FORM 10-Q

               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

 X   Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
 Act of 1934

For the quarterly period ended March 31, 2001 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 Number:  000-32227

      	AMERICA FIRST REAL ESTATE INVESTMENT PARTNERS, L.P.
     (Exact name of registrant as specified in its Agreement of Limited
      Partnership)

Delaware                                                39-1965590
(State or other jurisdiction                            (IRS Employer
of incorporation or organization)                       Identification No.)


Suite 400, 1004 Farnam Street, Omaha, Nebraska          68102
(Address of principal executive offices)                (Zip Code)


(402) 444-1630
(Registrant's telephone number, including area code)


     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.

                YES   X                  NO





























                                     -i-
Part I. FINANCIAL INFORMATION
Item 1.  FINANCIAL STATEMENTS


AMERICA FIRST REAL ESTATE INVESTMENT PARTNERS, L.P.
BALANCE SHEETS

<TABLE>
                                                                                            March 31, 2001       Dec. 31, 2000
																																																																																														(unaudited)
                                                                                            ---------------     ---------------
<S>                                                                                         <C>                 <C>
Assets
 Cash and cash equivalents                                                                  	$ 	 7,659,680 					$				8,543,561
 Investment in FHA Loans (Note 4)                                                             		18,638,274										18,674,291
 Investment in GNMA Certificates (Note 4)                                                     		43,004,358										43,097,291
 Investment in corporate equity securities (Note 5) 																																													1,141,650																-
 Investment in Operating Partnerships (Note 6)                                                 	 3,880,131											3,809,948
 Interest and dividends receivable                                                              		 499,640													498,562
 Other assets                                                                                  	  	210,978													101,081
 Goodwill, net																																																																																					890,285													889,278
                                                                                            ---------------     ---------------
                                                                                           	 $ 	75,924,996						$			75,614,012
                                                                                            ===============     ===============
Liabilities and Partners' Capital (Deficit)
	Liabilities
		Accounts payable (Note 9)	                                                               	 $  	1,818,931    		$    5,127,145
		Distribution payable (Note 1)		                                                              	 4,627,654	        	11,261,891
  Notes payable	(Note 7)																																																																									3,726,785											4,029,000
  Borrowings under repurchase agreement (Note 8)                                               	 9,500,000																-
  Interest payable                                                                                 152,749																-
                                                                                            ---------------     ---------------
                                                                                           	 			19,826,119										20,418,036
                                                                                            ---------------     ---------------
Partners' Capital (Deficit)
 General Partner                                                                                     -                (491,211)
 Unit Holders ($8.06 per Unit in 2001 and $7.57 in 2000)               	                        56,098,877          55,687,187
                                                                                            ---------------     ---------------
                                                                                                56,098,877        	 55,195,976
                                                                                            ---------------     ---------------
                                                                                      				  $  	75,924,996 		 		$			75,614,012
                                                                                            ===============     ===============

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

</TABLE>






























                                     - 1 -

AMERICA FIRST REAL ESTATE INVESTMENT PARTNERS, L.P.
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
																																																																																																Company											Predecessor (1)
                                                   																																				     ---------------     ---------------
                                                       																													        		For the Three       For the Three
                                                     																																	       	 Months Ended        Months Ended
                                                    																																				     March 31, 2001      March 31, 2000
                                                   																																				     ---------------     ---------------
<S>                                                 																							                 <C>                 <C>
Income
 Mortgage-backed securities income  													   																																								$    	1,363,590 	   $						798,656
 Interest income on cash and cash equivalents	      																																								       	123,407	           114,330
 Dividend income                                                                                     13,144															-
 Equity in earnings (losses) of Operating Partnerships																																							   	  	(29,817)											 15,488
 Gain on sale of investments                                                    																      6,099															-
                                                                                            ---------------     ---------------
                                                    																																								    		1,476,423	  		   				928,474
Expenses
 Operating and administrative expenses (Note 9)    																																								        	352,252         		 151,150
 Interest expense                                                                                   165,288               -
                                                     																																			     ---------------     ---------------
                                               																																									    		      517,540     	   		 151,150
                                                                                             ---------------     ---------------

Net income                                                                                          958,883            777,324
Other comprehensive income:
	Unrealized holding losses on securities
		arising during the period																																																																										(4,796)												(5,493)
                                                  																																					     ---------------     ---------------
Net comprehensive income																																																																			 $     		954,087					$    		771,831
                                                    																																								===============     ===============

Net income allocated to:
 General Partner                                   																																									$    	  501,196     $	       7,773
 Unit Holders (2)                                                                                   457,687	        		 769,551
                                                   																																				     ---------------     ---------------
                                                    																																								$     		958,883     $    		777,324
                                                    																																								===============     ===============
Net income, basic and diluted, per Unit (2)             																																				$          	.06     $          .23
                                                   																																									===============     ===============

Weighted average number of units outstanding (2)                                                  7,191,482          3,374,222
                                                                                            ===============     ===============
</TABLE>

(1) Predecessor refers to Cap Source I only and, therefore, does not include
				the accounts of Cap Source II.

(2) To BAC holders, per BAC or number of BACs for periods prior to the Merger.


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




















                                     - 2 -

AMERICA FIRST REAL ESTATE INVESTMENT PARTNERS, L.P.
STATEMENT OF PARTNERS CAPITAL (DEFICIT)
FOR THE THREE MONTHS ENDED MARCH 31, 2001
(UNAUDITED)
<TABLE>
<CAPTION>

                                                                                               Unit Holders
                                                                                            -------------------
                                                                  General             # of
                                                                  Partner             Units          Amount            Total
                                                               --------------     ------------   --------------   ---------------
<S>                                                            <C>                <C>            <C>             <C>
Partners' Capital (Deficit)
	(excluding accumulated other comprehensive income)
	Balance at December 31, 2000 																																	$				(491,607)					   7,351,212   $  55,648,017 		$   55,156,410
 Net income                                                          501,196         			  -       	   	457,687					     958,883
 Cash distributions paid or accrued                                		 (9,589)      		  	  -            (41,597)  				   (51,186)
 Purchase of Units                                                    		-      				   (388,957)           -                -
                                                               --------------     ------------   --------------   ---------------
                                                                        -                 -         56,064,107       56,064,107
                                                               --------------     ------------   --------------   ---------------
Accumulated Other Comprehensive Income
Balance at December 31, 2000                                             396              -             39,170           39,566
Other comprehensive loss  	                                       	   	 (396)            	-	            (4,400)     	    (4,796)
                                                               --------------     ------------   --------------   ---------------
                                                                         -            	   -      			    34,770           34,770
                                                               --------------     ------------   --------------   ---------------
Balance at March 31, 2001						                              	 $         -           6,962,255   $  56,098,877    $  56,098,877
                                                               ==============     ============   ==============   ===============
</TABLE>


