<PAGE>   1
 
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

                QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended September 30, 1998             Commission File No. 0-15940



              UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
                         A MICHIGAN LIMITED PARTNERSHIP
             (Exact name of registrant as specified in its charter)



              MICHIGAN                                       38-2593067
  (State or other jurisdiction of                         (I.R.S. employer
   incorporation or organization)                      identification number)


                  280 DAINES STREET, BIRMINGHAM, MICHIGAN 48009
               (Address of principal executive offices) (Zip Code)

                                 (248) 645-9261
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(g) of the Act:
             $1,000 per unit, units of limited partnership interest




         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 [ ]


<PAGE>   2


              UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
                         A MICHIGAN LIMITED PARTNERSHIP

                                      INDEX

<TABLE>
<CAPTION>
                                                                                        Page
                                                                                        ----
<S>                                                                                     <C>
PART I   FINANCIAL INFORMATION

  ITEM 1.         FINANCIAL STATEMENTS

                  Balance Sheets
                  September 30, 1998 (Unaudited) and
                  December 31, 1997                                                       3

                  Statements of Income Nine months ended September 30, 1998 and
                  1997 and Three months ended
                  September 30, 1998 and 1997 (Unaudited)                                 4

                  Statements of Cash Flows
                  Nine months ended September 30, 1998
                  and 1997 (Unaudited)                                                    5

                  Notes to Financial Statements
                  September 30, 1998 (Unaudited)                                          6

  ITEM 2.         MANAGEMENT'S DISCUSSION AND ANALYSIS
                  OF FINANCIAL CONDITION AND RESULTS
                  OF OPERATIONS                                                           7

PART II  OTHER INFORMATION

  ITEM 6.         EXHIBITS AND REPORTS ON FORM 8-K                                        10
</TABLE>












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<PAGE>   3
              UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
                         A MICHIGAN LIMITED PARTNERSHIP

                                 BALANCE SHEETS

<TABLE>
<CAPTION>

ASSETS                                                          SEPTEMBER 30, 1998   DECEMBER 31, 1997
                                                                ------------------   -----------------
                                                                     (UNAUDITED)
Properties:
<S>                                                                  <C>             <C>         
  Land                                                                $ 5,280,000     $ 5,280,000
  Buildings And Improvements                                           23,925,558      23,862,182
  Furniture And Fixtures                                                  120,945         668,108
  Manufactured Homes                                                      688,295         117,847
                                                                      -----------     -----------
                                                                       30,014,798      29,928,137

  Less Accumulated Depreciation                                         9,425,795       8,805,795
                                                                      -----------     -----------
                                                                       20,589,003      21,122,342

Cash And Cash Equivalents                                                 966,643         649,137
Unamortized Finance Costs                                                 732,048         796,547
Other Assets                                                              670,151         484,407
                                                                      -----------     -----------

Total Assets                                                          $22,957,845     $23,052,433
                                                                      ===========     ===========


<CAPTION>
LIABILITIES                                                     SEPTEMBER 30, 1998   DECEMBER 31, 1997
                                                                ------------------   ----------------
                                                                      (UNAUDITED)

       
Line of Credit                                                       $    469,523    $    358,916
Accounts Payable                                                           93,368         116,066
Mortgage Payable                                                       33,179,842      33,355,940
Other Liabilities                                                       1,106,862         891,073
                                                                      -----------     -----------

Total Liablities                                                     $ 34,849,595    $ 34,721,995

Partners' Equity:
  General Partner                                                      (1,372,014)     (1,261,905)
  Class A Limited Partners                                             (9,622,015)     (9,509,936)
  Class B Limited Partners                                               (897,721)       (897,721)
                                                                      -----------     -----------

Total Partners' Equity                                                (11,891,750)    (11,669,562)
                                                                      -----------     -----------

Total Liabilities And
  Partners' Equity                                                   $ 22,957,845    $ 23,052,433
                                                                     ------------    ------------
</TABLE>

                        See Notes to Financial Statements

                                        3
<PAGE>   4

              UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND
                         A MICHIGAN LIMITED PARTNERSHIP



<TABLE>
<CAPTION>

STATEMENTS OF INCOME                                            NINE MONTHS ENDED               THREE MONTHS ENDED
    (UNAUDITED)                                         SEPT. 30, 1998   SEPT. 30, 1997   SEPT. 30, 1998  SEPT. 30, 1997
                                                        --------------   --------------   --------------  --------------
<S>                                                       <C>              <C>              <C>              <C>
Income:
  Rental Income                                           $5,971,994       $5,863,350       $1,983,302       $1,967,425
  Other                                                      341,220          249,466          152,183           49,784
                                                          ----------       ----------       ----------       ----------

