investments in Local Limited Partnerships, continued

        Summarized  financial   information  from  the  combined  statements  of
operations of all Local Limited Partnerships is as follows:
                                             For the Nine Months Ended
                                                   September 30,          
                                            ----------------------------
                                                 1998           1997
                                                 ----           ----           

Rental and other income                      $ 4,109,287    $ 4,335,015
Expenses:
    Operating expenses                         2,763,207      2,733,215
    Interest expense                             760,419        776,828
    Depreciation and amortization                733,473        726,139
                                             -----------    -----------
      Total expenses                           4,257,099      4,236,182
                                             -----------    -----------

Net income(loss)                             $  (147,812)   $    98,833
                                             ===========    ===========

Partnership's share of net income (loss)     $  (146,200)   $    98,750
                                             ===========    ===========

Other partners' share of net income (loss)   $    (1,612)   $        83
                                             ===========    ===========

        The  differences  between  the  Partnership's  share of  income in Local
Limited Partnership investments in the Partnership's Statement of Operations for
the nine months ended  September  30, 1998 and 1997 and the share of net loss in
the above Summarized Statements of Operations consists of the following:

                                                For the Nine Months Ended
                                                       September 30,          
                                                -------------------------
                                                    1998        1997
                                                    ----        ----
Share of income in Local Limited
    Partnership Investments in the
    Partnership's Statement of Operations       $  72,667    $ 209,087

Partnership's share of income (loss) in the
    above summarized Statements of Operations    (146,200)      98,750
                                                ---------    ---------
        Difference                              $ 218,867    $ 110,337
                                                =========    =========
Partnership's unrecorded share of losses:
    Linden Park                                 $  60,819    $  36,666
    Brierwood Ltd.                                 23,720       14,061
    Brierwood II, Ltd.                              5,528        3,967
    Pine Forest Apartments, Ltd.                   18,692       17,703
    Surry Manor                                    38,360       15,595
    Glendale Manor                                 20,653         --   
                                                ---------    ---------
        Subtotal unrecorded losses                167,772       87,992

Cash Distributions
    recorded as investment income                  51,095       22,345
                                                ---------    ---------

        Total                                   $ 218,867    $ 110,337
                                                =========    =========

                                       8

                                   (Continued)
<PAGE>
                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


3.  Investments in Local Limited Partnerships, continued

         The Partnership  recorded its share of losses in Linden Park, Brierwood
Ltd., Brierwood II, Ltd., Pine Forest Apartments, Ltd., Surry Manor and Glendale
Manor  until its related  investment  was  reduced to zero.  Subsequent  to that
point, any cash distributions  received from these six partnerships have been or
will be recognized as investment income rather than as a reduction in Investment
in  Local  Limited   Partnerships  on  the  Partnership's   Balance  Sheet.  The
Partnership is not obligated to make additional  capital  contributions  to fund
the deficit in its capital accounts in these Local Limited Partnerships.

         Certain Local Limited  Partnerships have made payments on behalf of the
Partnership for non-resident  state  withholding  taxes in accordance with state
income tax regulations. These amounts totaling $566 during the first nine months
of 1998 have been treated as distributions  from the Local Limited  Partnerships
and  a  distribution  to  the  partners  of  Liberty  Housing  Partners  Limited
Partnership.

4.  Transactions with Affiliates

         During  the  nine  months  ended  September  30,  1998,  and  1997  the
Partnership recognized general and administrative  expenses owed to the Managing
General Partner, as follows:

                                           1998           1997
                                           ----           ----
Reimbursement of Partnership
  administration expenses                $36,136        $45,004
Partnership management fees               37,500         37,500
                                                        
        As of September  30, 1998 and December  31,  1997,  accounts  payable to
affiliates totaling $148,773 and $75,271,  respectively,  represent amounts owed
for  reimbursements  of  Partnership  administration  expenses  of  $56,002  and
$20,000,  respectively,  and partnership management fees of $92,771 and $55,271,
respectively.