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









































                                     - 3 -

AMERICA FIRST REAL ESTATE INVESTMENT PARTNERS, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
																																																																																																Company											Predecessor (1)
                                                   																																				     ---------------     ---------------
                                                                                           		For the Three 		 	  For the Three
                                                                                              Months Ended        Months Ended
                                                                                           	March 31, 2001   	  March 31, 2000
                                                                                            ---------------     ---------------
<S>                                                                                         <C>                 <C>
Cash flows from operating activities
 Net income                                                                                 $   		 958,883  	   $  				777,324
  Adjustments to reconcile net income to net cash
   from operating activities
    Equity in (earnings) losses of Operating Partnerships																																									  29,817				     		  (15,488)
    Amortization of discount on mortgage-backed securities                                        			 (257)               (308)
    Amortization of goodwill                                                                         8,993           	 		  -
    Gain on sale of investments                                                                     (6,099)                -
    Increase (decrease) in interest receivable																																																			  	(1,078)        		    	(143)
    Increase in other assets 																																																																					(109,897)	    	 				 	(6,521)
    Decrease in accounts payable                  																																							        	(839,700) 	  					  (223,781)
    Increase in interest payable                                                                   152,749                -
                                                           	                                ---------------     ---------------
Net cash provided by operating activities 		                                                							193,411        				 531,083
                                                                                           	 ---------------    	 ---------------
Cash flows from investing activities
 FHA Loan and GNMA principal payments received                                                  	 	133,747          	 		85,094
 Proceeds from sale of corporate equity securities                                                  25,712                -
 Distributions received from Operating Partnerships																																															    -  									      15,488
 Investment in Operating Partnerships 																						                         											  (100,000)															-
 Purchase of Units                                                                              (2,468,515)               -
 Purchase of corporate equity securities                                                        (1,170,598)               -
 Increase in goodwill                                                                              (10,000)               -
                                                                                            ---------------     ---------------
Net cash provided by (used in) investing activities                                             (3,589,654)         	 	100,582
                                                                                            ---------------     ---------------
Cash flows from financing activity
 Distributions paid                                                                         	 	 (6,685,423)        		 (860,597)
 Principal payments on notes payable                                                            	 (302,215)               -
 Borrowings under repurchase agreements                                                         	 9,500,000                -
                                                                                            ----------------     ---------------
 Net cash provided by (used in) financing activities                                           	 2,512,362            (860,597)
                                                                                            ----------------     ---------------
Net decrease in cash and cash equivalents               											                               (883,881)           (228,932)
Cash and cash equivalents at beginning of period                                 	               8,543,561          	8,658,997
                                                                                            ---------------     ---------------
Cash and cash equivalents at end of period                                                  $  	 7,659,680      $ 	  8,430,065
                                                                                            ===============     ===============
</TABLE>

(1) Predecessor refers to Cap Source I only and, therefore, does not include
				the accounts of Cap Source II.

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



















                                     - 4 -

AMERICA FIRST REAL ESTATE INVESTMENT PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001

1.	Organization

America First Real Estate Investment Partners, L.P. (the "Company") was formed
on June 18,1999, under the Delaware Revised Uniform Limited Partnership Act
for the purpose of acquiring, holding, operating, selling and otherwise
dealing primarily with multifamily residential properties, including the
acquisition of debt and equity securities of entities engaged in similar
activities.  The general partner of the Company is America First Capital
Source I L.L.C.  The Company commenced operations concurrent with the December
31, 2000 merger described below.

On December 31, 2000, the Company merged with Capital Source L.P. ("Cap Source
I") and Capital Source II L.P.-A, ("Cap Source II", and together with Cap
Source I, the "Partnerships"), (the "Merger") with the Company being the
surviving entity.  The Merger was approved by a majority in interest of the
holders of the beneficial assignment certificates (the "BACs") representing
assigned limited partner interests in each of the respective Partnerships. 	In
connection with the Merger, the outstanding BACs of Cap Source I were
converted into, at the election of the BAC holders made in connection with the
solicitation of consents to the Merger, 4,386,143 Units of assigned limited
partner interests in the Company (the "Units") and $3,155,000 in aggregate
principal amount of Variable Rate Junior Notes Callable on or After the Date
of Issuance, due January 15, 2008, Series A (the "Series A Notes").  In
connection with the Merger, the BACs of Cap Source II were converted into, at
the election of the BAC holders made in connection with the solicitation of
consents to the Merger, 2,965,069 Units and $874,000 in aggregate principal
amount of Variable Rate Junior Notes Callable on or After the Date of
Issuance, due January 15, 2008, Series B (the "Series B Notes" and together
with the Series A Notes, the "Notes").  Units issued in connection with the
Merger were issued in whole numbers only.  For each investor entitled to a
fractional unit, the Company made a cash payment to that investor on or around
January 16, 2001, equal to $10 multiplied by the fraction.  The Notes were
issued in incremental denominations of $1,000.  Notes issued in connection
with the Merger were issued in whole numbers only.  For each investor entitled
to a fractional Note, the Company made a cash payment to that investor on or
around January 16, 2001, equal to $1,000 multiplied by the fraction.

For financial accounting purposes, Cap Source I (the "Predecessor") was deemed
to be the acquirer of Cap Source II under the purchase method of accounting
because its investors were allocated the largest number of Units.
Accordingly, the transaction resulted, for financial accounting purposes, in
the effective purchase by Cap Source I of all of the BACs of Cap Source II.
As the surviving entity for financial accounting purposes, the assets and
liabilities of Cap Source I were recorded by the Company at their historical
cost and the assets and liabilities of Cap Source II were recorded at their
estimated fair values.  Together, the combined entities are now known as
America First Real Estate Investment Partners, L.P.

