UNITED STATES 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 QUARTERLY PERIOD ENDED JUNE 30, 1998,
  
                                    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 August 14, 1998 -- 1,000 shares



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                 FUND AMERICA INVESTORS CORPORATION
                          FORM 10-Q FOR THE
                    SIX MONTHS ENDED JUNE 30, 1998
  
  
                                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
  
   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
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                       PART I.  FINANCIAL INFORMATION
  
  Item 1.  Financial Statements
  
                    FUND AMERICA INVESTORS CORPORATION
                              BALANCE SHEETS
                                (Unaudited)                                 
      
           
                                     
<CAPTION>  
                                    June 30,      December 31,
                                     1998             1997      
                                 ____________     ___________

<S>                              <C>              <C>
  Assets
    Cash                           $ 99,557         $117,269 
    Deferred offering costs          38,903           38,903 
                                  _________         ________
       Total assets                $138,460         $156,172 
                                  =========         ========
  
  Liabilities -
       Accounts payable            $    108         $    106 
                                  ---------         --------
  
  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             (231,648)        (213,934)
                                   --------         --------
    Total shareholder's equity      138,352          156,066 
                                   --------         --------
    Total liabilities and
    shareholder's equity           $138,460         $156,172 
                                   ========         ========
  
  
  See notes to financial statements
    

                                  Page 3

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                    FUND AMERICA INVESTORS CORPORATION
                         Statements of Operations
                                (Unaudited)
  
  
  
<CAPTION>                                                   
                        Three months ended            Six months ended
                            June 30,                       June 30,
                        ------------------            -----------------
                          1998      1997                1998      1997
                        -------   -------             --------  -------

<S>                    <C>       <C>                 <C>       <C>
  Revenue                         
   Interest income      $1,261    $1,171              $2,565    $2,397 
                        ------    ------              ------    ------
    Total revenue        1,261     1,171               2,565     2,397
                        ------    ------              ------    ------
  Expenses
   General and 
     administrative        471       460               8,171     7,081
   Legal fees              108       550                 108       682
   Management fees       6,000     6,000              12,000    12,000
                        ------    ------              ------    ------
    Total expenses       6,579     7,010              20,279    19,763
                        ------    ------              ------    ------
    Net loss           $(5,318)  $(5,839)           $(17,714) $(17,366)
                        ======    ======              ======    ======
  
  
  
  
    See notes to financial statements
  

                                     Page 4

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                       FUND AMERICA INVESTORS CORPORATION
                            Statements of Cash Flows
                                   (Unaudited)
  

<CAPTION>                                                             
                                                Six months ended  
                                                     June 30,             
                                             ----------------------
                                                1998         1997 
                                             ----------   ---------
<S>                                        <C>           <C>
  Net cash flow used in
  operating activities:                                    
                     
    Net loss                                 $(17,714)    $(17,366)
  
  Adjustments to reconcile
  net loss to net cash flow
  from operating activities:
   Changes in operating
   assets and liabilities:
     Accounts payable                               2        2,010
                                             --------     --------
  Net cash flow used in
  operating activities                        (17,712)     (15,356)
                                             --------     --------

  Net decrease in cash                        (17,712)     (15,356)
               
  Cash at beginning of period                 117,269      147,076
                                             --------     --------    
  
  Cash at end of period                      $ 99,557     $131,720
                                             ========     ========
  
  
  See notes to financial statements
    


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                    FUND AMERICA INVESTORS CORPORATION
                      NOTES TO FINANCIAL STATEMENTS
                               (Unaudited)
                  Six months ended June 30, 1998 and 1997
   
  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 (1)
  issuing and selling bonds; (2) investing cash balances on an interim
  basis in high quality short-term securities; (3) purchasing, owning,
  holding, pledging or selling the collateral or other mortgage-related
  assets; and (4) engaging in other activities which are necessary or
  convenient to accomplish the foregoing and are incidental thereto.
  
  During the first quarter ended June 30, 1998, there was no activity on
  the Company's fourth Registration Statement No. 33-60662.  The Company
  is, however, planning to update the Registration Statement through
  amendments in order to utilize the $141 million of remaining and unissued
  CMOs. After all updates are completed, the Company expects that an
  affiliated mortgage company will utilize the remaining balance by
  securitizing mortgage loans generated from their operations.
  
  2. Unaudited Financial Statements
  
  The accompanying unaudited financial statements have been prepared in
  accordance with generally accepted accounting principles for interim
  reporting periods and in accordance with the instructions to Form 10-Q. 
  In complying to the guidelines, the accompanying financial statements do
  not include all of the information and footnotes that are required for a
  complete annual reporting period.   
  
  In the opinion of management, the accompanying unaudited financial
  statements contain all adjustments necessary to present fairly the
  financial position of the Company at June 30, 1998, and the results
  of its operations and  cash flows for the periods ended June 30, 1998 and
  1997.
  
                                 Page 6

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  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 June 30, 1998, $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 Company reported a net loss for the six months ended June 30, 1998 of
  $17,714  as compared to a net loss for the six months ended June 30, 1997
  of $17,366.  An increase in general and administration expenses is the
  primary difference in the results of operations between the two reporting
  periods.


                                   Page 7



  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
  
           SIGNATURES
  
  

                               Page 8

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  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:   August 14, 1998                By:   /s/ Helen M. Dickens
        --------------------------           ------------------------------
                                              Helen M. Dickens
                                              Vice President,
                                              Secretary/Treasurer
                                              (Duly authorized and
                                               Principal Financial Officer<PAGE>





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