                                   (Continued)



                                       9

<PAGE>

                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


5.  Statement of Distributable Cash from Operations

        Distributable  Cash From  Operations for the nine months ended September
30, 1998, as defined in Section 17 of the Partnership Agreement, is as follows:

Interest income per Statement of Operations         $ 27,761

Less:  Interest income added to long-term notes
         receivable, net of discount amortization    (11,863)

       General and administrative expenses per
         Statement of Operations                     (92,095)

Cash from Operations, as defined                     (76,197)
                                                    --------

Distributable Cash from Operations, as defined      $   --   
                                                    ========







                                       10



<PAGE>


                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

       ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

       The  aggregate  outstanding  principal  amount of and  accrued and unpaid
interest  on the  Purchase  Money Note  obligations  of the  Partnership,  as of
September  30,1998,  was approximately  $15,534,461.  The aggregate  outstanding
principal  amount of the  Purchase  Money Notes  reported  on the  Partnership's
Balance Sheet ($13,328,867 at September 30, 1998),  reflects a discount using an
imputed interest rate of approximately 21%, which was applied to the face amount
of the notes on the  respective  investment  purchase dates and which is used to
calculate an annual  interest  accrued in  accordance  with  generally  accepted
accounting  principles  that will  equate to the legal  obligation  expected  at
maturity of the notes.

       As of September 30, 1998, the unpaid  principal amount of and accrued and
unpaid interest on the Linden Park Associates Limited  Partnership Notes equaled
$2,423,205.

       At September 30, 1998,  the  Partnership  had reserves of $52,228 in cash
and cash equivalents. Accrued interest totaling $186,617 due on certain Purchase
Money  Notes  from  distributions   received  from  the  related  Local  Limited
Partnerships was distributed in the second quarter of 1998.

         In 1998, the Partnership accrued interest of $26,163 on the Linden Park
Associates  Limited  Partnership  Notes  held by the  Partnership  and  received
$14,300 of interest  payments on these  notes.  As of September  30,  1998,  the
outstanding  balance of principal and accrued and unpaid interest  receivable on
these notes amounted to $244,524, prior to unamortized discount of $89,176.

         Through   the   Multifamily   Assisted   Housing    Restructuring   and
Affordability Act of 1997 (MAHRAA),  the availability of US Government subsidies
has been  significantly  reduced  and  restructured.  Under  the new  assistance
program,  the Federal  Government has moved away from project based subsidies to
tenant  vouchers.  One year  extensions  are being  granted  under the  existing
subsidy program, however, the approved rent amount may be adjusted down based on
local fair market rent levels.  With this change in  approach,  the value of the
portfolio is expected to be adversely impacted.

         The  Purchase  Money  notes  outstanding  for  eleven  of the  thirteen
properties  held in this  portfolio  start to become due in September  1999. The
principal  and  accrued  interest  due cannot be realized  or  supported  by the
current  value  of most,  if not all of the  respective  property(ies),  through
either a sale or refinancing.

         The Partnership continues to explore options for resolving the Purchase
Money  Notes.  In  connection  with these  efforts the  partnership  engaged the
General Partner of Linden Park Associates Limited Partnership to assist with the
workout  or  liquidation  of  the  Partnership's  portfolio.  The  terms  of the
engagement  provide  for  the  payment  of  certain  fees  and  expenses.  It is
contemplated  that these fees and expenses  will be paid from the  principal and
interest from the Linden Park Associates  Limited  Partnership notes held by the
Partnership.   If  the  workout  or  liquidation  of  the  entire  portfolio  is
successfully  completed the  Partnership's  entire  interest in these notes will
have been exhausted.




                                       11

<PAGE>

                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

       ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

Liquidity and Capital Resources, continued

       In addition,  the Partnership has granted the Linden Park General Partner
an option to  acquire  the  Partnership's  interest  in Linden  Park  Associates
Limited  Partnership  over the next three and one-half years at a purchase price
of $400,000 for the next  eighteen  months and  increasing by $100,000 each year
thereafter.

Partnership Operations

       The Partnership is engaged solely in the business of owning  interests in
the Local Limited Partnerships rather than the direct ownership of real estate.

