<PAGE>
<PAGE> 1
     FORM 10-Q--QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
            OF THE SECURITIES EXCHANGE ACT OF 1934

                     UNITED STATES

          SECURITIES AND EXCHANGE COMMISSION

                Washington, D.C. 20549
                           
                           
                       FORM 10-Q



                      (Mark One)

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
 Securities Exchange Act of 1934
For the period ended September 30, 1996

                              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: 33-22908-A


                  NORTH LENDERS, L.P.
(Exact name of Registrant as specified in its charter)


       Tennessee                            62-1271664
 (State or other jurisdiction of          (I.R.S. Employer
 incorporation or organization)           Identification)


4400 Harding Road, Suite 500, Nashville, Tennessee 37205
(Address of principal executive office)   (Zip Code)

                    (615)  292-1040
 (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 at least the past 90 days.


                             YES    X     NO  ___  

<PAGE>
<PAGE> 2


             PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

                  NORTH LENDERS, L.P.
           (A Tennessee Limited Partnership)


                 FINANCIAL STATEMENTS
     For the Nine Months Ended September 30, 1996


                         INDEX



       Financial Statements:

            Balance Sheets                       3
            Statements of Operations             4
            Statements of Cash Flows             5
            Notes to Financial Statements        6




<PAGE>
<PAGE> 3
<TABLE>


                      NORTH LENDERS, L.P.
                    (A Limited Partnership)

                        BALANCE SHEETS
                          (Unaudited)



<CAPTION>
                              September 30,   December 31,
                                  1996            1995
                              -------------   -------------
<S>                           <C>              <C>        

                            ASSETS

CASH                             $46,707          $50,698

INTEREST RECEIVABLE 
     FROM AFFILIATE               37,211           11,186

NOTE RECEIVABLE FROM AFFILIATE   346,678          346,678

LOAN COSTS                       102,021          114,264

Total Assets                   $ 532,617         $522,826
                              ==========       ==========



               LIABILITIES AND PARTNERS' EQUITY



ACCRUED STATE INCOME            $ 30,816           30,816

PARTNERS' EQUITY                 501,801          492,010

Total Liabilities & Partners' Equity$  532,617  $ 522,826
                             ==========        ==========



<FN>
                      See notes to financial statements.


/TABLE
<PAGE>
<PAGE> 4
<TABLE>


                      NORTH LENDERS, L.P.
                    (A Limited Partnership)

                   STATEMENTS OF OPERATIONS
                          (Unaudited)


<CAPTION>

                       Quarter Ending     Year to Date Ending
                        September 30,        September 30,
                     ------------------  ---------------------
                      1996       1995       1996      1995
                     -------    ------     ------    ------
<S>                 <C>        <C>        <C>      <C>       
REVENUE:

Additional Interest $ -       302,978       -       622,696 
Interest Income      8,739      9,813      27,231     37,252

Total Revenue      $ 8,739    312,791    $ 27,231    659,948


EXPENSES:

Amortization         4,081      4,080      12,243     12,243
Legal & Accounting Fees-          300       4,822      7,864
General & Admin. Expenses-      1,293         375      1,690

Total Expenses   $   4,081      5,673   $  17,440     21,797

NET INCOME         $ 4,658    307,118     $ 9,791    638,151


<FN>
                       See notes to financial statements

</TABLE>
<PAGE>
<PAGE> 5
<TABLE>

                      NORTH LENDERS, L.P.
                    (A Limited Partnership)

                   STATEMENTS OF CASH FLOW 
                          (Unaudited)

<CAPTION>
                                        Year-to-date
                                        September 30,
                                _____________________________
                                  1996               1995
                                  ____               ____
<S>                             <C>                <C>     
Cash Flows from Operating Activities:

Net Income                        $9,791           638,151 
Adjustments to reconcile 
  Net Income to Net Cash used in 
  Operating Activities:
Amortization                      12,243            12,243 
Additional Accrued Interest      (26,025)          (35,229)
Interest Pymts. Received
   on Note Receivable               -               50,939 
Change in Accounts Payable          -                  151 

Total Adjustments                (13,782)           28,104 

Net Cash provided by 
Operating Activities              (3,991)          666,255 

Cash Flows from Investing Activities:

Change in Note Receivable 
from Affiliate                      -              978,835 

Cash Flows from Financing Activities:

Distribution to Partners             -          (1,647,727)

Net Increase/(Decrease) in
Cash and Cash Equivalents         (3,991)           (2,637)

CASH AT JANUARY 1,                50,698            50,607 

CASH AT SEPTEMBER 30,          $  46,707            47,970 
                                =========          ========
<FN>
See notes to financial statements.
</TABLE>
<PAGE>
<PAGE> 6


                      NORTH LENDERS, L.P.
                    (A Limited Partnership)

                 NOTES TO FINANCIAL STATEMENTS

         For the Nine Months Ended September 30, 1996
                          (Unaudited)


A.ACCOUNTING POLICIES

The unaudited financial statements presented herein have been 
prepared in accordance with the instructions to Form 10-Q and do
not include all of the information and note disclosures required
by generally accepted accounting principles.  These statements
should be read in conjunction with the financial statements and
notes thereto included in the Partnership's Form 10-K for the
year ended December 31, 1995.  In the opinion of management,
such financial statements include all adjustments, consisting
only of normal recurring adjustments, necessary to summarize
fairly the Partnership's financial position and results of
operations.  The results of operations for the nine month period
ended September 30, 1996 may not be indicative of the results
that may be expected for the year ending December 31, 1996.









<PAGE>
<PAGE> 7


Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
        FINANCIAL CONDITION AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS 

The Partnership's primary business is to lend monies to North By
Northeast, L.P.  ("the Borrower").

Due to the nature of the Registrant, all activity is a result of
transactions in North by Northeast, Ltd. (the "Borrower"), and
North by Northeast Land Partners (the "Land  Partnership"), the
investment of North by Northeast, Ltd.

There have been no sales by the Land Partnership during the
first nine months of 1996.  Operations of the Registrant are
comparable to prior quarters with the exception of interest
income.  The decrease in interest income is due to "additional
interest" earned in 1995 and a lack of "additional interest" in
1996.  "Additional interest" is earned when the required
interest payment to the Registrant exceeds the interest accrued
through that date.  Interest payments are a function of time and
principal but also include a portion of the proceeds from sales
at the Land Partnership level.

Due to the minimal expenses that the Registrant incurs, the
General Partner believes that the present cash balance of
$46,707 at October 31, 1996, will provide sufficient liquidity
for the future.



<PAGE>
<PAGE> 8


                      PART II. OTHER INFORMATION



Item 6. EXHIBITS AND REPORTS ON FORM 8-K


  (a)  Exhibits

       Exhibit 27 - Financial Data Schedule
                                         
  (b)  No 8-K's have been filed during this quarter.





<PAGE>
<PAGE> 9


                            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.


                                    NORTH LENDERS, L.P.

                                    By:   222 NORTH, LTD.
                                          General Partner



Date:  November 14, 1996                By:/s/ Steven D. Ezell
                                               General Partner


                                   By:    222 Partners, Inc.
                                          General Partner



Date: November 14, 1996            By:/s/ Michael A. Hartley
                                         Secretary/Treasurer