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 June 30, 2000 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:  333-52117

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

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



































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Part I. FINANCIAL INFORMATION
 Item 1.  FINANCIAL STATEMENTS


AMERICA FIRST REAL ESTATE INVESTMENT PARTNERS, L.P.
BALANCE SHEETS
<TABLE>
<CAPTION>
                                                   	 	June 30, 2000     	Dec. 31, 1999
																																																							(unaudited)
                                                    ---------------     ---------------
<S>                                                 <C>                 <C>
Assets
 Cash 																					                         $ 	 				1,000 	     $ 	 				1,000
                                                    ---------------     ---------------
                                                    $ 	 				1,000       $ 	 				1,000
                                                    ===============     ===============
 Partners' Capital
	 General Partner	                                  $			 						10	      $			 						10
		Limited Partner																														               990       										990
                                                    ---------------     ---------------
                                                    $ 						1,000       $ 						1,000
                                                    ===============     ===============

The accompanying notes are an integral part of the balance sheets.

</TABLE>
















































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AMERICA FIRST REAL ESTATE INVESTMENT PARTNERS, L.P.
NOTES TO BALANCE SHEETS
JUNE 30, 2000

1.	Basis of Presentation

America First Real Estate Investment Partners, L.P. (the "Partnership") 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 Partnership will facilitate the proposed merger of Capital
Source L.P. and Capital Source II L.P.-A (collectively referred to as the
"Capital Source Funds").  The Partnership intends to issue up to 7,765,772
units of assigned limited partnership interest to holders of Beneficial
Assignment Certificates (BACs) of the Capital Source Funds.  The General
Partner of the Partnership is America First Capital Source I L.L.C. The
General Partner will hold a 1% interest in the Partnership.  The Company has
not yet commenced operations.

2.	Transactions with Related Parties

The Partnership 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 Partnership 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.  The Partnership will also pay the General Partner an
administrative fee in connection with the ongoing administration of the
business of the Partnership 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 then still owned by the Partnership, plus, (ii) the purchase price paid by
the Partnership for new assets that are then held by the Partnership.  The
first $100,000 of the administrative fee shall be payable each year, with the
balance payable only during years that funds from operations, as more fully
described in the Partnership's limited partnership agreement, calculated
before administrative fees, exceeds 7% of the unit holders' average capital
for that year.  Such administrative fee will be paid on a monthly basis.

The Partnership may pay an affiliate of the General Partner a reasonable
property management fee in connection with the management of the Properties.
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.

The Partnership will reimburse the General Partner or its affiliates on a
monthly basis for the actual out-of-pocket costs of direct general and
administrative expenses.























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AMERICA FIRST REAL ESTATE INVESTMENT PARTNERS, L.P.
NOTES TO BALANCE SHEETS
JUNE 30, 2000

3.  Legal Proceedings

The Partnership has been named as a defendant in a purported class action
lawsuit filed in the Delaware Court of Chancery on February 3, 1999, by Alvin
M. Panzer and Sandra G. Panzer, against the Partnership, its general partner,
America First and various of their affiliates (including Capital Source L.P.,
Capital Source II L.P.-A, and their general partners (Capital Source L.P. and
Capital Source II L.P.-A are partnerships with general partners that are
affiliates of America First.) and Lehman Brothers, Inc.  Alvin M. Panzer and
Sandra G. Panzer are two Beneficial Assignment Certificate (BAC) holders of
Capital Source L.P. and Capital Source II L.P.-A.  The plaintiffs seek to have
the lawsuit certified as a class action on behalf of all BAC holders of
Capital Source L.P. and Capital Source II L.P.-A.  The lawsuit alleges, among
other things, that a proposed merger transaction involving the Partnership,
Capital Source L.P. and Capital Source II L.P.-A is deficient and coercive,
that the defendants have breached the terms of Capital Source L.P.'s and
Capital Source II L.P.-A's partnership agreement and that the defendants have
acted in manners which violate their fiduciary duties to the BAC holders.  In
this complaint, the plaintiffs sought to enjoin the proposed merger
transaction and seek to appoint an independent BAC holder representative to
investigate alternative transactions.  The lawsuit also requests a judicial
dissolution of Capital Source L.P. and Capital Source II L.P.-A, an
accounting, and unspecified damages and costs.

The general partners of the Partnership, Capital Source L.P. and Capital
Source II L.P.-A determined not to pursue the merger transaction which was the
subject of the initial lawsuit and proposed an alternative transaction to BAC
holders.  A prospectus/consent solicitation statement outlining this
alternative transaction was sent to BAC holders on or about November 16,
1999.  The plaintiffs amended their complaint on December 8, 1999, and again
on February 22, 2000.  The second amended complaint challenges this current
prospectus/consent solicitation statement on grounds similar to those alleged
in the original complaint, as well as on other procedural grounds.  The second
amended complaint does not seek to enjoin the proposed merger transaction.