Total Income                                              $6,313,214       $6,112,816       $2,135,485       $2,017,209
                                                          ==========       ==========       ==========       ==========

Operating Expenses:
  Administrative Expenses
  (Including $312,361, $303,058, $104,362, And $101,549
   In Property Management Fees Paid
  To An Affiliate For The  Nine and Three  Month
  Periods Ended Sept. 30, 1998 and 1997
   Respectively)                                           1,351,728        1,256,942          437,790          411,116
  Property Taxes                                             622,152          622,512          207,372          206,646
  Utilities                                                  352,795          342,291          116,307          105,333
  Property Operations                                        785,211          699,210          255,355          236,862
  Depreciation And Amortization                              684,500          620,847          228,200          206,949
  Interest                                                 2,102,016        1,462,857          699,156          704,060
                                                          ----------       ----------       ----------       ----------

Total Operating Expenses                                  $5,898,402       $5,004,659       $1,944,180       $1,870,966
                                                          ==========       ==========       ==========       ==========

Net Income                                                $  414,812       $1,108,157       $  191,305       $  146,243
                                                          ==========       ==========       ==========       ==========

Income Per Limited Partnership Unit:
  Class A                                                 $     0.46       $    30.00       $     0.37       $     2.00
  Class B                                                 $     6.00       $    50.00       $     2.00       $     2.00

Distribution Per Limited Partnership Unit
  Class A                                                 $     6.00       $    50.00       $     2.00       $     2.00
  Class B                                                 $     6.00       $    50.00       $     2.00       $     2.00

Weighted Average Number Of Limited
  Partnership Units Outstanding
  Class A                                                     20,230           20,230           20,230           20,230
  Class B                                                      9,770            9,770            9,770            9,770
</TABLE>

                        See Notes to Financial Statements
                                        4

<PAGE>   5


              UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND
                         A MICHIGAN LIMITED PARTNERSHIP




STATEMENTS OF CASH FLOWS
     (UNAUDITED)
<TABLE>
<CAPTION>
                                                                   NINE MONTHS ENDED
                                                      SEPTEMBER 30, 1998     SEPTEMBER. 30, 1997
                                                      ------------------     -------------------
<S>                                                       <C>                 <C>
Cash Flows From Operating Activities:
  Net Income (Loss)                                       $  414,812          $  1,108,157

Adjustments To Reconcile Net Income
  (Loss) To Net Cash Provided By
  Operating Activities:
  Depreciation                                               620,000               588,558
  Amortization                                                64,500                32,289
(Increase) Decrease In Other Assets From Operations         (185,745)           (1,191,028)
  Increase  (Decrease) In Accounts Payables                  (22,698)              (11,902)
  Increase (Decrease) Other Liabilities From Operations      215,789                82,128
                                                          ----------          ------------

Total Adjustments                                            691,846              (499,955)
                                                          ----------          ------------

    Net Cash Provided By (Used In)
      Operating Activities                                 1,106,658               608,202
                                                          ----------          ------------

Cash Flows From Investing Activities:
  Capital Expenditures                                       (86,661)           (1,758,258)
   Funds From Line of Credit                                 110,607               (64,818)
                                                          ----------          ------------

    Net Cash Provided By (Used In)
      Investing Activities                                    23,946            (1,823,076)
                                                          ----------          ------------ 

Cash Flows From Financing Activities:
   Funds from Mortgage                                             0            33,500,000
  Distributions To Partners                                 (637,000)           (2,113,400)
  Return of Capital                                                0           (30,000,000)
  Principal Payments on Mortgage                            (176,098)              (85,327)
                                                          -----------         ------------

Net Cash Provided By (Used In)
  Financing Activities                                      (813,098)            1,301,273
                                                          ----------          ------------

Increase (Decrease) In Cash                                  317,506                86,399

Cash, Beginning                                              649,137               640,086

Cash, Ending                                              $  966,643          $    726,485
                                                          ==========          ============
</TABLE>


                        See Notes to Financial Statements
                                        5




<PAGE>   6


              UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
                         A MICHIGAN LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS
                         September 30, 1998 (Unaudited)


1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Presentation:

The balance sheet as of September 30, 1998, the related statements of income and
statements of cash flow for the periods ended September 30, 1998 and 1997 have
been prepared by management, pursuant to the rules and regulations of the
Securities and Exchange Commission, without audit by independent public
accountants. In the opinion of management, all adjustments (consisting of only
normal recurring accruals) necessary for a fair presentation of such financial
statements have been included.