In connection with the Merger, and in accordance with the Stipulation of
Settlement (the "Settlement") dated April 24, 2000, which was approved by the
Delaware Court of Chancery on December 19, 2000, the Company made a
distribution of approximately $0.75 per Unit on or about January 16, 2001, to
holders of record as of December 31, 2000.  The Company also made a
distribution of approximately $75.01 per Note (see Note 6) on or about January
16, 2001, to Note holders of record as of December 31, 2000.   This
distribution to Note holders constituted a prepayment of principal on the
Notes, and reduced the principal amount outstanding on the Notes accordingly.
The Company will also make a second cash distribution of approximately  $0.66
per Unit (consisting of a special distribution of approximately $0.51 per Unit
and a regular quarterly distribution of $0.15 per Unit), and approximately
$51.33 per Note, on or about April 30, 2001, to holders of record on March 30,
2001.  In accordance with the Settlement, the Company is also attempting to
purchase $3,500,000 in Units on the open market during 2001.  In the event
that less than $3,500,000 in Units are purchased by the Company during 2001,
the difference will be distributed in cash to Unit holders after the close of
the fiscal year.  Through March 31, 2001, the Company purchased 388,957 Units
at an aggregate cost of $2,468,514.  Such amount was included as part of the
$3,500,000 which was accrued and reflected in Statement of Partners' Capital
(Deficit) at December 31, 2000, as part of the Settlement.  (Also see Note 11.)


                                     - 5 -

AMERICA FIRST REAL ESTATE INVESTMENT PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001

The exchange values, which were intended to fairly represent the value of the
assets of the Partnerships, used to determine the allocation of Units and
Notes among the Partnerships were based on (a) the principal amount of GNMA
certificates and the FHA loans as shown in the Partnerships' audited financial
statements for the period ended December 31, 1998, (b) the value of the
Partnerships' limited partner interests in the Operating Partnerships, and (c)
the market value of the Partnerships' remaining net assets as shown in the
Partnerships' audited financial statements for the period ended December 31,
1998.  The fair market value of the real estate held by the Operating
Partnerships, as determined by real estate appraisals dated December 31, 1998,
was the value assigned to the real estate for the purpose of determining the
exchange values.

America First Capital Source I L.L.C., the Company's general partner (the
"General Partner"), was a general partner of Cap Source I and is the successor
by merger to Insured Mortgage Equities, Inc., the other Cap Source I general
partner, and America First Capital Source II L.L.C., one of the Cap Source II
general partners.  The assets and liabilities of the other Cap Source II
general partner were acquired by the General Partner.  The General Partner is
controlled by the same entity, America First Companies L.L.C. ("America
First"), that controlled the general partners of the Partnerships.

Neither America First nor the general partners of the Partnerships
were issued any Units or Notes in connection with the Merger.  The General
Partner owns a 1% general partner interest in the Company.

As a result of the Merger, the Company became the limited partner of ten
limited partnerships ("Operating Partnerships") which own apartment complexes
(the "Apartment Complexes") located throughout the United States, including
three in North Carolina, two each in Florida and Michigan, and one each in
Ohio, Virginia and Illinois.  The Company owns a 98.99% limited partnership
interest in nine of these Operating Partnerships and a 99.99% interest in the
tenth Operating Partnership.  Either CS Properties I, Inc. or CS Properties
II, Inc., both of which are owned by the General Partner, serve as the Special
Limited Partner for each of the Operating Partnerships.  In the case of The
Ponds at Georgetown, CS Properties I, Inc. and CS Properties II, Inc. each
serve as a Special Limited Partner.  The Special Limited Partner has the
power, among other things, to remove the general partners of the Operating
Partnerships under certain circumstances and to consent to the sale of the
Operating Partnerships' assets.  CS Properties I, Inc. also serves as the
general partner of Misty Springs Apartments, Waterman's Crossing and Fox
Hollow Apartments and, along with CS Properties II Inc., as a co-general
partner of The Ponds at Georgetown.

In addition, the Company also became the owner of: (a) six mortgage-backed
securities guaranteed as to principal and interest by the Government National
Mortgage Association ("GNMA"), and collateralized by first mortgage loans on
six of the Apartment Complexes, (b) three first mortgage loans on three
Apartment Complexes insured as to principal and interest by the Federal Home
Loan Mortgage Administration ("FHA") (the "FHA loans") and (c) certain GNMA
securities backed by pools of single-family mortgages.

2.	Basis of Presentation

The accompanying financial statements include the accounts of the Company and,
prior to the Merger, the accounts of the Predecessor.  The interim unaudited
financial statements have been prepared according to the rules and regulations
of the Securities and Exchange Commission.  Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America
(GAAP) have been condensed or omitted according to such rules and regulations,
although management believes that the disclosures are adequate to make the
information presented not misleading.  The financial statements should be read
in	conjunction with the financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2000.  In
the opinion of management, all normal and recurring adjustments necessary to
present fairly the financial position at March 31, 2001 and results of
operations for all periods presented have been made.  The results of
operations for the three month period ended March 31, 2001 are not necessarily
indicative of the results to be expected for the full year.

                                     - 6 -

AMERICA FIRST REAL ESTATE INVESTMENT PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period.  Actual results could differ from
those estimates.

3. Partnership Income, Expenses and Cash Distributions

The Partnership Agreement of the Company contains provisions for the
distribution of Net Operating Income, Net Sale Proceeds and Liquidation
Proceeds and for the allocation of income and expenses for tax purposes among
the General Partner and Unit holders.  Income and losses will be allocated to
each Unit holder on a periodic basis based on the number of Units held by each
Unit holder as of the last day of the period for which such allocation is to
be made.  If either the General Partner or the Unit holders have a deficit
capital balance as of the last day of any fiscal year, then all items of
Income shall first be allocated prorata to the General Partner or the Unit
holders in the manner necessary to eliminate such deficit capital balances and
thereafter 99% to the Unit holders and 1% to the General Partner.
Distributions of Net Operating Income and Net Sale Proceeds will be made to
each Unit holder of record on the last day of each distribution period based
on the number of Units held by each Unit holder as of such date.

Net Operating Income, as defined in the Limited Partnership
Agreement, in each distribution period will be distributed 99% to the Unit
holders and 1% to the General Partner.

Net Sale Proceeds, as defined in the Limited Partnership Agreement, will be
distributed 99% to the Unit holders and 1% to the General Partner.