To resolve the lawsuit, the Partnership and the other defendants to the
lawsuit, on April 24, 2000, entered into a settlement agreement (the
Settlement) with the plaintiffs.  The Settlement remains subject to approval
by the Court.  In connection with the Settlement, Capital Source
L.P. and Capital Source II L.P.-A submitted a revised transaction to BAC
holders for approval on or about June 30, 2000.  The complete terms of the
Settlement, along with the updated consent solicitation material describing
the revised merger transaction, was filed with the Securities and Exchange
Commission (the SEC) on or about June 15, 2000.



























<PAGE>                               	-3-

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

As of June 30, 2000, the Partnership had not commenced operations.  For
management's discussion and analysis of the financial condition and results of
operations of Capital Source L.P. (Cap Source) and Capital Source II L.P.-A
(Cap Source II) for the six months ended June 30, 2000, please refer to the
Form 10-Qs of Cap Source and Cap Source II for the quarter ended June 30,
2000.

     Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

As of June 30, 2000, the Partnership had not yet commenced operations.  For
quantitative and qualitative disclosure regarding market risk of the assets to
be acquired from Cap Source and Cap Source II as a result of the merger,
please refer to the Form 10-Qs of Cap Source and Cap Source II for the quarter
ended June 30, 2000.

Part II. OTHER INFORMATION

Item 1.  Legal Proceedings.

The Partnership has been named as a defendant in a purported class action
lawsuit filed in the Delaware Court of Chancery on February 3, 1999, by Alvin
M. Panzer and Sandra G. Panzer, against the Partnership, its general partner,
America First and various of their affiliates (including Capital Source L.P.,
Capital Source II L.P.-A, and their general partners (Capital Source L.P. and
Capital Source II L.P.-A are partnerships with general partners that are
affiliates of America First.) and Lehman Brothers, Inc.  Alvin M. Panzer and
Sandra G. Panzer are two Beneficial Assignment Certificate (BAC) holders of
Capital Source L.P. and Capital Source II L.P.-A.  The plaintiffs seek to have
the lawsuit certified as a class action on behalf of all BAC holders of
Capital Source L.P. and Capital Source II L.P.-A.  The lawsuit alleges, among
other things, that a proposed merger transaction involving the Partnership,
Capital Source L.P. and Capital Source II L.P.-A is deficient and coercive,
that the defendants have breached the terms of Capital Source L.P.'s and
Capital Source II L.P.-A's partnership agreement and that the defendants have
acted in manners which violate their fiduciary duties to the BAC holders.  In
this complaint, the plaintiffs sought to enjoin the proposed merger
transaction and seek to appoint an independent BAC holder representative to
investigate alternative transactions.  The lawsuit also requests a judicial
dissolution of Capital Source L.P. and Capital Source II L.P.-A, an
accounting, and unspecified damages and costs.

The general partners of the Partnership, Capital Source L.P. and Capital
Source II L.P.-A determined not to pursue the merger transaction which was the
subject of the initial lawsuit and proposed an alternative transaction to BAC
holders.  A prospectus/consent solicitation statement outlining this
alternative transaction was sent to BAC holders on or about November 16,
1999.  The plaintiffs amended their complaint on December 8, 1999, and again
on February 22, 2000.  The second amended complaint challenges this current
prospectus/consent solicitation statement on grounds similar to those alleged
in the original complaint, as well as on other procedural grounds.  The second
amended complaint does not seek to enjoin the proposed merger transaction.

To resolve the lawsuit, the Partnership and the other defendants to the
lawsuit, on April 24, 2000, entered into a settlement agreement (the
Settlement) with the plaintiffs.  The Settlement remains subject to approval
by the Court.  In connection with the Settlement, Capital Source L.P. and
Capital Source II L.P.-A submitted a revised transaction to BAC holders for
approval on or about June 30, 2000.  The complete terms of the Settlement,
along with the updated consent solicitation material describing the revised
merger transaction, was filed with the Securities and Exchange Commission (the
SEC) on or about June 15, 2000.

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








<PAGE>                               	-4-

	    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 Partnership
																									(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 America First Real Estate Investment
																									Partners, L.P. (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 Partnership 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)).

                    27. Financial Data Schedule.

          					(b)  Reports on Form 8-K

															The Registrant did not file any reports on Form 8-K during
   												the last quarter of the period covered by this report.

<PAGE>                               	-5-

	                                 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:  August 11, 2000






















































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