UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                       WASHINGTON, D.C.  20549
                             FORM 10-Q

[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
     SEPTEMBER 30,1996

Commission File Nos.: 33-60662


                FUND AMERICA INVESTORS CORPORATION   
        (Exact name of registrant as specified in its charter)


           Delaware                              84-1070310       
(State or other jurisdiction of                 (I.R.S. Employer
 incorporation ororganization)                   identification number)

            6400 S. Fiddler's Green Circle, Suite 1200A,
                    Englewood, Colorado 80111 
              (Address of principal executive offices)

Registrant's telephone number including area code: (303) 290-6024

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 [ ]     

Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of November 14, 1996 -- 1,000 shares

<PAGE>

                FUND AMERICA INVESTORS CORPORATION
                        FORM 10-Q FOR THE
               NINE MONTHS ENDED SEPTEMBER 30, 1996

                             INDEX


PART I.  FINANCIAL INFORMATION                 PAGE NO.   

Item 1.  Financial Statements                        3

Item 2.  Management's Discussion 
         and Analysis of Financial
         Condition and Results of
         Operations                                  6

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings                           7

Item 2.  Changes in Securities                       7

Item 3.  Defaults upon Senior
         Securities                                  7

Item 4.  Submission of Matters
         to a Vote of Security
         Holders                                     7

Item 5.  Other Information                           7

Item 6.  Exhibits and Reports                        7

         SIGNATURES                                  8


                         Page 2

<PAGE>

<TABLE>
                   PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

                   FUND AMERICA INVESTORS CORPORATION
                            BALANCE SHEETS
                              (Unaudited)

<CAPTION>
                                         September 30,     December 31,
                                             1996             1995
                                         -------------     ------------
<S>                                      <C>               <C>
Assets
  Cash                                    $154,249          $212,361 
  Deferred offering costs                  111,672           116,672 
                                          --------          --------
Total assets                              $265,921          $329,033
                                          ========          ========


Liabilities-Accounts payable              $    168          $ 45,094 
                                          --------          --------

Shareholder's equity
  Common stock, par value $.01
    per share; 10,000 shares
    authorized; 1,000 shares
    issued and outstanding                      10                10 

  Additional paid-in capital               369,990           369,990 
  Accumulated deficit                     (104,247)          (86,061)
                                          --------          --------

Total shareholder's equity                 265,753           283,939 
                                          --------          --------
Total liabilities and shareholder's
  equity                                  $265,921          $329,033 
                                          ========          ========
 
<FN>
See notes to financial statements
</TABLE>


                              Page 3  

<PAGE>

       
<TABLE>
                  FUND AMERICA INVESTORS CORPORATION
                     Statements of Operations
                           (Unaudited)
<CAPTION>

                                      Three months         Six months
                                         ended               ended
                                      September 30,        September 30,     
                                     ----------------    ----------------
                                      1996      1995       1996      1995
                                    --------  --------   --------  --------
<S>                                 <C>       <C>        <C>       <C>   
Revenue
 Interest income                      $1,355    $2,541     $4,756    $9,283 

Miscellaneous income                       -     4,177      3,600     4,177
                                    --------  --------   --------  --------
Total revenue                          1,355     6,718      8,356    13,460 
                                    --------  --------   --------  --------
  
Expenses
 General and administrative              497     1,033      8,174    11,985 
 Legal fees                                -     1,048        368     2,442 
 Management fees                       6,000     6,000     18,000    18,000 
                                    --------  --------   --------  --------
Total expenses                         6,497     8,081     26,542    32,427 
                                    --------  --------   --------  --------
Net loss                             $(5,142)  $(1,363)  $(18,186) $(18,967)
                                    ========  ========   ========  ========


<FN>
See notes to financial statements
</TABLE>


                            Page 4

<PAGE>

<TABLE>
                    FUND AMERICA INVESTORS CORPORATION
                       Statements of Cash Flows
                              (Unaudited)

<CAPTION>
                                                Nine months ended  
                                                  September 30,  
                                               1996            1995
                                            ----------      ---------- 
<S>                                         <C>             <C>
Net cash flow from operating
activities:
 Net loss                                   $ (18,186)      $ (18,967)