Liquidation Proceeds, as defined in the Limited Partnership
Agreement, remaining after repayment of any debts or obligations of the
Company (including loans from the General Partner or its affiliates) and after
the establishment of any reserve the General Partner deems necessary, will be
distributed to the General Partner and Unit holders to the extent of positive
balances in their capital accounts.  Any remaining Liquidation Proceeds will
be distributed in the same manner as the Net Sale Proceeds.

The Company plans to make cash distributions on a quarterly basis; however,
distributions may be made on a monthly or semiannual basis if the General
Partner so elects.

With regard to the Predecessor, profits and losses from continuing operations
and cash available for distribution were generally allocated 99% to the BAC
holders and 1% to the General Partners.  Cash distributions of the Predecessor
included in the financial statements represent the actual cash distributions
made during each period and the change in cash distributions accrued at the end
of each period.





















                                     - 7 -

AMERICA FIRST REAL ESTATE INVESTMENT PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001

4. Investment in Mortgage-Backed Securities

The Company has classified all of its mortgage-backed securities investments
as available-for-sale.  At March 31, 2001, the total amortized cost, gross
unrealized holding gains, and aggregate fair value of available-for-sale
mortgage-backed securities were $61,598,526, $44,106 and $61,642,632,
respectively. At December 31, 2000, the total amortized cost, gross unrealized
holdings gains and aggregate fair value of available-for-sale mortgage-backed
securities were $16,732,016, $39,566 and $61,771,582, respectively.

Descriptions of the Company's mortgage-backed securities held at March
31, 2001 are as follows:

<TABLE>
<CAPTION>

                                      					          	    Number 	    Interest					  Maturity   				   Carrying
Type of Security and Name        			  Location       			of Units   	      Rate 		   					Date    	 	 	 		Amount
---------------------------------			-----------------   --------   ----------- 	 ------------   ---------------
<S>                              			<C>                	<C>        <C>   						  <C>			    		   <C>

GNMA Certificates:
 Crane's Landing (1)                Winter Park, FL         252    		 8.75%        12-15-2030  	$		 10,039,958
 Misty Springs Apartments	          Daytona Beach, FL       128       8.75%	       06-15-2029     		 4,180,787
 Monticello Apartments              Southfield, MI          106     	 8.75%        11-15-2029     		 5,219,129
 The Ponds at Georgetown	           Ann Arbor, MI           134       7.50%				    12-15-2029        7,361,493
 Waterman's Crossing	               Newport News, VA        260      10.00%	       09-15-2028       10,732,423
 Water's Edge Apartments	           Lake Villa, IL          108       8.75%	       12-15-2028        4,953,117
 Pools of single-family mortgages	                                    7.58%(2)   2008 to 2009       	  285,569
 Pools of single-family mortgages	                                    7.58%(2)	  2007 to 2008        	 231,882
																																																																																																---------------
																																																																																																				43,004,358
FHA Loans:
 Bluff Ridge Apartments	            Jacksonville, NC        108       8.72%	       11-15-2028	     		3,427,938
	Delta Crossing 			                 Charlotte, NC           178      	9.10%        10-01-2030  	  		 6,420,693
 Highland Park Apartments	          Columbus, OH            252       8.75%	       11-01-2028      		8,789,643
                                                                      								                  ---------------
                                                                    		                            		18,638,274
                                                                                                ---------------

 Balance at March 31, 2001                                                                      $	  61,642,632
                                                                                							 						  ===============
</TABLE>

		(1) GNMA Certificate collateralizes a repurchase agreement as disclosed in
      Note 8.
  (2) Represents effective yield to the Partnership.
























                                     - 8 -

AMERICA FIRST REAL ESTATE INVESTMENT PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001

Reconciliation of the carrying amount of the mortgage-backed securities is as
follows:
<TABLE>
<CAPTION>




<S>                                                                     																				<C>
Balance at December 31, 2000                                            																				$				61,771,582
	Additions
		Amortization of discount on mortgage-backed securities                        																						  257
	Deductions
		FHA Loan and GNMA principal payments received                            																								(133,747)
		Change in net unrealized holding gains on
   available-for-sale mortgage-backed securities                               																							4,540
                                                                        																				---------------
Balance at March 31, 2001                   					                       																				$				61,642,632
                                                                       																				 ===============
</TABLE>


5. Investment in Corporate Equity Securities

The Company has classified its corporate equity security investments as
available-for-sale.  At March 31, 2001, the cost, gross unrealized gains,
gross unrealized losses and fair value of the corporate equity securities were
$1,150,986, $9,145 $18,481,and $1,141,650, respectively.  The Company did not
have an investment in corporate equity securities at December 31, 2000.

6.	Investment in Operating Partnerships

The Company's Investment in Operating Partnerships consists of interests in
limited partnerships which own multifamily properties financed by certain GNMA
Certificates and FHA Loans held by the Company.  The limited partnership
agreements provide for the payment of certain amounts out of a portion of the
net cash flow or net sale or refinancing proceeds of the properties, subject
to various priority payments.

Descriptions of the Operating Partnerships held at March 31, 2001,
are as follows:

<TABLE>
<CAPTION>



                                                                                                       Carrying
Name                         	Location                 Partnership Name			                                Value
------------------------      ---------------------    -----------------------------------------    ------------
<S>                           <C>                      <C>                                          <C>
Bluff Ridge Apartments	       Jacksonville, NC         Bluff Ridge Associates Limited Partnership   $      -
Crane's Landing															Winter Park, FL										Crane's Landing Partner, Ltd.																		1,321,789
Delta Crossing																Charlotte, NC												Delta Crossing Limited Partnership															959,856
Fox Hollow Apartments									High Point, NC											Fox Hollow Limited Partnership																						-
Highland Park Apartments	     Columbus, OH             Interstate Limited Partnership                      -
Misty Springs Apartments	     Daytona Beach, FL        Cypress Landings II, LTD.                     	     -
Monticello Apartments									Southfield, MI											Centrum Monticello Limited Partnership									1,379,170
The Ponds at Georgetown	      Ann Arbor, MI            Ponds at Georgetown Limited Partnership          219,316
Waterman's Crossing	          Newport News, VA         Oyster Cove Limited Partnership                     -
Water's Edge Apartments	      Lake Villa, IL           Water's Edge Limited Partnership                    -
                                                                                                    ------------
Balance at March 31, 2001                                                                    							$ 3,880,131
                                                                                                    ============
</TABLE>