The financial statements and notes are presented as permitted by the rules and
regulations of the Securities and Exchange Commission for Form 10-Q and do not
contain certain information included in the Company's annual financial
statements and notes, which should be consulted.

2.       PAYMENTS TO AFFILIATES:
<TABLE>
<CAPTION>
                                           NINE  MONTHS ENDED                          THREE MONTHS ENDED
                                    SEPT. 30, 1998    SEPT. 30, 1997            SEPT. 30, 1998   SEPT. 30, 1997
                                    --------------    --------------            --------------         --------
<S>                                    <C>              <C>                        <C>              <C>
PROPERTY MANAGEMENT FEE
TO UNIPROP, INC.:                      $312,361         $303,058                   $104,362         $101,549
</TABLE>
















                                       -6-

<PAGE>   7


ITEM 2.


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

Capital Resources

The Partnership's capital resources consist primarily of its four manufactured
housing communities. On March 25, 1997 the Partnership borrowed $33,500,000 from
Nomura Asset Capital Corporation (the "Financing"). The Partnership secured the
Financing by placing liens on its four communities. As a result of the
Financing, the Partnership distributed $30,000,000 to the Limited Partners,
which represented a full return of the original capital contributions of $1,000
per unit.

Liquidity

As a result of the Financing, the Partnership's four properties are mortgaged.
At the time of the Financing, the aggregate principal amounts due under the four
mortgage notes was $33,500,000 and the aggregate fair market value of the
Partnership's mortgaged properties was $53,200,000. The Partnership expects to
meet its short-term liquidity needs generally through its working capital
provided by operating activities.

The Partnership's long-term liquidity is based, in part, upon its investment
strategy. Notwithstanding, that the properties owned by the Partnership were
anticipated to be held for seven to ten years after their acquisition, all of
the properties have been owned by the Partnership more than ten years. The
General Partner may elect to have the Partnership own the properties for as long
as, in the opinion of the General Partner, it is in the best interest of the
Partnership to do so.

The Partnership has a renewable $600,000 line of credit with National City Bank
of Michigan/Illinois (formerly First of America Bank). The interest rate on such
line of credit, floats 180 basis points above 1 month LIBOR, which on September
30, 1998 was 5.66%. The sole purpose of the line of credit is to purchase new
and used homes to be used as model homes and offered for sale within the
Partnership's communities. Over the past two years, sales of the new and used
model homes have been growing and the General Partner believes that continuing
the model home program is in the best interest of the Partnership. As of
September 30, 1998, the outstanding balance on the line of credit was $469,523.

Net Cash from Operations available for aggregate distributions to all Partners
in UMHCIF during the quarter ended September 30, 1998 amounted to $419,505. The
amount available during the same period in 1997 was $353,192. Management
considers Net Cash from Operations to be a supplemental measure of the
Partnership's operating performance. Net Cash from Operations is defined to mean
net income computed in accordance with generally accepted accounting principles
("GAAP"), plus real estate 


                                      -7-

<PAGE>   8


related depreciation and amortization. Net Cash from Operations does not
represent cash generated from operating activities in accordance with GAAP and
is not necessarily indicative of cash available to fund cash needs. Net Cash
from Operations should not be considered as an alternative to net income as the
primary indicator of the Partnership's operating performance or as an
alternative to cash flow as a measure of liquidity.

The quarterly Partnership Management Distribution due and paid to the General
Partner for the second quarter was $139,500, or one-fourth of 1.0% of the most
recent appraised value of the properties held by the Partnership.
($55,800,000 x .01 = $558,000 / 4 = $139,500)

The cash available, after payment of the Partnership Management Distribution of
$139,500 from Net Cash from Operations, was $280,005. From this amount, the
General Partner elected to make a total distribution of $75,000 for the third
quarter of 1998, 80.0% or $60,000 was paid to the Limited Partners and 20.0% or
$15,000 was paid to the General Partner. The General Partner will continue to
monitor on-going Net Cash from Operations generated by the Partnership during
the coming quarters. If Net Cash from Operations is lower or higher than the
amount needed to maintain the current distribution level, the General Partner
may elect to reduce or increase the level of future distributions paid to the
Limited Partners.

While the Partnership is not required to maintain a working capital reserve, the
Partnership has not distributed all the cash generated from operations in order
to build cash reserves. As of September 30, 1998, the Partnership cash reserves
amounted to $966,643. The level of cash reserves maintained is at the discretion
of the General Partner.

