<PAGE>
              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,
        1997
  
                                      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 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 or organization)           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, 1997 -- 1,000 shares
  
</PAGE>
<PAGE>      


                   FUND AMERICA INVESTORS CORPORATION
                           FORM 10-Q FOR THE
                  NINE MONTHS ENDED SEPTEMBER 30, 1997
  
  
                                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 Operation                     7
  
  PART II.  OTHER INFORMATION
  
       Item 1.   Legal Proceedings                            8
  
       Item 2.   Changes in Securities                        8
  
       Item 3.   Defaults upon Senior Securities              8
  
       Item 4.   Submission of Matters to a Vote
                 of Security Holders                          8
  
       Item 5.   Other Information                            8
  
       Item 6.   Exhibits and Reports                         8
  
       SIGNATURES                                             9
  

                                PAGE 2

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<PAGE>
<TABLE>

                        PART I.  FINANCIAL INFORMATION
  
  Item 1.  Financial Statements
  
                    FUND AMERICA INVESTORS CORPORATION
                              BALANCE SHEETS
                                (Unaudited)                                 
                
                                     
<CAPTION>  
                                      September 30,      December 31,
                                          1997               1996
                                      _____________      ____________
<S>                                  <C>                <C>  

  Assets
    Cash                                $123,234           $147,076
    Deferred offering costs              111,672            111,672
                                        ________           ________
      
      Total assets                      $234,906           $258,748
                                        ========           ========
  Shareholder's equity
    Common stock, par value $.01 per 
     shares; 10,000 shares authorized; 
     1,000 shares issued and 
     outstanding                              10                 10
    Additional paid-in capital           369,990             369,990
    Accumulated deficit                 (135,094)           (111,252)
                                        ________            ________
  
      Total shareholders equity          234,906             258,748
                                        ________            ________
       Total liabilities and
       shareholder's equity             $234,906            $258,748
                                        ========            ========
  

                                PAGE 3

</TABLE>
</PAGE>
<PAGE>
<TABLE>
  
                      FUND AMERICA INVESTORS CORPORATION
                         Statements of Operations
                                (Unaudited)
  
  
 <CAPTION>
                            Three months ended      Nine months ended
                               September 30,          September 30,        
                            __________________      _________________ 
                              1997      1996         1997       1996       
                             ______    ______       ______     ______
 <S>                      <C>        <C>         <C>        <C>
  Revenue                         
   Interest income          $1,100     $1,355       $3,497     $4,756
   Miscellaneous income          -          -            -      3,600
                            ______     ______       ______     ______
         Total revenue       1,100      1,355        3,497      8,356
                            ______     ______       ______     ______

  Expenses
   General and
   administrative              582        497        7,662      8,174
   Legal fees                  995          -        1,677        368
   Management fees           6,000      6,000       18,000     18,000
                           _______    _______     ________   ________  
         Total expenses      7,577      6,497       27,339     26,542
                           _______    _______     ________   ________
         Net loss          $(6,477)   $(5,142)    $(23,842)  $(18,186)
                           =======    =======     ========   ========
  
  
                                 PAGE 4

</TABLE>
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<PAGE>
<TABLE>



  
                     FUND AMERICA INVESTORS CORPORATION
                        Statements of Cash Flows
                                (Unaudited)
  

<CAPTION>                                                                  
                                                 Nine months ended  
                                                   September 30,
                                               ____________________
                                                 1997         1996 
                                               _______      _______
<S>                                        <C>           <C>  
Net cash flow from
  operating activities:                                                     
       
    Net loss                                 $(23,842)     $(18,186)
  
   Adjustments to reconcile
   net loss to net cash flow
   from operating activities:
    Changes in operating assets
    and liabilities:
       Accounts payable                             -       (44,926)
       Deferred offering costs                      -         5,000
                                             ________      ________
  Net cash flow used in
  operating activities                        (23,842)      (52,112)
                                             ________      ________
  
  Net decrease in cash                        (23,842)      (58,112)
  
  Cash at beginning of period                 147,076       212,361
                                              _______       _______
  
  Cash at end of period                      $123,234      $154,249
                                             ========      ========

  

                                  PAGE 5

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<PAGE>



                   FUND AMERICA INVESTORS CORPORATION
                      NOTES TO FINANCIAL STATEMENTS
                               (Unaudited)
              Nine months ended September 30, 1997 and 1996
  
  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 to engage in the issuance and
  administration of Collateralized Mortgage Obligations ("CMOs") which  are
  secured by mortgage loans or by mortgage loan pass-through certificates
  backed by mortgage loans (collectively referred to as the "Collateral"). 
  The Collateral may be issued and/or guaranteed by agencies, including the
  Government National Mortgage Association, the Federal National Mortgage
  Association and the Federal Home Loan Mortgage Corporation, or other
  entities.  To issue such CMOs, the Company may acquire, hold, sell or
  pledge the Collateral, but typically these activities are transacted
  through trusts beneficially owned and created by the Company. 
  
  The Company may not, either directly or indirectly through a
  beneficially owned trust, engage in any business or investment
  activity other than (i) issuing and selling CMOs (ii) investing its cash
  balance on an interim basis in high quality short-term securities; (iii)
  purchasing, owning, holding, pledging or selling the Collateral or other
  mortgage-related assets; and (iv) engaging in other activities which are
  necessary or convenient to accomplish the foregoing and are incidental
  thereto.  
  
  Under its fourth Registration Statement, declared effective on July 23,
  1993, the Company currently has registered but unissued $141,000,000 in
  CMOs.  The Company will continue to seek opportunities to utilize the
  remaining $141 million of registered and unissued CMOs.
  
  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, 1997, and the results
  of its operations and  cash flows for the periods ended September 30,
  1997 and 1996.
  

                               PAGE 6

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<PAGE>



  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 operations from its cash
  balances, revenue derived from CMO offerings and, if necessary, with
  borrowings from its sole shareholder.  As of September 30, 1997, $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 CMOs to acquire the mortgage loans or mortgage
  certificates pledged as collateral for such series of CMOs, and to pay
  issuance expenses incurred in connection with the transaction.
  
  Results of Operations
  
  The third quarter operations resulted in a net loss of $6,477 and $5,142,
  respectively, for the three months ended September 30, 1997 and 1996. 
  Comparably, the Company reported a net loss for both nine month periods
  ended September 30, 1997 and 1996 of $23,842 and $18,186.
  
  Both interim periods reflected the same operating activities, generating
  no issuance income while funding normal ongoing expenses.  The primary
  reason for the increase in the net loss from 1996 to 1997 resulted
  from reduced interest earnings on cash balances.


                                  PAGE 7

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<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 8

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<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, 1997         By: /s/ Helen M. Dickens            
                                            
                                        Helen M. Dickens
                                        Vice President, Secretary/Treasurer


                              




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