                                     - 9 -

AMERICA FIRST REAL ESTATE INVESTMENT PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001


<TABLE>

<S>                                                                    <C>
Balance at December 31, 2000                  								                 $    3,809,948
	Additions
		Investment in Operating Partnerships                                      		100,000
 Deductions
		Equity in losses of Operating Partnerships                          							 (29,817)
	                                                                      ---------------
Balance at March 31, 2001                					                         $    3,880,131
                                                                       ===============
</TABLE>


7. Notes Payable

Notes payable of the Company consist of Variable Rate Junior Notes Callable on
or after December 31, 2000, due January 15, 2008, (the "Notes") issued to BAC
holders of Cap Source I and Cap Source II who elected to receive such notes
in exchange for their BACs of the respective Partnership in connection with
the Merger.  At March 31, 2001, and December 31, 2000, the Notes had an
aggregate principal balance of $3,726,785 and $4,029,000, respectively,
consisting of $2,918,344 and $3,155,000, respectively, of Notes issued to
former BAC holders of Cap Source I and $808,441 and $874,000, respectively, of
Notes issued to former BAC holders of Cap Source II.

The Notes bear interest at the rate equal to 120% of the annual applicable
federal rate for debt instruments with a term of not over three years as
determined by the Internal Revenue Code and applicable regulations
thereunder.  At March 31, 2001, and December 31, 2000, such rate was 5.84% and
7.34% per annum, respectively.  The annual interest rate on the Notes is
calculated by averaging such interest rates for each month.  The average
interest rate for the three months ended March 31, 2001, was 6.39% per annum.
The Notes provide for annual installments of accrued interest payable on the
15th of each January, beginning January 15, 2001.  The unpaid principal
balance and accrued but unpaid interest is due January 15, 2008.

The Company may, at its option, redeem all or any portion of the Notes at any
time at a price equal to 100% of the outstanding principal balance of the
Notes together with accrued interest to the date fixed for redemption.

The Company is required to use 80% of the net proceeds as defined in the
indenture of trust related to such Notes from sales or refinancings of assets
of the Company that were owned by Cap Source I or Cap Source II prior to the
transaction ("Designated Assets") to prepay the Notes.  The Company is
required to deposit such proceeds into a segregated trust account established
under the indenture, and when the funds in the account equal or exceed $5
million, the proceeds will be used to redeem the Notes as provided in the
indenture.  Eighty pecent of the net proceeds from sales or refinancings of
Cap Source I Designated Assets will be used to prepay the Notes held by former
Cap Source I investors.  Eighty percent of the net proceeds from sales or
refinancings of Cap Source II Designated Assets will be used to prepay the
Notes held by former Cap Source II Investors.

The indenture related to the Notes prohibits the Company from incurring any
indebtedness if the new indebtedness would cause the Company's aggregate
principal amount of indebtedness then outstanding to exceed 70% of the greater
of (1) the value which is placed by an independent appraiser on all the assets
of the Company as of the date of the transaction, and (2) the value placed by
an independent appraiser on all assets of the Company as of the date of
determination.

During the three months ended March 31, 2001, the Company made total principal
payments of $302,215 ($75.01 per Note) on the Notes pursuant to the
Settlement.  (See Note 1.)





                                     - 10 -

AMERICA FIRST REAL ESTATE INVESTMENT PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001


8.	Borrowings Under Repurchase Agreement

During the quarter ended March 31, 2001, the Company entered into a repurchase
agreement to provide financing for the distributions and Unit buy-backs
pursuant to the Settlement.  As of March 31, 2001, the repurchase agreement
had an outstanding balance of $9,500,000.  The repurchase agreement bears
interest at 5.41% per annum and matures on January 18, 2002.  The repurchase
agreement is collateralized by one of the Company's mortgage-backed securities
which had a carrying value of $10,039,958 at March 31, 2001.

9.	Transactions with Related Parties

The Company will pay the General Partner an acquisition fee in connection with
the identification, evaluation and acquisition of new assets and the financing
thereof in an amount equal to 1.25% of the aggregate purchase price paid by
the Company for such new assets.  The acquisition fee with respect to an
acquisition of a new asset will be payable at the time of the closing of the
acquisition.  No acquisition fees were paid or accrued during this period.

The Company pays the General Partner an administrative fee in connection with
the ongoing administration of the business of the Company in an amount equal
to 0.50%, per annum, of the sum of (i) the fair market value on the Merger
date of the original assets that are still owned by the Company, plus, (ii)
the purchase price paid by the Company for new assets that are then held by
the Company.  The first $100,000 of the administrative fee shall be payable
each year, with the balance payable only during years that funds from
operations ("FFO"), calculated before administrative fees, exceeds 7% of the
Unit holders' average capital for that year.  FFO represents net income (or
loss) (computed in accordance with GAAP), excluding gains (or losses) from
debt restructuring and sales of properties, plus real estate-related
depreciation and amortization (excluding amortization of deferred financing
costs and depreciation of non-real estate assets) and after adjustments for
unconsolidated partnerships and joint ventures.  Such administrative fees will
be paid on a monthly basis.  Administrative fees payable to the General
Partner for the three months ended March 31, 2001, were $80,100.

An affiliate of the Company's General Partner was retained to provide property
management services for Fox Hollow Apartments, Misty Springs Apartments, the
Ponds at Georgetown and Waterman's Crossing. The property management fee paid
with respect to any property may not exceed 5% of the gross revenues of such
property (in the case of residential property) or 6% of the gross revenues of
such property (in the case of industrial or commercial property); provided,
however, that the property management fee shall not exceed an amount that
would be charged by unaffiliated parties rendering similar services in the
same geographic location and for comparable property.  Property management
fees payable to an affiliate of the General Partner totaled $62,669 for the
three months ended March 31, 2001.

Substantially all of the Company's general and administrative expenses and
certain costs capitalized by the Company are paid by the General Partner or
an affiliate and reimbursed by the Company.  The amount of such expenses
and costs reimbursed to the General Partner for the three months ended March
31, 2001, was $477,001.  Such reimbursed expenses included in this footnote
are presented on a cash basis and do not reflect accruals made at quarter end
which are reflected in the accompanying financial statements.