Results of Operations

Overall, as illustrated in the tables below, the four properties enjoyed a
combined average occupancy of 98.1% (1,790/1,824 sites) at the end of September
1998, versus 97.9% a year ago. The average monthly rent in September 1998 was
approximately $396, or 3.1% more than the $384 average monthly rent in September
1997.
<TABLE>
<CAPTION>
                                   Total          Occupied           Occupancy         Average
                                  Capacity          Sites              Rate             Rent
<S>                               <C>              <C>                 <C>               <C>    
Aztec Estates                       645              628                97.4%            $441
Kings Manor                         314              304                96.8              422
Old Dutch Farms                     293              286                97.6              389
Park of the Four Seasons            572              572               100.0              343
                                    ---              ---               -----            -----

Total on 9/30/98:                 1,824            1,790                98.1%            $396
Total on 9/30/97:                 1,824            1,786                97.9%            $384
</TABLE>


                                      -8-

<PAGE>   9

<TABLE>
<CAPTION>
                                          GROSS REVENUES                       NET OPERATING
                                                                                  INCOME
                                       9/30/98       9/30/97            9/30/98             9/30/97
<S>                                 <C>           <C>                <C>                 <C>
Aztec Estates                       $  825,133    $  728,660         $  402,763          $  397,097
Kings Manor                            363,761       353,653            220,337             217,509
Old Dutch Farms                        341,989       331,215            216,252             220,806
Park of the Four Seasons               593,453       598,273            364,050             357,412
                        -           ----------    ----------         ----------          ----------
                                     2,124,336     2,011,801          1,203,402           1,192,824

Partnership Management:                 11,149         5,408            (28,471)            (75,289)

Other Non Recurring expenses:            -----         -----            (56,271)            (60,283)

Debt Service                                                           (699,155)           (704,060)

Depreciation and Amortization            -----         -----           (228,200)           (206,949)
                                    ----------    ----------         ----------          ----------
                                    $2,135,485    $2,017,209         $  191,305          $  146,243
</TABLE>

COMPARISON OF QUARTER ENDED SEPTEMBER 30, 1998
TO QUARTER ENDED SEPTEMBER 30, 1997

Gross revenues increased $118,276, or 5.9%, to $2,135,485 in 1998, as compared
to $2,017,209 in 1997. The increase in gross revenues is the result of higher
overall occupancy and higher average rents at the Partnership's four communities
(see table on previous page).

Administrative expenses increased $26,674, or 6.5% to $437,790 in 1998, as
compared to $411,116 in 1997. The increase is the result of higher wages and an
increase in property management fees. Partnership management costs decreased
$46,818, or 62.2%, to $28,471 in 1998, as compared to $75,289 in 1997. This
decrease is due to the absence of legal/professional fees associated with the
financing of the properties that was completed by the Partnership in 1997.
Property operation costs increased $18,493, or 7.8%, to $255,355 in 1998, as
compared to $236,862 in 1997. The increase was the result of higher maintenance
and marketing expense.

As a result of the foregoing factors, net income increased to $191,305 for the
quarter ended September 30, 1998 from $146,243 reported for the same period in
1997.

MANAGEMENT EXPENSES

Net Partnership management expenses paid during the quarter amounted to $28,471.
Gross expenses of $39,620 (data processing, accounting and legal expenses,
office supplies and wages to employees of the Partnership) were partially offset
by income of $11,149 generated by interest on the Partnership's reserves and
transfer fees. The figures for last year's third quarter were $75,289, $80,697
and $5,408, respectively.


                                      -9-

<PAGE>   10


                           PART II - OTHER INFORMATION
                           ---------------------------


ITEM 6.  EXHIBITS AND REPORTS OF FORM 8-K

               (a) Exhibits

                     Exhibit Number          Description
                     --------------          -----------
                          27           Financial Data Schedule

               (b) Reports of Form 8-K 
                     There were no reports filed on Form 8-K during the three
                     months ended September 30, 1998.


                                   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.


                                  Uniprop Manufactured Housing
                                  Communities Income Fund,
                                  A Michigan Limited Partnership

                              BY: P.I. Associates Limited Partnership,
                                  A Michigan Limited Partnership,
                                  its General Partner

                              BY: /s/Paul M. Zlotoff
                                  ----------------------------------------------
                                  Paul M. Zlotoff, General Partner

                              BY: /s/Gloria A. Koster
                                  ----------------------------------------------
                                  Gloria A. Koster, Principal Financial Officer



Dated: November 13, 1998


                                      -10-

<PAGE>   11


                                  EXHIBIT INDEX
                                  -------------


EXHIBIT NUMBER                 DESCRIPTION                           PAGE
--------------                 -----------                           ----

     27                   Financial Data Schedule



















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