Adjustments to reconcile net loss to
net cash flow from operating
activities:
 Changes in operating assets
 and liabilities:
  Accounts payable                            (44,926)         (5,850)
  Accounts receivable                               -             641 
  Deferred offering costs                       5,000               -
                                            ----------     ----------

Net cash flow used in operating
activities                                    (58,112)        (24,176)


Net cash flow used in financing
activities:
  Shareholder distributions                         -        (200,000)
                                             ----------    ----------

Net decrease in cash                           (58,112)      (224,176)
                                                 
Cash at beginning of period                    212,361        441,727 
                                             ----------     ---------
Cash at end of period                         $154,249       $217,551



<FN>
See notes to financial statements
</TABLE>

                           Page 5    

<PAGE>


                  FUND AMERICA INVESTORS CORPORATION
                    NOTES TO FINANCIAL STATEMENTS
                            (Unaudited)
             Nine months ended September 30, 1996 and 1995


1.  Basis of Presentation

Organization

Fund America Investors Corporation (the "Company") was incorporated
in the State of Delaware on October 19, 1987 as a limited purpose
finance corporation.  The Company was established for the purpose of 
issuing and administering one or more series of bonds collateralized 
by mortgage loans or mortgage loan certificates directly or through
one or more trusts beneficially owned by it and purchasing, owning
and selling other mortgage-related assets.

The Company will not engage in any business or investment activities
other than, (i) issuing and selling bonds and receiving, owning,
holding and pledging as collateral therefor the mortgage loans or
mortgage loan certificates; (ii) investing cash balances on an interim
basis in high quality short-term securities; (iii) purchasing, owning,
holding, pledging or selling other mortgage-related assets; and (iv)
engaging in other activities which are necessary or convenient to
accomplish the foregoing and are incidental thereto, directly or through
one or more trusts beneficially owned by it.

The Company currently has registered but unissued $141,000,000 in
mortgage related bonds under a Registration Statement, which became
effective on July 23, 1993.

On January 3, 1994, the Company filed a Registration Statement on 
Form S-11 with exhibits thereto concerning the issuance of mortgage
related bonds (No. 33-73750).  The Registration Statement was withdrawn
from consideration on March 28, 1996.  The Board of Directors determined 
that pursuing this registration  was an unnecessary expense for 
the Company. 

2. Unaudited Financial Statements

In the opinion of management, the accompanying unaudited financial
statements contain all adjustments necessary to present fairly the
financial position of the Company at September 30, 1996, and the results
of its operations and cash flows for the periods ended September 30, 
1996 and 1995.

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

Liquidity and Capital Resources

The Company expects to fund its ongoing operating expenses from its
cash balances, revenue derived from bond offerings and, if necessary,
with borrowings from its sole shareholder.  As of September 30, 1996,
$500,000 was available to be borrowed from the Company's sole 
shareholder.  Any borrowings will be subordinate and junior to
any issued mortgage securities.

The Company will use substantially all of the net proceeds from the
issuance of each series of bonds to acquire the mortgage loans or
mortgage certificates pledged as collateral for such series of bonds,
and to pay the bond issuance expenses incurred in connection with
the transaction.

Certain administrative functions with respect to some of the Bonds
are being performed for the Company by an affiliate, Fund America
Management Corporation, pursuant to management agreements executed 
concurrently at the respective date of closing.

Results of Operations

The Company reported a net loss for the three months and nine months
ended September 30, 1996 of $5,142 and $18,186 respectively, compared
to a net loss of $1,363 and $18,967 respectively, for the three and 
nine months ended September 30,1995.


                         Page 6

<PAGE>

PART II. OTHER INFORMATION



Item 1.  Legal Proceedings

None.

Item 2.  Changes in Securities

None.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Submission of Matters to a Vote of
Security Holders

None.

Item 5.  Other Information

None.

Item 6.  Exhibits and Reports on Form 8-K

     A.  Exhibits

         Exhibit 27. Financial Data Schedule

     B.  Form 8-K - None.




                           Page 7

<PAGE>


SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.




                                     FUND AMERICA INVESTORS CORPORATION
                                                (Registrant)


Date: November 14, 1996  

                                     By:   /s/ Helen M. Dickens
                                     --------------------------------
                                     Helen M. Dickens
                                     Vice President and Secretary
                                     (Duly authorized and Principal
                                      Financial Officer)




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