       The  Partnership's  net loss  increased to  $1,944,781  in the first nine
months of 1998 from  $1,475,124 in the first nine months of 1997  primarily as a
result of the increase in the  Partnership's  interest expense of $331,649,  and
the decrease in income of local limited  partnership  investments  recognized of
$136,420.

         The Partnership's  interest income reflects interest earned on reserves
and interest net of discount  amortization  on the long-term  notes  receivable.
Total interest  income  decreased  $9,990 to $27,761 in the first nine months of
1998  compared  to $37,661 in the first nine  months of 1997.  This  decrease is
attributable  to lower cash  balances  maintained by the  Partnership  and lower
interest  payments  received on the Linden Park Associates  Limited  Partnership
Notes held by the Partnership.

         The Partnership's interest expense increased to $1,953,114 in the first
nine  months of 1998 from  $1,621,465  in the first  nine  months of 1997.  Such
increase is  attributable  to the accrual of interest  under the Purchase  Money
Notes.

       The  Partnership's  equity in income from the Local Limited  Partnerships
was  $72,667 in the first  nine  months of 1998 and  $209,087  in the first nine
months of 1997.  The $136,420  decrease in income  recognized  in the first nine
months of 1998 is attributable to: a decrease of $244,950 in net income from the
combined statements of operations of all Local Limited  Partnerships;  net of an
increase in  unrecorded  loss of $79,780  and an increase in cash  distributions
recognized  as investment  income of $28,750.  The decrease in net income of the
Local Limited  Partnerships is attributable to a decrease in revenue  recognized
by one of the Local Limited Partnerships,  which had received insurance proceeds
in connection  with an insured loss in 1997, but had not yet incurred all of the
expenses of repairs.



                                       12
<PAGE>
                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Partnership Operations, continued


         The Year 2000 issue may effect the Partnership's operations as a result
of issues  arising from systems and  services  utilized by the Managing  General
Partner or by various Local Limited  Partnerships.  The Managing General Partner
has inventoried  its systems and equipment that may require  correction for Year
2000 issues.  Management  believes that the principal software systems which are
critical  to the  Partnership's  operation  have  been  updated  with  Year 2000
versions.  Certain  personal  computers,  hardware  and other  imbedded  systems
require update in order to be rendered Year 2000 compliant. The Managing General
Partner is presently  soliciting bids for this remediation work and expects that
it will be completed by the second quarter of 1999. The Partnership  will assess
the Year 2000 readiness and contingency plans of the Local Limited  Partnerships
in connection with its year end audit.

         The  Partnership  does not  expect to bear any part of the costs of the
Managing General Partner's Year 2000 compliance.  The Local Limited Partnerships
may bear some or all of the costs of Year 2000  compliance  efforts  relating to
systems on which the Local Limited  Partnerships  depend. To the extent that the
Local  Limited  Partnerships  bear such costs,  such costs might have a material
adverse effect on the income of the Local Limited Partnerships.

         The  Partnership  does not  expect  that any  failure  of the  Managing
General  Partnership's  systems on which it  depends  to be Year 2000  compliant
would have a material adverse effect on the Partnership. However, the failure of
systems on which a Local  Limited  Partnership  depends  could result in adverse
effects,  including the failure to properly  account for and process  income and
expenses  and the failure to  properly  operate the  property.  The  Partnership
cannot presently  predict whether such effects would have a material and adverse
effect on the Local Limited Partnerships, and as a result, the Partnership.

                                       13
<PAGE>

                                     PART II

Item 6. Exhibits and reports on Form 8-K.

       The following exhibits are included with this report:

Exhibit Number    Description
--------------    -----------

  10.17           Letter  agreement  with  John  Wagner   regarding   consulting
                  services in connection  with the liquidation or workout of the
                  Partnership's portfolio.













                                       14



<PAGE>





                                   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.


                                   LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP

                                    By:   TNG Properties Inc.
                                          Managing General Partner



                                    By:   /s/ Michael A. Stoller      
                                          Michael A. Stoller
                                          President and CEO


                                    By:   TNG Properties Inc.
                                          Managing General Partner



                                    By:   /s/ Wilma R. Brooks          
                                          Wilma R. Brooks
                                          Chief Financial Officer


Date:  November 12, 1998






                                       15