                                     - 11 -

AMERICA FIRST REAL ESTATE INVESTMENT PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001


10. Pro Forma Financial Statements (Unaudited)

The following summary pro forma information includes the effects of the
Merger.  The pro forma operating data for the three months ended March 31,
2000 are presented as if the Merger had been completed on January 1, 2000.

<TABLE>
<CAPTION>

Pro Forma
Statement of Operations
																																																																																																				For the
																																																																																									Three Months Ended
																																																																																										   March 31, 2000
                                                    																																			   -----------------
<S>			                                                                                    <C>
Income
 Mortgage-backed securities income  													   																																						$   			1,376,024
 Interest income on temporary cash investments      																																								       117,578
 Equity in losses of Operating Partnerships																																																		   		 (81,636)
 Other income                                       																																												     	-
                                                    																																			   -----------------
															                                                    																									    	1,411,966

Expenses
 Operating and administrative expenses 								    																																								        407,170
 Interest expense																																																																																		225,370
                                                    																																			   -----------------
                                                    																																									    	 632,540
                                                    																																			   -----------------
Net income																																																																																$								779,426
                                                    																																						=================

Net income per Unit																			             																																							$  		        .04
                                                    																																						=================
Weighted average number of Units outstanding during the period																																			7,351,212
                                                    																																						=================

The pro forma financial information is not necessarily indicative of what the
results of operations of the Company would have been for the periods
indicated, nor does it purport to represent the results of operations for
future periods.

</TABLE>

11. Subsequent Events

In connection with the Settlement, on or about April 30, 2001, the Company made
a cash distribution of approximately $0.66 per Unit (consisting of a special
distribution of approximately $0.51 per Unit and a regular quarterly
distribution of $0.15 per Unit) and approximately $51.33 per Note, to holders
of record on March 30, 2001.

In connection with the Settlement, the Company purchased and cancelled 107,700
Units at an aggregate cost of $685,785 from April 1, 2001 through May 7,
2001.  Since implementing the $3,500,000 repurchase plan in January, 2001,
through May 7, 2001, the Company purchased and cancelled 496,657 Units at an
aggregate cost of $3,154,299.












                                     - 12 -

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

The following discussion should be read in conjunction with all of the
financial statements and notes included in Item 1 of this report as well as
the Partnership's Annual Report on Form 10-K for the year ended December 31,
2000.

General

The Company was formed on June 18, 1999 under the Delaware Revised Uniform
Limited Partnership Act for the purpose of acquiring, holding, operating,
selling and otherwise dealing primarily with multifamily residential
properties, including the acquisition of debt and equity securities of
entities engaged in similar activities.

The Company began operations on December 31, 2000, when it merged with
Capital Source L.P. ("Cap Source I") and Capital Source II L.P.-A, ("Cap
Source II", and together with Cap Source I, the "Partnerships"), (the
"Merger") with the Company being the surviving entity.  The Merger was
approved by a majority in interest of the holders of the beneficial assignment
certificates (the "BACs") representing assigned limited partner interests in
each of the respective Partnerships. 	In connection with the Merger, the
outstanding BACs of Cap Source I were converted into, at the election of the
BAC holders made in connection with the solicitation of consents to the
Merger, 4,386,143 Units of assigned limited partner interests in the Company
(the "Units") and  $3,155,000 in aggregate principal amount of Variable Rate
Junior Notes Callable on or After the Date of Issuance, due January 15, 2008,
Series A (the "Series A Notes").  In connection with the Merger, the BACs of
Cap Source II were converted into, at the election of the BAC holders made in
connection with the solicitation of consents to the Merger, 2,965,069 Units
and $874,000 in aggregate principal amount of Variable Rate Junior Notes
Callable on or After the Date of Issuance, due January 15, 2008, Series B (the
"Series B Notes" and together with the Series A Notes, the "Notes").  Units
issued in connection with the Merger were issued in whole numbers only.  For
each investor entitled to a fractional unit, the Company made a cash payment
to that investor on or around January 16, 2001, equal to $10 multiplied by the
fraction.  The Notes were issued in incremental denominations of $1,000.
Notes issued in connection with the Merger were issued in whole numbers only.
For each investor entitled to a fractional Note, the Company made a cash
payment to that investor on or around January 16, 2001, equal to $1,000
multiplied by the fraction.

For financial accounting purposes, Cap Source I (the "Predecessor") was
deemed to be the acquirer of Cap Source II under the purchase method of
accounting because its investors were allocated the largest number of Units.
Accordingly, the transaction resulted, for financial accounting purposes, in
the effective purchase by Cap Source I of all of the BACs of Cap Source II.
As the surviving entity for financial accounting purposes, the assets and
liabilities of Cap Source I were recorded by the Company at their historical
cost and the assets and liabilities of Cap Source II were recorded at their
estimated fair values.  Together, the combined entities are now known as
America First Real Estate Investment Partners, L.P.

Liquidity and Capital Resources

In connection with the Merger, and in accordance with the Stipulation of
Settlement (the "Settlement") dated April 24, 2000, which was approved by the
Delaware Court of Chancery on December 19, 2000, the Company made a
distribution of approximately $0.75 per Unit on or about January 16, 2001, to
holders of record as of December 31, 2000.  The Company also made a
distribution of approximately $75.01 per Note on or about January 16, 2001, to
Note holders of record as of December 31, 2000.   This distribution to Note
holders constituted a prepayment of principal on the Notes, and reduced the
principal amount outstanding on the Notes accordingly.  The Company will also
make a second cash distribution of approximately $0.66 per Unit (consisting
of a special distribution of approximately $0.51 per Unit and a regular
quarterly distribution of $0.15 per Unit), and approximately $51.33 per Note,
on or about April 30, 2001, to holders of record on or about March 30, 2001.
In accordance with the Settlement, the Company is also attempting to purchase
$3,500,000 in Units on the open market at various times during 2001.  In the




                                     - 13 -

event that less than $3,500,000 in Units are purchased by the Company during
2001, the difference will be distributed in cash to Unit holders after the
close of the fiscal year.  Through May 7, 2001, the Company purchased 496,657
Units at an aggregate cost of $3,154,299.

As a result of the Merger, the Company became the limited partner of ten
limited partnerships ("Operating Partnerships") which own apartment complexes
(the "Apartment Complexes") located throughout the United States, including
three in North Carolina, two each in Florida and Michigan, and one each in
Ohio, Virginia and Illinois.  The Company owns a 98.99% limited partnership
interest in nine of these Operating Partnerships and a 99.99% limited
partnership interest in the tenth Operating Partnership.  Either CS Properties
I, Inc. or CS Properties II, Inc., both of which are owned by the General
Partner, serve as the Special Limited Partner for each of the Operating
Partnerships.  In the case of one Operating Partnership, CS Properties I, Inc.
and CS Properties II, Inc. each serve as a Special Limited Partner.  The
Special Limited Partner has the power, among other things, to remove the
general partners of the Operating Partnerships under certain circumstances and
to consent to the sale of the Operating Partnerships' assets.  CS Properties
I, Inc. also serves as the general partner of three Operating Partnerships
and, along with CS Properties II Inc., as a co-general partner of one
Operating Partnership.

In addition, the Company also became the owner of: (a) six mortgage-backed
securities guaranteed as to principal and interest by the Government National
Mortgage Association ("GNMA"), and collateralized by first mortgage loans on
six of the Apartment Complexes, (b) three first mortgage loans on three
Apartment Complexes insured as to principal and interest by the Federal
Housing Administration ("FHA") ("the FHA Loans") and (c) certain GNMA
securities backed by pools of single-family mortgages.

Unlike the Partnerships, the Company has the ability to acquire additional
multifamily residential properties as well as debt and equity securities of
entities engaged in similar activities.  In addition, the Company has the
ability to more actively manage the makeup of its real estate portfolio as
compared to the Partnerships.  The Company's investment strategy will be
funded initially from available cash and short-term investments and from (1)
borrowing against or sale of the existing properties, (2) borrowing against or
sale of the GNMA Certificates and the FHA Loans, and (3) borrowing against the
additional properties acquired by the Company following the transaction.  The
Company may also use additional sources of financing, both debt and equity, to
further its business objectives and investment strategies.

The Merger and the implementation of the change in investment strategy will
materially affect the Company's future operations as compared to those of the
Predecessor.  Accordingly, the currently reported financial information is not
necessarily indicative of the Company's future operating results or financial
condition.

The Company believes it has adequate financial resources, including the
ability to borrow funds, to meet its obligations as they become due, including
funding committed distributions and Unit purchases pursuant to the Settlement,
as well as to actively pursue its investment strategy.

Asset Quality

In keeping with its investment strategy, during the three months ended March
31, 2001, the Company borrowed $9,500,000 against one of its GNMA Certificates
through the utilization of a repurchase agreement.  The repurchase agreement
bears interest at 5.41% per annum and had an original term of one year.  The
repurchase agreement matures in January 2002.  The Company also acquired
corporate equity securities at a cost of approximately $1,171,000 and made an
additional investment of $100,000 in one of its Operating Partnership
investments.

The overall status of the Company's other investments has remained relatively
constant since December 31, 2000.








                                     - 14 -

The following table shows the occupancy levels of the properties financed by
the Company at March 31, 2001:
<TABLE>
<CAPTION>
                                                                                                     Number    	   Percentage
                                                                                  Number          of  Units         of  Units
Property Name                     	         Location                           of  Units           Occupied          Occupied
-------------------------------             --------------------             ------------       ------------       ------------
<S>                                         <C>                              <C>                <C>                <C>
Bluff Ridge Apartments                      Jacksonville, NC        	                108                106            			98%
Crane's Landing                             Winter Park, FL                       			252               	238               94%
Delta Crossing                              Charlotte, NC                         			178                164               92%
Fox Hollow Apartments 	                     High Point, NC	                          184	               181               98%
Highland Park Apartments            	       Columbus, OH              	              252           	    236               94%
Misty Springs Apartments         	          Daytona Beach, FL                        128           	    127              100%
Monticello Apartments                       Southfield, MI                        			106                101               95%
The Ponds at Georgetown                     Ann Arbor, MI              	             134            	   126               94%
Waterman's Crossing                         Newport News, VA        	                260            	   256               98%
Water's Edge Apartments                     Lake Villa, IL                           108            	   101               94%
                                                                            -------------       ------------       ------------
	                                                                                  1,710	             1,636          					96%
                                                                            =============       ============       ============
</TABLE>

Results of Operations

As more fully described herein, the results of operations for periods prior to
the Merger include only the historical operating results of the Predecessor,
i.e. Cap Source I, and, therefore, do not include the historical operating
results of Cap Source II.  Also refer to the proforma Statement of Operations
for the three months ended March 31, 2000, included in Note 10 to the
accompanying interim financial statements.

Comparison of the Three Months Ended March 31, 2001 and March 31, 2000

Mortgage-backed securities income of the Company increased $564,934 for the
three months ended March 31, 2001, compared to mortgage-backed securities
income of the Predecessor during the same period in 2000. Such increase is due
to the Merger which resulted in an increase of approximately 76% in the
Company's mortgage-backed secruties portfolio, which was slightly offset by
the continued amortization of the principal balances of the Company's
mortgage-backed securities.

Interest income on cash and cash equivalents of the Company increased $9,077
for the three months ended March 31, 2001, compared to that of the Predecessor
for the same period in 2000 due to an increase in the average cash balance.

The Company recognized dividend income of $13,144 during the three months
ended March 31, 2001, on its investments in corporate equity securities.  The
Predecessor did not invest in such securities and, therefore, did not
recognize dividend income during the comparable period of 2000.

The Company recorded equity in losses of Operating Partnerships of $29,817 for
the three months ended March 31, 2001, on the investments in Operating
Partnerships acquired as a result of the Merger.  The equity in losses
represents the Company's pro rata share of the Operating Partnerships' income
or losses.  During the comparable period of 2000, the Predecessor recorded
equity in earnings of Operating Partnerships of $15,488, representing a
distribution received from one of the Operating Partnerships.  Accordingly,
equity in earnings (losses) of Operating Partnerships decreased $45,305 from
2000 to 2001.

Operating and administrative expenses of the Company increased $201,102 for the
three months ended March 31, 2001, compared to those of the Predecessor for
the same period in 2000.  Such increase is primarily due to the Merger,
including administrative fees payable to the General Partner.

The Company recognized interest expense of $165,288 during the three months
ended March 31, 2001, consisting of interest expense of $104,218 on a
repurchase agreement obligation of $9,500,000 entered into in January 2001,
and $61,070 of interest expense on notes payable originated in connection with
the Merger.  The Predecessor did not have such obligations and, therefore, did
not recognize interest expense during the comparable period of 2000.


                                     - 15 -

The Company recognized a gain of $6,099 on the sale of corporate equity
securities during the three months ended March 31, 2001.  The Partnership did
not invest in such securities and, therefore, did not recognize any gains or
losses resulting from related sales during the comparable period of 2000.

Forward Looking Statements

This report contains forward looking statements that reflect management's
current beliefs and estimates of future economic circumstances, industry
conditions, the Partnership's performance and financial results.  All
statements, trend analysis and other information concerning possible or
assumed future results of operations of the Partnership and the real estate
investments it has made (including, but not limited to, the information
contained in "Management's Discussion and Analysis of Financial Condition and
Results of Operations"), constitute forward-looking statements.  BAC Holders
and others should understand that these forward looking statements are subject
to numerous risks and uncertainties and a number of factors could affect the
future results of the Partnership and could cause those results to differ
materially from those expressed in the forward looking statements contained
herein.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in the Company's	market risk since
December 31, 2000, except as noted below.

During January 2001, the Company borrowed $9,500,000 against one of its GNMA
Certificates through the utilization of a repurchase agreement.  The GNMA
Certificate had a carrying value of $10,039,958 at March 31, 2001, bears
interest at a fixed rate of 8.75% per annum, and has a final maturity date of
December 15, 2030.  The repurchase agreement bears interest at a fixed rate of
5.41% per annum and matures on January 18, 2002.

Part II. OTHER INFORMATION

Item 1.  Legal Proceedings.

In connection with the Merger, and in accordance with the Stipulation of
Settlement (the "Settlement") dated April 24, 2000, which was approved by the
Delaware Court of Chancery on December 19, 2000, the Company made a
distribution of approximately $0.75 per Unit on or about January 16, 2001, to
holders of record as of December 31, 2000.  The Company also made a
distribution of approximately $75.01 per Note on or about January 16, 2001, to
Note holders of record as of December 31, 2000.   This distribution to Note
holders constituted a prepayment of principal on the Notes, and reduced the
principal amount outstanding on the Notes accordingly.  The Company will also
make a second cash distribution of approximately $0.66 per Unit (consisting of
a special distribution of approximately $0.51 per Unit and a regular quarterly
distribution of $0.15 per Unit), and approximately $51.33 per Note, on or
about April 30, 2001, to holders of record on March 30, 2001.  In accordance
with the Settlement, the Company is also attempting to purchase $3,500,000 in
Units on the open market during 2001.  In the event that less than $3,500,000
in Units are purchased by the Company during 2001, the difference will be
distributed in cash to Unit holders after the close of the fiscal year.
Through March 31, 2001, the Company purchased 388,957 Units at an aggregate
cost of $2,468,514.

There are no other material pending legal proceedings to which the
Company is a party or to which any of its property is subject.
















                                     - 16 -

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

              	(a).   Exhibits.

															The following exhibits are filed as required by this report.
															Exhibit numbers refer to the paragraph numbers under Item 601
														 of Regulation S-K:

                    2(a)	Agreement and Plan of Merger among the
																									Partnership and Cap Source and Cap Source II
																									(incorporated by reference to Appendix A to the
																									Prospectus included in Registration Statement on
																								 Form S-4 (No. 333-52117) filed by the Registrant
																								 on November 8, 1999).

																				4(a) Certificate of Limited Partnership of the Company
																									(incorporated by reference to Exhibit 3.01 to
																									Registration Statement on Form S-4 (No. 333-52117)
																									filed by Registrant on July 21, 1999).

                    4(b)	Amended and Restated Agreement of Limited
																									Partnership of the Company
																									(incorporated by reference to Exhibit
																									3.02 to the Registration Statement on
																								 Form S-4 (No. 333-52117) filed by the Registrant on
																									July 21, 1999).

																				4(c) Form of Indenture between Company and U.S. Bank
																									Trust National Association, as trustee, (incorporated
																									by reference to Exhibit 4.02 to the Registration
																									Statement on Form S-4 (No. 333-52117) filed by the
																									Registrant on May 7, 1998).

																				4(d) Form of Unit Certificate of the Registrant
																									(incorporated by reference to Exhibit 4.03 to the
																									Registration Statement on Form S-4 (No. 333-52117)
																									filed by the Registrant on September 28, 1999).

																				4(e) Form of Variable Rate Junior Notes are included in
																									Exhibit 4.02 (incorporated by reference to	Exhibit
																									4.04 to the Registration Statement on Form S-4
																									(No. 333-52117) filed by the Registrant on May 7,
																									1998).

																			10(a) Stipulation of Settlement.
																									IN THE CASE OF
																									ALVIN M. PANZER and
																									SANDRA G. PANZER
																									Plaintiffs,
																									v.
																									INSURED MORTGAGE EQUITIES, INC.,
																									INSURED MORTGAGE EQUITIES II
																									LP., AMERICA FIRST CAPITAL
																									SOURCE I, LLC., AMERICA FIRST
																									CAPITAL SOURCE II, LLC, AMERICA
																									FIRST	COMPANIES, LLC, AMERICA
																									FIRST REAL ESTATE INVESTMENT
																									PARTNERS, 	L.P., LEHMAN
																									BROTHERS, INC., CAPITAL SOURCE
																									L.P., PAUL L. ABBOTT, and CAPITAL
																									SOURCE II, L.P.,
																									Defendants.

																									(incorporated herein by reference to Form 10-Q dated
																								 March 31, 2000 filed pursuant to Section 13 or 15(d)
																								 of the Securities Exchange Act of 1934 by the
																									Registrant (Commission File No.  333-52117)).

          					(b)  Reports on Form 8-K

															The Registrant did not file any reports on Form 8-K during
   												the quarter for which this report is filed.



                                     - 17 -

	                                 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.


		                                 AMERICA FIRST REAL ESTATE INVESTMENT
																																			PARTNERS, L.P.

		                                 By	America First Capital
			                                   Source I, L.L.C., General
			                                   Partner of the Registrant


	                                 	By	/s/ Michael Thesing
			                                   Michael Thesing,
			                                   Vice President and
                                      Principal Financial Officer

Date:  May 10, 2001



















































                                     - 18 -